The Royal Ministry of Foreign Affairs, Oslo
Press Division – Editor: Benedicte Tresselt Koren

Norway Daily No. 197/02

Date: 16 October 2002

Major new union flexes muscles (Dagsavisen)

With 300,000 members at its back, the new local government workers’ union has started its battle for power and influence within the Norwegian Confederation of Trade Unions (LO). Neither the LO nor the Labour Party should feel certain of the support of the newly amalgamated union. Yesterday was a historic day for the Norwegian trade union movement. The national executive committees of the Norwegian Union of Municipal Employees (NKF), which is a member of the LO, and the independent Norwegian Association of Health and Social Care Personnel (NHS) agreed to join forces and create Norway’s largest trade union with over 300,000 members. Union leaders Tove Stangnes and Jan Davidsen have been eager to team up for a long time, but the latter’s desire to maintain close relations with the Labour Party and the LO has proved a stumbling block. After the decision to amalgamate was taken, however, Ms Stangnes said that the union would not consider affiliating itself with any other union confederation than the LO. It seems therefore likely that the LO’s offer to the two union leaders will decide if the new local government giant becomes a member of the LO or not.

PM turns on the charm to keep pay rises down (Vårt Land)

Prime Minister Kjell Magne Bondevik believes that moderate wage rises and a tight budget "are many times more important for ordinary people" than the price of after-school care and the other cuts for which the Government has been strongly criticized. "If we manage to cut interest rates by one percentage point, it will reduce gross interest expenses by NOK 15,000. This more than compensates for the disadvantages caused by a tight budget," said Mr Bondevik. A collaboration between the Government, employers and unions to keep wages down at next year’s round of pay negotiations heads the PM’s wish list, in addition to getting this year’s budget proposals accepted by the Storting. This is his recipe for bringing down interest rates, exchange rates and saving vulnerable industrial companies.

PM in effort to lash Progress Party to budget mast (Dagsavisen)

Prime Minister Kjell Magne Bondevik is afraid that Progress Party chairman Carl I. Hagen will run amok with the Government’s credit card after the budget negotiations have been concluded. He believes that the solution is a binding agreement. Towards the end of this week the Government and the Progress Party will probably start negotiating over next year’s national budget. While the Progress Party is reluctant to tie itself to a binding budget agreement, the PM – with last year’s budget negotiations in mind - will make every effort to achieve just that. Last year the Government saved its skin by demanding a vote of confidence from the Storting. The Progress Party let the Government stay in office, but wriggled out of tying itself to the economic framework which the Government had set for the budget.

Bellona demands escort for Russian oil tankers (Aftenposten)

Bellona has called on the Government to consider immediate measures to secure the Norwegian coastline against the dangers posed by Russian oil tankers. The first supertanker filled with crude oil for the European market has already left Murmansk. Environment Minister Børge Brende has previously expressed concern about Russia’s emergency preparedness in the event of an oil spill. Now Bellona is demanding action. "I feel the Coast Guard should give priority to shadowing every single transport. And I want tugs stationed at strategic locations along the coast," said Bellona leader Frederic Hauge. The Norwegian Pollution Control Authority (SFT) estimates that 10-15 oil tankers weighing 20,000 dwt sailed from northwest Russia to markets in Europe last year. In 2005 the SFT believes the traffic could have increased to one oil tanker weighing 100,000 dwt or more each week, rising to two a week by 2010. However, the SFT adds that these are merely guestimates.

Petoro chairman favours competition over oil (Dagens Næringsliv)

Petoro’s new chairman, Bente Rathe, believes the state’s petroleum assets can best be secured if Statoil and Norsk Hydro compete with each other. "Separately, Statoil and Norsk Hydro are expert operators. At Petoro we want competition so that the greatest amount of value can be created for the state," said Ms Rathe, who was appointed chairman of Petoro’s board of directors last week. Petoro is the company which manages the state’s North Sea petroleum assets, which are worth almost NOK 500 billion – five times the amount which Ms was in charge of as deputy chief executive of Gjensidige Nor.

Swedes refused permission to take aerial photos of Norway (Aftenposten)

Norwegian defence authorities do not like the idea of non-Norwegian citizens taking aerial photographs of Norway. For that reason those taking such pictures must obtain security clearance – which is only granted to Norwegian citizens. The EFTA Surveillance Authority (ESA) claims that this amounts to discrimination, and has demanded a change in the legislation. The ESA has also demanded that the Norwegian authorities explain why they think that airborne foreigners with a camera pose a security threat to Norway, while the Russians are allowed to do so. Aerial photos of, among other places, Gardermoen airport are the result of the Russian surveillance planes overflying Norwegian territory. This is not a problem for the Norwegian authorities. This summer Russia and Norway signed an agreement ensuring mutual aerial surveillance of each other’s territories. The agreement is intended to help ease tension and increase trust between the two countries.

Veritas wins wind power contract (NTB)

Det Norske Veritas (DNV) has won its first offshore wind power contract in Germany. DNV sees the German contract as a breakthrough in the world’s largest wind power market. The German energy company, Prokon Nord, is to spend NOK 3-5 billion on Germany’s first offshore wind farm, off the island of Borkum in the North Sea, near Germany’s territorial limit with the Netherlands. Prokon Nord has chosen DNV to carry out a "general structural design" for the Bokum West offshore wind farm, which is Germany’s first wind-generated power station located at sea. For DNV the contract is worth a total of NOK 20 million, but the company reckons this is just the start.

Worth Noting

• Arbitration efforts in the pay negotiations for brewery employees failed to produce an agreement on Tuesday night. As a result 440 brewery workers will go on strike from Wednesday morning. According to the unions, the strike will mean that deliveries of beer, soft drinks and bottled water from several bottling plants will come to an immediate halt. This will probably result in shops rapidly running out of stocks.
  (NTB)
• Public transport, central and local government offices and agencies, industry and parts of the service sector will grind to a halt tomorrow when members of the Norwegian Confederation of Trade Unions (LO) down tools for an hour long political strike in protest against the budget.
  (NTB)
• Affluent Norwegians are well known for crossing the Swedish border in pursuit of cheap spirits and bacon. But wages are also cheaper on the Swedish side. The strong Norwegian krone is strengthening a peaceful invasion, not quite a hundred years after Norway broke away from Sweden to become an independent state in 1905. Swedish local authorities along the border are promising substantial enticements to Norwegian companies who set up in Sweden. So far this year Norwegian companies have invested NOK 4.9 billion in Sweden.
  (Aftenposten)
• Tomorrow the Storting will approve the controversial baby-food directive in the EEA Agreement. A proposal to veto the directive has the support of only the Socialist Left Party and the Centre Party. The Storting’s Business and Industry Committee announced its recommendation yesterday. "All the expert agencies have advised Norway not to accept the directive because it could lead to the addition of various proteins, sugars and iron which may be detrimental to consumer health," said Marit Arnstad (Centre Party).
  (NTB)
• 216 Telenor Mobil employees are to lose their jobs despite the fact that so far this year the company has contributed a profit of over NOK 1 billion to the Telenor group. Telenor Mobil had sales of NOK 9.4 billion and made a pre-tax profit of NOK 2.9 billion last year. So far this year more than 1,250 employees have been told that they will no longer have a job to go to from the start of next year. The downsizing is part of Telenor’s efforts to cut costs by NOK 4 billion by the end of 2004.
  ()
• Norsk Hydro has lost huge sums of money in 2002 as a result of its international oil exploration activities. The company announced yesterday that its third quarter result would be hit by a NOK 1.3 billion charge to cover the costs of failed oil exploration activities abroad. This means that Norsk Hydro has lost almost NOK 3 billion so far this year.
  (Dagens Næringsliv)
• Kjell Almskog could be investigated by the National Authority for Investigation and Prosecution of Economic and Environmental Crime for decisions he made during his term as chief executive at Kværner. A decision to investigate will depend on what conclusions a commission of inquiry appointed by the company’s board of directors arrives at in January.
  (Dagbladet)
• Arable land is being lost to construction at a record rate. A total of 150,000 hectares (approx. 60,704 acres) of arable land was redesignated last year to uses other than agriculture. This is the equivalent of 2,500 football pitches and is 20 per cent more than the year before.
  (Nationen)
• Recent figures from the insurance industry reveal that insurance fraud to the tune of NOK 221 million was uncovered last year. But the industry fears the real amount of fraud could be more than thirteen times that figure. And the bill? It is the customers who must pay – in the form of increased premiums.
  (Dagsavisen)

Today’s comment from Vårt Land, Dagsavisen, Dagens Næringsliv

The Labour Party’s new manifesto is the first time this party has accepted the idea of collaborating with other political parties. It is no longer the Labour Party’s declared goal to win a majority by itself, but to work for a majority government made up of a centre-left coalition. This is something radically new in Norwegian politics. It will be exciting to see how the Labour Party follows up this new goal in practical political terms. (Vårt Land)

In its report, the Labour Party’s Dialogue Forum has proposed that the binding collaboration between the Labour Party and the Norwegian Confederation of Trade Unions (LO) should be continued and further developed. The proposal will certainly come as a disappointment to the party’s right wingers, who would prefer to see the two organizations cut the ties that bind them. We believe it would be best for the Labour Party and the LO to further develop their collaboration, but change it to more fully meet the demands of a new age. We believe it would be wise if the president of the LO were not elected onto the Labour Party’s central committee. This position has acquired a heavily symbolic significance. If the Labour Party’s annual conference in November elects the LO president as a member of its central committee, it will be perceived as though the existing relationship between Labour and the LO has remained totally unchanged. That is not the intention. (Dagsavisen)

The report to the Labour Party’s annual conference from the party’s Dialogue Forum makes sorry reading for anyone hoping that the Forum’s chairman, Jens Stoltenberg, would contribute a dose of radical new thinking. The party seems to be feeling very comfortable with itself as the political expression of unionized workers’ interests – especially the rapidly growing section of the union movement which works in the public sector. The Labour Party has not managed to leverage public dissatisfaction with the current government to make up any ground in the opinion polls. It is difficult to believe that the Stoltenberg report will reverse that trend. (Dagens Næringsliv)