THE PROMULGATION PROCESS OF THE NEW LAW ON SOCIAL AND SOLIDARITY ECONOMY IN FRANCE (Jérôme Faure)

“When the idea of a draft law on social and solidarity economy was first included in the French politic agenda, two different objectives – interrelated though sometimes mutually opposite – had to be fulfilled.

The former was to respond to the request for recognition coming from the traditional sectors (cooperatives, benefit societies, associations, foundations) of social and solidarity economy. Such sectors felt threatened by the growth of social entrepreneurship.

The latter objective was to include the development of social and solidarity economy into the decisions to be taken by the European Commission within the framework of the Social business Initiative (SBI), whose objective is the development and acknowledgement of social entrepreneurship.

In order to attain a synthesis and general consistency, a different paradigm of social economy was necessary. The statutory approach had to replace the dynamic conception of economybased on entrepreneurship with a conception including as well “classic” companies, committed to aim their action at “social usefulness”–socially useful businesses.

In my paper I wish to expound on the elements that have allowed for a greater consistency, and on the prospects for social and solidarity economy after the new law”.

Nonetheless, I should add that the paper presented to you this morning fulfils several requisites even if it contains different limitations. First I will have to illustrate the origins and motivations of the new law, to connect this with the recently-started work with Ecuadorian authorities under an agreement signed before the law was discussed and voted in the French parliament. Furthermore, since I am here in the double capacity of my assignment in France and of an evaluation effected within the scope of an European programme, I will have to keep in mind the European context of the development of social economy, of solidarity economy, of social entrepreneurship. And, to conclude, if I may say so, to assess the impact of such policies over inclusion and employment.

The law adopted by the French parliament and promulgated on July 31, 2014, a little more than three months ago, is a complex and ambitious act. Therefore, I should define the actual situation of the sector of social and solidarity economy – and of entrepreneurial economy – and the way they should be. Complex, since it is an economy of diversities, an economy of necessities – which are multiple. Complex, even because it is an economy that posits man at the centre of the development of activities. Ambitious, because this economy must face numerous challenges that traditional economy has not been able to solve.

In order to comprehend this complexity, we should have a quick historical overview, taking into account the antecedents of this draft law.

In political and administrative terms, the phrase “social economy” entered the vocabulary of politicians at the beginning of the 1980’s.

Was there no “social economy” before? Of course there was, but with no denomination yet, whereas politicians talked about different kinds of statutes.

  • Benefit societies since the 19th century
  • Civil associations, introduced by a law adopted on July 1st, 1901
  • Cooperatives since the last years of the 19th century, and through a law approved on September 10, 1947.

The term “solidarity economy” was first used during the 1990’s, jointly with the idea of an economy promoting sustainable development.

Social economy and solidarity economy are two different things. They do have something in common, but some differences remain:

  • In social economy the prevalence is given to statutes. These lay the foundation and the values within the initiatives of a group of people, democratic governability – one man, one vote – and the mutualisation of means and resources;
  • In solidarity economy, the more global features are to be found in the social aim of the action; it is intended rather as an economic model for development with a strong integrational impact for people in situations of exclusion;

Some important battles were and are still fought between these two concepts. To make matters “easier”, so to say, a third actor intervened in 2000. This is what is called “social entrepreneurship”, which may be defined as a liberal effort to act for the public interest by using, when necessary, tools that are typical of market economy.

More battles between progressivism and conservativism sprung forth.

Actually, what must be remembered is that the European Commission decided to support social entrepreneurship through the publication – on October 25, 2011 – of its Social Business Initiative.

The new law has been formulated within a context of conceptual differences. I think it is important to keep in mind three aspects of that context:

  • Progress in the comprehension of this economy to know and recognize its differences. There is no single definite model for social and solidarity economy;
  • To give this sector its full dimension, a French law could not get stuck into its unique tradition, no matter how positive, but it had to be linked with the European approach;
  • Thus, little by little, we got to an economy of human values;

So, what is it that we should take into consideration in the French law about social economy?

A text that, within the European context, is a first because of its inclusive definition of social and solidarity economy, has to respond to four demands:

  • To acknowledge: the existence of a legal definition of the domain of social and solidarity economy, common to all activities characterized by a line of conduct that does not limit itself to statutory companies –cooperatives, benefit societies, associations,and foundations – but is open to the private concerns of the classic market, so as to include new companies in the domain of social and solidarity economy going through the same forms as the “traditional” companies of the actors of SSE, when they comply with the requisites fixed by the text.
  • To organize: the organization of governance in this sector, in the Title I of the law of July 31, 2014, but also in texts targeting some specific sector, is oriented both to promote the dialogue between governmental authorities and the concerned parties in SSE’s, and to give these last a chance to control the compliance with the letter and the spirit of the law itself. The lawmaker, by adhering to a method based on the dialogue between authorities and actors, highlighted in the drafting of the text, has preserved the idea of a regional conference for social and solidarity economy (article 8), whose outcome will essentially depend on the capacity of governmental and private actors to mobilize all concerned parties.
  • To update: To shape up a new way of looking at social and solidarity economy, this act may save the cost of an update of similar texts for each of the traditional actors. Such update is not a review but it produces new rights, for instance the right to comply with the solidary endorsement of social usefulness. In other instances, the new law appears as a possible opening towards social economy, as in the case of the right – included in the text – of employees to information, so that they may present an offer for resumption if the company they work for relocates.
  • To innovate: Article 15 of the law introduces for the first time a definition of the terms of social innovation. Innovation and its corollary, experimentation is one of the main axes of this law, including territorial policies of social and solidarity economy (Section 4,Chapter II, Title I) as for instance is made plain by the orientation of territorial associations for economic cooperation or by a reference to additional local currency. Such a drive towards innovation and experimentation should turn into an identity signal from public policies in favour of social and solidarity economy.

Jérôme Faure, formerly Interministerial Delegate, is now Head of the Mission “Innovation, social experimentation, and social economy” of the State Secretariat for Commerce, Handicraft, Consumption, and Social and Solidarity Economy (Ministry of Social Affairs of France.)