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How this worker co-operative made it in South Africa

Who needs a boss? Inside one of South Africa’s most successful worker-run businesses
These are uncertain times for printing company Fingerprint Co-operative Ltd in Cape Town, South Africa. The company's prized printing machine has seized up. There's a lull in drumming up new business. Now the workers are worried about a succession plan for the 29-year-old-company. Time for the employees to hold a 'workers revolution'? Not at Fingerprint - for here workers take the decisions themselves.

Fingerprint is a worker cooperative, one of about 50 operating in Western Cape Province. In a worker cooperative, all the employees have a stake in the business and an equal vote in the way it runs. Historically, worker co-ops have held the most appeal when things seemed perilous for workers. Take, for instance, the conditions in factories in South Africa in the 1980s. Bosses didn't tolerate workers who joined unions or politics. It's no wonder that the founders of Fingerprint, Issy Engelbrecht (70) and his friend Brian Arendse (now deceased), found themselves jobless one day over 30 years ago.

"After we were laid off due to our activism, we couldn't find a job anywhere in South Africa in the printing sector. So we crossed the border into Mozambique and Zimbabwe to find work, and joined the black consciousness movement at the time," says Issy, speaking at the co-op's office in Elsies River. 

Issy and Brian still couldn’t find work and they returned to South Africa after some time. But something was different. In the political field, they'd come across the concept of worker cooperatives and loved it. 

"We thought it was a noble concept - that workers owned the same shares, first of all. That gave everyone equal rights – one vote, one person, equal shares," says Issy.

So, Issy and Brian began planning a new printing venture. The name for the co-op came about one glorious weekend as they chatted over drinks. They'd wracked their brains in vain trying to find the perfect name for the nascent outfit. On that weekend outing, one person glanced at Issy's right hand and noticed the missing finger. 

"Why don't you name it Finger Printing Co-operative Ltd," the person had quipped. Somebody else at the gathering suggested 'Fingerprints'. Eventually, they settled on 'Fingerprint Co-operative Ltd'. 

"We thought the name was catchy, non-political and aptly described what we aspired to offer - a quality and accurate service," says Issy.

The rest, as they say, is history. Today Fingerprint Co-operative is thriving despite the few challenges. The company rakes in some R2.5 million annually and has an investment fund of over one million rands. From two people at inception in 1989, the co-op grew to 11 members and currently has four (two in their twenties and two over 50). Fingerprint has served clients in South Africa, Zimbabwe, Lesotho and Tanzania. 

"The investment fund is a feat for our small co-op because it makes us creditworthy. Banks can provide the financing we need to deliver big contracts. It also shows the bank that we know how to work with money," he says

The case for worker co-ops

Worker cooperatives aren't a new phenomenon. They became popular in the world during the industrial revolution. As jobs in industrial areas declined, workers began organising and controlling businesses for themselves to 'cope with the evils of unbridled capitalism and the insecurities of wage labour', according to Frank Adams and Gary Hansen in their book, Putting Democracy to Work.

Co-ops are well established in many parts of the world, including Italy, Spain, UK and France. In post-apartheid South Africa, worker co-operatives are seen by some in the labour movement as part of the solution to the runaway unemployment. The Co-operatives Act of 2005 and the National Co-operatives Policy of 2007 prop worker co-ops, but few have been successful.  

Many people often think of worker cooperatives as a hotbed of anti-capitalist and radical thought. Images of hippies or vegan executives in overalls couldn't be further from the reality, however. A co-op faces the same market conditions as its competitors, says Issy. Two years after launch, the founders realised the business lacked critical skills needed to be competitive. 

"We were factory workers with no formal training in business management. I was good at repairing printing machines and Brian was a skilled administrator. But, business acumen? We didn't have much of that. We’d used our pension money to start the business. A friend who owned a repair shop nearby needed some help with rent and so we moved in. We used our private vehicles for company work," says Issy.

As the number of members grew, Brian and Issy applied to various institutions to upskill and also got better printing machines.
  
"We now had a firm strategy for getting business. We targeted the ‘sympathetic market’ comprising NGOs such as the Labour Research Service, community-based organisations and government departments. And we grew!" he says. 

Changing tack

"Brian was even a stauncher socialist. He’d draw us back when he thought we were heading towards capitalism and urged us not to forget the community. When we started out it was according to each of our abilities. Give according to your ability and receive according to your needs. Irrespective of your contribution, if you didn't need R10,000 for the month you didn't get R10,000," says Issy, who is the Coordinator of Fingerprint.

After studying other workers' co-ops, Fingerprint changed tack.

"We decided the labour one put in is what one would get out as a salary. But, we'd get equal profit because we all had the same shares. Also, the co-op would pay for the opportunity to improve the skills of members. Unfortunately, not everyone liked this, so two of our members left." 

Bringing democracy to the workplace

Fingerprint's motto is, 'Co-operatives bring democracy to the workplace'. Unlike other companies, the workers here are involved in making important decisions. They make major decisions such as hiring new members, buying new equipment and how profits are shared. 

Critics of the model argue that the decision making processes in worker co-operatives can be tedious. And so Fingerprint members prepared for this. 

"We studied good worker co-ops and learned what works. We held annual general meetings and the membership formulated policies for directors. We’d put our ideas together, debate and arrive at decisions amicably. And we tried to avoid getting to the voting stage. When we had to vote, which was rare, it'd be very democratic. The rule is still the majority wins." 

The co-op members would draw an annual budget anticipating among other things, profits, expenses, and the number of skills. They adopted the remuneration model used in factories. 

"If you were totally unskilled, semi-skilled or skilled and in management, you earned a specific amount. And we took the factory model and reduced the pay gap. Today the most senior person gets about R800 more than the most junior worker." 

The co-op advantage

Issy sees the business model as a not-so-magic formula of treating workers with respect. "I could be a director in the co-op but on the shop floor, my job is a cleaner. We respect and take instructions from members depending on where they are located," he says.

Traditional businesses spend a lot on marketing campaigns and customer care services to build personal relationships with their customers. Fingerprint has a clear advantage here when competing with its counterparts in the mainstream sector – members feel part of the business, have a vested interest in seeing it succeed and care about ethics. 

"Often people are surprised to know that we're competing successfully with traditional businesses in the printing sector. We even have accolades to prove it," says Issy.

Not everyone is convinced about the viability of the worker co-op, though. Issy has experienced outright antagonism from some corporates. 

"Quite a few times I have been asked where I think am heading with 'this communism' that's failed in places like Russia and even here at home. I tell them that I don’t dispute some co-ops have failed. But then capitalism has been around for long. So, why are there so many poor people in the world? I am yet to get a compelling answer from them."

"In my opinion, poverty is a designed product of capitalism. Would capitalism thrive if everyone was rich and employed? Things get hard, I must admit, and I feel tempted to go that route. But when I look at our community, I think we’re on the right track. Rather suffer and try to build something that’ll make you happy. I am happy trying to help people who want to start worker cooperatives. In fact, I am proud that the maintenance and construction worker co-operative that we nurtured recently got work as sub-contractor for an RDP housing project. My family is proud of me and what we are trying to achieve.

Lessons from capitalists

So, how has Fingerprint managed to survive and weather the storms over the years? 

Issy says they watched other companies and learned what to avoid. For instance, some business owners mentioned how they'd killed their ventures with pay and benefits. Fingerprint avoided that path.

"We aren’t the best-paid people in Cape Town, but we all have houses, cars and we can see to the needs of our families and educate our children," he says.  

The roses and thorns
 
It's not been all rosy for Fingerprint. Due to a huge downtown in sales, the co-op had to downsize at some point. "Three people offered to step down – they’d be 82 years old now. We paid them out because we’ve planned for that.”

Fingerprint is battling to attract younger members, but Issy is determined. He's mulling a succession plan that involves young people.

"When we started out we were politically motivated and conscious. We were unionists fighting for our rights. But now to get the youngsters you need to provide political education focusing on the alternative economy. But, it's a struggle. We've experienced a high staff turnover of young new members in recent years."

Issy worries the co-op concept might die despite his efforts to organise various groups in the community to form their own cooperatives. 

"I'd be very proud of Fingerprint if most people in the Western Cape, especially the oppressed and poor people, knew about worker co-ops and how to start and manage one. We thought by this time we’d have achieved that, but we haven’t." 

Issy believes this education must start at schools. Also, good co-operatives leaders and advocates would be required to get the message across. 

The members of Fingerprint are proud of how far the business has come. Issy is optimistic about the future of workers' cooperatives in South Africa.

"Cooperatives have great potential. People just need to take a different stance and be honest. When we speak to communities – and we’ve spoken to many – people are so excited about the concept. But imagine a person who’s always worked for someone else, has likely been treated badly, and all of a sudden they come into owning a business. That requires ongoing preparation and especially if the person is above 30 years of age," says Issy.

He has good advice for anyone interested in building a worker cooperative. 

"Be fair, objective and control greed. It's complicated to start a worker cooperative for people who really need them. The training and understanding must be 100 times more intense. And we are doing it and we’ll continue to try,” he says.


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