Cooperatives have been developing in response to the development of capitalism, to overcome social problems that emerged as the capitalism proliferated. Many states are actively recognizing cooperatives by law, expecting that they will function as supplementary economic entities to the capitalistic economy. Korea also have enacted laws that mainly govern individual cooperatives for the purposes related to industrial policies, such as Agricultural Cooperatives Act, since liberation in 1945, and enacted Framework Act on Cooperatives in December 2012 to promote various forms of cooperatives as a part of solutions to immediate social problems of unemployment and welfare.
Framework Act on Cooperatives is especially meaningful, because it popularized cooperatives, allows the government to consistently present its policies on cooperatives, and can promote cooperation between cooperatives which used to stand segmented by the laws that governed individual cooperatives. Promotion of cooperation between
cooperatives is more meaningful than others, because it is the core requirement for development of entire cooperatives, as it has been witnessed from the histories of those states where cooperatives have matured. Under such backdrop, International Cooperatives Alliance suggested “cooperation between cooperatives” (the 6th principle
of ‘7 Principles of Cooperatives’), and Framework Act on Cooperatives prescribed “cooperation with other cooperatives, etc.” (Article 8), and federations of cooperatives and social cooperatives (Chapters 3 and 5).
While approximately 10,000 cooperatives were established as of November 2016, which is in 3 years and 11 months from the day when Framework Act on Cooperatives took effect together with various policies, as the nation and society paid keen interest therein, the number of federations of so-called general cooperatives and social cooperatives established were mere 50 and 4, respectively, which shows that federation of cooperatives (as well as social cooperatives) is relatively not as active as individual cooperatives. Of course, there may be many causes of such situation, including, but not limited to, the concept of cooperatives in Korea still being in its early stage, and the federation of cooperatives, by their nature, grow slower than individual cooperatives.
On the other hand, I believe that there are some important causes from the institutional perspective, such as the clauses on qualification for membership to federation of cooperatives being arbitrarily interpreted in the field, and such clauses very narrowly prescribing the qualification. Thus, in this paper, I have analyzed the problems of applicable prescriptions in Framework Act on Cooperatives from the perspectives of interpretation and legislation, so that the applicable prescriptions can practically develop federations of cooperatives, and suggested specific ways to improve