Stakeholder meeting about the draft law of social enterprises

Lately in Kosovo the discussion about Social Enterprises has emerged in the society. Social enterprises are an alternate way of enterprises as the main purpose of social enterprises is aiming to improve a social problem. 

 

A social enterprise resembles with non-governmental NGO-s because it creates clear objectives of improving social problems in its mission, and resembles with common enterprises, because it seeks financial sustainability. Nevertheless, the resemblance social enterprises differ from non-governmental NGO-s exactly because of self-financial sustainability, and differs from a common enterprise because it doesn’t create dividends and because the enterprise profit is reinvested in the fulfillment of its social objectives. 

Ministry of Labour and Social Welfare has proposed the project law on Social Enterprises 05-L-148. In Kosovo there are enterprises and other NGO-s which function within this framework, therefore the draft law beyond being welcomed has opened a wide debate concerning NGO-s worries about the restrictions that are outlined in this draft. 

In order to discuss this concerns NGO Lens has organized the stakeholder meeting where it was discussed about the draft law of social enterprises. The meeting aimed to discuss about the legislative regulation of social enterprises as a new concept in Kosovo. The meeting gathered many NGO representatives, representatives from the Ministry of Labor and Social Welfare, Parliamentary Committee on Health, Labor and Social Welfare as well as enterprises which operate in the framework of a social enterprises. The main purpose of the meeting was the discussion raised from the relevant stakeholders which directly or indirectly play a role in the social enterprises. 

One of the main issues raised in the meeting were the restrictions within the social enterprises scope. Regardless the government’s view to depend itself from the possible misuses by other enterprises, the restrictions within this scope have alienated the main purpose of social enterprises. 

There are two forms of different social enterprise activities proposed in the Draft law:

1) Social enterprises engaged in providing services, which guarantee inclusiveness of marginalized groups and produce a positive impact in the life quality of those who are potentially at risk of social exclusion (Category A);

2) Social enterprises which employ at least 30% of the staff from vulnerable groups (Category B).

Essentially, providing services and including people at risk of social exclusion, is an opportunity to wish upon, but social enterprises deal with these problems a bit differently. Social Enterprises operate within economic framework while having a products and services in order to approach to a community problem. Thus, a social enterprise has products or services, customers, markets, and revenues like a regular enterprise. It is a no-loss, no-dividend, self-sustaining company that repays its owners` investments. 

During the meeting it was discusses as well for the implications that the law on social enterprises might have with the law on pensions scheme 04/L-131. Representative from Down Syndrome Kosovo (DSK) has proposed that this implication should be considered prior to the launching procedures of the discussed law. 

Another concern that Down Syndrome Kosovo and other organizations like (AMC) Action for Mothers and Children and Handicos Kosova have discussed about, is the possibility for an organization or association to be the owner of the social enterprise. Representative from AMC presented the function of “Tesha Vesha” enterprise. The store’s profits go to Action for Mothers and Children. The store employs marginalized women and sells second hand clothing at cheap prices. In the near future, they will open a second location as well.  With the current legislation, it is difficult for them to transfer the profit from “Tesha Vesha” to AMC since they’re different entities. Transferring this money to AMC to use would still be a social enterprise activity, but the law limits it. Same kind of concerns have raised the other 2 organizations as they already have social enterprises operating under their organizations umbrella. 

In the end it was discussed also for the bureaucratic procedures in order to open or win the status of social enterprise. The request was to provide organizations with the opportunity to be owner of social enterprises, which would help the operation of the mother organization. Furthermore, it was discussed about the enterprises which at the moment are operating within the normal business framework, but when looking deeper into their economic operations they are working within social enterprises regulation. These enterprises according to the legislature proposed are not allowed to convert to social enterprises. 

The person who tried to give the answers to these question was the representative from the Ministry of Labour and Social Welfare Mr. Mentor Morina. Mr. Morina said that the law has a lot of possibilities for non-governmental organizations that have operated within the same framework. He also mentioned that the law is focused basically in vulnerable groups, and this is the main reason why the law gives the opportunity to non-governmental organization but not also for businesses. However, these problems can be solved through the proposed amendments.

In the meeting there were also the representatives of the Parliamentary Commission of Health, Labour and Social Welfare. Mrs. Flora Brovina as the head of the commission has shown a great will to listen all the concerns raised from the organizations in the meeting. She noted that they are aware that the social enterprises are new concept for Kosovo, therefore she is committed to listen to all the concerns prior to take any decision. 

In the end of the meeting all organizations have agreed to work together in order to deliver to the Parliamentary Commission a written paper with proposals in order to get the best from the social enterprises possibilities.