Social partners clash over area agreement for Gioia Tauro

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An "area agreement" for Gioia Tauro (Calabria, southern Italy) was concluded at the end of March 1999. However, the agreement was vigorously opposed by the Cgil trade union confederation, which refused to sign it, thereby rekindling the debate on the effectiveness of area agreements in fostering economic and employment growth at the local level. Indeed, the results of such pacts to date have been judged unsatisfactory by the social partners. The government intends to hold talks with employers' organisations unions on changes to the rules that regulate these agreements.

Area agreements (contratti d'area) were introduced by the tripartite "pact for employment" of September 1996 (IT9702201F), as instruments targeted on areas hit by severe industrial and employment crises (IT9704203F). They can be considered a form of local-level planning which closely involves local government and the social partners, which are the promoting bodies for the agreements. These parties are responsible for defining a development plan and for finding the financial resources for the agreement, at least in part. The state performs coordination and control functions and provides funds to supplement those provided by the promoting bodies.

At a general level, the main instruments identified to foster local-level development in area agreements are:

• investments in infrastructure;

• the introduction by local-level collective bargaining of forms of work flexibility; and

• the simplification of bureaucratic procedures.

The Gioia Tauro area agreement

On 30 March 1999, the protocols for five new area agreements, mainly in the south of Italy, were signed in the offices of the Prime Minister by the social partners and local authorities concerned. Much controversy and discussion has been provoked by the area agreement for Gioia Tauro in Calabria, southern Italy. The main cause of the dispute has been the position taken up by the Cgil trade union confederation, which has refused to sign the agreement. For the first time, at the moment of conclusion of an area agreement, one of the parties involved has withheld its assent. This raises questions about what will happen when the measures defined by the agreement are implemented, and in particular when company-level agreements are signed in the firms concerned.

At the root of Cgil's opposition is the view that the situation in Gioia Tauro, despite ongoing problems, is not such to warrant an area agreement, which is an instrument which should be used only in areas suffering from severe economic and employment problems. In recent years, however, the building of a large transhipment harbour, one of the most important in the Mediterranean, has generated a certain amount of economic growth in Gioia Tauro.

Cgil's position has provoked a fierce reaction from the other union confederations, Cisl and Uil, and from Confindustra, the main employers' association. According to Cisl secretary Sergio D'Antoni, Cgil has not signed the area agreement because it will lead to the introduction of forms of wage flexibility, a highly controversial issue within Cgil. The secretary of Uil, Pietro Larizza, has argued that the initiative should go ahead regardless of Cgil's opposition. For Antonio D'Amato, head of Confindustria's South of Italy department, by refusing to address the flexibility issue, Cgil is hampering development in many areas of the South.

Assessing the use of area agreements

The Gioia Tauro affair has highlighted doubts and perplexities concerning area agreements as an effective instrument to support local development. There is a certain amount of agreement on this matter among both the social partners and the government.

A first critical point is the rather limited number of area agreements that have been signed to date. By 7 March 1999, only seven area agreements had been activated, leading to the creation of 1,898 jobs (according to the Il Sole 24 Ore newspaper, 22 March 1999). A further five were signed on 30 March, as mentioned above.

In the case of the initial seven agreements signed, some of the problems concern the implementation of the measures and initiatives for which they provide. In particular, the imprecise definition of the competences of the various bodies concerned has made the allocation of funds difficult and slow. Moreover, inefficiencies and coordination difficulties between the local public authorities and central authorities have caused delays, so that the streamlining of procedures, which should have been one of the main factors in fostering local development, has not come about.

In the light of these problems, the government intends to hold talks with the social partners on altering the rules and procedures which regulate area agreements. Moreover, more precise definition will be given to the criteria for selecting areas deemed to be affected by severe economic and employment crisis and therefore qualifying for area agreements.

Commentary

In Italy, local-level bargaining is traditionally underdeveloped. However, it seems bound to increase in importance on account of general factors, such as: the economic changes resulting from the changeover from a "Fordist" to a "post-Fordist" economy; the process of European unification and the consequent revival of regionalism; and the marked socio-economic differences between various parts of Italy.

The introduction of area agreements was viewed extremely favourably by both the government and the social partners. As stated above, the first results have not lived up to expectations.

Although reform of the rules and procedures seems unavoidable in order to increase the effectiveness of these instruments, there is no reason for reducing their use. Now that the government and social partners have pledged to extend local-level bargaining by signing the "social pact for development and employment" of 22 December 1998 (IT9901335F), it would be contradictory to dispense with one of the local-level planning instruments now available. (Marco Trentini, Ires Lombardia)