Central Co-Operative Fund (Amendment) Regulations, 2019

L.N. 81 of 2019

CO-OPERATIVE SOCIETIES ACT

(CAP. 442)

Central Co-Operative Fund (Amendment) Regulations, 2019

IN EXERCISE of the powers conferred by article 108 of the Co-

Operative Societies Act, the Minister responsible for Co-Operatives

has made the following regulations:-

The title of these regulations is the Central Co-Operative

Fund (Amendment) Regulations, 2019 and these regulations shall be

read and construed as one with the Central Co-Operative Fund

Regulations, hereinafter referred to as "the principal regulations".

Regulation 4 of the principal regulations shall be amended

(a)

sub-regulation (2) thereof shall be amended as

(i) paragraph (a) thereof, excluding its proviso,

shall be substituted as follows

''(a) The Committee shall consist of eleven

voting members who shall be composed of six

independent members appointed by the Minister, two

members each from amongst members of the two

leading, eligible and recognised organisations and

one member nominated by the joint consent of the

two leading eligible and recognised organisations

Provided that in the case of the one

member nominated by the joint consent of the two

leading and eligible and recognised organisations is

not nominated within one calendar year from a

request made by the Minister, then the Minister shall

decide at this discretion on the appointment of this

member:'';

(ii) in paragraph (e) thereof the words ''The three

members appointed by a majority vote from amongst

members of eligible and registered co-operative societies

and the two members appointed from amongst members

of eligible and registered organisations shall'' shall be

substituted by the words ''In the case of all the members

not appointed by the Minister, these members shall'';

(iii) sub-regulation (3) thereof shall be deleted; and

(iv) sub-regulations (4) to sub-regulation (10) shall

be re-numbered as sub-regulations (3) to (9) respectively.

Regulation 14

of

the

principal

regulations

shall Substitutes

regulation 14 of

substituted as follows

the principal

regulations.

''14. (1) In accordance with regulation 13(1)(a) and (b),

any eligible co-operative society or eligible recognised

organisation applying for access to funds shall be in conformity

with all of the following

(a) a copy of the co-operative’s last financial

statements; and

(b) a list of members, their identity card numbers,

addresses and email addresses; and

(c)

a list of the elected committee members; and

(d) a list of attendees at the last Annual General

Meeting or a declaration by the committee that the Annual

General Meeting was convened and held in accordance

with the legislation and co-operative’s statute; and

(e) the co-operative society shall have made a

minimum paid up contribution of two hundred and fifty

euro (€250) of the last three financial years as determined

by the audited financial statements filed with the

Committee; and

(f) the co-operative societies’ and recognised

organisations modified financial statements of the

preceding two financial years shall not be seriously

qualified by the co-operative societies or organisations

auditor.

(2) The following shall be exempted from being in

conformity with the requirements of regulation 14(1)

(a) a new co-operative with three complete years or

less of financial operations;

(b)

a co-operative for social or community benefit

that is a social enterprise.

(3) The requirements in regulation 14(2) may be

reviewed every three calendar years by the Board.''.

Regulation 16 of the principal regulations shall be

substituted as follows

''16. (1) Funding shall be distributed by the Committee,

subject to availability, according to the following structure

(a) a sum equivalent to three and half percent of the

five percent paid up dividend share capital contributed

during the preceding year shall be granted to the two

leading, recognised and eligible organisations towards the

financing, administration and provision of services to

members of the organisations;

(b) a sum equivalent to one and half percent of the

five percent paid up dividend share capital contributed

during the preceding year shall also be granted to

(i) member societies of both

leading,

recognised and eligible organisations;

(ii) co-operatives not members of or affiliated

with the two leading, recognised and eligible

organisations;

(iii) for jointly presented proposals by the two

leading recognised and eligible organisations; and

(iv) those eligible for funding in accordance to

regulation 13.

(2) The Committee shall make available the funds to the

two leading, recognised and eligible organisations in regulation

16(1)(a)

(a) upon majority approval of the forecasted annual

budget of the following year which shall be provided to the

Committee by not later than October of the preceding year;

(b) upon majority approval of the budget, the

Committee shall transfer the funds for the upcoming year

by not later that seventh day of January.".

The Schedule to the principal regulations shall be Substitutes the

Schedule to the

substituted as follows

principal

regulations.

''SCHEDULE

(Regulation 17)

Code of Ethics

1. Principles

The Committee and its members shall take as their

inspiration and aspiration the Values and Principles of the

International Co-operative Alliance as reproduced at the

end of this Code. The work of the Committee is dedicated

to improve the cooperative impact on the Maltese economy

and help to provide a sustainable pluralistic and diverse

national economy.

The Committee and its members should govern according

to the highest standard of integrity, honesty, loyalty,

confidentiality, commitment transparency, accountability

and professionalism, and in a manner that treats all

stakeholders fairly, equitably and promptly.

Without prejudice to the Constitution or where any other

law otherwise provides, the Committee and its members

should ensure that their actions are inspired by loyalty to

the Committee and to all stakeholders. This is especially

important as this Committee is responsible for the

distribution of funds that have been subscribed by a levy

prescribed by the Government on the surpluses of

successful co-operatives. Hence the Committee members

have a fundamental responsibility not just to Government

but also to co-operatives and their individual members, as

well as to the wider public.

The Committee and its members should ensure that their

members commit to decisions that not only economically

effective and efficient but are also socially responsible in

line with the underpinning philosophy of democratically

owned co-operative enterprise.

The Committee and its members are expected to provide

impartial and accurate advice to the Government of the

day.

2. Fiduciary duty and duty of care

Being a Committee member brings with it a commitment

to carry out all necessary duties and responsibilities which

must be performed by the Committee. The Committee and

its members owe both a fiduciary duty and a duty of care

towards the Committee and the persons that they serve.

Fiduciary duty relates to the concepts of loyalty, honesty,

avoidance of conflicts of interest, confidentiality and acting

in good faith and interests of the co-operative sector and its

members, as well as meeting the high standards expected

by the wider public.

Duty of care relates to the exercise of care, diligence and

skill in doing the job properly e.g;

Attend every meeting of the board and of any committee or

sub-committees of the board to which he is appointed,

unless there is an avoidable reason for non-attendance, in

which case the Member shall notify the Chairperson of

this.

Prepare properly for every meeting by reading in advance

any documents sent out for the purpose of the meeting.

Arrive on time for every meeting fully prepared and able to

take an active role in discussions and decision making.

As the Committee’s agents, the Committee and its

members must use their discretion to ascertain that

decisions are taken within the policies, parameters and

priorities in keeping with the objects of the Committee and

with the Values and Principles of the International Co-

operative Alliance. In particular, decisions should never be

made for any collateral purpose, nor for personal interest.

3. Compliance with the law

Each Committee member should understand and abide by

his legal duties and responsibilities. The Committee and its

members must ensure that individually, collectively as the

Committee, and the Committee, act in full compliance with

the letter and spirit of all the relevant legislation.

The Committee and its members must ascertain that they

commit themselves and the Committee to act ethically and

legally at all times. They must also avoid situations which

could be perceived as improper. Whilst the Committee and

its members must be conversant with the relevant

legislation and regulations in force, they are expected to

seek professional advice whenever in doubt. They must

also ensure that the Committee’s records are accurate and

faithful.

4. Fairness, equity and standards of behaviour

In addition to fulfilling their legal duties, members are

expected to show high standards of behaviour in carrying

out their responsibilities. This is necessary in order that the

Committee can function properly, that it can play its part

appropriately in the overall governance of the Central Co-

operative Fund, and that the good name and reputation of

the Central Co-operative Fund is maintained.

Members will observe the following general standards

Members will perform any duties associated with their

positions diligently, impartially and conscientiously to the

best of their ability.

In their dealings with each other, with the Committee’s

officers, and with its professional advisers, members must

treat people politely, fairly, and with dignity and respect.

The Committee and its members must ensure that their

Committee deals with issues or cases with consistency,

promptness and fairness. This involves dealing with

matters in accordance with approved procedures quickly

and without discrimination on any grounds. Every

Committee member is obliged to treat each issue

reasonably and with a view of meeting the principles of

natural justice.

On public occasions and on all Central Co-operative Fund

business, members must behave with integrity and in a way

that is appropriate for a member of such an organisation.

The member must not bring the Central Co-operative Fund

into disrepute or prejudice its general good standing in any

way.

Members should behave in a way that demonstrates their

beliefs in the Values and Principles and ethical stance of

the co-operative movement worldwide and shall conduct

themselves in a way that does not call these beliefs into

question or prejudice the general good standing of co-

operation in any way.

Members will treat meetings of the Committee as formal

occasions, and will

accept the authority of the Chairperson of any meeting,

expressing all questions and points of view through the

Chairperson;

listen to the views of other members with an open mind,

seek advice or clarification where needed, express their

own views, and come to their own decisions on individual

matters in good faith in what they believe to be in the best

interests of the Central Co-operative Fund and its

objectives, taking into account relevant factors and

ignoring irrelevant factors;

accept decisions made by the Committee in accordance

with the law and the Central Co-operative Fund governing

document, even if he disagrees with it, and voted against it

if a vote was taken. This includes a commitment to support

any decision of the Committee outside of Committee

meetings;

not resort to behaviour that could be considered aggressive

or intimidating,

nor indulge in favouritism, cronyism or nepotism;

keep to the agenda, raise other issues under "any other

business" according to agreed procedures, and not engage

in discussions during the meeting which are not relevant to

the issues of the meeting;

not present misleading information or behave in a way

designed to mislead the board.

5. Public comment and confidentiality

The Committee and its members enjoy the right to make

public comment and enter into public debate on political

and social issues. However, such action does not bring

them into conflict in any manner with their primary duties.

Committee members will treat all information which they

receive in their capacity as members, and all discussions at

Committee meetings as confidential.

5.3 Members will observe the following obligations of

confidentiality

They will not disclose any information outside Committee

meetings unless it is already in the public domain, or they

are specifically authorised by the Committee to do so, or if

required to do so by law. This includes information about

the business before the Committee, deliberations of the

Committee in reaching decisions, and the way individual

members voted on issues.

They will not use any information for personal advantage,

or the advantage of family, friend, associates or business

and other associations’ benefit.

They will not pass information to any representative of the

press or media, and will refer any press or media enquiries

to Chairperson.

They will not make unauthorised photocopies of any

documents.

They will take proper care of any documents they receive

as members, and store and dispose of them securely.

The Committee and its members must ensure that the

Committee applies the highest standards of management

ensure accountability requiring everyone to be held

responsible for their actions, ascertain transparency in the

decision making process to cultivate trust, and integrate

and instil all the elements of good governance within the

Committee’s culture.

Conflicts of interest

A conflict of interest arises out of a situation where the

Committee and its members use their post to benefit

themselves, friends or families or persons associated in

their work endeavours.

The Committee and its members should not use their

position to promote their interests, interests of related

persons, business associates, corporations, unions,

partnerships and friends.

The Committee and its members should not take advantage

from their Committee’s transactions and opportunities or to

solicit clients for their, their associates’, work, friends’ or

family business’ interests.

The Committee and its members should not only avoid

situations that may give rise to conflicts of interest and

must disclose to the Committee and the Chairperson in

writing any situation where there is a perceived or potential

risk that conflicts of interest may arise.

In the event that any member of the Committee declares

that the Chairperson or other member has a conflict of

interest, the Chairperson will notify the Minister of such

claim.

The Chairperson must fully disclose in writing to the

Minister all situations and circumstances that could give

rise to conflicts of interests. He is to seek the advice of the

Minister in such matters but as a minimum, he should not

participate in the meeting nor have access to the relative

documents.

Likewise the Committee and its members must fully

disclose in writing to the Chairperson and the Committee,

all situations and circumstances that could give rise to

conflicts of interests. Such member should recuse

themselves from the meeting when the relevant item is

discussed and should not have access to any documents

relevant to the conflicted item.

The Committee and its members are duty bound to reject

totally and immediately any undue pressure that is brought

to bear on them to influence their behaviour or decisions

and should disclose such instances to the Chairperson and

the Committee, who must decide on the most appropriate

action, giving due consideration to disclosing the matter

and seek advice from the responsible Minister.

The Chairperson must keep a register of member’s

interests which is open to inspection by members.

Entertainment, gifts and favours

Committee members must not, in their capacity as a

Committee member (or what might be perceived as their

capacity as member, receive from or give to any person or

organisation any hospitality, gift or any other benefit.

The Committee and its members, their relatives and friends

should not accept entertainment, gifts, benefits or favours

that give rise to or are perceived to create favoured

positions in doing business with the Committee or deviate

from the proper course of duty. Such benefits also include

the receipt of cash, loans, securities or commissions.

The Committee and its members should not offer

entertainment, gifts, benefits or favours in their role as

Committee members to solicit preferred treatment for

themselves, their families or friends, or the Committee.

Committees vary in their policies on the acceptance of

gifts and benefits depending on the nature of their business.

It is expected, however that only token gifts or benefits

may be accepted for example inexpensive items (less than

€20 in value) such as free calendars may be accepted in

circumstances approved by the Chairperson and the

Committee.

Procurement

In all procurement practices, including in the setting out of

procedures for tendering, the Committee and its members

must bear in mind that the expenditure involved is made

out of co-operative and public funds. The highest possible

level of accountability and transparency should be reflected

in every stage of the decision making process of

procurement.

The Committee and its members should seek to ensure the

best value for money in drawing up the specifications and

the conditions of procurement and in the adjudication of

the offer or offers.

The recognised organisation shall not be obliged to

observe public procurement practices (notwithstanding

regulation 17 of the regulations. but shall observe

commercial good practice.

Use of Committee’s property

The Committee and its members are expected to be

efficient and economical in the use and management of the

Committee’s resources. They are also required to be

conscientious in their use of the organisation’s property and

services, and are duty bound to avoid their abuse by other

parties.

The Committee and its members are required to seek the

Chairperson’s and Committee approval to use the

Committee’s property for any purpose not being the

Committees business.

Outside business interests, employment and associations

10.1 At the time of appointment the Committee and its

member’s nominees should declare in writing any outside

business interests, investments, positions of employment or

associations that could potentially give rise to conflicts of

interest.

10.2 A Committee member has a duty to notify the Chairperson

and Committee in writing if, during his membership of the

Committee his position as reported in paragraph 9.1 above

changes. An annual review should be conducted by

Committee officials.

10.3 The Committee and its members should act and behave in

the best interest of the Committee irrespective of any

outside activities.

Relationships with stakeholders

11.1 The relationship with stakeholders is at the heart of

corporate governance. The Committee and its members

should exhibit care and diligence in their dealings with the

various stakeholders, acting in good faith and fairness in

their rapport with them.

11.2 The relationship between the Minister and the Committee

is a complex one. The Minister is responsible to the

Government as well as to Parliament and must speak both

to and for the Committee. The Chairperson and the

Committee must ensure that the Minister is provided with

the best possible information about the decisions and

actions of the Committee.

11.3 The relationship between the Committee and the co-

operatives and their individual members is also a complex

one. Members must have a deep and thorough

understanding of the distinct nature of co-operative

enterprise. In particular its fundamental role to ‘meet the

needs of its members’ and not solely to maximise profits

where that could be to the detriment of the individual

member. Co-operative elected or appointed members of the

Committee must be particularly diligent in recognising

their fiduciary duty to the Committee and avoid pressure to

accept mandates for action from their co-operative

associations.

Breach of this Code

12.1 The Committee should ensure that it behaves, and is seen

to behave, in an ethical manner.

12.2 The Committee and its members should adhere to the

standards described in this Code of Ethics. In fulfilment of

this, every Committee member should review and declare

adherence to the Code of Ethics upon nomination.

12.3 The Chairperson is responsible to ensure that this Code of

Ethics is upheld by the Committee and the members.

Members found in breach of the Code of Ethics are liable

to censure and recommendation for dismissal from the

position. The Chairperson must ensure that breaches are

reported to the responsible Minister immediately after they

have come to their attention.

Declaration (to be completed and signed by each

Committee member before taking up appointment on the

Committee).

I (name and surname), .........................................................

Identity Card number ....................., declare that I have read

and understood this Code of Ethics for the Committee and

its members, and agree to conduct myself in accordance

with this Code.

Signature ............................................

Date ....................................................''.

B

€1.17