New legislation could make it easier for Japanese businesses to be set up as worker co-operatives.
A draft Worker Cooperatives Act submitted to Japan’s House of Representatives on 12 June would offer a specific legal form for worker co-operatives in the country. Existing legislation provides no legal entity for worker co-operatives. This means businesses cannot register as worker co-operatives, even when they operate in accordance with co-operative values and principles.
Until now, worker co-operatives have had to register either as non-profit organisations or small and medium enterprises. Apex bodies Japan Cooperative Alliance (JCA) and Japan Workers’ Cooperative Union (JWCU) have long been campaigning for legislative changes to enable the sector to grow. They argue worker co-operatives can help to provide much needed social services and drive sustainable development.
The legislation would be the first co-operative act in Japan since the 1978 Forestry Cooperative Act and the eighth co-operative law to have been adopted.
The draft legislation includes 171 Articles, which reference the ILO Recommendation 193 on promoting co-operatives and the ICA’s statement on co-operative identity.
According to JWCU, the aim of the legislation is to contribute to creation sustainable and vibrant communities by developing worker co-operatives. The draft bill makes clear references to the Sustainable Development Goals, a first for a Japanese law.
The act also adopts a principle-based approach, which means that businesses will have to comply with the conditions defined in it in order to be able to register as worker co-operatives, without requiring the approval of government ministries, something other types of co-operatives in the country have to do.
The worker co-operatives would have a not-for-profit character, meaning that the surplus dividends will be allocated to members depending on the extent to which they engage in the business, rather than their capital contributions.
The legislation will be discussed in the National Diet, Japan’s bicameral legislature over the coming months. JWCU expects the act to pass and says all major political parties have expressed support for the bill.
