current psi affiliation fee system payment by euro fixed amount (0.87euro/member/year) minimum...
TRANSCRIPT
Current PSI affiliation fee system
Payment by Euro
Fixed amount (0.87Euro/member/year)
Minimum affiliation fee (650Euro/union/year)
Index (100%, 75%, 50%, 25%, 10%)
Problem of payment by Euro
Fluctuation of foreign exchange Fall of exchange rate = Increase of
fee
No union can forecast fluctuationDifficult to buy EuroRemittance charge is expensive
Exchange rate against Euro
Country Sep.1
2002
Sep.1
2003
Sept.1
2004
Sept.1
2005
July 6
2006
Change
Australia 1.78 1.70 1.73 1.64 1.72 + 3.4%
Bangladesh 58.85 66.20 74.22 80.40 92.12 - 56.5%
Japan 116.40 128.46 133.02 136.57 147.00 - 26.3%
Malaysia 3.73 4.18 4.63 4.66 4.66 - 24.9%
Nepal 78.80 85.01 90.62 89.70 97.65 - 23.9%
Fixed amount system
Fair to the unions in the same countryUnfair to the unions in different countriesBig burden to the developing countriesFixed and stable only for Euro countries
Minimum affiliation fee (1)
Some unions don’t have financial foundation to pay the minimum affiliation fee of 650Euro because;
membership is too small, union due is too low, difficulties in collecting union dues from all members, etc. These problems are caused by their peculiar
natural, historical, cultural, political and organizational backgrounds.
Minimum affiliation fee (2)
Some unions tend to think it doesn’t matter if they pay only 650Euro even if they can pay more. It happens occasionally where such unions request reduction.
The unions who are intending to affiliate to PSI tend to apply with the membership whose affiliation fee is 650Euro despite having a bigger number of members.
Minimum affiliation fee (3)
Unions who can not pay 650Euro have to submit the request for exemption or reduction till the system to be abolished.
There are unions that have to give up affiliation to PSI because they are not able to pay 650Euro. This disturbs recruitment.
Minimum affiliation fee (4)
Minimum affiliation fee has brought neither the merging of small unions nor the increase of the total income to PSI.
In fact the income from affiliation fees fell even though the number of member organizations affiliated to PSI grew.
Minimum affiliation fee (5)
Decrease of minimum affiliation fee can not resolve essential problems as long as it is fixed amount.
Probability to expand further the gap between true membership and affiliated membership.
Index
Difficult to reflect accurate solvencyGDP might be more reasonable and
clearIndex of Australia = 100Index of Nepal = 10
GDP of Australia = 25,370 GDP of Nepal = 1,310
Vague definition, no up-dating
Arrear
50% affiliates are in arrears in 2005Many requests for exemption,
reduction, delayed payment, etc.Difficult to reject the request to join
PSI activities and to expel from PSI.
Less-registered membership
Big gap between affiliated membership and true membership
Increase free-ridersDiscourage unions from paying full
membership affiliation feesErode mutual trust and solidarity
Who really bears heavy burden?
Need to investigate actual financial condition of affiliates
Whose burden is heavier, Japanese or Nepali?
What is the fair burden?
Principles of new system
International solidarityFairnessTransparency
Our option
Introduce fixed ratio system based on the average salary of members
Pay by EuroAbolish the minimum affiliation feeAbolish the index
Conditions for introducing new system
Definition of average salaryCollecting and updating accurate dataRegister the true membershipProper ratio (reasonable and realistic)Secure enough income for PSIStrict rules for exemption and reductionStrict rules on arrears and expulsion
Trial calculation on Nepal
Current formula 0.87Euro x 10,000members x 10% = 870Euro
New formula ratio: 1 / 50,000, average salary: 612Euro
612Euro x 10,000members / 50,000 = 122Euro
ratio: 1 / 40,000
612Euro x 10,000members / 40,000 = 153Euro
Trial calculation on Malaysia
Current formula 0.87Euro x 10,000 members x 50% = 4,350Euro
New formula ratio: 1 / 50,000, average salary: 3,447Euro
3,447Euro x 10,000 members / 50,000 = 689Euro
ratio: 1 / 40,000
3,447Euro x 10,000 members / 40,000 = 862Euro
Trial calculation on Japan
Current formula 0.87Euro x 10,000 members x 100% = 8,700Euro
New formula ratio: 1 / 50,000, average salary: 40,816Euro
40,816Euo x 10,000 members / 50,000 = 8,163Euro ratio: 1 / 40,000 40,816Euo x 10,000 members / 40,000 = 10,204Euro
Actual burden ratio
Nepal: 1 / 7035
(0.87Euro / 612Euro x 10%)
Malaysia: 1 / 7,924 (0.87Euro / 3,447Euro x 50%)
Japan: 1 / 46,915 (0.87Euro / 40,816Euro x 100%)
Other potential options
Introduce fixed ratio system based on GDP and abolish both of index and minimum affiliation fees
Probably any others
Discussion of Steering Committee (1)
An extensive proposal for a coefficient for a fees level based on average wages
The need for simple, fair fees system The need to use a system based on a single currency The possibility of two tiers of membership in PSI The need for any system to be based on trust The need for financial stability and sustainability for
PSI The possibility of keeping the present system for those
affiliates on the 75-100% indexed rates but to look for a simple and fair system for others – the majority of affiliates but the minority in terms of payment
Discussion of Steering Committee (2)
The need to look for growth at the ‘rich’ end of the membership
The possibility of reviving the former ‘Development and Aid Fund’
The need for PSI to present a better case to show the added value of PSI to affiliates, especially to the major payers
Perhaps a consideration of setting different fees regionally
End
Thank you for listening