The government’s 2004–2010 strategy for the mining industry entrusted the Ministry of Economy and Commerce (Ministerul Economiei si Comertului, MEC [1]) with the management of the restructuring [2] process in the mining sector. This process involves the closing down of mines, environmental rehabilitation, and the reduction of any social impact arising from restructuring. In line with this strategy, all subsidies for lignite and ores will be phased out by 2007 and those for hard coal mines by 2010.[1] http://www.minind.ro/[2] www.eurofound.europa.eu/ef/observatories/eurwork/industrial-relations-dictionary/restructuring
A recent government decision will allow the collective redundancies of over 10,000 workers in the mining sector in Romania in 2006. The redundancies arise from restructuring, reorganisation and privatisation activities in 18 large national companies and organisations in the sector.
Increased restructuring in mining sector
The government’s 2004–2010 strategy for the mining industry entrusted the Ministry of Economy and Commerce (Ministerul Economiei si Comertului, MEC) with the management of the restructuring process in the mining sector. This process involves the closing down of mines, environmental rehabilitation, and the reduction of any social impact arising from restructuring. In line with this strategy, all subsidies for lignite and ores will be phased out by 2007 and those for hard coal mines by 2010.
The recently passed Government Decision No. 349/16, of March 2006, approves the continuation of the restructuring, reorganisation and privatisation of 18 state-owned national companies and organisations. This will lead to some 10,413 redundancies in 2006.
The restructuring of the mining sector, although initiated in 1991 (there were 230,000 employees in the sector in 1990), only accelerated after 1997 when the number of employees in the sector stood at 175,000 workers (RO0502101N; RO0405102F; RO0402102F). By 2005, this number had dropped to 48,000 workers, following the closure of 35 mines and 8,500 redundancies. During 2006, all lignite and non-profitable ore mines are due to be closed.
Alleviating socioeconomic impact
To apply the measures outlined in the government’s strategy, the MEC agreed on a protocol with the National Mining Central Office (Centrala Nationala Miniera, CNM), the Mining Central Office Meridian (Centrala Miniera Meridian) and the Valea Jiului Mining Trade Unions League (Liga Sindicatelor Miniere Valea Jiului). This protocol stipulates, among other things, that redundant workers will receive: redundancy pay; supplementary income; unemployment benefit depending on the contribution period; and two net monthly wage payments for January 2006. Essentially, this should lead to receipt of a total amount of approximately RON 20,000 (€5,700).
In addition, the MEC and representative trade unions have agreed to hold joint consultations in the last month of every quarter in 2006. At the first of these talks, on 13 April 2006 at Snagov, the government announced the introduction of a three-tier programme, totalling USD 200 million (€156 million), of which: USD 130 million (€101 million) will be used for infrastructure, USD 60 million (€47 million) for local economic development, and USD 10 million (€8 million) for institutional development. Of the total, USD 150 million (€117 million) is to be financed from loans, while the remaining USD 50 million (€39 million) will be funded from the state budget.
The three-tier programme is being run by seven ministries and other governmental institutions, including the National Employment Agency (Agentia Nationala pentru Ocuparea Fortei de Munca, ANOFM) and the National Agency for the Development of Mining Areas (Agentia Nationala pentru Dezvoltarea Zonelor Miniere, ANDZM), in addition to the company CONVERSMIN, prefectures and local councils, under the coordination of an inter-ministerial workgroup.
In addition to internal efforts, the restructuring of Romania’s mining sector is also being supported by a number of external bodies, including the European Commission, the World Bank, and the UK government.
Reaction of social partners
Prior to announcing its decision (No. 349/16), the government received advice from the Romanian Economic and Social Council (Consiliul Economic si Social, CES) and the Commission for Social Dialogue (Comisia de Dialog Social) of the MEC.
In addition to redundancy compensation and programmes announced by the government, other support measures aimed at mitigating the effects of restructuring include the establishment of business centres in affected areas.
Despite these efforts, President of CNM, Marin Condescu, declared: ‘Nothing has been done since 1997 to provide economic alternatives in mining areas. The only chance redundant workers have of finding a job is to leave the area.’ Mr Condescu claimed that: ‘the subsidy allocated for the mining sector has dropped from USD one billion in 1990 to USD 80 million in 2006, with the government unfortunately failing to devise a strategy for mining resources. Trade unions are prepared to present President Basescu with an economic and social plan for mining areas, agreed on with all previous governments, but never applied.’
According to Ion Popescu, President of the National Trade Union Confederation Meridian (Confederatiei Sindicale Nationale Meridian, CSN Meridian), whose members include 13,000 miners in the coal sector and 5,000 workers in non-ferrous ore extraction: ‘coal represents a strategic emergency resource in the energy crisis generated by rising oil and gas prices, and its efficiency could increase. If coal mines are closed down, we might have to pay the price twice over: once to close them down and a second time in the very near future to re-open them. As for copper, both demand and price are on the rise and under the circumstances I am against closing down the mines.’
Luminita Chivu, Institute of National Economy, Romanian Academy
Eurofound recommends citing this publication in the following way.
Eurofound (2006), Collective dismissals in mining sector, article.
