Government legislation ministry rules fisheries co-ops can withhold shares over policy loans

The Ministry of Government Legislation said that local fisheries cooperatives may suspend share refunds for withdrawing members who have outstanding policy loans, ruling that such funds constitute debts owed directly to the cooperative.

The interpretation clarifies that cooperatives can withhold payments under the Fisheries Cooperatives Act until members repay both general loans and government-subsidized financing in full. Officials reasoned that although the government provides the capital, the cooperative enters into the lending contract and bears responsibility for collection, meaning any delinquency directly impacts the local entity's financial soundness rather than the state.

Requiring cooperatives to refund shares while members hold unpaid balances would force the local entity to absorb losses, potentially eroding its capital base. The ruling stems from a civil petition asking whether the act's provisions on debt repayment apply to subsidized funds designed to promote the fishing and aquaculture industries.

Under the relevant statute, withdrawing members typically gain the right to claim their share of assets starting the fiscal year after their departure, but the law explicitly permits cooperatives to pause this process if the member has not settled all obligations. The Ministry of Government Legislation issued this determination in response to an inquiry, concluding that limiting share refunds serves as a minimal protective measure to ensure equity in creditor-debtor relations without infringing on property rights.