International Newsletter on Sustainable Local Development
Newsletter #54
December 1st, 2008

Summary

Message from the Editorial Team

Mondragon Cooperative Corporation
A critical analysis of the strengths, weaknesses and potentialities of the model

Bamako Declaration
Fair tourism as a vehicle for sustainable development of territories

International Conference of La Via Campesina, Maputo, Mozambique
The challenges of an international movement of peasants


Message from the Editorial Team
The Mondragon Cooperative Corporation (MCC) is known as one of the largest cooperatives in the industrial world. Judith Hitchman presents an article following her meeting with the Communications Manager of the MCC last September. This is not an exhaustive analysis of the challenges facing the MCC, but helps us to understand the key issues of governance and management of a large cooperative, on an international scale.

On the other hand, we bring to your attention the main results of meetings attended by Martine and Judith : the International Forum on Solidarity Tourism (Fair Tourism) in Bamako, Mali (FITS) and the fifth International Conference of La Via Campesina in Maputo, Mozambique.

As our next issue will appear in February 2009, we extend to you our best wishes and hopes for peace and prosperity in the New Year. We are also making collective wishes that the seriousness of the financial, economic, food and environmental crisis engages key leaders to initiate the radical transformation that the world needs. May 2009 bring positive outcomes is our utmost wish!

Editorial Team
Judith Hitchman
Yvon Poirier
Martine Theveniaut


Mondragon Cooperative Corporation
A critical analysis of the strengths, weaknesses and potentialities of the model

Many people are aware of Mondragon, often flaunted as the prototype of a successful industrial co-operative, in a world where the co-operative model is more generally identified with the agricultural or services sectors. We were recently the privileged visitors at the headquarters, and spent a long afternoon in the company of Mikel Lezamiz, the Communications Manager, who kindly devoted his time to us.

The history.
In 1941 Don José Arizmendiarrieta arrived in the small town of Mondragon, situated in the heart of the Spanish Basque country. In 1943 he founded the professional polytechnic school, followed some ten years later (1956) by the first co-op, ULGOR where the FAGOR brand of white goods is manufactured. Three years later, the Caja Laboral, a co-operative bank and Lagun Aro, the in-house welfare system, came into being. The first co-operative group (ULARCO-FAGOR) was born in 1964, followed two years later by one of the more innovative aspects, ALECOP, a plant where part-time jobs are reserved for students in order to enable them to earn a living while studying. It should remembered that Spain, and this region in particular, was still extremely poverty-stricken at the time, and still recovering from the Civil War. In 1974 a research centre was born, and progressively the vast empire of what is now the Mondragon Co-operative Corporation developed. The present form was designated by the Mondragon Congress of Co-ops in 1991.

What is Mondragon today and how does it operate?
Mondragon today is indeed an empire, comprising something over 103,000 people, 120 co-operatives, in the fields of products ranging from industrial, financial, consumer goods, agricultural, educational, research and welfare services. The 69 production plants are situated in many countries around the world, and are not all co-operatives for reasons explained below. In the co-operative Supermarket, EROSKI, the members include consumers. The representation in all the Co-ops also includes a health and safety Committee.

According to the mission statement:
Mondragón Co-operative Corporation (MCC) is an entrepreneurial socioeconomic entity with deep cultural roots in the Basque Country, created by and for the people, inspired by the Basic Principles of our Co-operative Experience, committed to the community, to the improvement of competitiveness and to the satisfaction of customers, to create wealth within society through entrepreneurial development and job creation, preferably membership-jobs in co-operatives.
MCC is based on a commitment to solidarity and uses democratic methods for its organisation and management

MCC encourages the participation and integration of people in management, profits and ownership of their companies, to develop a joint, harmonising project aimed at social, business and personal development.


The 10 Founding principles of co-operation:

1.Open Admission.
2.Democratic Organization.
3.Sovereignty of Labor.
4.Instrumental and Subordinate Nature of Capital.
5.Participatory Management.
6.Wage Solidarity.
7.Interco-operation.
8.Social Transformation.
9.Universality.
10.Education


The price of buying into the co-operative system is fixed at 14,000€, which is withheld from salary over a period of time. Being a member of one of the group’s co-ops entitles all members to an equal share in 20% of the corporation’s surplus. Other benefits include the automatic admission to the in-house welfare system (additional health-care and retirement benefits, preferential loan rates…), and relative job security. The level of life-long training and education is also high, following the 10% national requirement. Access to the technical university, management and language training centres is also guaranteed.

The first positive fact is that in spite of being a multi-national corporation, there have been no delocalisations in the various co-operatives in Spain and the Basque country (Industry, supermarkets, research centres, bank branches and provision of services, 90% of the staff are members of co-ops). The remaining staff (often less than 5%) also have some measure of flexicurity. In 2007, 10 co-ops made a loss. In 2008 this is expected to double, so this will be a key issue in the near future. Various for-profit companies are in the process of becoming co-ops.

What are the strengths and also the weaknesses of the model?
I tried to examine the way in which these principles were implemented in terms of the solidarity economy, which aims to create a more collective form of wealth and well-being, and to see how or whether a multinational corporation could serve the interests of local communities and people.

When faced with the tricky question on the sourcing of products, particularly in the EROSKI supermarkets, knowing how intensive agriculture in the south of Spain is often practiced in conditions that are the modern-day equivalent of slavery, I learned that the chain has had SA 8000 certification for the last two years. This technically means that human rights are thoroughly implemented, decent work respected (including by suppliers), and no child labour involved at any level. Not all products have been covered, but the process is on-going. The Fagor co-op, although not certified also works to SA 8000 standards.

Being a member of a co-operative also involves sharing the risks and accepting a cut in wages in periods of recession…And with the global recession, there will certainly be fewer jobs, be it in Spain or elsewhere. The social impacts are bound to be felt as much in co-operatives as elsewhere.

The many production plants world-wide are not however co-ops. Cultural differences in accepting the universal participative management style and co-operative principles would appear more than anything to be the reason. On the plus side however, they combine the Just-In-Time delivery of spare parts to clients with a minimal carbon footprint. Many are hardly beyond the start-up phase, and not yet profitable, but there is the same transparency of information, an attempt at the same management style and 30% worker-ownership (in the form of shares in the companies) as well as a dedicated sum of 5% profits being reinvested in sustainable local development projects. In many cultures where the corporation is present, there is no history of saving money, which also makes simple profit-sharing more difficult. The implementation of welfare or pension schemes have a greater social impact. It is also worth mentioning that the rate of pay is always at least 10% over the national minimum. Nevertheless the cultural limits of the model remain, even if the philosophy remains intact.

All of this means that there is an exceptionally high level of CSR (Corporate Social Responsibility). There is a stated will to ensure that Human Rights be fully respected at all times, as well as regulatory compliance, dignity and respect and transparency. The governance model is of a high standard, based on the principle of inter-co-operation and worker control.

An unanswered question: the non-existence of trade unions
Although the co-operative principle of one man, one vote means that there is clear democratic representation, the role of a union reaches far beyond the simple tenet of representation. Particularly when times are tough. Trade Unions also provide the means for workers to remain connected to those outside their own enterprise and sector.

At the end of the day, in a transnational corporation whose products are based on consumer society’s race to produce ever more, the question of the real intrinsic limits of the system is a fundamental issue. Can the co-operative model prevail, and transform society into a more reasoned approach to human beings use of all things? Or will the fact that the production of goods so intimately linked to the capitalist and neo-liberal model be the downfall of what is certainly a uniquely interesting attempt to provide a wider share of the cake at grass-roots level? As Mikel Lezamiz said “We are not angels”…

Author: Judith Hitchman
Original article in English and French

www.mcc.es


Bamako Declaration
Final statement for a fair tourism as a development vehicle of territories

The 3rd International Forum on Solidarity Tourism (Fair Tourism) held in Bamako, Mali from October 20th - 22nd, 2008 was preceded by 3 days of groundwork meetings. The Forum concluded with a declaration whose main points are listed below.

Workshops as round tables showed the significance of favouring, with a development purpose, a territorial approach within which tourism can have a decisive role.

The main issue of such a development is, on the one hand, to contribute to enhance populations’ quality of life who live on these territories and, on the other hand, to protect the natural resources of those territories.

Beyond the various expressions used to name « fair tourism », this one really must integrate the sustainable development objective.

Actors and partners for a fair tourism are invited to refer to the framework and values of what is called today “the social and fair economy”, considering particularities of world regions or countries.

Some operational main lines seem to have priority in order to reach the sustainable development objective through fair tourism:

• Getting public authorities to increase policy support towards fair tourism
• Creating and clarifying appropriate legislative and regulation frameworks to fair tourism
• Favouring local and regional government involvement
• Including fair tourism in an approach that encourages linkages with the whole activities of the territory
• Developing and strengthening means of support (training, financing, accompanying measures, etc.)
• Heightening the setting up and the networking of actors and territories favouring
• existing facilities in order to avoid activities breaking up
• Ensuring a quality-based fair tourism offer that is adapted to customers’ expectations
• Defining better conditions to enter the market.

We must now, all together, go from theory to action: this is our ambition at the end of this 3rd forum, as we are, from now on, aware of the deep duty to reach the objectives for which we are gathered.

Authors: Martine Théveniaut and Alain Laurent, participants at FITS and the workshop of Teriya Bugue.
See the report of this workshop on the site (under construction): www.pactes-locaux.org (French only)
See Base de fiches. Sphère : pactes ; Identifiant : INV ; mot de passe : pactes


International Conference of La Via Campesina, Maputo, Mozambique
The challenges of an international movement of peasants

The fifth International conference of La Via Campesina took place in Maputo, Mozambique from October 19th to 22nd, 2008. It was preceded by the International Youth Conference and the Women’s Assembly.

In the context of the current four-fold global crises – food, finance, energy and climate – these dimensions take on a significant new meaning for this movement which is already 15 years old. The logic of sustainable development that includes the possibility to reassert peoples’ rights to grow healthy, affordable local food is finding an echo like never before. A significant effort is still required to fight Free Trade Agreements (FTAs) and Economic Partnership Agreements (EPAs), which facilitate dumping of the overproduction of industrial agriculture, as well as advocating for a relocalised small scale model based on local empowerment, agrarian reform.

These issues were discussed in plenary and continental sessions by the 500 delegates from every continent present in Maputo. The conference was remarkably well organised and efficient, with a team of 50 interpreters co-ordinated by the collective Lyre.

« The Via Campesina is the international movement of peasants, small- and medium-sized producers, landless, rural women, indigenous people, rural youth and agricultural workers. It is a global, autonomous, pluralist and multicultural movement, independent of any political, economic, or other type of affiliation.
The movement is already some 15 years old. The Fourth International Conference took place in Maputo (Mozambique) from 19th – 22nd October. It was preceded by both the international Youth Conference and the Women’s Assembly.
The core objective of La Via Campesina is to develop solidarity and unity among small farmer organizations in order to promote gender parity and social justice in fair economic relations; the preservation of land, water, seeds and other natural resources; food sovereignty, as well as sustainable agricultural production based on small and medium-sized producers.
La Via Campesina promotes a model of peasant or family-farm agriculture based on sustainable production with local resources and in harmony with local culture and traditions. Peasants and farmers rely on a long experience with their locally available resources. This means producing the optimal quantity and quality of food with few external inputs. Production is mainly for family consumption and domestic markets.
Food sovereignty is the RIGHT of peoples, countries, and state unions to define their agricultural and food policy without the “dumping” of agricultural commodities into foreign countries. Food sovereignty organizes food production and consumption according to the needs of local communities, giving priority to production for local consumption. Food sovereignty includes the right to protect and regulate the national agricultural and livestock production and to shield the domestic market from the dumping of agricultural surpluses and low-price imports from other countries. Landless people, peasants, and small farmers must get access to land, water, and seed as well as productive resources and adequate public services. Food sovereignty and sustainability are a higher priority than trade policies.
The current industrialized agribusiness model has been deliberately planned for the complete vertical integration and to dominate all agriculture activities. This model exploits workers and concentrates economic and political power. La Via Campesina advocates a decentralized model where production, processing, distribution and consumption are controlled by the people the communities themselves and not by transnational corporations. »

Two of the decisions :
• The decision to create strategic alliances with other organisations to jointly take advantage of the international crises and move forward towards a more sustainable and equitable system
• The introduction of the campaign to end all violence against women (physical, mental and institutional). The latter campaign is in conjunction with the World March of Women, whose General Assembly took place at the same time in Galicia in Spain.
The final declaration can be found at : http://www.viacampesina.org/main_en/index.php?option=com_content&task=view&id=623&Itemid=68

Judith Hitchman, interpreter and member of the Lyre collective
Original article in English and French

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Special thanks to:
Évéline Poirier from Canada for the English translation
Brunilda Rafael from France for the Spanish translation
Michel Colin from Brazil for the Portuguese translation

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