Two forest industry groups, the Swedish-owned Stora and the Finnish-owned Enso, plan to merge in December 1998. As the new enterprise will be registered in Finland, the workers are not guaranteed representation on the board of directors of the parent company, to which the Swedish workers are accustomed.
Two forest products industry (ie wood, paper etc) multinationals, the Swedish-owned Stora and the Finnish-owned Enso plan to enter into a full merger in December 1998, creating the largest company operating in the sector. The European Commission is conducting an investigation into the merger, since it might have implications for competition, and this has delayed the timetable for the merger, which should have been completed in June 1998.
According to Swedish legislation, workers have the right to elect representatives onto the board of directors of companies with 25 employees or more. The workers employed within a group of companies are also entitled to representation on the board of the parent company. Up to now, there have been three workers' representatives on the board of Stora. However, the new merged company will be registered in Finland and Finnish legislation does not guarantee such board-level worker representation in the parent company.
The Swedish Paper Workers' Union (Svenska Pappersindustriarbetareförbundet, Pappers) and the Finnish Paper Workers' Union (Paperiliitto) have claimed that the Swedish tradition of employee representation on the parent company's board of directors should continue. The major shareholder of Stora, Investor, has rejected the request, arguing that there is no legal support for the unions' claims. However, as Enso is mainly state-owned, the Finnish Minister of Trade has stated that this matter "must be resolved".
The unions argue that the merger shows the need for common European legislation that strengthens employees' participation rights. Such common European legislation would discourage companies from changing their country base to avoid workers' influence at board level.