Polish government retreats on coalmine closure plan

By bne IntelliNews January 19, 2015

Wojciech Kość in Warsaw -

 

After a week and a half of tug-of-war between the Polish government and mining trade unions about how to save the heavily indebted Kompania Weglowa (KW) from having to declare bankruptcy, an agreement was signed on January 17 that both sides presented as their success. The fact is, however, that PM Ewa Kopacz’s militant rhetoric from earlier this month seems now just a disguise for poorly designed and poorly communicated plan for one of Poland’s key industries.

The plan’s main proposal was to close KW’s four worst performing coalmines - Piekary, Bobrek-Centrum, Sośnica-Makoszowy and Brzeszcze - and move others to a new entity. Roughly 5,000 jobs would be lost, being compensated with pay-offs, the original plan stipulated.

The agreement signed on January 18 turned out to be a near-complete U-turn on the original. The deal stipulates that no mine will be closed down. Instead of being liquidated, the four worst coalmines will undergo a programme to improve their performance. The programme’s details and its implementation will have to be agreed with unions. 

Everyone employed in administration and other non-mining roles in the four weakest coalmines will have guaranteed jobs unless they want to quit, in which case they will receive a pay-off. Mining jobs will be kept.

Following the restructuring programme, the four coalmines in question will be up for grabs for investors. The investors have not been officially named, but Polish industry press speculates that interested companies include state-owned coal exporter Weglokoks or Tauron Polska Energia, a major power generation company. Tauron has said it is preliminarily interested in taking over the Brzeszcze coalmine.

The remaining healthier coalmines will be taken over by a new entity, known as Nowa Kompania Weglowa (New Kompania Weglowa) that will be 100% owned by Weglokoks. This is pretty much the only leftover from the original plan of the government, which hopes that the new company will be strong enough not only to supply coal for the domestic market, but also able to compete internationally. Nowa Kompania Weglowa will be established by September 30, the agreement stipulates. Following the agreement, the government also pledged that it would try to reach out for EU money to help carry out the restructuring programme.

The agreement signed on January 18 marks an end to an important battle for the future of Poland’s coalmining industry. It is leaving PM Kopacz weakened: her tough stance on how KW could not continue business as usual melted in confrontation in what is perhaps last bastion of strong unions in Poland.

The PM is paying a political price for announcing the plan without proper consultations and amidst fear-mongering that KW would go down as soon as  January, were it to continue business as usual. But the plan galvanized unions quickly, with local authorities and people joining in protests and – surprisingly for the government – public opinion siding very much with miners too. A poll carried out by Millward Brown for TVN and TVN24 TV stations on January 12 showed that more than 68% of surveyed Poles supported the miners.

Unions can boast a success now, although they have taken on some responsibility for the success of the restructuring programme that they say themselves will involve some “tightening of belts”, as one of the unions leaders put it on Saturday.

 

 

 

 

 

 

 

 

 

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