Ukrainian government pledges reform of coal industry, payment of back wages (02/11/96)

Ukrainian government pledges reform of coal industry, payment of back wages

by Marta Kolomayets
Kyiv Press Bureau

KYIV - As the coal miners' strike in Ukraine entered its second week, Prime Minister Yevhen Marchuk said on February 8 that the government would begin reforming the coal industry and - within the next 20 days - would pay miners the back wages owed them.

With about half of Ukraine's 227 mines participating in the strikes in one form or another, Ukrainian government officials worried about the impact the strikes would have on Ukraine's energy sector during one of the coldest winters of the decade.

According to Prime Minister Marchuk, as of February 8, 38 mines in Ukraine were striking, 80 were mining coal but not shipping to customers, and eight mines had workers picketing the work area. Meanwhile, leaders of the Donetske city ad hoc strike committee said 68 mines throughout Ukraine were idle on February 7.

Prime Minister Marchuk told reporters that, before departing for a state visit to Finland on February 8, President Leonid Kuchma had signed a decree on coal industry reforms that promote competition within the industry and create state-owned joint-stock coal mining companies.

Although Prime Minister Marchuk did not say where the money to pay coal miners their back wages would come from, he ruled out any possibility of a government emission - which would send inflation rates into a tailspin and cause further upheaval in Ukraine's already shaky socio-economic picture.

Deputy Mykola Azarov, chairman of the Parliament's Budget Committee, told Interfax-Ukraine the money for back wages could come from the government's stabilization fund (funds are transferred from the budget for the repayment of miners' wages from its outlay side). He said the debtors in the case of the miners are coal and chemical industry companies that have not paid for their coal supplies.

Prime Minister Marchuk warned, "The strike has already become a politically organized action," which negatively affects Ukraine's stagnant energy sector.

He compared the strikes in Russia, which ended last week, with those in Ukraine. "Although the strikes were similar in form, the consequences of the strike in Ukraine will be graver," he noted, explaining, that given the higher costs of energy, such as gas and oil, as well as the lack of progress in reforming the coal industry in Ukraine, prolonged strikes in Ukraine will have a greater impact on Ukraine's devastated economy.

According to news reports from Donetske, striking miners were angry that they had not yet been paid their full salaries and upset that, while Russian miners had resolved differences with their government, they had not been able to settle their problems in Ukraine.

Mr. Marchuk said he understands and sympathizes with the striking coal miners, but he said the consequences of the strike could have a prolonged effect. When foreigners look for countries where they may want to invest some capital, they will not look at places where there are massive strikes, he added.

The prime minister emphasized that the Ukrainian government had paid out necessary funds to the coal industry; it had paid out all wages owed to the miners and was in arrears only in providing social services, such as housing and utilities, to the miners.

Perhaps the main reason there is a strike today, he said, is the fact that the coal sector - much like the agricultural sector of the government - had been slow in reforming. Indeed, the coal mining industry has not changed since the days of the Soviet Union, with directors of mines depending solely on the government for all of their needs - from equipment, to safety standards, to wages and housing.

"It remained within the old scheme of things, an industry from the old days of the giant complex of the former Soviet Union - not an industry of an independent state, or an industry that works in a market economy," explained Mr. Marchuk.

"We would give subsidies to various ministries, and these subsidies would not change anything in the sectors," he continued. "Within the last year the government spent 95 trillion karbovantsi in subsidies to the coal industry; this did not change anything," he said.

Direct subsidies to the industry as a whole would be unacceptable, said Mr. Marchuk, disclosing that the government had outlined a new plan: government assistance to be provided on a selective basis. This, said the prime minister, would be competitive and effective, enabling coal mines to earn money with start-up costs from the state for the implementation of specific projects.

Prime Minister Marchuk admitted that the government had been dragging its feet in trying to reform the coal industry; the longer this continues, he said, the more devastating the impact will be.

He said the government is aware of the coal mines with good records and added that the government would now concentrate on helping those that need just a bit of a push - not with subsidies, but with loans and technical assistance.

Such decisions will be made according to business plans that will be presented to the government by the mines. Thus, he explained, no longer will the entire coal sector be given aid from the government. Mines with professional management will be rewarded for their work.

Indeed, Mr. Marchuk said the strikes are due to problems of mismanagement within various mines. He added that favoritism is a problem he had encountered during his review of the entire industry. He noted that mines which had better connections with Kyiv got wages on a more regular basis.

Although he did not use the word "corruption," Mr. Marchuk did say that an investigation had begun into this matter of "favoritism."

On Thursday evening, February 8, Parliament deputies and government officials were scheduled to travel to Donetske to speak with strike committee members, who had said they would be talking to leaders of other trade unions to determine a further plan of action.

Previously scheduled meetings between the Ukrainian miners' strike committee and the government did not take place as Coal Industry Minister Serhiy Poliakov said he could not guarantee the repayment of back wages.

However, Interfax-Ukraine reported on February 7 that 192,000 tons of coal had been mined in a 24-hour period. Although below the target figure, it was an average amount, comparable to figures during the pre-strike period. The figures were given by Viktor Shchepachiov, who heads the coal production department at the Coal Industry Ministry.

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