Social partners agree way ahead for coal industry

A restructuring initiative for the Spanish coal industry has been agreed. Social partners and the Government of Spain have released details of the Coal Industry Framework 2013–2018 which outlines the plan for an ‘ordered closure’ of uncompetitive mines over the next five years. The agreement sets out measures designed to alleviate the social consequences of the closures and to encourage other activities in regions with economies that are largely dependent on coal-mining.

Background

Spain’s coal industry employs 4,894 workers. Of these, 3,407 work directly for 15 extractive coal companies and a further 1,487 are employed through subcontracting companies.

Four distinct regions have economies that are largely dependent on coal mining: around the town of Teruel in Aragón in eastern Spain; around León and Palencia in Castilla y León, northwest Spain; Puertollano in Castilla-La Mancha, in central Spain; and the eastern towns of Cuenca del Caudal and Cuenca del Nalón in Asturias.

Need to restructure

Over the last decade, various EU institutions and agencies have been encouraging Member States to restructure their coal industries. Council Regulation (EC) No 1407/2002 (131 KB PDF) was issued on 23 July 2002, supporting a minimum level of coal production to maintain a certain level of an indigenous primary energy source, while also encouraging restructuring to improve competitiveness and to encourage investment in renewable energy sources.

On 10 December 2010, a Council Decision (730 KB PDF) dealt with state aid to ease the closure of uncompetitive coal mines. It allowed Member States to subsidise production losses only up to 2018, after which uncompetitive coal mines will have to close. Competitive coal mines will be able to continue operating but they will have to repay any state aid received.

Acting on this, the Government of Spain has spent 18 months negotiating with the sectoral social partners to plan the ‘ordered closure’ of uncompetitive mines, create an alternative economic plan for the affected regions and alleviate the social consequences of the restructuring process. They finally agreed a framework in September 2013, published as the Coal Industry Framework 2013–2018 (in Spanish, 1.65 MB PDF).

Content of the Coal Industry Framework

Under the new framework, it is expected that between 2013 and 2018, the workforce in the coal mining sector will be cut by 15%. To alleviate the social consequences of the dismissals, the Coal Industry Framework 2013–2018 provides incentives for people to take voluntary redundancy. Workers who opt for the voluntary redundancy package will receive a lump sum of €10,000 in addition to 35 days’ pay for every year worked, up to a maximum of 30 months’ pay.

Workers over the age of 53 qualify for early retirement plans that will pay 70% of their current gross wage until they qualify for the state pension. There is also some funding for extra training and outplacement of redundant workers.

Two funds are to be set up to foster an alternative economic plan for the coal regions. The first, worth €250 million, will help pay for renewing infrastructure in the affected areas; the second, of €150 million, will promote entrepreneurship projects.

Finally, the plan guarantees that coal will still provide 7.5% of Spain’s electricity generation.

The government is now developing the legislative framework for the initiative.

Social partners’ view

A number of social partners have signed the Coal Industry Framework.

On the employee side, the deal was signed by the General Workers’ Union (UGT), the Trade Union Confederation of Workers’ Commissions (CCOO) and the Workers’ Trade Unionist Confederation (USO).

Generally, the unions are satisfied with the content of the agreement. CCOO, in a statement (in Spanish) on its website, says that the plan improves the situation of the sector’s workers and will save the coal mining regions. UGT says in a press release (in Spanish) that the agreement has been made possible by the efforts of the regional governments in the coal mining areas, the political parties, and especially by industrial action taken by mine workers. USO says the agreement will provide stability to the sector and to the coal regions.

On the employer side, it has been signed by CARBUNIÓN, and in a press statement (in Spanish) on its website the organisation says that the final framework ‘is not the plan that [they] would like to have signed’. The employers’ group is unhappy that state aid will be reduced by 20% each year in the run-up to 2018, saying that the loss of government subsidies will increase uncertainty and the viability of coal mining companies, and damage their ability to remain competitive beyond 2018.

Pablo Sanz de Miguel, NOTUS