Kazakhstan

The legal framework analysis aims to provide general knowledge of the national cooperative legislation and of its main characteristics and contents, with particular regard to those aspects of regulation regarding the identity of cooperatives and its distinction from other types of business organisations, notably the for-profit shareholder corporation.

It aims to evaluate whether the national legislation in place supports or hampers the development of cooperatives, and is, therefore “cooperative friendly” or not, and the degree to which it may be considered so, also in comparison to the legislation in force in other countries of the ICA region, or at the supranational level.

In addition, the research aims to provide recommendations for eventual renewal of the legal frameworks in place in order to understand what changes in the current legislation would be necessary to improve its degree of “cooperative friendliness”, which is to say, to make the legislation more favourable to cooperatives, also in consideration of their specific identity. This webpage presents a snapshot of the legal framework analysis results for Kazakhstan.

This legal framework analysis examines the current cooperative laws that have a direct impact on the cooperative movement of Kazakhstan. The cooperative movement in Kazakhstan along with the laws is guided in its activities by the provisions of constitution, civil code and other regulations of the country.

Main laws relevant to cooperatives in Kazakhstan

The Legal Framework established by the National Cooperative Law of Kazakhstan is found in the following legislations :

In general, these laws define the legal and economic principles for the formation and operation of cooperatives and their unions. According to these laws, cooperatives can be established as commercial cooperatives, if the main purpose of their activity is profit recovery or as non-profit cooperatives that operate in the interests of their members, for whom profit recovery is not the main purpose of the activity.

Cooperative Friendliness

In general the cooperative legislation in Kazakhstan can be termed as ‘more cooperative unfriendly than friendly’.  Despite the existence of laws, the existing legal acts do not take into account the specific features of the cooperative functioning, do not create sufficient conditions to unify the agricultural producers, especially small business forms, for the joint cultivation of land, production, marketing, processing, storage etc. and supply them with material and technical resources and other types of service.

Key recommendations for improvement

The Law on Agricultural Cooperatives, presented by lawmakers as a single law on cooperation, is based on the abolition of all types of rural consumer cooperatives and agricultural partnerships in favour of the creation of a new form of legal entity called “agricultural cooperative”. In order to distribute profits among members of a cooperative, the creation of agricultural cooperatives in the organizational of a production cooperative is envisaged, in other words, commercial organization. This provision limits the members’ rights in choosing one or another form of cooperatives and does not stimulate the process of their unification. Despite the presence of state support in laws and various government programs adopted to support cooperatives, most of it is not followed through with real policy actions. Thus, the main recommendation is to continuously inform the state issued faced by cooperatives at the grassroots; to familiarize the government with examples of successful cooperatives in the country, to attract international cooperative experts to meet with policy-makers who influence the activities of cooperatives.

Conclusions

In general it was observed that there is a need for serious work ahead towards creating a favorable legal environment for the development of cooperatives. Cooperatives need multifaceted support from the state, educational and consulting activities, and the creation and development of cooperative infrastructure. International donors, bringing advanced cooperative experience, as well as supporting the financial and logistical development of cooperatives,could play an important role in their development.

_{The legal frameworks analysis is a tool developed under the ICA-EU Partnership #coops4dev. It is an overview of the national legal frameworks at the time of writing. The views expressed within are not necessarily those of the ICA, nor does a reference to any specific content constitute an explicit endorsement or recommendation by the ICA.}