Comments about the proposed Bill about the branch organizations of the employers

A senseless and potentially harmful for the economy bill is being prepared again – this time about the branch organizations[1]; in contrast to many other occasions however, this time the proposal is supported by the greater part of the businesses or more accurately by the organizations which represent them, which is not surprising since the proposal was developed mainly by them. Those who support it naturally have good reasons for themselves – the proposal gives them a wide range of authority, including participation in the decision making process with respect to the destiny of their current and future competitors.  Which, naturally, means nothing else but undermining the foundations of the free entrepreneurship and initiative and creation of premise for drastic limitation of competition in many sectors. All this confirms the view that principal policies in Bulgaria are not made and everybody acts according to the principle to "pull the cover towards himself", as much as possible.

With respect to several fundamental points of the proposal, logic supports the argument that it should not be passed, if it reaches the Parliament.

  • The proposal must not introduce additional requirements for representation of the branch organizations, since even at present the existing legislation sufficiently clearly (The Labor Code) divides them into "significant" and "Insignificant". If passed, the bill would extend additionally this differentiation and would take away the right of free negotiation and the possibility everyone to defend his own interest;
  • As a continuation of the above argument, we must note, that some of the main employer organizations consider the additional requirements for representation too low and according to them "that would stimulate the swarming of branch organizations". If some representatives of the businesses imagine that the right of voluntary unions of their colleagues must be limited than they should pay attention to some decisions of the Government, which most probably do not affect them directly  (respectively allow for a more objective view), such as the establishment of an energy mega holding, which they have always been against and to check whether or not between the ideas proposed by them and the ideas of Rumen Ovcharov or his heir Petar Dimitrov there is any analogy. The same applies to the proposal, again by some of the leading branch organizations, "in the cases, when could not be achieved a voluntary consensus (for execution of some of the delegated state functions), to use criteria, allowing only one branch organization of given economic activity to execute the corresponding administrative functions";
  • Part of the texts in the proposal repeats articles from the Law about non-profit legal persons (LNPLP), others do so notionally. In third place, many of the covenants (participation in the development of strategies, providing opinions and recommendations, etc.) are either existing practice and/or are treated in other legal documents. In that sense, the existence of many texts in the proposal could not be justified from the point of view of maximum clarity in the regulations;
  • The belief that functions connected to administrative regulation and control could be transferred to private economic entities or their unions is faulty and totally unacceptable. That would mean the transformation of the latter into quasi-government structures, which administer and control themselves as well as their future competitors;
  • It is not necessary that the co-operation and the consultations between the ministries and state agencies on one hand and the branch organization on the other be institutionalized in the form of "Sector councils of economic activity". Firstly this practice already exists at present and secondly it is defined in other regulations (for example: Rules of the organization and the activities of the Parliament). It is totally unacceptable that the proposal gives the right to participate in the above mentioned councils only to the branch organizations "which are acknowledged as representative for these activities". This requirement, as well as the remaining paragraphs of Article 9 of the proposal is violating the right to participate in public consultations of all interested parties about the preparation and drawing up of the regulations and providing opinion.

Overall, the proposal should not be passed not only in this variant but in general, at least because at present exists a regulation (LNPLP), which completely and in detail sets the framework for the activities of such organizations. In wider observation, we would like to emphasize that if for every aspect of the person's life a separate bill is passed, which defines his behaviour, and control, in this specific case, which is the most dangerous, to delegate part of the state authority to private organizations. That would mean that private companies or more accurately those who are members of the respective unions would participate in the decision making with respect to remaining of the existing companies or access to the sector by future competitors. In every sense that would mean adhesion of the branch organizations with the state and gaining legitimacy which is not given to them and suppression of the principals, as well as the idea of freedom of unions with the aim of protecting their own interests (but not by force using the delegated authority), as well as the competition of economic activities.    In addition, if the proposal is passed, we could expect the remaining categories of voluntary organizations (all types' organizations and foundations – ecological, social, etc.) to request the creation of a special bill for them which would give them monopolistic or similar status or specific privileges compared to all the rest.  That would have extremely negative consequences on the development of the legislative process as such, which principals would move towards legalizing of feudal-oligarchic structures, as well as with respect to the real economy as a result of artificial limitation of competition, the higher costs for entry and creation of conditions for additional corruption practices.


[1] The idea is not new, the firs proposal was made at least in 2003; it is simpler, clearer and foresees the transfer of less Government authority to the branch associations and it was not passed, I hope that the current "harder" version also would not become a law, since the negative consequences from it would be enormous.


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