Bulgaria: Role of social dialogue in industrial policies

  • Observatory: EurWORK
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  • Published on: 14 september 2014



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The role of social dialogue in industrial policies in Bulgaria is limited as the Labour code clearly defines its scope – the labour and living standards issues. The social partners are isolated from the structures dealing with the industrial policy and are rarely invited to participate in consultations. However, social partners (namely the employer organisations) present their positions and views on legislation and strategies in this field. Quite often the meetings of the tripartite bodies, namely of the consultative committees on different issues, are limited to information about the already adopted decisions and the critical views and proposals of social partners are often ignored. This practice limits the sense of ‘ownership’. This has some impact on the Economic and Social Council proposals, many of which have been realised into concrete policies.

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.

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

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

X

 

Employment

X

 

Both economic growth and employment

X

 

Competitiveness

X

 

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: discussions of strategies, programmes, legislation through opinions, statements, conferences, workshops and rarely in ad hoc groups for their elaboration

Yes: Through programmes, opinions, statements, conferences, workshops

Cross-sector involvement

Yes: discussions of strategies, programmes, legislation opinions, statements, conferences, workshops and rarely in ad hoc groups for their elaboration

Yes: Through programmes, opinions, statements, conferences, workshops

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

Bipartite, tripartite, unilateral

public/private partnership

Bipartite, tripartite, unilateral

public/private partnership

2. 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

Sectoral and cross-sectoral

Tripartite ad hoc committees

Note: Ad hoc groups

 

X

     

National

Sectoral and cross-sectoral

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

.

X

.

     

.

National

.

Sectoral and cross-sectoral

If multi-stakeholder committees:

Please indicate which types of other stakeholders are (typically) involved:

Economic and Social Council was established by law as ‘a consultative body representing the views of the civil society structures on social and economic development’. It involves nationally representative social partners and NGOs.

There are Consultative Councils and in the last year Public Consultative Councils in sectors and subsectors to various ministries, agencies and departments, as well on regional level. These include NGOs, academic community, professionals and social partners.

Managing committees and working groups in the framework of the Operational programmes related to industry development co-funded by the ESF comprise social partners representatives and representatives of nationally represented nongovernmental organisations and scientific institutions (The composition and the participating organisations are defined by Council of Ministers Decree).

   

Hearings

     

X

 

National

Cross-sectoral

Consultations

X

       

National and regional

Sectoral and cross-sectoral

Conferences

 

X

     

National and regional

Sectoral and cross-sectoral

Other - please specify below:

             

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

Operational Programs on transport, regional development, human resource development, competitiveness co-funded by the ESF the Monitoring Committees comprise representatives of the government, social partners, academia, NGOs (the so called social and economic partnership)

National Reform Program 2020 - developed jointly by the Government, social partners, academia, NGOs

Partnership Agreement with EU – 2014 – 2020 (draft) - developed jointly by the Government, social partners, academia, NGOs. All these provide the framework for better industry development

Partnership is related to: efficient implementation, strict definition of the programme activities’ objectives and increasing the development capacity. The partnership process includes all stages of elaborating the strategic documents.

Development of legislation – amendments to the national legislation related to the transposition of EU legislation (public procurement, competitiveness, internationalisation of SMEs, innovations, Strategy Europe 2020, sector specific regulations)

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

Regional level

Local level

Public investment programmes:

0

0

0

infrastructure

1

1

1

construction

0

0

1

building renovation

1

1

1

other

     

Innovation programmes

1

0

0

Support for R&D

1

0

0

Cluster promotion

1

0

0

Export promotion

1

0

0

Internationalisation of SMEs

1

0

0

Improvement of access to finance:

     

loan

1

0

0

loan guarantee programmes

1

0

0

venture capital funding

0

0

0

other

0

0

0

Public procurement policies

1

0

0

Tax and duty policies

3

0

0

Adapting the skills base

3

3

3

Subsidies for restructuring/ bail-out of companies in crisis

1

0

0

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

2

2

3 (relates to company level)

Investment incentives

1

0

0

Energy efficiency/ energy shift

2

1

0

Energy supply security

1

0

0

Access to raw materials

0

0

0

Prices of energy and raw materials

2

0

0

Others, please specify below:

     

removal of regulatory barriers to competition

3

0

0

Note: In the most of these policy instruments are involved mainly the employer organisations. However in most cases their involvement consists of statements, opinions and proposasl, which are not always taken up. Most active and statutory defined is the participation of all social partners in policy instruments related to labour market and skills development as they fall into the scope of the social dialogue as defined by the national legislation.

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

   

Relevance of policy initiatives

X

Statements, opinions and proposals on legislation, strategies and programmes at national and sector level related to industry development, namely by the employer organisations, as well as the participation in ad hoc groups, improve the relevance of the policy initiatives.

Proposals made in the opinions and resolutions of the Economic and Social Council (e.g., on the Strategic priorities of the Bulgarian Economy at the background of the Europe 2020; Improvement of the Business environment in Bulgaria through better regulation, Challenges to the Bulgarian economy and others) increase the relevance of the policy initiatives.

Dynamism in the policy process

   

European coordination

Х

Managing committees of the Operational programmes, comprising social partners representatives increase the opportunities for participation in decision making in the corresponding sectors related to the rules of using ESF funding in line with the European priorities for development and competitiveness.

Participation of Bulgarian social partners in the European Economic and Social Committee improves the participation of Bulgarian Social partners in initiatives related to European coordination.

Ownership of policy initiatives

   

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

X

.

Social partners implement joint projects under the Operational programme Human resource development that promote the coordination of labour market, education and economic policies, e.g., the project of the Bulgarian Industrial Association (BIA) „Elaboration and implementation of information system for labour force competences assessment by branches and regions”. The project is implemented in cooperation with the Confederation of Independent Trade Unions in Bulgaria and the Confederation of Labour ‘Podkrepa.’ The main goal of the project is to increase the adaptability, effectiveness and labour market supply-demand balance through implementation of a system of labour force competences assessment.

The economic analyses of 20 economic branches, proposals for legislative amendments related to the economy as a whole and the project branches and the establishment of the information system for competence assessment are a useful tool for better matching the policies and needs in the field of industrial development, labour market and education and training.

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

   

Lengthy policy processes

   

Lengthy bargaining processes

   

Dilution (circumvention) of parliamentary democracy

   

Problems of establishing accountability

X

The participation of social partners is limited to consultations (in most cases just information) on some of the policies related to the economy. The presented positions and proposals of the social partners usually are not considered. There is a lack of argumentation by the government representatives in the established social partnership bodies why the proposals are rejected.

By the way of example, in 2009 and 2010 the government and social partner adopted anti-crisis packages. Despite the pressure from social partners the government did not assess the implementation of the measures (many of measures have not been implemented at all).

Till now the discussions and documents proposed for consultations in the National Council for Tripartite Cooperation have not been publicly available.

Lack of dynamism in the policy process

   

Lack of culture to involve social partners

 

The social dialogue in the country started to develop just recently and all parties to the social dialogue lack traditions and culture of social dialogue. .

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

Lack of culture to involve social partners

The new government in power since June 2013 held discussions with social partners on a range of issues related to industry development (e.g. on decreasing regulatory burden on business, the state of energetics, the state of mining, etc.), resumed the tripartite social dialogue and declared willingness to resume also the activity of the sector and branch social dialogue bodies.

.

Recovering social dialogue at all levels

Problems of establishing accountability

Social partners presented joint proposal for changing the rules for social dialogue and for regular accounting of the government in respect to the proposals of social partners not taken into account

The proposal is not yet discussed due to the change of the government in mid 2013.

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.

There are no relevant examples of industrial policies targeting specific sectors and involving social dialogue as treated in the section in question 5. As already said the social partners’ involvement in industry policies as considered in this CAR is limited. The social partners, namely employers’ organisations, participate with opinions and proposals on legislation, but there is not structured social dialogue. The provided example 1 to some extend responds to the criteria. However most of the information required is unavailable.

Example 1

Name of the instrument:

Преразглеждане на цените за електроенергия

Revision of electricity prices

Sector:

Energy supply and distribution

Type of instrument applied:

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

Prices of energy and raw materials

Timing:

(Period of implementation of instrument)

 

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.).

state budget

Target group(s):

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

all users - individuals and corporative

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.)

The situation in the energetics, the non transparent calculation of prices and lack of accountability using the monopoly status. Mass protests against the electricity bills starting in February 2013

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)

policy preparation (consultation),

Policy decision (co-determination)

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%

To make the activities of the companies engaged in electricity supply and distribution more transparent and to reduce the price of electricity

Activities and implementation:

(Please give details on the implementation of the intervention)

Discussions in the tripartite Standing State Energy and Water Regulatory Commission

Proposal for amendments to the legislation

The adoption of the proposed amendments by the Parliament

Social partner involvement

 

Type of social partner involvement:

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

tripartite

Level of involvement of social partners involvement:

European, National, regional, local

Sectoral

National

Specific form of social partner involvement:

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

Tripartite – Standing State Energy and Water Regulatory Commission

Discussions in the State Energy and Water Regulatory Commission and with the government

Meetings and consultations of trade unions with the parliamentary parties

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.)

Statements, positions and declarations of the employer organisations and trade unions on the state and future of the energetics, consultations with government respresentatives and MPs

Proposals

Social partners participated in consultations in the State Energy and Water Regulatory Commission

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)

 

Other stakeholders involved, if any:

(please name stakeholders and briefly describe their roles)

NGOs

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.)

The electricity prices have been reduced by 5%

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)

The measure is in force since 1 August 2013 and it is early for assessments. However there are mixed views on the measures introduced among the public and electricity providers.

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?)

 

Assessment of efficiency:

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

The measure is in force since 1 August 2013

No official assessment of the effectiveness is 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)

 
Example 2

Name of the instrument:

Обучение с ваучери по схемите „Аз мога” и ”Аз мога повече” по ОП РЧР

Voucher training schemes ‘I can’ and ‘I can do more’

Under the Operational Programme Human Resource Development

Sector:

All sectors (The participation in these schemes is based on individual decision of employed people. There is not available statistics for sector distribution of participants)

Type of instrument applied:

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

Adapting the skills base

Timing:

(Period of implementation of instrument)

The sheme ‘I can’ is implemented in the period 2009 -2013

The sheme ‘I can do more’ is implemented in the period 2011-2014

Operational level

National

Regional

Local

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

X

 

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.).

Operational Programme Human Resource Development co-funded by ESF and 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)

Employed people in all sectors

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.)

Increased labour market misbalances, the need to decrease the gap between skills and labour market needs, and to improve and promote industry’s competitiveness through investments in human capital development considering the future needs of the industry

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)

policy preparation (consultation),

policy decision,

policy implementation.

The social partnership is obligatory for all stages of elaboration and implementation of the OP HRD (according to Council of Ministers Ordinance)

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%

Increased employability and career development opportunities of the employed people through improvement/acquisition of professional qualification and/or key competences

Skills labour market needs matching

Activities and implementation:

(Please give details on the implementation of the intervention)

Elaboration of the framework of the initiative, Information campaign, applications presented in the branch offices of the National employment agency, approval of participants, individual decision of participants on the training provider, training, monitoring of the implementation – jointly with the offices of the NEA and social partners

Social partner involvement

 

Type of social partner involvement:

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

Tripartite – in the elaboration, implementation and monitoring of the OP HRD

Unilateral – training activities provided also by social partners organisations through registered training centres

Level of involvement of social partners involvement:

European, National, regional, local

Sectoral

National

Local – through the participation in the Councils for social partnership at the branches of the National Employment Agency (Labour offices) at municipal level

Specific form of social partner involvement:

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

Tripartite – Tripartite Council on Employment Promotion

Managing committee and working groups of the OP HRD

Tripartite Councils for social partnership at the branches of the National Employment Agency (Labour offices) at municipal level

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.)

Involved in all stages of the elaboration and implementation

Proposals, consultations, training

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)

More coherent policy on skills development and increasing employability as a factor for industry development

Other stakeholders involved, if any:

(please name stakeholders and briefly describe their roles)

NGOs - Involved in all stages of the elaboration and implementation through the working groups and Monitoring committee of the OP HRD, training providers – provide training

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.)

As of August 2013 under the scheme ‘I can’ in voucher training have been included more than 35 000 employed people, and under the ‘I can do more’ scheme – more than 42 000 people.

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)

The schemes ‘I can’ and ‘I can do more’ attract great interests of the employed people. In both schemes have been included more people than initially planned. According to the National Employment Agency assessment it proved to be very successful and effective

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?)

Corresponds to the need of employed people to update skills and qualification in line with the new requirements of the labour market and economy.

Active participation and engagement of social partners

Assessment of efficiency:

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

As yet no official assessment of the efficiency is 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)

 

The role of social dialogue in industrial policies in Bulgaria is limited as the Labour code clearly defines the scope of the social dialogue – the labour relations and living standards issues. The social partners are consulted namely in cases when the industry development will have an impact on employment (e.g., privtisation). Due to that, it is difficult to provide examples of instruments related to social dialogue and industrial policy development. However, social partners (namely the employer organisations) by individual initiative present their positions and views on legislation and strategies in this field.

Tatyana Mihailova, Nadezhda Daskalova, ISTUR

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