Communitybased enterprises and the commons: The case of San Juan Nuevo Parangaricutiro Mexico

2.1. San Juan Nuevo Parangaricutiro enterprise

San Juan Nuevo (http://www.comunidadindigena.com.mx) is a 28-year-old enterprise created to exploit timber and non-timber forest resources from the communal lands of a Purhepecha indigenous community. The Meseta Purhepecha, identified as one of the two main natural regions of the State of Michoacán, is a geographic area characterized by pine-oak forests and large populations of indigenous peoples. The land surface of Michoacán is 5,883,695 ha, of which 1.69 million ha are forested (Merino 2004). Particularly in the Purhepecha plateau, traditional farming and resin tapping have been used as means of establishing land tenure arrangements (Merino 2004). It was not until the nineteenth century that timber forest products acquired – for indigenous groups – a particular value that exceeded the traditional use for local markets, household construction, firewood and handicrafts.

The enterprise is comprised of 20 branches or productive areas with total annual sales of up to US $11 million, ˜1400 employees of which about half are full-time employees and half part-time and seasonal employees. The forestry enterprise of San Juan, initiated in the early 1980s, is an important large-scale socially driven forest exploitation initiative in Mexico. At the first stage of its development, in the late 1970s, San Juan exploited its communal resources through a Union with other communities and ejidos¹, but subsequently, because of management challenges in the Union, and leadership renewal in the community, San Juan withdrew from the Union to start its own community-based strategy at the beginning of 1981. This same strategy soon helped the community to establish its own community-based forestry enterprise in 1983, to start exploiting, among other things, the 6443 ha of forested land comprising about 30% of the communal territory (18,138.32 ha). In the process of establishing the enterprise, the renewal of the community’s resource use and management rules also took place. These progressive steps were also reflected in the community’s success in maintaining its resource base in the face of increasing pressure from surrounding communities that were systematically engaging in illegal logging. The umbrella of procedures and rules that influence Mexican communities have been largely driven by legal and regulatory instruments instituted through the Agrarian Reform Secretariat (SRA) and the Natural Resource and Environment Secretariat (SEMARNAT). These two agencies, in collaboration with others, have provided guidelines for the formation of officially recognized communal institutional structures (SRA) and have regulated the way communities and others should access forest and other resources.

As a long-standing case, San Juan has been the subject of many publications including two books (Velasquez et al. 2003; Garibay 2008). We summarize the literature on San Juan Nuevo, focusing on those that provide relevant background and some of which have not appeared in English. The latter includes four theses, two Masters and two PhD, all of them in anthropology and focusing on various managerial, cultural and institutional aspects of the community and its enterprise.

San Juan’s institutional capabilities and ability to maintain its resource base, the forest, has been widely recognized (Alcorn and Toledo 1998; Guerrero-Murillo 2000; Velasquez et al. 2003). Guerrero-Murillo’s (2000) thesis presents an overview of the San Juan communal system, acknowledging institutional challenges to communal political freedom and the enterprise’s management structures. He concludes that despite various challenges, the level of community self-governance and organization represents a model that can be followed by other indigenous communities. Bofill’s (2002) ethnography of San Juan includes an analysis of the leadership trends. She mentions that the community’s “communal management” discourse and practice has ultimately become an instrument to ensure individual benefit over communal interest. Bofill describes a shift from the values guiding the creation of the management system, and the values guiding local leaders and institutions in more recent times. Her conclusions illustrate the way empowered comuneros (legal members of the San Juan community), whose individual benefits and interests rose with the economic success of the enterprise, manipulated the community to maintain power. Acosta (2001) describes in detail the way discourse and leadership helped in the organization of the community and the creation of the San Juan enterprise. She focuses on the economic and political struggles that emerged in the community during and after the initial years of the enterprise. Her analysis identifies key aspects in the decline of community unity, and numerous conflicts at the local level, and represents San Juan as a community where freedom of choice is considered a threat to the long-term endurance of communally driven socio-economic development.

Garibay’s (2005) comparative study of two Mexican communities elucidates the instruments by which the San Juan comuneros envisioned themselves as a community, and the mechanisms they adopted to build their enterprise. Garibay acknowledges the contributions of the enterprise in improving economic conditions at the local level. He notes, however, the way wealth accumulates in already powerful players, while poor community members do not enjoy the same economic benefits. The study represents the comuneros of San Juan as a group of community entrepreneurs gathered to drive their own socio-economic development using the label and discourse of “indigenous community” to gain the allegiance of the disempowered and relevant support from agencies. Garibay’s conclusions imply that community cohesion is the outcome of common economic interests and the systematic repression of the masses to exercise ideological and political freedom. The San Juan case is not without its paradoxes and critics.

2.2. Community-based and indigenous enterprises

Community-based and indigenous enterprises have emerged as a specific form of social enterprises (Anderson et al. 2006; Peredo and Chrisman 2006). Similar to other social enterprises, they utilize market and non-market strategies to improve socio-economic conditions and generate social value for their members (Antinori and Bray 2005; Anderson et al. 2006; Peredo and Chrisman 2006). Membership of such enterprises is based upon mechanisms by which an individual is recognized as a member of a collective. In many indigenous cases this means they have legally recognized membership in an indigenous community as specified by the State of which they are a part (Bray et al. 2005). This issue of membership is important, but at the same time will be specific to each case and not something that can be easily generalized outside of a specific context.

More general characteristics of community-based and indigenous enterprises are that they are often seen as a mechanism of autonomous grassroots development. Such enterprises often emerge out of a social mission in which cultural values are mixed with socio-economic objectives and where profits are the means to achieve social and cultural goals and not simply a return on investment (Anderson et al. 2006). The social missions and objectives of such enterprises address the social and financial needs of diverse groups within a society while embracing values integral to their cultural identity and recognizing their dependence upon specific resources necessary for their collective survival in a specific place (Anderson et al. 2006; Cornell 2006). The organizational structures and institutions of such enterprises are directed to strengthening cultural practice and achieving socio-economic empowerment. They recognize the linkages between institutional, political and administrative empowerment, and trade and commerce. As such, implicit to the mission of the enterprise is the goal of legitimizing their appropriation of resources for both subsistence and trade (Cornell and Kalt 1998). Given that the inputs needed by the enterprise are a common good its success is dependent upon its ability to create or strengthen the institutional structures and trust needed to collectively organize for its internal operation and growth while maintaining the political and administrative control of the resources (Cornell and Kalt 1998). The enterprise can be seen as the means by which the society organizes its interactions with other actors while maintaining its collective identity and the resource base it needs for its survival through both direct consumption and trade. Community-based enterprises are increasingly been considered by rural and indigenous communities as a way to maintain autonomy by decreasing their dependence upon transfer payments from central authorities and as a way to negotiate with other corporate actors.

Long-term research on socio-economic development, carried out in Native American reservations in the USA, has provided insights into factors that are important for enterprises to be a successful mechanism for development rooted in collective action. As Cornell and Kalt (1992) have found, Native American enterprises have been successful when the following factors are present: they build upon collective institutions (governing bodies) rooted in cultural values and individual actions based upon rules that serve common aims; the partial or total control over land and/or resources; create their own human capital; and, draw upon their own systems and strategies for economic success. Other external factors that can influence the success of an enterprise are: the political and legal jurisdiction over land and resources; assets for economic success such as linkages with existing or emerging markets; and access to other resources, such as financial and in-kind capital (Cornell and Kalt 1998). Through ten years of research Cornell et al. (2004) have concluded that practical and capable local community governing structures emerge when there are conditions of effective sovereignty and a cultural match between governance institutions and local conceptions of political power. Such institutions combined with strategic leadership that searches out diversified sources of revenue, instead of depending upon transfer payments from the central state, and pursue the expansion of decision-making jurisdiction over resources, will provide a favourable environment for autonomous community development.

What is central to our analysis is that there is a common pool resource that is allocated to families but held in common, and there is an enterprise that processes and trades products derived from that resource as well as from other sources. In this case the commons is both the land and the enterprise, and thus our interest in the case. This is a set of circumstances not uncommon in Mexico where there are numerous resource-based enterprises whose natural assets are communally held (Antinori and Bray 2005; Bray et al. 2005). In numerous Mexican communities, local governance regimes, land tenure systems, and natural wealth have allowed the creation of profitable market-based enterprises as part of a commons.

4.1. Holistic vision, mission and values

The principal vision that resonates through the community is the perception that they belong to and are part of the land. Their attachment to the land has been challenged many times with one of the key events in current memory being the eruption of the Paricutin volcano in 1943, which forced the San Juan town to resettle outside the communal land. This vision links the forest to indigenous livelihoods, community cohesion and cultural practice and is the central mission of the enterprise. As one elder and member of the community noted “… they [private property owners and government programs] keep trying to make us change our forest for avocado farms, but with avocado trees you provide for a family. With a forest you provide for a community.” The link between the forest and survival of the community is a core cultural value; however, the emergence of the enterprise is also seen as a response to an increasing gap between poor and rich due to the mismanagement of the communal resources for the benefit of a few that worsened in the 1970s. Salvador Mendez, a chemical engineer and community member, mentions that the community enterprise emerges at a time “… when a large division appears in the community, where a group advocates for the re-appropriation of the land through the establishment of private property, as a way of having access to credit and therefore development and progress, and the other group, which was the one I always identified myself with, that supported the commons, as a way of advancing all commoners at the same time, the population as a whole. And this was our predominant position to establish and maintain the enterprise for the first ten years.” (Quotations from original transcripts, and translations by the authors). As the quotations above imply, their vision of the enterprise reflects a deep cultural value that perceives the forest as a common good that should generate benefits for all the members of the San Juan indigenous community. The mission of the enterprise was then to generate social well-being and development through the appropriation of the economic value that could be generated from the forest. Overall the economic objectives were seen as a means of promoting community well-being rather than as ends in and of themselves.

Mr. Francisco Ruiz, a lawyer and community member, indicates that “… our strategy with those community members identifying themselves with the private property sector was to negotiate, showing them the bounties of belonging to the communal regime, of maintaining the land as communal, our way of life as a forest community and the importance of generating employment and collective development.” While the vision put forward the linkage between the forest resource and community well-being, the mission became the means by which forest lands could be reclaimed and social cohesion rebuilt.

Their approach to engender a sense of ownership by community members was to demonstrate success soon after the formation of the enterprise. Mr. Ruiz explains that “The objectives were to show to the people that we know how to work, producing profits after a year, even if they were minimal; and to create a real source of jobs with all the legal benefits. But we first had to create a work discipline, which was at that time still foreign to our community, through making people conscious little by little … it was necessary, because what we were doing was for us, we developed the sense of ownership which was vital to survive.” While profitability was an important sign of success, he also emphasizes that the enterprise had to include their own people as employees as well as generating broader social and cultural benefits as “… we were addressing the other important aspect of our project, to promote social development, which was what we wanted from the beginning, not just improve economic conditions, but also general living conditions, education, training, all of that. We started providing training for our own native language to avoid losing it, because it comprises our own indigenous identity.” Ruiz’s contributions again address key aspects of their holistic goals and cultural values, and represent a good example on the ultimate goal of not simply acquiring commercial benefits, but also of building capacity for cultural sustainability.

The importance of cultural identity as part of the mission of a community-based enterprise expresses itself in unique ways depending upon the context of the case. In San Juan there is a strong identity as a forest community. Due to increasing national and international markets for products such as avocado and peach, the community has faced pressure to convert forest lands into tree crop production. However, this has been opposed as it would place a higher value on individual production and privatization of land into orchards, instead of a collective enterprise rooted in forest harvesting. The mission of the enterprise is to maintain forest cover and forest lands in spite of this pressure.

Finally, an important point that emerges regarding the mission of the enterprise is to ensure that the management and administration of the enterprise is coordinated with, but independent from, the political administration of the community. Mr. Mendez and Mr. Ruiz worked to implement a synergistic partnership to allow economic growth to be framed, but not handicapped, by the communal nature of the enterprise. As Mr. Ruiz indicates, “… we committed ourselves to work without obstructing each other’s work but, with coordination, to have positive results in the short-term.”

4.2. Institutions, governing and managerial structures

In order to operationalize the collective vision, it was necessary for the San Juan enterprise to clarify the roles of institutional oversight and day-to-day management while working within the Mexican legal requirements for corporations. As Mr. Ruiz explains, “We had a structural model that was small but very effective, and in that same way we presented it to the government, trying to explain all detail and under the parameters established by law, but adapting legal frames to our local institutional structures …” In this way the local leaders adapted imposed legal institutional structures to fit local customs and values and with it local institutional arrangements. Giving details of the institutional arrangement that results, Mr. Ruiz mentions “… that is why we created the Communal Council, as a decision-making body to represent each neighbourhood of our community, elected by the community, to be able to have a consultative body that can be called at any time and that represents the views of all the sectors of our community. That way we did not have to tire our main decision-making body, the General Assembly, by forcing them to hold extraordinary meetings to decide emerging matters but still having their ‘go ahead,’ at the same time not supplanting the General Assembly, whose key role was clearly defined and also carried out. That is why we developed a successful structure and efficient systems where we maintained transparency and had the required ‘go ahead’.” The General Assembly is the main legally prescribed political body that represents all official community members. This main local institution names representatives to sit on the Communal Council which acts like a board of directors for the enterprise. In this way the enterprise is accountable to the membership of the community, but the whole community is not required to meet to make decisions in an on-going basis. Rather, the enterprise reports to the community on an annual basis to ensure it is operating within the vision of the community and fulfilling its mission.

Similarly, San Juan leaders took steps to establish the necessary managerial structures. As Mendez says “… I established the rules of a private enterprise. They were not written but practiced and jealously followed. How do you realize that? Well, with your control reports, registry, work time, sales criteria, etc. That was completely my responsibility… the certainty that the money is going to be there for everyone the day it should be, to pay the chainsaw operators, the people working at the sawmill, for everyone. After ten years of total certainty, when there is not a single day of late payments for the worker or for the family whose trees are going to be cut, everything up to date, working like a bank. Ten years give that security, where everyone can start thinking in improving their homes, their social and economic conditions, and then a circle of certainty and confidence is generated. This was the system we rigorously followed during the first ten years, because we had Communal Council deliberations – functional and active institutional bodies – that maintained their independence from the enterprise’s administrative structures.” As indicated above, there was a clear separation between the managerial and institutional structures. Governing bodies oversee the fulfillment of community goals while guiding and monitoring, without interfering with productive processes.

In reflecting upon the opposition they faced, Mr. Ruiz explains that “Even though the opposition came from the local Catholic institution and the economically powerful small property owners [within the community], who strongly influenced people in different government agencies to make us stop our project, our General Assembly members by majority supported the continuation of the productive project, which left the opposition without much to do but to witness how our community was starting to drive their own development.” A tactic utilized by opposition groups within the community challenging the establishment of the enterprise was to demand from agencies surprise audits to demonstrate mismanagement. By having careful administrative procedures, the enterprise management was able to demonstrate to the government that the enterprise was meeting its legal and corporate obligations. As Mr. Ruiz notes “Then, they [the monitoring agency] convened a meeting of the General Assembly in order to present the result of the audit. They congratulated us, because our mistakes came from the kind of reporting systems we sometimes used, but not from mismanaged funds … we were triumphant.” Early success resulted in more and more adherents and people attending the annual meetings, and the enterprise was able to distribute profits to the members in order to enjoy the success they had achieved. However, as Mr. Ruiz reflects, a critical moment came when “… our own people decided to reinvest [in the enterprise], after we showed them the other productive projects that could accompany the forest exploitation.” The managerial and institutional success led to a tenfold increase just in its first year (1981) from 40 to 400, in those community members who supported the enterprise in the General Assembly and indicated their willingness to participate in it in the second year of operation. As can be argued for this case, clear roles, accountability, transparency and sustainability of the enterprise are always important but more so for indigenous enterprises. These enterprises, which often challenge existing structures of power face intense scrutiny. They also need to build, through actions, local legitimacy and trust if they are to truly gain the adherence and benefit the masses they represent.

The careful attention to the institutions governing structures and managerial procedures allowed the enterprise to increase both in the number of supporters – as mentioned above – and in the number of forestry workers from 100 to over 600 in six years between 1981 and 1986. The enterprise was also able to diversify beyond the sawmill and forest harvesting to include a Technical Forestry Service, other areas helping in the vertical integration of forest production and in the exploitation of other non-timber forest products and services. This allowed the enterprise to begin employing community members as administrators of the forest and expand the opportunities for youth beyond those provided through forest labour. In having their own people both working in and administering the forest they are one of the few communities in this part of Mexico who have managed to maintain their resource base – the forest – in their communal land.

4.3. Capitals and capacity building

Mr. Mendez and Mr. Ruiz strongly emphasize the importance of building upon existing financial, natural, social and human capitals² in the early years of forming the enterprise. When they started to build the enterprise they faced many challenges, including a lack of legal jurisdiction for the forest resource and political opposition. Strategically they decided to focus on what they did have, which was local financial and social capital. As Mr. Mendez puts it “… if the question is ‘where did the money for our sawmill come from?’ we can say that about 95% of the amount required to construct and operate it was generated at the local level, money from our profits from 1981 to July 1983. The other 5% came from the contributions given by our maize farmers, from the advance payment made by our clients (the ones buying our cellulose and fresh wood), and from the in-kind contributions made by the community interest groups, whose communal labour contributed to the development of facilities and to the start of operations in July of 1983 … from there the industrial exploitation of our forest was not interrupted during the next twenty-one years.”

In addition to local financial and social capital, they utilized the access they did have to natural resources as a way to capitalize the enterprise in the early years. The approach, as explained by Mr. Ruiz, was to start “… with our own dead wood, with a system that consisted initially in generating jobs through the use of the fallen branches and other dead wood to a paper company, and after by selling timbers logs, which helped to construct our communal enterprise without external economic support and without a Presidential Resolution [official document where common property and community membership rights are recognized by the government].” These comments reveal a degree of pride in how they started by using their own endogenous capital made up of community members who recently obtained university training mixed with customary values that emphasize the importance of voluntary labour and financial contributions. In part, this degree of participation was linked to the vision of the enterprise in regaining control of the forest as a means to provide opportunities for community members, and as the foundation of a cultural identity. In the early days they would contract outsiders, but ensure that a local community member worked with the contractor to learn the job. This, along with training and education programs, has led to the result that more than 95% of the employees of the enterprise are also community members and can be found in both positions of management and labour.

Another type of capital that is emphasized in the interviews is the external linkages that the community was able to draw upon during the formation of the enterprise. For example, local political leaders were able to draw upon their political alliances within the Institutional Revolutionary Party which was the strongest political institution at the national and local levels at the time. Such nested institutions often characterize common property regimes (Orozco-Quintero 2007). More than ideological, such affiliations can be strategically important for communities who lack power within the political system. For example, as Mr. Ruiz notes “Among the outsider friends of the community, there was a Subforest Secretariat delegate that believed in our project. He was part of a stream of thought that believed in helping and providing all necessary tools to communities for them to manage their own forest resources; he opposed industry exploiting community resources without benefits for communities.” While political partnership was seen as important the interviews also indicated the need to find other types of partners so as not to be dependent upon political linkages. They approached this by participating in forestry programs and addressing government demands to approve and certify their forestry activities, which helped them to establish international market partnerships in Germany and the USA through the support of certification institutions like the Forest Stewardship Council. In the interviews, Mr. Ruiz clarifies the transition from an early dependence upon political linkages to a broader base of partnerships over time. He notes that “the political affiliation to the PRI was something for convenience – being the main and almost only political party in Mexico, a hegemony. Our main problem has not been to have had identified ourselves with a political party, our major current problem is that now that we have been able to obtain our Presidential Resolution [granting property and membership rights], it should be enough for us to become autonomous and let our commoners to vote with their conscience. We should base our decisions on people and ideas not on parties.”

San Juan’s de facto sovereignty helped the community to access their forest resource, which was fundamental for the enterprise to emerge and be consolidated, even before they were granted the Presidential Resolution in 1991, ten years after the creation of the community-based management system and seven years after the acquisition of the industrial sawmill in 1983. Arguably, all the natural, human, financial and institutional capitals they accessed have contributed to making the commons system successful and robust.

4.4. Regulatory framework

The regulatory framework of the case focuses on the legislative and legal environments within which a community enterprise, like other enterprises, must operate. The parameters established in Article 27 of the Constitution of 1917 would provide the frame for state jurisdiction on land and resources (Weaver 2000). It became the starting point for subsequent governmental actions and legislation to return or provide land to communities and ejidos and for regulations, which continue to this day, limiting access to and exploitation of natural resources, including land (Merino 2004; Garibay 2005). Although the Mexican agrarian experiment of distributing large portions of land to agrarian communities and ejidos started early in the century (Merino 2004; Bray et al. 2006), for San Juan the legislative support that would make a difference emerged during the presidency of Luis Echeverry in the 1970s. One major regulatory influence noted in the interviews was the effort by Cuauhtemoc Cardenas, first as Forest and Fauna Sub-secretary and later as the state governor, from the early 1970s to the mid 1980s, to foster community forestry. While the State government could not transfer territorial property rights to communities, as this required a Presidential Resolution, it did support them in efforts to organize enterprises to utilize forest resources (Merino 2004). The renewed policy window that opened encouraged San Juan to start their forestry enterprise first as part of a union of ejidos and communities and after as an individual community. The importance of the role of the government in creating a favourable regulatory environment for communities is summarized by Mr. Ruiz in the following manner: “It is when the government creates a new program to facilitate the union of ejidos and communities, with and without presidential resolutions, in order to provide resources for communal exploitation … that was the window we were waiting for, we then met with the local institutions of San Juan and other communities and decided to form the Union of Ejidos and Communities around 1977.” The increased awareness, emerging leadership and institutional trends in San Juan allowed the community to take advantage of such enabling policy and to start mastering their redefined common property regime.

A legislative trend, also mentioned by interviewees, was the one related to the changes in the status enjoyed by rural resource management systems. The San Juan enterprise, currently the primary employer in the municipality, accounts for ∼75% of economic growth (Instituto Nacional para el Federalismo y el Desarrollo Municipal and Gobierno del Estado de Michoacán 2005) and directly benefits about a thousand people. However, Mexican fiscal reformations has located communal and indigenous enterprises under the same taxation conditions as private enterprises, a trend that started with the changes brought by the Free Trade Agreement. This redefinition of communal enterprises has created a large debt for the enterprise that increases each year. The consequent pressure from the new normative and legislative trends and overall the lack of a clear regulatory framework for a community-based enterprise affects San Juan’s management performance and its contribution to local socio-economic development.

4.5. Land and resource tenure

In the literature on community-based enterprises, a key factor of success is the security of tenure over the resource related to the core mission of the enterprise (see Table 1). As mentioned in the previous section, indigenous communities like San Juan have experienced a number of changes in regulatory frameworks that have influenced forest tenure. While the Mexican Revolution (1910–1917) reversed the appropriation of indigenous lands during the reign of Porfirio Diaz by allocating tenure to communities and ejidos (Campos 2004; Merino 2004; Garibay 2005), it also created a regulatory framework that would mandate the provision or restitution of land centering power and decisions in the state (Garibay 2005). The two forms of common property established were the agrarian communities and the ejidos. While agrarian communities were given contol of land as long-standing groups with cultural and/or other connections to the land, ejidos were granted or redistributed land as groups of people gathered for such aims that are unable to demonstrate ownership (Vazquez 1992; Garibay 2005). Communities needed to demonstrate historic connections with the land, while ejidos mainly needed to demonstrate their lack of ownership of land. These difficulties often created conditions of open access and privatization through individual land titles when communities were unable to demonstrate long-standing connections to the land and therefore were not granted official common property rights; and gave way to abuse when ejidos requests did encourage the displacement of previous occupants of the land (Ruiz Anguiano 1986; Campos 2004).

The indigenous community of San Juan, without legal jurisdiction over its communal territory, faced the challenge of having to demonstrate its long-standing link to the land by exercising de facto sovereignty. As Mr. Ruiz notes, “Because of the lack of a Presidential Resolution we were not qualified to receive bank credit or loans, neither to receive permits to exploit our own resources, but the small property owners could, because of their land titles … there were too many incidents with the small property owners and private companies, to the point that we decided to close our main road to give the message that it was enough of abusing our resources.” Mr. Ruiz then indicates the community’s approach to achieve communal management. “That is why we said yes to be part of the Union and exploit our resources as a community.”

The path chosen of exercising de facto ownership did help to capitalize the community enterprise. The lack of legal jurisdiction over the resource, moreover, limited their access to credit and external support. These constraints were turned into opportunities by the San Juan leaders, who made use of the local resources they were initially allowed to use, such as dead wood, and the financial capital provided by its members. The short-term strategy allowed the community to demonstrate their management skills, to build their capacity in institutional and financial aspects, and to capitalize and acquire their industrial sawmill in 1983, just two years after starting the communal exploitation.

Shifting policies, individual-based subsistence in the community, and the lack of legitimate local institutional structures during the first three-quarters of the twentieth century endorsed the transformation of communal land into private. The communal land, where family landholders carry out their subsistence activities and possess landholding inheritance rights, belongs to the community as a whole; however, San Juan had become a patchwork of private titles and state land to which resource permits were assigned. Recognizing that there would be continued pressure to transform communal land into private property, the members of the community began to raise the financial resources needed to obtain a Presidential Resolution that would provide the community with clear property rights to the forest not held under private title. The basis of this claim for San Juan was documents dated from the 1700s when the Spanish Kingship recognized their property rights, but these were subsequently ignored by the Mexican State. The community, as explained by Mr. Ruiz, embarked upon a process to have their rights recognized by the government that required “Our documents from the Spanish Kingship […] to pass through a palaeographic study and a judiciary process, to prove both their authenticity and their legality.” The results of the study “… declared our documents as authentic and with that, being a de facto community and nothing else we started to enforce our rights. To officialise our communal perimeter, we hired the most important company on photogrammetric studies, which came to make the necessary flights over the communal land and developed the mosaic to identify the boundaries of the communal land. We identified 82 km of communal perimeter, and after that we hired a topographer to reorganize the information based on topographic coordinates to be able to present it to the Agrarian Reform Secretariat. Through it we established the foundations that eventually facilitated the acquisition of the land registry (Presidential Resolution) and recognition of the community members.” In the San Juan case the enterprise did emerge under conditions of unclear tenure. In time, however, leaders of San Juan began to recognize the importance of clarifying forest tenure, and the enterprise provided an organizational structure to raise the funds necessary for legal and technical support to help assert resource rights and obtain government exploitation permits.

One other potential problem was the reaction of private title holders, some of whom were not identified among the 1229 official members of the indigenous community and owners of the enterprise. After receiving the Presidential Resolution for the comuneros of San Juan in 1991 (after ten years of communal exploitation), there were still 133 pieces of land registered as private property, comprising over 4000 ha of the 18,138,323 ha identified as communal land. The community has pursued a number of strategies to recover this land through negotiated land purchases and, through judicial processes where there are questions regarding how legal title was obtained by individuals. The strategy of building the legitimacy of the enterprise can be seen to have contributed to the long-term strategy of regaining the commons by the community and provided the necessary social capital to withstand the opposition generated through reasserting their rights to the forest as a commons.

4.6. Informed leadership

Leadership is a topic common to the enterprise literature and a key factor is the legitimacy in the eyes of those whom they are leading. In a community-based enterprise one of the factors that contribute to legitimacy emerges out of shared cultural values. As Mr. Ruiz reflects upon the issue of leadership he comments that “… based on my modest experience, in any community, the community’ heads should be the local leaders. We are saying that he is born there, knowledgeable about key aspects, participating in communal affairs, in everything; honest in his actions, and if making mistakes apologizing and at the next opportunity correcting himself.” Through familiarity with cultural customs and norms, the leaders of the San Juan enterprise were able to demonstrate an ability to reconcile differences with some opponents, increase participation and commitment on the part of community members and strengthen communal institutions. Mr. Ruiz notes that “some of the community members identifying themselves with the private property sector started to see that we were serious in exploiting the forest resources and paying people for the timber extracted from their lands. They then started to see us with respect. That is why I keep telling people, always speak the truth, keep your word, be honest and the people will respond in mass.” Leadership, in this perspective, was able to overcome opposition and gain a broad base of respect and participation in the enterprise while not shirking from defending the interests of the enterprise when necessary through both political and legal means.

A challenge that emerged was the succession of leadership from those who founded the enterprise to the next generation of leaders. While the first generation of leaders established core cultural values based upon a clear separation between the roles of political and enterprise leaders, this principle has faced recent threats. Mr. Mendez, commenting on the evolution of leaders respecting each other’s role, notes that “… we see a politicization of the administrative structures. As an example, the management meetings became meetings to consult on communal issues … the Communal Council’s role is then supplanted, when decisions belonging to them were taken at managerial meetings … now it is easy to confound enterprise with community, and at some moments there is no difference between what is the community and what is the enterprise … then the problems start when the heads of communal affairs impose their will on administrative matters, without having knowledge of entrepreneurial issues or market related issues, it is then when we start to lose our management institutions.”

Another challenge facing the new generation of leaders is to maintain the mission of the enterprise as a means to create and distribute benefits through the use of forest resources. As Mr. Ruiz points out “… in more recent time the maintenance of the land as commons is still there, our challenges may be in that even though the land and resources are for the common well being, it might be being employed to further individual or group agendas and interests instead of community interests.” The San Juan enterprise provides an example of the challenges faced by a community enterprise in the succession from one generation of leaders to the next. As is common in other types of enterprises, it is not always clear that new leaders will continue to base the vision and mission in the core cultural values of the time when the enterprise was founded. Or it could be that new leaders simply reflect a new set of core cultural values found in the community and that the community enterprise has to adapt to maintain legitimacy in the eyes of the new generation of owners and beneficiaries.

In San Juan, trends in leadership, after the founding leaders moved away, have both increased and decreased local legitimacy at different periods of time. Subsequent changes in leadership and generational perspectives have produced the release of accumulated capacity and resources, generating crises but also new conditions for re-organization. The fact that San Juan survived these crises, moreover, demonstrates the strength of the foundations of the communal enterprise.