The Paul Singer Act, approved on December 23, 2024, marks a significant moment for the solidarity economy in Brazil.
This law, also called Law No. 15,068/2024, establishes the National Solidarity Economy Policy and sets up the National Solidarity Economy System (Sinaes) to encourage social inclusion and sustainable economic growth.
We have chosen the key news and updates from the law in this article to keep you informed.
What was the state of the National Solidarity Economy Policy prior to the Paul Singer Act?
Before the Paul Singer Law, the solidarity economy was regulated in a disjointed and unacknowledged way within the legal framework.
Self-managed and cooperative projects encountered challenges in securing funding, technical assistance, and integration into established markets.
Furthermore, there was no organized national policy to incorporate and acknowledge these efforts as a vital component of the country’s economy.
The absence of regulation also hindered the efforts of legal professionals, who frequently faced a lack of guidelines when addressing matters concerning the solidarity economy.
The new law marks a significant step in acknowledging and advancing this economic approach that emphasizes collaboration, autonomy, and shared advantages.
What are the modifications brought about by Law No. 15,068/2024?
The Paul Singer Law provided a strong legal foundation for enhancing the solidarity economy.
A National Solidarity Economy Policy is put in place to encourage the growth of the Brazilian economy with a greater emphasis on initiatives that align with social and environmental values.
The law also establishes the Sinaes (National System of Solidarity Economy), a program designed to support and enhance these cooperative initiatives.
Let’s examine how each of these aspects is covered in the legal document.
National Solidarity Economy Policy: Operational Mechanisms [Sections 3 to 9]
The National Solidarity Economy Policy aims to promote an economic system founded on principles like solidarity, self-governance, and sustainability.
It sets specific rules for managing and backing solidarity projects to enhance coordination among various efforts.
What is the evolution of the solidarity economy? [Article 4]
The Law no. 15.068/2024 outlines various traits that can distinguish solidarity economy businesses.
Projects of solidarity economy that qualify for benefits under the National Solidarity Economy Policy must exhibit the following characteristics according to Article 4.
Self-management organizations are groups where members work together to manage economic activities and decide how to share the outcomes in a transparent and democratic manner, with decision-making power held collectively by the assembly and each member having an equal vote.
Members of the organization are actively engaged in achieving their social objective.
Practice trading goods or offering services in a just and cooperative way.
Distribute the financial outcomes of economic activities based on the decisions made by its members, taking into account the proportionality of operations and economic activities conducted both individually and collectively.
V – determines the final operational outcome, if achieved, to serve its objectives, provide assistance to similar struggling ventures, and support community development or the professional and social advancement of its members.
It is crucial to mention that:
- The structure of the project as a recipient relies on its legal structure (Art. 4(1)).
- Solidarity economic initiatives will be considered non-profit legal entities if they are legally formalized (Article 4, § 2).
- Undertakings with lower-level labor mediation are not eligible to receive benefits (Article 4, Section 3).
- Enterprises that choose to operate as cooperative corporations must adhere to particular laws (Article 4, Section 4).
What are the guiding principles for projects that benefit from the National Solidarity Economy Policy? [Art. 5]
The Paul Singer Law sets out certain instructions for beneficiary projects to adhere to.
- Encouraging sustainable practices that uphold the environment and minimize environmental effects.
- Valuing and promoting inclusion by respecting cultural and social diversity, including local differences.
- Emphasize the significance of workers’ role in management by focusing on self-management and collective collaboration.
Read Article 5 of Law No. 15.068/2024 entirely.
Art. 5 provides instructions for the projects eligible for benefits under the National Solidarity Economy Policy.
Democratic management;
II – assurance of membership that is both free and voluntary
III – good employment opportunities;
IV – sustainability of the environment;
Collaboration among businesses and networks.
Community integration involves the implementation of democratic practices and citizenship.
VII – Implementation of reasonable pricing practices based on the principles of fair and ethical trade.
Promotion of equity, fundamental rights, and guarantees while respecting human dignity and differences.
Transparency and public disclosure in managing resources and equitable distribution of outcomes.
Encourage members to actively participate in strengthening their projects.
XI – participation of members in fulfilling the social goal of the business.
Financial outcomes from economic activities will be distributed based on the decisions made by the members, taking into account the proportionality of individual and collective operations and economic activities.
Fair and solidarity trade involves a unique way of conducting commerce that is focused on social justice and solidarity, practiced by solidarity economy enterprises. Fair pricing is determined through open dialogue, transparency, and active involvement of all stakeholders, leading to a fair distribution of profits across the production chain.
What are the goals and fundamental beliefs of the National Policy for Solidarity Economy? [Articles 6 and 7]
The goals and principles that must guide the recipient businesses are outlined in the 6th and 7th articles of the National Solidarity Economy Policy.
- Reduce social and regional disparities by creating jobs and increasing income.
- Strengthening solidarity economy networks involves establishing links between projects to facilitate resource and knowledge sharing.
- Developing specialized tools to make it easier for these businesses to expand their market reach and access financing.
- Prioritizing the well-being of the group over individual financial gain: Valuing human labor over capital.
- Democratic and inclusive methods: Guaranteeing equal involvement in decision-making processes.
- Encouraging mindful purchasing and supporting small-scale production to boost the local economy and foster solidarity.
What are the main pillars of the National Policy for Solidarity Economy? [Article 8]
Law no. 15.068/2024 outlines various strategies in the National Solidarity Economy Policy chapter.
The National Solidarity Economy Policy is structured through the following measures.
Training, technical support, and social and professional development.
Accessing financial and credit services.
Promotion of marketing, fair trade, solidarity trade, and responsible consumption is emphasized.
Support for collaborative economic initiatives and partnership networks.
Promoting company recovery through self-managed worker organizations.
Supporting research and development and the suitable adoption of technologies is crucial.
Paragraph 1 of the Regulation will impact the execution of the National Solidarity Economy Policy based on the instructions outlined in the Article’s Chapter.
The National Solidarity Economy Policy aims to support individuals receiving social benefits by engaging in solidarity economic initiatives, with a focus on those in socially vulnerable situations.
Solidarity economic initiatives must be registered in the National Register of Solidarity Economic Enterprises to qualify for public policy benefits.
All Sinaes members have guaranteed access to registration information, and informal solidarity economy groups will be prompted to pursue legal regularization.
Sinaes Program, also known as the National Solidarity Economy System, is covered in Articles 10 to 14.
Law no 15.068/2024 establishes the National System of Solidarity Economy (Sinaes) to manage and oversee the execution of the National Solidarity Economy Policy (Article 10).
It operates as a combined system of various efforts and assets to guarantee its efficient implementation.
- Sinaes aims to connect solidarity economy projects at various levels to encourage knowledge sharing and collaborative network building.
- Prioritizing social involvement, promoting transparency and inclusivity in their endeavors is highlighted in the guidelines (Article 12).
- Sinaes serves as a link between various actors, including government and non-governmental organizations, and solidarity economy networks, promoting integration (Art. 13).
State, district, municipal, or territorial meetings on Solidarity Economy will take place, along with a national conference on the topic.
What modifications are being made to the Civil Code? [Article 15]
Law no. 15.068/2024 introduced modifications to the Civil Code (CC), officially acknowledging solidarity economy businesses as legal entities.
Art. 15 also brings in tools to make it easier to formalize these businesses, encouraging the acknowledgment of their legal and economic characteristics.
The article 44 of the CC will come into effect in the following manner.
Legal entities under private law include:
I – groupings;
Societies – II
III – the bases.
Religious institutions;
Political parties – V.
VII – the advancement of the solidarity economy.
Religious organizations have the freedom to create, organize, and operate internally as they see fit, and public authorities are not allowed to reject their recognition or registration requirements.
The rules for associations also apply to solidarity economy enterprises and societies covered in Book II of this Code.
Political parties will be structured and operate in accordance with a specific law.
This modification ensures more legal certainty for cooperatives and associations, which previously encountered challenges in registering their operations or obtaining loans.
Lawyers now have a more defined legal structure to support and defend these businesses.
When will this law be implemented? [Article 16]
Law no. 15.068/2024 became effective on December 23, 2024, as mentioned in Article 16.
Why is this legislation commonly referred to as the Paul Singer Law?
Paul Singer was a leading figure in promoting the solidarity economy in Brazil.
He dedicated his life to advocating for fairer and more sustainable economic systems, working as an economist and sociologist.
His efforts sparked numerous solidarity economy projects across the nation and played a key role in achieving political and social acknowledgment.
Honoring Paul Singer’s name highlights his legacy and underscores Brazil’s dedication to establishing an equitable and supportive economic framework.
The Significance of a National Policy for Solidarity Economy
The Paul Singer Act marks a significant step forward for the solidarity economy in Brazil.
Legislation is creating a better atmosphere for projects focused on cooperation, social inclusion, and sustainability through the introduction of the National Solidarity Economy Policy and the Sinaes Program.
Clear and thorough regulations provide a strong foundation for lawyers and other professionals to work effectively, safeguarding and advancing ventures that help reduce inequalities and boost the local economy.
References:
The text discusses a law related to the Brazilian Civil Code of 2002.
