Restructuring: the role of social dialogue at regional and local level

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A recent study from the Warsaw School of Economics highlights the important role to be played by social dialogue at regional and local level in cases of restructuring. While the restructuring plan is initiated at national level, social dialogue at regional and local level could most effectively take account of the specific situation on the ground. The research indicates, however, that cooperation among the social partners at this level is poor.

The restructuring of entire economic sectors is not only an issue affecting the national economy, but also - and perhaps mainly - a local problem. The impact of enterprises closing down, changes in ownership, and reshaping of the business activity profile falls heavily on the local job market and on the overall economic state of the region in question. This assumes special importance in the case of mining or metallurgy, as these are sectors with a strong regional concentration, and ones in which individual companies employ thousands of people. For this reason, the study on Strategies of the main actors of the second restructuring phase in selected industrial sectors, carried out by the Economic Sociology Faculty at the Warsaw School of Economics (Szkoła Główna Handlowa, SGH), focused on the subject of cooperation between the social partners in public administration at regional level in cases of restructuring. The study also analysed the participation of local government bodies in restructuring projects and of their cooperation with the social partners. The research concentrated on four sectors: coal-mining, iron and steel processing, the Polish National Railways (Polskie Koleje Państwowe, PKP), and the energy (electricity) sector. The research involved numerous interviews with representatives of the social partners, which provided the basis for more general conclusions.

Regional social dialogue commissions

It was expected that the establishment in 2001 of the 16 regional social dialogue commissions (Wojewódzkie Komisje Dialogu Społecznego, WKDS), one for each voivodship, or administrative region, would ensure the comprehensive inclusion of restructuring issues in regional affairs. The WKDS have since become the object of numerous studies and analyses, and a criticism often raised concerns the relatively narrow scope of their activities. The study set out to examine the significance of the WKDS in the development of social dialogue and their contribution to sectoral restructuring programmes.

The study investigated the nature of the contacts between the WKDS and specific enterprises undergoing restructuring, and found these to be generally sporadic. When a representative of the metallurgy sector was asked if he and his colleagues had any first-hand experience with the relevant social dialogue commission, he replied: 'We have no experience because there is no nexus ... we have never been invited (to a WKDS session).' Another representative of the metallurgy sector explained: 'The WKDS have yet to find their place ... the meetings are of an ad hoc nature, very much geared to social expectations.'

An equally sceptical assessment of the WKDS is offered by representatives of the energy (electricical power) sector: 'We can get much more done through acquaintances and through informal arrangements than through the WKDS ... the WKDS, no matter in which voivodship, have no influence as regards the energy sector. The power industry operates in accordance with its own procedures, and it is hard to expect a WKDS to exercise influence over the development of any power company.'

Involvement of local government

The involvement of local self-government bodies cannot be taken as a model worthy of emulation in any of the four case studies covered by the Warsaw School of Economics project.

In the case of the Polish National Railways (Polskie Koleje Państwowe, PKP), cooperation among the social partners ought to have played a key role. One of the premises of the public administration reforms being implemented in Poland since 1999 is that provision of local transport services is the responsibility of local government. To date, however, local government has resisted sharing in the costs of passenger rail transport: the local government bodies do not exercise complete control over their budgets, and they have argued that such expenses would exceed their capabilities. They have also claimed that, if they are eventually coerced into footing at least part of the bill for passenger transport, they will proceed in accordance with free market principles, choosing a transport operator other than the costly PKP. The unions, clearly, are unhappy at the prospect of such an outcome: they point out that the entire situation is beyond the means of individual local government bodies acting on their own and that this item in the restructuring programme cannot be implemented without assistance from the national authorities in Warsaw. From the perspective of PKP, regional rail carriage - while consistently reporting losses - provides employment for the largest number of PKP employees. Thus, the regionalisation of passenger transport has been a sensitive issue.

In the metallurgy sector, meanwhile, the successful track record of resolving problems at sectoral level has resulted in a situation where the social partners have little interest in dialogue at local level.

Much the same situation prevails in coal mining. While both these sectors (mining and metallurgy) are covered by the 'Integrated programme for assuaging the effects of restructuring in the mining, metallurgy, and big chemical industries in the Małopolska voivodship', the effects of implementation have been modest. Part of the reason lies in the fact that the local authorities, for the most part, have limited understanding of the problems pertaining to these industries, and are reluctant to learn more about them. The directors of the companies, meanwhile, have little idea what the regional authorities are up to, or what they are planning. There seems to be a lack of cooperation with the public administration: each side tends to its own affairs, and any contacts which do occur are only activated when some major problem arises, and then only on an ad hoc basis.

Despite the fact that the national restructuring plan for Silesia recommends cooperation between the regional and local government authorities, company directors and trade unions, the study reveals that no shared strategies have been devised or any joint actions undertaken between the social partners and the companies undergoing restructuring. One mining union leader complained: 'The local government activists are opposed to mining: they regard this sector as a ball and chain at their feet... The regional climate for miners is even worse than it is in the government.'

A leader from another mining union declared: 'Our union does not maintain any contacts with the regional authorities, and I do not know of anything that those authorities would be doing for the benefit of miners.' Managers similarly gave critical assessments of official (voivodship as well as local) involvement in the problems of sectors being restructured. The chief executive of Kompania Węglowa, a mining conglomerate, elaborated: 'Until now, especially in mining areas … it was easier to follow the same rules that were in force for many years. Yet coal extraction in any given region comes to its natural end, and one must plan ahead and prepare for these difficulties. Accordingly, we need not just regional, but also local, programmes creating alternative jobs ... Their implementation should precede the inevitable changes which, after all, have been occurring in the Polish mining industry for years now.'

Commentary

The study concludes that the role that is currently played by social dialogue at local and regional levels in cases of restructuring is weak and its potential needs to be developed. The inclusion of restructuring issues in planning and activities at regional level remains a theoretical proposition, with little bearing on reality. While the government at national level is responsible for developing the restructuring plan, it is at local level that the restructuring effects are most deeply felt by the local communities, particularly where large enterprises of critical importance are concerned, with a consequent impact on the entire economy. It is essential, therefore, for social actors at regional and local level to become involved in dialogue with enterprises when restructuring is taking place (Rafał Towalski, Institute of Public Affairs (Instytut Spraw Publicznych, ISP) and Warsaw School of Economics (Szkoła Główna Handlowa, SGH))