Academy SSE Elective on “The role of social and solidarity economy organizations in formalising the informal economy July 2015 – South Africa

A. Background

Informality, poverty and exclusion end up in a mutually reinforcing phenomenon that generates a vicious circle of intergenerational inequality and deprivation. The term informal economy identifies those economic activities performed by workers and economic units that take place out of the law or in practice are not fully covered by formal arrangements. Informal employment is defined as the total number of informal jobs, whether carried out in formal sector enterprises, informal sector enterprises, or households and comprises employees not subject to labour regulation, taxation, social protection or entitlement to certain employment benefits; Own account workers, employers and members of cooperatives in informal economic units, and Unpaid family workers. Informal employment may occur in the informal sector as well as in the formal sector as well. Among the

workers engaged in informal employment, specific groups are particularly vulnerable such as those workers in self-employment; but also migrant workers, rural workers, the poorest segment of the populations.The heterogeneity in the informal employment is connected with the fact that transiting to formality requires different interventions.

Thus, interventions may include mechanisms to increase formal jobs opportunities through for example active labour market policies, reinforce compliance in the formal sector or to ease registration in the

informal one, as well as providing social guarantees to workers such as social pillars in social security and social protection programs in order to mitigate informality effects (in particular on segments not ready yet to transition); skills development, improved and safer working conditions as well as promotion of freely chosen associations of informal economy workers and employers

This summary looks at the latter and the potential of social and solidarity economy organisations as valuable vehicles for extending services and protection to workers and economic units (enterprises, entrepreneurs and households) in the informal economy. Examples of Social and Solidarity Economy practices have proven successful in extending social protection, creating employment, ensuring representation and voice as well extending rights and reducing vulnerability of male and female workers and economic units in the informal economy.

The ILO defines the social economy as "a concept designating enterprises and organizations which have the specific feature of producing goods, services and knowledge while pursuing both economic and social aims and fostering solidarity”. Social economy enterprises and organizations put people

1

Vulnerable groups Among the workers engaged in informal employment, specific groups are particularly vulnerable such as those workers in self-employment; but also migrant workers, rural workers, the poorest segment of the populations

and their communities, rather than profit, at the centre of their aspirations. They do not primarily seek to maximize profits but aim at creating economic, social and societal benefits. They share common values such as democratic control, voluntary participation, flexibility, self-help, self-reliance, solidarity, and community ownership. Social economy organizations are clearly economic actors, but many have political intentions: they work to achieve greater equity and social justice; they fight exclusion and facilitate popular decision-making.How these specific features and characteristic of SSE can be useful to extend protection while enhancing productivity and wellbeing for workers and economic units in the informal economy?

Social economy organizations are particularly important in the informal economy debate and more and more seen as alternative pathway to transition workers and economic units from the informal economy. Work in the informal economy is often characterized by small or undefined workplaces, unsafe and unhealthy working conditions, low levels of skills and productivity, low or irregular incomes, long working hours and lack of access to information, markets, finance, training and technology. These are deficits that social economy organizations can fill. In addition, there are a growing number of associations of street vendors, market women, transport operators, waste pickers, home-based producers, micro-entrepreneurs and other self-employed workers who generally belong to the informal economy. It would be important to legally recognize these organizations, to enhance their outreach, to build their capacity, and to facilitate their horizontal and vertical integration. The social economy organizations represent also an alternative way of doing business while being an integral component of the private sector (which includes the informal economy).

Participants to the elective “The role of social and solidarity economy organizations in formalising the informal economy” will look - in particular - at how the social and solidarity economy, principles, values, operations and institutions can be instrumental in facilitating the transition to formality. The Academy on SSE takes place one month after the adoption by the International Labour Conference 2015 of a new instrument – “Recommendation 204 concerning the transition from the informal to the formal economy” that gives guidance to member states on policies and avenues to promote the transitions to formal economy.

The programme proposed in the elective seeks to: 1. Familiarise participants with the new ILO Recommendation on the transition to formal

Economy adopted by the ILO 2015, and discuss in particular the role of SSE in implementing the new instrument

2. Map out and share policy approaches by participating countries as well as practices on SSE and the link to formalisation;

2

Women are over represented in the informal economy.

The impact of social economy organisations in supporting formalisation of the informal economy is good for women as they often make up the majority of vulnerable groups in informal work. As a sector the SSE promotes the inclusion of women because of its principles of democracy and social justice, in addition it is seen as a sector that can in itself be a source of jobs for women.There is however a caveat, occupational segregation in the SSE is prevalent and reflects the wider world of work. It has been argued that the SSE has a risk of ghettoising of women in stereotypical roles, for example keeping them in caring and social development professions within the SSE.

3. Discuss way forward in putting into practice the Recommendation concerning the transition from the informal to the formal economy”

In order to reach the objectives assigned, the team of facilitators will seek to provide conceptual inputs on the link SSE and IE and gather collective knowledge through active participation and discussion. Case studies will be presented to provide comparative study of practices for policy making on the role of SSE; including mapping out and sharing of policy approaches by participants on SSE and the link to formalisation.

3

Recommendation 204ILC 2015 adopted the Recommendation No. 204 concerning the transition from the Informal to formal Economy. Its aims to 1) facilitate the transition of workers and economic Units form the informal to the formal economy; 2) to promote the creation of enterprises and decent jobs in the formal economy, and 3) to prevent the informalization of formal jobs. It offers guidelines for interventions in the field of Legal and policy framework, Employment policies, Rights and social protection; Incentives, compliance and enforcement; Freedom of association, social dialogue and the role of employers and worker organisations

R204 mentioned several times social and solidarity organisation in particular cooperatives as bridge between informal to formal.

The informal economy in numbers

4

1. In Latin America and the Caribbean the share of informal employment in non-agricultural activities ranges from 39.8 per cent in Uruguay to 75.1 per cent in Bolivia.

2.[1.] In many African countries, non-agriculture informal employment exceeds 50 per cent, reaching highs of 76.2 per cent in Tanzania and 81.8 per cent in Mali.

3.[2.] With 9.3 per cent and 17.8 per cent respectively, middle income countries in Africa like Mauritius and South Africa show much lower percentages of informal employment.

4.[3.] For North Africa and the Middle East, informal employment also accounts for a substantial proportion of employment ranging from 30 per cent to 70 per cent.

5.[4.] South and East Asia also host large numbers of workers in the informal economy, ranging from 42.3 per cent in Thailand to 83.6 per cent in India. In China, informal employment reaches 32.6 per cent – an estimate that is based on six cities.

6.[5.] In all developing regions, self-employment constitutes a greater share of informal employment (non-agriculture) than wage employment. It represents nearly one-third of total non-agricultural employment worldwide

7. In the majority in Sub Saharan African countries women outnumber men in the informal economy

B. Conceptual framework on informal economy and the transition to formal economy

Informal economy, Informal sector and informal employment

Millions of workers and economic units around the world today are in the informal economy where they suffer poor working conditions and a lack of rights at work. Workers and enterprises in the informal economy often face challenges such as low quality employment, inadequate social protection, poor governance and low productivity.

Women’s share in the informal economy:The share of women in informal employment is higher than men in most countries. Other vulnerable populations, such as youth, ethnic minorities, migrants, older people and the disabled are also disproportionally present in informality. Overall women are more likely to be in the informal economy than men. In sub-Saharan Africa, 84 percent of women non-agricultural workers are informally employed compared to 63 percent of men; in Latin America those figures are 58 and 48 percent, respectively; while in Asia the proportion is 65 per cent for both. Gender based discrimination, because of the lack of regulation and redress, tends to be more entrenched in the informal economy with lower wages, precarious employment and sexual harassment for women a real challenge.

Transition to formal economy: Formalization must be intended as a transition to the formal economy1. It implies a process, which involves several phases. Different views exist about what is meant by formalization and how it can be achieved. Current policy initiatives around the world show that there is no universal policy framework, but rather a set of approaches that can be combined and adapted to each specific country context. Policies should recognize the importance of the informal economy, restricting and regulating it when necessary, but also seeking to increase the productivity and improve the working conditions of those who work in it. Formalization will bring benefits not only to both formal and informal employees, but also to formal and informal entrepreneurs; their institutions and the state as a whole. The process to achieve it brings also some challenges at individual, institutional and state levels.

Country experiences Countries in the world have implemented several measures and there are many examples of good practices around the world which can lead the way out of informality.

1 This is also the term used in the title of the ILO report “Transitioning from the informal to the formal economy”, Report V(1) for International Labour Conference, 103rd Session, 2014

5

The “informal economy” refers to all economic activities that are – in law or in practice – not covered or insufficiently covered by formal arrangements. These activities are not included in the law; or are not covered in practice, as the law is not applied or not enforced; or the law discourages compliance because it isinappropriate, burdensome, or imposes excessive costs.

The term “informal economy” is preferred to that of “informal sector”, as it captures the diversity of workers and economic units, in different sectors of the economy and across rural and urban contexts.

Informal employment comprises of: i) Own-account workers and employers employed in their own informal enterprises, ii) Contributing family workers, in both formal or informal enterprises, and iii) Employees holding informal jobs, in formal enterprises, informalenterprises, or as paid domestic workers.

Mozambique for example has put in place a simplified registration of new business (Decree 5/2012) to reduce the procedures for licensing the business. Nigeria is in the process of developing guideline for the extension of labour protection to the informal economy and the Federal Government has approved in principle the extension of Social Security for all in the informal sector. In Uruguay, the social security administration and the tax collection authority teamed up to establish a simplified and unified collection scheme for small contributors called Monotax. South Africa has a draft Business Licensing bill and the Government adopted an informal Business Upliftment Strategy aimed at facilitating the creation of an enabling policy and regulatory environment for mainstreaming the broader participation and competitiveness of South Africa’s

Informal Business Sector. A few provinces have established provincial policies for the informal economy and at the municipal level by-laws are being drafted to manage the informal economy. When fully integrated into strategies, access to finance can be a powerful driver for changes, such as contributing to transition to formality of micro enterprises, reducing vulnerability of economic units.

There has been increased coverage of basic social security in Kenya to include the informal economy workers by NSSF and NHIF; social assistance programmes and government cash transfer programmes targeting older persons, orphans and vulnerable children, persons with severe disabilities have been expanded. La Mutuelle de Sante du Benin (MSSB) is now open to informal sector workers and to all who are excluded from the formal social security schemes. MSSB covers sickness and retirement.

In Egypt a total of 167 enterprises in the area of waste collection have been formalized to become small private sector companies.

SSE is a complementary pathway to tackling the ongoing growth of precarious employment and acute decent work deficits connected with the informal economy. Within an enabling policy and institutional environment, cooperatives and other social enterprises can play a key role in realizing the goal of decent work. From an aggregate point of view, cooperatives are among the largest employers in many countries in both the global North and South. SSE organizations can facilitate access to finance, inputs, technology, support services and markets, and enhance the capacity of producers to negotiate better prices and income. They can reduce power and information asymmetries within labour and product markets and enhance the level and regularity of incomes. The low capital requirements needed for forming certain types of cooperative can be beneficial for informal workers seeking to engage in enterprise activities.

6

In Burkina Faso and India, the ILO piloted initiative to test the impact on formalisation of microfinance services (loans, deposits and other services)

Informal sector workers in Malawi are able to enjoy the right to Freedom of Association as they have their own trade union, the Malawi Union for the Informal Sector (MUFIS).

economic objectives

envionemental objectives

social objectives

C. Social and Solidarity Economy as an alternative pathway to promote transition to formality

What is Social and Solidarity Economy and which organisations are found the SSE?

SSE activities share the following features:1. They explicitly combine economic viability and

social utility;2. They produce goods and services that actively

involve communities and/or basic social networks which foster the participation of both men and women;

3. They form local, regional and national but also international consultative and cooperative networks of associations and communities;

4. They contribute to the emergence of new economic and social arrangements, namely collective and democratic management methods of enterprises and development.

The field of SSE involves not only traditional ‘social economy’ or ‘third sector’ organizations and enterprises such as cooperatives, mutual associations, grant-dependent and service-delivery non-governmental organizations (NGOs), and community and other forms of volunteering and giving, but also types of self-help groups organizing to produce goods and services, fair trade networks and other forms of solidarity purchasing, consumer groups involved in collective provisioning, associations of ‘informal economy’ workers, new forms of profit-making social enterprises and social

7

SSE organizations first, have explicit economic AND social (and often environmental) objectives. They involve varying forms of co-operative, associative and solidarity relations, including, for example, cooperatives, mutual associations, NGOs engaged in income generating activities, women’s self-help groups, community forestry and other organizations, associations of informal sector workers, social enterprise and fair trade organizations and networks.

SSE in the world: some figures

1. In the UK some 62,000 social enterprises contribute £24 billion ($37.1billion) to the economy and employ 800,000 people.

2. In Europe; 2 million SSE organizations represent about 10% of all companies.3. In India, over 30 million people (mainly women) are organized in over 2.2 million self-help groups; and the

country’s largest food marketing corporation, the cooperative organization Amul, has 3.1 million producer members and annual revenue of $2.5 billion.

4. In Nepal, 5 million forest users are organized in the country’s largest civil society organization.5. The global fairtrade market has grown to €4.9 billion ($6.4 billion) and involves some 1.2 million workers and

farmers producing certified products.6. Mutual benefit societies provide health and social protection services to 170 million people worldwide.

ILO report 2011

entrepreneurs, and NGOs that are having to shift from a dependence on donations and grants to sustaining themselves via income-generating activities. This includes as well traditional forms of solidarity (such as the tontines) which can provide the basis for the emergence of modern types of SSE organizations.In addition, various forms of solidarity finance, such as complementary currencies and community-based saving schemes, are also part of SSE.

Main characteristics of social economy organizationsTypes Types CharacteristicsCooperatives voluntary and open membership

equal voting rights – resolutions carried by majority members contribute to the capital which is variableautonomy and independencesectors of agriculture, manufacturing, banking, retailing and services particularly important

Mutual societies voluntary and open membershipequal voting rights – resolutions carried by majority members' fees based on insurance calculations (where relevant) – no capital contributionautonomy and independencemedical, life and non-life insurance; guarantee schemes; home mortgages

Associations/voluntary organizations

voluntary and open membershipequal voting rights – resolutions carried by majority members' fees – no capital contributionautonomy and independenceservice providers, voluntary work, sports and advocacy/representativeimportant providers in health care, care for elderly and children and social services

Foundations run by appointed trusteesfinancial resources supplied through donations and giftsfinancing and undertaking of research, supporting international, national and local projects; providing grants to relieve the needs of individuals, funding voluntary work,health and elderly care

Social enterprises no universally accepted definitionsocial and societal purposes combine with the entrepreneurial spirit of the private sectorsurpluses reinvested to achieve a wider social or community objectiveregistered as private companies, cooperatives, associations, voluntary organizations, charities or mutual; some are unincorporated

Source: European Commission, Enterprise and Industry Directorate-General, Unit E3 Craft, Small Businesses, Cooperative and Mutual’s (http://www.caledonia.org.uk/eu-see.htm)

Contribution of SSE to Decent Work Promoting the social economy means contributing to each dimension of the Decent Work Agenda. Organizations in the social and solidarity economy create and sustain jobs and livelihoods, extend

8

social protection, strengthen and extend social dialogue to all workers, and promote the application and enforcement of standards for all. Rights: As per their nature, values and principles cooperatives promote human rights, including

the fundamental principles and rights at work, and can serve as a transmission belt to promote application of such rights among members and farmers2. Thirdly, cooperatives are also the subject of international labour standards. ILO’s Recommendation 193 (2002) on the Promotion of Cooperatives (and its predecessor R 127 of 1966) had a significant impact on cooperative legislation and policy in many countries around the world.

Employment: Cooperatives allow members to pool their resources; they increase the bargaining power of their members, generate economies of scale and scope, and enhance the productivity of member businesses. In doing so they can create jobs where other forms of enterprises cannot. While cooperatives are significant providers of salaried employment, their role may be even more important as facilitators of self-employment. The countless micro finance institutions, most of which are formed according to cooperative principles, offer appropriate financial solutions for the promoters of small businesses; agricultural marketing and supply cooperatives enable hundreds of millions of small farmers around the world to convert crops into cash. Finally, cooperatives can save jobs by transforming bankrupt private or public enterprises into worker-owned cooperatives: in Argentina, well over 15.000 jobs have been saved through the establishment of 130 worker-owned “empresas recuperadas”.

Protection: Cooperatives and mutuals have long proven their unique ability to extend social protection and social services to people and communities not covered by formal social security systems. Informal systems of mutual assistance and community solidarity are still very widespread, in particular in developing countries, and are providing the basis for more formal social protection schemes, such as mutual health benefit insurance systems which cover 305 million people worldwide. In French speaking Africa, some 336 schemes with 1.7 million beneficiaries have been established. Moreover, low-income workers in many countries have established burial societies as a way to guarantee a decent funeral, which is of greatest importance in many cultures. The most recent studies conducted on stokvels in South Africa reveal that there are over 11.4 million individual stokvels members, belonging to over 811 000 groups. Collectively, stokvels are said to save R44 billion (4 billion US-$) a year (NASASA, 2015). A relatively new phenomenon are the micro-insurance institutions based on cooperative principles; an example is DECSI which operates in the Tigray Federal State of Ethiopia where it provides insurance coverage to over 460,000 rural households.

Social Dialogue: Cooperatives and other social economy organizations represent the voice and interests of those who are not reached by traditional social partners, i.e. trade unions and employers’ organizations. The SSE can represent marginalised groups whose voices are not normally heard or heeded, such as women in the informal economy. Examples include small farmers represented through agricultural marketing and supply cooperatives, informal economy operators organized in street vendor associations, or the members of mutual health insurance

2 In West Africa cooperatives are engaged in the fight against child labour in cocoa plantation (Convention 182); for many years the ILO implemented the INDISCO programme which provided support to cooperatives and similar organizations formed by indigenous minorities (Convention 169)

9

schemes who are not covered by formal social security systems. All these organizations, and many more, are involved in civil dialogue while accomplishing their respective main function. They are active at the local level, where they lend a voice to their members in negotiating with local authorities, but also at the national level through their national structures. Cooperatives entities have a natural tendency to establish horizontal networks, vertical structures and regional and global organizations, which increases their weight and bargaining power when representing their members.

Contribution to formalise workers and economic units in the informal economy through:

People have a tendency to organize in order to obtain economic and social services that the State of the formal private sector does not or cannot provide. Organizations in the SSE defend rights, represent interests and provide voice which is essential in the informal economy. SSE offers mechanism through which poor or disempowered people in society gain greater control over resources and decision-making processes that affect their lives. From the village farmers who set up a co-operative to market their produce more effectively, to the group of savers who set up a mutual-fund to ensure they each receive a decent pension, by way of charities and organisations offering services of general interest, the social economy touches a huge range of individuals across the world.

For example, in many areas of economic activity, groups of individuals have got together to set up their own structure to promote their own or general public interests. The basis of such structures is membership and solidarity. Social economy enterprises are characterised by a strong personal involvement of its members in the management of the company and the absence of seeking profits in order to remunerate shareholders capital. Due to their specific way of doing business which associates economic performance, democratic operation and solidarity amongst members, they also contribute to the implementation of important community objectives, particularly in the fields of employment, social cohesion, regional and rural development, environmental protection, consumer protection, and social security policies.

Fight against poverty

One of the most immediate concerns of the SSE is how to respond to widespread poverty. To address this issue, a range of efforts have been initiated to promote food security and sustainable livelihoods, including the promotion of production for personal consumption, the formation of individual micro-enterprises and cooperative businesses, and the unionisation of informal work. The strategy is generally to supply resources (finance, training, materials, and access to land) to marginalised groups to enable them to engage in economic activity. The basic benefit of such programmes is that they help to ensure subsistence for a large number of people, ideally at relatively low costs. Dependingon the nature of the programme, they may also have other additional effects, such as providing financial independence for women or promoting fairer gender relationships in families.

10

Social protection and health services: the role of mutual health organizations

The majority of the population in the world works in the informal or rural economies without any kind of formal social health protection. Existing state-run social security systems offer limited benefits to a small portion of the population, namely civil servants and workers employed by formal enterprises. Mutual health Organisations as crucial future partners in government’s ambitious plans to extend health cover to large rural and informal economy populations who are currently not covered by private and state systems. The inclusion of such organisations in public policies can be interpreted as recognition of an expanding grass-roots network that is in tune with local needs and can act as ‘an interlocutor that represents members’ interests vis-à-vis healthcare providers’ and in policy dialogues.Since the late 1980s, many community-based or non-governmental organisation (NGO) initiatives have offered health insurance packages to people not covered by their national state-run social security systems or unable to buy insurance packages from private (i.e.for-profit) companies. Many of these initiatives led to the creation of social and solidarity economy (SSE) organisations, particularly mutual health organisations (MHOs).In several francophone African countries, social protection strategies being developed or under discussion classify the overall population according to their activity (formal/public or private economy and rural/urban informal economy, including agriculture) and/or individual characteristics (vulnerable groups, specifically women, people with disabilities, children under five, and people with no revenue). For each group there are corresponding specific (private, public or community-based) mechanisms (insurance, assistance) and financing sources (government revenue, contribution of the population, international aid). SSE organisations are expected to play a major role in these new social protection models; MHOs should, according to the model elaborated in these countries, cover about 80 per cent of the population, namely all those working in the informal economy or in the rural sector 3Like other insurance systems, mutual heath organizations are based on a mechanism of risk-sharing and resource-pooling. But as social and solidarity economy organizations, these organizations are non-profit and do not select their members based on their individual risk profiles. Access to healthcare through solidarity is thus the main objective of these organizations. The members of mutual health organizations are the owners, the decision-makers and the policyholders.4

Mutual health organizations present indeed many advantages in terms of proximity with the members and the population. Considering the weakness of the public administration, this proximity could be used not only to collect the insurance premiums but also as communication channel between the administration and the insured people. Without such intermediary organisations, the implementation of a social protection mechanism for population working in the informal economy or in the rural sector would be almost impossible. In Latin America, this

3 Social and Solidarity Economy as Main Actor of the Extension of Social Protection in Health in Africa ?Bénédicte Fonteneau HIVA–KU Leuven - Draft4 Social and Solidarity Economy as Main Actor of the Extension of Social Protection in Health in Africa ?Bénédicte Fonteneau HIVA–KU Leuven - Draft

11

Mutual health organisations would become one of the main actors of the extension of social protection in health in West-Africa.

choice has been explicitly made by several governments to promote a plural economy by incorporating social and solidarity economy to the public policy design.

Rural informality:5

Most informal economy workers and entrepreneurs live in rural areas, often in extreme poverty and insecurity. The problems of informality are exacerbated in rural areas due to weak socio-economic infrastructure, remoteness from national institutions and basic services, limited income opportunities and poor legal protection, all of which make rural economies more vulnerable to shocks and risks.

Facilitating transition to formality in rural areas rests on a set of multidimensional policies adapted to each country, to be combined in an integrated framework: promoting profitable agriculture, diversifying and supporting rural enterprises, developing skills relevant to rural transformation, enhancing rural social coverage, strengthening legal frameworks and workers’protection, encouraging rural actors’ organization and social dialogue, promoting local rural development strategies. Through cooperatives, small producers can pool their assets and competencies to overcome market barriers and other constraints such as lack of access to natural resources and lack of voice in decision-making. Agriculture cooperatives6, workers cooperatives as well as credit cooperatives operate in rural areas and are recognized as alternative sources of employment and income for rural inhabitants.

Smallholders, in particular women farmers who are less likely than their male counterparts to have access to credit or collateral, may benefit from the establishment of a production cooperative that integrates —partially or totally— their farming activities. Cooperatives may increase productivity through the attainment of economies of scale (as fixed production costs spread over higher output volume), the collective acquisition of technology (leading to increases in labour productivity) and the use of common productive assets. The integration of several small informal agents into one collective gives them superior bargaining power relative to other stakeholders of the supply chains such as wholesale retailers, handlers, packers, supermarkets , producers of seeds and fertilizers … ). As a result they may be able to sell their goods at higher prices and reduce their costs by contracting goods and services at lower prices. Cooperative such as agricultural cooperatives can also be a means to stimulate stronger social bonds, solidarity, and partnership and trust among the members, enhance their capacity for collective action, and their capacity to defend their political and economic interests.

Women’s Well-Being and Empowerment7

The share of women in informal employment is higher than men in most countries.

5 Rural Policy Briefs: Addressing Informality for Rural Development”, ILO, 20126 Smallholders’ Agricultural Cooperatives in Colombia7 Social and Solidarity Economy and the Challenge of Sustainable Development, A Position Paper by the United Nations Inter-Agency Task Force on Social and Solidarity Economy (TFSSE) - June 2014

12

Agricultural cooperatives facilitate smallholder producers’ access to:

1. Natural resources such as land and water

2. Information, communication and knowledge

3. Markets, food and productive assets such as seeds and tools

4. policy- and decision-making

Various forms of SSE initiatives lend themselves to tacking issues relating to women’s well-being and empowerment. Women often make up the core of the membership of agricultural self-help and credit and saving groups, as well as of community forestry initiatives. Employment in SSE organizations can be particularly important for poor women facing labour market discrimination and work-family conflict. In addition to providing employment, SSE organizations and enterprises often facilitate flexibility in time management, providing opportunities for paid work that can be managed alongside responsibilities associated with unpaid care work.6 Moreover, much of the rise of social enterprise has centred on provision of care and other services that impact on women’s wellbeing. By shifting the responsibility for care away from the individual provider and the household, SSE childcare centres, for example, can facilitate the participation of women in the labour force and other economic activities. Beyond the aspects of social well-being and women’s economic empowerment, the organization of women in SSE organizations and networks is important for women’s emancipation and political empowerment. Through such organizations and participatory roles, women in particular from the informal economy can gain voice, as well as networking and advocacy skills, allowing them both to renegotiate traditional gender relations and to access and make demands on more powerful institutions.Key challenges remain for cooperatives and other organizations in realizing gender equality. Women are often disadvantaged in terms of assets, education and training and may not even speak the dominant language. Such constraints can impede access to the resources and markets needed to establish, expand or sustain an organization. Within agricultural cooperatives women tend to be more numerous in sectors relating to commodities such as fruits, spices, cereals and dairy products, where requirements relating to ownership of land and capital investment are often less onerous. Thesetend to be sectors at the bottom end of the value chain, often associated with perishable products, earnings from which are low. Furthermore, women in SSE organizations may have weaker ties to support organizations such as cooperative unions, federations and NGOs.

Three Cases studies (see annexes)

Case study 1: SWACH - Workers cooperative in India Informal workers’ cooperatives come in many forms: registered cooperatives, associations, self-help groups, societies and so on. They often join together into networks, federations or movements to struggle for their rights as workers and producers, and to increase their bargaining power with buyers, suppliers, local authorities and national governments.

Case study 2: Raising the standard of living of rural women through cooperative development, in Morroco,

Case study 3: Voice and representation through SSE types of organisations – case of SEWA The largest trade union of informal workers is the Self Employed Women's Association (SEWA) of India. SEWA, established in 1972, is a trade union of low-income working women who earn their livelihoods by running small businesses, doing subcontracting work or selling their labour. SEWA is the first trade union of workers in the informal economy not only in India but around the world. It is

13

also the largest trade union in India. SEWA's objectives are to increase the self-reliance as well as the economic and social security of its members. SEWA groups its membership into four broad occupational categories:

1. hawkers and vendors, who sell a range of products including vegetables, fruit and used clothing from baskets, push carts or small shops;

2. home-based producers, who stitch garments, make patchwork quilts, roll hand-made cigarettes (bidis) or incense sticks, prepare snack foods, recycle scrap metal, process agricultural products, produce pottery or make craft items;

3. manual labourers and service providers, who sell their labour (as cart-pullers, head-loaders or construction workers), or who sell services (such as waste-paper picking, laundry services or domestic services); and

4. Rural producers, including small farmers, milk producers, animal rearers, nursery raisers/tenders, salt farmers and gum collectors.

Other trade unions of informal workers include the Self Employed Women's Union (SEWU) in South Africa and SIBTTA, the union of embroidery, tapestry, textile and handicraft workers on the island of Madeira, Portugal. SEWU was launched in Durban/eThekwini, South Africa in July 1994 and is a membership-based organisation composed of women who work informally in both urban and rural areas of the country. While the national office is based in Durban/eThekwini, SEWU has offices in the Western and Eastern Cape regions of South Africa, as well as the Free State and Mpumalanga regions. It empowers its members through workshops aimed at building self-reliance through savings, providing leadership training and teaching negotiating and many other skills that aid them in becoming "key agents of change in South African society". Additionally, SEWU has worked to help members obtain soft loans as well as assisted them with opening savings accounts at post offices and commercial banks.

Way forward: Promotion of the SSE within the framework of the post -15 targets.

The potential role of SSE in addressing several of today’s major development challenges including the ones of informal economy suggests that policy-makers in government and intergovernmentalOrganizations should be paying far more attention to forms of economic activity that are inherently inclusive and holistic. Such an approach resonates with the broader post-2015 challenges of (i) better integration of economic, social and environmental objectives, (ii) poverty reduction, decent work, gender equality and equitable development, (iii) addressing the structural causes of global crises linked to finance, food and energy, and (iv) building up resilience for coping with crises andexternal shocks.

Sustainability of the SSE depends on its capacity to root itself in community, to mobilize various stakeholders and to build strong alliances with social partners and public authorities. SSEOs have demonstrated a strong capacity to create constructive and lasting partnerships and networks. SSE to bottom –up collective initiatives has committed to collaboration rather than competition through which community needs are responded apart from financial gains.

The organizations in the SSE need better access to capital, training, markets, and tools of research and development to attain the full-fledged benefits, and multi-strategic initiatives are required.

14

The Johannesburg action plan (see annexes): The Social Economy Conference: Johannesburg, 19-21 October 2010The Johannesburg action plan defined by participants to the ILO conference8 on SSE in 2009 in Johannesburg offers timely avenues to achieve that goal (Africa)

Objective 1: An increase in the recognition of and partnerships with social economy enterprises and organizationsObjective 2: Increase knowledge related to the promotion of social economy enterprises and organizations and the reinforcement of African social economy networks;Objective 3: Establish an enabling policy, legal and institutional environment for social economy enterprises and organizations; as well as strengthening and promoting social economy structures at the national level;Objective 4: The social economy enterprises and organizations become more effective, efficient and contribute to the populations’ needs in terms of income creation, social protection, employment promotion, rights at work, food security, environmental protection, fight against HIV-AIDS, elimination of child labour and the impact mitigation of the crisis.

8 More than 200 participants: 1. Social economy promoters, leaders and practitioners from 39 African countries, plus constituents from

all five African sub-regions;2. Social economy promoters from overseas (12 countries from the Americas, Asia and Europe);3. Development partners, projects, ILO staff;

Objectives: To share knowledge and experience about different social economy models from around Africa; To discuss how to mobilize the social economy in response to the crises in Africa; To develop the contours of a programme to promote the social economy in Africa; To assess the desirability and feasibility of putting the social economy on the international agenda

15

Annex

Annex 1: Case Study: India SEWA

SEWA – A Multi-Faceted Approach to Formality

Context The Self Employed Women’s Association (SEWA) in India is one of the best known examples of a successful initiative to organize and empower the diversity of poor women workers in the informal economy. Adopting a multifaceted approach, as a union, cooperative and women’s movement, SEWA provides a range of services, including training, assistance in establishing cooperatives, and financial, insurance and social security services. SEWA has been active in policy research and advocacy, collaborating with representative powerful actors at national and international platforms. The SEWA model has inspired other initiatives, in Asia, South Africa and Turkey. It has taken a lead in or collaborated on the formation of several international networks to improve the lives and promote the rights of informal economy workers. The most notable are Women in Informal Employment: Globalizing and Organizing (WIEGO), HomeNet, StreetNetSEWA is an association of poor, self-employed women workers in the informal economy. It was registered in 1972 and grew out of the Textile Labour Association becoming independent in 1981. The members of SEWA include self-employed women, producers and services providers; hawkers and vendors (11 percent); home-based workers such as weavers and potters (15 percent); and manual labourers and service providers (>70 percent) according to a survey conducted in Gujarat in 2006.

Informality PatternsOf the female labour force in India, more than 94% are in the unorganized, informal economy. These poor, self-employed women workers earn a living through their own labour or small businesses. They do not obtain regular salaried employment with welfare benefits like organized workers in the formal economy. Their work is not counted, hence remains invisible. In fact, women workers themselves remain uncounted, undercounted and invisible.

Self Employed Women’s Association (SEWA) initially represented retrenched garment women workers and started as a trade union to support these women in sustaining their livelihoods as self-employed workers. Hence, SEWA emphasizes self-reliance so that the poor can build their own organizations. It provides training to strengthen women’s leadership, confidence and bargaining power, both within and outside the home. SEWA’s services include mobilization and negotiations along sectoral lines, formation of production and service cooperatives, financial services, insurance and social security associations.

16

Objective of the Initiative

Poor women’s growth, development and employment emerge when they enjoy security of work, income, food, health, and shelter. Hence, full employment and self-reliance are the twin goals which guide SEWA’s response to the member’s priorities and needs.9

Full employment Employment: have our members obtained more employment? Income: have their incomes increased? Ownership: do they have more assets in their own name? Nutrition: are they (and their families) better nourished? Health Care: do they (and their families) have access to better health care? Housing: do they have improved or more secure housing? Child Care: do they have access to child care, if needed?

Self-reliance Organized strength: has the organizational strength of the members increased? Leadership: have more and stronger leaders emerged from the membership? Self-reliance: have they become more self-reliant both individually and collectively? Education: has the education of the members (and their children) improved?

Actions implemented Membership-based organizations: SEWA is building strong organizations that straddle the trade union, cooperative and women’s movements and nurtures a diversity of organizations of informal workers – trade unions, or cooperatives of rural producer groups, social security organizations, savings and credit groups. SEWA supports these Member- Based Organisations through skills training, entrepreneurship development, linkages to and development of markets, as well as access to financial and insurance services and social protection.

Leadership development and capacity buildingAs a core dimension of its organizing efforts, SEWA aims to build Leadership of two kinds: leadership skills within each of its members – their personal sense of self-confidence, competence, and responsibility; as well as local leaders that emerge from within each organized group. SEWAbuilds leadership through on-going organization strategies (convening regular local meetings and periodic campaigns); through special leadership trainings; and through exposure opportunities.

9 http://www.sewa.org/Annual_Report2004_Part_A.asp , Chen, Martha et al, 2005.

17

Policy influencing and advocacy: SEWA with its network partners lobbies for labour and social policy reforms and instruments at the sectoral, national and international levels, especially labour rights and women’s rights as well as quality of work. It engages in evidence-based advocacy to overcome legislative and regulatory barriers to access social protection and other welfare related schemes and programmes for informal workers and enterprises.

Alliance building and networking: SEWA fosters national and international sector specific networks of unorganized sector organizations, unions of construction workers, domestic workers, agricultural workers and forest workers to strengthen its policy influencing and advocacy. It also fosters linkages with development research institutes to assist in its policy influencing agenda (refer Impact).

Impact

Membership: SEWA has over 1.35 million self-employed women members in 9 states of India (as of 2011). It is affiliated to the trade union movement at sectoral and enterprise as well as local, national and international levels. SEWA is a member of a member of the Indian Central Trade Unions and the International Confederation of Free Trade Unions (ICFTU).

Leadership development and capacity building: SEWA trained local leaders are the key organizers of the primary groups comprising 20% of the membership-base. It is their organizing efforts and leadership capabilities, which has enable SEWA’s vast membership base in terms of sectors as well as geographic spread. Specially-trained SEWA members serve as paraprofessionals providing a range of services to the general SEWA members as health care providers, child care teachers, hand-pump mechanics, SEWA Bank extension agents, grassroots researchers, designers and quality controllers for SEWA Marketing.

SEWA negotiated with the Gujarat state government to accept a certificate issued by the union as a valid proof of 90 days work to Gujarat State Building and other Construction Workers Welfare Board which it had been instrumental in establishing as a member of the state level task force. SEWA is recognized as a legitimate representative voice of informal construction workers in the state of Gujarat and that there are established channels for bargaining and consultation (SEWA, 2011)

“When women organize on the basis of work, a woman's self-esteem grows - in the self-recognition that she is a 'worker', a 'producer', an active contributor to the national income, and not only somebody's wife, mother or daughter. While participating in the organisation and management of her cooperative or union, her self-confidence and competence grow, a sense of responsibility grows, leadership within her grows.”

Ela Bhatt. Founder, SEWA. Keynote Address at the First Meeting of the South Asian Association for

18

Policy and advocacy: Sustained representation, pressure and dialogue by trade unions such as SEWA and its network partners, NCL and NASVI at the national level have led to the passage of the Unorganized Workers Social Security Act, 2008, as well as the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Bill, 2012.

Alliance building and networking: SEWA co-founded National Centre for Labour (NCL) with other unions representing unorganized sector workers. The visibility and recognition these workers obtained enabled them to organize for their rights into a number of sectoral trade groups/unions, manual laborers, home-based workers, hawkers and vendors, producers and service providers.

SEWA supported the formation of National Alliance of Street Vendors in India (NASVI), a federation of more than 715 street vendor organizations and trade unions across 23 states with a membership of more than 500,000 as of 2012. The alliance obtained greater recognition for the contribution of street vendors to the urban economy. (For impact at the regional and international levels, refer Role of ILO Constituents.)

Role of the ILO Constituents

Within India, SEWA as part of a larger national network of unorganized sector organizations such as the National Centre for Labour (NCL) has successfully lobbied for the passage of the Unorganised Sector Social Security Act, 2008. It has created the National Alliance of Street Vendors of India (NASVI) to make a positive impact on inclusive development frameworks in changing Indian cities and bring about changes in the regulatory environment in order to improve their livelihoods and work security. SEWA Bharat, a federation of SEWA member organizations, strengthens their capacities and serves their interests.

SEWA has co-founded HomeNet India, South Asia and South East Asia, and StreetNet to give greater visibility and recognition to the rights of home-based workers and street vendors in labour and social policy.

Internationally, SEWA has inspired the women’s trade union movement leading to the formation of Self Employed Women’s Union (SEWU), South Africa and supported the setting up of SEWA in Turkey. With its alliance and network partners SEWA has successfully lobbied for international instruments to support their progress to decent work and formality, for example, the adoption of the ILO Homework Convention, 1996 (No.177) and the Domestic Workers Convention, 2011 (No.189).

19

SEWA is the co-founder of Women in Informal Employment: Globalising and Organising (WIEGO), a global action-research-policy network to improve the status of the working poor in the informal economy, especially women. WIEGO in turn has supported the Global Alliance of Waste Pickers. It is on the executive committee of the International Federation of Workers’ Education Associations (IFWEA).

Lessons LearntMBOs and leadership: With a strong vision and leadership, a women’s trade union can grow organically to address women’s need for economic organizing through the formation of cooperatives. To grow and to be relevant, the MBO must represent and respond to the diverse needs of women workers for example access to credit and markets, child care and health care. They need to build on both their critical mass and political influence to fight against odds in a male-dominated trade union culture at local and national levels, change policies and challenge the politics of exclusion.Alliance building for policy and advocacy: Alliance building provides a critical mass that increases the visibility, recognition and representation of the diversity of women workers in the informal economy. Grassroots learning and theoretical research, alliance building and networking guided by a rights-based approach need to feed into policy influencing and advocacy work at local, national, regional and international levels.

References Chen, Martha et al, 2003, Towards economic freedom: The impact of SEWA,http://www.sewaresearch.org/impact.pdf accessed on 21 November 2013.

GTZ, 2006, Formalisation of Informal Enterprises: Economic Growth and Poverty. http://www.giga-hamburg.de/dl/download.php?d=/content/staff/kappel/publications/gtz1.pdf

http://nasvinet.org/newsite/invitation-national-convention-growing-cities-marginalized-vendors-need-of-comprehensive-central-law/ accessed on 21 November 2013.

http://www.nationalcentreforlabour.org/about_us.html accessed on 21 November 2013.

http://www.sewa.org/About_Us_Structure.asp

Rothboeck, Sandra, 2013, Promoting transition towards formalisation: selected good practices in five sectors (draft).

20

Annexe 2: Other shorts examples outdated but still relevant.Social entrepreneur links rural beekeepers with export markets, Kenya

Another way in which informal producers can reach export markets is through social entrepreneurship. A good example of this is the social entrepreneur who set up Honey Care Africa about four years ago in Kenya. Since then the company has enabled almost 12,000 rural beekeepers to improve their incomes by linking them with markets in Europe with the help of funds from almost 20 donors. It does this through a tripartite model that involves a private sector company (Honey Care), a development organisation and the rural communities. Honey Care guarantees to purchase every kilogram of honey a bee-keeper can produce at a fair and fixed price and to pay in cash on the day of collection. It then processes and packs this honey and sell it at a profit to export markets. It also provides the necessary training for the rural communities and, where economically viable, it provides extension support. While its main product at the moment is honey, for which it has International Organic and Fair Trade Certification, Honey Care is also exploring higher value products such as royal jelly, pollen and beeswax as well as doing research on developing better bee-keeping technology. The development organisation has experience in working with rural communities and has extensive outreach into the rural areas, thus providing a conduit to bee-keepers and ensuring that an exploitative relationship does not develop between the private sector organisation and the bee-keepers. In some instances, it also provides loans to beekeepers to acquire improved beehives. The loans are recoverable at the time that the honey is sold to Honey Care. (Source: Jiwa, 2002)

Women's cashew business creates market linkages for informal women producers, SenegalA Dakar-based company owned by two women from Benin holds the single largest market for processed cashew nuts. The first company to formally commercialise cashew kernels in Senegal, it has been buying all its kernels from women's associations based in the Kaolack and Farick regions for over ten years. Through close linkages over time with 12 of these groups, which involve an estimated 300 women in six villages, they have developed a product that sells well in key markets north of The Gambia. They distribute an elegantly packaged brand of artisanally-processed nuts in a chain of petrol stations in Dakar and other major urban centres. They enjoy strong name recognition in Dakar, having been recently brand marketed. (Source: Cambon, 2003)

NGO helps to link local producers with supermarkets, internationalNGOs are also active in linking local producers with global markets. For example, Technoserve, an international NGO, has been experimenting with ways to enable local producers to benefit

21

from the rapid spread of supermarkets in the global South. Between 1990 and 2000, throughout Latin America and South Africa, supermarkets grew from 15 to 55 per cent of the total food retail sector. Technoserve believes that, for rural entrepreneurs in developing countries to sell their products to urban supermarkets, they need to (a) understand how supermarkets procure products and (b) use post harvest methods that meet the needs of the companies they want to sell to – or that give them a competitive advantage over other suppliers. This involves going far beyond traditional washing and crating of products to include packaging, labelling – even bar-coding and refrigerated delivery. It also means that most entrepreneurs will need investment capital to make this giant leap forward. In Ghana, in 2002, Technoserve trained 322 small-scale pineapple and citrus fruit farmers in organic production, helped them to become organically certified and then established a commercial link to Athena Foods, a local juice processing plant. Athena, in turn, processed and bottled $400,000 of organic juice for a new supermarket client in the Netherlands. All over Africa, it is hoped that the development of supermarkets may provide a stepping stone to supermarkets in the US and Europe for other producers and entrepreneurs who succeed at becoming part of the farm-to consumer chain in their own countries. (Source: Technoserve, 2002)

Trade union obtains marketing license for informal women producers, IndiaTrade unions have helped their members to link with markets in a variety of ways. For example, during the agricultural off-season about 80-90 per cent of women in Gujarat, India, engage in gum collection from the forest areas where they live. Although there is a thriving open market for gum that includes textile and pharmaceutical companies, the collectors have historically been restricted by law to selling their products to the National Forest Department. The Self Employed Women's Association (SEWA) negotiated with the Gujarat State Forestry Development Corporation to obtain a license for their members to collect gum and to sell it to private traders who pay higher prices.SEWA Rural has also worked extensively to facilitate the transfer of appropriate technology and skills so that gum collectors can increase their yields and secure a better price for their products. In addition, SEWA has partnered with the Centre for Science for Villages to provide training for women on improved collection techniques and the production of various gum-derived products, such as chocolates, chewing gum and a variety of Indian sweets. (Source: Chen, Jhabvala and Nanavaty, 2003)

Women fishworkers union uses ICTs as marketing tool, SenegalIn Africa, many women entrepreneurs who are traders, ranging from micro-trading in foodstuffs to large-scale import-export trade, are in need of market information and are beginning to use ICTs to access this. In Senegal, the Grand Coast Fishing Operators Union, an organisation of women who market fish and fish producers, uses ICTs to exchange information on supply and

22

demand between their different locations along the Atlantic coast. The women feel that this tool has improved their competitiveness in the local market. They are planning a website to enable the nearly 7,500 members to promote their produce, monitor export markets and negotiate prices with overseas buyers before they arrive in Senegal. (Source: Hafkin and Taggart, 2001)

Annexe 3: Four profiles

Val, Domestic worker in BrazilBorn in the North of the country in a family of poor rural workers with no schooling, Val started as working as a domestic worker in Bahia at the age of 17. At work, Val has been discriminated and exploited. Her working hours ranged from 12-16 hours per day. During the first years, Val was often not paid. "I only started to receive a real salary when I was 21," she told. "Until that age, my payment was often in used clothes and food. She is now paid monthly, at a rate, below the national minimum wage. Holidays are not recognized, and she does not receive overtime pay. She works even when she is sick because she doesn’t want to lose the job, and needs that income to support her mother's medical treatment. She has never had a contract. Her tasks are explained to her verbally and she seems to be fine this way. She

doesn't know that domestic workers in her country are protected within the regulatory framework of labour law and are entitled to formal registration of contracts, provision for minimum wages, voluntary pensions and unemployment benefits (C189). Val does not enjoy any of these basic workers’ rights. But Val’s life could change soon because she heard on the radio about organisations of domestic workers fighting for their rights.

Samuel, the owner of a restaurant Rafael is 35 years old and is the owner of a little restaurant located in Saly, a very popular tourist destination. He employs a family member, but during peak times, he hires other seasonal workers to fulfil the needs. Working hours are often long and working conditions are poor: in particular, the kitchen of the restaurant is badly lit, not very well equipped and with not enough ventilation. Sometimes the value of food is low due to scarce row materials and his clients often reject dishes

because of poor quality. Rafael has considered the formal recruitment of workers registering them, but after spending a day going to different local agencies, he was daunted by the amount of documents to fill out, the costs of registering, and the number of different institutions that he needs to get permits and certifications from, dealing in particular with food. He is also afraid that local authorities can shut down his eating place because of poor working conditions. He

23

wants to totally legalize his activity and improve the situation of his workers and at the same time his business, but he is worried because of the impact of costs implied from taxes on his business and social security. Rafael is member of a small business association but does not have time to attend meeting to better understand how he can get support from them.

Tam - a woman entrepreneur

Tam runs a food vending stall. She buys the raw materials early in the morning and cooks them to sell at a road side stall in her local community. She did not have much schooling but since she knew how to cook well she decided to start this income activity, despite intense competition from other women doing similar work. She recently had her fourth child after a difficult pregnancy. As a result she had to stop her income activities while she recovered. Her husband lives and works in a nearby city and can only send money

intermittently through trusted acquaintances. When she stopped working it resulted in a serious income shock for her family and she relied heavily on the support of neighbours and friends. She has now restarted her business, but since she lacked collateral and was intimidated by commercial banks, she uses the services of a money lender with exorbitant interest rates. Although she is reluctant to do so, she is considering taking her 10 year old daughter out of school to look after the younger children, so that Tam can devote more time to earning an income. Tam has never had business training, and does not even think of herself as an entrepreneur. She has never considered registering her enterprise or joining a cooperative.

Stephen, a construction worker Stephen is a migrant worker, working as a construction worker in his neighbour country. In his country he was a highly-skilled craft worker. But in this new country, for workers like him job is scarce and competition is high among daily-work seekers in the various construction sites. He is lucky as his skills allow him to find regularly some daily jobs but it is a battle as he has to look for jobs every day. The construction sector is booming in this new country and he hopes to get a contract leading to decent working conditions, matching his skills levels and allowing him to earn enough to bring his family. But this is

just a hope and he is afraid of approaching the trade unions as this can be seen by his potential employer as a threat.

24

References Social and solidarity economy beyond the fringe - edited by Peter Utting

Cooperatives in Africa, Past and Present, Success and challenges, Jürgen Schwettmann Geneva May 2015

European Commission, Enterprise and Industry Directorate-General, Unit E3 Craft, Small Businesses, Cooperative and Mutual’s (http://www.caledonia.org.uk/eu-see.htm)

Social and Solidarity Economy as Main Actor of the Extension of Social Protection in Health in Africa ?Bénédicte Fonteneau HIVA–KU Leuven – Draft

Rural Policy Briefs: Addressing Informality for Rural Development”, ILO, 2012

Smallholders’ Agricultural Cooperatives in Colombia

Social and Solidarity Economy and the Challenge of Sustainable Development, A Position Paper by the United Nations Inter-Agency Task Force on Social and Solidarity Economy (TFSSE) - June 2014

http://www.sewa.org/Annual_Report2004_Part_A.asp , Chen, Martha et al, 2005.

25