Social and solidary economy law in uruguay: Text and context

Abstract

This article analyzes the Law on Social and Solidarity Economy of Uruguay (N°19.848), ratified on December 10, 2019 by the majority of both Chambers, after a long period of discussion since 2008, when Law N° 18407 (General Law of Cooperativism) included among the powers of the new National Institute of Cooperativism (INACOOP), to make proposals for the regulation of “other forms of social and solidarity economy”. The law aims to recognise, promote and support the Social and Solidarity Economy - and says it is in the national interest to stimulate and develop it in any of its expressions On the one hand, we will refer to the law-building process, showing how the various collective subjects were interacting, how the changes in the different drafts handled were being processed and how was the parliamentary process, that led to its approval by majority in both Chambers. On the other hand, we will show the particularities of the Law with the text which was finally approved. It will be exposed how the Law is inspired by the theoretical development that sees the SSE as a broad and alternative sector both to the capitalist private sector as to the state sector, including perspectives of principles and values commonly embraced by the social movements that have boosted with the greatest force the solidarity economy and the solidarity social economy around the world, so that the classic actors (cooperatives, mutuals, associations and foundations) are integrated together with the so-called new actors or new movements of transforming economies (case of fair trade, responsible consumption, ethical finances, recovered companies to self-managed ventures, etc.). Even so, in the law-building process, conceptual and strategic differences have been evidenced in addition to merely technical ones. Many actors participated in its formulation, some of them very in favor of having a Law of these characteristics, others in disagreement. For example, the cooperative movement was divided: Although a majority supported the gestation process and the Law itself, another party was opposed to regulating in these matters (the most notorious case was that of Agrarian Cooperatives). New social actors, such as the National Coordinator of Solidarity Economy, were favorable from the beginning to a Law of this type. Regarding the political system, the party then at the head of the national government (Frente Amplio) unanimously voted for the Law. The opposition, for its part, voted divided. Regarding the structure of the Law (20 articles organized in 7 chapters), the scope of some of the most important articles is analyzed, highlighting aspects such as the delimitation of the concept of the social and solidarity economy, the principles and entities of the sector, promotion policies and the role of INACOOP, as well as state control and registration of entities. Concerning the content of the Law, we believe that Art. 4 is one of the richest from a strictly doctrinaire point of view. There the principles that the entities of the sector must respect are established. The first of these principles says “The person must be the center of economic and social activity, having absolute primacy over capital.” It is, as can be seen, a principle commonly used by solidarity economy movements around the world and even present in other legal texts, the case of Spain (2011). The list of principles continues with references to the commitment to the environment (a principle that, as we know, does not appear in the Declaration of Principles of the International Cooperative Alliance and which is also little taken up by other legislation on Social and Solidarity Economy in the rest of the world ), to social inclusion, gender equality or democratic management. It is also an interesting Law with regard to the entities mentioned as part of the sector. Article 6 lists cooperatives first, but then a list of other entities follows, such as mutuals, self-managed companies by their workers, rural development companies (an expression of rural associativity that responds to the particularities of Uruguayan case), the networks that promote food sovereignty, agroecology and organic food production, civil associations that promote fair trade, ethical finance, responsible consumption, responsible tourism, artisanal networks, or even mercantile societies to the extent that they comply a series of very severe requirements regarding how they are managed, how they are capitalized and how they distribute eventual profits. As you can see, this is an extensive list that obeys a broad view of the sector that includes traditional actors in the social economy and new emerging actors (the Law, for example, is the first in the world to refer to the concept of “transforming economies”, recently adopted by the Intercontinental Network for the Promotion of the Social and Solidarity Economy (RIPESS). As for the institutionality that carries out the policies, Art. 11 provides that the National Institute of Cooperativism -INACOOP- will be the driving agency, with its powers and responsibilities in this regard (a) defining, promoting and promoting public policies aimed at the development and strengthening of the SSE; (b) Register and recognize ESS organizations; (c) develop ESS policies, projects and programs for training, research and technology transfer, and technical assistance; (d) create a technical assistance network; (e) favor strategic agreements with public and private institutions; (f) monitor and evaluate the ESS organi zations; (g) register entities in the Registry created by the law itself; and (h) create an ESS Observatory. One of the aspects that generated the most debate was related to the control system. The Law chose to follow the model of cooperatives, assigning control of the entities of social and solidarity economy to the Internal Audit of the Nation (AIN). However, it also established that INACOOP “may establish technical control criteria, which must be communicated to the AIN, and, when requested by the AIN, shall exercise the functions of oversight of said entities.” Concluding, this Law, beyond its successes and failures, will allow for the first time in the country, to implement public policies of promotion and development to a wide sector of the economy that will bring together cooperatives, mutuals, companies self-managed by its workers, artisanal production networks, rural development societies, associations as well as other organic or fair trade enterprises that comply with a series of guiding principles.