Laws of Vietnam

DECREE No.43-CP OF APRIL 29, 1997 ISSUING THE MODEL STATUTE OF AGRICULTURAL COOPERATIVES

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of September 30, 1992;

Pursuant to the Law on Cooperatives of March 20, 1996;

At the proposal of the Minister of Agriculture and Rural Development,

DECREES:

Article 1.- To issue together with this Decree the Model Statute of Agricultural Cooperatives.

Article 2.- The Minister of Agriculture and Rural Development shall have to guide the implementation of this Model Statute.

Article 3.- The Ministers, the Heads of the ministerial-level agencies, the Heads of the agencies attached to the Government, the Presidents of the People’s Committees of the provinces and cities directly under the Central Government and the President of the Vietnam Federation of Cooperatives shall, within their powers and responsibilities, organize the implementation of this Decree.

Article 4.- This Decree takes effect 15 days after its signing, the earlier stipulations which are contrary to this Decree are now annulled.

On behalf of the Government

For the Prime Minister

Deputy Prime Minister

PHAN VAN KHAI

THE MODEL STATUTE OF AGRICULTURAL COOPERATIVES

Chapter I

GENERAL PROVISIONS

Article 1.- Definition of an agricultural cooperative:

An agricultural cooperative is a self-governing economic organization established by farmers and other laborers who share common needs and interests, and volunteer to contribute capital and labor in accordance with the provisions of law, in order to bring into play the strength of the collective and of each cooperative member to assist one another to efficiently carry out service activities in support of the household economy of cooperative members and business in the production, processing and consumption of agricultural, forestry or aquacultural products and business in other branches and trades in rural areas, in service of agricultural production.

Article 2.- Scope of regulation of the Model Statute:

1. This Model Statute shall apply to agricultural cooperatives in rural areas;

2. An agricultural cooperative shall have the legal person status; be entitled to open accounts at banks; must have at least 7 members; has its capital and assets contributed by cooperative members and self-accumulated capital; it shall take liability for its debts and other obligations with the whole capital and assets under its ownership; it has its own seal and its organization and operating Statute;

3. Groups of agricultural cooperatives in different forms and under different names shall not fall within the scope of regulation of this Model Statute.

Article 3.- An agricultural cooperative shall be organized and operate on the following principles:

1. Voluntariness to join and leave the cooperative: All farmers and other laborers, who meet the conditions prescribed by the Law on Cooperatives and approve the Statute of the agricultural cooperative can become a member of an agricultural cooperative; a cooperative member can leave the cooperative as prescribed in the Statute of each agricultural cooperative;

2. Democracy and equality in the management of a cooperative: Members of an agricultural cooperative are entitled to participate in the management, supervision and control of all activities of the cooperative and have equal voting right;

3. Self-liability and mutual interests: The agricultural cooperative shall take self-liability for the results of its service, production and business activities; and decide by itself the distribution of income, assure mutual benefits of both the cooperative and its members;

4. The distribution of profits must ensure the combination of the cooperative members’ interests and the development of the cooperative: After fulfilling tax obligations, a part of the profits shall be deducted for various funds of the cooperative, the rest shall be distributed to the cooperative members according to their respective capital and labor contributions and to the extent of their respective use of the cooperative’s services as decided by the Congress of cooperative members.

5. Cooperation and community development: The cooperative members shall have to bring into play and raise the sense of cooperation in the cooperative and the social community and the cooperation between the domestic and foreign cooperatives in accordance with the provisions of law.

Article 4.- The agricultural cooperative has the following rights:

1. To select service, production or business activities in the fields of agriculture, forestry, aquatic products and other production, business and service branches and trades, that meet the need and interests of the cooperative members and the capabilities of each agricultural cooperative;

2. To decide the form and organizational structure of services, production and business of the agricultural cooperative;

3. To conduct export and import, enter into joint ventures and cooperation with domestic and foreign organizations and individuals in accordance with the provisions of law;

4. To hire labor if the cooperative members fail to meet the requirements of service, production and business of the cooperative as provided for by law;

5. To admit new cooperative members, settle the wish of members to leave the cooperative, expel cooperative members as prescribed by the Statute of each agricultural cooperative;

6. To decide the distribution of incomes and settlement of losses of the cooperative;

7. To award those individuals with meritorious achievements in the building and development of the cooperative; to discipline those members who violate the Statute of the cooperative; force cooperative members to compensate for losses they caused to the agricultural cooperative;

8. To borrow capital from banks and other credit organizations, mobilize capital from cooperative members, and act as guarantee for its members to borrow capital from credit organizations;

9. To be entitled to contribute capital to become a member of a People’s Credit Fund and borrow capital from such organization;

10. To have its technological secrets protected in accordance with the provisions of law;

11. To refuse requests of organizations and individuals that are contrary to the provisions of law;

12. To open its branches, representative offices outside the district or province in accordance with provisions of law;

13. To join the Union of Cooperatives and the Federation of Cooperatives;

The agricultural cooperative shall also have other rights as prescribed by law.

Article 5.- The agricultural cooperative has the following obligations:

1. To carry out service, production and business activities in conformity with the already registered branches, trades and business lines;

2. To strictly observe the regimes of accounting, statistics and auditing set by the State, to be subject to supervision and inspection by specialized agencies in accordance with the provisions of law;

3. To pay taxes and fulfill other financial obligations in accordance with the provisions of law;

4. To preserve and develop the capital of the cooperative, manage and use the land assigned by the State in accordance with the provisions of law;

5. To be liable for all debts and other obligations with the whole capital and assets under the ownership of the cooperative;

6. To protect the environment, ecology, landscape, historical relics and projects of national defense and security in accordance with the provisions of law;

7. To ensure the rights of the cooperative members and fulfill economic commitments to its members;

8. To fulfill obligations to those members who directly work for the cooperative and laborers hired by the cooperative, encourage and create conditions for laborers to become members of the agricultural cooperative;

9. To pay social insurance premium for its members as prescribed by law;

10. To provide education and training, fostering and upgrading of professional skills and provide information for all members so that they can actively participate in building the agricultural cooperative.

Article 6.- Establishment and business registration of an agricultural cooperative:

1. For its establishment, an agricultural cooperative must complete the procedures prescribed in Articles 12, 13, 14 and 15 of the Law on Cooperatives.

2. The business registration dossier comprises:

a) The application for business registration attached to the minutes adopted at the conference to found the agricultural cooperative;

b) The Statute of the agricultural cooperative;

c) The list of the Managing Board composed of the Manager and other members, the Control Board;

d) The list of cooperative members, their addresses and occupations and the agricultural cooperative must have at least 7 members;

e) The list of those who contribute to the statutory capital of the cooperative, with their signatures;

f) The plan for service, production and business;

g) The address of the head office of the agricultural cooperative;

3. An agricultural cooperative wishing to do business in branches and trades that require practicing permits as prescribed by law shall have to send its permit(s) together with the business registration dossier.

4. An agricultural cooperative shall have the legal person status from the date it is granted the business registration certificate.

Article 7.- Merger and splitting of the agricultural cooperative:

1. The Congress of cooperative members shall decide to merge the agricultural cooperative with another or other agricultural cooperatives into one agricultural cooperative or to split the agricultural cooperative into two or more cooperatives.

2. Upon the merger or splitting up, the Managing Board of the agricultural cooperative shall have to:

a) Request the competent People’s Committee to establish a Council to decide the merger or splitting of the agricultural cooperative, such Council shall be composed of the Managers of the agricultural cooperatives to be merged or the Manager of the agricultural cooperative to be split up. The members of the Council shall have to discuss and consult one another to solve questions related to the merger or splitting, perform the tasks of the preparatory board(s) of the new cooperative or new cooperatives;

b) Elaborate the plan for settling assets, capital, funds, organization and personnel of the to-be merged or to-be split-up cooperative, which shall be decided by the Congress of cooperative members; draw up the orientation for production, business and service; draft the Statute of the new agricultural cooperative to be approved by the Congress of cooperative members;

c) Convene the Congress of cooperative members to decide on the plans for settling assets, capital, funds, organization and personnel of the to-be merged or to-be split-up agricultural cooperative;

d) Notify in writing creditors, organizations and individuals having economic relations with the agricultural cooperative of the decision on the merger or split-up and settle economic issues related to them;

e) Submit the dossier of application for the merger or splitting of the agricultural cooperative to the district People’s Committee, which comprises:

- The application for the merger or splitting of the agricultural cooperative;

- The resolution of the Congress of cooperative members on the merger or splitting of the agricultural cooperative;

- Plans for settling issues related to the merger or splitting of the agricultural cooperative, that have been discussed with creditors, organizations or individuals having economic relations with the agricultural cooperative;

- The Statute of the newly merged agricultural cooperative or the Statute of the cooperatives newly formed by splitting.

Article 8.- Joining the Union of Cooperatives and the Federation of Cooperatives:

An agricultural cooperative shall join or leave the Union of Cooperatives and the Federation of Cooperatives of its own free will when more than half of the cooperative members present at the Congress of cooperative members vote for it.

Article 9.- Dissolution of an agricultural cooperative:

1. Voluntary dissolution: In case of voluntary dissolution under the resolution of the Congress of cooperative members, the agricultural cooperative shall submit an application for dissolution and the resolution of the Congress of cooperative members to the district People’s Committee, and at the same time publish on the newspapers in the locality where the agricultural cooperative has operated for three consecutive issues the application for dissolution and notify its creditors, the organizations and individuals having economic relations with the cooperative of the time limit for debt payment and liquidation of contracts;

Within 30 days from the expiration of the time limit for debt payment and contract liquidation, the People’s Committee shall issue a notice about its approval or disapproval of the application for dissolution of the cooperative.

Within 30 days from the date of receiving the approval notice of the district People’s Committee, the agricultural cooperative shall have to proceed to the dissolution procedures, pay for the dissolution costs, return the contributed capital and other payments to the cooperative members in accordance with the Statute of the agricultural cooperative.

2. Compulsory dissolution: The district People’s Committee is entitled to decide the compulsory dissolution of an agricultural cooperative in one of the following cases:

a) The cooperative has not commenced its operation twelve months after it is granted the business registration certificate;

b) The agricultural cooperative has ceased operation for twelve consecutive months;

c) After six consecutive months, the cooperative still has not gathered a minimum of 7 members;

d) For eighteen consecutive months, the cooperative fails to organize its regular Congress of cooperative members without plausible reasons;

3. The district People’s Committee shall issue decision on compulsory dissolution, set up a Dissolution Council and appoint its Chairperson so as to organize the dissolution of the cooperative;

The Dissolution Council shall have to publish in three consecutive issues of the newspapers in the locality where the agricultural cooperative has operated the decision on dissolution of the cooperative, the announcement on the steps, procedures and deadlines for debt payment, contract and asset liquidation, return of contributed capital to the cooperative members and settlement of relevant interests, within one hundred and eighty days at the latest from the date of the first publication on newspaper.

4. After receiving the notice of dissolution, the cooperative shall have to hand over its seal, business registration certificate and documents related to its operation to the competent State agency according to the notice of dissolution;

5. If the agricultural cooperative disagrees with the decision of the district People’s Committee on the dissolution, it can lodge a protest or initiate a lawsuit to the competent State agency for settlement in accordance with the provisions of law.

Article 10.- Declaration of bankruptcy of an agricultural cooperative:

The declaration of bankruptcy of an agricultural cooperative shall comply with the Law on Bankruptcy of Enterprises.

Chapter II

NAME, EMBLEM, HEAD OFFICE AND OPERATION DOMAINS OF THE AGRICULTURAL COOPERATIVE

Article 11.- The name, emblem and head office of the agricultural cooperative:

The agricultural cooperative shall select its name, transaction name, emblem and address of its head office;

The name, emblem and head office of the cooperative must be registered at the district People’s Committee that has granted the business registration certificate.

Article 12.- The production, business and service branches and trades practised by the agricultural cooperative may include the following activities:

1. Rendering services in support of the household economy and in service of the cooperative members’ life:

- Supply of materials, plant seeds and animal breeds;

- Irrigation and drainage;

- Prevention and fight against plant insects and pests, and animal disease and epidemics;

- Purchase, processing and consumption of products;

- Other services for the production and cooperative members’ life;

2. Organizing the promotion of agricultural, forestry or aquacultural production in the cooperative;

3. Agricultural, forestry or aquacultural production;

4. Industrial production, first of all the agricultural and forestry products processing industry;

5. Transport, construction, commercial activities in accordance with provisions of law on business in such fields.

Chapter III

COOPERATIVE MEMBERS

Article 13.- Criteria for the cooperative membership:

1. Every farmer or other laborer aged from eighteen years upward, who has full capacity for civil acts, approves the Statute of the agricultural cooperative, voluntarily applies for the joining to the cooperative, contributes capital and labor, can become member of the agricultural cooperative;

2. A person can be a member of many cooperatives, regardless of administrative boundary, unless Statute of each agricultural cooperative stipulates otherwise;

3. A family household that wishes to join the agricultural cooperative shall have to nominate its representative qualified for cooperative membership to apply for cooperative membership. The representative of a family household member of the agricultural cooperative shall have the rights and obligations like any other cooperative members.

Article 14.- A member of an agricultural cooperative has the following rights:

1. To enjoy the priority to work for the cooperative and be paid as agreed between him/her and the cooperative;

2. To be given dividends and profits according to the extent he/she uses the services of the cooperative, and his/her capital and labor contributions;

3. To be provided with necessary economic and technical information by the agricultural cooperative, to participate in the courses on managerial and technical training organized by the agricultural cooperative or other units.

4. To benefit from the common social welfare of the cooperative, to be entitled to economic commitments by the cooperative and participate in social insurance in accordance with the provisions of law;

5. To be rewarded if he/she has made meritorious contributions to the building and development of the cooperative;

6. To attend the Congress of cooperative members or the Congress of delegates of cooperative members and other meetings of cooperative members to discuss and vote on the work of the cooperative;

7. To stand for as member of the Managing Board, Manager, member of the Control Board or other elected positions of the cooperative.

8. To make proposals or suggestions to the Managing Board, the Manager, the Control Board of the cooperative and request for reply; request the Managing Board, the Manager or the Control Board to convene an extraordinary congress of cooperative members;

9. To assign his/her contributed capital and rights and obligations to another cooperative member or person eligible for cooperative membership in accordance with the Statute of each agricultural cooperative;

10. To be entitled to leave the cooperative but have to send the application to the Managing Board for consideration and reporting to the Congress of cooperative members;

11. To be paid back his/her contributed capital in accordance with Article 31 of this Statute and other interests when leaving the cooperative; If a cooperative member dies, his/her contributed capital and other interests and obligations shall be settled in accordance with the legislation on inheritance.

Article 15.- A member of the agricultural cooperative shall have the following obligations:

1. To abide by the Statute and the Rules of the agricultural cooperative, the resolutions of the Congress of cooperative members and the decisions of the Managing Board of the cooperative;

2. To contribute capital as prescribed by the Statute of the cooperative;

3. To cooperate with one another, to study so as to raise the educational and professional levels and contribute to accelerating the cooperative’s development;

4. To fulfill the economic commitments to the cooperative, pay social insurance premium in accordance with provisions of law;

5. To bear, within the scope of his/her contributed capital, the joint liability for the debts, risks, damage and losses of the cooperative;

6. To compensate for the damage caused by himself/herself to the cooperative in accordance with the Statute of his/her agricultural cooperative.

Article 16.- Termination of cooperative membership:

1. Cooperative membership shall be terminated in one of the following cases:

a) The cooperative member dies;

b) The cooperative member loses his/her capacity for civil acts;

c) The cooperative member is allowed to leave the cooperative in accordance with provisions of the Statute of the agricultural cooperative;

d) The cooperative member has transferred all his/her contributed capital, rights and obligations to another person in accordance with Clause 9, Article 14 of the Model Statute of Agricultural Cooperatives;

e) The cooperative member is expelled from the cooperative;

f) The cooperative member has moved to another place or another branch or trade, and has not taken part in the activities of the cooperative for one year or more;

2. The interests of the person whose cooperative membership is terminated shall be settled in accordance with Article 31 of the Model Statute of Agricultural Cooperatives.

Chapter IV

ORGANIZATION AND MANAGEMENT OF AN AGRICULTURAL COOPERATIVE

Article 17. - The Congress of cooperative members:

1. The Congress of cooperative members has the highest decision-making power in the cooperative;

2. The Congress of delegates of cooperative members: An agricultural cooperative with 100 members or more may organize the Congress of delegates of cooperative members; the number of delegates shall be determined by the Statute of such agricultural cooperative and the delegates shall be directly elected by production groups and teams in the cooperative;

3. The term of office of a member of the Congress of cooperative members’ delegates shall be stipulated by the Statute of each agricultural cooperative;

4. The Congress of delegates of cooperative members and the Congress of the cooperative members (commonly referred to as Congress of cooperative members) shall have similar tasks and powers.

Article 18.- The Congress of the cooperative members shall discuss and decide on the following issues:

1. The annual reports on the results of service, production and business activities of the cooperative, reports on the activities of the Managing Board and Control Board;

2. The public financial statement, the reports on income distribution and settlement of losses;

3. The orientation and plans for service, production and business activities as well as for capital mobilization for the next year;

4. The increase or decrease of the statutory capital, the deductions made for various funds of the cooperative;

5. The election or dismissal of the Manager of the cooperative, the election or supplementary election or dismissal of other members of the Managing Board and the Control Board;

6. The admission of new cooperative members and the permission for cooperative member(s) to leave the cooperative, the expulsion of cooperative member(s); the settlement of cooperative members’ protests and denunciations about the work of the cooperative;

7. The regime of wages and remuneration in the cooperative;

8. The amendment to the Statute and the Rules of the cooperative;

9. The merger, splitting or dissolution of the agricultural cooperative as well as its joining the Union of Cooperatives and the Federation of Cooperatives;

10. The reward system and the handling of violations in the cooperative;

11. Other issues proposed by the Managing Board, the Control Board or at least one third of the total number of cooperative members.

Article 19.- Regulations on the number of delegates and the voting at the Congress of cooperative members:

1. The Congress of cooperative members must be attended by at least 2/3 (two thirds) of the total number of cooperative members or delegates of cooperative members. If the number of participants falls short of this level, the Congress must be postponed. The Managing Board or the Control Board shall have to reconvene the Congress within 15 days from the date of postponement.

2. The decisions on the Statute amendment, the merger, splitting or dissolution of the agricultural cooperative shall be adopted only when at least 3/4 (three fourths) of the total number of cooperative members or delegates of cooperative members present at the Congress vote for it. The decisions on other issues shall be adopted when they are voted for by more than one half of the delegates present at the Congress.

3. The voting at the Congress of cooperative members and other resolutions of the cooperatives shall not depend on the capital contributions or the positions of the cooperative members in the cooperative. Each cooperative member or delegate of cooperative member has only one vote.

Article 20.- Convening the Congress of cooperative members:

1. The regular Congress of cooperative members shall be convened once a year by the Managing Board within 3 months from the date of closing the annual final account. Ten days before the opening session of the Congress, the Managing Board shall notify each cooperative member or delegate of cooperative member of the time and agenda of the Congress;

2. The extraordinary Congress of cooperative members shall be convened by the Managing Board or the Control Board of the agricultural cooperative to make decisions on necessary issues that are beyond their powers;

If at least 1/3 (one third) of the total number of cooperative members request the Managing Board or the Control Board to convene a Congress of cooperative members, the Managing Board shall, within 15 days after receiving the request, have to convene the Congress of cooperative members; Past that time limit, if the Managing Board has not convened the Congress, the Control Board shall have to convene the extraordinary Congress of cooperative members;

3. The Congress of cooperative members shall discuss and decide only issues listed in the agenda of the Congress and newly arising issues proposed by at least 1/3 (one third) of the total number of cooperative members or delegates of cooperative members present at the Congress.

Article 21.- The Managing Board:

1. The Managing Board is responsible for managing and running all activities of the cooperative, elected directly by the Congress of cooperative members and composed of the Manager and other members. The number of members of the Managing Board shall be determined by the Statute of the agricultural cooperative. An agricultural cooperative with less than 15 members may elect only the Manager to perform the tasks and powers of the Managing Board;

2. The term of the Managing Board shall be stipulated by the Statute of the cooperative but shall not be less than two years and more than five years;

3. The Managing Board shall meet at least once every month. The meetings of the Managing Board shall be convened and presided over by the Manager or the person authorized by the Manager and shall be considered valid only when they are attended by 2/3 (two thirds) of the number of the Board’s members.

The Managing Board of the cooperative shall operate on the principle of collective work and make decision by majority of votes. In case the number of votes for is equal to that of votes against, the vote of the person who presides over the meeting shall be the decisive vote.

Article 22.- Criteria for the Managing Board membership:

A member of the Managing Board must be a member of the agricultural cooperative, have good ethical qualities, professional qualification, ability to manage the agricultural cooperative and have the trust of the cooperative members.

A member of the Managing Board must not concurrently be a member of the Control Board, the chief accountant or the cashier of the agricultural cooperative; when a family member is a member of the Managing Board, the other members of such family (his/her parent, spouse, offspring or sibling) shall not be allowed to be a member of the Control Board, the chief accountant or the cashier of the same cooperative.

Article 23.- Duties and powers of the Managing Board:

1. The Managing Board of the agricultural cooperative has the following duties and powers:

a) To implement the resolutions of the Congress of cooperative members;

b) To elect the Deputy Manager, select and appoint the chief accountant, decide the organizational structure of the specialized and professional sections, production and service groups and teams of the agricultural cooperative;

c) To draw up the general plan and plans for service, production and business activities, negotiate with the cooperative members on the service charges in the agricultural cooperative, mobilize capital for the cooperative, prepare reports on the activities of the Managing Board to be submitted to the Congress of cooperative members;

d) To prepare the agenda of the Congress of cooperative members, convene the regular or extraordinary Congress of cooperative members and assign a person to preside over the Congress of cooperative members;

e) To organize the execution of plans for production, business, service and other activities of the agricultural cooperative; evaluate the results of service, production and business activities of the cooperative and prepare reports on financial final settlement to be submitted to the Congress of cooperative members;

f) To consider the admission of new cooperative members and the requests of cooperative members to leave the cooperative and report it to the Congress of cooperative members for approval;

g) To hire laborers and managerial, technical or professional personnel according to the needs of the cooperative.

2. The Managing Board of the cooperative shall take responsibility for its decisions before the Congress of cooperative members and before law.

Article 24.- The Manager of the agricultural cooperative:

1. The cooperative Manager has the following duties and powers:

a) To represent the cooperative before law;

b) To organize the execution of plans and run all service, production and business activities of the cooperative;

c) To convene and preside over the meetings of the Managing Board; organize the implementation of the resolutions of the Congress of cooperative members and the decisions of the Managing Board;

d) To organize the exercise of the rights and the performance of obligations of the cooperative as stipulated in Articles 4 and 5 of this Model Statute.

2. The Manager of the agricultural cooperative shall take responsibility before the Congress of cooperative members and the Managing Board for the work assigned to him/her.

When absent, the Manager of the cooperative shall have to mandate the Deputy Manager or a member of the Managing Board to run the work of the cooperative.

3. The post of Deputy Manager of the cooperative is stipulated by the Statute of the agricultural cooperative.

Article 25.- The Control Board:

1. The Control Board supervises and inspects all activities of the cooperative as prescribed by the Statute of the agricultural cooperative and law;

2. The Control Board shall be directly elected by the Congress of cooperative members. An agricultural cooperative with less than 15 members may elect only one controller;

The Control Board shall elect its Chairman to run its activities.

3. The criteria of the members of the Control Board are identical to those of the members of the Managing Board. A member of the Control Board must not concurrently be a member of the Managing Board, the chief accountant, the cashier of the agricultural cooperative; when a member of a family is a member of the Control Board, other family members (his/her parents, spouse, offspring or sibling) shall not be allowed to be members of the Managing Board, the chief accountant or the cashier of the same cooperative;

4. The term of the Control Board shall correspond to that of the Managing Board.

Article 26.- The Control Board has the following duties and powers:

1. To inspect the observance of the Statute, and the Rules of the cooperative and resolutions of the Congress of cooperative members;

2. To supervise the activities of the Managing Board, the Manager and members of the cooperative as prescribed by law, the Statute and the Rules of the cooperative;

3. To examine the finance, accounting, distribution of income, settlement of losses, use of funds of the cooperative and use of assets, borrowed capital and subsidies from the State;

4. To receive and settle protests and denunciations related to the work of the cooperative;

5. To be entitled to attend meetings of the Managing Board;

6. To notify the Managing Board of the examination results and report them before the Congress of cooperative members; to propose to the Managing Board and the Manager of the cooperative measures to overcome weaknesses in economic activities of the cooperative; to handle violations of the Statute and the Rules of the agricultural cooperative;

7. To request the concerned persons in the cooperative to provide necessary documents, vouchers and information to serve the inspection work, but not to use such documents and information for other purposes;

8. To convene an extraordinary Congress of cooperative members in one of the following cases:

a) The Managing Board fails to apply or has inefficiently applied measures to prevent acts of violation of law, the Statute or the Rules of the cooperative and the resolutions of the Congress of cooperative members;

b) The Managing Board fails to convene the extraordinary Congress of cooperative members within 15 days when 1/3 (one third) of the total number of cooperative members so request .

Article 27.- Groups, teams and specialized and professional sections of the agricultural cooperative:

1. Depending on its service, production and business form and scale, the agricultural cooperative may organize specialized and professional sections or staff; service, production or business group and teams, service-receiving groups and teams;

2. The heads of specialized and professional sections or staff, service groups and teams shall be appointed by the Managing Board of the agricultural cooperative;

3. The heads of service-receiving groups and teams and the heads of production and business groups and teams shall be elected by the cooperative members in such groups and teams under the direction of the Managing Board and the Manager of the cooperative;

4. The tasks of such groups, teams, specialized sections or staffs shall be defined by the Statute of the agricultural cooperative.

Article 28.- The Party and mass organizations in the cooperative:

The Communist Party of Vietnam’s organization in the cooperative shall operate under the Constitution, the laws of the State and the regulations of the Communist Party of Vietnam. The Trade Union, the Peasants’ Association and other socio-political organizations and the militia and self-defense forces in the cooperative shall operate under the Constitution, laws and the statutes of such organizations.

Chapter V

ASSETS AND FINANCE OF THE AGRICULTURAL COOPERATIVE

Article 29.- The operating capital of the agricultural cooperative includes:

1. Capital contributed by cooperative members;

2. Capital accumulated by the cooperative;

3. Capital borrowed from banks;

4. Capital borrowed from cooperative members and other organizations and individuals under the mutual agreements;

5. Capital given by the State and aid from domestic and foreign organizations and individuals.

Article 30.- The statutory capital of the agricultural cooperative:

The statutory capital of the cooperative is contributed by the cooperative members in accordance with the regulations of each agricultural cooperative and stated in its Statute when the cooperative applies for the business registration certificate. For an agricultural cooperative doing business in a branch or trade that under the provisions of law requires a prescribed capital, its statutory capital must not be lower than the corresponding prescribed capital for such branch or trade.

Article 31.- Capital contributed by cooperative members:

1. When joining the agricultural cooperative, the cooperative members must contribute a minimum capital as stipulated by the Statute of the agricultural cooperative, the capital contributed by a cooperative member may be higher than the minimum level but shall not at any time exceed 30 % (thirty percent) of the statutory capital of the agricultural cooperative;

2. Cooperative members may contribute capital in cash, in kind or in cash equivalent of labor according to the current prices in the locality, which shall be determined by the Congress of cooperative members;

3. A cooperative member may contribute his/her capital in one or several installments, but the first installment must be equal to at least 50 % of the prescribed level; the rest shall be contributed within 12 months;

For an agricultural cooperative doing business in a branch or trade that, under the provisions of law, requires a prescribed capital, the total capital contributed in the first installment by cooperative members must not be lower than the corresponding prescribed capital for such branch or trade.

4. The contributed capital of cooperative members shall be readjusted by decision of the Congress of cooperative members.

Article 32.- The repayment of contributed capital:

The contributed capital shall be paid back to a cooperative member in the following cases:

a) The cooperative member dies;

b) The cooperative member is allowed to leave the cooperative;

c) The cooperative member is expelled from the cooperative by the Congress of cooperative members.

2. The repayment of contributed capital to cooperative members shall be based on the financial situation of the agricultural cooperative at the time of capital reimbursement, after the agricultural cooperative has made the annual final accounts and settled all the economic interests and obligations of the cooperative members towards the cooperative;

3. The repayment of contributed capital can be made in cash or in kind as agreed upon by the Managing Board and cooperative members according to the concrete conditions of the cooperative but the time-limit shall not exceed 12 months. In the event of the death of a cooperative member, the repayment of his/her contributed capital shall be made in accordance with provisions of the legislation on inheritance;

4. It is prohibited to deduct the funds of the agricultural cooperative, which have been formed by public donations or aid and the risk insurance fund for the purpose of repaying the contributed capital to cooperative members in cases defined in Clause 1 of this Article.

Article 33.- The funds of the agricultural cooperative include:

1. The production development fund shall be used to increase the capital for expansion of service, production and business activities; for upgrading equipment and technique and for personnel training and fostering, etc.

2. The reserve fund shall be used to supplement the capital and funds that have diminished due to natural calamities or risks;

Besides, depending on the extent of development, the Congress of cooperative members may decide to set up other funds.

Article 34.- The assets of the agricultural cooperative:

1. The assets of the cooperative are assets under its ownership, which are formed by the operating capital of the agricultural cooperative;

2. The management and use of the assets of the cooperative shall comply with the provisions of the Statute and the Rules of the agricultural cooperative and the provisions of law. The cooperative shall not in any case be allowed to divide to the cooperative members the capital subsidies from the State, the public facilities and infrastructures in service of the population community.

Article 35.- Settlement of assets and capital of the dissolved agricultural cooperative:

Upon its dissolution, the agricultural cooperative shall have to transfer to the local administration its indivisible assets as prescribed by Clause 2, Article 34 of this Model Statute, for management and common use by the population community;

The land together with the land use right assigned by the State to the agricultural cooperative shall be settled in accordance with provisions of the land legislation;

After repaying all the debts of the agricultural cooperative and expenses for the dissolution, the remainder of the cooperative capital, funds and assets shall be distributed to the cooperative members according to the amount of their capital contributed to the cooperative.

Article 36.- Remuneration in the agricultural cooperative:

1. Remuneration paid to members of the Managing Board, the Control Board shall be decided by the Congress of cooperative members, depending on the financial situation of the cooperative and their performance of assigned tasks and shall be accounted for as production and business costs. If the cooperative suffers losses, the Congress of cooperative members shall determine the level of remuneration and the sources of payment;

2. Remuneration paid to the heads of groups and teams, managerial and technical personnel shall be decided by the Managing Board depending on the performance of tasks assigned to them;

3. Remuneration paid to other laborers shall be agreed upon by the Managing Board and the laborers and decided by the Congress of cooperative members.

Article 37.- Annual profit distribution:

After the settlement of the annual financial accounts, annual profits shall be distributed as follows:

1. To make up for the losses of the previous year (if any);

2. To deduct for various funds of the cooperative;

3. To distribute to the cooperative members according to the extent they use services of the cooperative in the year;

4. The rest shall be distributed to the cooperative members according to their capital contributions;

The rates of annual profit distribution and deductions for the funds of the agricultural cooperative shall be determined by the Congress of cooperative members.

Article 38.- Annual losses settlement:

The annual losses of the cooperative due to objective causes such as natural calamities, market price fluctuation, etc. shall be made up for by the profits of the subsequent accounting period, funds of the cooperative or contributed capital of cooperative members by decision of the Congress of cooperative members. If the losses are due to subjective causes, the concerned individuals shall, depending on the extent of the losses, have to make compensation by decision of the Congress of cooperative members.

Chapter VI

REWARD AND HANDLING OF VIOLATIONS

Article 39.- Reward:

Cadres, cooperative members and other laborers working in the agricultural cooperative who have made achievements in the building of the cooperative shall be materially and spiritually rewarded;

The form and level of reward shall be decided by the Managing Board or proposed by the Managing Board to the Congress of cooperative members for decision;

Article 40.- Handling of violations:

Managerial personnel, cooperative members and other laborers working in the agricultural cooperative who fail to abide by the Statute of the cooperative, the resolutions of the Congress of cooperative members or infringe upon the assets of the cooperative shall, depending to the extent of violations, be reprimanded, warned, demoted, dismissed from office or expelled from the cooperative. Persons who are guilty of corruption, take advantage of common assets for their own use, cause damage or losses to the assets of the agricultural cooperative shall have to make compensations;

The Managing Board is entitled to reprimand, warn, demote, dismiss the heads of group or team and their assistants, sack the hired laborers, force persons who are guilty of corruption, cause damage or losses to the cooperative’s assets to pay compensations;

The Congress of cooperative members has the right to dismiss members of the Managing Board and the Control Board, to expel cooperative members from the agricultural cooperative or request prosecution.

Chapter VII

IMPLEMENTATION PROVISIONS

Article 41.- Elaboration and amendment to the Statute of the agricultural cooperative:

Each agricultural cooperative shall base itself on the Law on Cooperatives and the Model Statute of Agricultural Cooperatives to elaborate its own statute;

All amendments and supplements to the Statute of the agricultural cooperative must be adopted by the Congress of cooperative members and approved by the agency that has granted the business registration certificate to the cooperative.

The Statute of the agricultural cooperative shall take effect from the date it is granted the business registration certificate.

On behalf of the Government

For the Prime Minister

Deputy Prime Minister

PHAN VAN KHAI