Green growth

1
Green growth sustainable resource extraction
and the role of trade unions

• NFS Conference
• Ilulissat, Greenland
• 24 April 2013
• Béla Galgóczi
• bgalgoczi_at_etui.org

2
Structure

• Structure of the presentation
• Background we have only one planet, not five!
• Resource and material use (the reckless
  exploitation of natural resources) cannot go on
  as in past
• Green economy, green growth, green jobs
• Green transformation double challenge for trade
  unions
• Resource extraction, mining what are the major
  social and environmental challenges
• The case of Greenland
• What trade unions do and could do?

3
Background Revision of growth model

• Long term challenge a fundamental revision of
  previous growth model, above all face the
  challenge of climate change,
• The Great Transformation of the next decades will
  be the
• transition to low (zero) carbon economy
• Green growth a strategy to promote
  eco-industry, clean energy and also give push
  to green restructuring of traditional sectors
• In 2011-2012 we see the danger of a reversal of
  green policies in Europe what we see is black
  austerity where incentives and subsidies into
  the green economy are cut back for sake of fiscal
  consolidation and affordable energy gets fake
  priority (e.g. Italy, Spain)
• This is in sharp contrast with 2009 green
  stimulus packages
• We also see a revival of fossil fuel (shale) gas
  and coal

4
Track record the challenge is bigger then
assumed by mainstream policy scenario

• It is clear that on basis of current policy
  scenario the world is heading for a 3.5-4C
  temperature increase by 2100 (IEA, 2012)
• Keeping the 2C target requires four times higher
  rate of future decarbonisation (reduction of CO2
  emitted per unit GDP).
• Global ghg emissions keep on growing
• Ghg emission reductions in Europe were more due
  to crises then to systematic implementation of
  climate policy no signs of decoupling economic
  growth from emissions
• Huge gap in Europe in term of resource
  productivity (Bulgaria -Luxembourg 130), but
  diversity also in per capita emissions, although
  in a reverse order Luxemburg has the highest
  level
• No paradigm change visible yet

5
CO2 emissions from fossil fuels and cement in
MtC/yr (TgC/yr), 1980-2008
Source Eloi Laurent (2012) and Raupach et al
(2007)
6
Looking beyond 2020 the 2050 Low-Carbon Roadmap
(ghg emissions in of 1990 level)LONG WAY TO GO

• 80 domestic reduction
• in 2050 is feasible
• With currently available technologies,
• With behavioural change only induced through
  prices
• If all economic sectors contribute to a varying
  degree pace.

• Efficient pathway and milestones
• -25 in 2020
• -40 in 2030
• -60 in 2040

7
Performance in decoupling economic growth from
resource and material use in Europe

• No major progress in decoupling, as the next
  graph for Europe shows
• Only Germany, Italy, the Netherlands, Hungary and
  Luxembourg achieved absolute decoupling (economy
  grew with less resource use)
• In decoupling, Nordic countries were not
  performing well DK, SE and FI all performed
  worse than the EU27 average and with economic
  growth they also used higher resources
• It is a general problem that no (hard-core)
  incentives for higher resource productivity
  exist companies are good in increasing labour
  productivity, but not resource productivity!

8
Yearly average change of domestic material
consumption and GDP between 2000 and 2007 by
member state
no decoupling
relative decoupling
absolute decoupling
Source Eurostat (2011)
9
The bulk of the adaptation is still to come

• Current climate policy tools are clearly not
  enough to reach target. If we had those (and they
  would be also implemented), their effects would
  be also harsher than what we see now!
• The major challange for the employment effects of
  the green transformation is this uncertainty
• Some principal questions
• Decarbonisation through desindustrialisation??
• Downscaling energy intensive activities or to
  improve energy efficiency and resource
  productivity efficiency while keeping and
  developing them (we need to make sure the second
  option will apply)
• Address carbon leakage

10
Green jobs the positive agenda

• Takes a narrow perspective on employment effects,
  looks at the labour market in a singular and
  segmented way in isolation from the rest of the
  economy
• Definition problems
• Process or product based view? (with view to
  their positive climate/environment effects), e.g.
  are the following green jobs?
• Steel industry (with inputs to eco-industry
  equipment)
• Construction industry (depending on product and
  technology what and how you build)
• Financial services /?/, IT services
• Focusing on green jobs by investments into a
  green economy (taking the opportunities arising
  from a new expanding sector) is indeed a useful
  policy, BUT it is only PART of the FULL STORY
• The green transformation should encompass the
  entirety of the whole economy

11
Challenge for trade unions in the broader context
of the green transformation

• Tension between their role as broad social actors
  and as membership organisations (e.g. Canada oil
  pipeline)
• Path dependency? In industrial societies trade
  unions fought the fair share of labour within the
  growth based resource wasting production and
  consumption model in the past
• Are they still locked-in in that role /as some
  NGO-s state/?
• The tension appears between the role of
  supporting more determined and ambitious climate
  policy on the one hand, but protect jobs that
  might come under pressure as a consequence, on
  the other
• In this context we also see divergergent
  positions at different levels of TU organisations
  /international, national, branch level/

12
Trade union role the positive agenda active
policy role and social dialogue to meet the
challenge

• Trade unions (especially at higher organisational
  levels) are engines of green policy at national
  and international level (ETUC, ITUC, national
  unions as TUC, DGB, Nordic unions)
• Good practices at company level Green
  workplace project/initiative by ETUC, tools,
  manuals for trade unions
• Managing restructuring on enterprise level under
  pressures of globalisation, especially in
  countries with strong workers participation
  patterns (successful plant level practices during
  the crisis in Germany, Austria, Nordic countries)
• The Green Transformation is the most
  comprehensive restructuring process ever faced
  and will go on in the following decades trade
  unions should promote this process actively!
• A socially responsible and just transition to a
  low carbon economy is a vital interest for trade
  unions but posing also huge challenges for all
  actors managing this process including workers
  representatives.

13
Innovative alliances between NGO-s and trade
unions

• Trade unions are committed to more ambitious
  climate policy at the same time demand a
  framework that provides a balanced approach just
  transition
• This makes a comprehensive policy approach
  necessary climate employment social
  industrial policy
• Just burden sharing during the transition - job
  quality
• Trade unions developed practices of managing
  change and managing transitions /they are not
  anymore clinging to preserve status quo/
• Innovative approaches TU-NGO alliances
  /Green-Blue Alliance in US (also at company and
  project level), Spring alliance in Europe (now on
  EU policy level)

14
Sustainable mining and resource extraction

• The priority of a greening economy is to produce
  (more) value out of less material and resource
  input through higher resource productivity and
  efficiency, through changing behaviour,
  consumption and mobility patterns
• AND NOT CHASING FOR MORE RESOURCES..TO COVER THIS
• What we see nowadays is a new race for resources,
  a mining and gas boom
• US and Canada gas fracking boom, new oil pipeline
  to boost consumption
• Extraction in Africa by Chinese firms is
  expanding rapidly
• Brazil sees ist future in the new oil and gas
  field explorations
• Mongolia is said to become the Saudi Arabia of
  rare earthes
• Greenland and the wider Arctic region is the next
  target
• Not a healthy trend, BUT still (or even more so)
  we need to address the case of sustainable
  mining and resource extraction and trade unions
  need to develop a strategy for this!

15
Sustainable mining and resource extraction

• What is at stake, where trade unions must be
  aware?
• - financial transparency (in order the benefit
  of the extracted natural values contributes to
  the wealth of the local population and not (only)
  to the profits of multinational companies
• - technological safety (preventing natural
  catastrophes), limit exposure of workers to
  health and safety risks
• - labour standards, working conditions, fair
  pay, decent work
• - environmental standards (least possible
  intrusion into the ecological balance of the
  environment, recultivation of landcape and soil,
  preserving biodiversity)
• - special attention to pristine natural
  environment (Alaska, Amazonia, Greenland)
  especially if the environmental balance of the
  region has an impact on the whole planet

16
Greenland the challenge of mining and resource
extraction

• There is a new goldrush for mineral resources
  worldwide (US, Canada, Brazil, Mongolia and now
  also Greenland)
• A vice President of a global mining company on
  Greenland
• Greenland offers relatively low corporate taxes,
  and an environment that requires no royalty
  payments or the challenge of having to deal with
  Aboriginal land claims issues. Permits can also
  be secured within a six-month window.
• Question is it necessary to enter into this
  race? Go for more and more resources just to feed
  the appetite of a resource wasting production
  model? Instead of embarking on a new growth model
  based on resource productivity and efficiency?
• Sure, there are economic realities, Greenland
  wants to create an independent economic fundament
  and given its natural resources their
  exploitation seems to be unavoidable for the
  well-being of ist 58 thousand population

17
Greenland mining and resource extraction projects

• Although not one mining or oil project started
  yet, more than 100 exploration licenses were
  awarded.
• The big hope for the mining companies now is that
  Greenland will permit to extract uranium as a
  by-product from rare earth deposits (largest in
  the world outside of China that now has 90 of
  global production.
• Alcoa plans to bring 3000 workers from China.
• Greenland Minerals and Energy Ltd. - plans to
  extract 40,000 tons of rare earth metals per
  year, with some uranium as a by-product.
• Hudson Resources, (White Mountain) - access to
  27.4 million tonnes of rare earth minerals.
• London Mining Plc. - 2 billion Isua iron-ore
  project 700 permanent jobs, 2,000 Chinese
  workers for its construction.

18
Sustainable mining and resource extraction
Canada - a conflict case for trade unions

• Conflict case, Keystone XL Oil pipeline, Canada
  
• The development of tar sands oil supply (twice
  the amount of carbon dioxide as other oil
  reserves) is a huge risk for the climate...
• Unions should not only bear the interests of
  their own members in mind, but also wider risks.
  To offer support for the Keystone XL pipeline,
  the AFL-CIO won a few construction jobs and a
  little money at huge external costs
• The Murray River coal project (Canada) create up
  to 600 permanent jobs, and in 30 years three
  billion tonnes of coal. Chinese investment and
  the project was welcome, only the workers not,
  (Trade unions filed a court case against the use
  of foreign workers but support the project).
• LESSONS for TRADE UNIONS for the proper BALANCE

19
Sustainable mining and resource extraction tools
for trade unions

• Sustainable mining principles, guidelines
• Extractive Industries Transparency Initiative
  (EITI) 32 countries produced EITI reports, from
  Europe only Norway (Greenland should join!)
• The EITI Criteria
• -Regular publication of reports on all material
  oil, gas and mining payments by companies to
  governments (payments)
• -Civil society is actively engaged (design,
  monitoring and evaluation)
• -A public, financially sustainable work plan
  developed by the host government
• OECD, International Investment Agreements Survey
  of Environmental, Labour and Anti-corruption
  issues, 27 February 2007
• ITUC Briefing note on Bilateral Investment
  Treaties (BIT)
• New BITs must contain clauses in respect of OECD
  Guidelines for Multinational Enterprises and the
  ILO Tripartite Declaration of Principles
  concerning Multinational Enterprises

20
Sustainable mining and resource extraction
summary of challenges for trade unions

• Addressed (even if not fully) transparency,
  distribution, direct environmental effects on
  population, flora, fauna
• For direct safety risks and related direct
  environmental effects also have attention (like
  oil spills, or water contamination) push for
  higher standards through lessons (Deep Water
  Horizon)
• Less focus however on long term consequences and
  environmental impacts here we only have
  one-sided declarations and corporate social
  responsibility initiatives from companies this
  is clearly not enough, TU-s should push for more
• BUT Towards Sustainable Mining (TSM) reporting
  (Canada) for mining companies is useful needs
  to be binding (trade unions to urge)
• For social aspects we have the ILO norms as
  basic guidance, European social standards and
  national standards (either by Labour Law minimum
  criteria or through collective agreements)

21
Greenland the challenge of mining and resource
extraction

• Greenland is a special case from an other
  aspect, also it is a pristine landscape and its
  ecological balance is critical for the whole
  planet (in this regard only Amazonia is
  comparable).
• It would be an illusion however that a proposal
  could be raised, as the aborted attempt at the
  Yasuni Natural Reserve (Equador) where a
  compensation of cca. 2.7 bn USD was discussed to
  prevent the project.
• We cannot expect this in case of Greenland. BUT
  at least the limits of extraction activity should
  be addressed!
• Nordic countries, Denmark and also the EU
  (although Greenland is not part of it) should pay
  more attention!
• But the EU is more aiming at special mining
  rights in Greenland (not granted, but a
  Memorandum of Understanding on the EUs access
  had been signed in 2012)
• The EU also rejected a ban on oil drilling in the
  Arctic region (October 2012)
• PRESSURE on the EU from a NORDIC Alliance?

22
Greenlands large scale law relaxation labour
law

• The Law on large-scale projects in Greenland
• New legislation to encourage foreign investments
  in large-scale projects through reducing labour
  standards (only to building and construction
  activities linked to the exploitation of
  minerals)
• The foreign workers will be entitled to the same
  labour rights as Greenlandic workers, (right to
  strike, to organize and collective bargaining).
• BUT foreign employees, who are subject to a
  foreign CB agreement will be allowed to maintain
  the salary and employment conditions of their CB
  agreement if in accordance with Greenlandic
  legislation.
• The foreign workers are also entitled to a
  certain minimum wage equivalent to the
  Greenlandic (with a limitation on possible
  deductions)
• Local trade unions, employer's associations and
  NGOs are entitled to have access to the
  collective agreements.

23
Greenlands large scale law relaxation labour
law

• Issues for trade unions
• It is a fundamental question however do resource
  extraction investments need special treatment and
  preferences? (possibly no)
• Incentives by countries to attract manufacturing
  investment is a different matter (these can be
  moved) - not relevant for resource extraction)
• Greenland has unique rare earth deposits, it does
  not need to give away concessions cheap! Why
  preferential treatment? Is the Large scale law
  necessary? More self-confidence needed!
• Mining only starts now, a broader impact on the
  wider environment is not yet to be expected, but
  it is already time to think about the limits
• It is necessary to implement the highest
  environment and safety standards for the
  immediate effects (contamination of soil,
  water/ice masses, prevent possible spills, leaks,
  etc)

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Recommendations for trade unions

• Clarify responsibility of investors in case of
  potential accidents
• Recultivation obligations after extraction
  activity ends
• For labour effects, Greenland has a different
  context then countries with a larger population
  (and population density)
• The conflict situation in countries with larger
  population appears in the substitution effect
  between foreign and local labour
• Preserving existing labour standards is an utmost
  priority, the danger of a crowding out effect by
  foreign labour is less the case
• Investors should pay attention to include
  domestic labour and also provide training for
  tasks that can be performed
• Local labour content maximisation according to
  potential should be a criterion!
• USE the power of the Alliance of Nordic Countries
  to agree on sustainable mining and social
  standards also in Greenland
• NGO-trade union alliances are ideal to increase
  influence on resource extraction, mining issues