A trade union-commissioned reported published in September 2004 examines the consequences of 10 years of membership of the European Economic Area (EEA) for Norwegian industrial relations, working life and the role of the trade union movement. The study concludes that on the whole the effects of the EEA have been positive, but that it has, to some degree, also contributed to reducing the democratic accountability of Norwegian working life policies. The trade unions have not been able to sufficiently compensate for this deficit through their participation in European-level organisations and social dialogue, it is argued.
The European Economic Area (EEA), created by an agreement that came into force in 1994, is an internal market involving the EU Member States plus three European Free Trade Association (EFTA) countries - Iceland, Liechtenstein and Norway. One of the effects of the agreement is that much EU legislation - including in the area of industrial relations - is implemented by the other countries.
The EEA agreement’s consequences for Norwegian industrial relations, working life and the role of the trade union movement is the subject of a recent report by the Fafo Institute of Applied Social Sciences, published on 21 September 2004. The report concludes that on the whole the effects of the agreement have been positive in Norway, contributing to favourable developments in productivity, employment and wages. The other side of the coin, however, is that it has, to some degree, also contributed to reducing democratic accountability in relation to Norway's working life policies. This is partly because many rules and regulations are implemented without the national authorities being able to influence the decision- and policy-making in the EU, and partly because the trade unions have been unable to take full advantage of the opportunities for exerting influence through European social partner organisations and participation in the social dialogue at the EU level.
Background
The report, entitled Ten years of the EEA agreement: Consequences for Norwegian working life and the trade union movement, is based on the findings of a research project commissioned by the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO). The project was initiated following a decision at LO’s 2001 national congress to evaluate the effects of the EEA agreement on Norwegian working life. Although LO, by a narrow majority, opposed EU membership at its national congress in 1994, it has been a strong supporter of the EEA agreement from the start. This dual position, according to the authors of the report, has shaped LO’s European policies and stance ever since. The issue will once again be placed on agenda within LO in connection with its national congress in 2005, where the experiences with the EEA agreement are due to be discussed.
Economic and social developments
The economic consequences of the EEA agreement have, according to the report, been favourable for Norway, although economic success cannot be ascribed to the agreement alone. During the 10-year period in which the agreement has been in force, Norway has witnessed positive developments in industry productivity and employment, and also substantial pay increases for most wage earners. Moreover, the agreement has allowed Norway easier access to the EU internal market, and trade with the EU still constitutes three-quarters of all Norwegian exports and imports. However, these developments have also been accompanied by an unprecedented increase in Norwegian oil wealth. Thus, it is not possible to isolate the exact effects of the EEA agreement on Norwegian growth and development, which must rather be seen as the result of interaction among a wide range/complexity of factors. However, the agreement has beyond doubt helped to speed up restructuring and change in certain areas, in particular because of Norway’s willingness to adapt to the requirements of the internal market. This is particularly the case in relation to former public monopolies and utilities, and the consequences for jobs and working conditions have been substantial. As such, the authors argue that the EEA agreement has contributed to a regime shift in economic policy towards greater market orientation and liberalisation.
Changes in labour rights and collective agreements
Before the EEA agreement came into force, and in connection with the EU debate in Norway, there were fears that EU labour law regulations would undermine the collective bargaining system and workers' rights in Norway. This, according to the report's authors, has not happened. Indeed, in some areas the rights of workers have been strengthened, either through statutory action being taken in areas once regulated solely by collective agreements, or by introducing new areas to be regulated in agreements or consultation processes between the social partners. Improved regulations on employee rights in transfers of undertakings and improved rights for part-time and temporary workers are but two examples of such developments. The introduction of legislation on the extension of collective agreements (to non-signatory employers) is also mentioned as a novelty introduced in Norwegian working life as a result of the EEA agreement (NO0407101N). EU regulations have even expanded the potential and scope of Norwegian agreements through implementation of the European Works Councils Directive (94/45/EC).
Whereas accelerated restructuring in the single market has hit workers hard in several sectors and worker protection may have been weakened in a few areas, the overall effects of EU labour law regulations have, according to the study, benefited Norwegian workers. The authors conclude that the problems or challenges today facing Norwegian employees, and their trade unions, are derived from developments that go beyond the EEA agreement, and result from changing employment, industry and organisational patterns, nationally as well as internationally. These challenges, according to the report, would most probably have arisen regardless of Norway’s affiliation to the EEA.
'Democratic deficit' in policy formation
Given the above findings, the concerns of those who opposed the EEA agreement on grounds of its perceived negative effects on developments in the Norwegian economy and labour market, have, according to the authors, proved ill-founded. However, despite the fact that the overall impact of the agreement must be regarded as beneficial to Norway, one may, according to the authors, question the apparent 'democratic deficit' that has emerged in relation to policy formation, in particular in the area of working life/industrial relations. The Norwegian authorities - and social partner organisations - have rather limited influence on the formation of the EU policies they implement nationally, due to the fact that Norway is outside the formal policy- and decision-making system of the EU. Instead the EEA agreement has become a means by which Norwegian 'bureaucrats' and 'technocrats' implement and enforce the EU regulations that are made applicable through the agreement, claims the report. Participation by Norwegian experts and technocrats in EU advisory and technical committees is the only formal channel of influence, but these representatives lack both political accountability and actual powers, given that many of them are only observers within the system. Thus democratic responsibility for a number of policies with significant implications for Norwegian working life have been taken away from elected political representatives, and placed in the hands of experts and bureaucrats, the authors argue
This democratic deficit has not sufficiently been compensated for by the social partners, through their participation in European organisations and the social dialogue at the EU level, according to the report. This potential for power and influence has long been recognised as important by both the social partners themselves and the national authorities (NO0003180N). Apart from the fact that only two out of Norway's four trade union confederations are members of the European Trade Union Confederation (ETUC) - LO and the Confederation of Vocational Unions (Yrkesorganisasjonenes Sentralforbund, YS), together accounting for 36% of Norwegian employees - the inability to take advantage of these opportunities may, according to the authors, be explained by the diminishing significance of the EFTA actors within these bodies, and a lack of strategic focus by the Norwegian trade unions themselves in this area. With growing imbalances between the EFTA and EU 'pillars', the political significance of the EEA agreement has also been reduced within EU-level organisations (such as ETUC). Thus the EFTA representatives have to some degree become marginalised, and their role and influence diminished. Norwegian trade unions are thus increasingly becoming dependent on their counterparts in the other Nordic countries in order to 'promote their interests and objectives' at the European level.
The report argues that political impediments to influence and power over EU policy formation and decision-making have been accompanied by a lack of strategic focus within the trade union movement itself - including LO - on how to exploit the available opportunities to exert influence, in particular through participation in EU-level organisations. What is noteworthy, according to the authors, is the fact that the EEA agreement effectively prevents Norwegian unions from linking lobbying work through both political and union channels at the European level, a feature that has been a hallmark of Norwegian unionism at the national level since the 1930s.
Commentary
On the basis of the report, one may partly conclude that, although it is difficult to identify specific, concrete effects of the EEA agreement on Norwegian working life, there is an argument to be made that it has not hampered the prosperous developments witnessed in Norway over the last 10 years. Moreover, it may also be seen to have aided economic growth in Norway, in particular by means of providing access to the internal market of the EU. Moreover, it has not had significant detrimental effects on Norwegian working life. However, as the authors argue, one may question the democratic viability of implementing rules and regulations without being sufficiently able to take part in influencing the formation of these policies. This democratic deficit may to some degree be compensated for by greater efforts by the social partner organisations in exploiting the possibilities available to them through their membership of European organisations, and through these organisations, the social dialogue at the EU level. So far, however, this opportunity has not sufficiently been exploited.
Considering the challenges facing the Norwegian labour market as a result of the EU enlargement in May 2004 (NO0405105F), and the political and constitutional developments now taking place within the EU, the importance of gaining access to the Union's decision-making channels will apparently not diminish in the years to come. Increased mobility of workers associated with the provision of services, the prospect of substantial migration by workers from the new eastern Member States, and a greater 'welfare gap' between the EU countries are all developments that necessitate closer coordination by the European trade unions. This is also the case for Norwegian trade unions, and they need to establish strategies to meet these challenges. Thus, a lack of access through formal governmental channels necessitates a stronger focus on alternative channels of influence through their European umbrella organisations. These are factors that LO, and indeed the Norwegian trade union movement in general, will have to take into account in their internal debate on this issue in the time to come.
The Fafo report comes at a time when the EU debate is resurfacing on the political agenda in Norway. The leadership of LO has pledged that it will direct efforts at achieving a change in government in the 2005 election, and the only viable alternative to the present government - a coalition of the Liberal Party (Venstre) and the Conservative Party (Det Konservative Folkeparti) - is a coalition between the Norwegian Labour Party (Det norske Arbeidspartiet, DnA), the Socialist Left Party (Sosialistisk Venstreparti, SV), and the Centre Party (Senterpartiet, SP). The two latter parties have been the most ardent opponents of EU membership in Norwegian politics. DnA on the other hand has supported Norwegian membership for some time. LO’s own position on the matter will most probably be settled at its national congress in 2005. (Håvard Lismoen, Fafo Institute of Applied Social Sciences)