Lebanon

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 Lebanon.

Cooperatives in Lebanon are regulated by three separate acts: The law of the cooperative associations decree number 17199/1964 which was last amended in 1983. The executive decree for cooperative associations number 2989 enacted on 17/3/1972 was last amended on 21/6/1977. In addition, other complementary decrees were issued related to the regulation to the support and help given by the state to the cooperative associations.While the Lebanese Constitution does not explicitly mention the cooperatives, the target of cooperatives is mentioned specifically: “social justice as a right and social and economic development as a pillar of unity and stability of the state”.

Main laws relevant to cooperatives in Lebanon

Cooperatives in Lebanon are regulated by three separate acts: The law of the cooperative associations decree number 17199/1964 which was last amended in 1983. The executive decree for cooperative associations number 2989 enacted on 17/3/1972 was last amended on 21/6/1977. In addition, other complementary decrees were issued related to the regulation to the support and help given by the state to the cooperative associations. While the Lebanese Constitution does not explicitly mention the cooperatives, the target of cooperatives is mentioned specifically: “social justice as a right and social and economic development as a pillar of unity and stability of the state”.

Cooperative Friendliness

Theoretically, the legislation is ‘very much cooperative friendly’ since the provisions of the law have incorporated the principles of cooperation. There are, however, exceptions to these principles, and the real challenge seen is the lack of awareness among people in charge of applying the law about cooperative principles. In addition to this, there is  support of state through tax exemptions and financial aid both in cash and in kind, training, and supporting fairs to open access to markets. Practically, the law is not totally enforced, but is in the process of being enforced, and the support of the state is not properly channeled.

Key recommendations for improvement

Monitoring the enforcement of the rules is necessary in order to see if any changes are needed to the Lebanese legislation on cooperatives. However, the following amendments are necessary:

• Means of notification to attend the general assembly.
• Incorporating gender equality.
• Reducing bureaucratic procedures that are time consuming need revision.
• Issuing specific laws to each kind of cooperative, rather than changing the current law

Conclusions

Apart from the challenge in enforcing the cooperative law, eliminating the idea of continuous financial support is essential and this should be substituted by self-dependency to ensure sustainability of the cooperative enterprise. The cooperative sector should be broader than the Ministry of Agriculture and they should have an entity by itself to focus on all types of cooperation and issue specific laws to enhance and improve the cooperative activities and make it more friendly.

_{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.}