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American

SPRING 2016

Vol. XXVI, No. 2 • ISSN 1506-3240

Investor The quarterly of the American Chamber of Commerce in Poland

amcham.pl

The workforce cliff When downward demographics meet massive work emigration INSIDE: OVER 100 PICTURES FROM AMCHAM EVENTS IN JANUARY-APRIL


In this issue SPRING 2016 Vol. XXVI No. 2 MONTHLY MEETING January The view from the tower of power A Presidential minister shares his vision of the new government’s policies, the role of the head of state in pursuing Poland’s interests, and the remaining democracy in the country, p. 18

COVER STORY

The workforce cliff When downward demographics meet massive work emigration, p. 14 Building global awareness Leszek Surowiec, president of LS Tech-Homes, producer and developer of high-tech construction elements, talks about the modern construction market in Poland and how his American experience affects how he does business in Poland, p. 34

February Escaping traps The Polish government has identified five structural pitfalls for the country’s further economic growth, but says it has a plan to escape them with the help of science, p. 19

EXPERT Tricky identities Linked in or spear-phished? p. 36

March A man with a plan The Minister of Development has a comprehensive vision for boosting Poland’s economy, p. 20 April An independent course Poland’s new foreign policy has a lot of ground to cover, p. 22 FOCUS Learning from experience AmCham launches the second edition of the 30 Under 30 mentoring program, p. 24 Reality check After decades as the strongest magnet for FDI in CEE, Poland may start to suffer from political unpredictability, p. 26 Challenges of the global economy US manufacturing companies examine the Polish government’s plan for sustainable economic growth and its commitment to boosting an innovative economy, p. 28 Getting tech, getting smart Innovative use of new technologies drives business forward, p. 29

Meet pre-pack liquidation Companies in dire straits may opt for pre-pack liquidation, a quick way to sell a company in bankruptcy proceedings, p. 38 Do it again! The best strategy for sustainable growth by American manufacturers in Poland is reinvestment, p. 30 Mother Nature’s birthday Spring toasts the health of our terrestrial orb, p. 31 COMPANY PROFILE Growing and sharing Joanna Bensz, country manager of project management, engineering design and consulting company CH2M Polska, talks about how its regional operations in Kraków have evolved into a global shared services center, p. 32

Poland bets on innovation Or does it? The new R&D tax relief is broader than the previous technology relief, but only a modest percentage of eligible costs can be deducted, p. 39 The 33/3 rule Employers face amended regulations governing fixed-term employment contracts, p. 40 ADR on the way up From this year, alternative dispute resolution in Poland should be faster, cheaper and more popular, p. 41

Departments:

Letter from the Chairman, p. 3, Newsline, p. 4, Agenda, p. 8, AmCham Committee Guide, p. 13, AmCham Events pp. 42-56. SPRING 2016 AMERICAN INVESTOR

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Your American

YOUR AMCHAM

On-line resources to AmCham

BoArd oF dirEctors Tony HousH – APCO Worldwide Chairman

Joanna Bensz – CH2M Polska Vice Chair

JudiTH Gliniecki – Individual Member Vice Chair

Paul FoGo – JF Legal Treasurer

Rick lada – Individual Member Secretary

MEMBERS Magdalena BurnatMikosz Deloitte

Anna Jakubowski

John Lynch Lynka

Roman Rewald

Weil Gotshal & Manges

Coca-Cola

Jolanta Jaworska IBM Poland & Baltics

Joseph Wancer BGŻ BNP Paribas

Marek Kapuściński Procter & Gamble Central Europe

Advisory council

Check out our revamped website, with enhanced functionality including intuitive grouping of topic threads and multimedia coverage of our events! MEMBERS This link includes access to AmCham community news, the member directory, information on how to become a member, and a list of companies and individuals who have received AmCham awards. EVENTS The link Upcoming Events will take you to announcements of our future events. Past Events will take you to our events archive, which includes photo and multimedia coverage of selected events. COMMITTEES AmCham’s 13 committees are the heart of the organization, providing a forum for business leaders with similar interests to network, share best practices, and discuss relevant topics and issues. This enables active participation and input on matters of vital importance to members. The link will take you to a pop-up menu to choose the committee of interest to you. MEDIA This link will take you to five databases: AmCham in the Press is a database of press clippings about AmCham in Poland. American Investor will take you to a .pdf version of our print quarterly, American Investor, including the most recent edi-

tion as well as archives of past issues. Video Clips will take you to multimedia coverage of selected AmCham events. AmCham Media Contacts provides contact information for members of the media. Galleries will take you directly to the vast archive of photo coverage of our events. ADVOCACY This link will take you to the archive of our position papers, policy statements, official letters to government ministers, and research papers—all produced in our effort to build a more open and business-friendly economic environment. REGIONS AmCham may be closer than you think. Apart from Warsaw, AmCham has three regional branches, which are active all year long and offer many exciting opportunities to interface with regional business leaders and politicians. Use the Regions menu to find out more about our services in Gdańsk and northern Poland, Kraków & Katowice and southern Poland, and Wrocław and Lower Silesia. USEFUL LINKS This section provides links to other important US business organizations, such as the US Chamber of Commerce and the American Chamber of Commerce to the European Union, and other organizations working for the benefit of transatlantic trade and investment relations.

What’s on

amcham.pl

Your online guide to AmCham activities

AmchAm Auditor

© American Chamber of Commerce in Poland 2016. All rights reserved. 2

AMERICAN INVESTOR SPRING 2016


Investor Letter from the Chairman

Dear AmCham Members,

S

pring has arrived and so has a new edition of American Investor covering a wide range of issues and our many activities so far this year. They have been rewarding, I believe, to the participants, and demonstrate AmCham’s continued commitment to be a world-class business organization. We have started the year with a very strong, very senior series of speakers: Presidential Minister Krzysztof Szczerski, Deputy Prime Minister and Minister of Science and Higher Education Jarosław Gowin, Deputy Prime Minister and Minister of Development Mateusz Morawiecki, and Minister of Foreign Affairs Witold Waszczykowski. From the NATO Summit to regional security, from innovation and academic cooperation to the government’s development plan, we have been able to hear firsthand about the ministers’ views and ask questions face to face. In April we were pleased to organize and host a “Factories of the Future” discussion at the AmCham Manufacturers’ Forum. Senior US and Polish government officials shared the podium with leading experts on the Internet of Things, modern logistics, technology and business self-awareness. On Earth Day AmCham was the co-host of an event at Ambassador Paul Jones’s residence to talk about Smart Cities programs and how new ideas and technologies can change the way we work and live in an urban environment. This issue of American Investor also looks at the situation on the labor market in Poland with regard to wages and flexibility, as well as the impact BPO and shared-services centers are having on various regions of the market. You will also find a discussion on cybercrime, along with legal issues and coverage of the launch of the second ediTony Housh AMCHAM CHAIRMAN tion of the “30 Under 30” leadership mentoring program. The world continues to be a sometimes too-interesting place in 2016. In May we are discussing the European Union, its state, funding programs and future, as well as the implications of the UK referendum in June. We will follow that at the beginning of June to hear from Ambassador Jones on how he and the Obama Administration see the world today in the run-up to the NATO Summit. AmCham will also be at the European Economic Congress in Katowice on May 18–20 with our popular AmCham Diner venue to meet and discuss key issues with MPs, government ministers, MEPs, officials, competitors and clients. We invite you to join us in Katowice and in Warsaw on July 2 at the AmCham Independence Day picnic. Allow me to close this letter with a great thank you to Commercial Counselor William Czajkowski as his tour in Warsaw winds down. Bill is a valuable friend to our organization, the staff, the Board of Directors, and me personally. His energy, good nature, and willingness to push forward in chaotic or stormy times are why he has been such an important part of US business success in Poland in the last few years. Thanks Bill. Wish you all a great second quarter and a safe, relaxing summer.

SPRING 2016 AMERICAN INVESTOR

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Newsline YOUR AMCHAM AMCHAM STAFF

Dorota Dabrowski

Managing Director director@amcham.pl

Marzena Drela

Deputy Director marzena.drela@amcham.pl

Anita Kowalska

Events & Media Manager anita.kowalska@amcham.pl

Robert Kruszyna

Office Manager robert.kruszyna@amcham.pl

Barbara Pocialik-Malinowska

Membership and Committees Coordinator barbara.pocialik@amcham.pl

Marta Pawlak

Policy Counsel marta.pawlak@amcham.pl

Dorota Serafin

Project Manager dorota.serafin@amcham.pl

AmCham in Gdańsk

Alina Gronek

gdansk@amcham.pl

AmCham in Kraków & Katowice

Joanna Bensz

krakow@amcham.pl

AmCham in Wrocław

Monika Ciesielska-Mróz

amcham.wroclaw@pmg.pl

EDITOR

Tom Ćwiok tomasz.cwiok@amcham.pl

ENGLISH EDITOR

cHRisToPHeR smiTH christopher.smith@neostrada.pl

Printing

Q Invest Ltd +48 22 424 6600 To contact AmCham please write or call: Spektrum Tower, 16th Floor ul. Twarda 18 00-105 Warsaw tel: +48 22 520 5999 fax: +48 22 520 5998 e-mail: office@amcham.pl www.amcham.pl © American Chamber of Commerce in Poland 2016. All rights reserved.

American Investor is the official publication of the American Chamber of Commerce in Poland. It is a voice for foreign investors and the business community in Poland. The magazine strives to keep our members and other readers up to date by following chamber news and reporting on the leading trends in business and policy. Unless otherwise indicated, all articles authored by Tomasz Ćwiok. letters to the editor should be e-mailed to tomasz.cwiok@amcham.pl Cover Photo: Tom Ćwiok.

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AMERICAN INVESTOR SPRING 2016

News from AmCham and its members 3M Poland

Safety-at-work programs developed by 3M Poland were highlighted as best practices to follow in the industry report Responsible Business: Best Practices 2015, compiled by the Forum of Responsible Business, an NGO promoting safety at work since 2002. The report covers 800 safety programs at 130 companies. In other news, 3M Poland won an award as one of the best employers in Great Places to Work, a ranking of the most employee-friendly companies, compiled since 2008. 3M won the award in the category of companies employing up to 500 people.

specializing in political science, history, sociology, philosophy and Slavic studies. It is supervised by five scientific institutes of the Polish Academy of Sciences.

AmCham

Ambassador Michael Froman, US Trade Representative, met with the business community in Warsaw at a breakfast hosted by AmCham and the Polish Business Roundtable to discuss issues of transatlantic trade and bilateral relations. Froman, the chief US negotiator of the Transatlantic Trade and Investment Partnership, argued that the US government is pursuing TTIP as a tool to promote growth in the US and the EU, which will enhance the competitiveness of US companies globally. With TTIP, the US and the EU will work together to promote increased standards. TTIP is also a strategic alliance that will enforce American and European values in a volatile world. Froman was cautiously optimistic that TTIP negotiations can be successfully concluded this year, while there is considerable political will to make it happen. After the US Presidential election in November, and then elections in Germany and France, the commitment to TTIP may shift. Froman said that while negotiations had progressed, challenges remain in the agricultural sector, which is always sensitive, in areas of new regulations and standards that could be converged from conception, and in the politically charged debates around ISDS and data flows. Still, these and other issues have been on the US-EU agenda for years, with TTIP now making the push to find real solutions. Enforcing the value of the transatlantic trade relationship is strategically wise and, as AmCham Chairman Tony Housh pointed out, the entire business community is an ambassador of this cause. He further called TTIP a “generational decision” that would set the stage for economic relations and development for generations to come. (See also Events on page 46.) In March, AmCham was one of the sponsors of the 2016 International Career Day, a job fair held at Warsaw’s Collegium Civitas and organized by the school’s International Students Club. It was the third year for the job fair, with record-high participation of jobseekers this year, estimated by club president Anastasia Karuzina at around 1,000. Among the AmCham member companies present at the fair were Citi Handlowy, Manpower and Delphi. Collegium Civitas is a private college

Zbigniew Berdychowski (pictured), founder of the Eastern Institute and chairman of the Krynica Economic Forum Program Council, which operates Poland’s oldest and largest international gathering of politicians, businesspeople and economic experts from the region of Central & Eastern Europe, met with the AmCham to talk about what the 2016 edition of the Krynica Economic Forum has to offer corporate participants. He said that Polish President Andrzej Duda will be the guest of honor at the opening celebration of the forum in the first week of September, accompanied by top politicians from Czechia, Slovakia and Hungary. (Poland assumes the presidency of the Visegrad Group in June.) Berdychowski said that in 2015 the forum generated record year-on-year growth in participants—20%—mainly through the large number of local government representatives. This is a good signal to other forum participants, because local governments in Poland are in charge of huge investment budgets allocated by the European Union. Another sector of the economy which will enjoy substantial coverage at the forum this year is defense. Berdychowski underlined that debates about defense and security policies have been among the most important for public opinion in Poland in recent years, following Russia’s annexation of the Crimean Peninsula. The head of the forum also said that the 2016 edition will offer more events to engage participants in other ways than just as members of the audience listening to panelists. While panel discussions will remain the core of the program, there will be numerous additional events such as meetings, presentations and mixers. Berdychowski said that one of the major changes in the forum this year will concern security measures to ensure the safety of all participants. This move is understandable in light of terrorist threats in Europe occurring in 2015 and 2016. In other news, in April, AmCham held an open house at its new office, on the 16th floor of Spektrum Tower, just a block north of the former location. The AmCham staff are thankful


PM Group

Project management specialist PM Group was appointed by Aero Gearbox International, a joint venture of Rolls-Royce and HispanoSuiza, to deliver comprehensive project management and engineering design services for its new production plant under construction in Poland. PM Group provided the solutions in cooperation between its offices in Warsaw and Cork, Ireland. The AGI factory in Poland will design, develop, produce and support accessory drivetrains for all of Rolls-Royce’s future civil aircraft engines.

Wardyński & Partners to Universal Express Relocations for moving the AmCham office so seamlessly and to Coca-Cola for the new Coke refrigerator stacked with beverages. Pictured, AmCham staff at the new front desk: Marzena Drela, Robert Kruszyna, Anita Kowalska, Dorota Dabrowski and Barbara Pocialik.

Citi Handlowy

In January, Citi Handlowy sponsored a dinner discussion organized by the European Commission Representation in Warsaw in partnership with AmCham, to welcome Ambassador Michael Froman, US Trade Representative, who made a stop in Warsaw after his stay at the economic conference in Davos. Pictured: Michael Froman; Tony Housh, AmCham Chairman (APCO Worldwide); Sławomir Sikora (Citibank); Paul W. Jones, US Ambassador to Poland.

Members on the move Dentons

Jakub Celiński has joined the Capital Markets Team at Dentons law firm as a partner. Celiński has over 20 years of experience in financial advisory, including managing IPOs, M&A, investment funds and private banking. A lecturer at the Warsaw School of Economics, Celiński has been ranked as one of the top lawyers in capital markets in Poland by Chambers Europe, The Legal 500 and IFLR 1000.

In February, as part of AmCham’s TTIP awareness campaign, the chamber partnered with law firm Wardyński & Partners for a breakfast meeting to discuss a number of issues regarding TTIP negotiations, in particular TTIP’s objectives and scope, benefits and risks related to the agreement, and how it will affect Polish business. The speakers were Bartłomiej Czyczerski, Trade Policy Advisor at the Permanent Representation of Poland to the European Union; Tony Housh, AmCham

Chairman (APCO Worldwide); Prof. Jan Jakub Michałek, Dean of the Faculty of Economic Sciences at the University of Warsaw; Wojciech Talko, Policy Coordinator at the Directorate General for Trade of the European Commission; and Marcin Kwasowski from the EU Economic Department at the Ministry of Foreign Affairs. The event was prepared by Agnieszka Kraińska (pictured), a lawyer at Wardyński & Partners.

New members Provider of customer management solutions Capita Polska (capita-europe.com) is a new AmCham member. The contact person is Agnieszka Zygner, general manager.

LS Tech-Homes (lstech-homes.com), producer and developer of high-tech construction elements, has joined AmCham. The contact person is Leszek Surowiec, chairman.

Food processing specialist Cargill Poland (cargill.com.pl) has joined AmCham. Joanna Byczyńska, board member, is the contact person.

Provider of real-time customer management and billing solutions MDS (mdscem.com) is a new AmCham member. The contact person is Iwona Golińska, sales director for Eastern Europe.

Developer and manufacturer of industrial optical solutions Corning Optical Communications Polska, is a new AmCham member. Mariusz Bielawski, member of the board, is the contact person.

Luxury retailer Moët Hennessy Poland (lvmh.com) is a new AmCham member. The contact person is Jacques Marbot, corporate & private sales manager.

Provider of luxury hospitality Courtyard by Marriott Gdynia Waterfront (marriott.com/hotels/travel/ gdncy-courtyard-gdynia-waterfront) is a new AmCham member. The contact person is Joanna Stachowiak-Szczotko, general director.

Provider of global money transfer solutions Moneygram Payment Systems (moneygram.com) is a new AmCham member. The contact person is Peter Ohser, executive vice president for business development.

Specialist in high-performing management professionals Crossover (crossover.com) has joined AmCham. The contact person is Markus Tornberg, general manager.

Consulting firm North Highland Poland (northhighland.com) has joined AmCham. The contact person is Rayner Reid Graeber, director of business development.

Private equity and investment advisory specialist CVC Capital Partners Poland (cvc.com) is a new AmCham member. The contact person is Krzysztof Krawczyk, partner.

Electricity provider PKP Energetyka (pkpenergetyka.pl) has joined AmCham. The contact person is Wojciech Orzech.

Provider of innovative IT solutions for business Econocom Polska (www.econocom.com) is a new AmCham member. The contact person is Gildas Chouin, country manager. Electronics manufacturer Flextronics International Poland (flextronics.com) is a new member of AmCham. The company is represented by Andrzej Polojko, general director.

Reesco (reesco.pl), an interior design firm, is a new AmCham member. The contact person is Agnieszka Kawęcka, head of business development. Developer and manufacturer of innovative products and solutions for industry Rockwell Automation (Rockwellautomation.pl) is a new AmCham member. The contact person is Maciej Sieczka, general manager.

Media company Gremi (gremi.pl) has joined AmCham. The contact person is the company owner Grzegorz Hajdarowicz.

The Polish branch of Takenaka Europe (www.takenaka.eu), a project management company, is a new AmCham member. The contact person is Katsutoshi Takao, general manager.

Freight specialist Jeppesen Poland (jeppesen.com) has joined AmCham. The contact person is Rafał Stepnowski.

Law firm Wolf Theiss (wolftheiss.com) has joined AmCham. The contact person is Ronald B. Given, co-managing partner. SPRING 2016 AMERICAN INVESTOR

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Newsline News from AmCham and its members

AmCham Charity Drive 2015

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n December 2015, for the 20th consecutive year, AmCham held its Christmas Charity Drive to help children from eight orphanages across the country and the single mothers’ shelter in Słomczyn. Our member companies donated products and Christmas presents for children in need, while individual members donated food, clothing, toys, and cosmetics. AmCham is grateful to Procter & Gamble, which donated large amounts of laundry detergent, toothpaste, and other personal care items, all of which are much needed by the organizations we support. Among other large donors we would like to recognize the Warsaw Marriott Hotel, which delivered two pallets of food, clothes, cleaning products and Christmas gifts donated by their employees; McCormick, which donated large quantities of snacks and spices; and BP Europe, which delivered 100 sets of blocks to the children at all the orphanages. With the help of Panattoni and Accenture, AmCham financed sports equipment, food and clothes for children at an orphanage in Rzeszów. Special thanks go to Leaseplan, which bought Christmas gifts requested in letters sent to Santa Claus by the residents of the Bochnia orphanage, and Mattel, which delivered plenty of toys and gadgets for the youngsters. We are also grateful to X-Press Couriers and Sky Net Worldwide for delivering our gifts all over Poland. Also last year, the AmCham Foundation sent the proceeds from its 2015 Fourth of July raffle to the Ronald McDonald Foundation for the needs of their newly opened Ronald McDonald House in Kraków, and bought an oximeter for the Litewska Children’s Hospital in Warsaw. Before the 2015 holiday season, Anita Kowalska, who leads the AmCham Charity program, took part in a Radio Kolor show called Leaders of Smiles and talked about AmCham’s charitable activities in Poland. 6

AMERICAN INVESTOR SPRING 2016

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1. AmCham office packed with donated goods. 2. Anita Kowalska, AmCham Charity Drive manager, preselecting aid items. 3. Justyna Sokołowska, Radio Kolor; Anita Kowalska.


Agenda Intelligence from AmCham Committees Business Technology & Services “Cyber Detective Work: Techniques for Professionals in the Digital Era” was the title of the presentation delivered by Andrew Haggard of OSINT (Open Source Intelligence) for the AmCham Business Technology & Services Committee in January. He covered such problem areas as the dynamics of the virtual world and the exponential growth in the numbers of devices hooked up to the Internet, digital pollution or streams of digital data each Internet user leaves behind, and digital hygiene—the basic steps Internet users can take to protect their devices online. The presentation was supported by practical case studies showing how users have been targeted online with spear-phishing. Chris Mondini, VP for Business Engagement at the Internet Corporation for Assigned Names and Numbers (ICANN), met with the committee in January to talk about what will happen when the US government relinquishes control of ICANN. Oversight of technological standards on the Internet was shifted from the US Department of Defense to ICANN during Bill Clinton’s presidency, making the Internet accessible to as many people as possible around the world. As a distributed network of independent networks, the Internet has no central control and no central point of failure. But it needs a supervisory authority to ensure the compatibility and functionality of its addressing system so new devices hooked up to the Internet can work and keep helping the network expand. ICANN is the guardian of that central coordination. ICANN has had the backing of the US government through a deal with the National Communications and Information Agency, which is supervised by the US Department of Commerce. The US government’s support for ICANN was meant to show the world that the US administration is committed to the development of the Internet. The strategy was to let people use the Web and figure out ways they could benefit from it. It was hugely successful. Today, the Internet is vital to the development of all economic sectors. Globally, there are 3 billion Internet users, but the next billion are expected to come online within the next four years. That will be more than half of the world’s population of more than 7 billion. Today, Mondini explained, the Internet is owned by what is called the Internet multistakeholder community: business, government, society—including Internet users— and technologists. In September 2016, the contract through which the US government backs ICANN expires and will not be prolonged. The idea to withdraw its formal backing was considered as far back as 2014 when the US government concluded that with the Internet being a global network, it should no longer be involved, to avoid accusations of using ICANN for its own ends in international politics.

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Some countries attempted to stop the Internet at their borders and threatened to set up their own address systems and create their own networks, which would not be compatible with the global Internet. This would be a bad idea because the Internet is meant to be global, not regional. Had the idea caught on with other countries it would have spelled the end of the global Internet, and a new term would have come into circulation: the “Splinternet.” Mondini said that with the withdrawal of US government backing, ICANN will not change its mission, because none of the actors will change. It will just continue to do what it has been doing independently. In April, the committee held a meeting with Dave Piscitello, VP for Security and ICT Coordination at ICANN, who talked about the threats cybercrime poses to the existing domain name system. Piscitello explained that DNS, the current system for assigning domain names, matches the IP address with the name of the network. So a domain name, such as abc.com, translates into a particular numerical address. Currently there are four sets of digits, separated by dots. A new form of addressing is coming to the marketplace, allowing many more addresses to be used, which is important given the rapid growth of computers on the global network. But DNS is a distributed system, which means there is no one single place on the Internet where all the domain names are stored. They are stored on “name servers,” and there are plenty of them on the Internet. They tell web browsers where to go to connect with websites Internet users are looking for. If they cannot find the desired name, users’ computers go to root-name servers, which hold the essential information about web addresses registered on the Internet. Criminals and hackers can also set up their own websites. The data for directing traffic to their websites will be stored in DNS servers. So it happens that DNS data are stored where both criminals and legitimate users intersect. This gives hackers opportunities to play games with legitimate users. There are some 30 types of attacks, as classified by targets and objectives, from obtaining information to flogging servers with data so they get clogged and cannot respond, keeping customers from accessing the site. Piscitello said the DNS system may be compromised by hackers to perform different sorts of attacks. He gave some bestpractice tips on how companies should configure their DNS servers and concluded by explaining how the law enforcement community is working to intercept the most talented hackers.

EU Affairs In March, the AmCham European Union Affairs Committee held a meeting with Jan Filip Staniłko, deputy director of the Inno-

vation Department at the Ministry of Development. He is also co-founder and general director of a Polish think-tank, the Institute of Industrial Studies. Staniłko talked about the potential for innovation by Polish industry under the government’s Responsible Development Plan (aka the “Morawiecki Plan”). Staniłko admitted there are areas of the Polish economy, such as coal mining and manufacturing, which are not associated with innovation. He pointed out that innovation does not happen just because companies have enough money to invest in innovative development. There are other aspects of successful innovating, and they depend on the specifics of the products that companies sell, their life cycles, and how global the companies are. He presented theories of how innovation comes into play with certain products in various historical periods. He concluded that the more global a company is, the easier it will find it to sell new, innovative products.

Human Resources Management New rules regarding fixed-term contracts for employees were the topic of the AmCham Human Resources Management Committee meeting in January, with guest speakers from law firm CMS Poland: Katarzyna Dulewicz (partner), Tomasz Sancewicz (senior associate) and Magda Kalinowska (associate). The most fundamental change is the time limit for fixed-term contracts. The total duration of all fixed-term contracts signed with the same employee will be limited to 33 months. No such limit existed before. For existing contracts, the 33-month period will be calculated from the date on which the new rules came into force. An employer can hire a worker for a fixed period exceeding 33 months only if it has objective reasons which are spelled out in the contract. This also applies to contracts already in force. No guidelines have been given on what these objective reasons might involve, so this will be a gray area for some time. Another important change is that the parties can enter into a maximum of three fixedterm contracts (instead of two as before), but irrespective of any gap between the contracts. An existing contract will be deemed to be the first one in the succession. The last but not the least, the presenters talked about extended notice periods, whereby the employer will be able to terminate any fixed-term contract on notice of 2 weeks, 1 month or 3 months, depending on an employee’s length of service with the employer. Previously, only a 2-week notice period applied in the case of fixed-term contracts. A justified reason for termination will not be required. The new rules apply to existing contracts, unless the contract was made for less than 6 months or did not provide for early exit.


The one-and-only AmCham 4th of July Picnic will be held on July 2, at Tor Wyścigów Służewiec ul. Puławska 266 Warsaw

For more information visit www.amcham.pl. For sponsorship opportunities contact anita.kowalska@amcham.pl


Agenda Intelligence from AmCham Committees Manufacturing and Energy & Environment In February AmCham’s Manufacturing Committee joined forces with the Energy & Environment Committee to meet with Tomasz Styś, a waste management expert at the Sobieski Institute, who talked about the EU’s Circular Economy proposal and its impact on the Polish waste management system. The Circular Economy package, presented by the European Commission in December 2015, brings a number of opportunities and challenges to the Polish waste market. Styś focused on methods of organizing packaging waste systems and key aspects related to selective collection of waste. He also talked about 2020 and 2030 targets for packaging waste systems and the current market potential of communal waste in Poland.

Marketing & Communications In January, the AmCham Marketing & Communications Committee met with Nate Espino and Paweł Kozłowski from Aldgate Strategy Group, financial communications strategy specialists, to discuss how to work with the Polish media from the point of view of advertisers and how to gain the attention of target groups in Poland. The third speaker was Paweł Gała, managing partner of MEC, a global media agency with a local presence in Poland. Gała said that the advertising market across traditional media in Poland is worth about 0.5% of the country’s GDP, which translates into USD 7 billion. The ad market was flat in the last three years even as the economy was growing, and before that advertising expenditures (on traditional and digital media) were actually shrinking in Poland despite economic growth. This was because international companies were cutting their budgets in the region to optimize market costs. Gała also said that launching a new consumer brand in Poland is unthinkable without television, as certain shows are very popular and TV advertising is still relatively inexpensive. In fact, Poland is one of the cheapest countries in the CEE region for reaching television audiences. The downside of TV is weakness of the ad message, because there are increasing numbers of commercials being aired on television. But TV is still holding strong when it comes to attracting viewers, especially compared to markets in Western Europe. Poland has one of the largest numbers of TV channels available through satellite and cable. Publishers have good connections with readers, and print titles are doing fine in Poland. New titles continue to appear, targeting more affluent consumers. Print media are also effective at building “purchasing intent,” especially with male consumers. Radio in Poland has not been hurt too

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badly by the digital revolution, as the Internet was treated as a natural extension of existing platforms and an alternative way listeners can tune into their favorite stations. In terms of digital media and television content, watching movies and TV shows online is popular in Poland. According to an MEC study, 91% of Internet users watch long-form content online and 73% use video on demand; 27% use Torrent to access video content and 100% use YouTube. Gała said that in Poland the development of the Internet is not jeopardizing television, as it is viewed as just another way of accessing TV programs. Nate Espino gave an overview of the politics behind the media market in Poland and the effect of politics on the advertising market. Because the political scene is split in two, people use media that reinforce their own political views. At the regulatory level, Espino said, the current government has replaced the management and many journalists at state-owned media. This change was carried out quickly and more radically than such changes were made by governments before. The government also plans to introduce new legislation governing the public media to shift their mission toward promoting Polish culture and tradition instead of global pop culture. This may cut audiences for the national media, and advertising may follow these audiences to private channels.

Sustainable Real Estate In January, the AmCham Sustainable Real Estate Committee met with CBRE’s Jonathan Steer, senior director of building consultancy, and Joanna Mroczek, director, who talked about the results of a survey of Polish employees’ preferences in the work environment and practical tools to organize offices in light of changing needs and expectations. Their presentation was followed up by Anna Rajkow-ska, facilities manager at Google, who talked about collaborative and inspiring office interiors that help employees perform at their best, stay healthy, and think big. Mroczek showed how the survey sample reacted to different types of offices: cellular offices (most often used by law firms), openplan offices, and agile offices, where there are no personalized desks and employees can choose where they work. For cellular offices, most of the sample said they would rather work in that space because it is predictable and offers no surprises. In open-plan offices, the answers depended on the respondents’ experience working in such offices. Those who did not have that experience had strong reservations, but those who have experienced that environment were apparently “keen on working in it,” Mroczek said. She concluded that we should not be afraid of changes in our work environment. When it comes to agile offices, employees

in Poland expressed an interest in part of the concept, such as meeting rooms and call rooms—places where employees can make phone calls in privacy. In general, the diversity of the environment seemed an attractive aspect to many respondents. Another new concept in office design, coworking offices, fared poorly in the poll. But Mroczek thought this was because the sample apparently misunderstood the concept, which is not about working in large groups but working in connection with people from other departments or companies to increase work efficiency and creativity. Anna Rajkowska said that the ideal of a good office is a place where people work efficiently, are happy and productive, and still are “energized to go home” when the work is done. Google designs its office space to provide employees focus, collaboration, learning and socializing. Those are all key aspects of the perfect office for a company that is present in more than 100 cities globally and employs over 55,000 young people in over 120 office buildings. Rajkowska said this all means Google is a very open company. This is reflected in its holistic approach to work and the work environment. And last year the company had over 2 million guests worldwide. Those were business and academic partners, but also employees’ family members and friends. To meet the noshing needs of such a diverse crowd, Google operates some 185 cafés in its offices worldwide, but also uses catering and micro-kitchens. Every day 180,000 meals are served at Google offices around the world, Rajkowska said. With such a philosophy for work and the workplace, Google is driving a change in office planning and design. While the company mostly uses open-plan offices, it still maintains “a healthy ratio of different types of office spaces,” Rajkowska said. This includes old-style offices with rooms for just one occupant—senior managers. As Rajkowska put it, “There are still people who need to work in a closed environment.”

Tax & Financial Services In February, the AmCham Tax & Financial Services Committee held a meeting with Paulina Karpińska-Huzior, a tax advisor and attorney at Chadbourne & Parke, who talked about the changes in tax procedure governed by the Tax Ordinance which entered into force in January 2016. In her presentation, Karpińska-Huzior discussed the new rule that doubts should be resolved in the taxpayer’s favor, and what this means for taxpayers. She also discussed the procedures for obtaining tax interpretations and submitting documents in tax cases, changes in tax payments, including refunds of overpayments, new rules for calculating default interest, the statute of limitations on tax liabilities, and tax review and audit procedures. Karpińska-Huzior ended with an outline of


Agenda Intelligence from AmCham Committees

the new competencies of tax offices. In March, as the deadline for filing personal income tax returns approached, the committee held its annual KPMG Tax Session. This year the theme was “International Taxpayers Under Scrutiny by the IRS,” with presentations by Dagmar Gessner-Gaspar and David Villwock from KPMG’s US Tax Center in Frankfurt, and Andrzej Marczak and Mateusz Kobyliński from KPMG Global Mobility Services in Poland. They covered a diverse range of topics, from increased IRS initiatives focusing on international taxpayers, an overview of US taxation, informational filing requirements, and revocation of US passports due to tax debt, to current issues regarding US withholding taxes. The venue

was the Warsaw Marriott Hotel (pictured). In April, the committee held a meeting with Marcin Matyka from Norton Rose Fulbright (and co-chair of the Tax & Financial Services Committee), who talked about the plans to reintroduce a general anti-avoidance rule (GAAR) into the Polish tax system. In his presentation, Matyka explained that the main purpose for implementing a GAAR in Poland is to target multinational and Polish companies that minimize their corporate income tax liabilities in Poland by applying legal tax-avoidance measures. The idea behind the GAAR is for the real economic (business) outcome of transactions to be subject to taxation, regardless of the legal form employed. Matyka said that according to the bill to amend Poland’s Tax Ordinance, the GAAR will apply to transactions taking place after the clause is introduced. If the tax advantages gained through an artificial transaction or series of transactions do not exceed PLN 100,000 the GAAR will not be applicable. He noted that the Ministry of Finance will be the only authority seeking to apply the GAAR during tax proceedings. According to the bill, a new advisory body will be appointed to provide opinions on the applicability of the GAAR during tax proceedings conducted by the Ministry of Finance. In addition, taxpayers who wish to confirm that the GAAR will not be applicable

will be able to apply to the ministry for formal confirmation in their specific case, following disclosure of the details of the planned transaction and the expected benefits, including tax benefits. The fee for issuing an opinion is expected to be PLN 20,000. But individual tax rulings issued with regard to artificial transactions would no longer provide protection to the taxpayer. Matyka expected that the GAAR would return to the Polish tax system by the middle of 2016.

Travel & Tourism In April, the Travel & Tourism Committee met with Grzegorz Wolff from the EU Funds and Economic Development Department of the City of Warsaw and Mateusz Czerwiński, director of the Warsaw Convention Bureau, to talk about the city’s vision of how the private sector can contribute to Warsaw’s development and how Warsaw can promote the innovative economy and entrepreneurship. Wolff said that Warsaw has the largest human potential in Poland, with 1.7 million citizens living in the city and a total of 3.5 million in the metropolitan area. And every day 1.5 million commuters come to Warsaw to work or study. He mentioned a survey finding that 95% of Warsaw’s population are happy about the quality of life in the city. Wolff said that Warsaw offers investment opportunities in such areas as urban infrastructure, with the second Metro line a recent example. Further investment opportunities lie in the area of lifestyle. Meanwhile, Warsaw’s cultural institutions provide the most extensive offerings of any Polish city. Mateusz Czerwiński talked about the opportunities for business in the meetings, incentives, conferences and exhibitions industry (MICE), where he said Warsaw has a strategy to compete with other centers in Europe such as Vienna. Czerwiński said that to convince convention organizers to come to Warsaw, the Warsaw Tourism Organization, of which the Warsaw Convention Bureau is a part, targets top decision-makers in the MICE field. Last year the city held a trade show bringing 80 of these key individuals to meet leaders of the city’s administration. They went home loaded with information about Warsaw’s potential for hosting MICE events. He said this year a similar promotional campaign will attract another 70 or more decision-makers in the MICE industry. Hopes are high that Warsaw will become a hot spot on the MICE map of Central & Eastern Europe.

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AmCham Committee Guide

For the most recent information about the AmCham Committees and upcoming events visit amcham.pl Agri, Food & FMCG

Mission: To provide a platform for discussing and overcoming issues and identifying opportunities related to operational activity for companies in the agricultural and food sectors in Poland by creating a basis for dialogue and expertise leveraged among producers, sector professionals, experts and decision-makers in the Polish government. Co-Chairs: Piotr Bonisławski, Eli Lilly Polska; Andrzej Pawelczak, Animex.

Business Technology & Services

Mission: To provide a platform for discussing, identifying and addressing common SSC/BPO issues related to hightech operations; to maintain contact with local authorities, educational and governmental institutions to present a unified business perspective and options for cooperation. Co-Chairs: Jacek Stryczyński, Lionbridge; Angelo Pressello, Direct Communication.

Defense & Security

Mission: To discuss issues regarding the defense industry and exchange information, to create a networking forum for members, and to lobby and encourage decision-makers in government. Co-Chairs: Stan Prusiński, Boeing Europe; Marta Frąckowiak, DLA Piper.

Digital Economy

Mission: To provide a forum for innovative companies to support the digital economy in Poland as a key driver of sustainable growth. It aims to raise awareness about the importance of balanced investments in digital infrastructure, fully exploiting digital potential, and increasing competitiveness in the global environment. Co-Chairs: Patrycja Gołos, UPC; Igor Ostrowski, Dentons.

Energy & Environment

Mission: To help members develop their energy and environmental business in Poland. By helping members work collectively to overcome any systemic difficulties encountered in their business the committee aims to increase the level and quality of investment and activity in these sectors. Co-Chairs: Michał Koczalski, CEC Government Relations; Mariusz Mielczarek, GE Central and Eastern Europe.

European Union Affairs

Mission: To provide a platform for discussing business-related issues coming out of the EU, including EU funds; to work with AmCham EU on mutual lobbying initiatives; and to represent member companies before the European Commission and the government of Poland. Co-Chairs: Magdalena Burnat-Mikosz, Deloitte; Jerzy Thieme.

Health & Pharma

Sustainable Real Estate

Mission: To discuss issues regarding the complexities of the real estate market in Poland, and exchange information. To be an educational and networking forum for members and to lobby and influence legislative departments of the Polish government. Co-Chairs: Halina Więckowska, K&L Gates; Magdalena Pavlak-Chiaradia, ERM Polska.

Tax & Financial Services

Mission: To represent the voice and opinions on various issues of the health sector, to discuss conditions, news and challenges of the sector; to provide expertise. Co-Chairs: Ernest Bartosik, Unipharm; Aldona Zygmunt, Pfizer.

Mission: To provide a platform for identifying tax and financial issues and create an educational forum to keep AmCham members informed on current and upcoming legislation. Co-Chairs: Adam Soska, GE International; Marcin Matyka, Norton Rose Fulbright.

Human Resources Management

Travel & Tourism

Mission: To create an information exchange forum of HR professionals to share, discuss and learn about the latest trends in HR management and influence local policy and decision-makers. Co-Chairs: Jolanta Jaworska, IBM Poland; Agata Dulnik, Accenture.

Mission: To provide a platform for discussing issues and problems related to travel, leisure and the hospitality industry and to provide networking opportunities and to discuss trends and standards in the industry that will allow members to fully benefit from AmCham. Chair: Tim Hyland, FCm Travel Express.

Manufacturing

Mission: To provide a platform for discussing issues and problems related to the manufacturing sector in Poland and to provide networking opportunities; to discuss conditions, news and challenges in the manufacturing sector across Poland; to coordinate with AmCham’s annual Manufacturers’ Forum. Co-Chairs: Joanna Bensz, CH2M Polska; Przemysław Paździorek, 3M Poland.

Marketing & Communications

Mission: To provide a forum for member firms to share knowledge and exchange experiences in marketing, communications and PR; provide educational and networking opportunities for member firms interested in these areas; and serve as an advisory body for AmCham. CoChairs: Anya Ogorkiewicz; Ewa Suszek, Deloitte.

THOUGHT LEADERS

Individuals who are point people and experts for specific areas of interest for AmCham that do not require a formal committee structure or activity level. SME & Entrepreneurship Alain Bobet

Innovation Bogusława Skowroński

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Cover Story Polish labor market

The workforce cliff I

n April, a man we’ll call Łukasz interviewed for a job at a restaurant in Warsaw’s Old Town. He hoped to get a better deal than in the place he had just left, because with the summer tourist season approaching Warsaw restaurateurs are in desperate need of waitstaff and kitchen workers. During the interview he said he had 20 years’ experience as a cook and had even tried to open his own small business. “It makes no sense to work for someone else all your life,” he explained. His bakery near Plac Bankowy failed due to “too-high rent and the high cost of labor.” The little adventure of running his own business was a lesson to him. He learned it is “virtually impossible to run a small business legally, which is to pay all the taxes and charges on hired labor in Poland.” As he had expected, at the restaurant Łukasz was offered a minimumwage contract of PLN 1,850 gross a month (PLN 1,355 after tax), so the employer could minimize the social security charges he would have to pay on top of Łukasz’s salary. But then he offered “at least twice as much” in cash under the counter. With this, Łukasz landed himself a better deal than he had at his previous restaurant, where he was paid the same minimum wage through an employment contract and only half of the amount he was now offered in cash under the counter. Łukasz is no entrepreneurial whiz (and perhaps not a strategist when it comes to what he is supposed to say during an interview), but there are hundreds of thousands like him in Poland—relatively young and with no particularly attractive education— who, as breadwinners, are trapped between unemployment benefits and working for salaries that buy a living standard which borders on poverty. 14

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When downward demographics meet massive work emigration


official numbers According to data from the Central Statistical Office (GUS), in 2013, out of the total of 14.3 million employees in Poland, nearly 96% of them worked in companies and institutions where the median monthly salary was below the monthly social minimum defined by the Institute of Labor and Social Affairs (IPiSS) at PLN 4,856 gross for a family of four. What is more, in this number there were nearly 250,000 employees working at companies with median salaries below the poverty line (PLN 2,561 monthly gross according to IPiSS), while nearly 500,000 employees worked for companies with median salaries only PLN 2 (sic) above the poverty level. will they leave? Łukasz and other jobseekers in his situation do not need to learn to live in a permanent state of social insecurity, however. They can simply pack up their things (and oftentimes their entire family) and go find a job in one of the many EU countries where workers from Poland are more than welcome. It is estimated that over 2 million Poles have done just that in recent years. Add to this 460,000 people who get sent to construction sites across EU countries by construction companies or HR agencies in Poland annually, and you will see that quite a significant portion of the country’s labor force have gotten attached to labor markets outside of their country of origin. Government action This is a problem for Poland’s economy, and it has been recognized by the new government. The first target was “junk” work contracts, a common form of employment under a civil mandate contract (umowa zlecenia), where the “employee” acts as a subcontractor and not a salaried worker, which gives the employer the liberty of not paying social security and medical insurance on the person’s contract. In this case the employee is free to register as a sole proprietorship, but this means the person will have to pay social security and medical insurance from the “salary” he or she receives, and in the case of pay around the country’s median the amount of money left after income tax borders on the poverty level anyway. So many employees do this but do not register as a sole proprietorship, just to stay financially afloat. In February, the government introduced a law making it obligatory for employers to pay social security on civil contracts they enter into with their “employees.” However, the payment is deducted only from the minimal wage figure, so anything above PLN 1,850 a month is not “taxed.” Another government move to ensure social security confidence for people employed on civil contracts is to boost the minimum hourly wage to PLN 12. This is a fair deal, said Anna Wicha, country manager at HR company

Adecco, who noted that there are instances when people would be paid PLN 5 an hour net, which is “an abuse.” The same notion was reflected in March by Deputy Minister of Family, Labor and Social Policy Stanisław Szwed, who told the press, “A company that hires at PLN 5 an hour net should rather go bankrupt.” The government aimed at introducing the PLN 12 minimum in April, but the decision was postponed as social consultations continued on what jobs may be exempt from the rule. The new minimum is likely to become law by September. employers’ reaction How employers will react to it is a guess at this point. What is known, however, is that following the introduction of social security payments on civil contracts of this kind, employers have resorted to hiring staff on the basis of another type of civil contract—a contract to deliver a specific work and the rights to the work (umowa o dzieło), which is not yet subject to social security and can also provide an income-tax break for the contractor. According to Anna Wicha, “The number of umowa o dzieło contracts registered with the tax authorities has grown significantly since February. At the same time, the number of umowa zlecenia contracts has dropped. Employers don’t want to enter into such contracts because they are burdened with social security fees.” This all shows that the determination of employers in Poland not to pay social security on the contracts with people who work for them is strong. A few months back, one of the largest dailies in Poland, Gazeta Wyborcza, ran an article about how “creative” some Polish companies are—to the extent that an office cleaning company could hire cleaners on an umowa o dzieło and somehow explain that the individuals clean the offices based on a system of work “of their own authorship.” a threat of overregulation? Minimum wage and social security on civil contracts are predominantly an issue for small and medium-sized companies. (Of all companies in Poland, 95% are SMEs, generating over 50% of the country’s GDP.) Thus these issues generally have no direct impact on US companies in Poland, which largely hire workers under regular employment contracts and pay above-average wages. But the government’s drive to extend social security to all workers may have a direct effect on foreign investors in the temporary employment sector. Currently the temporary employment sector represents some 1.2–1.3% of the total labor force in Poland—about a third of the figure in Western Europe, where depending on the country it is 3–4% of all employed people. Temp workers enjoy the same salaries and social benefits (including paid holidays) as regu-

lar workers, and their contracts are subject to social security and medical insurance premiums. The difference between the two is that temp work contracts expire on a predefined date. One of the latest regulations affecting temporary work is that, in a nutshell, once a temp worker has been employed for 33 months, he must be rehired under a permanent employment contract. This goes a bit too far, according to Anna Wicha. She explained that temporary work is about labor flexibility, and virtually every firm in the modern economy is subject to business cycles. The ability to resort to temporary workers adds to their competitiveness. In other words, temporary workers are people who don’t need to be there all the time (as core workers do), but come and go as need be. What is more, the best of them get hired on full-time contracts when vacancies arise, so the status of a temporary worker is the best way for those who want to work permanently to get acquainted with the company, prove their value, and get hired. According to Wicha, if the temporary work segment becomes overregulated, companies will simply resort to outsourcing of temporary work. This in turn will be bad news for jobseekers, as outsourcing is not yet well-defined in legal terms, forcing candidates into self-employment and other “alternative” solutions. where’s dual education? In its role of avatar in providing social security to employees in Poland, the government may look further than just work contracts, and one area is vocational training. A lot has changed in this department since the 1990s, when many vocational schools in technical specialties lost their way in the fast-changing economic situation and had to close down. Aware of the need to educate people in line with the demands of the economy, in August 2015 the former government introduced a reform called “dual education,” where vocational school curricula could be 50/50 theoretical and practical, and the practical education is undertaken in cooperation with a company hiring students as interns and paying for their work. The new regulation also stated that companies collaborating with vocational schools could have a say in the theoretical training as well. So far the reform has been implemented as a pilot program at a number of schools in cooperation with companies in special economic zones. The results are good, according to Sławomir Majman, CEO of the Polish Information and Foreign Investment Agency (PAIiIZ), which helps large foreign investors start projects in Poland. Speaking at a press conference in April, Majman said that foreign investors “praise us for the development of vocational training.” But in its role in keeping the workforce in Poland, the system of vocational training is still

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Cover Story Polish labor market largely counterproductive, according to Piotr Wojaczek, CEO of the Katowice Special Economic Zone, Poland’s largest SEZ and a substantial automotive cluster. Speaking at the AmCham Manufacturers’ Forum in Warsaw in April, he said that while there are thousands of industrial jobs in the zone for technicians, mechanics, and specialists in automation and electronics, the vocational schools in a city bordering the zone produced 150 hairdressers and 200 cooks last year, and only 23 mechanics and 3 electronics specialists. Wojaczek approached the educational authorities of that city to complain that they were producing graduates with weak potential for employment. He was surprised to learn that all those cooks and hairdressers find jobs instantly in Ireland or the UK. Wojaczek said that reform of vocational education in Poland will be a lengthy and painful process because the status quo is guarded by people who do not want to lose their jobs. examples to follow? It is a tough mission for the authorities to continue with the reform of the vocational education system, but US companies in Poland may have something to offer in this respect. Speaking at the Manufacturers’ Forum, Paweł Wideł, GM’s government relations and public policy director for Poland, Czechia and Slovakia, noted that almost every big American manufacturing company in Poland sponsors either a vocational class or an entire school. Some go beyond that. GM cooperates with the Silesian University of Technology on many levels, including a scholarship program for PhD students. GE, which runs a number of R&D centers in Poland, was behind the creation of an undersea exploration specialty at the Faculty of Ocean Engineering and Ship Technology of the Gdańsk University of Technology. Flexitronics, a US electronics producer with a factory and logistics center in Tczew, northern Poland, employing over 3,200 people, cooperates with the Gdańsk University of Technology in running a graduate program dedicated to quality in technology. The company and the university also plan to launch another program in electronics manufacturing engineering. The graduates of all these programs have a great chance of finding well-paying jobs and career opportunities in Poland, close to where they studied. According to Jolanta Jaworska, government and public relations director at IBM Poland, Polish universities have improved a lot in the way they cooperate with business. “Teachers are more willing to boost their qualifications, especially in high tech,” she said. “They are learning to be able to pass those competencies to their students.” BPo boom Looking at the efficiency with which investors create and keep jobs in Poland, the most suc-

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cessful of success stories is the growth of business process outsourcing, IT and shared-services centers. An industry that did not exist 11 years ago now supports more jobs than the country’s entire coal mining industry. “This is an industry which has been growing at up to 20% year on year,” said Richard Kałużyński, managing partner of Odgers Berndtson, a leading executive search company. “It is the biggest growth area we have seen in Poland for the last 10 years. In 2015 the sector employed over 300,000 people.” According to PAIiIZ data, the leaders are Polish investors (214 centers as of 2015), followed by American (155), British (49), German (44) and French (42). Their preferred locations include Warsaw, Upper Silesia, Kraków, Wrocław and Łódź. The leader is Kraków, with over 30,000 jobs, followed by Warsaw (28,000) and Wrocław (23,000). The growth of the sector, made possible thanks to the deep pool of well-educated workers in Poland, displays yet another quality: Poles can innovate successfully. Payment solutions developed by Polish programmers at the IT center run by Citi Handlowy, part of Citibank, have become a standard used by the bank globally. At a conference in Spain last year, the chairman of Santander spoke enthusiastically of the success of the bank’s subsidiary in Poland, Bank Zachodni WBK, and how its Polish programmers developed payment solutions which were then implemented by the group worldwide. According to IBM’s Jolanta Jaworska, “The services delivered in Poland are increasingly advanced. The competencies of the Poles have been tried and appreciated.” With such a great track record, the sector keeps growing and looking for new regions to expand into. Michael Dembiński, chief advisor to the British Polish Chamber of Commerce, said at a press conference in April that British investors in BPO are eying such cities as Lublin, Szczecin and Radom, and “other cities where there is a university,” as the established locations like Kraków and Wrocław have so many centers they are “running out of people.” Jaworska noted that there are some problems with hiring the right people but “it all depends on the kind of competencies investors are looking for.” The highest demand is for financial and accounting specialists, as well as IT and informatics. Another problem is to find skilled candidates with the knowledge of languages that the investor is looking for. English is not enough, and Scandinavian languages in particular are also in demand. She added that companies with well-known brands have it easier in finding the right candidates: “People who care about their careers tend to pick well-known, big companies.” Conversely, she said, “Not so well-known companies tend to offer better work conditions and salaries.” According to Zbigniew Płaza, managing

partner at Boyden, an executive search company, there is a growing problem with the supply of engineering talent on the marketplace. “In recent years,” he said, “technical universities have not been recruiting too many people because, after all, technical studies are difficult. Hence the vacuum in supply, which is getting bigger.” Płaza said another shortage area includes marketing specialists, sales and business management. A relatively stable supply of professionals is still coming online in finance-related areas, such as finance directors, controllers and accountants. There are plenty of HR specialists as well. Elżbieta Laskowska, assistant to the CFO of Focus Research Europe, a market research company, confirmed that it is hard to keep the best people. “Highly specialized professionals establish their own companies or go abroad because of the higher salaries they can make there and more career opportunities in international companies abroad,” she said. When it comes to business management, there is a very limited group of people who have the right experience. Managing a BPO center in Poland is a relatively rare professional experience, and those who can do it are in high demand as new projects pop up around the country. Jaworska said, “It is a problem to make managers move to a new place. Higher salaries and benefits come into play.” emigration the default setting? Higher salaries and better job opportunities are what makes graduates in Poland consider other countries. According to Zbigniew Płaza, the vacuum in the supply of engineering talent to the labor market is getting bigger because university graduates with specialties that are in demand in the West just go there. “They can make more money and generally have better work conditions and career opportunities,” he explained. “The higher you look up the corporate pyramid, the fewer people available there are. It is a really painstaking problem to find the right people. It’s brain drain.” Other executive headhunters who talked to American Investor on condition of anonymity confirmed that view. One said that a Scandinavian company that set up an IT center in Poland two years ago has lost some of its best people. Having gained the right entrepreneurial contacts over the Internet, they moved to Berlin, taking their ideas with them. Another HR consultant said that startups in Berlin and London attract Polish entrepreneurs, who after a year or two there move on to Silicon Valley. Then they “are lost to the Polish economy forever.” A source explained, “If you are somebody who has invented something really valuable, you are not going to wait in Kraków for a grant or some money from the government. You are going to fly to Silicon Valley for USD 500. Your investment is a ticket to the US. This happens.


It is there where you get funding if your invention is great.” Big IT companies also do headhunting in Poland for positions in other countries. “Talented people start to get picked off,” the same source said. “It is happening probably more often than we are aware of.” workers from the east According to Michael Dembiński, the shortage in human power is felt not only in the service sector but also in manufacturing. “British companies who established factories here, most often in Lower Silesia, have been signaling problems,” Dembiński said. “Some people are hard to find, and it is rather about technicians than people with a master’s degree. They provide bus rides, sometimes as long as 20 to 30 kilometers, to people to have them work in their factories.” Other companies rely on relatively inexpensive Ukrainians. “Had it not been for the Ukrainians, we would not be in business today,” said an executive from a food process-

Minimum wage and social security on civil contracts are predominantly an issue for small and mediumsized companies. Thus these issues generally have no direct impact on US companies in Poland, which largely hire workers under regular employment contracts and pay aboveaverage wages. ing company on condition of anonymity. Zbigniew Płaza confirms that companies in Poland, to varying degrees, have begun to hire Ukrainians. They were hired in the service sector first, but now are increasingly likely to be employed in the technical sector. This should come as no surprise to anyone, especially as a million Ukrainians are estimated to live in Poland. Elżbieta Laskowska of Focus Research Europe agreed, saying that the company employs foreigners from the East “because of their knowledge of languages.” But they are not a long-term solution, argued Płaza: “They treat Poland as an entry point to the European Union. They make money in Poland and send it back home to Ukraine. Some of them may stay here longer for personal reasons. The majority of them will find better opportunities outside of Poland, mostly in Germany. Poland is just a transit country for them.” He noted that according to data from the Goethe Institute in Poland,

Ukrainians and Belarusians comprise 70% of all those taking up German language courses today. And soon Ukrainians may not even need Poland’s transitory advantages to make their way to Germany. In April the European Commission proposed to lift visa requirements for Ukrainians who want to travel to any EU country. While the Commission said the visa exemption will not provide the right to work in the EU, one can safely estimate that with the inroads Ukrainian employees have already made in Germany, introducing more will be a pure formality. After all, Germany faces a steep decline in population growth, and such a replacement workforce could not be more welcome. Business as usual The shrinking pool of the workforce in Poland is not a surprise for many companies that monitor the labor market vs. demographics. In its internal analysis, McDonald’s rated Germany, the Netherlands, and Poland as the top three markets in the EU where the company will have to face a steep decline in workforce availability—what the company calls the “workforce cliff.” Krzysztof Kłapa, corporate affairs and human resource director at McDonald’s Polska, explained that the workforce cliff is estimated to hit the market in Poland in 2016–2017. Given the massive emigration of young people in Poland to work outside the country, McDonald’s Polska has arguably the toughest job of ensuring a steady supply of new workers. “The situation is diverse, depending on the region of the country,” Kłapa explained. “In small cities there is a steady supply of workforce. In big cities, the situation is more demanding, with the most challenging market being Warsaw.” Kłapa said that in small cities, where there are not too many work opportunities, jobseekers are interested in social security and stability. They perceive McDonald’s as a strong and growing brand, and are interested in career opportunities the company offers within its own structures—at present the company has approximately 4,000 managers in Poland. But in big cities those who look for work at McDonald’s restaurants are students and other young people who are interested in flexible work time primarily. Because they are often supported by their parents, they tend to treat this type of work as a source of extra income. McDonald’s, which hires only on regular work contracts, offers both flexibility of employment to those who need it and career opportunities to those who are interested. Thanks to numerous media campaigns, the company has created a strong brand recognition within its target group, and regularly runs open houses in different cities to get jobseekers acquainted with its job offers, conditions and opportunities. It also has set up a website,

called Talent Finder, where people interested in employment can register and their candidacy will be matched with demand from 369 locations around the country. In Warsaw, the most competitive market of all in Poland, the company has opened a recruitment office at Warsaw Central Station. Its staff speak foreign languages, including Ukrainian. In the summer vacation the company also hires underage workers—age 16–18—based on a license issue by the Central Labor Inspectorate. They work for money, and it is a good way for many of them to get connected with the company for much longer. There is an employment program for people 50+ and for the handicapped, including individuals with minor mental deficiencies. “We can’t say that we don’t have enough people to work,” Kłapa said. “But we have to try harder to get them. We have to be constantly active.” Think positive It is hard to know today what the fallout of the government’s crackdown on “junk contracts” and gray-market employment solutions will be. Some HR experts argue they will deliver a stimulus for boosting work efficiency across the SME sector, but others warn against overregulation, especially in the area of temporary employment. It is certain, however, that the steep drop in the workforce supply, coinciding with the largest wave of work emigration Poland has seen since it began its economic and political transformation in 1989, makes wage rises inevitable, especially as new investment keeps coming to Poland. According to the numbers from PAIiIZ, the investment and reinvestment projects the agency is working on today will translate into some 40,000 new jobs around Poland. As Zbigniew Płaza of Boyden put it, “Wages will rise and adequate people to work will be harder to find. The wage rising process will go bottom-up across all positions. Actually it has already started.” It is hard to disagree, given recent press reports of wage hikes for floor personnel in major retail chains such as Biedronka and IKEA. In April McDonald’s upped its base entry-level pay in Warsaw to PLN 13 an hour. For Marcin Petrykowski, director for CEE at Standard & Poor’s, this is a natural process in an economy that has come through a major transition—from a time when the main contributor to the generation of GDP was natural resources and a handful of big state-owned companies employing low-salaried personnel, to a state in which the main contributor to economic growth is creative people. At a press conference in April, Petrykowski said, “This is a strong message to investors that the economy will keep growing, because it is not fueled by big state-owned companies. It is fueled more than 50% by people who work in SMEs. And that is very good news.”

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Monthly Meeting January

The view from the tower of power

A Presidential minister shares his vision of the new government’s policies, the role of the head of state in pursuing Poland’s interests, and the remaining democracy in the country

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n January, AmCham members and friends had the first opportunity to meet a highranking official connected to the newly governing Law & Justice party (PiS) at the AmCham Monthly Breakfast Meeting. It was Krzysztof Szczerski, a Presidential minister with the title of Secretary of State for Foreign Policy in the Chancellery of the President of Poland. The minister welcomed the opportunity to speak in front of the American business community in Poland, and said that he had always been full of respect for businesspeople: “I know that you know the reality and you have shaped the economy of my country.” Szczerski divided his speech into two parts. The first was devoted to introduction of the PiS government policy, the second to how the President will execute some of his functions MEET THE SPEAKER

Krzysztof Szczerski, Presidential minister, is Secretary of State for Foreign Policy in the Chancellery of the President of Poland. Szczerski earned an MA in political science at the Jagiellonian University, and, in 2001, a PhD at the university’s Institute of Political Sciences and International Relations. In 1998– 2001 Szczerski served as an advisor to the Prime Minister and the Minister of Health on issues of European integration, regional health policy and healthcare systems. In 2007–2008 Szczerski served as Deputy Minister of Foreign Affairs in the European Integration Department. He was a member of the Civil Service Council to the Prime Minister (2009–2010) and a member of Parliament (2011–2015). In 2015 he was named the Polish Parliament’s representative to the Parliamentary Assembly of the Council of Europe.

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regarding economic promotion of Poland. Speaking of the government, Szczerski said that its main underlying philosophy is “development with respect to social solidarity.” Szczerski cited three words from Prime Minister Beata Szydło, “development, development and development,” as they “best describe her government policy,” which aims at solving Poland’s most serious problems, including a middle-income trap. “This is about more cohesive development, which is development that is made not only by the champions of business and the market, but also we want this development to be deeply rooted in the consumer powers of the average family,” he explained. He added that the flagship social program of the PiS government, 500+, whereby parents or guardians of two or more children can draw a PLN 500 monthly allowance for each child past the first, “is all about how the idea is being put into this political and economic reality.” He said that for the government it is a way to “distribute purchasing power into average families.” a proposition for business Szczerski admitted that he is one of the few people who had drafted the overall political program for PiS before the 2015 elections. He explained that the government policy for business is that “it should be open with respect to social solidarity.” “We have solutions for big business—a tax introduced on supermarkets. This is the way,” Szczerski said. He also mentioned that the government is focused on the need to develop the innovation-based economy and “a huge innovative drive in Poland, with strong partners for IT.” President’s mission In the second part of his speech, Szczerski talked about the political and economic goals that Polish President Andrzej Duda is “energetically pursuing.” The first part of the Duda mission, as rendered by his minister, is working on Poland’s national security. Szczerski said that the first half of 2016 will be devoted to this goal, as the President’s agenda will be mostly determined by the summer NATO summit in Warsaw.

The second part of Duda’s mission is in international relations, and aims to find “new partners for Poland around the world.” Szczerski said that the President sees himself as an agent forging new economic contacts for Poland. He wants to travel “around the world and have at least two or three big economic visits every year.” As Szczerski explained, “Geographically, we need to find new partners and promote investment to Poland and investment in new technologies and IT.” He also identified a need to stop the braindrain from Poland. “Brain partnerships are what we want to promote to keep Poland’s best young researchers and scientists at home, but with partnerships with institutions and laboratories and R&D centers around the world.” democracy in Poland? The AmCham Breakfast Meeting coincided with the constitutional crisis launched by President Duda when he refused to swear in members of the Constitutional Tribunal elected by the previous Parliament, and instead swore in judges elected by the new PiS-led Parliament to fill those already filled seats. At the time of the AmCham meeting, this snafu was being examined by the Venice Commission, the Council of Europe’s advisory body on constitutional matters. Skirting this “Polish-EU debate,” as he termed it, Szczerski claimed that democracy in Poland is “flourishing.” He supported this view as of 2016 by pointing to the fact that elections had been held in 2015: “People are able to change the government by the power of their vote, and that’s exactly what happened in Poland. Voting changed Poland’s President and the Polish government.” He also said that democracy in Poland is solid because there is a functioning parliamentary opposition. “They are able to express their opinions, and”—he chuckled—“they even work overnight because of long debates.” More proof that the constitutional order is intact? “People can express their opinions on the streets by demonstrating their concerns.” Despite the many anti-government rallies on the streets of Warsaw, “the government has no will to suppress it.” Szczerski also referred to a recent purge of the public media in Poland, where the govern-


ment passed a law changing the legal status of Polish Radio and Polish Television, replacing the management of the institutions and the bulk of their journalists. With the “reform,” the public media were transformed into what the government calls the “national media,” pursuing a new programming policy based on “national values” and the government’s “historical policy.” But his gaze also fell on the private media

in Poland. Here Szczerski said, “The truth is that there was a problem with pluralism in the media and there is a problem with it still.” He said they are “biased and not very transparent, and not in sync with the reality.” Relations with the us When talking to the American business community it is impossible not to touch upon Poland-US relations both in the economy and

politics. To this tune, Krzysztof Szczerski said that with the new government, Poland and the US “will open a new chapter of trade relations that rest on two solid pillars: enhanced military and security partnership within the frame of NATO after the NATO summit in Warsaw, and an enhanced new trade agreement that will make the transatlantic links even stronger.”

February

Escaping traps

The Polish government has identified five structural pitfalls for the country’s further economic growth, but says it has a plan to escape them with the help of science

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n February, AmCham hosted Jarosław Gowin, Deputy Prime Minister and Minister of Science and Higher Education, who met with AmCham members to talk about how his ministry’s policies tie into the government policy of boosting Poland’s economic growth by making its economy more innovation-based and competitive. Gowin said that since Poland’s entry into the European Union, the country’s GDP has grown at over 4% a year, to reach a cumulative 46% increase since 2005. Meanwhile, the economies of the old EU states grew by nearly 10%. Gowin cited the numbers as “an expression of homage and admiration to entrepreneurs, for the source of that Polish success was through their hard work and innovativeness, which all came through without—and oftentimes at odds with—the policies of the Polish state.” He added that the new government of Law & Justice (PiS) intends to relieve businesses of burdens imposed by the state. demographics Gowin said the new government has identified several structural threats to further economic growth for Poland. The first trap is demographics. Gowin described it as “the most serious threat to the development of Poland.” This is why, he explained, one of the first government policies put into practice was the 500+ program, whereby families with two or more children are entitled to PLN 500 cash each month for each child after the first one. Previously, Gowin had been a critic of the program, arguing that simple cash for families does not address the core of the problem, and a side-effect of this approach could be long-term exclusion of women from the labor market. But at the AmCham Monthly Meeting he simply said that 500+ “will take Poland out of the demographic trap.”

weak state Another structural trap jeopardizing the growth of the Polish economy, according to the government, is “the weakness of state institutions.” To support this view Gowin said that Poland does not collect as much tax as it should. “In VAT alone, the loophole is PLN 40 billion annually,” he said. Presenting further arguments for the weakness of Poland’s government institutions, Gowin noted that there are as many as 40 different state agencies that can audit enterprises in Poland. On average, it takes 685 days to resolve a commercial dispute in court. “Economic growth requires an in-depth institutional overhaul of the Polish state,” he concluded. “We need a new model of the state. What we are dealing with today is an overwhelming bureaucratic and social state which on one hand leaves very little room for freedom but on the other hand is lame and cannot even guarantee efficient dispute resolution in the courts.” He continued: “We need a different model for the state. It has to be a limited state, which leaves as much freedom to entrepreneurs, families, associations and civic society as possible, while it is strong and efficient and determined. It means efficient courts, efficient police and others.” middle income The third structural trap stalling Poland’s economic development Gowin called the middleincome trap. Gowin said that half of the working population in Poland earn a take-home pay of below PLN 2,500 a month, and the bottom 10% below PLN 1,300, all working full-time. “The wages in Poland are one-third what they are in developed countries,” Gowin said. “So far, such low income has been a competitive edge of the Polish economy. But we want to get

away from that because we see that low wages are a barrier to further economic development.” developmental dependency Another structural trap Gowin discussed is MEET THE SPEAKER

Jarosław Gowin studied the history of philosophy at the Jagiellonian University in Kraków, where he earned an MA in 1985. In 2001 he earned a PhD from the Institute of Political Studies of the Polish Academy of Sciences. In 1980–1985 he was a member of the Independent Students’ Association and the Solidarity trade union. In 1989– 2005 he served as assistant editor and then editor-in-chief of the Catholic magazine Znak. In 2003 he founded a private school in Kraków called Tischner European University, which he headed until 2011. In 2005 he was elected to the Senate on the Civic Platform (PO) ticket, and in 2007 he became a member of the Sejm, also with PO. He joined the PO steering committee and served as Minister of Justice in 2011. In 2013 he unsuccessfully challenged Donald Tusk for the PO chairmanship, and then established a party called Polska Razem (Poland Together), which failed to enter the European Parliament in 2014. In 2014 Gowin joined the National Security Council, an advisory body to the President. In 2015 Gowin was elected to the Sejm again, this time from the PiS list in Kraków.

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Monthly Meeting February what he called developmental dependency, and it directly involves foreign investors. He said this trap is about having too many foreign investors making the Polish economy tick, as opposed to investors with solely Polish capital. “Two-thirds of Polish exports are generated by companies with foreign capital,” he said. He said the government will devise “a set of mechanisms” to help companies in Poland find new export markets, but the mechanism will be aimed at SMEs because “by and large they are firms with Polish capital.” innovation deficiency The last structural trap Gowin said is hindering growth of the Polish economy is that it does not rely on innovation to create value but creates its competitive edge by low labor costs. Gowin said that expenditures on innovation development in Poland are below 1% of GDP, and innovative products comprise only 5% of Polish exports by value. He counted only six Polish companies among the world’s most innovative, and said that only 13% of all SMEs in Poland employ innovation in their business strategies.

Panacea Gowin said the government had readied a set of programs to address all these threats. While the programs aimed at demographics and the weakness of state institutions, as well as exports, do not involve the Ministry of Science and Higher Education, the role of science will be pivotal in government programs aimed at rebuilding different industries in Poland— “neo-industrialization”—and boosting the level of innovation and R&D in the Polish economy. As the minister explained, the areas for neoindustrialization will be selected as follows: The Ministry of Development (formerly the Ministry of Economy) will draw a map of industrial areas in Poland with the highest potential to develop innovative goods and services. Then the Ministry of Science and Higher Education will supplement that map with a map of the areas in Poland with the highest scientific and R&D potential to serve industry. The areas where both economic and scientific potential overlap will be selected for a program to deliver stimulus for cooperation between industry and science. The program will be man-

aged by the National Center for Research and Development. The underlying goal of that program, Gowin said, is to make Polish science collaborate more effectively with business than before. This will come through a new set of bonuses for scientists who work with business. The ministry will look at such systems in other EU countries, especially Germany, where a platform supporting and enhancing collaboration between business and academia is sponsored and managed by a government agency. Gowin also said the government is also working on a new act to support the development of innovations in Poland, which will offer even more incentives for innovative companies than envisioned by the proposal by former President Bronisław Komorowski. Another act the government is working on, concerning scientific institutions, will give more decisionmaking power to young scientists. So far they have been excluded from strategic decision processes in the institutes where they work because they are too young to be elected to the management.

March

A man with a plan

The Minister of Development has a comprehensive vision for boosting Poland’s economy

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t was one of the most anticipated Breakfast Meetings in memory, as crowds of AmCham members packed the InterContinental Warsaw ballroom to hear Mateusz Morawiecki, Deputy Prime Minister and Minister of Development in the Law & Justice (PiS) government, talk about his master plan for growing the Polish economy. The head of the Ministry of Development (previously known as the Ministry of Economy) began his presentation on an historical note, saying that after World War II Poland did not have an opportunity to develop good investment mechanisms for the economy, as the country was part of the Soviet bloc, where most investments were mismatched to the real economic needs. When Poland began to allocate investments to what the country needed to grow economically, in the 1970s, the money was sourced from commercial loans in the West, and soon the need to pay back the loans and interest dwarfed the government’s potential to invest further. Morawiecki acknowledged the role of American investors, who were the first to come to Poland in the 1990s when the country began its political and economic transformation and generated investment through the privatization of state-owned enterprises.

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Today, Morawiecki said, Poland intends to be part of the international business community and is looking for its own place in the global value chain. investing in business-efficient projects In order to achieve that goal, the government intends to focus on allocating investments to projects with commercial potential, instead of “building new opera houses, stadiums and aqua parks,” as he put it. This is why the government plans to allocate EU funds in the current EU financial perspective to “productive investments.” For such projects the government will reduce the red tape to the bare minimum. Another “pillar” of the government strategy is to focus on making Poland an innovationbased economy. To achieve that, the government plans to have Poland’s academic community “better connected with business and the business ecosystem.” Morawiecki said that in this respect the government is eying solutions developed in France and Japan. But according to him, part of the solution would be to channel the largest portion of EU funds for boosting innovation (about PLN 40 billion to be utilized in five years), and also some domestic funds, into micro and small

companies. The program, called Start-Up Poland, is being developed by the government. It will deploy solutions known in Silicon Valley and “other places around the world” to make the business environment more friendly for both big companies and SMEs. The minister did not mention any concrete solutions, but said that “cutting the red tape” will raise Poland in the rankings of innovative economies, including the ratings by the Heritage Foundation in the US and the World Bank’s Doing Business reports, which, he said, are the government’s “key benchmarks for going forward.” cluster luck Talking about how different regions of Poland are developing, Morawiecki said that only “five or six” of Poland’s 16 provinces are taking advantage of ec onomic development, while “the rest of the country has stagnated.” One idea to change that is to “encourage” more investors to invest in Poland’s special economic zones, where they can enjoy certain tax allowances and cuts. In addition, the minister said, those areas have higher than average unemployment rates, which bodes well for investors with labor-intensive projects in mind. This is why, Morawiecki said, the government


will encourage investors in BPO centers—a sector that has been highly successful in Poland over the last 10 years—but also IT services and data management. He added that the government will maintain the approach of past governments to special economic zones, and had already increased the area of two, in Słupsk and Kraków. But the government doesn’t want just any type of investment in SEZs, but evaluates potential candidates from the point of view of “what kind of relationship it may have to the local community and businesses,” the minister said. “We will look for investors with whom the local community and businesses will be able to cooperate and benefit from the technologies that investors bring.” Morawiecki also said that technology clusters play an important role in the government’s plan to give the Polish economy a push forward, especially since, as he said, clusters such as Aviation Valley in Podkarpacie province in southern Poland and the Shipbuilding Valley in the Tricity have been delivering. “We are not going to put any investment there,” he said, “but we are going to create better conditions for investors there in those different clusters.” Boosting exports Looking at the country’s exports, Morawiecki acknowledged that despite all its other problems, “Poland over the last two to three years has been quite successful,” and the government “wants to continue this.” Continue, but in a different fashion. Morawiecki said the government will put more emphasis on finding new export markets, including in the US, where Poland sells goods worth USD 5 billion annually. “We want to double it over the next couple of years,” the minister said. He also said that the government would like to “redirect” to the Far East some of the Polish exports that now go to the EU. With this in mind, the government plans to set up new trade missions in Asia to help Polish exporters find contractors there. At the same time, the government does not plan to help Polish exporters to the EU: “They do not need so much support any longer because they are familiar with the markets and know how to work there successfully.” Government initiatives in export-boosting areas will not come for everybody, however. SMEs will be preferred. This is because, as the minister explained, when it come to exports, “small and medium-sized companies have a more difficult task than big companies.” investing in infrastructure Prompted by questions from the audience, Morawiecki gave an overview of the government’s plans regarding big investment projects in infrastructure, saying that while many road construction projects have been accomplished in Poland in recent years, some of the

experience gained by Polish companies in the process was “painful.” This is where the government’s role will be delivering knowhow for project management and securing financing. When it comes to railway infrastructure, Poland has come halfway, as the minister said: “The process we have inherited from the previous government was suboptimal, and there are many changes that we have to introduce now for the railway infrastructure and related investments to happen.” He noted that the government is working on an action plan for rail infrastructure which will be ready by June 2016. Talking about energy and water infrastructure, the minister said that while there is a delay in starting projects in the 2014–2020 EU financial perspective and some EU funds are in danger of not being used in time, the government is working on a better methodology for project evaluation. “If we do well over the next 6–12 months,” he said, “there will be a lot of great opportunities for investment in our infrastructure projects for the next 6–7 years.” economic stability When it comes to maintaining the stable economic environment Poland has been boasting about for the last 10 years, the minister said that the government is committed to a stable macroeconomic policy. Both the budget deficit and public debt are to be kept under control, while the National Bank of Poland will maintain its independence. “We have a strong threshold in our Constitution relative to public debt and the portion of public debt that is available to the government, which cannot be exceeded—60% of GDP,” he explained. “It creates a good understanding for the government of what can be done and how to manage the income and expenditures.” He added that when it comes to the national currency, the government is interested in keeping the zloty strong against the euro, as it has been for the last three years. He further noted that Polish government bonds are strong, which means that “the business community understands our policy, and the perception, which is reality, is positive.” Talking about Poland’s prospects for entering the eurozone—which the country declared it would do when it joined the EU—Morawiecki said the government does not think that the next three to four years will be a good time for such a move. Financing for investments Again, prompted by the questions from the audience, the minister gave an overview of the government’s vision for how it will get the money it needs to support its ambitious investment plans as well as its new and costly social programs, such as 500+, which covers families with two or more children, offering monthly cash allowances of PLN 500 per child (after the first one) until they reach age 18. He

said that the government plans to keep the budget deficit below 2% of GDP this year and in 2017. The money to shoulder new government expenditures will come from multiple sources. One is tighter tax collection devised by the Ministry of Finance. He said that the need for such a system is evident considering that in 2007, when the former PiS government left office, the level of taxes collected was 17% of GDP, but now it is 13%. The minister explained that the missing percentage points translate into approximately PLN 65 billion. “If we could collect 10% of that amount of money, we would have the money to cover the 500+ program already paid for,” he claimed. Other areas from which the government will source money is the VAT gap, estimated by PwC at PLN 36–56 billion annually, and the leakage of corporate income tax, which Morawiecki said the European Commission estimates at PLN 40 billion annually. He concluded that even a small portion of the money Poland has lost this way will alleviate the kind of expenditures the government needs to fulfill its plans. supporting TTiP When it comes to spreading free trade globally, Morawiecki said that Poland remains a strong supporter of the Transatlantic Trade and Investment Partnership, the free-trade agreement currently being negotiated by the EU MEET THE SPEAKER

Mateusz Morawiecki was appointed Poland’s Deputy Prime Minister and Minister of Development in 2015, following a long and successful career in the banking sector. He was named CEO of Bank Zachodni WBK in 2007. In 1998 he was appointed deputy director of the Committee for European Integration and negotiated the EU accession terms for Poland in the area of banking and finance. Morawiecki is a graduate of the University of Wrocław and Central Connecticut State University, and the MBA program at Wrocław University of Technology, and has also studied at the Wrocław University of Economics, the University of Hamburg, and the University of Basel. In 2013 he was awarded the Cross of Freedom and Solidarity for his activities in the anti-communist observance of human rights. In 2015 Polish President Andrzej Duda awarded Morawiecki the Knight’s Cross of the Order of Polonia Restituta in recognition of his accomplishments in promoting Polish culture and national heritage.

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Monthly Meeting March and the US. What is more, the government would like to see TTIP implemented across all the aspects under negotiation, not just selected parts. “We believe in liberal trade,” he said, “so the soft version of TTIP is not an option for us.” creating synergies At the end of his presentation, Morawiecki said that foreign investment has played an im-

portant role in Poland’s economic development over the last 20 years, and acknowledged the role of foreign technologies and business models for the current government, which it hopes will be able to create more synergy with the private sector from abroad. “All that has been achieved in Poland over the last few years was possible thanks to foreign investments,” the minister said. “Polish companies were able to take technologies from

foreign companies, and the international community invested here and increased our efficiency and productivity, so for this reason Poland’s GDP growth in the last 20 years was going up and very strong. We are going to keep the approach, enhancing it with some smarter methodologies and mechanisms for investment and development going forward.”

April

An independent course

Poland’s new foreign policy has a lot of ground to cover

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n April, Minister of Foreign Affairs Witold Waszczykowski met with AmCham members to present the policies of the Law & Justice (PiS) government on such issues as the European Union, NATO, Russia, the Visegrad Group, and the United States. Russian imperialism Waszczykowski told AmCham it should not surprise anybody that the greatest challenge for Poland today is Russia, with its imperialistic ambitions aimed at “trying to change the national security architecture” in Central & Eastern Europe. According to Waszczykowski, Russia is driving at regaining the status of a global superpower to match that of the US, to create “a world which is ruled by a Russian-American alliance.” This best-case scenario for Russia is impossible to implement today, however, because of the “shrinking” Russian economy and “the collapsing prices of oil and gas,” the minister said. This is why Russia is now trying to implement a different plan: “to create a world which is governed by a group of countries,” he said. “Russia wants to recreate the world of the 19th century which was ruled by the Concert of Powers.” Waszczykowski explained that in this model there is no room for countries such as Poland, which is why Poland strongly objects to Russian policies. naTo and keeping Russia at bay Waszczykowski made it clear that for Poland the best strategy against “Russian imperialism” is to stick to the European Union and NATO. Yet, despite being a member of both organizations, Poland does not feel secure enough. “Right now we have two different statuses of security within NATO: higher security status for Western Europe and lower status for other parts of the EU,” the minister ex-

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plained. “If you look at the map of NATO troop deployment and defense facilities, they are in Italy and the central part of the EU. The so-called Eastern Flank is a kind of military desert. We would like to improve this situation.” At the last NATO summit in 2014 in Newport, Wales, the minister said, “The main decision was to create a spearhead of 5,000 troops ready for almost immediate deployment into an area between the Baltic Sea and the Black Sea.” However, this is not the best strategy, it turns out. “The last NATO exercise revealed that it is not enough, that this kind of support can be easy stopped or blocked by Russia.” Instead of relying on fast deployment of significant military potential when and where necessary, the Polish government thinks a permanent NATO military presence is needed in Poland and other countries which make up the eastern border of NATO. This is not what NATO plans currently, but Waszczykowski said he hopes Poland will manage to bring NATO around to its defense ideas soon. (For more on the NATO defense strategy as presented by Gen. Ben Hodges, commanding officer of US forces in Europe, during his visit to Warsaw in December 2015, see the Winter 2016 issue of American Investor at page 22.) Waszczykowski noted that in 1997 Russia and the new NATO member states signed an agreement where the new NATO members declared that they would not build any major NATO military installations. In his view, at that time “major” meant “two heavy divisions.” “If we deploy troops below this rank—a brigade or two brigades—we will not violate any political declarations,” he claimed. He also referred to the agreement itself, arguing that “it is not supposed to be valid still” because it was agreed when Russia had

“a much less imperialistic government.” To prove his point, Waszczykowski noted that since 1997 Russia has “violated all those terms and conditions by attacking Georgia first, and then Ukraine, and now by getting engaged in the Syria crisis.” As Waszczykowski complained, “Despite that, there are nations in the West who believe that we should continue to respect this political declaration. We believe that we should respond to it by providing a deployment of troops which will be satisfactory for Poland.” He said that the NATO summit in Warsaw in July “will provide the answer to this problem with a deployment of NATO troops and the creation of NATO facilities on the Eastern Flank, especially in Poland but also in other countries, such as Romania.” The eu dilemma Waszczykowski shared his views on the future of the European Union. He said that while there is some pressure to turn the EU into a federal state “or some kind of a political entity resembling a federal state,” Poland opts for a different model: “an institution which protects the EU Treaty values, such as the freedom of movement of people, capital, services, and other values, and as a Union which cooperates closely with NATO and the US.” Minutes later, this vision was tested when a member of the audience asked Waszczykowski about his view on the recommendations from the Venice Commission, the Council of Europe’s advisory body on constitutional matters, whose members had come to Poland at Waszczykowski’s invitation to investigate the constitutional crisis which emerged after President Andrzej Duda refused to swear in three judges lawfully elected by Parliament to the Constitutional Tribunal and was exacerbated by Prime Min-


ister Beata Szydło’s refusal to publish judgments of the Constitutional Tribunal. Waszczykowski said he would not comment on the Venice Commission recommendations. “The government is not a part of the European Parliament debate about the state of democracy in Poland,” he added. He claimed that the constitutional crisis “is a political problem, and political problems are supposed to be solved through a political dialogue. This is a problem with the Constitution, because you can draw different conclusions from the Constitution based on different points of the Constitution. So the problem is supposed to be solved by amending the Constitution.” Poland’s complex approach to the EU came to light following yet another question from the audience, enquiring about a new European Commission policy aimed at forcing the US to follow reciprocity when it comes to visa-free travel to the US for all citizens of the EU. The Commission said it would consider introduction of a visa requirement for US citizens traveling to the EU if the US does not include all EU member states in its visa waiver program—including Poland and other eastern EU member states currently excluded from the program. Asked if the Polish government would support such policy, Waszczykowski was clear: “The Polish government is not going to support this policy because it would hurt Polish Americans. Full stop. We would like to facilitate their trips to Poland and not create any barriers.” The Visegrad solution Apart from trying to find its place in the EU, the other most pressing problem that Polish diplomacy is facing today is that the region of Central & Eastern Europe “is not united,” as Waszczykowski put it. He said that Polish diplomacy is working hard to “create the solidarity of the Visegrad countries.” In the minister’s view, Poland, Hungary, Slovakia and Czechia make up a region that is “shattered”—“a periphery of Western Europe and just a passage for transit from East to West.” Instead, the region should be “integrated, as the Benelux countries are integrated in the EU and as part of NATO.” He said he believes that the Visegrad Group may become “kind of a lobbying group inside of the EU and NATO.” This is also an alternative to EU integration “for Poland and the countries in the region, because if something bad happens to the European Union, we will stay together in the region not shattered, not a target of a game between the West and the East.” approaching the us Talking about US-Polish relations, Waszczykowski said the Polish government finds the presidential election campaign in

the US “difficult for us” because it makes the US government focus on domestic issues, so it is “not very active in international politics.” It is crucial for Poland to keep the US “engaged and involved in European issues,” the minister said, adding: “The US is on a different continent but is still perceived by us as a European power—a European player— in fact the most important player in Europe with whom we want to improve and develop cooperation.” He added that Poland will cooperate “with any US President because Poland and the US share values and interests, and I hope these will not be changed by any new US President.” Waszczykowski noted that so far PolandUS cooperation has focused mostly on security issues, but while Poland would like to continue this, the government would like to see more US investment in the country. “This is why we cooperate with the American Chamber of Commerce and hope that this cooperation will expand and create more opportunities for American companies to invest in Poland,” he said. He noted that the agenda of Prime Minister Szydło’s upcoming visit to New York, to take part in a climate conference, would include a meeting “with the Polish community in New York, and I hope it will be a very interesting visit.” When asked if the government has any agenda for the Polish community in the US—“Polonia”—Waszczykowski said the government would like to encourage Polonia to unite around Polish ideas: “We managed to unite Polonia in the 1990s in the campaign for Poland’s accession to NATO. We hope we can unite Polonia in a campaign to grant Poland visa-free travel to the US, or around problems like the antimissile base in Poland or about the US deployment of troops to protect the Eastern Flank of NATO. These are the goals and targets around which Polonia in the US can organize and unite.” a view from the vacuum Towards the end of the meeting, responding to a question from the audience, Waszczykowski dismissed rumors that Poland’s President and Prime Minister, who both gained office through PiS, are puppets controlled by the uncompromising PiS chairman Jarosław Kaczyński. According to the minister, a “strong personality” in politics is a characteristic feature of Polish politics, and pointed to Donald Tusk, former Prime Minister and leader of Civic Platform (PO), who stayed in power for two parliamentary terms before the last general election. “For the last eight years the government was ruled by a strong person, Mr. Tusk, who behaved in a very uncompromising way,” the minister said, adding that it

might just be “the character of Poles.” Waszczykowski exited with a warning to the American business community not to listen to “rumors” about the government. “All those discussions about the lack of respect for law in Poland, the role of the chairman of the party and his influence on decision-making processes, and the rumors about hurting business, are not created in a vacuum,” he said. He claimed that the reason these views are spread is that Poland is changing its foreign policy into a “more active” one: “We are not just simply following, as it has been done for the last several years, one or two capitals. We just want to have an independent foreign policy, and that creates problems and rumors. Why? To destabilize our policy. So, follow our words and deeds, not rumors.”

MEET THE SPEAKER

Witold Waszczykowski, Minister of Foreign Affairs, graduated from the Faculty of Philosophy and History at the University of Łódź and the Department of International Studies at the University of Oregon. He earned a PhD at the Geneva Centre for Security Policy in Switzerland. He joined the Polish diplomatic corps in the early 1990s. In 1992 he became a senior expert in the United Nations System Department and the European Institutions Department, in 1996 deputy director of the European Institutions Department, and later director of the Security Policy Department. In 1997 he served as head of Poland’s Liaison Office to NATO in Brussels and was deputy permanent representative of Poland in the newly created diplomatic mission to NATO (1997–1999). From 1999 to 2002 he was posted as Poland’s Ambassador to Iran. In 2003 he worked at the Department of Foreign Policy Strategy and Planning, and in 2005 became deputy director of the Department of Africa and the Middle East. In 2005–2008 he was Deputy Foreign Minister, also serving as the chief negotiator during Poland-US missile shield talks. In 2008, President Lech Kaczyński appointed Waszczykowski as deputy head of the National Security Bureau. Since 2011 he has been a PiS deputy to the Parliament, reelected in 2015.

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Focus AmCham Mentoring

Learning from experience AmCham launches the second edition of the 30 Under 30 mentoring program

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he 30 Under 30 program is a mentoring program for 30 selected professionals below age 30 from AmCham member companies. The program was conducted for the first time in 2015. Now AmCham is launching the second edition. Named after Forbes magazine’s famous ratings of young entrepreneurs, 30 Under 30 aims at helping young professionals in Poland develop the soft skills they need to build interpersonal relations to enhance their professional career and become business leaders in their fields in the future. The 30 Under 30 committee selected the 30 best out of 70 applications filed for the second edition of the program, all with distinctive cover letters and promising recommendations. According to program director Magdalena Pavlak-Chiaradia, managing director and partner at ERM Polska, the 30 people who were selected as a group speak 11 languages, with some individuals speaking three languages. There is a CEO, a sailor, musicians, lawyers, managers. While most participants come from Warsaw, some are from Kraków, Wrocław, and in between. Their education spans many disciplines: IT, law, engineering, property management, marketing and finance. And they earned their degrees from universities all over the world, not just in Poland or the US. “The group is a cross-section of what Poland is becoming,” Pavlak-Chiaradia said at the inaugural meeting in March.

perspectives add value to the program and the participants are part of the process. In other words, what they get out of the program depends on what they contribute to it. The takeaway A participant in the first edition of the program, Jakub Olek, public affairs consultant at MSL Group, did a good job aligning with the group. Speaking at the launch of the second edition, he described what he had expected of the program. “Networking and workshops were one of those things and that was all important,” he explained. “But the program is also a learning experience, and it is about learning from the extraordinary leaders whom I had a chance to meet.” In Olek’s view, the speakers offered so much in terms of learning experience that he had to come up with a list of the most important lessons for him personally. He named several aspects as the “crucial takeaway” from the program: “What I learned was that all those leaders had at least four things in common. The first was integrity— understood as value, that actions come from values. Any decision, in personal and professional life, has to come straight from the gut and has to be supported with the backbone.” Another characteristic feature of business leaders, he said, is development. All business leaders are eager to learn and take responsibility. “There is this true will to continue learning and development, and during this learning process you cannot be afraid of taking responsibility. Responsibility is a good thing.” And business leaders know how to listen

to others, Olek said. “They listen to people and remember to listen twice as much as they speak.” The last crucial takeaway from the first edition for Olek was that reading is important in overall knowledge generation for business leaders. “You need to read a lot, and not only what is within your scope of interest but elsewhere, to broaden their knowledge. When you meet those leaders, you have to ask them for reading advice. Last year I read at least twenty books recommended by people at the course, and it was a great reading experience.”

change and human capital Dorota Dabrowski, AmCham managing director, and Angela Palazzolo, Second Secretary, Consul for Trade and Investment at the US Embassy in Warsaw, spoke at the opening session about the chance aspects of career planning. They stressed the importance of professional networks one can build over time in furthering careers in a time of constant change in the professional environment. They argued that the 30 Under 30 program may be a good opportunity for the participants to tap into the professional experience of some of the speakers. As Palazzolo said, “Think about the relationships that you build. Think about the bridges you cross or don’t cross, and don’t burn them as you’re building relationships with people. Use the networks that you get through this program. It is best to work with people you know not only as friends and colleagues, but to take one’s experience and connect others to build something even more valuable. That is the skill I think you will get out of this program that I encourage you to take full advantage of.” AmCham Chairman Tony Housh (APCO Worldwide) said that today managers have to Ground rules be prepared to embrace change. “Nothing The 30 Under 30 program is designed to you do today necessarily guarantees that meet the expectations of ambitious young those ideas and what you do is managers, and therefore the curricugoing to be relevant in 5 or 10 lum is not exactly a cake-walk. Firstly, years,” he said. “But that does not attendance at all nine sessions is mean that what you are doing does mandatory. In addition, the particinot have value—it all goes into the pants have to do community service value pot.” with Big Brothers Big Sisters, an As Housh added, “Things NGO which is an AmCham member change so quickly these days that and partner to the 30 Under 30 proevery advantage in terms of thinkgram. ing, learning, thinking outside the When it comes to the attitudes exbox, and taking ideas, is absolutely pected of the participants, they need important.” He pointed out that for to be proactive, which includes sharmost American companies, that ing and exchanging ideas and consort of thinking is welcome. “Now tributing something to the whole. you are expected to add value to the This can be challenging when the execution process, the decisionparticipants differ in education, expemaking chain. Please see this 30 rience, gender and other aspects, said Under 30 program as another tool Pavlak-Chiaradia. in your toolbox, as you develop your In addition, the participants will The opening session speakers: Dorota Dabrowski, Tony careers and develop yourselves proneed to offer their own opinions dur- Housh, Angela Palazzolo, Jakub Olek, Magdalena fessionally.” ing discussions, because their unique Pavlak-Chiaradia

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AmCham Advisory Council The Advisory Council accumulates the knowledge and experience of its member companies and is a point of advice to the AmCham Board of Directors. With its global business expertise the Council has helped the American Chamber of Commerce in Poland to become one of the leading advocates of business in the country.


Focus Foreign investment

Reality check After decades as the strongest magnet for FDI in CEE, Poland may start to suffer from political unpredictability

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oland is still the most attractive country in Central & Eastern Europe for foreign investors, but its lead over other economies in the region has shrunk because of question marks about social and political stability and the predictability of economic policies, according to the 2016 edition of a foreign investors’ survey by the Polish-German Chamber of Industry & Commerce (AHK). Poland scored the highest overall rating in the CEE region (4.8 points out of a maximum 6), ahead of Czechia (4.4), Slovakia (4.3) and Estonia (4.2). The polling was conducted this winter on a sample of 351 companies in Poland with foreign capital. German companies made up 51% of the sample, US 5.4%, Scandinavian 4.6%, Swiss 4.3%, Dutch 4.0%, and 3.1% each from France and the UK. For the first time in 10 years, the 2016 edition involved all the main foreign chambers of commerce in Poland.

some improvements… The most positive changes in Poland compared to last year’s survey were signaled in the category of “financial responsibility,” which means that more companies see their invoices paid on time—90% in the case of large companies and 65% in the case of SMEs. Other categories showing the greatest positive shift from 2015 to 2016 were public administration, infrastructure, access to state aid and EU aid, and legal security. Sławomir Majman, CEO of Poland’s inward investment agency, the Polish Information & Foreign Investment Agency (PAIiIZ), which helps big foreign investors start new businesses in the country, spoke at the press conference announcing the results of the 2016 AHK survey. Majman said the fact that more companies are paying their invoices on time means that “the business ecosystem in Poland is getting civilized.” Also, the appreciation of Poland’s infrastructure signals a big pro-investment shift in the way Poland is perceived by foreign investors. Majman recalled that for 30 years Poland’s infrastructure had been seen as a drawback to potential investment here. The survey also revealed that Poland is no longer viewed as a cheap labor market. Asked to choose from 10 categories that make Poland an attractive market to invest in, first was Poland’s membership in the EU, followed by the quality labor force, quality education, quality and availability of local subcontractors, and the high efficiency and 26

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motivation of the labor force. Labor cost was at the bottom of the list. Among the 10 categories, cost of labor and availability of labor were two that in 2016 became a much less critical driving force for investment in Poland than in previous surveys, a trend that signals maturity of the labor market as well. (See the Cover Story for more labor market analysis.) The polling also revealed that investors are not very enthusiastic about the speed with which innovations are introduced in the Polish economy. The level of digitization could be higher, too, the sample indicated, and would help the Polish economy grow much faster. uncertainties… Negative assessments of Poland’s attractiveness for foreign investors showed up in two categories, both of significant weight: social and political stability, and the predictability of government economic policy. Marek Szymański, chairman of Swiss Chamber Poland, said at the press conference that there are big question marks regarding the future of the Polish economy, emanating from the messages sent by government members. For business, he said, “What government representatives say isn’t always positive, and sometimes terrifying indeed, which triggers immediate reactions and negative attitudes towards investing in a country where it is unclear what is going to happen.” Patrycja Gołos, corporate affairs and public policy director at UPC Polska, an AmCham member company, said that because of the unpredictability of government policies, many investors with a long-term perspective are resorting to a wait-and-see strategy, despite the 25 years of Poland’s growing reputation for foreign investors. She pointed out that foreign investors in Poland have their operations in other countries as well, and when it comes to reinvestment strategies they may look to other countries in the CEE region for new projects. The technological changes that affect business are global, and companies are constantly looking for new ideas to grow their business. But according to Sławomir Majman, Poland has not been hurt by the negative perception of the government’s economic policies. A strong investment trend is still there, Majman argued, citing the number of new investment projects that PAIiIZ was working on in April. “We are processing 179 investment projects right now,” he said,

“which is 20% more as compared to the same period of 2015. He claimed that the numbers do not substantiate the theory of the wait-and-see attitude of foreign investors. This view was countered by Marcin Petrykowski, director for CEE at Standard & Poor’s, an AmCham member company and the first of the big three rating agencies to lower Poland’s rating after the Law & Justice (PiS) government came to power. He said that investors draw up their investment plans in advance, and the projects PAIiIZ is working on today must have gotten the goahead before the PiS government announced its policies. “The dropping numbers in new investment projects will materialize later,” he said, “in the 4th quarter of 2016 or the 1st quarter of 2017.” …and difficulties This view was echoed by Artur Tomaszewski from the Scandinavian-Polish Chamber of Commerce, CEO of DNB Bank Polska SA, who said that the banking sector is watching the government’s policies closely, especially when it comes to the social agenda. “The money to finance many of the election campaign promises is sourced from banks and insurance companies,” he explained. Tomaszewski commented on the recently introduced banking tax. While such taxes were already present in several EU countries, the tax in Poland “is among the highest taxes of its kind, if not the highest.” He also noted that the proceeds of the banking tax in Poland will be channeled into social expenditures, instead of safety cushion instruments for the financial sector, as is the case in other EU countries with a banking tax. Tomaszewski also criticized the growing negative assessment of the banking sector in Poland in public opinion (influenced to a high degree by government-controlled radio and television). He admitted that when looking at the banking sector’s profits expressed in pre-tax numbers, “Those are high profits indeed. When you look at the return on capital, however, it was below 8% in 2015, which was before the banking tax was introduced. It will lower those profits by 20%, so the return on capital will be around 6%, and it isn’t interesting anymore.” Tomaszewski said that this situation will discourage investors in the Polish banking sector, and thus banks may not have enough fresh capital to facilitate the further development of the Polish economy. Tomaszewski added that the capitalization of the banks in Poland is good right now—higher than the EU average—so the threat of running out of money is not immediate. But he warned, “The threat is nevertheless real.”


Focus AmCham Manufacturers’ Forum

Challenges of the global economy US manufacturing companies examine the Polish government’s plan for sustainable economic growth and its commitment to boosting an innovative economy

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ne of AmCham’s flagship events, the Manufacturers’ Forum, made a big bang at its first gig in Warsaw. For years the forum was associated with AmCham operations in Kraków and Katowice. Held this year in cooperation with the US Embassy in Poland and the Ministry of Development, the half-day event brought together American diplomats, Polish government officials, and representatives of leading US manufacturing companies in Poland. The agenda of the event was twofold. It focused on the future of the manufacturing sector, including the idea of the emergence of the “fourth generation” of industry—Industry 4.0—and the growth of smart networks—the Internet of Things. It also emphasized the importance of the new government’s policy for Poland’s sustainable economic growth—the Responsible Growth Strategy, also called the “Morawiecki Plan” after its author, Mateusz Morawiecki, Deputy Prime Minister and Minister of Development. In his opening remarks, Tony Housh, AmCham Chairman (APCO Worldwide), said that manufacturing is of critical importance for the Polish economy not only because it is a solid generator of the country’s GDP, but also because it drives productivity and innovation through its tight connection with R&D, and in the end adds great value to the society—changing people’s lives for the better. This is why it is hard for any government to have just a single industrial policy. “Supporting the manufacturing sector is about the right policy,” Housh said. “That can be the Labor Code, or delivery of consistent energy supplies in the heat of the summer. It can be tax credits supporting the drive to push industry forward, which are not only accessible through a wall of red tape but are accessible in a normal way.” Housh said that with the right set of policies, the government will not only help US manufacturing companies, but above all, Polish SMEs, which after all comprise 94% of all manufacturing companies in Poland: “They need to be able to focus on growing, partnering, investing in technology and processes, rather than dealing with bureaucracy and paperwork and fighting city hall, so to speak. This is what affects all of us in this room, big and small.”

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science for business Another speaker, Paweł Chorąży, Deputy Minister of Development, said that the Polish government takes a holistic approach to the economy and aims at delivering growth stimulus to the manufacturing sector—one of the staples of the Responsible Growth Strategy—through programs seeking more effective deployment of innovation and academia in the process of delivering key drivers to the sector. Chorąży also acknowledged the importance of all new growth models for the manufacturing sector, where further digitization of production and technological processes is indispensable: “Smart factories will have higher efficiency and reliability, which will give us an opportunity to get to a higher level of development by delivering products for the most advanced industrial needs.” Indeed, Poland’s economy needs to do some leapfrogging if it is to conquer the challenges of the global economy, the deputy minister said. In this respect, he noted, tighter and more efficient cooperation between business and academia is a must. While Polish educational institutions have been producing skilled graduates with high potential to learn and innovate for business, the academic sector needs to upgrade its grasp of the modern economy and global challenges if it is to keep delivering a valuable workforce for the economy of the future. Chorąży argued that the potential to cooperate creatively and innovate in a business environment is not adequately appreciated by the academic sector, but is vital for the private sector. But these are also features that are important for the overall Polish economy, because the intelligence of the economic sector translates into government policies in such areas as climate change, renewable energy, trade, transportation and environmental protection. Chorąży also expressed his appreciation to US manufacturing companies in Poland for the huge impact they have had on the development of the Polish economy over the last 25 years. He said that the feedback the government has been getting from American companies is “the right diagnosis of the problems of the Polish economy” and helps the government better identify barriers to further economic development in Poland.

Room for growth Also speaking at the opening session of the forum, John Law, Deputy Chief of Mission at the US Embassy in Warsaw, said that the economic relationship American companies create between the US and Poland is “one of the pillars of US-Poland relations,” centering around “our security relationship, shared values, and strong people-to-people relations that have been built over generations.” Law echoed the words of Paweł Chorąży, saying that US companies—particularly US manufacturing companies—have played a significant role in the development of the Polish economy over the last 25 years: “It was about working together with their Polish partners and making that economic transformation possible.” He said that those 25 years are a good foundation for US-Poland cooperation in manufacturing to move forward, especially considering that in manufacturing, an industry that is always evolving, “looking into its future is essential.” This is why US companies have a strong appreciation for the new government’s plans for delivering growth stimulus, especially when it comes to the government’s commitment to boosting innovation in Poland. Law pointed out that US-Poland economic relations are part of the broader USEU economic relations. “This is the most important platform of economic cooperation in the world in terms of global economic growth,” he explained. “Half of the world’s economic output is between the US and the EU. This dwarfs any other economic relationship in the world, and it is the foundation of the global economy.” Law expressed his hopes that with the conclusion of the Transatlantic Trade and Investment Partnership between the US and the EU, the US-Poland economic partnership will strengthen, generating new jobs in the SME sector in Poland. adding value Apart from discussion panels with industry professionals and representatives of Polish science, this 8th edition of the Manufacturers’ Forum included two presentations on the new dimensions to thinking about the immediate future of manufacturing in Poland.


The first presentation was given by Niklaus Waser, director of IBM’s Watson Internet of Things Europe and head of the Watson IoT Center in Munich. Waser presented the results of a study showing that while most companies (80%) think they provide outstanding solutions to their customers, only a fraction of their customers (8%) think this is true. He went on to de-

scribe how this loophole can be closed with better use of the data that companies generate. Today firms use only some 12% of all data they have, while turning a blind eye to the remaining 88% because they do not make use of smart networks. But the trend is changing, and Waser presented some of the solutions. Capt. Maciek Kwiatkowski, CEO of

Deepwater Container Terminal Gdańsk, gave an overview of the situation in the global container freight business and how producers who move goods to their markets can benefit from it. He also presented the position of DCTG in the European market and how it can meet the freight needs of companies located in Poland.

Jolanta Jaworska, Niklaus Waser, IBM; Janusz Dzurzyńśki, P&G; Michał Golasz, GE; Prof. Stanisław Wincenciak, Warsaw University of Technology; Piotr Dardziński, Deputy Minister of Science and Higher Education; Henryk Siodmok, Atlas Group; Andrzej Soldaty, Initiative for Polish Industry 4.0

Getting tech, getting smart Innovative use of new technologies drives business forward

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he first discussion panel at the Manufacturers’ Forum, moderated by Jolanta Jaworska, government and regulatory affairs director at IBM Polska, examined how academia and business see human interaction with technology in the factories of the future and how the two spheres should collaborate to attain cohesion and synergy in molding university graduates for their anticipated roles. For Piotr Dardziński, Deputy Minister of Science and Higher Education, a key aspect of modern technical education is for students to face practical problems in their curriculum and work on projects related to commercial ends, to help develop innovative, unconventional thinking. Dardziński said the reforms of Poland’s higher education system will focus on mixing theory with practice as much as possible. This will require the involvement of the business sector in drawing up curricula. This can be

achieved if leaders of business and academia meet frequently to discuss these issues. While businesspeople do not need any encouragement for such contacts, the government needs to change the attitudes of the academic sector. It will not be a revolution, Dardziński said—“Institutions with long histories and traditions are hard to revolutionize”—but it will be an evolution: gradually delivered stimulus for the Polish academic sector to start appreciating collaboration with business. This view was echoed by another panelist, Prof. Stanisław Wincenciak, Dean for Development at Warsaw University of Technology, who said that Polish academia has long traditions of developing theoretical sciences, but it will have to consider business as a partner due to global trends and pressures on business/academia cooperation.

Business practice Michał Golasz, Grid Solutions Executive for Poland at GE, explained GE’s philosophy of working with university graduates. He said that graduates of technical faculties have little practical skill working in a commercial environment but are still valuable for business. “The fact that they graduated from difficult studies means that they can learn a lot,” he said. They get hired by GE’s centers of technological excellence, where they evolve into business professionals. This is why GE has opened up several collaboration programs with technical universities in Poland. By being involved in developing the curriculum for specialty studies and having the students do internships with GE, the company has an opportunity to get connected with the best students and also have an impact on shaping the educational system in Poland. GE now has such collaboration programs with polytechnics in Gdańsk, Gliwice and Warsaw. According to Janusz Dziurzyński from P&G’s Product Supply Shared Services division in Europe, one of the most critical intellectual features P&G looks for when recruiting is the candidate’s drive to understand business and what drives it forward. “Those are questions about how products

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Focus AmCham Manufacturers’ Forum and services may deliver added value in the future, and how this value may be a driving force for business,” Dziurzyński said. For Henryk Siodmok, CEO of Atlas Group, the largest manufacturer of chemical products for construction in Europe, new technologies provide huge opportunities to optimize business as well as expand into new areas, such as human relations. He said that thanks to the Internet of Things philosophy, the 25 separate factories the company operates are all interconnected through a system that measures electricity consumption, which in turn allows the company to purchase electricity efficiently online from a power trading platform. Thanks to customer relationship software, Atlas managed to build a community

of professionals who use its products. Through its CRM platform, Atlas can talk individually to each of the 60,000 construction specialists who have become involved with Atlas brands and are designing new applications based on Atlas products and creatively interacting with the supplier. Siodmok explained that with this, the company’s in-house people get creative feedback and are able to boost its competitive edge. Generation relations Niklaus Waser, director of IBM’s Watson Internet of Things Europe and head of the Watson IoT Center in Munich, picked up on the idea of engaging others to boost the company’s innovative potential. He explained that innovation comes through

young people who think outside the box and are not afraid to experiment. To do this, they draw on their experiences with modern, more flexible education, as well as the technologies they have grown up with. But the traditional model for introducing young people into a company is for them to be subordinated to senior people, whose innovative spirit may not be so sharp. “By subordinating the young to the old, we maybe lose an opportunity to innovate,” Waser said. He explained that in the Watson IoT center in Munich, “we ask young people to decide what should be done and what the next step should be for the company. This is the key to transforming our business forward.”

Aneta Muskała, International Paper; Paweł Wideł, GM; Przemysław Paździorek, 3M Poland; Iwona Chojnowska-Haponik, Polish Information and Foreign Investment Agency; Piotr Wojaczek, Katowice Special Economic Zone; moderator Joanna Bensz, AmCham Vice Chair and chair of the Manufacturing Committee (CH2M)

Do it again!

The best strategy for sustainable growth by American manufacturers in Poland is reinvestment

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he second discussion panel of the 8th Manufacturers’ Forum centered around the Polish government’s Responsible Economic Development plan— aka the “Morawiecki Plan”—with a focus on how American manufacturers in Poland fit into the plan. Paweł Wideł, GM’s government relations and public policy director for Poland, Czechia and Slovakia, said the plan centers around five strategic pillars to ensure economic development. Those pillars, he said,

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are in line with business development strategies of US companies in Poland. The first pillar aims at boosting the number of production facilities in Poland (“neo-industrialization,” as the government calls it). This reflects a belief that there are certain products, such as paper, electronics, and automobiles, that modern society will continue to need well into any foreseeable future. This is exactly what manufacturing companies believe, which is why they keep investing in production facil-

ities and R&D centers. Another pillar of the government economic development plan is the belief that innovation delivers great added value to products, which means they can be sold for a higher price. The proceeds return to the Polish economy through the taxes the company pays in Poland and the higher purchasing power of the company’s workers. Wideł claimed that most US companies deliver highly innovative products. The proof is that most of them sell those products abroad, in Western Europe and beyond. (GM exports 99% of its Polish output.) “Today, you can’t sell in modern markets if your products are not innovative,” he said. Another pillar of the government plan is a huge emphasis on production companies in Poland selling to foreign markets. Wideł


Earth Day said that most US manufacturers meet that criterion to a high degree, and GM is one of the best examples. The government plan also calls for huge capital involvement in the economy in Poland as a sign of investors’ long-term commitment to the Polish economy. No one can be rated higher in this category than US manufacturing companies, Wideł argued. They have invested many millions of dollars in Poland (some, like GM, over a billion) and have plans to continue capital-intensive investments in the years to come. Last but not least, Wideł noted that the government plan puts a lot of emphasis on the economic and social aspects of business activities in Poland. Again, US manufacturing companies are exemplary in this respect, with their intensive and growing engagement in supporting vocational and technical education across Poland on all levels. Aviation Valley, an aerospace technology cluster in Southern Poland led by UTC which has used its educational foundation to reshape the region’s standing in the advancement of technology education, is just one example of the enormous groundwork US investors have laid in Poland over the years. Wideł concluded by saying that with their business growth strategies, American manufacturing companies support all the critical pillars of the government’s strategy for Poland’s sustainable economic development. The panelists agreed that in order for the Responsible Economic Development plan to deliver on its promises, the government must come up with a strong incentive component for investors in the manufacturing sector. Poland not only needs to attract new investors, but needs to keep the ones it already has and encourage them to expand their operations in Poland. This is vital, because these investments will shore up all the critical growth pillars identified by the government. Meanwhile, the government has to bear in mind that global headquarters have different optics, and like to keep innovating close to their headquarters. But they also have to keep innovating processes close to the assembly line—which explains why so many R&D centers have been established in Poland by US investors alongside their production facilities. So if companies reinvest in Poland and expand their manufacturing facilities and potential, it is natural that they will keep their innovation centers in Poland as well. This is a key concept the Polish government can use to the benefit of the country’s economy—keeping US manufacturers in Poland, reinvesting in the country.

Mother Nature’s birthday Spring toasts the health of our terrestrial orb

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n April 21, AmCham and the Foreign Commercial Service of the US Embassy joined hands to celebrate the 47th annual Earth Day—a global environmental initiative with its roots in environmental movements of the 1960s and 1970s. The event at the US Ambassador’s residence attracted over 80 people, including Polish parliamentarians, city officials from around the country, and government representatives, such as Andrzej Piotrowski, Deputy Minister of Energy, and Piotr Naimski, Secretary of State in the Prime Minister’s Office and government plenipotentiary for strategic energy infrastructure. Welcoming his guests, Ambassador Paul W. Jones said that the world is at a crossroads when it comes to taking care of the Earth, as according to global weather forecasts 2016 will be another record hot year in a row. He noted that while the problem of global warming still needs effective policies to be tackled, city planners face the challenge of rapidly growing urbanization. While today over half of the global population lives in cities, by 2050 it will increase to twothirds, Jones said. smart cities One solution for this problem may be the concept of Smart Cities, which is about creating a cleaner, more sustainable urban environment. This requires smarter collaboration among all stakeholders—government, NGOs, businesses and researchers. The ambassador said that the US government has been supporting Smart Cities with the Global Cities Team Challenge, an annual event bringing together representatives of cities around the world to share their experiences with Smart Cities concepts. He said he hoped that some cities in Poland will be represented in Austin, Texas, where the next gathering of Global Cities Team Challenge participants will take place in June. Another speaker, Tony Housh, AmCham Chairman (APCO Worldwide), picked up on the ambassador’s remarks about the need for collaboration between stakeholders, and said that to make the Smart City concept reality, all bits of information that are critical in understanding how cities work need to be gathered and analyzed so municipal authorities can see patterns of asset and resource usage, traffic, energy consumption, and

other types of information. He added that AmCham member companies have huge experience helping authorities in the US, as well as in Poland and globally, address the most pressing issues. For instance, IBM has run projects to demonstrate interconnectivity benefits in Katowice, Łódź and Lublin. The advanced Smart Cities solutions help local governments better understand, predict and intelligently respond to different patterns of activity and events on a daily basis as well as on a long-term planning level. In Warsaw, Coimpex, a development and investment organization, helped masterplan parts of the city with the development of an innovation campus in the northern district of Młociny, and is in the process of developing a transit-oriented neighborhood in Warsaw which will encourage walking and cycling with appropriate infrastructure. Housh said there are also innovative and practical technologies companies are introducing to help sustainability and Smart Cities projects reach their goals. United Technologies, a family of companies including Otis, Carrier, Chubb, Kidde, Pratt & Whitney and UTC Aerospace, provides high-tech systems and solutions used around the world to reduce greenhouse gas emissions, water consumption and industrial waste. This focuses on how industry can limit negative impacts on the environment while delivering solutions for Smart Cities programs. Housh added that the future of Smart Cities is efficient, environment-friendly production and value-added services, but for these sectors to thrive cities have to remove barriers in the digital world. With a true digital single market, new, innovative digital solutions can appear, generating environmentfriendly jobs for citizens of environmentfriendly cities. With this in mind, governments and businesses should support innovation and education as well as uninhibited cross-border data flows through broadband digital technology platforms. To make all that reality, Housh said, it requires efforts from society, business, public policy and community leadership. Only working together can they make sustainable development a reality “in our generation and for future generations to come.”

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Company profile CH2M Polska

Growing and sharing

How would you briefly describe your company? We are a global project and program management company delivering industrial and infrastructure projects. In Poland we have 20 years of experience, and employ more than 650 people across the country, including nearly 600 in Kraków. kraków is your Polish headquarters? Yes, our main office is in Kraków and it has grown significantly since September 2015, when the company decided to convert it into a global design and shared services center to support our global operations. At this point we are one of the largest global centers providing design and business support services to other CH2M offices around the world. So we are definitely on a growth path and will continue growing through 2017. why did the company pick kraków as the base for its Polish operations? There were several factors that influenced the company's decision. It is all about business and services optimization. We decided to source the best engineering talent at the right cost level globally and our choice was to build on our existing team of engineers based in Kraków, who have already been involved in global projects for the last eight years. They proved to be successful in delivering high quality work as part of international engineering teams on projects in the UK, the US and the Middle East. So

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AMERICAN INVESTOR SPRING 2016

Photo courtesy of CH2M Polska

American Investor’s Tom Ćwiok talks with Joanna Bensz,  country manager of project management, engineering design and consulting company CH2M Polska, about how its regional operations in Kraków have evolved into a global shared services center

New people bring in new energy and come up with new bottom-up initiatives based on their professional interests and ambitions. The expectations of the young generation of workers are growing in their vision of how the company can help them grow and facilitate their careers.

it was a good base for building a larger structure. kraków has not been perceived as a center for engineering and project design, but more of an iT hub and ssc location. How do you find the right candidates? There obviously are certain fields, such as marine engineering, in which we could not find the right candidates locally, but in this case we are looking for candidates to relocate from other locations. With two technical universities in Kraków and a number of them in the proximity, the region gives us an excellent supply of young engineering talent which is also important for us in the longer term.

How would you characterize the people who apply for jobs with your company today? Kraków is very attractive to young professionals. In addition to local candidates there are quite a few foreigners and many Poles who used to live and work abroad, but are now returning to Poland to be closer to their families. They would still like to work at an international company with global clients, on international projects. Such engineers bring over a tremendous experience in international markets and companies, which is a very important aspect to us, because engineers make up the core of our current and future staff. In such areas as IT, finance and accounting, the situation is a bit different. We face challenges in attracting shared


services skill sets due to many business centers in Kraków. Therefore we are building a strong local brand in order to attract the best talent and to become the employer of choice. Some functions, such as project accounting that are very specific to our sector, are currently not available in Kraków, as it is a relatively new and rare specialty. We find plenty of candidates with experience in accounting but not too many with combined experience in accounting and big projects delivery in close collaboration with project managers. In this case we look for candidates who have experience in accounting for large projects and put them through specialized internal training programs. Project management and engineering have been seen as a male stronghold. what is the gender balance across your Polish operations? Thanks to our SSC which includes mainly accounting and finance staff, this balance is currently quite unusual for our sector. Our female employees including engineers constitute the majority at over 50%, which is a higher percentage than our offices in the UK or US. Science and engineering-related subjects, the so-called STEM, appear to be more popular with women in Poland than in other countries. So there must be something about the culture in Poland that encourages more women to choose STEM for their professional career. For example, our project department in Kraków has more female than male colleagues and is unique in this respect globally. However, in the next few months we will concentrate mainly on growing our engineering staff so the balance might change slightly.

There is an important aspect in managing such a rapid growth—retaining corporate culture. For the eighth consecutive year we have been ranked among the World’s Most Ethical Companies. It is very important for us not only to hire the best candidates in terms of education or experience but also to make sure they share our values, as it carries over into how we work. CH2M has formal ways of helping employees boost their professional potential, and teach them the CH2M way. We do this via global employee networks, one of which is the Women’s Network. Its goal is to enhance the professional potential of our female colleagues, and show how the female point of view and empathy add value to the team work. Another employee network, called JuMP, concentrates on our junior and mid-level professionals who can discuss their experience, ways to shape work/life balance, etc. Experienced managers and business leaders from CH2M, but also guests from other companies, share their career tips and present case studies to learn from. It is a good, practical way of helping people realize their potential at the workplace. How do you work to recruit the right candidates? We enjoy a reputation as a preferred employer and are ranked among the Top 100 Most In Demand Employers which additionally generates an influx of CVs. What is more, we differ a bit in this respect from other companies because we run our own recruiting department and this solution has worked well for us globally. Direct contact with candidates is the best way to evaluate their potential and build relations for the future. We also cooperate with career centers at universities.

How about the average age? The median age at our company in Poland is currently 33, which makes us one of the youngest teams of all CH2M offices globally. This is again mainly due to our SSC growing faster than our engineering group. For years we had a stable work dynamic due to high staff retention. Now the number of recent hires exceeds the number of those who have worked with us for a long time. Some have been with us for 10 and even 15 years. New people bring in new energy and come up with new bottom-up initiatives based on their professional interests and ambitions. Diversities in gender, country of origin, and age contribute to a dynamic work culture.

which schools? How does that cooperation work? We collaborate with a number of schools in the Małopolska region, including AGH University of Science and Technology and the Cracow University of Technology. We run career days for their students and share professional knowledge with them. For instance, many guest trainers who come to Kraków from all around the world to train our people agree to speak about the business side of engineering at the guest sessions. It is crucial for us to extend our collaboration with academia, because we have been growing very fast recently and will continue to grow, plus we have plenty to share.

How do you control this young and diverse group of new people in your company?

How about cooperation with municipal and regional authorities? Understanding the importance of close

alignment with the private sector, the city and regional governments are open to cooperation with international business leaders and business organizations. They are aware of the value that such companies as CH2M add, helping shape the region and the city’s modern image as a technologically advanced location. CH2M is also a member of the Małopolska Innovation Council—an advisory committee to the Marshal of Małopolska, which helps the region to develop its innovation strategy. Thus with our local presence and continuous growth we are a good partner for Kraków’s new development strategy. From your perspective, how does the cooperation with business organizations such as amcham work? AmCham gives us a great insight into many areas that we operate in and helps us make more informed decisions. At the same time it facilitates cooperation with the city. For example, recently, AmCham in Kraków held a meeting with two major officials—the deputy mayor of Kraków and the governor of Małopolska province—who presented development plans for the region in different areas, including infrastructure. The company plans to grow its kraków operations until at least the end of 2017. what are your other plans? The growth of our Kraków operations is part of CH2M’s global strategy to move some competencies to regional and global delivery centers. At the same time, we would like to increase our share of business locally in Poland and the region. For us it is important to help our engineers achieve a much bigger footprint in the country to implement their knowledge on the local market. Having worked on state-of-the-art projects around the world they have experience designing a wide variety of modern industrial and infrastructure projects: semiconductor factories or data centers in the US and the Middle East, super-modern transportation infrastructure, smart motorways in the UK and Ireland or flood defense systems in the UK. I can even say that they work on projects using technologies that have not yet debuted in the marketplace. So in terms of professional engineering experience, there is a lot our employees can contribute to Poland, to enrich Polish engineering at large. We hope that the market in Poland will grow, seeing more investment from private and public investors.

• SPRING 2016 AMERICAN INVESTOR

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Company profile LS Tech-Homes

Building global awareness

what is your story in the us and how did you become interested in green buildings? I lived in the US, in the Chicago area, for more than 30 years. My primary business was construction and the housing industry. I was also involved in creation of the Polish-American Contractors and Builders Association, which is now celebrating its 20th anniversary. The philosophy of green buildings came to me in a natural way as a continuation of my general ideas regarding nature and the environment. The first time I had an opportunity to implement environment-friendly solutions was by winning and participating in the City of Chicago’s program Green Homes for Chicago. I cooperated with the mayor’s office to solve the problem of low-income families, where elements like construction costs and home maintenance costs were crucial. Those goals could be achieved by applying lightweight construction and energy-efficient solutions, which are all now part of the green building philosophy. what is the story of your company in Poland? The idea to invest and do business in Poland, where I was born, was with me for years when I was in the US. With the political and economical transformation in Poland, and especially Poland’s membership in the European Union, I was encouraged to re-emigrate and start a company in Poland. I came up with the mission for my new company in Poland, LS Tech-Homes, that it would be to bring energy-efficient, ecological and cost-effective solutions for the contracting industry. My company does this by introducing structural insulated panels (SIP) to the market in Poland as well as covering the growing demand in the neighboring markets. To support this strategy my company runs a strong R&D department as well as state-of-the-art production lines in three different locations in Poland. So I can say that the story of LS Tech-Homes, which is about development and growth, has just begun in Poland.

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AMERICAN INVESTOR SPRING 2016

Photo courtesy of LS Tech-Homes

American Investor’s Tom Ćwiok talks with Leszek Surowiec, president of LS Tech-Homes, producer and developer of high-tech construction elements, about the modern construction market in Poland and how his American experience affects how he does business in Poland

what is your product line? what are your markets? do you sell in Poland or also export? LS Tech-Homes is currently developing a chain of distributors in Europe. The company already has trade representatives in the Scandinavian countries, the UK, Ireland and Germany. We also have some ongoing projects in those countries. When it comes to the market areas that we target with our products, it is housing, commercial construction, infrastructure projects, and mining. Our company has three technological lines for SIP panels and two lines for pultrusion, which is a process for reinforcing plastic elements. We have just finished the construction of a production plant in northern Poland. It will output two-dimensional and three-dimensional elements for modular homes, which is the latest addition to our product line. So with the last addition, our company has four production plants in northern and southern Poland. I have to say that this would not have been possible had it not been for our excellent staff, who strive to make a difference through their collaborative work with experts from our strategic partner companies.

what is the role of innovation and R&d in your product development strategies? Innovation and R&D have always been crucial elements of our company’s business development strategy. For instance, our R&D department has upgraded our SIP panels by using MgO board as a facing. A SIP panel consists of two facing boards and a core that is usually EPS, PUR or polyurethane. With this the product is much more fire-resistant and moisture-resistant and obtains mechanical parameters that are much higher than popular drywall or OSB. So we invest in the research process and obtain all necessary certificates and technical approvals for our products. We did the first research in SIP and MgO boards and not only in Europe but also in the world. In addition, I have to say that our company has received numerous awards from local authorities in the housing industry. We have excellent relations with technical universities and industry labs in Poland. LS Tech-Homes is constantly investing in young engineers and PhDs, who are helping our company to develop new products and tools.


It is fair to say that LS Tech-Homes seizes every opportunity to invest in R&D. That is the main reason why four of our plants with technologically advanced production lines will open in strategic regions in Poland this spring. Under the same R&D-oriented strategy, our company is introducing another innovative technology—pultrusion—for composite profiles strengthened with fiberglass.

major towns usually build multifamily houses where they apply traditional technology. Currently innovative solutions cover only 5–10% of the market. But due to changes in home construction that will come to Poland with the new EU building regulations that highly promote sustainable and energy-efficient building, the shift toward innovative and high-tech solutions is inevitable.

Due to changes in home construction that will come to Poland with the new EU building regulations that highly promote sustainable and energy-efficient building, the shift toward innovative and high-tech solutions is inevitable.

with 30 years in business in the us, i wonder how this experience carries over to how you conduct business under the realities in Poland? As I said, I was involved in construction projects executed by the Chicago Housing Department. Those projects were aimed at less-fortunate residents of Chicago, who lived mainly in apartment towers or compounds and were relocated to new townhouses in better-off neighborhoods where they could integrate. I was a builder in those projects and saw how business works with the local administration. I worked closely with Chicago Mayor Richard M. Daley, who has been the longest-serving mayor of Chicago so far, and later with Congressman Barack Obama and Rahm Emanuel, who currently is Mayor of Chicago. So one of the lessons was about cooperation between government and business, how US companies lobby the government or government departments and individual decision-makers and local politicians to create a better business environment and get new business. That is a good process when it is transparent and open. It is quite different than in Poland, where politicians generally are afraid of having such relations with business, of getting good advice from business. But because I cooperated with the Trade Section of the Polish Consulate in Chicago, and later, after it was closed in 2006, with the Trade Section of the Polish Embassy in Washington, I did my share of gentle lobbying of Polish government ministers who visited the US and whom I was meeting through my Polish consulate connections. So, for instance, we would have a meeting on Monday in the morning, and I showed them that it was possible to establish a company via a computer connection in the US, and that the bank accounts of the newly established company were open before our meeting was over. It was about lobbying for the “one-stop shop,” where Poland should have a tool for entrepreneurs to open a company with almost no effort. I tried to show the Polish politicians that Americans attach no value to opening a company itself, while in Poland establishing a company was viewed as a value-adding project in itself. So that’s my share of lobbying that I did

i understand that your products are technologically advanced, but what does that mean in practice? Our products are perfect for harsh environments. They withstand adverse and extreme natural conditions. They are also energy-efficient and easy to move, disassemble, relocate and reassemble, which is why our mobile housing units are in demand by the military sector. For instance, the EU Rapid Reaction Force is eying our solutions with interest. are such solutions popular in Poland? We hope they will become popular in Poland as well. So far we generate most of our sales abroad. Our first delivery went to Angola, for the construction of living facilities for students and for the staff of the Academy of Fisheries and Marine Sciences in Namibe. At present, our largest project is in Croatia, where we will deliver SIP panels for 250 luxury mobile homes in the next two years. But the Polish market is a very specific one. First, 50% of homes in small towns and villages are built with local and traditional products like bricks or Ytong blocks. The construction process lasts very long. The builders that operate in

for American solutions in business administration. When I came back to Poland and based myself in Bielsko-Biała, I pursued another purely American idea for how business may operate. My company began to organize business breakfast meetings every other Tuesday for local businesses and politicians. It was a very successful project right from the start. Today we have some 50 participants at every meeting. They are members of companies in Bielsko-Biała but also from other regional cities such as Żywiec and Cieszyn. Those meetings serve as a platform for them to get to know each other, introduce their business, and talk about potential business opportunities. There are many Polish people in the region who have had business experience abroad, in countries such as the US and Canada, but also Western European countries. They return to Poland after many years working abroad and they find our breakfasts the right platform to build links with other businesspeople in the region. Those meetings are also frequented by local politicians, because they want to stay updated on what is going on in local business. Because of my American experience in working with less-fortunate residents of Chicago, and thanks to the idea of our business breakfasts, we were able to establish a foundation called Fundacja Lunita, which supports social projects in the region. I also keep in touch with the Polish American Congress. It is good cooperation too, because we can bring American business delegations to the region and to Poland. what are ls Tech-Homes’ plans for 2016 and beyond? The company has just gained a strategic investor—the Industrial Development Agency (ARP), which specializes in investing and managing some major companies in Poland. So considering this and the fact that we are opening three new production plants in the country, our production capacity is going to reach a completely new dimension, which means that our strategic plans will grow. Consequently, we plan this year to pursue more aggressive sales strategies and work on growing our chain of distributors. We are also thinking of building global awareness of our products and the value they bring. LS Tech-Homes was recently listed on NewConnect, the alternative trading floor of the Warsaw Stock Exchange. This year we plan to do the transition to be traded on the WSE main floor. So it is another huge challenge for us.

• SPRING 2016 AMERICAN INVESTOR

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Expert Cybersecurity

Tricky identities Linked in or spear-phished?

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obin Sage is a cyber threat analyst at the Naval Network Command Center in Norfolk, Virginia. She is attractive, present across all major social media platforms, and has 10 years of work experience. During her career, she started connecting and engaging with other people in the intelligence community using social and professional networking websites. She developed her network to include officials at US government agencies, highprofile political aides, and executives at top defense firms. She also engaged regularly with these people online to further develop her professional relationship with them. leaking information These contacts provided Robin with private and classified documents to review and for reference, as well as handing over emails and bank account details. Her Facebook friends in the Navy and other military branches shared photos of themselves at top-secret bases (with geolocation tags still embedded in the images). As Robin’s network grew, she started receiving job offers from firms. She was so well respected that she was invited to speak at various conferences. There is one slight problem with Robin Sage: she doesn’t exist. She was the invention of Thomas Ryan, a security consultant, who wanted to prove how much intelligence could be gathered via the virtual world. Over the span of a year, he built and gathered his intelligence under the guise of Robin Sage. easy prey Ryan proved how easily the mil36

itary and intelligence community could be duped. These same techniques are now being used by cybercriminals to target companies or individuals through increasingly sophisticated social engineering attacks. These attacks involve criminals gathering readily available information about their target company, to then use that data against their target. Using private data against its owner—“spear-phishing”— is fast becoming the go-to tool for industrial espionage and cybercriminals. We live today in a society where each of us freely gives away endless amounts of data about ourselves, allowing profiles to be built and used against corporations. Mattel, the US toy producer, fell victim to a social engineering scam when an email from the recently-appointed CEO requested a finance executive to transfer USD 3 million to a new vendor in China. The fact that such requests from the CEO required a second executive to sign off on the transfer was no problem, as the finance executive who initiated the transfer was authorized to sign off on the transfer. The scammers who carried out the fraud had clearly done a lot of homework prior to pulling off the scam: they penetrated the company’s corporate hierarchy, its internal procedures, and its payment patterns. They knew the right person to attack within Mattel. In terms of spear-phishing, LinkedIn has proven to be the platform of choice. There are several reasons for this: it is a social network for business, so nearly all businesses with aspirations to grow have a presence on the site. What is more, increasingly sophisticated crimi-

AMERICAN INVESTOR SPRING 2016

By Andrew de Roy, managing partner, CEE Consulting Group

nals are playing the “long game.” They’re not in this for a short-run, small-time scam. They’re willing to develop contacts for months or years in order to “soften them up” before actually attacking. Last but not least, LinkedIn is an easy site to use to make a profile appear credible. “Power networkers” (those with 500+ connections) are often happy to connect with anyone, and creating a virtual profile online as a headhunter or sales agent is more likely to get traction compared to most other social networking sites. lost in the crowd The weakest point in a company is its people. The easiest way to find out which people work in an organization is to scour LinkedIn. It is a treasure trove of easily accessible personal and corporate information. Moreover, there are plenty of fish in the sea, so within larger organizations there are always some less security-conscious social media users to target, and they are precisely who attackers want to connect with. Even if a manager does not use LinkedIn, it is likely that the scammer can identify another employee’s Facebook account, allowing them to “mine” the employee’s friends list for other employees and gather intelligence on the company’s operations and structure. Once you build up the specific information, you can use it against other members of the company. When you have several people from one organization connecting with you, it is much easier to get other individuals to connect with that profile, as people are much more likely to connect with oth-

ers with mutual connections. Imagine you are the scammer and now you have mapped out the corporate structure of a company by pilfering the data of a company’s employees from LinkedIn. What do you do next? More often than not, you are going to start emailing the company, and not as a Nigerian prince or by asking them to open malware-infected attachments (although that can still be effective). scam industry According to the Financial Times, fake emails sent by “CEOs” cost as much as USD 2 billion a year globally. There have been more than 12,000 corporate victims worldwide. These figures are huge, but this is still likely to be the cusp of the wave. All of us are at risk, regardless of the size of our organization. The truth remains that cybercrime conviction rates are negligible to non-existent, with current estimates that convictions are 1/1000 th of a percentage point. Unfortunately, law enforcement is years behind sophisticated cybercriminals in adopting and exploiting technologies. In the CEO email scam, after gathering intelligence on a company, a scammer sends an email purporting to be from the CEO of a company with a request that money be transferred from the company’s account to the scammer’s account. The ploy is usually accompanied with instructions to the accountant, whose identity was uncovered thanks to LinkedIn, to complete the transaction immediately and to keep the transaction secret from coworkers for some reason or another. Often the scammer says that


the transaction is related to a possible takeover bid for a rival company, and hence secrecy is of the upmost concern. Of course, other stories have also hooked accountants and finance employees. dirty tricks At this point, you may be thinking, “OK, but my company requires the written authentication of the CEO and the finance director.” Not a problem. The scammer will cc the “finance director” on the email, who will just minutes later reply—from an email account controlled by the scammer—that he or she also authorizes the transaction. How is this accomplished? The scammer simply identifies

The scammer added a single i between the m and p in “company.” not too small to be a victim You might be under the assumption that your company is too small to go after, or maybe your IT department actually knows what they’re doing. You would be wrong. Many Fortune 500 companies lack basic IT security policies that could be used to secure email communications. Have you ever heard of a Sender Policy Framework record? SPF records specify which computers are permitted to send emails from that company’s domain. SPF records should be at the forefront of major compa-

neering scams are Poland and Bulgaria. According to Rafał Karbowniczak of law firm Wolf Theiss, this is due to the very quick and efficient banking systems, where the money can hit the account within a few hours and the money can then be sent on again. Once you make the chain complicated enough, chasing the money becomes many times more difficult. In Poland it is possible to buy a shelf company in a few hours, and after that you are good to go. Thus Karbowniczak warns that any company should be vigilant when dealing with any new vendor in Poland, and checks should be made on the legitimacy of the company to which you are going to transfer money.

There is virtually no way to avoid having an online presence. The truth is that privacy is a relic in the digital era—“the end of pre-history,” as described by science fiction writer Charles Stross—and companies and individuals simply have to adapt to these new realities. a security hole in the company’s online identity and takes advantage of that hole. Often they purchase legitimate-looking domain names and create an email alias in the name of the C-level executives and email the employees directly responsible for the company’s finances. And all of this started because of the information you and your employees willingly shared on social media. In the US, the Federal Bureau of Investigation has issued several warnings pertaining to the so-called CEO scam. According to the FBI’s website, “The following is an example of a changed domain used for fraudulent activity: the domain name of the business is ‘legitimatecompanyABC123.com,’ and the domain name used to commit the fraud is ‘legitimatecomipanyABC123.com.’” Did you notice the difference between the domain names?

nies’ IT security, but often they are not. Not having an SPF record makes spoofing an email address to appear as if it came from the official company email address relatively easy for a knowledgeable cybercriminal. While multi-billion-dollar corporations have been attacked successfully, with scammers making off with millions of dollars by requesting the finance department to transfer cash into the scammers’ coffers, smaller mom-and-pop operations have also fallen victim to the scam. A scammer masquerading as a vendor requests that they fix an error on an invoice and nets several thousand dollars in profit, forcing SMEs to close up shop and declare bankruptcy when it turns out they cannot pay the real vendor and employee salaries after paying the scammer. In Europe, the favorite jurisdictions for such social engi-

Nevertheless, there are some basic tips for protecting yourself and your company from social engineering attacks: • Don’t be a “power networker.” At a minimum, briefly review a potential connection’s profile and make a determination of whether or not the profile is real. • Maintain good privacy settings. • Build rapport with your professional connections so they know you’re trustworthy. • See if a potential connection has profiles on other social networks or do a basic search to see if that person is indeed who they claim to be. • If you suspect a profile is fake, do a reverse image search on the profile photo using

Google or TinEye. Scammers often use images of models or stock photos on fake accounts. A good example of this is Robin Sage: her social media photos originated from a porn website. In terms of protecting your company from fake emails, we offer the following tips: • Conduct thorough background checks on any new vendors or subcontractors you bring into your firm. Check the legitimacy of the company you are taking on, and be extremely vigilant about any company that has just been formed or is “offthe-shelf.” • Require employees to doublecheck email addresses. • Employ encryption standards, such as S/MIME or Pretty Good Privacy (PGP), to secure your sensitive communications and help verify the sender’s identity by “signing” the email. • Attempt to require two-factor authentication for sensitive company decisions. For example, require the finance department to have written permission from multiple executives before sending large sums of money outside the company. But as we described before, this is not always reliable when a scammer sends an email from the “CEO” and a follow-up email from the “CFO.” • Carry out a full security audit periodically of your key procedures from a physical as well as a cyber perspective. don’t stay out There is virtually no way to avoid having an online presence. The truth is that privacy is a relic in the digital era— “the end of pre-history,” as described by science fiction writer Charles Stross—and companies and individuals simply have to adapt to these new realities. With data growing exponentially and some of us posting a selfie every day on Facebook or Instagram, we’re making it much easier for scammers to hijack our personal identities as well as our corporate identities.

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Expert Bankruptcy

Meet pre-pack sale Companies in dire straits may opt for pre-pack sale, a quick way to sell business in bankruptcy proceedings

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ne of the foremost problems in bankruptcy proceedings commenced before the end of 2015 was that it took ages to sell the debtor’s assets. When a company was declared bankrupt—and sometimes even earlier than that, when it filed for bankruptcy— its business started eroding. Employees began leaving, business partners drifted away, and new orders dwindled. The only way many of these businesses could keep afloat was to find a new owner, and quickly too. With no new owner on board, the companies went into business limbo, and could only sit back and watch their market position and value melt away. Time-consuming old ways Under the previous regulations, it was possible to acquire the debtor’s business in a procedure other than a (public) tender, but receivers rarely agreed to this, and the business was just left to languish that much longer. Even when a determined investor stepped forward, ready to buy the business there and then, receivers still announced a (public) tender, often asking an unrealistic price to avoid accusations of selling cheaply. As a result, it was rarely possible to sell business

in the first or even the second tender, despite gradual price reductions. Potential investors, having spent months waiting for reasonable terms and conditions of the deal to materialize, eventually walked away. new petition The pre-pack sale procedure in the amended Bankruptcy Law is meant to speed up sales of the debtor’s business (or its organized parts, or major asset components) to new investors by “pre-packaging” the deal. In the new procedure, it will be possible to sell the debtor’s business soon after it is declared bankrupt, thus boosting its chances not only of survival but also of growth. The proposition to sell the debtor’s business, its organized part, or any of its major asset components (such as real properties), and a description of the terms and conditions of the envisaged transaction, must be filed together with the bankruptcy petition. The petitioner must indicate at least the sale price and the buyer, but may also attach a draft sale agreement negotiated with the potential buyer. This kind of petition may be filed by a creditor or the debtor alike.

Pre-pack sale is designed to prevent the value of the bankrupt enterprise from eroding. A quick sale also helps stem other adverse consequences that are often triggered by declarations of bankruptcy and impact the value of enterprises. 38

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By Anna Maria Pukszto, partner, head of the Restructuring, Insolvency and Bankruptcy Practice in Poland, and Piotr Dulewicz, partner, head of the M&A and Private Equity Practice in Poland, Dentons

Role of bankruptcy courts The bankruptcy court now has three options available to it. It must grant the petition and approve the terms and conditions of the sale in its decision declaring bankruptcy if the proposed price exceeds the amount that could be obtained in regular bankruptcy proceedings involving liquidation in accordance with the generally applicable rules less the costs of the proceeding that will be “saved.” The court may also approve the terms and conditions of sale if the price comes close to this amount and approval is advisable in light of the public interest or would help the debtor’s business to survive. Finally, the court may dismiss the petition if the proposed price is deflated. If the court grants the petition, the receiver should conclude the proposed sale agreement with the indicated buyer within 30 days after the court’s decision becomes final and non-appealable. Right to appeal The decision approving the terms and conditions of sale may be appealed by any of the creditors within a week after the declaration of bankruptcy is announced. In its appeal the creditor must demonstrate that it is entitled to claims against the debtor and explain the reasons for appealing the court’s decision by, for example, charging that the bankruptcy court erroneously found that the price it approved is higher than the amount that could have been salvaged in liquidation in accordance with the generally applicable rules. The receiver may also refrain from entering into the sale agreement on the approved terms and conditions if the value

of the assets to be sold changes substantially as a result of changed or new circumstances. If this happens, the receiver must file a petition with the bankruptcy court to set aside or amend the decision approving the terms and conditions of sale, indicating, in particular, a new price. If the court sets aside its decision, the pre-pack sale will not go ahead and the receiver will liquidate the bankruptcy estate in accordance with the generally applicable rules. If the court amends its decision, thus amending the terms and conditions of sale, the sale agreement will be concluded in accordance with the amended terms and conditions. summary Pre-pack sale is designed to prevent the value of the debtor’s business (its organized parts, or major asset components) from eroding. A quick sale also helps stem other adverse consequences that are often triggered by declarations of bankruptcy and impact the value of business. Pre-pack sale may translate into tangible benefits for both creditors and buyers. Creditors may hope to satisfy their claims sooner and recover more money. Buyers can be sure they will be buying the business on the terms and conditions negotiated before the bankruptcy is declared, and can negotiate the sale agreement that will be concluded by the receiver. Also, the businesses they acquire will be free of any encumbrances: mortgages, pledges or third party rights and claims. And, most importantly for investors— they will not be liable for the bankrupt’s debts.


Taxation

Poland bets on innovation Or does it? The new R&D tax relief is broader than the previous technology relief, but only a modest percentage of eligible costs can be deducted

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nnovation is universally recognized as one of the fundamental conditions for a competitive economy. Fostering innovation is one of the tasks assumed by the European Union and the individual member states. The Innovation Support Act of September 25, 2015, is designed to support Polish businesses in developing innovative solutions. The main way the act seeks to achieve this goal is through introduction of a new tax deduction— R&D relief—in the Corporate Income Tax Act and the Personal Income Tax Act. scope of R&d relief The scope of R&D relief is specified in the definitions section of the Innovation Support Act. First, the act defines research and development activity to mean creative activity including (i) scientific research and (ii) development work undertaken systematically with the aim of increasing resources of knowledge or exploiting such resources to create new solutions. The concept of scientific research is broken down into three categories: • Basic research—original research, experimental or theoretical work undertaken primarily to obtain new knowledge about fundamental phenomena and observable facts, without the expectation of immediate commercial application • Applied research—research work undertaken with the aim of obtaining new knowledge oriented primarily to practical application • Industrial research—research aimed at obtaining new knowledge and skills in order to develop new products, processes or services or introduce significant improvements in existing products, processes and services. Development work is under-

stood to mean work consisting primarily of exploiting existing knowledge to create and design new, modified or improved products, processes and services, excluding work on periodic and routine changes, even if they do constitute improvements. Rules for taking R&d relief Under the new regulations, taxpayers taking R&D relief must segregate the costs of their research and development work in their accounting records or, in the case of legal persons, in their register of fixed assets and intangibles. Through R&D relief, the taxpayer is entitled to take an additional deduction from taxable income for the amount of revenue-earning costs incurred for R&D activity, referred to in the act as “eligible costs,” including costs of: • Salaries for staff hired to conduct R&D activity, and their related non-salary employment costs • Acquisition of materials directly connected with R&D activity • Expert opinions, consulting and similar services, as well as research conducted under a service contract, but only if the contractor is a scientific unit and the services are acquired for the purpose of conducting R&D activity • Paid use of apparatus and research equipment, dedicated exclusively to R&D activity (and acquired from unaffiliated entities) • Depreciation of fixed assets (excluding passenger cars, buildings, other structures and separately owned premises) and intangibles used in R&D activity. The Innovation Support Act also introduces an additional condition for eligible costs incurred in connection with basic research. Such costs can be deducted only if the basic research was conducted

By Aleksandra Faderewska-Waszkiewicz, advocate, tax adviser, partner, and Karolina Jesionowska, associate, Łaszczuk & Partners

pursuant to an agreement with a scientific unit within the meaning of the Act on the Rules for Funding of Science of April 30, 2010. The relief may be taken by taxpayers who are individuals earning income from non-agricultural economic activity, regardless of whether they are taxed under general rules or under a flat rate (which was not possible in the case of the previous technology relief). Taxpayers who operate in a special economic zone during the tax year are not eligible for the relief. Taxpayers also lose the right to R&D relief if they are reimbursed in any form for the eligible costs. amount of deduction Unfortunately, eligible costs are not subject to an additional deduction in full. Micro, small and medium-sized enterprises have a right to a 20% deduction, and other enterprises 10%, except for salaries and non-salary employment costs of staff hired to perform R&D activity, where there is a 30% deduction. Moreover, the amount of the deduction is capped at the amount of income obtained from non-agricultural economic activity during the tax year. The deduction is taken in the tax return for the year in which the eligible costs are incurred by the taxpayer. If the taxpayer cannot take some or all of the deduction in that year because the taxpayer had a loss or had insufficient income to take the full deduction, it may be carried forward for the next three tax years. elimination of existing relief The R&D relief replaces the previously functioning relief for new technologies. The technology relief had a much narrower scope. It covered only expenditures on new

technologies constituting intangibles (such as licenses and intellectual property rights) which had not been used anywhere in the world for longer than five years. Technology relief did not cover fixed assets. Moreover, a condition for taking the relief was to obtain an opinion from an independent scientific unit confirming the innovativeness of the acquired technology. In the case of individual taxpayers, technology relief was available only to those taxed under general rules, not at the flat rate. But the amount that could be deducted was higher, at 50% of the incurred costs. R&D relief entered into force on January 1, 2016. However, taxpayers who obtained the right to technology relief prior to the end of a tax year that began before January 1, 2016, as well as taxpayers whose tax year does not coincide with the calendar year, will retain the right to the technology relief under the prior rules. will it matter? The final form selected for R&D relief has met with criticism. The significant reduction in the amount that can be deducted, as compared to the amount originally included in the draft of the Innovation Support Act, as well as the requirement to contract out research services only to scientific units, raises doubts whether the relief will achieve the desired results and actually attract foreign investors to Poland and encourage taxpayers to conduct R&D projects in Poland. It remains to be seen whether taxpayers take more advantage of the new R&D relief than they did of the previous technology relief, and what influence this new tax incentive will have on the growth of innovation in Poland.

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Expert Labor law

The 33/3 rule Employers face amended regulations governing fixed-term employment contracts

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he last few years have seen several significant amendments to employment regulations in Poland. The latest major amendment to the Labor Code came into force on February 22, 2016. One of the new features it introduces is the “33/3 rule,” which means that the combined period of employment on the basis of one or more fixed-term employment contracts between the same parties to the employment relationship may not exceed 33 months, and the total number of fixed-term employment contracts between the parties may not exceed three. Transitory provisions It is worth noting the importance of the transitory provisions that entered into force along with the amendment. They say that in certain instances, the new regulations will apply also to contracts in force at the time the amendment entered into force. First we should emphasize the instances where employers will continue to apply the previous regulations after February 22, 2016. The earlier regulations apply in the case of: • An employment contract for the period of performing specific work in force on February 22, 2016. The contract will be binding until its underlying condition has been satisfied (completion of the work), causing the contract to expire, and entry into force of

the amendment does not affect the nature of the contract. Bear in mind that from February 22, 2016, it is no longer possible to enter into this type of contract. • A fixed-term employment contract in force on February 22, 2016, where notice of termination was given before that date. In such cases the notice period runs for 2 weeks. • An employment contract for a fixed term of up to 6 months which was in force on February 22, 2016. Under the current provisions, there is no possibility to terminate such contracts upon notice, and such contracts will terminate on the date specified in the contract. • An employment contract for a fixed term exceeding 6 months which does not provide for the possibility of termination on 2 weeks’ notice, in force on February 22, 2016. In such cases as well, there will be no possibility to terminate the contract upon notice under the previous provisions and the contractual provisions. However, the lack of the option to unilaterally terminate the contract with notice will apply for a period of no longer than 33 months following the date the amendment entered into force. Once 33 months has elapsed following February 22, 2016, those contracts will be converted into contracts for an

The Labor Code amendment that entered into force on February 22, 2016, makes far-reaching changes, especially when it comes to fixedterm employment contracts. 40

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By Katarzyna Witkowska-Pertkiewicz, attorney at law, Squire Patton Boggs

indefinite term and can be terminated with notice in accordance with the general rules. notice periods The new law on notice periods is applicable when terminating employment contracts for a fixed term of more than 6 months which provide for the possibility of termination on 2 weeks’ notice and were in force on February 22, 2016. On that date, the clauses in such contracts providing for the possibility of termination on 2 weeks’ notice expired, and consequently the notice period based on the employee’s period of employment with a given employer will apply. Significantly, in such cases the length of the notice period will be determined based on the period the employee has been employed following February 22, 2016. new provisions for old contracts Fixed-term employment contracts in force on February 22, 2016, will be governed by the new provisions regarding the combined period of employment. However, the period of employment includes the period of employment based on the employment contract for a fixed term starting from February 22, 2016, and the employment contract in force on that date is treated as the first or second contract. If the allowed 33month period of employment on the basis of one or more contracts for a fixed term, calculated from the date the amendment entered into force, is exceeded, the contract will be deemed to be a contract for an indefinite term. This does not apply to employment contracts for a fixed term concluded before February 22, 2016, if the termination

of such contracts is to take place later than 33 months from that date and the employee’s employment relationship is subject to special protection against termination or unilateral termination in the period from February 22, 2016, through 33 months after the amendment entered into force. In such case the contract will expire at the end of the period for which it was concluded. counting to three A contract in force on February 22, 2016, will be treated as the first contract out of the allowed maximum of three contracts if it was concluded as the first contract before the introduction of the changes, or the second contract of the allowed maximum of three if it was concluded as the second contract before the changes. Significantly, an employment contract for a fixed term concluded after the amendment entered into force, but within one month after termination of the second contract for a fixed term under the new regulations, will be deemed to be an employment contract for an indefinite term if the one-month period began on or before the amendment entered into force. summary The Labor Code amendment that entered into force on February 22, 2016, makes far-reaching changes, especially when it comes to fixed-term employment contracts. Under the transitory provisions, whether the old rules or the new rules apply to a contract in force on February 22, 2016, depends on the contents of the contract.


Dispute resolution

ADR on the way up From this year, alternative dispute resolution in Poland should be faster, cheaper and more By Maciej Jóźwiak, attorney at law, Litigation team, Wierzbowski Eversheds popular

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ver 1.8 million commercial cases were filed in the Polish courts in 2015. Statistics in the United States show that there a substantial majority of commercial disputes end in settlement, reached through mediation or arbitration. But in Poland neither of these institutions is that popular yet, mainly because they are not recognized by businesspeople. Lawmakers in Poland decided to change that. The Act of September 10, 2015, Amending Certain Acts to Encourage Amicable Methods of Dispute Resolution has been in force since January 1, 2016. The intention of the changes was to promote mediation and arbitration in civil cases by streamlining the procedures and organizational aspects affecting the time and cost of the proceedings.

stronger mediator First, in amending the existing regulations governing mediation, the Parliament sought to strengthen the mediator’s position. The mediator will now be able to support the parties in formulating settlement proposals, and, at the parties’ mutual request, even suggest how the dispute should be resolved. Mediators have been ensured the right to review the case file promptly after the parties enter into mediation, thus increasing their level of preparation to conduct the mediation. A list of permanent mediators has been drawn up at each of the regional courts throughout the country, with the contact details of the mediators and additional information about their qualifications to help the parties make a selection. The parties have the freedom to make their own choice of mediator, as the parties are entitled to refer to the permanent list but not required to.

Guarantees of the confidentiality of mediation proceedings have also been expanded by introducing a legal obligation to maintain the confidentiality of facts disclosed during the course of mediation, not only on the part of the mediator but also by the parties and any other persons taking part in the mediation.

different procedures The second group of changes in the regulations cover formal solutions in judicial proceedings. It is now a mandatory element of a statement of claim filed with the state court to inform the court whether the parties have attempted mediation or some other out-of-court method of resolving the dispute before filing the case in court, and if not, to explain why such attempts were not made. Significantly, the reasons for not attempting an amicable resolution of the dispute must be justified. Thus it is insufficient for the plaintiff to state that no attempt was made to resolve the dispute because it obviously would have been pointless. Moreover, the absence of this information is now regarded as a “formal defect” in the statement of claim, and consequently the court is authorized to reject the statement of claim if it lacks this information, and close the case without reaching a decision. The judge is now entitled to summon the parties to participate in an informational meeting concerning amicable methods of resolving the dispute. The judge may also direct the parties to mediation at any stage of the case, and not only at the beginning of the case, and can do so more than once during the same case. Therefore, if the judge conducting the case perceives that there is a chance for reaching a settlement, and the litigants only need

the assistance of a third party acting as mediator, the court will be authorized the stay the proceeding and direct the parties to mediation.

Favorable cost regulations Thirdly, the changes extend to the cost element of mediation proceedings. Now, if mediation was conducted before filing suit but was unsuccessful, the costs of the mediation can be included in the award of trial costs. This means that if either of the parties to the trial grossly contributed to the failure of attempts at amicable resolution of the dispute, the party should expect to be required to bear the costs of that procedure if the case is lost. Financial relief has also been introduced in the form of exemption from the court filing fee on an application to confirm an out-of-court settlement concluded before a mediator, as well as refund of the entire court fee to the parties if they reach a settlement before commencement of the hearing of the case at the first instance. Another positive move is the new rule that commencement of mediation proceedings interrupts the running of the limitations period for claims covered by the mediation, so long as the party holding the claim files a statement of claim with the court within three months after completion of mediation. changes in post-arbitration As a way to persuade businesses to consider alternative dispute resolution methods, the Parliament also simplified the arbitration regulations. One of the most important aspects of arbitration is the ability to enforce the award issued by the arbitral tribunal. The amendment simplified and shortened the procedure for obtaining recognition

or enforcement of an arbitration award, but also the procedure for seeking to set aside the award. The procedure will be conducted at only one instance, and the period for filing a petition to set aside the award has been cut by a third, from three months to two months. Finally, the regulations concerning judicial and arbitration proceedings have been unified in relation to bankruptcy. It will no longer be necessary to abandon pending arbitration cases because one of the parties enters bankruptcy, and it will be possible to commence new arbitration proceedings involving debtors in bankruptcy. Tax incentives Interestingly, favorable solutions have been introduced in the tax law to encourage parties, particularly enterprises, to resolve disputes out of court. The amending act introduced the possibility of settling correcting invoices and other accounting documents involving adjustment of revenue and costs (adjustment of taxable income for purposes of personal income tax or corporate income tax) during the current settlement period. summary The recent amendments represent one of the many steps that will need to be taken to bring the effectiveness of the model of mediation and arbitration followed in Poland closer to that achieved in English-speaking countries. It remains to be seen whether the desired effect will be obtained. But the longest journey begins with a single step.

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Events AmCham in Warsaw

Breakfast with a power broker

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n January, AmCham held a Breakfast Meeting with Ambassador Michael Froman, US Trade Representative, a member of President Barack Obama’s Cabinet and advisor on trade and investment. The venue was the Sobański Palace in Warsaw, home of one of the most powerful business alliances in Poland, the Polish Business Roundtable.

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1. Jacek Szwajcowski, president of the Polish Business Roundtable (Pelion); Paul Jones, US Ambassador to Poland; Tony Housh, AmCham Chairman (APCO Worldwide); Ambassador Michael Froman, US Trade Representative. 2. Tony Housh; Eric Plas, MSD Polska. 3. Marzena Drela, AmCham Deputy Director; Bartosz Ciołkowski, MasterCard; Dorota Dabrowski, AmCham Managing Director. 4. Jacek Szwajcowski; Tony Housh. 5. Roman Rewald, AmCham Board Member (Weil Gotshal); Magdalena Burnat-Mikosz, AmCham Board Member (Deloitte), Wojciech Arszewski, UPS. 6. Robert Koński, Rathdowney Polska; Tony Housh; Michael Froman. 7. Marzena Drela; Tony Housh; Daniela Piotrowska, Polish Business Roundtable. 42

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Meet the President’s man

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n January AmCham met with presidential minister Krzysztof Szczerski, who talked about Polish President Andrzej Duda’s priorities in foreign policy, foreign investment and promotion of Poland abroad, as well as the President’s approach to changes at home.

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1. Tony Housh, AmCham Chairman (APCO Worldwide); Krzysztof Szczerski, Secretary of State at the Chancellery of the President of Poland. 2. Marten Shoenrock, InterContinental Hotel; Sebastian Arana, 3M. 3. Roman Rewald, AmCham Board Member (Weil Gotshal); Jeff Kohler, Stan Prusiński, Boeing; William Czajkowski, US Commercial Service. 4. Ernest Bartosik, Unipharm; Dorota Dabrowski, AmCham Managing Director; Joanna Bensz, AmCham Vice Chair (CH2M Polska). 5. Jolanta Jaworska, AmCham Board Member (IBM); Dorota Dabrowski. 6. Agata Dulnik, Accenture; Krzysztof Szczerski. 7. Tony Housh comments for Polish Radio. SPRING 2016 AMERICAN INVESTOR

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Events AmCham in Warsaw

Science in business

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n February AmCham hosted Jarosław Gowin, Deputy Prime Minister and Minister of Science and Higher Education, who talked about the ministry’s plans for reforming Polish science so it works more in sync with business and economic demands.

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1. Dorota Dabrowski, AmCham Managing Director. 2. Jarosław Gowin, Deputy Prime Minister, Minister of Science and Higher Education. 3. Andrew Lubelski. 4. Robert Szymański, Heidrick & Struggles; Ernest Bartosik, Unipharm. 5. Roman Rewald, AmCham Board Member (Weil Gotshal); Piotr Skirski, Cisco Systems; Richard Kałużyński, Kałużynski & Madeja. 6. Stanley Urban; Jagoda Zabłocka, Boyden. 7. Magdalena Pavlak-Chiaradia, ERM; Andrzej Pawelczak, Animex. 8. Minister Jarosław Gowin at a press briefing.

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Mixing in winter

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n February, AmCham, in cooperation with the Sheraton Warsaw, held its Winter Business Mixer at the Sheraton’s Olive Restaurant. The sponsors were Amundsen, Jim Beam, Coca-Cola, Mielżyński, Avis, BSCAN and Forever Living Products.

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1. Dorota Dabrowski, AmCham Managing Director; Agata Prosińska, Sheraton Warsaw Hotel. 2. Marek Siwiec, former Vice President of the European Parliament; Dorota Dabrowski. 3. Pat Burke, Ernst & Young; Tim Hyland, FCm Travel Solutions; Marek Szydłowski, TVN. 4. Michał Kozłowski, Icon Real Estate; Sandra Wróblewska, Kajima. 5. Sebastian Zacharko, Stock Polska; Monika Smorawska, Sheraton Warsaw Hotel; Michael Hopf, Westin Hotel. 6. The Jim Beam bar. 7. Radosław Lesiak, Avis; a raffle winner; Anita Kowalska, AmCham. 8. Aleksandra Wiśniewska, Air France–KLM/Delta; Jacek Stryczyński, Beata Bednarska, Lionbridge.

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Events AmCham in Warsaw

Growing in a new political reality

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n March, AmCham held its Monthly Meeting with Mateusz Morawiecki, Deputy Prime Minister and Minister of Development, who talked about the government’s strategies for giving Poland’s knowledge-based economy a boost.

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1. Dorota Dabrowski, AmCham Managing Director. 2. Tony Housh, AmCham Chairman (APCO Worldwide); Mateusz Morawiecki, Deputy Prime Minister, Minister of Development. 3. Aneta Muskała, International Paper Kwidzyń; Kiejstut Żagun, KPMG. 4. Andrzej Pawelczak, Animex; Joseph Wancer, AmCham Board Member (Bank BGŻ BNP Paribas); Mirosław Dackiewicz, Agri Plus. 5. Tony Housh; Judith Gliniecki, AmCham Vice Chair (CEE Equity Partners); Dorota Dabrowski. 6. Dorota Dabrowski; Bartłomiej Śliwa, NCR. 7. Anita Kowalska, AmCham; Eric Stewart, US-Poland Business Council. 8. Press briefing with Mateusz Morawiecki. 46

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Mixing in work-friendly spaces

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n March, AmCham members and friends took part in the Spring Business Mixer at the offices of CBRE, commercial real estate specialists. The offices, designed using the agile office concept Workplace360, supports the CBRE New Way of Working culture.

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1. Dorota Dabrowski, AmCham Managing Director; Daniel Bienias, CBRE. 2. Michał Cader; Tony Housh, AmCham Chairman (APCO Worldwide). 3. Angela Palazzolo, US Embassy; Krzysztof Wierzbowski, Wierzbowski Eversheds. 4. Angel Kalinov, C.H. Robinson; Anita Kowalska, AmCham. 5. Magda Pavlak-Chiaradia, ERM; Aleksandra Minkowicz-Flanek, Dentons. 6. Beata Pawłowska, Oriflame; Bolesław Czerwiński; Marzena Drela, AmCham. 7. Dorota Serafin, AmCham; Błażej Świętanowski, Lionbridge; Anita Kowalska; Tony Housh. 8. The mixer in progress.

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Events AmCham in Warsaw

Around the world in 45 minutes

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n April, AmCham members and friends met with the head of Poland’s diplomacy, Minister of Foreign Affairs Witold Waszczykowski, to hear about the current government’s plans for the world. The venue was the InterContinental Warsaw Hotel.

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1. The meeting in progress. 2. Michał Koczalski, CEC government relations; Frank DeParis, US Embassy. 3. Grzegorz Hajdarowicz, Gremi; Krzysztof Krawczyk, CVC Capital Partners. 4. Marta LaCrosse, BAE Systems; Marten Schoenrock, InterContinental Warsaw.  5. Tony Housh, AmCham Chairman (APCO Worldwide); Marcin Korolec. 6. Jerzy Thieme; Dorota Dabrowski, AmCham managing director; Józef Sobolewski, Ministry of Energy. 7. Bartek Kwiatkowski, PwC; Aneta Muskała, International Paper. 8. Alexandra Kazimierski, Hudson; William Czajkowski, US Commercial Service. 9. Robert Jędrzejczyk, French Chamber of Industry and Commerce in Poland; Tony Housh. 10. Marzena Drela, AmCham; Maksymilian Świniarski, Eli Lilly; Anita Kowalska, AmCham.

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AmCham in Kraków & Katowice

In touch with local reality

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n March, AmCham in Kraków & Katowice held a meeting with Jacek Krupa, Marshal of Małopolska Province (speaker of the province parliament), and Tadeusz Trzmiel, Deputy Mayor of Kraków, who talked about business growth strategies and investment plans for the city and the region.

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1. Jacek Krupa, Marshal of Małopolska Province; Joanna Bensz, AmCham Kraków & Katowice Director, AmCham Vice Chair (CH2M Polska). 2. Tadeusz Trzmiel, Deputy Mayor of Kraków. 3. Olaf Kamel, Delphi; Joanna Bensz; Rachel White, CH2M; Walter Braunohler, Consul General, US Consulate in Kraków. 4. Olaf Kamel; Andrew Caruso, US Consulate in Kraków; Chad Legere, CH2M UK. 5. Walter Braunohler; John Lynch, AmCham Board Member (Lynka). 6. Joanna Bensz; Tadeusz Trzmiel. 7. Joost van der Voort, CH2M Polska; Marta Godlewska, White & Case. 8. Walter Braunohler. 9. Joanna Bensz. 10. The meeting in progress. 11. Marcin Nowak, Capgemini; Tomasz Berbeka, International Paper.

SPRING 2016 AMERICAN INVESTOR

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Events AmCham in Wrocław

Diplomacy at work

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n February, AmCham in Wrocław held a reception for John C. Law, Deputy Chief of Mission at the US Embassy in Poland. The venue was Wrocław’s Q Best Western Hotel Plus.

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1. Donald Emerick, US Consulate General in Kraków. 2. Walter Braunohler, US Consul General in Kraków. 3. John C. Law, Deputy Chief of Mission at the US Embassy in Poland. 4. Małgorzata Ordon, PM Group; Walter Braunohler; Leszek Patrzek, Deloitte; Monika Ciesielska-Mróz, AmCham in Wrocław Director (PM Group). 5. Rafał Szafraniec, KPMG; Monika Ciesielska-Mróz; Jacek Kudrzycki, PM Group. 6. Pam DeVolder, US Consulate General in Kraków; Joanna Matryba, Mondelēz Polska. 7. Donald Emerick. 50

AMERICAN INVESTOR SPRING 2016


Keep it safe

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ag1 dalena PavlakChiaradia, managing director of ERM Polska, moderated a discussion panel at the March Business Breakfast held by AmCham in Wrocław, devoted to behavioral safety. The venue was Wrocław’s Q Best Western Hotel Plus.

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1. Monika Ciesielska-Mróz, AmCham in Wrocław Director (PM Group); Łukasz Gałan, Mondelēz Polska; Małgorzata Paprocka, Magdalena Pavlak-Chiaradia, ERM Polska; Jonathan Cuthbert, PM Group. 2. Beata Barańska, Wabco Polska; Małgorzata Paprocka, Agata Godlewska-Hejduk, ERM Polska. 3. Magdalena Pavlak-Chiaradia; Beata Barańska. 4. Rafał Trzaska, IBM; Paweł Niewojno, Mondelēz Polska; Tomasz Morawski, Iron Mountain Polska. 5. Monika Ciesielska-Mróz; Beata Barańska; Jonathan Cuthbert; Małgorzata Paprocka; Łukasz Gałan; Magdalena Pavlak-Chiaradia. 6. The Mondelēz Polska team: Łukasz Gałan, Joanna Matryba, Paweł Niewojno, Barbara Olbert. SPRING 2016 AMERICAN INVESTOR

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Events AmCham in Gdańsk and AmCham in Wrocław

Digital time bandits

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yber detective work in the digital era was the topic of a meeting held by AmCham in Gdańsk with guest speaker Andrew Haggard from CEE Consulting Group, specialists in cybercrime, digital forensics and market intelligence. The venue was the Radisson Blu Hotel in Gdańsk.

Andrew Haggard grabs the attention of his audience.

We are all in it together

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n April, Gabriella Schittek, Global Stakeholder Engagement Manager for CEE at the Internet Corporation for Assigned Names and Numbers (ICANN), met with AmCham in Gdańsk to talk about the role of businesses in shaping the Internet after the US government stops overseeing ICANN, as it recently announced. The venue was the Gdańsk Qubus Hotel.

Gabriella Schittek talks about the future of the Internet.

Drivers of change

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n April, AmCham member companies Edenred and PwC held a workshop in Wrocław, with AmCham in Wrocław as a partner for the event, devoted to how finance directors may be leaders of change in their organizations across such areas as corporate finance management, expense control and tax optimization. Henrietta Varju, CEO of Edenred Polska, gives her presentation.

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AMERICAN INVESTOR SPRING 2016


Boost your company exposure by sponsoring AmCham events We offer a unique opportunity to increase your company’s visibility through sponsorship of AmCham events, by promoting your company to the business and diplomatic community and receiving media coverage. AmCham events in Warsaw include business mixers, high-level discussion panels at CEO Forums, as well as our big annual events, the 4th of July Picnic and the AmCham Diner at the Krynica Economic Forum and the European Economic Congress in Katowice, which attract hundreds of guests. In addition to AmCham’s Warsaw events, companies can sponsor events in Kraków, Katowice, Wrocław, and Gdańsk. Events include business mixers, conferences, the AmCham Academy in Kraków, and more. For more information on events, please contact us at

anita.kowalska@amcham.pl


Events AmCham in Warsaw

Breakthrough technologies ahead!

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actories of the Future was the theme of the 8th Manufacturers’ Forum, held at the Warsaw Marriott Hotel in April. The half-day event was a joint effort by AmCham and the Ministry of Development.

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1. The forum opens: Tony Housh, AmCham Chairman (APCO Worldwide), delivers his welcome speech. 2. Paweł Chorąży, Deputy Minister of Development. 3. John Law, Deputy Chief of Mission, US Embassy. 4. Prof. Stanisław Wincenciak, Dean for Development, Warsaw University of Technology. 5. Henryk Siodmok, Atlas Group. 6. Jolanta Jaworska, AmCham Board Member (IBM); Niklaus Waser, Watson IoT Center Munich, IBM. 7. Janusz Dziurzyński, P&G. 8. Andrzej Soldaty, Initiative for Polish Industry 54

AMERICAN INVESTOR SPRING 2016


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4.0. 9. Michał Golasz, GE. 10. Joanna Bensz, AmCham Vice Chair and Manufacturing Committee Chair (CH2M). 11. Capt. Maciek Kwiatkowski, Deepwater Container Terminal Gdańsk. 12. Piotr Wojaczek, Katowice Special Economic Zone. 13. Przemysław Paździorek, 3M Poland. 14. Paweł Wideł, GM. 15. Aneta Muskała, International Paper Kwidzyń. 16. Iwona Chojnowska-Haponik, Polish Information and Foreign Investment Agency. 17. Piotr Dardziński, Under Secretary, Ministry of Science and Higher Education. 18. Iwona Chojnowska-Haponik; Andrzej Soldaty; Paweł Tynel, EY. 19. Robert Orzyłowski, Joe Breen, Lockheed Martin. 20. Capt. Maciek Kwiatkowski; Dorota Dabrowski, AmCham Managing Director; Tony Housh. 21. Przemysław Paździorek, Bartek Morzycki, 3M Poland; Paweł Wideł. 22. Monika Nachyła, Bank BGŻ BNP Paribas; Ryszard Kruk, Enterprise Investors. SPRING 2016 AMERICAN INVESTOR

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Events AmCham in Warsaw

Down to Earth

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n April, AmCham and the Foreign Commercial Service of the US Embassy joined hands to celebrate Earth Day, focusing on solutions for sustainable development and efficient use of resources.

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1. Tony Housh, AmCham Chairman (APCO Worldwide). 2. Paul W. Jones, US Ambassador to Poland. 3. Bill Czajkowski, Commercial Counselor, US Embassy; Angela Palazzolo, Economic Officer, US Embassy; Ales Bartunek, IBM Polska. 4. Włodzimierz Zahuta, Coimpex; Jolanta Samul-Kowalska, Hudson; Anna Hipsz, Coimpex. 5. Piotr Naimski, Secretary of State, Prime Minister’s Office; Marzena Drela, AmCham Deputy Director. 6. The Otis team. 7. Michał Koczalski, CEC Government Relations; Marzena Drela; Marcin Olender, Google. 8. Tony Housh; Piotr Kania, Otis. 56

AMERICAN INVESTOR SPRING 2016

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Sponsors


Working with industrial clients worldwide to tackle their most complex engineering challenges At CH2M we believe no challenge is unsolvable. We combine our best resources from across the company to deliver exciting projects including data centers, manufacturing plants, R&D facilities, universities, special economic zones and infrastructure laying the foundations for human progress.

Katarzyna Chmurzyล„ska Marketing and PR Manager Katarzyna.Chmurzynska@ch2m.com ul. Wspรณlna 47/49 00-684 Warsaw ul. Podgรณrska 34 31-536 Krakรณw


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