Social enterprises will soon have legal status in Jamaica when a new law is passed in the next few months.

Although social enterprises have existed in Jamaica for at least 20 years, there is no formal definition or regulation, meaning that their impact is little understood, public awareness of them is low, and they struggle to access funding. However, after many years of work, Jamaica is on the cusp of gaining formal legal status for its social enterprises with a new law being drafted to govern the sector.

The draft act is currently going through its final stages before becoming law, it is hoped, within the next few months. The new law will be the culmination of many years’ work involving a variety of different people and organisations.

Campaigners for the new law hope it will lead to new opportunities and success for an ambitious sector that has been struggling for recognition and support.  One such campaigner, René Gayle Roper, an attorney and consultant at the Jamaican law firm of BeyondLegal said, “the legislation will help shift the local fourth sector from an emergent, highly fragmented stage to a recognised, established and cohesive sector.”

Gaining visibility and recognition

Roper, who is among those, who have played a key role in drafting the new law added that the new law “will enable social enterprises to gain the visibility and recognition that they deserve and will address issues and concerns with the current regime of self-identification, such as inaccurate or illegitimate labelling, which dilutes the image and impact of the sector by obscuring the magnitude and breadth of their activity.”

An important step in drawing up the new legislation was looking at what laws and best practices already exist for social enterprise around the world, explained Roper. This included the UK’s community interest company, Canada’s community contribution company and the USA’s low profit limited liability company.

However, she emphasised, each country has to create something that suits its own circumstances. Another such campaigner is Charmaine Brimm of the Planning Institute of Jamaica (PIOJ), a government agency, which manages policies for the country’s sustainable development.

Brimm, who has been campaigning with others for more legal recognition for social enterprises in Jamaica since 2016, contended that while social entrepreneurs have been active in Jamaica for at least two decades, the lack of a clear definition and understanding of social enterprise means that people have “defined it to suit their own purpose”

As such, sometimes not reflecting international best practice for social enterprise. The legislation she said will help shift the local fourth sector from an emergent, highly fragmented stage to a recognised, established and cohesive sector. Brimm admitted, “the sector is developing in a highly informal and fragmented way.”

Social enterprises being held back

Many social enterprises are held back from growing and thriving because they don’t qualify for favourable tax treatment, they can’t get the right sort of finance, or they can’t be listed on the Jamaica Social Stock Exchange (which is currently a platform for attracting donations but which soon aims to attract social investors who expect both social and financial returns on their money). 

This lack of understanding of what social enterprises are and can do has far-reaching implications, Brimm emphasises adding that it can prevent social enterprises from accessing markets and getting involved in public procurement.  She conceded that there are challenges with attracting people with the right skills to work for them, and it means that there are only fragile networks of support.