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The first World Social Economy Law has finally been approved by the United Nations

By Rafael Chaves Ávila, president of the Scientific Commission of CIRIEC-Spain, member of the EU Expert Group on Social Economy and Social Enterprises (GECES)

For their common mission to provide effective responses to major global problems, such as inequality and the climate crisis, and for their governmental mission to solve the economic and social problems of their territories and their citizens, especially the most vulnerable, all the countries of the planet have, since last April, a first-rate regulatory reference that legitimises and gives concrete form to a new public policy, the social economy policy.

On 18 April 2023, the United Nations General Assembly adopted Resolution A/77/L60 entitled “Promoting the social and solidarity economy for sustainable development”, a major milestone. Twenty-eight countries from all continents supported this resolution, with no opposing positions. In the last part of a long working process that can be considered to have begun in 2013, with the creation of the United Nations Inter-Agency Task Force on the Social and Solidarity Economy (UNTFSSE), fifteen countries promoted this proposal with the support of the members and observers of the aforementioned Task Force. Since that year, several milestones have followed one after the other, although Resolution ILC110-RII of the International Labour Conference of 10 June 2022 “concerning decent work and the social and solidarity economy” and Resolution 76/135 of 2021 of the United Nations General Assembly on “Cooperatives in social development” deserve special mention.

It is true that the headline of this paper is intended to be provocative, as the United Nations does not pass laws as such. A Resolution of this nature belongs to the sphere of soft law, as it has no binding force whatsoever, however, it has sufficient political force to incite the countries that have supported this initiative and, above all, it constitutes a precedent and an unquestionable point of reference for the drafting of subsequent binding instruments at both international and national level. It has resolved many issues, such as the definition of the scope of action. And national governments now know what they can do.

This Resolution, which I call the “World Social Economy Law”, contains the five necessary ingredients of a law of this nature and opens up the space on the political agenda for the deployment of a social economy policy, adjusted to each national reality: firstly, it delimits the scope of the social and solidarity economy; it establishes, secondly, the macro as well as the meso and microeconomic functions that this sector of the social economy plays in the system; thirdly, it specifies the mode of governance of this social economy policy; fourthly, it determines which public policies are to be implemented and, finally, closing the cycle of this social economy public policy, it establishes evaluation and monitoring measures. Let us look at this in more detail.

First of all, this Resolution makes what is in my opinion one of its most important contributions, which is the delimitation of the scope of the social and solidarity economy, an issue that has been the subject of much dissension, if not deliberate confusion, and which has been one of the main reasons for the lack of political progress to date. This delimitation is carried out at a double level, on the one hand, by establishing the structural characteristics that the organisations and enterprises included in this sphere must have and, on the other hand, by identifying the main legal-business forms of that compose it. To this end, it reproduces and endorses the above-mentioned Resolution of the International Labour Conference.

The Resolution defines the following structural characteristics of the social and solidarity economy: it encompasses enterprises, organisations and other entities (1) whose governance is democratic or participatory, (2) whose criteria for the distribution and use of surpluses or profits and assets give primacy to people and social purpose over capital, (3) autonomy and independence (in its relation to governments and traditional enterprises) and (4) which are based on the principles of voluntary cooperation and mutual aid.

This Resolution also indicates, at the economic level, that social economy organisations operate in all sectors of the economy, in both the formal and informal sectors, carrying out economic, social and environmental activities of collective or general interest, and aiming at long-term viability and sustainability and the transition from the informal to the formal economy. At the level of values, it indicates that they are organisations that put into practice a set of values that are intrinsic to their functioning and in line with caring for people and planet, equality and equity, interdependence, self-governance, transparency and accountability, and the achievement of decent work and decent livelihoods.

Of great significance is the identification of the main legal-entrepreneurial forms within the social economy. In this respect, the Resolution recognises international diversity, but specifies that it unequivocally includes cooperatives, associations, mutuals, foundations, social enterprises, self-help groups and other entities that operate according to its values and principles.

Secondly, the UN Resolution establishes the macro-, meso- and microeconomic functions that the social economy plays in the system, which constitutes the policy fields, and sets out the criteria according to which the impact of this sector can be assessed. These policy fields include the fight against poverty, employment, entrepreneurship, financial exclusion, inclusive and sustainable local development, digital transition, provision of social services, environmental protection, promotion of social and gender equality, promotion of cultural diversity and solidarity, as well as the promotion of democracy and people’s participation in decision-making and resources. Explicit mention is made of the cross-cutting contribution of the social economy to the achievement of the Sustainable Development Goals and their adaptation to the local context.

Specifically, the Resolution details that the social and solidarity economy contributes (1) to employment and decent work by promoting labour rights, social protection, retraining and skills development, raising workers’ awareness of their human rights and developing partnerships to improve their bargaining and organisational capacity, (2) to the eradication of poverty and hunger, catalysing social transformation by increasing the productive capacity of those in vulnerable situations and producing goods and services that are accessible to them, (3) access to affordable finance, (4) improving enterprise potential and entrepreneurial and management skills, productivity, competitiveness, social and technological innovation and participatory business models, (5) local and community economic development, (6) provision of social services such as health and care, education and vocational training, (7) just and sustainable digital transition, (8) protection of the environment, including the promotion of sustainable economic practices, (9) promotion of gender equality and the empowerment of women, youth, persons with disabilities and persons in vulnerable situations, (10) fostering diversity, solidarity and the protection of and respect for traditional knowledge and cultures, and finally (12)  promoting democracy and the socio-political empowerment of people in relation to decision-making processes and resources, promoting participatory policy-making and all human rights.

Thirdly, this United Nations Resolution indicates the mode of governance that must govern this social economy policy: it must be multilevel, i.e. it must involve public decision-makers, both international, from the United Nations system, and from national and regional governments, the heads of international financial institutions and development banks, in cooperation with the agents of the social and solidarity economy, involving them in the process of drawing up their policies in a model of co-construction.

Fourthly, this Resolution, in its first prescriptive paragraph (where it ‘encourages’ Member States) sets out the range of public policies to be deployed in the framework of a social economy policy. It indicates that they should not be reduced to isolated measures, but should take the form of wide-ranging plans, namely strategies, policies and programmes. As for the measures to be implemented, it contemplates both those aimed at promoting a favourable ecosystem for the social economy (a specific legal framework, improving the visibility of the social economy – with special reference to its inclusion in national statistics -, its promotion in education, research, capacity building and entrepreneurship programmes), and those aimed at improving the competitiveness and economic and business capacity of these entities and enterprises (tax incentives, promotion of public procurement, support for enterprises – consultancy and others -, better access to financing and financial services).

Fifthly, and closing the cycle of this public social economy policy, the Resolution establishes two measures for the evaluation and follow-up of this social economy policy: it requests on the Secretary General of the United Nations to draw up a report on the application of this Resolution and to follow up the implementation of this agenda by including the topic “Promotion of the social and solidarity economy for sustainable development” in the provisional agenda of the next (seventy-ninth) session.

Undoubtedly, the United Nations has made a decisive contribution with this Resolution to what is being called the Momentum of the social economy. This year has marked a before and an after.

The United Nations has just indicated the path to be followed

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CIRIEC-International CIRIEC-España Social Economy Europe Ministerio de Trabajo y Economía Social Unión Europea