Background

IDEALS is one of the very few non-governmental organisations in the Philippines providing alternative legal support to farmers, migrants and other marginalized groups primarily in rural areas. As an alternative legal resource institution, IDEALS subscribes to the philosophies of developmental lawyering, holding fast to its commitment to practice law as one of the means to social transformation.

For around nine (9) years now, IDEALS has been giving its services to farmers and agricultural workers in the pursuit of their right to own the land they till and to have productive and peaceful possession of the same. The organization has likewise been pursuing its mission for migrant-workers’ rights protection and security against abuse in both the domestic and global arena. It treads the line of international trade laws through trade law education and research, as well as through trade advocacy, that aims to advance or push for executive and legislative action relative to critical international trade commitments, agreements, policies and laws. In its trade-related interventions, IDEALS pursue agenda that will be most beneficial to marginalized sectors affected by these commitments, agreements, policies and laws.

As IDEALS go about its rights-claim-taking work, it has invariably involved itself in areas that have to do with their partner-marginalized sectors’ pursuit for economic advancement through enterprise initiatives. In the process, IDEALS started getting exposed to the work of small and social enterprises, non-government organizations supporting social enterprises and small entrepreneurs and/or local and international donor/support organizations have initiated enterprise development initiatives emphasizing on the value-chain development approach.

With the growing interest in business initiatives and the increasing emphasis on value-added interventions, IDEALS wants to further its legal development involvement and test the environment where the players are the social entrepreneurs and/or small producers/ enterprises striving to contribute to local economies and working for a more equitable distribution of income, wealth and opportunities. This extends to organizations that support or facilitate the development of the said enterprises to include local and international support organizations and donors. IDEALS finds this move strategic considering the growing and urgent need for legal services along this line.

Common Problems, Issues, Needs, Concerns (PINCs) of Social / Small Enterprises

In their economic endeavours, social entrepreneurs and small producers/processors are often tossed in the whirlpool of legal obscurities and obligations thus impeding operations of their respective businesses. With the numerous, ever-changing and complex set of laws, and complicated and highly-technical composite of administrative legal procedures and regulations in the country governing every conceivable aspect of economic activity, the need for various legal services are inevitable. This includes legal literacy interventions, legal representation, as well as assistance in pertinent policy reform and advocacy. To a large extent, such interventions are needed to close the huge divide based on legal technicalities that separates the “legal enforcers” from those that the law seeks to govern, whether in the area of rights protection or in the pursuit of entrepreneurship.

Several policies and laws govern the establishment and regulation of social and micro/small enterprises. These include the Magna Carta for Small and Medium Enterprises, the Barangay Micro-Business Enterprise Law, and the National Small and Medium Enterprises Development Plan. While there is a push for establishing small enterprises in every barangay and municipality in the country and while there is abundant sources for raw material requirements of such enterprises, there is, however, little emphasis given by government in the area of assistance to such enterprises to make them viable/profitable, much less in ensuring the competitive edge of small producers in the local and global market.

It is common among start-up organizations to have problems relative to compliance with legal documentation required by the government. Indeed, the legal and regulatory framework may serve as a severe disincentive to register one’s enterprise, thus preventing social entrepreneurs from availing various government and financial services. The social and small enterprises face tedious and cumbersome legal and regulatory procedures, draining on managerial time and productive usage of resources.

There is also the question of whether social entrepreneurs, small producers/processors and other business entities are compliant with the legal provisions governing specific acts and transactions in line with the actual operation of their businesses; or even the question of whether these enterprises are able to maximize the full benefits that various applicable laws and legal institutions (e.g. local government units, industry-based government institutions) affecting their activities, may have to offer.

In dealing with second and third parties, it is ordinary to hear of issues where enterprises suffer the consequences of unconscionable, lopsided, or even unclear/ambiguous contractual terms and stipulations or of such enterprises forfeiting possible legal remedies for causes of action against another party on account of the latter’s contractual/quasi-contractual violations, among others.

Finally, certain small/social enterprise concerns could be primarily or even solely addressed through new policies, laws, or administrative guidelines. The issue in this regard is as to how these players might be able to utilize available democratic spaces to ensure that new policy issuances may be beneficial to them, in particular, or render a better policy environment for social enterprises and/or small producers/enterprises, in general.

Developmental Lawyering

Consistent with its vision and mission, IDEALS is venturing into developmental lawyering for social and small enterprises to address the above-mentioned problems, issues, needs and concerns. IDEALS will function as a Legal and Allied Services Provider to select social and small enterprises as well as to enterprises’ facilitators and/or supporters (including local and international development/donor agencies, business services providers, and similar organizations).

IDEALS has developed distinct competencies in alternative/developmental lawyering from its long experience in providing various legal interventions in the area of sectoral rights’ protection and legal claim-making for marginalized groups in the agrarian reform and rural areas. Moreover, two years ago, IDEALS has started its involvement with social enterprises through its management of Agriterra’s Business Development Services Project for the development/enhancement of the latter’s partners’ business units and social enterprises. Recently, it started working on legal matters/issues referred by the Foundation for a Sustainable Society, Inc. (FSSI), Federation of People’s Sustainable Development Cooperative, Inc (FPSDC) and Philippine Rural Reconstruction Movement (PRRM) to include technical analysis of transactions relating to property acquisitions, recovery on loan collaterals, representation of SE partners in estafa/ bouncing checks cases, general research on tax obligations of cooperatives and non-government organizations, etc. It has also started assisting the Organics Certification Center of the Philippines (OCCP) in claim-taking work with the Department of Agriculture relative to an issue involving government’s rules/ processes in the accreditation of organics certification organizations. As of this writing, other work on various areas of concerns in which small and social enterprises are interested, are under discussion.

IDEALS believes its institutional experience has provided it with a competitive advantage in the area of lawyering for small and social enterprises. More specifically, IDEALS has such competitive advantage because:

  • In terms of target groups, IDEALS has already established rapport with small producers/processors especially in the rural areas, and has working relationship with development groups or organizations that undertake and support business initiatives.
  • IDEALS is proficient in the field of land and related laws, including the very esoteric field of agrarian reform (AR) law. Its competence in this field of law will be very useful in dealing with agri-based producers/enterprises. In addition, as land is a basic factor of production, issues relating to land ownership, possession and use by small and social enterprises abound and might even increase.
  • IDEALS has ample experience in providing direct legal assistance, legal education, and policy and law reform advocacy interventions as part of its core programs and has had numerous opportunities to undertake legal/technical corporate housekeeping, representation, and related interventions under its development consulting program.
  • As a developmental legal institution, IDEALS has worked around the themes of good governance, accountability, and empowerment since its inception up to the present. Its adherence to and experience related to the promotion of these values immediately distinguish IDEALS from the mainstream legal groups.

Expected Impact

IDEALS hopes to pave the way to the creation of an enabling environment for social and small enterprises and value chain development, by giving impetus on the legal services and support as a natural and important aspect in the value-chain approach.

The proposed project is directed towards inculcating among players the need for compliance to the legal requirements and laws and the importance of good corporate housekeeping and ‘legal due diligence’’ for business survival and competitiveness, the need to fully understand the regime of laws, government institutions and programs that affect or govern their specific business types and the particular industries in which they are engaged.

The modules that will be developed can tremendously help target enterprises and entrepreneurs and like organizations as well as other related players in fulfilling their responsibilities and obligations to the government and certainly to the consumers of their products/ services.

For IDEALS, it hopes to establish a client-base for its services such as: direct legal assistance, legal education, and technical legal and allied services; promote its programs and advocacies extensively, and generate income for its sustainability.

Legal Equity: Providing Legal and Allied Services for Social Enterprises and Small Entrepreneurs

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