Function of the Division_bcd

The Training and Development program of the Business and Cooperatives Development (BCD) Division is designed to have only one focus and that is to transfer business and entrepreneurship skills to a wider section of Solomon Islands society.

This includes training of potential business entrepreneurs, existing SMEs, CBOs, NSAs and individuals that are interested to venture into business activities throughout the Solomon Islands. The emphasis of the program is to equip potential Solomon Islanders with the necessary skills and knowledge that will assist or help them to start their own business or manage their own business enterprise and at the same time access to other relevant business information (finance, market and institutional or capacity building).

In the provinces, the BCD Division coordinates with the Ministry of Commerce’s (MCILI) Industrial Development Division (IDD), through the IDD’s provincial offices and its Business Development Centre (BDC) in Noro to offer its training and development programs.

Private Sector Service Providers

The BCD Division outsources its business skills trainings to Private Sector Service Providers such as the Solomon Islands Small Business Enterprise Centre (SISBEC) and Tefila and MASE. These Private Sector Service Providers may changed after a certain period so interested persons or groups are encouraged to contact the Business Unit of the Business and Cooperatives Development Division to find out more about its Service Providers or to find out more about how to apply to become a Service Provider.

This is a relatively new program (established in 2009) under the review and recommendation of the functions of the Business and Cooperatives Development Division (BCD).

The changing environment in the world’s global economy (internal and external forces) had gauged the division to establish and engage in an R&D program. The conduit mechanism of research studies into areas of existing resources such as land, mobilization of commerce, agriculture, fisheries, forestry, minerals, infrastructure, and other industries within the public, private sector and the communities is seen as a great potential for research.

The establishment and promotion of The program’s strategic objective is that all constituency business associations, cluster groups and associations (fishermen, farmers, retailers, tribal landowning groups, women’s association groups, village and community based associations (CBOs), individual businesses are to be organized and linked to the relevant constituency framework (proposed concept).

An integrated planning process model is also attached to the constituency framework with the aim to encourage all cluster groups to have their own corporate and business plans.

The Business and Cooperatives Development Division mostly supports registered Micro, Small and Medium Enterprises (MSMEs) through the provision of business trainings, promotions and business advisory services.

These advices are based on detailed research activities, including detailed market research that the Division carries out through its Business Unit in coordination with relevant stakeholders, partners and service providers.

In terms of trainings, the Division’s role is to coordinate with Private Sector Service Providers to provide training for identified SMEs and their selected staff members. In the provinces, these trainings are channeled through the Industrial Development Division’s (IDD) Provincial Offices and the BCD’s Business Development Center (BDCs) in Noro. The Division also works with the Marketing and Export Promotions Division (MEPD) to promote products and services offered by local SMEs. The Division also does some financial advisory services for SMEs, particularly for financing options. One such option is the Business Loan Guarantee Scheme for Micro, Small and Medium Enterprise businesses.

How do I apply for the Scheme?

A prospective borrower (loan applicant) can only make his/her application direct to one of the Scheme’s participating Partner Banks and not to the Central Bank. It is the Partner Bank’s prerogative to nominate a loan application to be covered under the credit guarantee scheme.

The Business and Cooperatives Development Division’s Cooperative Society Unit is responsible for the promotion of the cooperative movement by encouraging the formation of cooperative societies and ensuring that cooperatives operate in accordance with the requirements of the Cooperative Societies Act (Cap 164), the Act’s Rules, Principles and each cooperative’s By-Laws.

The Unit can also provide support services for registered cooperative societies such as trainings, research and marketing. Additionally, advisory services such as financial advice on how to access financing options can also be provided to cooperative societies through the Unit.

The following are questions and information based on the  Cooperative Societies Act (Cap 164).

What is a Cooperative Society

Generally, a cooperative is a business organization formed and owned by group of individuals for the purpose of improving their economic standard of living and social services rendered. This is achieved through their participation in economic and social activities based on the cooperative principles. In the Solomon Islands, cooperatives are registered under and governed by a Cooperative Societies Act.

What are the Cooperative Principles?

The cooperative movement is governed by seven (7) cooperative principles that have been universally accepted and adopted by the International Cooperative Alliance (ICA). The principles are:

1. Voluntary and open membership
2. Democratic member control
3. Member economic participation
4. Autonomy and independence
5. Education, training and information
6. Cooperation among cooperatives
7. Concern for community

What is the Philosophy of Cooperatives?

The underlying philosophy of cooperatives emphasizes services and well being of members rather than maximization of profits. As such, co-operatives are not profit oriented, not oppressive but uphold honesty in conducting their business activities. The ultimate aim is to provide a suitable alternative to society in terms of quality goods and services rendered at a reasonable price.

What challenges are faced by Cooperative Societies?

In the past, the main emphasis of cooperative development in the Solomon Islands from the very beginning had always been placed on consumer cooperatives in the form of rural trade stores. This emphasis eventually contributed to the challenges faced by these cooperatives as profit driven individual or community registered business enterprises became direct competition to these cooperatives. Other challenges include the lack of capital, bad management and the misuse of funds.

The Business and Cooperatives Development Unit is responsible for registering and keeping a register of cooperative societies that operate within the Solomon Islands.

This responsibility is carried out by the Registrar of Cooperative Societies who also heads the Cooperative Society Unit within the Division.

The Registrar, along with members of his Unit, carries out this function in accordance with the  Cooperative Societies Act (Cap 164) of 1969.

The Registrar also has the power to de-register cooperative societies as well as to oversee the auditing, inspection and if necessary, the liquidation of cooperative societies. The Registrar and his Unit also ensure that cooperative societies comply with the requirements of the Cooperative Societies Act.

In cases of dispute, the Registrar can conciliate or if necessary, arbitrate or appoint an arbitrator to settle the dispute.

Director’s Note

Greetings from the Office of the Registrar of Cooperative Societies in Solomon Islands!

Indigenous community businesses throughout the country; whether your locality is in urban centers or rural areas, individuals, researchers, students, stakeholders and friends of cooperatives, if you would like:

• to register your entity;
• to know more about the cooperative movement in SI;
• to know about the current status of a registered cooperative society;
• to legally deregister a cooperative society;
• to have access to any information or advice regarding a registered cooperative (esp. members) or;
• any other matter affecting the affairs of a registered cooperative, please contact our office as we are there to assist you.

History of Cooperative Societies in Solomon Islands

Cooperative societies are recognized as a suitable type of business organization in the Solomon Islands. They are appropriate because of the communal ownership of land and other resources. The first attempt to start cooperative movement in Solomon Islands was in 1952 with the first appointment of a Colonial Cooperative Officer but was then collapsed in 1953. The then colonial administration believed that the movement should be seen as a kind of development which portrays self-help, promotes self-sufficiency and promotes good business practices.

In 1957, the co-operative movement was revived with the establishment of the co-operative division, the appointment of the first Registrar of Co-operatives by then Colonial Government and the enactment of its own ordinances and legislation. The Solomon Islands Cooperative Societies Act Chapter 73 now re-numbered to Chapter 164 of the Solomon Islands Laws as well as the co-operative principles. This Act which is currently in force today is under major review.

 It has been utilized as a general guideline whereby co-operatives have been using it as a “policy” in streamlining their operations. In practice, this “policy” is more statutory and regulatory in nature utilized for the purpose of supervision.

The co-operative though has come to light in a hope to bring people together in social and economic participation for their own benefits. The general idea was based on “united we stand while divided we fall”.

Despite co-operatives are another type of business organizations, there are differences, from private businesses. The main difference is motive or objectives of the two or so ways. When people form a co-operative business, their aim is to help each other, so that all benefits are shared equally among them, where as when an individual owns a business, all benefits are kept to himself, thus become richer while the majority remain poor. Rather than one person exploiting the community, the co-operatives’ aims to stop this, thus to group together and help each other for common social and economic benefits. This will not only raise the standard of living among the communities but will also contribute to the economic development of the country as well.

The main emphasis of co-operative development in the Solomon Islands from the very beginning has always been placed on consumer co-operatives in the form of rural trade stores. This is a relatively narrow concept being mainly the distribution of consumer goods together with the idea that co-operatives serve members mainly by way of distributing bonuses at the end of each financial year. This has created a negative image for co-operatives in times where individually or community owned enterprises come into competition with consumer co-operatives and where management problems, in-appropriate use of credits and lack of working capital have led to the collapse of many such societies.

The co-operative division has seen as a narrow concept of co-operation, thus extended wide as productive undertaking in the fields of agricultural production, fisheries, forestry, processing, marketing, and small scale manufacturing. These are not only seen as rural people making use of their resources, but also with an aim of increasing employment opportunities and increase in export earnings.
 

Growth and Fall

In 1952 the first co-operative was formed at a village in Ngella but went out of operation when the colonial co-operative officer had to return to England for his annual leave. Later in 1957, five co-operatives were started in north Guadalcanal and Small Ngella. These co-operatives had a total of 195 members, 750 shares and the year’s turnover was 911 pounds. The first annual report noted that the co-operative movement was department-driven and encountered a profound reluctance rooted in a suspicion of the government’s intention. Nevertheless, once properly informed about co-operation, the idea of co-operatives became popular.

There was fast growth in the number of Cooperatives since its inception up until 1980s when the number had declined sharply with more than half went into liquidation.  However, there was again a growth period in the late 1980s and early1990s.

Since its establishment to the present date the total number of cooperatives been registered is 388, 68% or 265 were been either liquidated or self wound up, 25% or 95 remain dormant and at least 7% or 28 are actively functioning or in their initial stages of operation.

Secondary Association

To date none of the two major Cooperative Associations started in the 1970s are still operating. Both the CCA and the western general co-operative associations were technically bankrupt during 1987 and were been forced to be liquidated.

The difficulties faced by the Secondary Associations include: rapid expansion of operations, sale by credit to primary cooperatives, lack of allegiance of primary cooperatives to the Association.

Apex Body

There has been no national co-operative federation or Apex organization to represent co-operatives in policy making and in other related aspects of co-operative development in the country. Co-operatives rely entirely on the Registrar of Co-operatives for guidance and representation. It is seen yet untimely to establish one though future vision would emerge a circumstance.

Credit Unions

In 1963, rural savings and loans co-operative societies were started in the western province. The 1967 annual report states that it was evident that the savings and loans societies were placing too much emphasis on lending rather than saving. At one stage, there were 13 such societies but they have all since closed.

Credit Unions have since emerged as a strong movement in the country after the passing of the separate Credit Union Act in 1986 and the forming of the Solomon Islands Credit Union League, the national federation for credit unions. The current Registrar for Credit Union is the Governor of the Central Bank of Solomon Islands.

Other Types of Co-operatives

A number of fishing co-operatives were formed in the country but were all totally inactive due to mismanagement, disregard for advice and petty dissension among members.

Land Purchase co-operatives (LPC) were initiated in the 1970s with the intention of returning alienated land to customary owners and maintaining their agricultural productivity. All 42 LPCs were also totally inactive except one on Guadalcanal plains remains operational.

A number of sawmilling co-operatives were started in the mid 70s, and some were particularly successful. To date none is operational.

There were Rice growers, Pineapple processing, and Honey producer co-operatives started in the 1980s with good potential for marketing locally and overseas. A major obstacle to expansion and become more economical is funding.

Who is the Registrar of Cooperative Societies?

The Registrar of Cooperative Societies may be a public officer or any other person appointed for the position by the Minister of Commerce, Industry, Labour and Immigration. A Deputy Director is appointed in the same way. The Director of the Cooperative Society Unit is the current Registrar of Cooperate Societies.

What kind of societies can be registered?

Societies that aim to promote the economic interests of its members in accordance with cooperative principles or a society that aims to facilitate the operations of such a society may be registered as a cooperative society by the Registrar with or without limited liability.

What are Cooperative Society By-laws?

Learn how to register a cooperative societyCooperative Society By-laws are rules that regulate the operations of a particular cooperative society.

Who is responsible for auditing Cooperatives?

The Registrar of Cooperate Societies or a person appointed by the Registrar is responsible for carrying out an audit of each cooperative society. The audits are to be carried out on an annual basis.

What happens if there is a dispute amongst members?

If there is a dispute amongst members of a cooperative society, the Registrar of Cooperative Societies may take steps to either;

1. Negotiate an agreeable outcome or;
2. Arbitrate or appoint an arbitrator to settle the dispute.

Appeals on a decision of an arbitrator may be made to the Registrar for consideration. The Registrar’s decision is usually final. However, if a question of law arises from a decision made by the Registrar, that decision may be appealed to the Minister of Commerce, who will refer the matter to a Court of Law for review.

What is the current state of Cooperative Societies?

A recent analysis has revealed that most cooperatives in Solomon Islands lack working capital; are archaically managed and have little or no strategic planning. These cooperatives also suffer from poor leadership and from a lack of rigorous control mechanisms that are necessary to ensure productivity.

The analysis concludes that the key to improving cooperatives’ chances of success lies in internal structural adjustments, the recruitment and training of young professionals, financial autonomy, learning the new techniques of modern management, business efficiency, the formation of co-operatives in new sectors, the creation of co-operatives by women and youth and appropriate human resource development policies and programmes to be adopted by co-operatives

How do I register a Cooperative Society?

Communities and Societies can register a Cooperative Society under the  Cooperative Societies Act (Cap 164) through the following steps:

Check List for Cooperative Registration

Step 1 – Interested group or community should hold an inaugural meeting;

Step 2 – A brief background report should be submitted to the office of Registrar of Co-operatives (ROC);

Step 3 – The ROC may send an Officer to conduct an educational awareness meeting and carry out a survey/feasibility study on the proposed venture;

Step 4 – A full report described in Step 3 should be sent to the office of the ROC;

Step 5 – A set of By-law should be agreed upon and adopted by members of the prospective Cooperative Society;

Step 6 – Three copies of the proposed By-law and an  Application Form for Registration should be forwarded to the ROC with relevant fee.

Step 7 – The ROC considers the proposal. If accepted the Cooperative will be registered; if rejected a notification will be sent to applicant Cooperative;

Step 8 – When registered, Cooperative obtains accounting books and other office necessities;

Step 9 – Commence operation.

List of Cooperative Societies

There are a number of Cooperative Societies registered under the  Cooperative Societies Act (Cap 164) and operating within the Solomon Islands. The full list of Cooperative Societies can be found under the  Directories section of this website.  Contact the Division for more information.

The Business and Cooperative Societies Division is also involved in the review of policy and legislations governing MSMEs, business associations and cooperative societies.

Some of these review work include:

Formulation of National Cooperative Policy

Similar to the national policy for Micro, Small and Medium Enterprise (MSME) businesses, a policy document for cooperative societies was formulated and completed in 2009. The document needs Cabinet approval and is intended to be part of the guidelines to review the Cooperative Act.

The policy outlines implementation strategies for the development of cooperatives in the country. It enables the cooperative movement to play a more effective role in the nation’s development as well as face future challenges in line with the requirements of the government. Onward progress of meetings and interactions will be conducted with identified implementing agencies during the course of the document implementation phases.

Review of Cooperative Societies 1999 Draft Act

The Cooperative Society Unit within the Business and Cooperatives Development Division is planning to review the long existing Cooperative Societies Act Cap. 164. The existing Act was modeled on a similar Indian legislation from 1904.

It was first passed for Solomon Islands in 1957 and reissued in 1969 with minor amendments.

Efforts to replace the outdated Cooperative Societies Act were undertaken in 1980 and 1983. In 1987 the revision of cooperative legislation, drafted by Professor Hans H. Munker of the ILO was submitted. In 1998, an ILO funded review of the cooperative movement was carried out by an appointed committee chaired by Mr. Bob Pollard and was completed in 1999. The 1999 draft cooperative Act was further revised by the Deputy Legal Drafter of the Attorney General’s Chambers and completed in the form of a Cooperative Societies Bill in 2004 but has since been misplaced.  The Cooperative Society Unit is working very closely with the AG’s Chambers to identify further ways of reviewing the Act.