Public-Commons Partnership

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Contextual Citation

Pat Conaty:

"We should link up social-public partnership and Commons-Public Partnerships. The important point to highlight is that social or commons must precede the state. Our elected representatives need to become again public servants and arrogant masters need to be rapidly recalled." (email, February 2014)


Description

From a draft article by Keir Milburn and Bertie Russell:

"Public-Common Partnerships are less a fixed institutional form, but rather a series of principles and processes that need to be designed and implemented on a largely case-by-case basis. They are not limited in their application to any particular resource or asset, although there are certain areas which will be either more pressing (such as municipal energy production) or more easily implemented (such as the Seven Sisters market) than others. In practice, there are likely to be some “stock recipes” that emerge as we become more experienced in the development of PCPs, but successful implementation will invariably require a blend of technical expertise, lived experience, and place-based knowledge. Rather than a monocultural institutional form applied indiscriminately and without connection to the needs and desires of different contexts, PCPs should emerge as an overlapping patchwork of institutions that respond to the peculiarities of the asset and the scale at which the PCP will operate (whether it be city-region wide energy production in Greater Manchester or the commercial activity of a North London market), and those individuals and communities that will act together as commoners. The very design of PCPs must therefore be a democratic one which, from the outset, considers the most effective, responsive and equitable institutional processes to facilitate us acting in common." (https://docs.google.com/document/d/1fOVOtMXDi57GDZP4jH4HByti-S0f69sxLqkYDfaVbCo/edit)


Characteristics

From a draft article by Keir Milburn and Bertie Russell :

"Notwithstanding their heterogeneity, there are a handful of common ingredients that define PCPs as institutional mechanisms orientated towards the capitalization of collective self-governance:


Joint Enterprise

Conventional understandings of democratic control see the state (whether that be local, regional or national) as owning the infrastructure (such as a municipal energy company), controlling who sits on the board of directors, and benefiting from any financial surplus produced by the enterprise. In this instance, the ‘place’ of democratic activity remains located firmly in the institutions of the state, primarily through representative politics at the local/national level, in some cases coupled with processes such as the limited co-production of services or small-scope participatory budgets.

PCPs are models of joint ownership and governance, in which the two principal parties are a state agent (such as a municipal council) and a Common Association (such as a mixed cooperative or community interest company). In the first instance, the Common Association sits on the board of directors of the Joint Enterprise alongside representatives of the local authorities and other organisations relevant to the operations of the PCP (which could variously include trade unions, the environment agency, consumer groups, independent experts and so on). Whilst there are numerous examples that demonstrate mixed approaches to the directorate of public utilities - such as the governing council of Eau de Paris (the Parisian water company that was brought back into public control in 2010), SEMAPA (the Cochabamban water company that was democratized following the Bolivian ‘water wars’ in 2000) or the Sacramento Municipal Utility District (the sixth largest community-owned energy company in the US) - there are relatively few cases in which a Common Association is a key feature.


The structure of the Joint Enterprise produces three democratic fora:

  • The state apparatus, where the democratic act is primarily representative electoral politics;
  • The governance of the Joint Enterprise (comprised of representatives of the local authority, the Common Association, and parties appropriate to the Joint Enterprise);
  • The Common Association itself, with its own membership and independent mechanisms of participation and decision-making.

The democratic structure and membership of the Common Association is highly contingent on the nature of the Joint Enterprise. For example, in the German town of Wolfhagen (one of the few examples of where a Common Association sits on the board of directors), a joint enterprise energy company was established between the local authority and 264 citizens that had constituted a new cooperative - BEG Wolfhagen. Whilst membership of the cooperative was initially open to any citizen of Wolfhagen that purchased a membership share, membership of the cooperative is now open to anyone who purchases their energy from the company (and thus, in the first instance, is a consumer cooperative). Whilst in some cases such a membership structure would be relatively straightforward to replicate (such as for a water utility), a community land trust, social care service or market would demand careful consideration of the most appropriate scale, legal form and membership criteria.


Distributed Democratic Control of Surplus Value

A core feature of all PCPs is the democratic control of surplus value produced through the Joint Enterprise. This feature is essential to the capitalization of collective self-governance and the wider disarticulation of the state. In the first instance, a portion of any surplus is retained by the joint enterprise to be reinvested towards its operational goals (such as delivering a zero-carbon energy supply for the city, building repairs to a market, and so on), and is thus under the collective control of the board of directors (which variously will include worker representatives, technical experts, and so on, alongside local authorities and the Common Association). Crucially however, a significant portion of surplus value would be transferred directly to the Common Association which, through its own democratic structures, are responsible for its redistribution.

Wolfhagen’s energy partnership provides some limited inspiration for this, where shareholders in the cooperative receive an annual dividend (which was around 4% in 2016), whilst the remaining funds flow into the cooperative’s energy saving fund. Overseen by the cooperatives Energy Advisory Board (comprised of 9 cooperative members along with one each from the local energy agency, the Stadtwerk, and the municipality), the fund is then redistributed to support strategies and initiatives for increasing energy efficiency among its members. In practice, this fund has been used towards quite modest consumer oriented goals, such as providing subsidies on the purchase of electric bikes and programmable radiator thermostats.

In the case of PCPs, where joint capitalization has been part of the process of establishing a Joint Initiative (as discussed in the forthcoming point), any dividend should be capped at the total value of the initial stake provided by members of the Common Association (e.g. those who invested a £250 membership share would receive a maximum lifetime return of £250 plus interest on that share). More significantly - and essential to the definition of a Public-Common Partnership - are the restrictions and guidelines as to how the Common Association utilizes the surplus. Unlike the Wolfhagen case, the principle usage of any surplus managed by the Common Association is to capitalize other Public-Common Partnerships without expectation of financial return.

Whether done independently or in collaboration with other PCPs, this acts (in the first instance) as a wealth transfer to support the development of other PCPs. For example, the Common Association of a Greater Manchester Energy Company could help finance an Haringey-based Commons Association (with its own membership, democratic structures, and so on) in their purchase of the Seven Sisters market, supporting the implementation of their current community plan, whilst bringing that asset under the governance of a separate Public-Common Partnership.


It is this centrifugal finance dynamic that allows us to emphasise the importance of thinking of PCPs not in isolation, but as part of a self-expanding circuit. For every new PCP supported through such a process, the net capacity of the circuit increases, which in turn accelerates the capitalization of further (and potentially more capital-intensive) PCPs. Not only is wealth transferred from one initiative to another, the wealth is transformed from ‘surplus value’ produced through one PCP into common use value. The net effect of this is to create an ever-expanding movement of decommodification and collective democratization, which is why we identify the underlying purpose of this circuit of PCPs as the capitalization of collective self-governance.


Joint Capitalization

Whilst not a necessary condition (in some cases assets may already be owned by the state, and thus can be transferred into a Joint Enterprise), there is an opportunity for joint capitalisation of a PCP, with the state-agent providing direct contributions, loans & underwriting of non-state contributions, and the common association most-likely contributing through crowdfunding, bonds and membership-shares (along, crucially, with inward capitalization from other PCPs). For example, the 264 citizens that established BEG Wolfhagen pursued a cooperative share offer (valued at €500 each, with a maximum of 5 per member), which raised €1.47m of the €2.3m required to gain a 25% stake in the energy company. Given the shortfall between in value between cooperative capital and the valuation of the 25% stake, the city granted the cooperative the option to gradually capitalise its stake through a loan. This further period of capitalisation took around 12 months, with the cooperative fully covering its €2.3million share by the Spring of 2013. At the end of 2016, BEG Wolfhagen had 814 members - representing almost 7% of Wolfhagen’s population - with a cooperative wealth of more than €3.9 million. Now established, any new cooperative members are given a two-year period to pay for their initial share in €20 installments, helping to broaden access to the cooperative to lower income households.

In practice, Public-Common Partnerships begin to address two of the determining risks confronted by the GMCA in establishing an energy company - political risk and cost. The opportunity of joint capitalization, especially when this comes inwards from other PCPs, has the potential to address financial barriers (such as the establishment of the energy company infrastructure, the collective purchasing of a market building, initial subsidisation of a platform taxi cooperative, the purchasing of land for a community land trust, and so on). Whether there has been joint capitalization or not, joint enterprises also go some way to address issues of political risk. Whereas state authorities are often averse to risk-taking for fear of losing political capital - and ultimately office - joint enterprises address this through reframing initiatives as collaborations and shared experiments to be worked on." (https://docs.google.com/document/d/1fOVOtMXDi57GDZP4jH4HByti-S0f69sxLqkYDfaVbCo/edit)



Discussion

The Public-Commons Partnership is a concept proposed by Tommaso Fattori, Italian commons activist, to replace the concepts of:

- public-private partnership and public-public partnership


Tommaso Fattori:


"The field of Commons can be for the most part identified with a public but not-state arena, in which the actions of the individuals who collectively take care of, produce and share the Commons are decisive and fundamental.

In this sense, Commons and commoning can become a means for transforming public sector and public services (often bureaucracy-bound and used to pursue the private interests of lobby groups): a means for their commonification (or commonalization). Indeed, there are many possible virtuous crossovers between the traditional public realm and the realm of Commons.

Commonification goes beyond the simple de-privatization of the public realm: Commonification basically consists of its democratization, bringing back elements of direct self-government and self-managing, by the residents themselves, of goods and services of general interest (or participatory management within revitalized public bodies). Commonification is a process in which the inhabitants of a territory regain capability and power to make decisions, to orientate choices, rules and priorities, reappropriating themselves of the very possibility of governing and managing goods and services in a participatory manner (1): it is this first-person activity which changes citizens into commoners. Generally, there are a series of circumstances (including living space and time schedules, job precariousness and other difficult work conditions, the urbanization of land and the complexity of infrastructures) which do not physically allow the inhabitants of a large metropolis to completely self-manage fundamental services such as water utilities or public transport, bypassing the Municipalities and the public bodies (or managing without public funds to finance major infrastructure works): it is on the other hand possible to include elements of self-government and commoning in the distinct stages of general orientation, planning, scheduling, management and monitoring of the services. At the same time it is necessary to also give back public service workers an active role in co-management. Which means going the other way down the road as compared to the privatization of that which is “public”.

But there are also other overlaps possible between the idea of public and that of Commons, apart from the necessary creation of legislative tools which can protect and encourage Commons and commoning. Several forms of Public-Commons partership can be developed, where the role of state is realigned, from its current support and subsidising of private for-profit companies, towards supporting commoning and the creation of common value. This can be achieved through tax exemptions, subsidies and empowerment of sharing and commoning activities, but also, for example, by allocating public and state-owned goods to common and shared usage thanks to projects which see public institutions and commoners working together. (2) This is a road which could be the beginning of a general transformation of the role of the state and of local authorities into partner state, “namely public authorities which create the right environment and support infrastructure so that citizens can peer produce value from which the whole of society benefits”, according to the definition of it given by Michel Bauwens (3)."


Notes:

1) Naturally, the commonification of a service presupposes first of all that the collective goods reguired to satisfy their needs and fundamental rights are managed according to a model which is not based on market logic and profits.

2) At the present time there are examples of degraded or unused public buildings which local administrations have targeted for projects of self-recovery and co-housing, which involve social groups who are not “poor enough” to be entitled to public housing programmes but nor are they in a position to buy themselves a house (normally young people in medium-low income brackets). The future residents receive a lease to use the publicly-owned buildings for a pre-defined number of years (in order to allow an actual shared use of the areas recovered) in exchange for a certain number of hours' work on the building site (and a modest monetary contribution): the residents' community is built, centred around a project, even before they live together. Another possible example is that of the repopulating of some abandoned areas in the mountains of Tuscany, where the Regional administration has held to the non-saleability of the common land and has activated a project to reconstitute communities of commoners who, grouped into cooperatives and other forms of association, have been able to buy and restore the abandoned buildings, return the common land to cultivation and take care of the woodland.

3) Bauwens points out that, to avoid the risk that the concept of partner state be confused with plans to dismantle the welfare state, along the “big society” model: “the peer production of common value requires civic wealth and strong civic institutions. In other words, the partner state concept transcends and includes the best of the welfare state, such as the social solidarity mechanisms, strong educational systems and a vibrant and publicly supported cultural life. What the British Tories did was to use the Big Society rhetoric to attempt to further weaken the remnants of social solidarity, and throw people to fend for themselves. This was not enabling and empowering; it was its opposite.” Bauwens M., The Partner State & Ethical Economy, July 2012. See: http://www.shareable.net

Examples

In Germany

Keir Milburn, Bertie Russell:

"One approach for pursuing such a commoning of society could be through the development of Public-Commons Partnerships, such as that developed in the town of Wolfhagen, Germany. In 2012, Wolfhagen developed a form of ‘cooperative participation’ that would make the municipality and a new cooperative – BEG Wolfhagen – joint stakeholders in the town’s energy utility, Stadtwerke Wolfhagen. This has meant that both the ownership and the decision-making process of the town’s energy infrastructure is distributed outwards, with the municipality acting as a partner that guarantees collective forms of decisional-participation over both assets and surpluses. The setting up of BEG Wolfhagen was driven partly by the lack of the necessary financial resources to fulfil the city’s goal to become 100 per cent self-sufficient in renewable energy, and partly by a vision of a coproduced and co-owned energy system, Speaking in 2011, the director of the Stadtwerke Martin Rühl explained:

Through the cooperative participation we want to make the citizens not only co-owners and co-earners, but through the form of a direct participation in the Stadtwerke also co-decision-makers. For future projects, citizens and electricity customers will be at the table from the very beginning.

The cooperative holds a 25 per cent stake in the Stadtwerke and is only open to those who purchase electricity from the company. Valued at €2.3 million at the time of its formation in 2012, the cooperative’s stake was funded through the sale of shares (with a maximum of five per member). To ensure membership in the cooperative is inclusive, new members are given a two-year period to pay for an initial share in twenty instalments. Most immediately, the formation of BEG Wolfhagen generated sufficient capital investment to facilitate the establishment of a solar park, contributing to the town achieving its goal of producing 100 per cent renewable energy by 2015.

The cooperative has two members sitting on the nine-person board of the Stadtwerke, and thus has voting rights on all issues concerning electricity production and supply in the region, ranging from the setting of energy prices through to the reinvestment of financial surplus. Meanwhile, members of the cooperative receive an annual dividend (which was around 4 per cent in 2016), whilst the remaining funds flow into the cooperative’s energy saving fund. The cooperative’s Energy Advisory Board – which is comprised of 9 cooperative members alongside one each from the local energy agency, the Stadtwerk, and the municipality – then develops strategies and initiatives for increasing energy efficiency among its members. In practice, this means that the citizen cooperative has a direct role in the energy industry development of the region, and the implementation of the energy transition in Wolfhagen.

Such Public-Commons Partnerships do more than devolve power downwards, they distribute power outwards. Rather than reducing the residents of the city to consumers (whose ability to shape society is limited to their purchasing decisions) or an electorate (where political expression is solely through irregular elections and consultations), participants in the cooperative experience their capacity to act as collective decision-makers. Meanwhile, the distributed model of governance means that power – understood here as the capacity to shape the collective conditions under which we live our lives – is less concentrated in the state apparatus. Rather than a centralised and paternalistic state making decisions on behalf of consumers and the electorate, we instead see the possibility for distributed forms of governance that incubate and promote new forms of relationships between citizens. Furthermore, through the co-financing process, citizens are enabled to have a stake in the ownership and governance of capital-intensive sectors – something that is often unattainable for cooperatives and mutual associations, due to the sheer quantity of liquid capital required." (http://renewal.org.uk/articles/what-can-an-institution-do)


In French Law

Excerpt from a study by Olivier Jaspart:

""Comme nous l’avons vu dans l’introduction au droit administratif des biens communs, le droit français ne connait pas de troisième catégorie juridique entre les personnes publiques et les personnes privées. Il existe au contraire un champ des Communs partant du statut de la personne privée et allant jusqu’au statut de la personne morale de droit public.

En effet, le droit public est un droit dérogatoire, permettant à certaines personnes de pouvoir exercer ou être titulaires de certaines prérogatives exorbitantes leur permettant d’atteindre leur objet social. Cet objet social pouvant recouvrir, satisfaire ou concourir à l’intérêt général.

Il reviendra alors à l’Administration de définir les formes de collaborations avec des représentants de Communs, afin de leur reconnaître ce statut dérogatoire.


...


Il convenait de présenter cette jurisprudence afin d’introduire les différents modes d’organisation des relations entre le Commun et la Puissance publique. Nous l’avons vu, elles sont de trois ordres :

  • la convention ;
  • l’association ou l’agrément à la décision ;
  • l’institutionnalisation.

La contractualisation : une relation collaborative entre la personne publique et le Commun Dans le cadre de la redéfinition des grands contrats administratifs entrepris par le Législateur depuis les années 2000, nous pouvons citer les trois grands types de convention passée entre l’Administration et le Commun." (http://rpubliquepourquoifaire.unblog.fr/2018/06/26/les-partenariats-public-commun-repenser-les-relations-traditionnelles-sous-le-prisme-des-communs-premiere-partie/)

See also:

  • another important French legal expert on this subject is Lionel Maurel

More Information

Concept proposed by Tommaso Fattori, Italian commons activist:

" the "commonalization" or "commonification" of the Public (ex the commonalization of the public services, like the water utilities), mainly through democratic participation of the people, transforming the citizens in commoners "