KATHMANDU, Jan 26: Leaders of cooperatives associations have opposed the governance norms that the Ministry of Cooperatives and Poverty Alleviation (MoCPA) has proposed for cooperatives in a new cooperative bill.
Speaking at an interaction organized by Cooperatives Journalist Society Nepal (CJN) in Kathmandu on Tuesday, they said they will lobby strongly against the bill.
The draft of new cooperatives bill is awaiting cabinet’s approval.
“As many lawmakers are from the cooperatives sector, the bill will not be passed even if it is tabled in the parliament. Even if the government managed to get the bill passed from the parliament, the new law will meet the fate of the Social Practices Act, 2033,” said Tek Prasad Chaulagain, president of District Cooperatives Union Kathmandu.
The cooperative leaders have demanded amendments to the draft bill to remove various clauses including the one that bars a board director to work as an executive in a cooperative. They have also said that barring a person from becoming a member of more than one cooperative of similar nature was aimed to limit the scope of the cooperative sector.
“The proposed law is aimed at controlling and regulating the cooperative sector which is not acceptable to us. There might be some bad cooperatives. Only 130 cooperatives out of more than 32,000 operating across the country have landed into trouble due to bad governance. Cooperatives cannot be controlled just because there are problems in few cooperatives,” lawmaker Keshav Badal said.
Badal also said the proposed law restricts licensing of more than cooperative in one ward. We can encourage cooperatives to go to villages where there are no cooperative, but there cannot be such restriction in the law,” Badal, who is also the chairman of National Cooperative Federation of Nepal, said. “The law is oriented toward controlling the cooperatives which has been recognized by the constitution of the country as one of the three pillars of the economy.”
Among other good governance norms, MoCPA has proposed restricting board director from working as staffer of the cooperative. Similarly, it has set a deposit ceiling which allows a depositor to deposit in the ratio of 1:10 which means a person holding a share will be allowed to deposit Rs 10 only. Similarly, it bars a member of one cooperative to take membership of cooperative of similar nature. Likewise, there cannot be more than one members of a family while registering new cooperatives.
Cooperatives leaders have vehemently opposed all these provisions. “The preamble of the new bill mentions a word ‘regulation’ which indicates that the new bill is aimed at regulating the cooperatives,” added Badal.
Officials of the MoCPA, however, defend the measures included in the new bill, stating that there are necessary to address the current problems seen in the cooperative sectors. “The new cooperative bill was presented in the cabinet after rigorous consultations with the stakeholders. The measures in the new bill are in line with the recommendations made by the Gauri Bahadur Karki-led commission which was formed by the government after 130 cooperatives, which had mobilized Rs 12 billion deposits, ran into trouble,” Shankar Adhikari, secretary of MoCPA, said.
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