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Cooperative Societies Inspection Directive No. 922/2022
Ethiopian Cooperative Commission922/2022
Summary
This directive outlines the procedures and standards for inspecting cooperative societies in Ethiopia. It details the powers and responsibilities of the Ethiopian Cooperative Commission and cooperative inspectors, the rights and obligations of cooperatives, and various penalties for non-compliance. The directive aims to ensure that cooperatives operate in accordance with laws and regulations, benefit their members, and contribute to the national economy.
Who's affected
Cooperative societies operating in Ethiopia, their management, employees, and members.
Action required
Cooperative societies must adhere to the inspection procedures, fulfill their obligations, and rectify any identified non-compliance within the stipulated timelines to avoid penalties.
Key points
5- Establishes detailed inspection procedures for cooperative societies.
- Defines the roles and responsibilities of the Ethiopian Cooperative Commission and inspectors.
- Outlines the rights and obligations of cooperatives and their members.
- Specifies various types of offenses and corresponding penalties, including suspension and loss of legal personality.
- Emphasizes the importance of proper governance, financial management, and adherence to operational directives.
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Requirements
13- Cooperatives must be organized and registered according to the law.
- Cooperative by-laws must be approved by the general assembly and registered.
- Cooperative management bodies (General Assembly, Management Committee, Control Committee) must function according to legal requirements and bylaws.
- Cooperatives must maintain proper records and submit required reports to the appropriate authority.
- Savings and credit cooperatives must adhere to specific lending and savings regulations.
- Agro-processing, mechanization, and marketing cooperatives must follow established directives and procedures.
- Cooperatives must conduct annual audits and implement audit report recommendations.
- Inspection feedback must be submitted to the general assembly and kept in a visible place.
- Disputes must be resolved according to legal procedures.
- Cooperatives must have necessary directives for operations, including finance, procurement, and human resources.
- The number of members must meet legal minimums.
- Cooperatives must operate within their defined scope and territory.
- Cooperative property must be used for the benefit of the society and not for personal gain.
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Rights and permissions
6- Cooperatives have the right to request inspection services.
- Cooperatives have the right to ask inspectors for clarification.
- Cooperatives have the right to request information on the inspector's legality.
- Cooperatives have the right to receive inspection reports.
- Cooperatives have the right to submit complaints and appeals regarding inspection feedback and penalties.
- Cooperative members have the right to receive services and benefits as per bylaws and law.
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Restrictions
9- Cooperative activities must be conducted in accordance with the law, regulations, and bylaws.
- Cooperatives cannot operate without proper registration and bylaws.
- Management committees and inspectors must act within their legal powers and responsibilities.
- Property and funds of the cooperative cannot be used for personal gain.
- Cooperative operations are restricted to their registered scope and territory.
- Agro-processing and mechanization cooperatives must have and implement relevant directives.
- Loans must be disbursed according to regulations and primarily to members.
- Sales must adhere to procurement and sales directives.
- Penalties are imposed for non-compliance, including suspension and loss of legal personality.
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Penalties
8- Suspension of operations without notice.
- Written warnings to management or designated individuals.
- Fines imposed on management committee members, managers, or the cooperative.
- Suspension of management committee members or managers from their duties.
- Disciplinary action against employees.
- Loss of legal personality (dissolution) for serious or repeated non-compliance.
- Sealing of workplaces and bank accounts.
- Civil and criminal proceedings for misappropriation of funds or property.
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Objectives
5- To ensure cooperative societies operate in compliance with laws and regulations.
- To protect the benefits of cooperative members.
- To promote effective and competitive cooperatives that contribute to the national economy.
- To identify and address problematic practices through inspections and corrective actions.
- To prevent and mitigate risks associated with cooperative operations.
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Organizations
4- Ethiopian Cooperative Commission
- Regional and City Administration Cooperative Offices
- Cooperative Societies
- Government Revenue Offices
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Legal references
5- Cooperatives Proclamation No. 985/2016, Article 52(4) and 76(3)
- Cooperatives Proclamation No. 985/2016, Article 61
- Cooperatives Proclamation No. 985/2016, Articles 62, 63, 64, 65
- Cooperatives Proclamation No. 985/2016, Article 23
- Cooperatives Proclamation No. 985/2016, Articles 55 to 60
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Original sourcehttps://justice.gov.et/en/directives/cooperative-societies-inspection-directive-no-922-2022-2/
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