16.000

65.000

8.100.000

Sri Lanka

Key figures

Research overview

Responding to challenges and existing knowledge gaps facing the cooperative movement, this mapping research seeks to provide exhaustive information on cooperatives worldwide. This is achieved through a process jointly conducted by the ICA and its four regional offices – Cooperatives of the Americas, Cooperatives Europe, ICA Africa, and ICA Asia-Pacific – using a common methodology. Each office collected the input of ICA members present in the countries within its geographic area, by using the same questionnaire, and completing it with relevant national statistics, in order to obtain an accurate picture of the national situation. Mapping out cooperatives in each country provides a more precise picture of the cooperative context at national and regional levels, enhances the movement's visibility, networking, partnerships opportunities, as well as advocacy, and empowers cooperators by providing them tools for positive change.

This webpage presents a snapshot of the research results for Sri Lanka. For more information, you can download the full report and the highlights here.

History

Cooperatives in Sri Lanka have a long and rich history going back to the British colonial period in the early 20th century. Initially started by the rural working class who set up their own credit societies, cooperatives have gradually branched out to other sectors under the guidance of the government. During the civil war years, cooperatives were identified by the United Nations (UN) as the only “stable” economic structure present in northern Sri Lanka. Cooperatives are now being seen in a new light and strengthened by the government to withstand competition in the current liberal market economy. 

Overview

ICA has five members from Sri Lanka



In Sri Lanka, the research questionnaire was distributed to and completed by 1 ICA member organisation in the country. National data was provided by NCCSL. The data collected was for the reference year 2019. 


Summary

ICA members represent 16,000 cooperatives in the country, with 8.1 million members and 65,000 employees.

Cooperatives are present across diverse sectors in Sri Lanka including thrift and credit, fisheries, consumer/retail sector among others.

Legal framework

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 Sri Lanka.

 

There is no separate or special legislation on any specific type of cooperative organization. Cooperative legislation in Sri Lanka relating to the central government has not been subject to change since the last Amendment Act in 1992; hence the Cooperative Identity statement (1995) has not been incorporated. Cooperative Principles which referred in legislation are from 1966 version. As per the government structure after the 13th Amendment of the constitution in 1987, provincial councils (PCs) are empowered to have their own cooperative legislation. However, only four out of the nine PCs use the previous legislation formed under the Central government.

 

Main laws relevant to cooperatives in Sri Lanka

Currently, the following Acts of parliament are used in the regulation of cooperatives at the central level and in provincial councils who have not introduced their own Cooperative Statutes:

Title of legislation

Date of Approval

Cooperative societies Act No. 5 of 1972

11th October 1972

Cooperative Societies (Amendment) Act No. 32 of 1983

24th August 1983

Cooperative Societies (Amendment) Act No. 11 of 1992

6th March 1992

Cooperative Friendliness

The cooperative legal environment of Sri Lanka is ‘only limitedly friendly’ to cooperative development. Some barriers which inhibit cooperative development are since the Government has tight regulations on cooperatives, such as to diversify or decide on business direction cooperatives require approval to be obtained from the Registrar of Cooperative Societies (RCS). This is based on an out dated legislation, which was introduced in 1972, when the country had a closed socialist economy, but has now turned out to be a neo-liberal economy. Also, there is no special government funding for promotion of cooperatives. This has affected promoting cooperatives among new generations.

Key recommendations for improvement

There is a pressing need for legislative reform and the law which is feasible should be common law for all types of cooperatives, but there could be certain special provisions for any type of cooperatives within the same legislation. Any legislation created should be in line with the independence of the Provincial Councils to have their own cooperative legislation and also another legislation to be regulated by the central government for the inter-province cooperatives and national federations as well as coordinating functions.

Conclusions

The experience derived from Sri Lanka confirms that creating a new legislation would be conducive for the development of cooperatives in the country. However, this should be a consensus-driven and participatory process in which all stakeholders at all levels should be involved towards the creation of a new law which would look after cooperative needs not only at the central level, but also at the provincial level.

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. 

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