Friday, May 7, 2010

South America: Mercosur’s Cooperatives in an Age of Integration

Editor's note: In the US we have the US Federation of Workers Cooperatives and NoBAWC (Network of Bay Area Worker Cooperatives) though they are grossly unfunded for the kind of work they should be doing- more training of new cooperatives, development support, integration at a regional level especially, market planning, and providing seed funding for these businesses. Governments should help fund these organizations through their economic development budget and offer preferential contracts to local worker cooperatives. Additionally, successful cooperatives should offer credit to new or expanding cooperatives at no interest (fee based insurance pool is easier to pay back, and doesn't require the economy to grow to come up with the interest) through a mutual credit bank for worker cooperatives like the WIR Bank in Switzerland.

Reposted from Upside Down World
Written by Michael Fox
Wednesday, 05 May 2010 00:35

“There has to be a process of integration, there has to be a process of cooperation, there has to be a process of strengthening the identities of the coop movements with the respect and the sufficient capacity to know that we are diverse, because according to the sector, according to the region, according to the positive or negative public policy characteristics, the movements acquire a series of identity that have different accents.”

- Daniel Bentancur, President of the Specialized Reunion of Cooperatives of Mercosur, speaking in May 2006 at the inauguration of Venezuela’s National Cooperative Councils (Cencoop) in Caracas.

Univens co-op member

Univens co-op member
“Right now we have the most work we’ve ever had,” says Nelsa Inês Fabian Nespolo with a smile. “We’re really doing well.” She leads me up a flight of concrete stairs and we look out on the workspace below—part of a building they acquired a few years ago with a loan from a Spanish NGO. “We’re paying it off in monthly installments, so our coop federation can pass the funds on to another needy cooperative,” she says.

On the far end of the room, three women are cutting a long roll of blue material. Beneath us a pair of middle-aged women sit behind their sewing machines, quietly chatting with one another. Nespolo leads me into another room where four women and the cooperative’s only male member are stenciling letters on to an order of t-shirts being made for a local union.

You can tell this is not your everyday textile business. They stop to welcome us as we enter the room. Someone cracks a joke. Everyone laughs. The atmosphere is relaxed, they go home for lunch, and while their output is more than ever—about 13,000 pieces of clothing per month—they don’t have a time clock or a even a boss hanging over them.

Univens (The “We Will Overcome Cooperative of United Seamstresses”) is a cooperative, formed 14 years ago among three-dozen women in the working class neighborhood, Sarandi in the southern Brazilian city of Porto Alegre. In the beginning they had only a couple of sewing machines, no workspace and no resources. “I could sit here for a whole day telling you about all of our difficulties,” says Nespolo.

The coop now has 26 members who all make the same salary. Decisions are made democratically in their monthly assemblies on the 23rd of the month.

“We discuss everything. It goes through everyone. We don’t decide anything here if we aren’t sure that it’s the best decision for us,” says Nespolo. “We don’t have a problem having two or three meetings to make a decision.”

For it’s cooperative members, Univens may be a dream come true, but it is just one of numerous such experiences in the long history of cooperativism across the region.

Cooperative Beginnings in the Southern Cone

The first co-ops began to form in most South American countries by the beginning of the 20th century, as immigrants sailed across the Atlantic carrying with them cooperative ideals, which intermixed with the communal traditions of many of South America’s indigenous ancestors.

By the 1960s, cooperative sectors surged again as the United States’s international initiative, Alliance for Progress, began to encourage Latin American governments to promote cooperatives to marginalized communities in an attempt to isolate growing support for Cuban-inspired guerrilla movements taking hold across the region.

Ironically, subsequent US-backed South American dictatorships of the 1970s and 1980s did their best to put a can on the sometimes-vibrant coop movements the Alliance program had just helped to encourage. As did the deregulated markets of the neoliberal 1990s, which, advertently or not, pulled the rug out from under some of the oldest co-op experiences in the region.

Then with the 2001 economic crash in Argentina (and to a lesser extent Uruguay and Brazil), recuperated factories, businesses, and worker collectives across the region sprang onto the scene like never before as a means for workers to continue producing even after the factory doors were closed.

“We, the workers began to say, the buildings are here, the machines are here, and so are the workers. The only thing missing is the boss. Let's continue to produce, and that's what we did.” says Jose Abelli, co-founders of the Argentina’s National Movement of Recuperated Businesses (MNER) and President of the Argentine Federation of Self-governed Worker Cooperatives (FACTA).

Brazil’s renowned Landless Worker’s Movement (Movimento dos Trabalhadores Rurais Sem Terra - MST) began to form local worker and producer cooperatives among its members in order to sell reasonably priced products through “Agrarian Reform Stores” in order to support their autonomous struggle for land reform in South America’s largest country.

Each of these experiences is unique, shaped by the home country’s diverse history which resulted in its cooperatives taking on certain characteristics particular to that region. For instance, while agricultural, financial, consumer, health, housing, service and worker cooperatives are found in nearly every country, Uruguay is best known for its housing cooperatives, which sprung to life in the 1960s and remained one of the bastions of struggle against the repressive Uruguayan dictatorship of the 1970s. Argentina is known for its service cooperatives and since the 2001 crisis, its recuperated factories. Paraguay has a rich tradition in savings and loan cooperatives. Brazil has important numbers of worker collectives and agricultural cooperatives. Venezuela’s cooperative history is organized around funeral cooperative federations and, more recently under President Hugo Chávez, worker collectives.

Cooperative Integration

Nespolo leads me past a computer into a side room on the first floor of their headquarters. The space is filled with clothing materials, merchandise and boxes piled four feet in the air.

“This is Justa Trama,” she says offering me a school-chair and shifting the metal fan to blow in our direction. Behind me are ceiling-high shelves filled with organic shirts, t-shirts, bags, pants and clothes, part of this year’s line of clothing from Justa Trama, an innovative network of local Brazilian cooperatives, recuperated businesses and artisans which was launched to unite every step of their clothing supply chain, and cut out the corporate middle man.

As Nespolo explains, having a successful Univens “isn’t enough.” They like a challenge. “That’s part of our dynamics. We create new challenges if there aren’t any,” says Nespolo. “Today we have a network of cooperatives here in Porto Alegre, with orders which we sometimes fulfill jointly.”

In 2005 Univens produced 50,000 bags for the 2005 World Social Forum in Porto Alegre. But in order to do so, they needed to join forces with another 35 textile cooperatives and small solidarity economy businesses in Southern Brazil. They fulfilled the order, and since they cut out the corporate overhead embedded in most business transactions, the cooperatives made more than double the price per bag they would get in the market, and the World Social Forum paid less per bag than they had in previous forums.

The experience was the impetus to take on yet another challenge. Justa Trama was launched the same year uniting small organic cotton farmers in the Brazilian state of Ceará, with a São Paulo recuperated business which spins the cotton into thread, to the cooperative which weaves the thread into material, and finally the coop textile manufacturers in Southern Brazil. Every step of the supply chain is in the hands of local producers, cooperatives, recuperated or small solidarity economy businesses. Seven hundred workers are involved in the business which is now producing 10 tons of organic cotton clothing per year, and is now exporting to Europe.

“For me, that’s integration,” says Nespolo. “Integration is when it’s good for everyone. When you come together and in the end it makes everyone stronger. And integration can happen in various ways.”

The term is broad. To some it means joining to produce a product, to others it is the joining of cooperatives in unions, federations and secondary or tertiary organizations. The idea of integration is nearly as old as the concept of cooperativism itself. The International Cooperative Association (ICA) was founded in 1895 and according to its website, now has “222 member organisations from 85 countries, representing more than 800 million individuals worldwide.”

To others it also means the frequent cooperative and solidarity economy fairs. Every year in July, the rural town of Santa Maria, in Brazil’s Southernmost state, Rio Grande do Sul, holds the annual Mercosur Solidarity Economy Fair, which brings together more than 700 cooperatives and small solidarity economy businesses from across the region to present and sell their goods. Uruguayans and Argentineans speak Spanish along-side Portuguese-speaking Brazilians. 2008 was the fourth annual event and at the same time the fifteenth annual state cooperative fair. “We always go to that fair,” says Nespolo. “And this year there are gong to be some really good things.” Univens doesn’t miss the regional fairs.

Nevertheless, across the Mercosur region, cross-border cooperative integration has not always been easy, especially considering the region’s diversity, size and the fact that on the state level, each country’s governing bodies, cooperative legislation, public policy, oversight, regulation and even the definition of a cooperative can vary substantially.

As a result, cooperative members have recently been reaching out to their neighbors, through the Common Market of the South (Mercosur)—set up as a neo-liberal trade block between Argentina, Uruguay, Paraguay and Brazil in 1991, for the last decade the cooperative branch of the block has been attempting to shed its neoliberal past and facilitate the coordination and integration of cooperatives across the continent.

Specialized Reunion of Cooperatives of Mercosur (RECM)

“We don’t talk about Mercosur as a Common Market of the South, we speak about Mercosur as a synonym for a regional process of integration,” says Daniel Bentancur, active RECM President, “Why? Because one of our principles is integration, because we have a culture and a history of relations between the cooperative movements and even some sporadic meetings at the state level.”

Upon its foundation, the Reunion quickly set out to attempt to “harmonize and perfect” co-op legislation between the various countries; eliminate the registration, tax, auditing, and definition differences; unify a database of cooperative information; and coordinate mutual cooperation in cooperative promotion, education, and technical assistance.

It opened space for the co-op movements to express themselves, and to review and debate public policy with the state organizations in order to unify cooperative development in the region. The Reunion began to organize regional meetings such as the 2006 “Cooperativism and Latin American Integration” Summit, where a generous cross-section of the region’s co-ops and co-op movements traveled to Caracas, Venezuela for the international gathering. In 2009, it began an innovative education program aimed at training individuals—predominantly youth and women—in cooperative experiences, using the history and knowledge already available in each country’s cooperative sector.

The RECM has also been studying the cooperatives working along the borders, with the eventual goal of breaking down the physical divisions between one country and the next, and enabling border co-ops to form bi-national cooperative businesses. But with 15,000 (agricultural, financial, consumer, health, funeral, housing, worker and service) cooperatives and nearly 22 million cooperative members stretched across the Mercosur region, it makes sense that not everyone would be involved in the RECM.

Building Diverse Ties

“Are they affiliated with the OCB?” Nespolo responds when I ask her if they are involved in the RECM. It doesn’t seem that she has ever heard of it. She’s asking about the 41-year-old Organization of Brazilian Cooperatives (OCB), the largest coop organization in Brazil. “We question various things about them [the OCB], and within it you find the most traditional style of cooperativism, and the most distorted. For instance the coops that contract out workers are all within this organization.”

Instead Univens is a member of the ten-year-old Unisol Brazil Federation, which unites a little over 200 cooperatives and small solidarity businesses. Nespolo says Unisol is more grassroots because the Unisol representatives all remain workers in their coops or small solidarity businesses.

But just because Univens and Justa Trama aren’t participating in the RECM, that doesn’t mean that they haven’t been working across borders. They have been consolidating ties with housing cooperatives in Uruguay and recuperated factories in Argentina. In 2007 the Venezuelan government invited representatives from every aspect of the Justa Trama supply chain to Venezuela to teach their local cotton producers and manufacturers how to do what they do.

The move by Venezuela was one of many in recent years building relations with the region’s coops. In January 2006 the Venezuelan government passed over $5 million in loans to support three Uruguayan recuperated factories who promised to return the favor in training and capacity for Venezuelan industry. Representatives from Uruguay’s housing Federation, Fucvam, have traveled to Venezuela sharing experiences and strategies with Venezuela’s Urban Land Committees (Comites de Tierra Urbana - CTU). Meanwhile, despite a high turnover rate in the Venezuelan co-op governing body, Sunacoop (which has created friction between Venezuela and other RECM members) various Venezuelan cooperatives have signed cooperation agreements with their Southern neighbors.

“We’ve entered in to an agreement with Brazil over some buses that are being produced by a cooperative in [the Venezuelan state of] Tachira. We have taken steps in an agreement with Argentina regarding some industrial coffee production plants,” says Venezuelan cooperativista Alfonso Olivo, one of the founding members of the Venezuelan National Cooperative Councils, which were formed in 2006 to take steps towards coordinating a united Venezuelan cooperative movement that could increasingly dialogue with its neighbors.

Of course, not all of the region’s cooperatives are interested in integration.

According to Luis Carlos Volcan, the former Vice-President of the Organization of Cooperatives of the Brazilian State of Rio Grande do Sul (Ocergs), many agricultural cooperatives compete amongst each other for market access. “It’s not smart,” says Volcan, “We could have a common strategy, in which we were not necessarily competing amongst each other.”

The difficulties don’t end there. Although Ocergs—which represents 1600 cooperatives and 1.6 million members in Brazil’s Rio Grade do Sul—does participate in the regional summits, Volcan admits that at least in Brazil, “unfortunately, there really isn’t a national or local commitment to cooperative integration… nor are there funds allocated.”

Diego Rosemberg is a member of the Argentine communication collective, La Vaca, which has compiled the most comprehensive list of the roughly 200 recuperated factories in Argentina. In Argentina “there are political questions and other issues,” he says. “Some [of the factories] are connected and others not—that’s the reality. A very important delegation of recuperated factories from Argentina traveled to the conference of recuperated factories in Venezuela in 2005... Some made connections, others not.”

According to Mario Racket, Head of the Cooperative department at the Argentine Cultural Center of Cooperation, this has much to do with the fact that the “new generation” of Argentine cooperatives developed as a viable alternative to resolve immediate needs in response to the 2001 economic crisis. But as a result of their short co-op experience, many of the younger cooperatives and their members are still influenced by what Racket calls “the installed culture” and “hegemonic thought.”

“When cooperative consciousness doesn’t yet exist, you can’t develop cooperative integration,” says Racket, which is part of why Racket, like the RECM and many others, are holding training courses for younger cooperativistas to “confront and invert the present hegemonic model.”

“Truly, the cooperative has nothing to do with the capitalist world,” explains Racket passionately, “It is anti-capitalist, because it has different criteria.”

If they didn’t already know it, this appears to be something that the region’s co-ops are learning quickly.

“Here, during the 1990s in Latin America, they spoke about the problem of the cost of labor”, says La Vaca’s Rosemberg, reflecting on the period when Argentine President Menem first signed Mercosur into affect with its neighboring countries. “They said that the problem of the economic development was above all else the cost of labor… What the worker’s have now discovered with this type of [cooperative] organization is that the true cost that made these projects unviable was the cost of the owners. Once they got rid of the owners the factories began to be viable.”

“Before, the managers were paid 30 or 40 times what the workers made,” he continues with a chuckle. “That was the problem.”

Although the modality of each country and each cooperative is different, co-ops across the region are breaking previous paradigms and proving that they are not only economically viable, but have the capacity to join together and support each other in their struggle—either through the regional institutions or bilaterally. It is often not easy, and not always successful, but many are trying.

Like Uruguay’s co-op housing Federation, Fucvam, which has been building relationships with housing movements across the Americas for decades. “It is not only economic integration, it is social integration,” says Vicente Addiego, a long-time Uruguayan Fucvam activist and member of the Federation organizing committee, “It is integration of the people.”

Or like Univens. “Look at all the women that are here,” says Nespolo back at their headquarters in Porto Alegre. “What would they hope for economically? Some of them, because of their age, would no longer be working, and the cooperative gives them a good feeling about their lives… Now, on top of this to be part of a production chain that isn’t polluting the environment, and in which everyone makes more for their production. That for us is the real meaning of distributing resources, to do social justice. It’s not just benefiting one of us, but all of us. It has to be worth it for everyone. That’s integration.”

This is an updated version of an article that was originally published with Third World Resurgence in 2009

Michael Fox is a South America-based freelance journalist, radio reporter and documentary filmmaker. He is co-director of Beyond Elections: Redefining Democracy in the Americas, and co-author of Venezuela Speaks!: Voices from the Grassroots. He is currently finishing a documentary on the U.S. financial crisis. You can visit his website at,

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