Cak Policy Position On The Cooperative Bill, 2024

By Admin Monday, 4th November 2024

The Cooperative Bill, 2024 is the culmination of a long reform process that began in 2017 with the development of a new National Cooperative Policy to replace Sessional Paper No. 6 of 1997.

Key milestones include:

  • 2019: Adoption of the Revised National Cooperative Policy by stakeholders
  • 22 November 2019: Cabinet approval of the revised Policy
  • 16 December 2020: Appointment of a 15-member Taskforce to develop an implementation framework
  • August 2021: Adoption of the Policy as Sessional Paper No. 4 of 2020 by the National Assembly
  • November 2021: Submission of Draft Cooperative Bill to the Cabinet Secretary
  • February 2024: Introduction of the Cooperative Bill, 2024 in the National Assembly
  • 3 December 2024: Passage by the National Assembly with amendments
  • 12 February 2025: Introduction in the Senate (currently under Second Reading and public participation)

CAK recognizes the Bill as a major reform aimed at aligning cooperative law with the Constitution of Kenya, 2010 and strengthening governance and accountability in the sector.

2. CAK Overall Position on the Cooperative Bill, 2024

CAK supports modernization of cooperative legislation to:

  • Align with constitutional devolved governance structures
  • Strengthen accountability and transparency
  • Improve professional management
  • Enhance regulatory clarity
  • Promote sector growth and sustainability

However, CAK expresses concern regarding amendments introduced by the National Assembly to Section 61(2) relating to term limits for directors.

3. Section 61(2) – Board Term Limits

Provision as Passed by the National Assembly

Section 61(2) provides:

“Members of the board of directors shall be elected for three years and shall be eligible for re-election for one term of three years.”

This limits cooperative directors to a maximum of two terms (six years).

CAK Policy Position: Oppose Mandatory Two-Term Limit

CAK does not support the blanket limitation of directors to two terms.

3.1 Grounds for CAK’s Position

(1) Interference with Democratic Member Control

The Cooperative Bill is guided by the principle of:

  • Democratic member control
  • Autonomy and independence

Imposing mandatory term limits interferes with members’ constitutional and cooperative right to freely elect leaders of their choice.

Members must retain sovereign decision-making power.

(2) Over-Legislation of Internal Affairs

Cooperatives are autonomous member-owned institutions.

The proposed limit:

  • Over-legislates internal governance
  • Restricts flexibility of societies
  • Undermines self-regulation

The Act should provide framework principles — not micromanage leadership tenure.

(3) Leadership Resource Drain

Not every cooperative member has:

  • The skills
  • The governance competence
  • The willingness to serve

A rigid two-term limit risks:

  • Loss of experienced leadership
  • Weakening institutional memory
  • Governance instability
  • Succession crises, especially in secondary cooperatives, unions, and apex bodies

(4) Contradiction with Guiding Principles in Clause 4

Clause 4 of the Bill emphasizes:

  • Autonomy
  • Democratic member control
  • Independence

Mandatory term limits contradict these guiding principles.

(5) Existing Regulatory Safeguards Are Adequate

The Bill already establishes oversight through:

  • The Commissioner for Cooperative Development
  • County Directors for Cooperatives
  • The Sacco Societies Regulatory Authority (SASRA) for DT-SACCOs

These mechanisms are sufficient to address:

  • Mismanagement
  • Abuse of office
  • Governance failures

Additional term restrictions are unnecessary.

(6) Previous National Consultations Dropped Term Limits

The issue of term limits was:

  • Extensively debated during Taskforce consultations
  • Discussed during nationwide public participation
  • Ultimately dropped in the original draft

Reintroducing it at this stage undermines the consultative legislative process.

4. CAK Proposed Way Forward on Section 61(2)

CAK proposes the following options for Senate consideration:

Option 1: Revert to Original Draft

Revert to the original wording:

“Members of the board of directors shall be elected for a term of three years and shall be eligible for re-election.”

This allows members to determine leadership continuity.

Option 2: Allow Self-Regulation Through By-Laws

Amend Section 61(2) to provide that:

  • Term limits shall be determined in the cooperative’s by-laws.

This preserves autonomy and flexibility.

Option 3: Remove Section 61(2) and Allow Regulation by CS

Remove the provision and empower the Cabinet Secretary to develop regulations, allowing flexibility without hard-coding term limits in primary legislation.

5. Role of Senate – Engagement Strategy

CAK calls upon the Senate Committee responsible for Cooperatives to:

  • Review the impact of Section 61(2)
  • Align the provision with cooperative principles
  • Protect democratic member control
  • Amend the Bill accordingly

CAK remains ready to provide technical submissions and participate in public participation forums.

6. Broader CAK Position on the Cooperative Bill, 2024

CAK supports:

  • Clear delineation of national and county roles
  • Strengthening regulatory coordination
  • Enhancing governance standards
  • Professionalization of cooperative management
  • Technology adoption and modernization

However, CAK emphasizes that:

Reform must strengthen — not weaken — cooperative autonomy.

7. Conclusion

The Cooperative Bill, 2024 is a historic reform opportunity for Kenya’s cooperative movement.

CAK supports modernization and governance strengthening but urges the Senate to amend Section 61(2) to preserve:

  • Democratic member control
  • Autonomy and independence
  • Institutional continuity
  • Leadership stability

The future of Kenya’s cooperative movement depends on reforms that are principled, balanced, and aligned with cooperative values.