Many stakeholders will be involved during the course of a PPI transaction. Government is itself a vital stakeholder, as well as the principal decisionmaker at key approval steps in the PPI process and the labor program. Investors, consumers, and regulatory authorities are stakeholders, too. The wider processes of public policymaking and strategic communication for privatization and PPI are described in material provided in the accompanying CD-ROM.
The CD-ROM contains:
As described in module 1, the starting point for engagement is a thorough stakeholder analysis. This module focuses on the processes of engagement with the key actors with whom government needs to interact in designing a labor program, in particular labor and trade unions.
There are four forms of engagement that can apply in labor restructuring, namely:
Consultation and negotiation are very different processes.
Communication is mainly a one-way transfer of information from government, the implementing agency, or redeployment counselors to the stakeholder audience.
Consultation and negotiation are both two-way processes, but the expectations of outcomes are very different. Participants in consultation expect their views to be heard and taken into account, whereas those in negotiations expect that mutually binding results will be the outcome.
Cooperation can be seen as a more mature form of engagement where both sides expect to participate actively and are committed to win–win outcomes. That distinguishes it from negotiation, which can be adversarial and can yield win–lose outcomes. Cooperative approaches often have longer-term and broader perspectives than does negotiation.
Communication, consultation, and cooperation in the labor relations context align well with the three forms of engagement between citizens and government recognized by the Organisation for Economic Co-operation and Development (OECD) (see box 6.1). Negotiation is a distinct form of engagement that arises from the contractual employer–employee relationship between government and the work force. (Subsequent sections of this module deal in more detail with each of the four levels of engagement.) The OECD PUMA program has reports on how to engage with citizens.
The OECD PUMA program has reports on how to engage with citizens.
An OECD study of the mechanisms of interaction between government and citizens in policy design, implementation, and evaluation recognized three forms of engagement: information, consultation, and active participation. The working definitions adopted in the study recognized a key role for government in setting the boundaries for engagement, and noted that the final decisionmaking responsibility remained with government:
Source: OECD 2001.
The engagement strategy sets out which of the various forms of engagement are to be used, and when. For the purposes of labor restructuring, which is the focus of this Toolkit, the main stakeholder groups are employees and unions, government, and investors–and the views of all need to be heard. It is, however, rarely the case that all stakeholders must be dealt with at the same time. An engagement strategy (see table 6.1) may therefore envisage a series of actions using all four forms of engagement. For example, the strategy might resemble the following:
Hasty or ill-prepared events can be damaging.
One particular risk is that of premature activities. Hasty and ill-prepared announcements, press conferences, and newspaper or radio interviews can damage the credibility of everyone in government and so delay PPI if they expose uncertainty on key issues or weaknesses in the government's "story." The implementing agency should be able to advise government officials and politicians about when to sequence engagement events and the key messages to be conveyed. Certainly the basic rationale for work force restructuring must be clearly defined and understood before any government official or politician approaches TV, radio, or newspapers.
The actual process of engagement is likely to have stops and starts and periods of progress and setback. It may not always be possible to follow a precise, neatly sequenced plan. As the case of Côte d'Ivoire Railways presented in box 1.14 in module 1 illustrates, a commitment to engage on work force restructuring issues can lead to mutually acceptable solutions and improved outcomes for the implementing agency, workers, and other stakeholders.
| Type of engagement |
Phase in work force restructuring (sequencing) | |||
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| Initial assessment | Design | Implementationt | Monitoring and evaluation | |
| Communication |
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| Consultation |
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| Negotiation |
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| Cooperation |
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Skills may be acquired by subcontracting or by training key people.
Effective engagement requires a particular mix of skills. Where government does not have these in house, some skills can be acquired through subcontracting to specialist providers or consultants. Skills and capacity in opinion polling, conducting focus groups, copywriting, media design and commissioning, and strategic advice can all be brought in.
Other skills, however, may have been developed in key people through training. As part of the communications process the senior manager in the implementing agency or senior government officials may need to communicate directly and credibly with workers or via radio or TV. Personal skills development for these circumstances may be very valuable. Negotiation training for key people can also have significant financial, strategic, and tactical benefits.
In some cases, it is more a question of acquiring the right person than the right skills. In Italy the "right" minister was able to be credible with trade unions (box 6.2).
The ILO has supported capacity building in national trade unions in developing and transition countries.
The implementing agency can budget and secure financing for the government's side of the engagement: consultants and advisers, opinion pollsters, stakeholder research and analysis, and media purchase. Donor funds are an important source of finance for these activities and resources, but building the capacity of other parties in the engagement should also be encouraged.
The privatization of Italy's Enel, the state-owned electricity giant, was opposed by unions until the government decided to propose a cabinet reshuffling and select a former leader of the Communist Party in parliament as minister of industry. The new minister, who had close ties to the unions and some credibility with them, helped the unions to accept a deal, acting as a mediator and broker between the parties. The privatization that followed the agreement in 1999 was the largest initial public offering that ever appeared in the marketplace.
Source: World Bank 2002.
In many developing countries, for example, there are no effective trade unions or the existing ones have limited capability. Both the International Labour Organisation (ILO) and a number of international trade unions have programs designed to strengthen the capacity of trade union organizations in developing and transition countries. Although there are few concrete examples, the value of capacity building is increasingly recognized. In India the ILO helped trade unions in the telecommunications sector develop strategies for reskilling in the face of technological change. In Russia trade unions were seen as having an important role in coal sector restructuring. Over a fiveyear period, financing from a World Bank technical assistance loan allowed the trade unions to conduct regular seminars on topical issues in sector restructuring (for example, on relations with private employers), to maintain legal services in the coal regions, and to carry out monitoring and other activities relevant to sector restructuring (Artemiev and Haney 2002).
Where workers and trade unions are weakly organized, one approach is to ignore capacity building, exploit that weakness, and use coercion to accelerate work force restructuring. This approach, however, is embedded in a win–lose mindset. Cooperation, for example, assumes much more of a partnership or win–win approach. Attention to capacity building is therefore most likely to be adopted in the same circumstances as those in which cooperation is the appropriate engagement approach.