The Northern Dimension - The role of trade unions in the promotion of the labour market

Speech by Lauri Ihalainen at the Northern Dimension Labour Market Forum 11.2.2003

The decision taken by the European Union last December to admit ten new member states poses a major challenge to the development of the Union and its various regions. Four of the new member states - Estonia, Latvia, Lithuania, and the densely populated Poland - are located in the Northern Dimension area. The emergence of the long common EU-Russia border is an extra factor in the development of northern Europe. With the enlargement, objective-oriented cooperation in the northern area of the EU - the development of the Northern Dimension - will inevitably gain more significance in the agenda of the European Union.

Peace, security, stability and wealth are the ultimate objectives of the European Union. These objectives have been promoted, ever since the early days of European integration, by developing economic cooperation and trade. Development of a dynamic and effective internal market by using economic methods and instruments will be a central task of the Union in the future, too. The enlargement will particularly increase the importance of the labour market. In order to become the most competitive region in the world, the Union must be able to make good use of the potential for development, which the skilled and well-trained workers have to offer as well in the present as in the new member states.

From the point of view of productivity growth within the Northern Dimension, the potential provided by the population and the purchasing power in the area is, indeed, a significant factor. There are a great number of people in the new member states and in the Russian borderline district, along with considerable population centres. They form a solid basis for economic development and provide an important resource considering consumers and workforce. The core issue, from the Northern Dimension point of view, is this: How can we best exploit this resource in a way that will be favourable to the development as a whole?

The areas for cooperation under the Northern Dimension include projects for promoting trade, investment and transportation, creating infrastructure for traffic, communications and production as well as energy cooperation and enhancing the state of the environment. Significant environmental projects under the Northern Dimension may concern, for example, the improvement of maritime safety or energy cooperation in the Baltic Sea Region. A major joint project in Russia is the St. Petersburg wastewater purification project, within which a major construction contract of the southwestern wastewater purification plant is at the moment in progress.

The cooperation also includes measures to promote employment policy, industrial relations and social and health issues. Maritime safety includes, along with ice classifications, also issues related to the wages, working hours and shifts plus skills of the members of the crews. Also, for example, the construction of the St. Petersburg wastewater plant has been supported by reorganization of the structures of the municipal water and sewage works, and by a project for change carried out by the Finnish municipal sector union KTV in order to help and train the employees in St. Petersburg in issues related to the changing of enterprise structures.

Although the projects under the Northern Dimension always include issues concerning working life and employees, only business organisations and undertakings have been represented in the seminars and other functions along with governments. From the point of view of the success of the projects, it would, however, be of utmost importance that also the employees and trade unions of the various countries, not to mention the employees of the joint enterprises, could take part in the creation and development of ideas from the very beginning.

The implementation of multinational projects requires a stable and foreseeable operational environment. Along with building a basic structure for production and efficient communications, it is necessary to see to the stability of the operational environment and, for example, make sure that the provisions regulating taxation are foreseeable. Another, perhaps even more important issue, from the point of view of the smooth progress of joint projects and companies operating in several countries, is predictability in labour market and workforce issues.

Labour market cultures in the area of northern Europe are extremely varying. The Nordic countries are characterized by the prominent position of the labour market organizations, a very high rate of organization and an industrial relations structure based on national, industry-wide collective agreements. Also in Germany, the trade union movement and the large unions in particular, hold a notable position in social and economic life, and the employee organisations and employees have considerable influence at the enterprise level.

In the new member states - Estonia, Latvia, Lithuania and Poland - as well as in Russia sharing a border with the EU, the economy as well as the labour market are still in transition. Employer organisations are, to a great extent, only about to develop, and many trade unions are still building up to become genuine representatives of employee interests. The same applies to the bargaining structures in various countries.

As a special concern for northern Europe, it should be noted that trade union activities have in practice been made nearly impossible in Belorussia, and that this state of affairs also hinders any development of labour market structures there.

* * *

Maintaining the ability of trade unions to act requires both effective labour market regulations and a properly working social infrastructure. It is essential that the regulations concerning and the control of, for example, industrial health and safety as well as industrial accidents are effective, so that employees can feel safe while working, and undertakings can be convinced that there is no unsound competition in this respect. Likewise, it is indispensable that governments safeguard the development of the basic structures for reproduction of labour power, for vocational training and other education, in a way required by the parties involved in working life.

Our experience here in Finland indicates that a social and educational policy best meeting the requirements of the labour market, labour legislation and working life, can best be developed through tripartite cooperation. In this development and legislative process, the Government needs the expertise of the employer and employee organisations to get firsthand information about the operation of enterprises and the needs of the employees at workplace level.

Corresponding tripartite cooperation approaches also exist and are being developed in other Baltic Sea countries. The differences between the countries are great, due to the dissimilar starting points and labour market and political cultures. This causes problems both to the undertakings operating in the Baltic Sea Region and to the joint projects carried out to promote the Northern Dimension.

To solve the problems, it is essential to switch from national, in-border activities to joint projects covering the entire Baltic Sea Region. Due to enlargement, the circumstances have already been improved, as the new member states are developing their economies and social models to harmonize them with the European social model. In Russia, on the other hand, developments may well take an entirely different turn in the future, if Russian needs and interests are overlooked in the activities related to the Northern Dimension.

In order to hold to the ambitious growth and employment targets set by the European Union, it is necessary to take multinational measures within the Union and the various geographical regions to lay a foundation for labour market and social policy. The trade unions, on their part, have been leading the way in this development both at the European level and in the Baltic Sea Region. The time has now come to combine forces and involve also employers, representatives of business life and undertakings as well as the governments of the Baltic Sea states in this work both individually and in the framework of the Council of the Baltic Sea States (CBSS). Strengthening the role and responsibility of trade unions in the cooperation and projects implemented under the Northern Dimension presents a good way to proceed.

* * *

The employee organisations in the Baltic Sea Region have already for years made significant contributions in order to promote common activities and projects within the area and in the entire northern Europe. Ever since the late 1990's, the Baltic Sea trade unions have made efforts to turn their multilateral cooperation more objective-oriented. The founding of the Baltic States Trade Union Network (BASTUN) in 1999 was a significant step forward.

The network serves as an umbrella organisation for the trade union confederations in the Nordic countries, Germany, Poland, the Baltic states and northeast Russia, representing today more than twenty million employees in the region. The north European trade union confederations involved in the network aim, among other things, at promoting trade union goals in the economic and social development of the region and, in a wider context, the development of the European Union - in various fora like in the EU, in the Baltic Sea Region and Nordic cooperation organs, and in relation to their own governments.

Joint cooperation projects, involving trade union organisations from the EU member states in the Baltic Sea area and the Nordic and Baltic countries as well as from Poland and Russia, have been carried out in the framework of this network. There are projects to develop the system of vocational training in the Baltic states, to study the labour legislation in Central and East European countries and train local union lawyers in issues related to European labour legislation. The most recent project that was carried out is a joint project related to the social security systems and employment policies in the Baltic countries and Poland, with the aim of creating conditions for the enlargement of EU. Russian unions were involved in the project as observers. According to plan, this project will be continued this year, with a special target of developing employment policy.

The BASTUN has an important role as an influencing force in the Baltic Sea Region. From the point of view of the developments and projects that northern Europe is facing, it is of primary importance that we, the trade unions, are able to increase our influence right there where the decisions on the political and economic direction of the area are made. The debate on this issue is already under way in our own Baltic Sea network, and the strengthening of the position of this network also in the activities of the intergovernmental Council of the Baltic Sea States is within sight.

The BASTUN has struggled to influence particularly the policies of the CBSS Ministry of Labour and Social Affairs by holding its conferences in connection with the ministerial meetings arranged by the Presidency of the Council. The BASTUN participated in the latest ministerial meeting in Kaliningrad during the Russian Presidency, and discussed in its own conference special regional problems especially in the field of labour and social policy.

The BASTUN Presidency rotates from one Baltic Sea country to another in step with the CBSS Presidency. At present, during the Finnish Presidency, BASTUN is chaired by Mr Mikko Mäenpää, Chairman of STTK (The Finnish Confederation of Salaried Employees).

* * *

In addition to multilateral cooperation, trade unions in the Baltic Sea area share a considerable amount of bilateral activities. A significant part of trade union cooperation is cross-border activity and cooperation in borderline districts. The activities are often functional by nature, based on mutual participation.

Finnish unions have implemented projects and cooperated with unions in the Baltic countries, particularly in Estonia, as well as with Russian unions in the entire borderline district. Finnish unions have, for example, carried out an extensive democracy and training project with the Karelian Trade Union Federation. The project was financed in the framework of Tacis, and plans have been made to continue this project in a more extensive form.

Norwegian trade unions have well-established contacts with trade unions in the Murmansk and Archangel area, and the partners also organizing wide cooperation and projects. Also other Nordic unions have already for a long time been active in issues related to the Northern Dimension. Nordic unions have hundreds of joint development projects in the Barents and the Baltic Sea areas with unions in the Baltic countries, Poland and Russia. Bilateral cooperation with the Baltic countries and Poland was launched long before the EU enlargement process.

Democracy projects promoting social issues, working life and labour market are ranking high among employee projects. Respect for workers fundamental rights, versatile development of working life and creation of effective labour market structures and industrial relations significantly promote the goals of developing social infrastructure, constitutional state and democracy as well as civil society, all of which are fundamental conditions for the achievement of economic goals.

* * *

Trade unions contribute to the development of the Northern Dimension, therefore, essentially through projects and similar concrete cooperation. This work could be made more useful and target-oriented, if the trade unions were given better opportunities to participate and more financial and other resources for cross-border cooperation. Also development of information exchange and tripartite cooperation between unions, business life and public authorities in the Northern Dimension projects are called for.

At least in Finland, the possibilities of the unions to be active in this field is in practice limited by the insufficient financing for cross-border cooperation available to organizations. Reasonable financial resources have been available, in the framework of the Northern Dimension, for major projects-as the above-mentioned St. Petersburg wastewater purification project. But trade unions must execute their projects, aiming at the development of working life and promotion of workplace level adaptation required by the structural change, by using their own funds or by resorting to the insignificant cross-border financing, competing of the same, scanty appropriations with all the non-governmental and other organisations involved in cross-border cooperation. From the point of view of implementation of projects under the Northern Dimension, it is necessary that, along with the financing channelled to construction and physical infrastructure, a part of the appropriations will be earmarked for projects to develop working life, and that the social partners may apply for these funds for the implementation of the working life items in their projects.

* * *

Along with the reform process concerning the future of the EU, the so-called social dimension issues, labour market and social policy, will be an ever more significant factor in the integration process. Social policy, economic policy and employment policy constitute an interacting triangle. It is vital that all member states will accept the fact that the social dimension is within the sphere of the EU competence. For this reason, the Union must be able to convince also the citizens of the importance of this development.

Citizens can be activated only through participation, by doing things together. It is necessary that wage-earners, who constitute the majority of the population both as employees and as consumers, and the organisations representing them, are the engines in this development. The effective industrial relations and well-established tripartite cooperation in the northern member states provide good opportunities to progress in this area. This cooperation model can be extended to the entire Baltic Sea area by deepening and developing the cooperation under the Northern Dimension and by strengthening the role of the employees and their organisations in joint projects, taking into consideration as well the new member states as the needs of our neighbour, Russia.

This is how we will be able to speed up the economic capacity of our area and to exploit at the best possible way all production factors, above all the significant know-how potential contained in the workforce, and are able to set the northern areas into a sustainable track of development that will guarantee both the successful operation of the enterprises and the purchasing power and employment of the citizens.

Northern Dimension Labour Market Forum 11.2.2003
Finlandia Hall, Helsinki
President Lauri Ihalainen, The Central Organisation of Finnish Trade Unions SAK