Co-operatives are active in every sector of the global economy. A key distinguishing feature is that co-operatives create wealth for the many members of co-operatives who engage in co-operative businesses as service users, producers, independent business owners, consumers, and workers (1), not solely for the few who are rich enough to invest capital in investor-owned enterprises. Co-operatives help counterbalance the massive growth of inequality between the world's rich and poor; an issue that, if not addressed, has major economic, social, cultural, environmental, and political consequences.

In its role as custodian of the distinctive characteristic of co-operatives enterprise, the Alliance (2) adopted in 1995 the Statement on the Co-operative Identity, Values and Principles, ("the Statement") that is reproduced in the Appendix to these Guidance Notes. The Co-operative Principles included in the Statement have been forged in the furnace of over 150 years of practical experience of what constitutes the foundational principles necessary for the successful operation of a sustainable co-operative enterprise.

The Statement was adopted by the Alliance at its 1995 Centennial Congress and General Assembly in Manchester, England. Recommended to the General Assembly by the Alliance's Board, the Statement was the product of a lengthy process of consultation involving thousands of co-operators around the world. The Statement includes a definition of co-operatives, a listing of the global co-operative movement's key values, and a reformulation of the co-operative movement's principles to guide co-operative enterprises in their day-to-day business operations.

Our co-operative identity and values are immutable, but the principles have been reviewed and reformulated. In the history of the Alliance revisions to them have been approved three times after special commissions and consultation with Alliance members at the Congress of Paris in 1937, the Congress of Vienna in 1966, and in Manchester in 1995. Whilst the principles have been reformulated and restated, their essence remains: they are the guiding principles by which our co-operative identity and values are brought to life in the day-to-day operations of a co-operative enterprise.

The Co-operative Principles, which are the subject of these Guidance Notes, have long been known internationally as the Rochdale Principles, although the Alliance recognises the contribution of many co-operative founders in different countries, in particular Charles Gide in France, Alfonse and Dorimène Desjardins in Quebec, Canada; Friedrick Wilhelm Raiffeisen and Hermann Schulze-Delitzsch in Germany; Horace Plunket in Ireland; Frs. Jimmy Thompson and Moses Xavier of the Antigonish Movement in Nova Scotia; and Father José María Arizmendiarrieta in Mondragon, Spain. The human and international nature of the Principles is shown by the fact that the Rochdale Pioneers never claimed ownership of them. At the Rochdale Pioneers Museum in England, the following quotation is displayed next to the Alliance Statement on the Co-operative Identity - words that are well to be remembered:

"The co-operative ideal is as old as human society. It is the idea of conflict and competition as a principle of economic progress that is new. The development of the idea of co-operation in the 19th century can best be understood as an attempt to make explicit a principle that is inherent in the constitution of society, but which has been forgotten in the turmoil and disintegration of rapid economic progress." (3)

The Alliance's General Assembly resolution in 1995 adopting the Statement added: "that if further understanding is required, reference should be made to the accompanying background paper" . (4) That background paper , written by the late Professor Ian Macpherson, sought to issue guidance on the interpretation and implementation of the Co-operative Values and Principles in the modern world.

The world does not stand still. The world has changed significantly since the background paper was published in 1996. Society has changed, the globalisation of the economy has continued apace, there has been a global financial crisis, and new technologies have emerged as they have done since co-operatives themselves emerged at the beginning of the industrial revolution. All of these changes have led to the decision by the Alliance General Assembly in 2012 to issue these Guidance Notes on the practical application of the Co-operative Principles in the modern 21st century world.

Notwithstanding these wider global changes, the fundamentals of co-operative enterprise remain unaltered. The generic essence of what makes a co-operative enterprise a co-operative is as vibrant and relevant to the economic, social, and environmental quality of human society now as it was when pioneered by the co-operative founders in the 19th and 20th centuries. Our values are immutable, but the application of our Co-operative Principles require constant re-appraisal in light of economic, social, cultural, environmental, and political change and challenge.

The Co-operative Principles do not stand in isolation from each other. They are interdependent principles which support and strengthen each other. For example, the 5th Principle on Education, Training and Information will, if applied, strengthen and enhance Principle 2 on Democratic Member Control. If all the Principles are observed and applied in the day to operations of a co-operative enterprise, that co-operative enterprise will be stronger and more sustainable.

The Statement on the Co-operative Identity adopted by members of the Alliance in 1995 created a milestone in the history of recognition for co-operatives. Its clarity enabled the essential nature of co-operative enterprise to be recognised by the United Nations General Assembly in resolution 56/114 (5) of 2001. The Statement also underpins the International Labour Organization's Recommendation 193 of 2002 that has been widely used in reviewing and updating co-operative legislation in over one hundred countries and is a powerful tool for co-operatives throughout the world to make the case for a vibrant and expanding co-operative enterprise sector of the economy. Co-operatives are the only type of enterprise that have an internationally agreed ethical code of values and operate in accordance with principles democratically and internationally agreed by co-operatives that are members of the Alliance.

The Co-operative Principles and these Guidance Notes on their application are not a doctrine to be observed, nor are they a straightjacket on the entrepreneurial innovation of co-operatives seeking to meet their members' economic, social, cultural, and environmental needs. Innovation to meet the needs of co-operative members has always been the mother and father of co-operative enterprise and will remain so. These Guidance Notes are exactly that: guidance for co-operatives operating in different legislative jurisdictions with differing regulatory requirements, serving many different communities and cultures. The Co-operative Principles are universal, but these Guidance Notes are not intended to be prescriptive. They seek to explore and encapsulate how the underlying principles of a co-operative enterprise are to be applied in vastly different conditions to those that existed when co-operatives were first established. They are guidelines that should be able to be interpreted by co-operatives and, with the good practice examples included in them, help strengthen the growing co-operative enterprise sector of the global economy.

The global co-operative movement represented through the Alliance is very diverse. How the Co-operative Principles can be legitimately implemented through the interpretation and application of these guidance notes will vary, not just across cultures and traditions but also the size, stage of development and focus of a co-operative's business enterprise. Small co-operatives may operate in ways that are less formal than these guidance notes advise. Established co-operatives developing innovative new products and services for their members or facing new regulatory requirements may apply the Co-operative Principles in ways these guidance notes have not envisaged. The relevance of these guidance notes and the practical application of them is for each co-operative democratically to decide, but the adherence to the spirit of them, and their formal application where relevant, will benefit every co-operative enterprise and its members.

Our Co-operative Founders wanted to achieve much more than just establishing and operating successful business enterprises. They were concerned for social justice and were motivated by a passion to help transform the lives of those whose social, economic and cultural needs they had the vision to seek to meet through a jointly-owned and democratically controlled enterprise. In the tradition of our founders the Alliance too seeks, through these Guidance Notes, to show that same passion for social justice and transformation and a renewed vision of how co-operative enterprises in the 21st century can indeed build a better world by putting our Co-operative Identity Values and Principles into practice.

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