Portugal: Role of social dialogue in industrial policies

  • Observatory: EurWORK
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  • Published on: 15 Rugsėjis 2014



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Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

This study is based on desk research and interviews with one employers’ confederation (CIP), one trade union confederation (UGT) and one industrial union organisation (FIEQUIMETAL) affiliated at the confederation CGTP-IN. There was a clear divide between unions and employers. The latter made a positive assessment of social dialogue in industrial policies (although criticising some aspects). The trade unions, on the other hand, complained about the lack of commitment of the government to a substantial social dialogue. UGT focussed its critical review on the most recent period (after 2012), while FIEQUIMETAL made a more general and more profoundly negative assessment of the government’s practice.

Part 1: Overall role and involvement of social partners in industrial policy in the national context

Industrial policy is in this context used in its broader sense as…

those policies that have an impact on the cost, price and innovative competitiveness of industry and individual sectors, such as standardisation or innovation policies, or sectoral policies targeting e.g. the innovation performance of individual sectors [1].

The policy instruments are then defined as the method or mechanism used by government, political parties, business or individuals to achieve a desired effect, through legal or economic means.

Industrial policy initiatives are often undertaken unilaterally by the government but other forms may include social partners in different constellations, including:

  • bipartite initiative (a common approach by the social partners);
  • tripartite initiative (the social partners in tandem with the public authorities);
  • tripartite+ initiative (the three stakeholders in combination sometimes with other civil society players such as NGOs, research centres or qualified figures);
  • public-private partnership initiatives (one social partner and the public authorities); and
  • unilateral initiatives by a single social partner

1. Is there in your country currently a policy framework to stimulate investments that both create economic growth and employment? Tick Yes/No

Table 1

Policy framework

Yes

No

Economic growth

   

Employment

   

Both economic growth and employment

x

 

Competitiveness

x

 

There is a series of governmental documents that represent a kind of “policy framework to stimulate investments that both create economic growth and employment”, as for instance the government’s national reform plan “Portugal 2020” (March 2011) and its review from April 2013 (“Estratégia Europa 2020 - Ponto de Situação das Metas em Portugal”). The Ministry of Economy and Employment’s presented in October 2012 a document on “Competitiveness, Employment and Investment” and launched in April 2013 a “Strategy for growth, employment and industrial support 2013-2020”.

These documents are designed to implement the “MEMORANDUM OF UNDERSTANDING ON SPECIFIC ECONOMIC POLICY CONDITIONALITY” (17 May 2011) signed by the Portuguese government and the Troika.

In the course of the most recent reshuffle of the government (July 2013) the portfolio of employment was separated from the Ministry of Economy (before Ministry of Economy and Employment) and integrated into the Ministry of Solidarity and Social Security (now Ministry of Solidarity, Employment and Social Security). The Minister of Economy was replaced. It is not clear which parts of the political legacy of the former Minister of Economy and Employment will be continued by his successors and to what extent the documents referred above will stay valid or not.

2. Is there evidence in your country of involvement of social partners in the process of formulating industrial policy interventions? If yes, please indicate which types of involvement:

Table 2

Type of social partner involvement:

… in the formulation of horizontal (cross-sector) interventions

… in the formulation of vertical (sector-, industry- or company-specific) interventions

Sector-specific involvement

 

Yes

Cross-sector involvement

Yes

 

Bipartite, tripartite, tripartite+, unilateral, public/private partnership?

The “Tripartite agreement on Competitiveness and Employment” signed March 2011 and the tripartite “Compromise for Growth, Competitiveness and Employment signed January 2012. All confederations represented at the Standing Committee for Social Concertation (CPCS) signed the agreements, with the only exception of the trade union centre CGTP-IN.

Bipartite negotiations between government and the Entrepreneurial Confederation of Portugal (CIP) on the “new regime of industrial licensing” (Decree-Law 169/2012).

CIP refers also “cluster policy definition”.

3. How have social partners been involved in the industrial policy formulation process?

Table 3
 

Please indicate (X) the extent to which the different types of involvement are used, including whether this involvement is statutory:

Level of government?

Sector focus?

Specific form of social partner involvement:

Statutory/mandatory

Very common/ used in most policy processes but not statutory

Fairly common but not consistently used

Rarely used

Not used at all

National or regional?

Sectoral or cross-sectoral?

Tripartite standing committee

X

       

National

Cross-sectoral

Tripartite ad hoc committees

 

X

     

National

Both

High-level groups or other multi-stakeholder committees involving other stakeholders in addition to social partners

X

       

National

Cross-sectoral

If multi-stakeholder committees:

Please indicate which types of other stakeholders are (typically) involved: The Economic and Social Council (CES) is composed by representatives of the central government, the employers, the workers, the regional governments and local authorities, diverse interest associations like cooperatives, academics, certain occupational groups, state-owned companies, women, rural families, banks and insurance companies, and others.

Hearings

 

X

         

Consultations

X

           

Conferences

   

X

       

Other - please specify below:

             

.

             

The “tripartite standing committee” is the “Standing Committee for Social Concertation” (Comissão Permanente de Concertação Social / CPCS).

The “other multi-stakeholder committee” is the Economic and Social Council (Conselho Económico e Social / CES).

Mandatory consultations refer to changes in labour legislation which must be preceded by consultations with trade unions and employers’ associations. Furthermore, the tripartite Standing Committee for Social Concertation (CPCS) may issue opinions on any change in labour legislation.

The CES must be heard during the elaboration of the government’s mid-term plan (Grandes Opções do Plano) and of the budget presented by the government to the Parliament. Furthermore, the CES may express its opinion on other legislation.

4. Is there evidence in your country of initiatives that follows recommendations and development at EU-level? If yes, please indicate in which sectors:

Since 2011, the industrial policy in Portugal is developed and implemented under the conditions set out in the “MEMORANDUM OF UNDERSTANDING ON SPECIFIC ECONOMIC POLICY CONDITIONALITY” (17 May 2011) signed by the Portuguese government and the Troika.

One trade union organisation referred consultations at European level (like one on a future directive on maritime equipment in May 2013) as a positive example of participation of social partners in political decision making. The same union pointed out that this positive experience at EU-level contrasted with the lack of social dialogue at national level.

5. Which types of industrial policy instruments/interventions at different government levels have social partners been involved in? Please indicate degree of involvement

3 = high degree of involvement,

2 = involvement to some extent,

1 = low degree of involvement,

0 = no involvement.

Table 4

Policy instruments:

National level

Based on assessment of employers confederation CIP

See note below

Regional level

See note below

Local level

See note below

Public investment programmes:

     

infrastructure

3

   

construction

1

   

building renovation

3

   

other

     

Innovation programmes

3

   

Support for R&D

3

   

Cluster promotion

3

   

Export promotion

3

   

Internationalisation of SMEs

3

   

Improvement of access to finance:

     

loan

3

   

loan guarantee programmes

3

   

venture capital funding

3

   

other

     

Public procurement policies

1

   

Tax and duty policies

3

   

Adapting the skills base

3

   

Subsidies for restructuring/ bail-out of companies in crisis

3

   

Social plans in case of restructuring. Training/re-training

3

   

Investment incentives

3

   

Energy efficiency/ energy shift

3

   

Energy supply security

1

   

Access to raw materials

1

   

Prices of energy and raw materials

3 (only prices of energy)

   

Others, please specify below:

     
       

Portugal is a highly centralized country. The central government controls the largest part of state revenues. With the exception of the autonomous regions of the Azores and Madeira there are no political regional structures. The five Regional Coordination Committees on the Portuguese mainland are pure administrative structures financed and controlled by the central government. According to one trade union organisation, some of these administrative bodies make an effort to involve social partners in their activity. Under the conditions of political centralism this involvement at regional level is largely limited to the implementation of decisions taken at national level.

Local authorities have some autonomy and capacity in some areas, but the involvement of social partners in their decisions depends on several factors that vary strongly between different municipalities. In this study it is not possible to assess to what extent the more than 300 municipalities involve social partners in their activities in the areas referred above.

The answers to the degree of involvement at national level are based on the assessment of the employers’ confederation CIP. The answers of trade unions to these questions tend to be negative and to a large extent less specific. In this line of argument union representatives referred for instance that unions are not part of the consultative body for the internationalisation of the economy (Conselho Estratégico para a Internacionalização da Economia) and that important tripartite bodies in the area of vocational education and training like the National Council for Vocational Training (Conselho Nacional de Formação Profissional) and the sectoral committees of the National Agency for Qualification and Professional Edudaction (ANQEP) are not working.

6. Which, if any, positive effect(s) can be related to the involvement of social partners in the industrial policy process in your country?

Table 5

Positive effects

Tick (X) where applicable

Please comment briefly: How did effect manifest itself?

Speed of policy process

   

Robustness of policy initiatives

X

Consultation of social partners helps to improve content of policies and to create a more solid social and political consensus for their approval. (CIP)

Relevance of policy initiatives

   

Dynamism in the policy process

   

European coordination

   

Ownership of policy initiatives

   

Coherence and coordination of labour market, education, and economic policies

X

Policies can be considerably improved if social dialogue is taken seriously by the government, as in the case of the agreement of 2011. (UGT)

Stimulating public-private partnerships

   

Others, please specify below:

   

.

   

7. Which, if any, problems or challenges related to involvement of social partners in the industrial policy process have been encountered in your country?

Table 6

Problems/challenges:

Tick (X) where applicable

Please comment briefly: How did the problem manifest itself?

Increased bureaucracy

X

Lack of quick communication (CIP, FIEQUIMETAL)

Lengthy policy processes

X

Lack of effective and quick results (CIP, FIEQUIMETAL)

Lengthy bargaining processes

X

Lack of quick communication and effective and quick results (CIP)

Dilution (circumvention) of parliamentary democracy

 

FIEQUIMETAL

Problems of establishing accountability

X

Most recently government’s commitment to concertation has been reduced to lip service. Government promises to involve social partners, but does not act accordingly. (UGT)

Problems with accountability in general (FIEQUIMETAL)

Lack of dynamism in the policy process

 

Many important tripartite bodies, as for instance in the area of vocational education and training are not working. (UGT)

Lack of culture to involve social partners

X

The trade union federation FIEQUIMETAL criticises that the government lacks a culture to involve social partners, giving as an example the government’s refusal to enter a dialogue on FIEQUIMETAL’s study on “Industry and Industry Policy in Portugal” (2011). (FIEQUIMETAL)

Others, please specify below:

   

.

   

8. What, if anything, has been done to address these challenges/problems listed in questions 7? What was the outcome?

Table 7

Problems/challenges:

Measures undertaken

Effect positive/negative

Communication, effectiveness and results

Problems are frequently discussed at the CPCS.

Social partners seem not to be satisfied with the state of social dialogue, but there is a clear divide. The employers’ assessment is clearly more positive than that of the unions’

     

Part 2: Description of relevant sector examples of social partner involvement

This section aims to identify examples of policies targeting specific sectors and involving social dialogue. Among the industrial policies treated in the previous section in question 5, please select 2-3 examples which represent significant industrial policies in your country and describe the policy instruments used and the contribution of social partners to the shaping of the policy and the outcome of their involvement.

The selection of examples should be guided by the following criteria:

  • importance of the sector to the national economy;
  • level of government support to the industry; and
  • best practice of social dialogue in the country.

Please provide references to key sources.

Example 1

Name of the instrument:

Sistema de Indústria Responsável (SIR)

System of Responsible Manufacturing

Sector:

Manufacturing

Type of instrument applied:

(use categories from question 5. Some sector policies may apply more than one instrument

System of licensing of activities in manufacturing

Timing:

(Period of implementation of instrument)

Decree-Law 169/2012, approved on 1st August 2012 by the government and in force since September 3rd 2012.

Until December 31st 2012 creation of the administrative infrastructure for the implementation of the basic functions of the SIR.

Until March 31st 2013 conclusion of 2nd phase of creation of infrastructure, allowing implementation of further functions of the SIR.

Until June 31st 2013 conclusion of final phase of creation of infrastructure, allowing complete implementation of the SIR.

Operational level

National

Regional

Local

Please tick the government level and/or provide details of geographical implementation area if relevant:

X

   

Funding:

(Please describe the size of the instrument and detail the source(s) of funding, e.g. EU, state budget, levies, stakeholder contributions, etc.).

The creation of the administrative structures is financed by the state budget. The functioning of the system is financed by stakeholder contributions and possibly in part by the state budget.

Target group(s):

(please describe target group in terms of sector/industry, type of company, geographical criteria and/or other relevant characteristics)

Entrepreneurs in manufacturing

Rationale/motivation for the instrument:

(please describe the problem that the instrument should address – for instance: market failure, need to increase sector competitiveness, crisis intervention, etc.)

Simplify and accelerate the licensing procedures, thus facilitating the investment in and the establishment of manufacturing activities in Portugal.

Policy stage

Please describe stage of involvement of the social actors i.e.

policy preparation (consultation),

policy decision (co-determination? and

policy implementation (fx. by involvement in agencies)

In plain implementation

Objectives of the instrument:

(please describe the objectives and any quantitative targets set for the instrument– e.g.

increased employment by X% in sector Y by 20xx

increase in sector exports by X%

increase in FDI by X%

 

Activities and implementation:

(Please give details on the implementation of the intervention)

 

Social partner involvement

 

Type of social partner involvement:

(Bipartite, tripartite, tripartite+, unilateral, public/private partnership? – cf. qu. 1)

The government heard during the preparation of the decree-law the National Commission for Data Protection, the National Association of Municipalities and the CIP (Entrepreneurial Confederation of Portugal - Confederação Empresarial de Portugal).

The CIP was involved in the analysis of the weaknesses of the previous system of licensing and in the elaboration of the new system. In June 2012, the State Secretary of Entrepreneurship, Competetiveness and Innovation participated in a discussion of the project organized by the CIP. At this occasion the CIP presented a document that named some aspects this confederation considers critical for a successful implementation.

Level of involvement of social partners involvement:

European, National, regional, local

Sectoral

National, sectoral (manufacturing)

Specific form of social partner involvement:

(tripartite standing or ad hoc committee, high-level group, hearing, consultation, conferences, etc.? – cf. qu. 2)

Bi-partite consultation

Timing and nature of social partner involvement:

(Please provide more details on the processes that social partners were involved in, their input, the timing, etc.)

Consultations, followed by a meeting between the State Secretary of Entrepreneurship, Competetiveness and Innovation and CIP in June 2012 (some weeks before approval of the decree-law)..

Impact of social partner involvement on design and implementation of instrument:

(Please describe how/if the design and/or implementation was affected through the involvement of social partners)

The participation of CIP in the analysis of the weaknesses of the previous system of licensing and in the elaboration of the new system was important for adapting the planned reform to the needs of entrepreneurs in manufacturing.

Other stakeholders involved, if any:

(please name stakeholders and briefly describe their roles)

The National Commission for Data Protection was heard. Its participation was important for aligning the new regulation with the requirements of data protection legislation.

The National Association of Municipalities was heard. The municipalities play a central role in the implementation of the new licensing system.

Results and outcomes

 

Outputs/results:

(Please give details of the outputs/results of the intervention; e.g number of jobs created/retained, number of workers upskilled; wage increases, investment increases, increased co-operation between social partners, etc.)

No data available

Assessment of effectiveness:

(Please provide an assessment of the effectiveness of the intervention - were the objectives reached? If possible, base the assessment on evaluation reports or similar)

CIP considers that the new system put an end to some absurd requirements of the old regulation, thus removing some serious obstacles to investment.

Possible explanations for the effectiveness of the instrument:

(Please provide possible explanations for the degree of effectiveness achieved, including the contribution of the social partner involvement; e.g. improved bargaining process? Increased dynamism in the policy process? Other explanations?)

The complexity and malfunctioning of the Portuguese licensing system has been criticised as one of the major obstacles for investment. The active participation of the CIP seems to have helped to increase the effectiveness of the reform in 2012.

Assessment of efficiency:

Did the outputs/results measure up to the effort/resources invested? If possible, base the assessment on evaluation reports or similar)

No evaluations available.

Possible explanations for the efficiency of the instrument:

(Please provide possible explanations for the degree of efficiency, including the contribution of the social partner involvement)

 

Reinhard Naumann and Paulo Alves, DINAMIA-CET / ISCTE-IUL

[1] COM(2010) 614 An Integrated Industrial Policy for the Globalisation Era Putting Competitiveness and Sustainability at Centre Stage. EC 2010

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