Agreement ends strike in nationalised coal mines

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A month-long dispute over industrial restructuring hit Spain's publicly-owned coalmining companies in December 1997-January 1998. The dispute arose following the Government's amendments of agreements reached in May 1997, following the release of a critical report by the European Commission. A satisfactory settlement was eventually reached on 27 January 1998.

The low profitability of coal mined in the Asturias region in comparison with imported coal has been a subject of debate since shortly after the publicly-owned coalmining company, Hunosa, was set up in 1967 through the purchase of private mines. Since then the public company has been partially subsidised, and a policy was proposed to reduce production and employment in the medium term in exchange for an ambitious plan of economic development to replace the concentration on coalmining in the region. Coalmining and steelmaking - which faces similar problems - could not be dismantled without setting up a real alternative that would maintain business activity and the standard of living. However, few other companies have been established in the mining districts, and Asturias has undergone a process of economic decline since the 1960s.

When Spain joined the European Economic Community in 1986, the production of Hunosa was over 3.6 million tonnes per year, with a workforce of 20,756 and annual losses of ESP 35,2269 million. Production and the workforce have since gradually decreased and the losses have increased (peaking in 1992 at ESP 100,195 million). For the end of 1997, the combined forecasts for Hunosa and the Minas de Figaredo company were a production of 2.5 million tonnes, a workforce of 9,300 and losses of ESP 56,375 million. Negotiations were held in 1997 over a 1998-2001 Hunosa company plan (in the framework of the 1998-2005 "Plan for the coalmining sector and alternative development of the mining basins" - ES9707119N), with the aim of reducing losses and stabilising the production and workforces of the two companies.

The Ministry of Industry and the coalmining trade unions affiliated to CC.OO and UGT reached a preliminary agreement in May 1997 and signed an agreement in July of that year. For the year 2001, this agreement provided for a decrease in production to 2.1 million tonnes and a decrease in the workforce to 7,000. The mechanism for achieving this would consist of early retirement for 4,000 workers over the four years as they reached the age of 52, and redeployment for 1,060 employees (some of whom were made redundant by the restructuring of other mining companies).

New dispute

The consensus was broken at the end of December 1997, due to a report from the European Commission that proposed reducing the workforce by 4,000 without redeployment and reducing production to 1.5 million tonnes by 2001. The Ministry of Industry and the State Society of Industrial Shareholdings (Sociedad Estatal de Participaciones Industriales, SEPI) announced their acceptance of the proposals of this report during the course of negotiations for the collective agreement for the next four years, claiming that negotiations over the July agreements had not completely finished.

As is traditional, the response of the strong mining unions was overwhelming: a total strike in the mines of Hunosa and Figaredo from 26 December (ES9801241N). The new situation opened up two areas of dispute: the proposed new collective agreement, in which management offered wage rises lower than inflation forecasts for 1998, 1999 and 2000; and the new restructuring proposals put forward by the European Commission.

The strike mobilised not only the miners but also the wider population, which is very sensitive about the economic future of the region. Demonstrations were called, pickets cut the traffic on the main roads and a number of organisations in Asturias, including political parties, made public statements in support of the miners - including the PSOE (Socialist)/IU (United Left) mixed group majority in the regional parliament, although not PP (conservative), which governs the region. The death of a miner hit by a car at a roadblock and several other injuries extended the strike to the coalmining sector across Spain for one day and the conflict escalated in the region. As is habitual in miners' strikes, confrontations between strikers and police were common. However, the most important feature was the doubt cast over the coherence of economic policy in a region that is not able to overcome its economic decline.

New negotiations and new agreements

Negotiations were held between the leaders of CC.OO and UGT in Asturias, the Ministry of Industry and SEPI. Initially the unions refused to accept the Government's inclusion of the Brussels proposals, arguing that the pact had been agreed in July 1997 and accusing the Government of using the report to favour privately-owned coal mines - also partially subsidised - which would benefit from the new reduction in the production quota of public companies. A new element then appeared: the Government seemed to give less importance to the opinion of the Commission on the restructuring than to the cost of the early retirement of the 4,000 workers. It therefore proposed that workers of Hunosa and Figaredo accepting early retirement would not receive 100% of their net wage but only 76%, which is the rate for early retirement in private companies. The miners' opposition to this measure was based both on the agreements signed and on previous practice on early retirement. They were unwilling to lose the historic rights that they had acquired.

Finally, agreement was reached on 27 January 1998, with the aim of satisfying the demands of all parties to the dispute. The public mining companies will take on only 736 new workers and will offer early retirement to 3,397. A further 325 workers will be placed in economic diversification projects in the mining areas (to which ESP 20,000 million have been assigned for next few years) by Hunosa. The remainder of the previously proposed early retirements will be replaced by a programme of voluntary redundancies amongst the administrative staff of the company. In any event, by the end of 2001 the workforce will not be less than 6,500 (500 more than the figure proposed by the European Commission). Those taking early retirement will receive 100% of their wages with a monthly net income ceiling of ESP 412,000. Production levels for 2001 will be as laid down in the July 1997 agreements, although revisions will be made in some pits in order to reduce production if possible.

There is also a pact on wage increases effective up to the year 2001. The unions accept that they will be set below the rate of inflation in 1998, 1999 and 2000, and equal to inflation in 2001. Workers' assemblies examined the draft agreement as always the case, and it was approved by the majority. Since 26 January, the pits have returned to normal although there were some irregularities over the first few days.

The opinion expressed by many union leaders and several local organisations in the area is that a report such as that issued by the Commission was no justification for the Ministry of Industry and SEPI returning to subjects that had been sufficiently discussed and agreed only a few months before. According to them, a month-long strike was needed to reach the point that had already been agreed. On the other hand, the Government maintains that the agreement has placed coalmining on a better path towards restructuring.

Commentary: the future of coal mining

The current agreement has been reached for two reasons: because mining disputes, which can easily spread to other Asturian companies, carry a very high political cost for any government (and perhaps far more for the current one); and because strictly economic criteria cannot be applied to coalmining, as is recognised by SEPI and the Ministry of Industry, probably following instructions from the Government. Indeed, the subsidies to Hunosa and Minas de Figaredo, as well as those received by the other mining companies - of which there are some 75 - meet the objective of maintaining a wide range of business, industry and services in the mining regions.

It is not possible to give up coalmining and depend totally on imports because this would involve not only many job losses but also a state of dependence in the strategic economic area of energy. Furthermore it is not possible to close down the mines without previously providing the region with an infrastructure of industry and services that can maintain its economic level. This has been the key topic for the last 30 years up to the present moment. Nevertheless, neither recent history nor the new agreements are in themselves a sufficient guarantee that the root problem will be solved.

During the course of the dispute, the Asturian unions complained that the declarations of government representatives and the information given to the public suggested that the miners were seeking only their own benefit. On the contrary, they argue, their aim is to provide the region with an economic structure - including the mines - that will allow Asturias to overcome its problems. The same opinion is probably shared by many Asturians who see how the reduction in mining so far has done no more than accentuate economic decline. For this reason, they thought that the miners' strike was justified. (Fausto Miguélez, QUIT)

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