In Video: Minister of “Affairs”: New Cooperative Bylaws of 122 Articles Enhance Governance and Protect Shareholders’ Funds

Minister of Social Affairs, Family, and Childhood Dr. Amthal Al-Huwail announced the issuance of Ministerial Decision No. (196) of 2026, promulgating the new regulations governing cooperative work. She emphasized that this marks a pivotal milestone in the development of Kuwait’s cooperative sector, replacing the previous regulations issued under Ministerial Decision No. (46) of 2021. This move aligns with the Ministry’s vision to update the legislative and regulatory framework, strengthen governance and transparency, enhance operational efficiency, and safeguard shareholders’ funds.

Speaking at a press conference held by the Ministry to launch the new regulations, Al-Huwail stated that they reflect the directives of the wise political leadership to improve government performance, reinforce governance and transparency, and protect public funds. The regulations were developed following a comprehensive review of practical experience, incorporating oversight observations and analyzing challenges encountered during implementation in recent years. The aim was to provide a modern regulatory framework that keeps pace with changes and responds to the requirements of the coming phase.

She stressed that the Ministry ensured the regulations serve as a “regulation for the future,” rather than merely amending previous provisions. The new framework focuses on enhancing digital transformation, simplifying procedures, and entrenching principles of transparency and accountability. It also provides cooperative societies with more efficient management tools, while tightening oversight over all matters related to protecting shareholders’ funds, state funds, and subsidies provided to cooperatives.

Al-Huwail highlighted that a key feature of the regulations is the establishment of a unified electronic platform to manage all cooperative procedures and transactions. This platform aims to accelerate processing times, standardize procedures, and enhance transparency through electronic integration with government entities. It will also facilitate the publication of guidelines, model contracts, tenders, practices, and price quotations. A transitional period of no more than six months has been granted to complete the platform’s operationalization. Furthermore, the regulations adopt a modern legislative approach that simplifies legal provisions and delegates executive procedures to specialized guidelines that are continuously updated. This provides greater flexibility in developing procedures without the need for frequent amendments to the regulations.

She noted that the regulations include fundamental reforms in the management of cooperative societies. These include regulating appointment procedures for non-supervisory positions, including part-time roles, subject to Ministry approval, thereby strengthening oversight and improving human resources management efficiency. Additionally, all contracts have been reorganized, and the principle of tendering has been adopted for investment, facility, cleaning, and security contracts, among others. This reinforces the principles of competition, transparency, and equal opportunity.

Regarding investment, Al-Hawila clarified that the regulation has developed the system for investing branches, lands, and sites affiliated with cooperatives through clearer and more transparent procedures, the availability of electronic appeals, the organization of rules for determining investment value and support, and the prevention of dominance over branches and sites. Additionally, the duration of land investment contracts has been increased to ten years, renewable for five years, with a fixed annual increase of 5% in investment value, thereby enhancing investment stability and boosting cooperative revenues.

She added that the regulation placed great emphasis on regulating the relationship between cooperatives and suppliers by introducing an electronic system that allows suppliers to monitor their transactions, view sales and turnover movements, and check inventory levels for each product. It also established objective criteria for approving suppliers and product categories, prohibited rejecting approvals for commercial reasons, and banned dealing with any supplier without a standardized approved contract. Furthermore, it emphasized that suppliers cannot be compelled to participate in festivals or offer discounts or benefits as a condition for supply unless they consent.

She pointed out that the regulation also stressed the adoption of sound purchasing and marketing policies and linked purchasing operations to inventory turnover rates, thereby preventing stockpiling and enhancing market management efficiency. It also mandated cooperatives to prepare an annual social services plan, pre-approved by the Ministry, to ensure that their allocations are directed toward initiatives with the greatest community impact.

Al-Hawila emphasized that the regulation included unprecedented provisions to protect shareholders’ funds by regulating free goods and support provided by suppliers, requiring them to disclose and account for these items, and reconciling actual receipts with financial statements. This enhances oversight and prevents any manipulation or corruption. Additionally, cooperatives are required to contract with audit offices approved by the Capital Markets Authority, and a more precise regulation for inventory management has been introduced to strengthen financial oversight and preserve cooperative assets.

She revealed the introduction of a points system for non-shareholder consumers, granting them non-cash benefits linked to their purchase volume, aimed at attracting more shoppers and increasing cooperative sales and revenues. This positively impacts shareholders’ profits and enhances the sustainability of the cooperative sector.

She added that the Ministry also issued a decision amending the Executive Regulations of Decree-Law No. (24) of 1979 concerning Cooperatives, which raised the maximum return on shareholders’ purchases from 12% to 15%. This provides shareholders with a greater return on their annual purchases and reinforces the cooperative principle of redistributing a portion of the surplus to them.

Al-Hawila affirmed that the new regulation runs parallel to the new Cooperatives Bill, which has been submitted to complete its legal procedures, as part of a comprehensive vision to update the legislative and regulatory framework of the cooperative sector. She stressed that it represents an integrated project that balances the protection of shareholders’ funds, state assets, and subsidies, the safeguarding of suppliers’ rights, the improvement of the consumer experience, the enhancement of investment, and the increase of management efficiency, thereby consolidating the position of cooperatives as one of the key pillars of food security and economic and social development in Kuwait.

For his part, Dr. Khalid Al-Ajmi, Deputy Minister of Social Affairs and Chairman of the Committee for Preparing the Regulatory Framework for Cooperative Work, affirmed that the new regulatory framework for cooperative work represents a historic decision and an unprecedented leap, ranking among the most significant ministerial decisions that will lay the foundation for a new phase of governance and transparency, serving as the primary regulatory reference for cooperative work in Kuwait in the coming period.

He clarified that the regulation comprises 122 articles, forming a comprehensive regulatory framework that addresses various aspects of cooperative work. Its primary objectives include safeguarding public funds, protecting investors, enhancing principles of governance and transparency, and establishing clear rules to ensure procedural integrity and sound management of cooperative societies. He added that meetings of the boards of directors of cooperative societies will be video-recorded to guarantee transparency.

He further noted that the committee was keen on involving all relevant stakeholders, holding a wide series of meetings and workshops, and inviting representatives from government, regulatory, and legal authorities, as well as specialists, board members, suppliers, investors, and citizens, to listen to their views and comments. This approach ensures that the regulation reflects the needs of practical reality and responds to the challenges faced by the sector in recent years.

For his part, Dr. Sayed Eissa, Acting Assistant Undersecretary for the Financial and Administrative Affairs and Cooperative Affairs Sector, confirmed that cash purchases from cooperative societies will be capped at 200 dinars, coordinated with relevant authorities to streamline procedures and strengthen oversight of sales and purchasing operations.

He added that the new Cooperative Work Regulation mandates cooperative societies to renovate their buildings both internally and externally without exception, in accordance with specific requirements and standards, keeping pace with modern developments and elevating the level of services provided to shareholders and consumers.

Four Prohibitions for Members of Cooperative Society Boards of Directors

The new regulation includes clear controls to prevent conflicts of interest and enhance governance and transparency within cooperative societies. Among the key prohibitions for board members are:

- Prohibition of personal expenditure: Board members are barred from using society funds for any personal activities or initiatives, including financing advertisements or personal election campaigns.

- Prohibition of travel at the society’s expense: Board members are not permitted to travel at the society’s cost to attend conferences, seminars, or external events unless prior approval is obtained from the Ministry of Social Affairs.

- Prohibition of receiving unauthorized benefits: Board members are forbidden from receiving any bonuses, benefits, or advantages not grounded in legal or regulatory provisions. Additionally, they are prohibited from benefiting from discounts or special offers provided by suppliers to the society.

- Prohibition of approving financial transactions: Board members are barred from signing payment vouchers, receipt documents, or purchase requests on behalf of the society.