Railway reforms prove difficult

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On 22 March 2002, the Belgian parliament adopted legislation reforming the management structure of the NMBS/SNCB national railway company. Trade unions lost their seat on the board of directors, though they are represented on a 'strategic committee'. On 25 April, Christian Heinzmann was nominated as the new chief executive. However, following reported problems with both politicians and trade unions he submitted his resignation on 1 May, to widespread astonishment.

The policy path pursued by the current coalition government with regard to the Belgian state railway company (Nationale Maatschappij der Belgische Spoorwegen/Société Nationale des Chemins de fer Belges, NMBS/SNCB) has been fraught with problems. Among other issues, the government is trying to gain control over the NMBS/SNCB financing plan: according to the company itself, debts will run up to EUR 5 billion by the end of 2002. The transport minister, Isabelle Durant, has stated that NMBS/SNCB's accounts are built on quicksand (in the Le Soir newspaper on 22 December 2001). Its goods transports subsidiaries especially are a drain on government funds, though without the political sphere having any control.

Industrial relations at NMBS/SNCB feature a number of historically-based peculiarities (TN0003402S). Notably, the NMBS/SNCB national joint committee has 10 seats for employee representatives, the distribution of which is based on the union's membership figures rather than results of 'social elections' of workplace employee representatives. As a result, three seats on the committee are held by CSC/ACV Transport and Communications (CSC/ACV-Transcom), affiliated to the Confederation of Christian Trade Unions (Algemeen Christelijk Vakverbond/Confédération des Syndicats Chrétiens, ACV/CSC). The remaining seven seats are held by the rail section of the General Confederation of Public Services (Algemene Centrale der Openbare Diensten/Centrale Générale des Services Publics, ACOD/CGSP), affiliated to the Belgian General Federation of Labour (Algemeen Belgisch Vakverbond/Fédération Générale du Travail de Belgique, ABVV/FGTB). The liberal Free Trade Union of Civil Servants (Vrij Syndicaat voor het Openbaar Ambt/Syndicat libre de la Fonction Publique, VSOA/SLFP) and the Independent Union of Rail Workers (Syndicat Indépendant des Cheminots, SIC/OVS), primarily representing engine drivers, are not represented because the membership of each does not constitute 10% of the workforce. As a result, engine drivers have gone on strike on several occasions without any of the recognised trade unions having any control over them.

Another feature of industrial relations at NMBS/SNCB is that, unusually in Belgium (which has no legislation on the issue - TN9809201S), the trade unions have had a seat on the board of directors.

Structural reforms

On 22 March 2002, the federal parliament adopted an law reforming NMBS/SNCB (published in the Belgian Official Journal on 26 March). Reforms include a reduction of the size of the board of directors from 18 to 10 members including the chief executive. As a result, ACOD/CGSP and ACV/CSC-Transcom have - to their dismay - lost the board seat they had jointly held until now. However, they are represented on a new 'strategic committee' whose main duty is to draw up a long-range investment plan (including employment) for NMBS/SNCB. However, the trade union seats on this body are to be shared with VSOA/SLFP, to the annoyance of ACOD/CGSP and ACV/CSC-Transcom.

Another – this time, political – point of controversy in the NMBS/SNCB reforms is that the management committee, composed of several general managers and one chief executive, will henceforth have a director-general to represent the company together with the chief executive. In other words, from now on, every decision taken by NMBS/SNCB requires two signatures. For the sake of balance, it was furthermore decided that the director-general and the chief executive must not belong to the same linguistic community - ie if one is Dutch-speaking, the other must be French-speaking.

New chief executive resigns

A new board of directors, including a chief executive, was to be in place no more than 30 days after the NMBS/SNCB law was published in the Official Journal. On the day of the legal deadline, 25 April, the composition of the new board of directors was made public. Almost all of its members are thought to be clearly political appointments and often come directly from the various ministerial cabinets.

The most difficult mission was the quest for a chief executive. Etienne Schouppe had held this position since 1991 and he applied for reappointment. Throughout his mandate, he had launched an expansion of NMBS/SNCB's goods transports subsidiaries and managed to maintain acceptance among the various parties in this process. One striking example of his approach was a collective agreement he concluded with the unions on 16 April 2002, providing for a 1% wage increase for 2002 combined with higher bonuses for night and weekend work as well as additional recruitment. The outgoing board of directors was not informed of this agreement by Mr Schouppe, who allegedly did not want to link the future board members to an agreement made by himself. Thus, he avoided affronting politicians whilst knowing the trade unions were already bound to him.

Eventually, the new chief executive position was handed to Christian Heinzmann, a 49-year-old from Antwerp, who until then had headed Luxair, the Luxembourg airline company, and was found at the very last moment by a headhunter. He was to implement the innovations the minister of transport, Isabel Durant, had sought. However, to general bewilderment, Mr Heinzmann submitted his resignation on 1 May, whereafter events took a dramatic turn, with mutual accusations between Mr Heinzmann, the trade unions and the government culminating in the public humiliation of the chief executive. The sequence of events was as follows:

• in his official resignation letter to Ms Durant, Mr Heinzmann stated that on various occasions after his appointment he had been put under pressure, 'which sometimes came close to intimidation and even threats'. He also said that both management and trade union representatives had blocked him;

• the Prime Minister, Guy Verhofstadt, argued in parliament that the intimidation that Mr Heinzmann had allegedly experienced was an indication of how bad problems are at NMBS/SNCB. According to Mr Verhofstadt, the government will not yield to intimidation as Mr Heinzmann did;

• José Damilot, the chair of the ACOD/CGSP rail section clearly felt himself targeted by Mr Heinzmann's vague accusations. Mr Damilot filed a complaint against Mr Heinzmann for slander;

• Michel Bovy, the chair of ACV/CSC-Transcom, stated he had not even spoken with Mr Heinzmann. He claimed that Wallonia appeared to be the only part of Belgium that Mr Heinzmann identified with railroads and that he took no account of Flemish trade unions;

• during questioning by a parliamentary commission, Mr Heinzmann let slip a statement about initially having handed a different, unsigned letter of resignation to Ms Durant, criticising the government for having appointed him too hastily and for allegedly leaving him totally unaware of the necessity for two signatures to be put to each NMBS/SNCB decision;

• Ms Durant admitted to parliament that the letter signed by Mr Heinzmann was a corrected version, adding that she did not so much as 'consider' the first, unsigned one. It was, in her view, only the second, signed letter that contained Mr Heinzmann's position;

• Mr Heinzmann then sent a registered letter to Ms Durant wherein he formally broke his commitments at NMBS/SNCB, and made a similar declaration in a fax to the parliamentary commission on 8 May;

• in parliament, Ms Durant stated that she 'had to admit' that Mr Heinzmann obviously had not been the right choice.

Commentary

The troublesome reform process on the Belgian railways is indicative of how much NMBS/SNCB management lacks transparency. The different parties involved have become so entangled with each other that outsiders are kept out. The problems of the relations between the parties are illustrated by fact that Mr Schouppe related quite well to the unions and was able to make deals that presented the government with a fait accompli (and the bill to pay). This also shows that managing a public company is far more complicated than running a private enterprise.

Beyond the initial institutional vicissitudes, outlined above, lies the real reform work for NMBS/SNCB. There is a long-range investment plan up to 2012 to be considered. The government wants rail passengers to increase in numbers by 50% over the next eight years and is willing to invest heavily in infrastructure in order to reach that goal. Nevertheless, it still has not been established what means are to be provided by NMBS/SNCB for this. Also pending is the matter of renewal of the management contract binding NMBS/SNCB to certain results and performance indicators. Passengers as well as staff who have regular contacts with passengers are in urgent need of higher service standards and clearer communication. In short, the new administration at NMBS/SNCB will have a lot on its plate. (Jan De Schampheleire, TESA/VUB)