Jamaica closer to social enterprise legislationWednesday, December 08, 2021
Jamaica's social enterprise sector is gearing up for greater acceptance as the Draft Legal Status Act, with an accompanying Market Strategy and Resource Mobilisation Plan is now being prepared for submission to Cabinet by the Ministry of Industry, Investment and Commerce (MIIC).
The draft was prepared with coordination support from the Planning Institute of Jamaica (PIOJ).
This follows the July 15 close-out of the European Union (EU) Investment Climate Reform Facility.
The Act will place the definition and qualifying criteria of a social enterprise in law and formalise the sector to make it more attractive to investment and credit, support the improvement of national standards bodies, and enable social enterprises to cohesively petition for government incentives.
Currently, in order to conduct business, social enterprises such as co-operatives, associations, foundations and non-profit organisations have to register as limited liability companies, charities or benevolent societies.
The Draft Legal Status Act defines a social enterprise as an entity with a defined social mission set out in its constitution to contribute to solving social, economic, environmental, or cultural problems at the community, national, or international levels through ethical business.
The MIIC Micro Small and Medium Sized Enterprise (MSME) Policy already recognises social enterprises and, when the Act is passed, Jamaica will be the first nation to have such legislation.
Speaking at the July 15 launch of the draft, Minister of Industry, Investment and Commerce Audley Shaw said of the development, “The Government of Jamaica recognises that social enterprises can uplift and place more Jamaicans at the centre of the nation's development agenda. They are aligned to Jamaica's Vision 2030 National Development Plan, particularly in relation to strategies aimed at poverty reduction, environmental protection, and employment of the marginalised. We also recognise that social enterprises are critical supporting pillars in Jamaica's commitment to the attainment of the country's [UN] Sustainable Development Goals (SDGs).”
In her remarks, Head of European Delegation to Jamaica Marianne Van Steen stated, “I am proud to see that this is the first ICR [Investment Climate Reform] Facility intervention to be completed in the Caribbean region, with regional support towards the improvement of credit infrastructure, the insolvency framework as well as support for national standards bodies, in the context of the pandemic, currently still ongoing… We are very positive on the impact that this initiative will have and we see it as one more positive step from this Government towards improving the business environment and the investment climate for social enterprises in Jamaica. Promoting a social economy is a key policy focus for the European Commission. We are currently working on a social economy action plan for the European Union and are happy to see that this topic is also high on the agenda for Jamaica.”
Director General of the PIOJ Dr Wayne Henry, in his address, stated that: “Jamaica faces several social, environmental and cultural issues inimical to its development. Social enterprises are playing a crucial role in highlighting these issues and devising solutions, through positive contribution to aggregate demand, social inclusion and economic gains.”
He added that, “The accomplishments gained and activities undertaken within the social enterprise sector align with and will contribute to accomplishing the goals of Vision 2030 Jamaica and its intended outcomes.”
The ICR Facility was co-funded in 2020 by the Delegation of the European Union and the Organization of African Caribbean and Pacific States (OACPS) under the 11th European Development Fund. The project was approved under the ICR's Business Environment Reform for the Social Enterprise (SE) Sector in Jamaica.
According to a 2015 The University of the West Indies (UWI) research paper, in 2014, social enterprises contributed $136 million to gross domestic product (GDP). It noted that most social enterprises are operated from volunteer labour and nearly 40 per cent had been in operation for 10 years or more.