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Interview conducted by Mohit Dave, Research Officer, (Asia-Pacific),  ICA-EU Partnership on Co-operatives in Development in Athens, Greece, on September 28.

 

 

Q1: Hello, Morshed! Thank you for speaking to us. Can you briefly introduce yourself for the readers?

 

A1: I am Morshed Mannan, currently working in the Company Law Department of Leiden University, the Netherlands, where I conduct research on (workers') co-operatives, corporate governance, freedom of establishment, corporate social responsibility and international insolvency law. I was appointed as a PhD candidate by the Meijers Research Institute and the Company Law Department in 2017. The topic of my research is: "Buyout: Achieving Business Resilience by Democratizing Ownership". I first moved to Leiden to pursue an Advanced Masters in International Civil and Commercial Law, during which time I wrote a thesis assessing whether Bangladesh, India and Pakistan should adopt the UNCITRAL Model Law on Cross-Border Insolvency. After my graduation, my thesis was published in the International Insolvency Review. While working at Leiden University as a Research and Teaching Staff Member, I have also written about co-operative governance and contributed to a textbook on corporate social responsibility, targeted at prospective business lawyers.

 

Prior to moving to Leiden, I was an Associate at Juris Counsel, a Dhaka-based full-service law firm, & lectured on commercial law, administrative law and jurisprudence at the London College of Legal Studies (South), an affiliate center of the University of London International Program in Dhaka. I have written on workers’ compensation in Bangladesh, the influence of literature on English trusts law and international commercial arbitration, for both peer-reviewed publications & the popular press. Previously, I completed an LLB (Hons) at the University of Warwick in 2011 and was called to the Bar of England & Wales by the Hon’ble Society of Lincoln’s Inn.

 

Q2: Worker buyouts have had their share of criticism. Do you think they have been rightly placed?

 

A2: Well, the scientific literature on business transfers reveals that buyouts and co-operatives have the potential to recognise the contribution of a broader group of stakeholders and preserve the social value of businesses! Academic and institutional studies indicate that buyouts of such businesses and organisation as (worker) co-operatives may have the potential to prevent market exit, while preserving employment, technical know-how and community ties. Nonetheless, they have not been frequently chosen as a transfer strategy. This is particularly true of the current generation of businesses that deploy new forms of work, often through the use of digital technologies. The main apparent obstacle has been the lack of a regulatory framework that encourages buyouts and business transfers to organisations such as co-operatives!

 

My doctoral research builds on my earlier work investigating worker co-operatives, by analysing how workers and users have sought to privately organise business transfers to democratic business structures in lieu of facilitative legislative frameworks. This has chiefly been through the use of corporate law structures such as trusts and foundations and, increasingly, the deployment of technologies such as blockchain. I will subsequently consider the legislative options that will be best suited to promote transfers to broad-based ownership structures. I then hope to be able to better answer that question!  (smiles)

 

Q3: Fantastic! So, you do believe that the workers' enterprise model has a lot of promise for the future of work?

 

A3: Absolutely! Looking beyond Mondragon, there are noteworthy examples of successful employee-owned and controlled businesses across the globe and across a wide variety of industries. For instance, in India, the Kerala Dinesh Beedi worker co-operative comes to my mind as a long standing example. In Bangladesh, following the Rana Plaza disaster, a garment worker co-operative, Oporajeo, was formed as a means of rehabilitation and as a more sustainable form of work. There are also the worker-owned recuperated enterprises (empresas recuperadas) that arose in Buenos Aires following Argentina’s sovereign debt default in 2001 and continue to do business and the worker co-operatives that have emerged in New York City and Cincinnati in recent times. These enterprises have shown how worker-controlled and managed firms can flourish in a capitalist economy, paying wages well above industry level, catering to the heterogeneous interests of worker-members, ensuring product quality as well as high worker satisfaction.

 

I believe that recent developments in the uses and application of digital technology could bolster the co-operative economy; making coops accessible to a new generation of cooperators. This can range from digital tools that provide information and help register coops, to the creation of entirely new online business platforms that are co-operatively organised - platform co-operatives! In fact, in the recent past, coops have had an intuitive appeal for those seeking to resist, and provide alternatives to, new manifestations of capitalism such as platform capitalism. It is seen as a way of gaining control over precarious working conditions and sharing the financial rewards of enterprises more broadly and equitably. In industries where the risk of automation is high, for instance through the introduction of self-driving cars, broad-based ownership of businesses is seen as a guarantee against the future loss of wages. From my own research of the 'platform co-operative’ landscape in Europe, it is evident that dozens of such initiatives are mushrooming across the Continent.

 

Q4: It’s heartening to hear that! Are there lessons on platform cooperativism for the cooperators in Asia-Pacific, especially at a time when they are sowing the seeds in Hong Kong, as we speak!?

 

A4: As I mentioned during my presentation at the Forum (in Athens), platform cooperativism refers to a heterogeneous group of entities, that differ considerably in their preferred legal entity form, economic activities, membership base and geographical market. There is also a sharp distinction between coops that use platforms as a tool to further an existing business model and those that have an online platform at the heart of their enterprise but seek to co-operatively organise its governance structure. What these entities have in common is only a general adherence to the Co-operative Principles.

 

The variety of legal entity choices may stem from the fact that there are entry barriers to forming co-operatives across countries and other corporate forms may be easier to set up, in both regulatory and procedural terms, especially in the Asia-Pacific. A central issue is that platform cooperativism is only now beginning to receive attention in policy circles, such as in Jeremy Corbyn's Digital Democracy Manifesto and in certain EU policy documents. In view of this, one lesson for cooperators in the Asia Pacific may be familiarizing legislators with platform co-operatives, work on which has already started in Australia, South Korea and elsewhere. Another is to guard against broad-based ownership or cooperativism being used as a gimmick. The abrupt cancellation of the Restricted Stock Units Plan of the Juno drivers who were promised and granted equity in the Juno ride-hailing platform has fuelled scepticism about broad-based ownership of platforms and underscores the need for caution. However, bearing this in mind, the upsurge in freelancing arrangements across the Asia-Pacific (especially in Bangladesh) as well as the use of (mobile) internet, provides many novel opportunities for platform co-operatives to grow in the region. Lessons from these early forays into platform cooperativism can be beneficial to co-operators in other parts of the world, as well as policy makers and legislators monitoring this space.

 

Q5: So, what is the main challenge you face in this ecosystem?

 

A5: The absence of legislative frameworks specific to platform co-operatives presents certain difficulties. In some cases, long-standing co-operative legislation may not fit the needs of cooperators seeking to structure their enterprise in a global scale. Professor Juliet Schor and her fellow researchers have also noted the difficulties in forming a common culture due to the lack of a shared physical environment. At the same time, there is a definite risk of putative platform co-operatives conflicting with other areas of law -- such as competition law. While there is a broad enthusiasm for the platform co-operative movement, practical guidance on how to form such co-operatives, either de novo or through a business transfer, is still scarce. This presents a significant obstacle for promising ideas getting off the ground. This is coupled with the fact that financing the start-up and growth of co-operatively organised technology companies presents a number of obstacles, especially if external investment is limited for governance or ideological purposes. This may inhibit efforts at scaling the co-operative and growing the number of patrons using the co-operative’s services; network effects usually being a key determinant of the success of platforms. However, this also provides an opportunity of re-imagining platform growth, away from the behemoths we see today to more community-oriented structures. The fact that, in some cases, mainstream co-operative movements have begun incorporating platform co-operatives into the fold of their work is promising!

 

Q6. Indeed! What has been your motivation, then? What gets you out of bed in the morning?!

 

A6: In terms of my research, I find speaking to cooperators and attending conferences where developments in the co-operative economy are discussed to be very inspiring. I leave each meeting buzzing with new ideas. On a more personal level, I find democratic business ownership to be one of the most pressing political issues of our time, especially in countries where the shareholder wealth maximization model has held sway for several years and has been found to be detrimental to both corporate governance and wider society. A passage from Pankaj Mishra’s Age of Anger (2016) particularly resonated with me. He charted the growth of individualism globally and observed that now “individuals with very different pasts find themselves herded by capitalism and technology into a common present, where grossly unequal distributions of wealth and power have created humiliating new hierarchies” (p. 13). In a world that, according to some,  doesn’t have a ‘society’ (to paraphrase Margaret Thatcher), can cooperativism contribute to (re)forging bonds of solidarity? The role of co-operatives is as important now as it has ever been, particularly in view of the UN Sustainable Development Goals. Keeping an eye on this bigger picture spurs me on! (smiles)

 

Q7: Finally, what do you think young cooperators need to know about the platform economy?

 

A7: When discussing the platform economy, it is easy to focus on a few key actors: Uber, Facebook, Amazon and so on. By doing so, the platform economy is framed as a marginal phenomenon, shaped by certain major actors, but of limited interest to the activities of co-operators. However, the platform economy is far larger and more diverse than it may first appear. Even ‘gig’ platforms involve a heterogeneous group of stakeholders, from those who use them intermittently for supplementary income to those who are regular workers, depending on the platform for their survival. Going beyond how platforms mediate user groups, their algorithms and corporate governance practices also have a significant influence on society at large. In general, there is a need to build awareness about the complexity of the platform economy and the myriad effects they have.

 

Of course, platform co-operatives strive to re-orient the ownership and practices of online platforms. They seek to make use of platforms, but with ownership held by user-owners and with guaranteed work and data protections. Through transparency, they hope to counteract algorithmic biases. If interested in forming platform co-operatives, as with earlier generations of co-operators, networking with other co-operators and co-operatives will be key for the youth. Along with developing a viable business model and critically reflecting on the technological apparatus used by the co-operative, it is essential for platform coops to be well-integrated into the wider co-operative movement. Not only will this provide potential commercial opportunities, but will help in capacity building, developing supportive and complementary institutional structures and bonds of solidarity among co-operative enterprises.