The legal framework for Solidarity Economic Enterprises in Brazil: backgrounds and perspectives

Conferences Selected Papers Series, ECSP-5EMES-10

The social and solidarity economy currently goes beyond countries and continents. In Brazil, as well as in several Latin-American countries, these concepts usually refer to economic organisations aiming at financial gain for their members, but also benefits in terms of quality of life and citizen participation. Such goals are achieved mainly through a great effort which mobilizes the capacity of the associated workers. Because of their social and community embeddedness, these initiatives also fulfill a number of functions in the fields of health, education, environmental protection, etc., encompassing a multitude of social segments, agents and institutions.

Such initiatives have been emerging, step by step, since the 1980s, giving new amplitude to a history whose roots go further back in time but which is also discontinuous. The inconsistency of available statistics hinders even the analysis of those sectors that have a stable regulatory framework and a reasonable degree of institutionalization, such as cooperatives. Moreover, if there were systematic and comprehensive statistics on the most common forms of solidarity organisations, under the prevailing conditions of conceptualization, it would be inappropriate in most cases. The reason is that such organisations usually adopt one of the available institutional formats – basically association or cooperative – precisely because they lack alternatives more suited to their goals and their sui generis dynamics. As such, these choices are often an uncomfortable stopgap solution they find to avoid informality, but not a real membership.

Therefore, the solidarity economy has not identified itself with the associative sector or with the cooperatives. Its new enterprises are searching for their institutional identity and a compatible legal framework. As participants in a new wave of economic solidarity, they go against traditional institutionalised formats; this is particularly true of their main representative, cooperatives: there is no associative or cooperative movement in the solidarity economy, but instead a unanimous demand so that the Brazilian regulatory framework comprises new juridical forms, which should be consistent with concrete experiences and concepts generated from this field of practices.

For at least a decade the establishment of a legal framework suitable for solidarity economy has been one of the central points on the agenda of solidarity enterprises, supporting organizations and public authorities. Progress was made in some sectors, such as work cooperatives, but obstacles and difficulties persist, postponing the adoption of a specific national law. In addition to disputes between social actors involved in the solidarity economy, it faces major opposition from the traditional cooperative sector, whose 2 institutionalization occurred during the military regime, guaranteeing the uniqueness of representation and broad economic benefits for its own organisations.

To approach these subjects, the first section of this paper outlines the history of solidarity economy in Brazil, with a view to tracing the dividing line between older and more recent experiences. Particular prominence will be given to the unique characteristics of solidarity economy and the reason for its incompatibility with the legal alternatives currently available to its organisations (section 1). After highlighting the progressive political convergence amongst the main social actors of solidarity economy in legal matters, the text examines the main innovations covered by the current proposals for a national legal framework, underlining the main obstacles to its approval and establishment. As an example of these difficulties, the text ends with an analysis of the new cooperative work laws, a crucial sector as much for the solidarity economy as for traditional cooperativism in Brazil.(section 2).

ECSP-5EMES-10

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