Miners protest against proposed merger

The case of Lubelski Wegiel Bogdanka S.A. shows that not all enterprises that appear to be doing well financially can be certain of their long-term survival. For companies in which the state retains some degree of control, as in the case of the Bogdanka mining company, one potential risk for companies is the decisions taken by politicians. As a result of such political decisions, Bogdanka may be forced to merge with a group of energy companies and to move its corporate headquarters to Poznan in western Poland; a recent demonstration by Bogdanka’s employees was staged in protest against the government’s plans.

The Lubelski Wegiel Bogdanka S.A. mine, in which the State Treasury retains a 97% stake, has successfully completed its restructuring plan: it now has just over 3,000 employees (down from over 6,000 employees in the 1990s) and shows a net profit of PLN 72 million (€19 million as of 17 December 2006) for 2005. As a result, the company’s directors have drawn up plans to open two more mine shafts; if this project is carried out, Bogdanka will need as many as 1,000 new workers.

Possible merger with energy companies

Although Bogdanka shows respectable financial results and has ambitious development plans, this does not guarantee its future autonomy. On 28 March 2006, the Council of Ministers approved a ‘Programme for the energy sector’, which stipulates that Bogdanka should merge both with the Kozienice S.A. power plant (a body generating over 10% of Poland’s aggregate electricity output) and with ENEA S.A. (an electricity distribution company with a grid extending over four administrative regions). The new body created as a result of this consolidation would be based in Poznan in western Poland, the current location of the ENEA headquarters.

Trade union reaction

On 12 September 2006, the Deputy Minister of the State Treasury issued a statement designed to allay the fears of Bogdanka employees, stating that the ministry – in its capacity as Bogdanka’s supervisory body – would not take any measures detrimental either to coal production in the mine or to the company’s investment projects. However, the trade unions active at Bogdanka were unconvinced by this statement; their representatives maintain that the principal motivation for involving Bogdanka in the merger is the need to repay debts built up by the Kozienice power plant: they are thus worried that Bogdanka’s assets may be used for this purpose. The unions are also unhappy with the prospect of locating the new entity’s headquarters away from Bogdanka’s current head office in Lublin in eastern Poland; they believe that this will result in a weakening of Bogdanka’s financial involvement in supporting local communities around the region.

Attitudes of employees

It appears that almost all Bogdanka employees share the union’s negative assessment of the proposed merger. In a referendum held among the workforce on 19 September 2006, as many as 94% of Bogdanka employees rejected the plan of the Council of Ministers and endorsed industrial action if the government proceeds with the implementation of its plans.

In protest against the proposed merger, Bogdanka’s employees organised a demonstration on 23 September 2006. The protest action took place in Lublin’s city centre, with an estimated 1,000 to 2,000 people taking part. The event was organised by activists from two of the larger trade unions – the Independent and Self-Governing Trade Union Solidarity (Niezalezny Samorzadny Zwiazek Zawodowy ‘Solidarnosc’, NSZZ Solidarnosc) and the All Poland Alliance of Trade Unions (Ogólnopolskie Porozumienie Zwiazków Zawodowych, OPZZ) – as well from a number of smaller mining unions; railway employees and workers from the Wozuczyn sugar refining plant also took part in the demonstration. The slogans on the banners displayed by the demonstrators were aimed at the government, with such messages as ‘Hands off Bogdanka’, ‘Nothing about us without us’, and ‘Don’t move Bogdanka to Poznan’.

Petition to Prime Minister

The protesters delivered a petition to the Prime Minister, Jaroslaw Kaczynski, calling for abandonment of the plan to merge Bogdanka with Kozienice and ENEA. The central government’s regional representative (wojewoda) accepted the petition and promised to pass it on to Prime Minister Kaczynski; the government representative also expressed hope that the issues raised by the protesters would be duly considered by the government.

Commentary

The meeting between representatives of the demonstrators and the wojewoda marked the end of the protest action; after having delivered the petition, the demonstrators dispersed. For the moment, employees at Bogdanka can do little but wait for further developments in Warsaw, as the hope expressed by the wojewoda hardly amounts to a promise of concrete measures. However, in light of the government’s plans for building up strong entities in the energy sector, it may be asked whether the opposition mounted by Bogdanka employees will yield any positive results for the workforce.

Piotr Sula, Institute of Public Affairs (ISP) and Wroclaw University (UWr)

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