10.1 A cooperative society is a member-based, member-owned and member-managed institution. A member of a cooperative is not a shareholder as in a company, but also a user. Most cooperative laws include provisions on shareholders rights and responsibilities, but most laws neglect or pay little attention to the members' user role.
Only in Fiji, Korea, Japan, and the Philippines this subject has been addressed properly. Fiji's Cooperative Law provides certain obligations to members. Neglect or unsatisfactory handling of the obligations is treated as an offence, and may be fined. In Sri Lanka, subsequent to the 1992 Amendment, section 11 A, (a new section) states that “a member shall not enjoy the right to vote or the right to hold office until the expiry of one year from the date of enrolment”. However, the provisions in the laws of the Philippines, South Korea, and Japan are more effective with regard to member cooperative relations and user obligations.
South Korea
10.2 Under the South Korean Agricultural Cooperative Law (Article 22) only farmers can be member of a cooperative. However, agricultural organization of farmers living in the area of operation can be associate members who can also use the services of cooperative but are non-shareholders and non-voting members can be asked to pay membership fee. One important provision regarding expulsion of membership is worth noting under Article 33 (1) when a member has failed to utilize the cooperative for a period of more than one year, he could be expelled. Also when he fails to comply with obligations such as payment of investment, sharing of expenses or any other obligation to the cooperative, he can be expelled. The other important provision is to have maximum services under article 5 as under: “the objective of the cooperative and the federation in business operations shall be to provide non-discriminating maximum services to their competent members and they will refrain from operating their business to the benefit of only a part of their members. No cooperative or federation shall be allowed to engage in profit making or speculative activities”.
Japan
10.3 Japanese Cooperative Law is similar to Korean Law. Members who have not made use cooperative facilities for a certain period of time can be expelled by the General Body.
Philippines
10.4 In Philippines (Article 31, 3.a), when a member has not used the services of the cooperative for an unreasonable period of time as may be determined or fixed by the Board of Directors, his membership could be terminated.
10.5 To make a cooperative a genuine members oriented member-use-base institution, it is necessary to ensure that a member uses the services. If he fails to use the services, his membership should cease after a year as provided in Korean Law. If this is not feasible, then he should loose his right to vote and contest elections. The principle should be ‘no use of service- no participation in the management’. Also provision in the laws should state that if a cooperative fails to maintain a certain level of its business with cooperatives members, it should cease to be treated as a cooperative. The reasonable range will be sixty to eighty percent as provided in Fiji and Japan. Both the above practices are followed strictly in Japan and Korea, being a key factor in securing the success of cooperatives in said countries.
