Addressing social impacts of mining sector restructuring

1
Addressing social impacts of mining sector
restructuring

• Henk Busz
• Energy Sector Manager
• Europe and Central Asia Region
• World Bank
• Bucharest, October 11-12, 2004

2
Addressing social impacts

• Two countries and projects
• Romania (slides 3-6)
• Poland (slides 7-9)

3
Romania the impacts

• Direct impacts
• From 171,000 workers in 1997 to 57,738 in January
  2004
• 120,000 laid off, of which 20 were women
• High unemployment in single industry towns less
  severe in economically diversified areas
• Indirect impacts
• Miners layoffs causes additional job losses
• Municipal ability to maintain infrastructure and
  social services adversely affected (revenue loss)
• Social effects on women and families

4
Romania Social Mitigation

• Mining I focus on creating 10,000 jobs
• Employment and training incentives scheme 4,100
  jobs created so far, another 1,700 planned
• Micro-credit new law and new industry - 1,800
  jobs so far, another 1,200 planned
• Enterprise support over 2,000 jobs
• Workspace centers 10 completed

5
Romania Learning through implementation

• Job creation alone not enough added effects of
  lay-offs on social and physical well-being
• Focus shifted to mining communities
• DFID partnership allowed innovation
• Community-based planning process
• Financed small scale social development
  activities
• WB loan amended social development scheme for
  mining communities added

6
Romania - New approach socio-economic
regeneration

• Diversified approach support to individuals,
  groups, and mining communities
• Scaling up to create at least 24,000 jobs
• Support for local development through
• Community capacity building
• Economic and social infrastructure and services
• Small grants to stimulate women and youth groups,
  and benefit children
• Institutional strengthening of government
  agencies and communities, for sustainable social
  and economic development.

7
Poland Hard Coal Reform Program (1998-2002)

• Voluntary program helped reduce employment from
  243,000 to 140,000
• Severance packages only for underground workers
• Early Retirement (Monthly payments to bridge
  period to retirement for up to 5 years)
• Lump sum departure payment
• Up to 24 months lump sum payment depending on
  length of service
• Retraining incentive for all workers
• Minimal acceptance.

8
Poland Hard Coal Reform Program (2004-2006)

• Voluntary program starting early 2004 aimed at
  reducing employment from 137,000 to 111,000
• Severance Packages for Underground Workers
• Early retirement monthly payments to bridge
  period to retirement for up to 3 years with
  target of 12,000 workers
• 4,000 workers accepted packages so far in 2004
• Program to create 8,000 new jobs outside mining
  industry for surface workers (about 50 women)
• Incentive system covering 50 of employment costs
  to encourage employers outside the mining
  industry to offer new employment guaranteed for 2
  years to surface (mostly clerical) workers
• So far very little take up because jobs are only
  guaranteed for 2 years wages are lower than in
  mining big boom in export coal prices means
  mining employment now looks promising

Boom in exports to China means no more voluntary
reductions
9
Poland Reform Program (cont)

• Other social mitigation and job creation measures
  include micro enterprise scheme, job counseling
  and vocational guidance
• Silesia Economic Recovery Program
• aim is to attract new capital to support job
  creation in Silesia by providing loans, loan
  guarantees and direct financial incentives to
  support new projects
• Includes development of infrastructure such as
  industrial parks, regional roads, revitalization
  of degraded areas and mine site reclamation, and
  of tourism.
• Funding from state budget, Council of Europe
  Development Bank, European Social Fund and
  private resources.
• Program envisages attracting as much as PLN 710
  million in investments in the Silesia region over
  the next three years.