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Content

Mission of LDDK

3

Council

4

President’s message

5

Message of General Director

6

For the business

8

For the people

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For the world

22

Members of LDDK

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Mission of LDDK To enhance effectiveness of entrepreneurship and employment development by taking into account the interests of sociey at large, to promote strengthening and development of Latvian employers and their organizations. To enhance the growth of Latvian employers, the development of enterprise culture and creation of favorable social conditions. To represent and protect economic, social and professional interests of its members in conformity with the Law on Employers’ Organizations and Their Associations. To represent and defend its members’ interests in relations with trade unions, state and municipal institutions, as well as international employers’ organizations. To provide LDDK members with an opportunity to participate in discussion of issues of their interest at all government levels.


Council VICE–PRESIDENTS Juris Bikis Joint stock company “Latvijas Finieris”

Va l d i s J a ko b s o n s Association of Chemistry and Pharmacy Employers’ of Latvia

Kirovs Lipmans Joint stock company “Grindeks”

Va s i l i j s M e l n i k s Limited liability company “Eiroholdings”

Te o d o r s T v e r i j o n s Association of the Commercial Banks of Latvia

Andris Zorgevics State joint stock company “Latvijas Dzelzcels”

A i v a Vi k s n a Limited liability company “Lietiskas informacijas dienests”

COUNCIL MEMBERS Janis Bertrands Limited liability company “Baltijas logi”

Arkadijs Suskins Regional Entrepreneurs’ Club of Cesis

Vi k t o r s P u r i n s Constructors’ Association of Latvia

Juris Binde Limited liability company “Latvijas Mobilais Telefons”

Janis Dirba Energy Construction Association of Latvia

Ivars Strautins School of Business Administration “Turiba”

Rolands Gulbis Joint stock company “Latvijas Balzams”

Gundars Strautmanis Limited liability company “Lattelekom”

Va l e r i j s Te r e n t j e v s Joint stock company “Liepajas Metalurgs”

Vi l m a r s L u c a n s Association of Municipality Employers of Latvia

Jevgenijs Kalejs Association of Hospitals of Latvia

Edgars Sins Limited liability company “Latio”

L a r i s a Po l o s u h i n a Limited liability company “Rigas laku un krasu rupnica”

Vi l n i s R a n t i n s Association of Mechanical Engineering and Metalworking Industries of Latvia


President’s message

Employers and confederates! LDDK is striving to contribute to the growth of the competitive capacity and productivity of the enterprises and to foster the stability of the macro economical situation of the country by involving into the enhancement of the legal environment. In 2006 the efforts are devoted to the strengthening of the innovation process, promotion of the cooperation amongst the business sector and the educational establishments, cultivated the role of the corporative social responsibility in the sustainable business growth. The voice of LDDK is becoming more countable when the issues of employment and education are being solved. The work should be continued in order to unite employers to strengthen the social dialogue with the state institutions and municipalities. Involvement of the municipalities into the social dialogue will provide the considerable support and motivate entrepreneurs to create the new and better work places what is not possible without the improvement of legislative acts in the area of labour rights and more effective labour organization.

in EU laws and regulations, taking part into mutual dialogue on the policy of energy, struggle against the national protectionism and for the harmonization of tax policy. The European projects have given us a lot of lessons and a lot of possibilities that should be used for the providing of the growth of the enterprises and attainment of the so called Lisbon aims to rise the level of welfare. The support to the unification of business is traced in the European Business Confederation. Useful is the change of experience gained in the Consulting Committee of Business and Industry what operates at the Organization of Economic Cooperation and Development (OECD), and we ourselves have to “follow the rules� of the tomorrow world in hand with the International Organization of employers. Only together we can be strong, prosperous and proud for our country, to find inspiration for new business ideas and to improve the quality of our life!

In the focus of attention of the business sector also in the future will remain the active participation in providing the availability of the labour force and the improvement of its quality by means of active communication of business interests in the public institutions and the change of the attitude of all the society towards the role of the education in our life, labor movement and the unity potential of the society. Only the favorable entrepreneurship environment can lay basis to the strengthening of the entrepreneurship spirit, promotion of the movement of the small and middle enterprises and investors as well. In 2007 it will be important for the members of LDDK to participate and to get the support of the cooperation partners in the shaping the better legislation in the EU, state and municipal levels as well as to understand and put into practice the effective public and corporative administration principles to facilitate better services for the national economy and inhabitants as well as to promote usage of the public and private partnership pattern. Acquisition of the European mutual market potential will mean for the Latvian entrepreneurs the more pragmatic and careful look at the innovations and changes

Vitalijs Gavrilovs President

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Message of general director

Dear members of LDDK and cooperation partners! The time of progress and changes for enterprises, employers’ organisations and the public continue. LDDK has invested a lot of energy to reach the positive and strategic decisions for the business growth. Every single day the members of LDDK ascertain that the growth means the continuous improvement and the search for compromises in order let the winners be all the members of the society. Entrepreneurs of Latvia have recognized that this is not possible without the clear vision, priorities and partners. That demonstrates the considerable increase of the new members of LDDK and the expanding of the representation of our organisation as the members of LDDK employ already 30% of Latvian labour. Recognizing that the business sector needs the stable vision of the future perspectives and plans of the country growth, the work preceded on the National Development plan and the Allocation plan of the EU structural funds for the years 2007.–2013. to foster the quality of the financial resources exploration and investment planning in human resources, entrepreneurship activity and the quality of infrastructure. LDDK directs attention towards the providing of the macro economical stability, commences the collection of the opinions in respect to the issues of the power resources, encouragement of the competition and the measures of the inflation control in order to ensure the long term competitive capacity of the enterprises. Now is the important time for the facilitation of the social dialogue in the national, regional as well as in the level of industries. The National Tripartite Cooperation Council has commenced its work in the new status and with new subcouncils, the quality and ability of which to affect the future is in hands of the social partners. The social dialogue is the potential of the organized business society to put forward own relevant priorities for the improvement of the legal environment and to transform the ideas into laws and regulations in that way fostering the growth and competitiveness of our enterprises. LDDK has commenced the active work on the strengthening of the social dialogue in the regions with the support of Latvian Association of Local and Regional Governments (LALRG) and the Association of Major Cities of Latvia.

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To rise the level of the welfare of the inhabitants and root out illegal employment as well as unfair competition related with that, the most considerable increase of the minimal salary and tax free minimum in the country is achieved together with Free Trade Union Confederation of Latvia and LALRG, that way promising to continue the mutual work in revision and reduction of tax burden for the employers and employees. To foster the new workplaces the measures are introduced and drafted into the Entrepreneurship environment improvement plan of the Ministry of Economics of Latvia. The coordination of the public and private sector should be improved, organisations should be administered more effectively and we should prove that the values created by the successful public and private partnership is the benefit for the whole society what cultivates social responsible action of the each individual. The agreement is concluded with Free Trade Union Confederation of Latvia to set up the European social partners’ contracts, with that step preparing the guidelines and providing the instruments for the carving of the new pattern of labour relations, improvement of labour organisation and enhancing the productivity in our enterprises. Basing on the proposals of the organisations of industries and regional employers, LDDK and Free Trade Union Confederation of Latvia has commenced the implementation of the new general agreement devoting efforts towards the topical needs of the society. LDDK has succeeded to introduce the certain improvements in the development of industries as well as facilitated the activity of the each industry by improving the availability of the human resources and improvement of the employment situation in our country in general. The changes have affected Labour law; significant proposals are included in the government report on the facilitation of the flexibility of labour relations. The cooperation and the scope of the provided services of the State Employment Agency has improved, also the activities of the State Labour Inspection on the prevention of illegal employment has enhanced. That will reduce unwillingness of the employers and employees to create legal labour relations and will increase the tendency towards the fare competition and the creation of new, better work places.


Support has gained the employers’ vision of the improvement of the quality of educational system in order the youth receive long-range profession but those who already are in the labour market and those who will be attracted could maintain their competitiveness in the changeable and dynamic labour environment. The Ministry of Economics of Latvia will continue the forecasting of labour market commenced by the Ministry of Welfare of Latvia, the Office of Citizenship and Migration Affairs of the Ministry of Interior of Latvia has undertaken to solve the topical migration questions. The cooperation in the administration of migration processes will allow elaborating clear immigration criteria, to attract talented and hardworking people, to solve the questions of remigration and public solidarity. The events in the connection with the “Innovation Day” has provided the possibilities to demonstrate the best samples of the cooperation of the business sector and the educational establishments and to confirm the considerable investments made by the business in that way showing in practice the responsible attitude towards the society. The leaders of the municipalities, entrepreneurs and young people have proposed their ideas during the video teleconferencing of the seven Latvian cities and during the Leaders’ Forum “Educate.Protect.Earn.” where they discussed the possible improvements of the educational system and the new forms of the cooperation aimed to strengthen the innovation process in our enterprises what grow into petition to the Latvian government “Education and innovations for Latvia’s competitiveness”. In the level of the European Union, LDDK has actively involved in the fostering of those legislative acts essential for entrepreneurs, which were advanced during the presidency of Austria and Finland. The historical agreements of mutual cooperation between LDDK and the Union of Manufacturers and Entrepreneurs of Russia as well as LDDK and United Coordination Council of employers are signed. The cooperation with the national organisations of employers of the other countries is toughened what builds strong basis for the successful partnership with entrepreneurs of the other countries. The members of LDDK have highly evaluated the efforts invested by the employees of the Ministry of Foreign Affairs of Latvia for entrepreneurs’ new business plan execution.

LDDK is grateful for the support of the European Social fund to elaborate and improve the services provided for its members, providing the guidelines on the most appropriate pattern for the country of employers unification and the new training programme for the strengthening of employers organisations. Seminars and trainings of foreign languages, IT, business, finance, quality management, public relations are being carried out. Field trips to Austria, Belgium, Finland and Russia have facilitated the understanding of Latvian journalists about the role of employers’ movement in Europe. I want to thank the members of LDDK and our cooperation partners for the support in the improvement of entrepreneurship environment. I wish to the new members to be actively involved in focused mutual work what contributes to our welfare and strengthens enterprises.

Faithfully, Elina Egle, General Director

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For the business


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Business in Latvia experiences the rapid growth – the turnover of the enterprises increases and the markets of goods and services expand. More and more people become entrepreneurs in that way creating the new labour places and contributing to the competition in the market. LDDK by representing the interests of employers in the national level, in cooperation with the government, Free Trade Union Confederation of Latvia, ministries and other state institutions, provide considerable support to the adjustment of the entrepreneurship environment by supporting the reduction of administrative obstacles and creating foreseeable, predictable tax policy. Enterprises are more active in conquering the new markets outside Latvia that way improving the export and import indicators in the EU and other regions and carrying the name of Latvia to the world. In order to compete successfully with the countries of other regions the competitiveness of the goods should be improved and the productivity of work increased. It requires considerable investments into the development of knowledge and innovations from the side of entrepreneurs and the state. The increase of the labour productivity, adjustment of entrepreneurship environment, the quality of education, usage of science, effectiveness of production, investment yield and adjustment of laws and regulations are the essential elements of the business growth what ensures the dynamic development of Latvia’s national economy. LDDK is the opinion leader in the representation of the interests of the national economics and entrepreneurship what finds understanding in the public institutions, cooperation partners and members as well as draws the perception of the future growth and competitiveness by facilitating the creation of favourable entrepreneurship environment in Latvia.

n Proposals elaborated for the improvement of competition policy and encouraging the competition; n Priorities are set of the allocation of the EU funds for the years 2007.–2013. in cooperation with respective institutions; Pe r f o r m a n c e i n E u r o p e i n 2 0 0 6 n Resolutions drafted for the European Commission on state positions of Latvia by making the effective use of the channels of the existing international employers’ organisations; n Partaking in the Commission of the National Economy policy at the European Business Confederation and its work groups dealing with questions of transport, energy, public tenders etc.; n Summarized and analysed the interests of Latvian employers in the context of global economy of the Organisation for Economic Co-operation and Development in the national economy task groups at the Consulting Council of Entrepreneurship and Industry. Priorities of 2007 n Commencing the execution of the priorities of the EU seven years’ planning period by finishing the elaboration of the supplements to the EU funds Operational programme setting three priorities: “Human resources and employment”, “Entrepreneurship and innovations”, as well as “Infrastructure and services”; n Participation in the “Entrepreneurship Improvement Action plan” what is the initiative for better legislation in the process of prevention of the identified problems; n Facilitation of the export and promotion of the implementation of “Export Facilitation programme”.

Predictable entrepreneurship environment Achievements of 2006 n Proposals developed for the changes of the regulations to ease the start of entrepreneurship and to reduce administrative obstacles; The speech of Ms V. Vīķe–Freiberga at the Innovation Day, 2006

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For the business Balanced tax policy One of the priorities of LDDK during the last years is the reduction and integration of the tax burden what stimulates entrepreneurship in the most direct way by promoting the emerging of socially responsible companies. The improvement of the cooperation of tax administration is the process in which are involved all the social partners and respective parties. Tax incentives plans are a good tool to promote investments into the growing and new companies. LDDK works at the initiatives in the result of which the tax burden for the employers is reduced, the responsibility on taxes’ remuneration divided amongst the employer and employee and tax incentive plans are developed. Achievements of 2006 n LDDK elaborated proposals for the evaluation of the rate of VAT and achieved the reduction of EIT rate to 15% starting from the year of 2008 for the individual businessmen, self-employed persons and performers of the individual work thereby relieving entrepreneurship; n Elaborated proposals for the introduction of differential VAT rates; n Proposals set on the application of the natural resources tax, achieved that the tax is not applied for the certain groups of goods starting from the year of 2007 – until the elaboration of the administration plan of waste treatment, determining precise costs; n LDDK in cooperation with Free Trade Union Confederation of Latvia and Latvian Association of Local and Regional Governments has increased untaxed minimum and the minimal salary. It is achieved that starting from the year of 2007, year’s minimal salary is increased to 120 LVL and untaxed minimum to 50 LVL what considerably increases the income of employees and reduces the tax burden of employers; n This year the efforts continued on the adjustment of tax system in order the penalty for violation becomes commensurable; n Elaborated the appeal to utilize the entrepreneurship risk state tax for the planned purpose.

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Priorities of 2007 n Differentiation of VAT rates; n Recognizing that the relevant increase of salaries and the pace of the inflation still remains to introduce changes in the social insurance payments by determining the relocation of the social tax rate; n Considering that at the end of 2006 it was achieved that natural resources tax starting form 2007 is not applied to separate groups of chemical goods, to continue work on the elaboration of administration system of these goods and if needed to the amendments to the rate of natural resources tax; n Work will be continued to increase untaxed minimum until it reaches 60% of the minimal salary; n Foster the improvement of tax administration to reduce the time necessary for employers’ tax administration as well as to reduce human resources and administrative costs by executing obligations towards the state – introduction of “one stop agency” principle ensuring annual reports submission in one place; n Initiate the amendments to the Law on taxes and charges in order before sanction readjustment it would be possible to state the level of consciousness; n Facilitate the change of the policy of the State Revenue Service towards taxpayers by devoting more attention towards information and consulting the taxpayers; n Achieve the change of the submission date of the VAT declaration aiming to the 20 days’ and more – the term determined in the most European countries; n Adjustment of the order of the exclusion of the company form the VAT payers register preventing the possibility of the specialists of the State Revenue Service to take one-sided decisions; n Continue efforts to release entrepreneurs from “cheat charge” – utilization of the entrepreneurship state risk tax for its purpose by cancelling its direction to the unsustainable agency – Insolvency Administration by separating it into separate controllable account; n Elaborate proposals for the changes of the real estate tax to stabilize real estate market; n Work out proposals for the changes in the tax policy to motivate employers to introduce financial partnership plans.


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LDDK, Free Trade Union Confederation of Latvia, Latvian Association of Local and Regional Governments are signing the cooperation agreement

Efficient public administration and formation of public–private partnership (PPP) For the companies who have reached certain level of development, have attracted local and foreign investors and are listed in the stock exchange, the participation in the public tenders as well as getting the support of EU structural funds, the public-private partnership becomes essential component. Publicprivate partnership is the practice of entrepreneurship the introduction of which could not be imagined without observing the principles of good administration and constant improvement to raise the productivity and competitiveness of the enterprise. The development of modern technologies and innovations, cooperation with private sector and society are the basis for successful introduction of effective public administration and public-private partnership (PPP).

Achievements of 2006 n Efforts on the introduction of PPP principles in Latvia by drafting proposals to the amendments in the Law on concession, Law on public tenders; n Resolution brought forward and meetings organised on the project of the concept drafted by the Ministry of Justice of Latvia on the facilitation of the accessibility of the laws and legislations as the result of what the progression of the project concept is suspended. n Cooperation with Riga City Council to facilitate public-private partnership projects; n Discussion with the members and cooperation partners on the problems of effective administration and the current situation what has found reflection in activities in the municipal, regional and state level and involvement into implementation of public-private partnership projects; n E-administration: promoted the introduction of esignature and tax administration e-reports resulting in time and costs savings needed for the performing of the administrative procedures and formalities. Priorities of 2007 n Cooperation improvement with the State Revenge Service by providing the possibility for entrepreneurs to order and receive electronic notices for the tax accounts, electronic declarations; n Efforts at the introduction of electronic signature and electronic reports for tax administration resulting in considerable reduction of the time and costs for the management of the administrative procedures and formalities; n Facilitation of effective administration practice by using the possibilities of public-private partnership in solving the national economy problems by involving responsible institutions of the public sector and addressing to enterprises; n The aim of LDDK is to relieve essentially the starting and execution of such cooperation projects by inviting the responsible institutions to define priorities and to work out long-term policy for the development of the country by integrating the most important industries and their priorities, anticipating appropriate financing.

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For the business Strengthening of the innovation process More successful enterprises are acknowledging their ability to integrate achievements of science into business what requires additional and regular long-term investments into the development of industries. Innovations are the driving force of the entrepreneurship and the prerequisite of the competition what enhances productivity, rises the added value of the goods and services. Problems affecting business not only in Latvia but also in other EU countries by unwelcoming to fill vacant work places, is the inadequate education and qualification of labour. A lot of industries lack qualified specialists as the system of education has gaps and the limited financing is allocated for its improvement. In Latvia’s situation the opinion of entrepreneurs concerning the questions of the education are not always listened because the links amongst educational system and labour market are broken as the result entrepreneurs are introducing innovations and rising productivity with hardships in this market. Achievements of 2006 n This year LDDK organized the event “Innovations Day 2006” within the framework of the programme “Education and innovations for Latvia’s competitiveness”. During it the Forum of business leaders “Educate. Protect. Earn” and students video teleconference amongst seven Latvia’s cities were held.

Innovations’ Day 2006 – video teleconference in 7 cities of Latvia (Riga)

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Microsoft Latvia, SIA – support to innovation

LDDK initiative in cooperation with SIA Microsoft Latvia, the representative office of Siemens and the Baltic International academy helped to strengthen and popularise the process of innovation and the cooperation amongst the business sector and educational establishments; n LDDK annual prize 2006 for the best educational and employer organisation and/or the cooperation sample was acknowledged the cooperation of Lauma Lingerie, joint stock company and Liepaja vocational secondary school; n It was for the first time when business leaders discussed the cooperation options amongst enterprise and educational establishment by elaborating the appeal to the new government proposing solutions how to link business with knowledge what in overall facilitate the development of knowledge based

Lauma Lingerie, AS and Liepaja vocational secondary school – laureates of LDDK Annual prize


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Environment and energy

LDDK Annual prize jury at work

economy in Latvia and draws more attention to the questions of the education; n LDDK becomes the coordinator of intermediary process amongst the state administration institutions and the social partners in order to facilitate the possibilities of improvement of professional skills and lifelong education for entrepreneurs and employees in the IT industries. Priorities of 2007 n LDDK will concentrate on the planning and introduction of the innovation policy by inviting to bring forward it as the priority and by improving the coordination of institutions involved; n Main activities and the closest future challenges are connected with the acquiring of EU structural funds in the next planning period and the introduction of new programmes to faciliate the innovations; n More attention should be brought to the education of entrepreneurs and young people on the questions of innovations as well as more efforts should be involved to facilitate the conception of the role of innovations to the involved parties in the development of enterprises, rising the competitiveness of the country and social welfare.

Employers more often feel the fluctuations of such global impacts as climate changes and the stronger regulations on the environment for employers in that respect, the dependence from import and the increasing energy costs. With increasing interdependence of the EU countries from the power industry and new players entering the market, by making the investment into the development of the enterprise, the investors want to be assured for the safety of their investments. Company sustainability and successful development more often depend from the ability to observe heightened demands of the environment protection and the ability to cope with increasing dependence form energy resources. Achievements of 2006 n Dialogue commenced with the Public Utilities Commission (PUC) to ensure timely involvement and awareness of the costs of energy resources; n The first year of work has experienced the newly founded Tripartite Cooperation Subcouncil of environmental affairs by examining those issues that are important for entrepreneurs administered by the Ministry of Health of Latvia; n Resolutions prepared on the utilization of the renewable energy resources, bio fuel and fossil fuel; n Position expressed on the long-term, safe and competitive policy of energy. Priorities of 2007 n Sustainable, safe and competitive energy policy; n Definition of the opinion on the utilization of the renewable energy resources and bio fuel n Alteration of the calculation procedure of CO2 emission quota towards the interests of Latvian manufacturers.

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For the people


Some Latvians Wanted* *Vajadzīgi Latvijas iedzīvotāji

Social dialogue As the leader of the implementation and promotion of the social dialogue in the national level, LDDK is insisting on the implementation of the principles of social dialogue into the corporative administration of the enterprises in the regional level and on the tripartite social dialogues of the industries. When forming tripartite social dialogue, concluding collective agreements and general agreements with cooperation partners, the unfair competition is rooted out what is the cause of increasing problems in public tenders. Employers are interested in formation of organized civil society and facilitation of the productivity of the enterprises by raising the qualification of employees and to guarantee social safety starting with the increase of the salary and improvement of the work conditions. LDDK invites to raise the welfare and productivity of Latvia by working into the national and international level, by making use of the experience gained in the foreign countries of persons who being departed and now are returning. LDDK considers that in the conditions of free labour movement the efficiency of local workforce and the remigration process of the appropriate inhabitants should be improved, but in case of necessity the long term and middle term plan dealing with the labour shortage problems should be worked out to prevent the crisis in labour market.

New general agreement The first general agreement of LDDK and Free Trade Union Confederation of Latvia (FTUCL) was made in the year of 2004 – one day before Latvia joined the European Union. In 2006 LDDK and FTUCL commenced the elaboration of the new agreement in cooperation with employers’ organisations and trade unions. In the negotiation process the parties agreed on the priorities of the general agreement. The priorities of LDDK concern the improvement of Latvia’s social economic situation in the EU by getting involved into the solution of the issues concerning the education, employment, social security and healthcare, the creation of more adequate fiscal and tax policy in order to increase the welfare of the inhabitants and facilitate the growth of enterprises and formation of new employers. The new general agreement corresponds to today’s

Industries’ employers and trade unions meet in Valmiera

challenges – increasing the quality of education, facilitation of employment, adjustment of migration issues, and optimization of the tax burden and the reduction of the costs of the public administration. Considering the tendency that each year more enterprises, employers’ organizations and social partners are involving into the facilitation of the civil society, the total number of agreements has increased in all the levels of the social dialogue. LDDK continues the work at the fostering of organized civil society by strengthening the practice of tripartite dialogue in Latvia.

National Tripartite Cooperation Council LDDK is actively involved in the National Tripartite Cooperation Council (NTCC) and its subcouncils already more than 10 years. In 2006 the significance and prestige of the NTCC increased when at the supervision of the Prime Minister of the Republic of Latvia regularly at one table met the social partners – employers, employees and municipalities. This year the cooperation was renewed with the Ministry of Transport of Latvia and the Ministry of Regional Development and Local Government of Latviaby forming interdisciplinary subcouncils. While a huge work has been done in raising the status of NTCC, at the same time a lot of efforts still needed to improve the work of separate sub-councils. Great role

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For the people tions set within the project for 2007 is to examine the situation, possibilities and possible arguments for concluding the mutual agreement between enterprises of one industry. That will allow avoiding the unfair competition based on illegal employment. LDDK will support the formation of cooperation amongst industry employers’ organization and industry trade unions.

In regions Evaluation of the development of infrastructure with the Ministry of Transport of Latvia

in the successful accomplishment of this work is played by the State chancellery what fosters the possibilities of social partners’ copartnership in drafting and implementation of the executive policy.

In industries During the EU funded draft project of the National program “Increase of the capacity of the national employers” the work commenced on the fostering of the social dialogue of the industries and consulting employers’ organizations what resulted in 13 new industry members joining LDDK. The task for the coordinators of employers’ organiza-

Unfortunately in the large part of the regions tripartite social dialogue is not developed in the classical meaning of the term. The obstacle could be weak and unbalanced regional development as well as weak organization of the civil society in general. That fact could burden our investment in the development of the country and execution of the Lisbon strategy in raising the competitiveness of the EU. In 2006 a huge efforts were invested in the strengthening of regional cooperation, formation of the representation and the facilitation of the understanding between municipalities and entrepreneurs in the regions. As the testimony to commence constructive dialogue the Association of Big Cities of Latvia signed the cooperation agreement by solving the issues of tripartite social dialogue. The meetings were held in the largest cities of Latvia – Liepaja, Daugavpils, Valmiera, Jelgava, Ventspils. As the result of that cooperation LDDK succeed to attract the coordinators of the regional representations who will launch the active work in 2007.

National Tripartite Cooperation Council (NTCC) Representatives from the each party: LDDK, FTUCL and Cabinet of Ministers

Secretariat of NTCC

Sub-council of the Health industry

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Sub-council of the Social security

Sub-council of the Tripartite cooperation on labour issues

Sub-council of the Professional education and employment

Sub-council of the Regional development

Sub-council of the issues of the Environment protection

Sub-council of the issues of the transport, communications and IT


Some Latvians Wanted* *Vajadzīgi Latvijas iedzīvotāji

Signing the Treaty with LLPA

In enterprises Coordinated relations of employer and employee are very important for socially active enterprise. The formation of trade union in the enterprise is one of the first steps towards formation of qualitative communication in the enterprise where the responsibility is divided between employer and employee. It is important for entrepreneur to speak with organized representative of employees to reach the constructive solutions of mutually important issues. The scope of questions could be very wide – salaries, social guaranties, education, increase of the qualification as well as labour environment, labour rights, labour protection, violations and other questions. By signing the collective agreement it is possible to solve the issues of human resources in private sector as well as in the state and municipal sectors. These agreements will help the entrepreneurs to avoid the social dumping, help to present guarantees for employees, settle work environment, foster labour protection, and raise the professional qualification.

Improvement of the social dialogue in 2007 In 2007 LDDK will concentrate the attention to employers; motivation in regions by inviting to strengthen employers’ organizations aimed to unite its capacity to the coparthership in the regional social

Employers meet Ventspils City Council

dialogue with municipalities and trade unions by consolidating the interests and opinions of the employers. It is important that regional employers get involved into the solution of the issues on the national level by representing the interests of the regional entrepreneurs with intermediary of LDDK. To achieve targets set, LDDK will continue within the project: n work of industries’ experts, n execution of the corporative communication plan, n work at formation of social partnership in industries with the support of 12 coordinators of social dialogue, n strengthening of regional social dialogue with the support of 5 regional social coordinators (Riga, Valmiera, Daugavpils, Jelgava, Liepaja).

Support to employers’ organizations Within the EU funded project of the National program “Strengthening the capacity of LDDK”, the experts of LDDK worked out guidelines on the most appropriate unification model of employers for Latvia, training programs and have arranged the appropriate seminars on the following themes: n Financing aspects of employers organizations; n Management of employers organizations; n Elaboration of missions and strategies of employers organizations; n The strategy of employers’ organization to attract the members;

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For the people n Provision of the effective information flow in employers’ organization. LDDK has completed the training of nine representatives of employers’ organizations in the professional MBA study program “Labour protection”. Organized the courses of the English and French languages for the representatives of employers’ organizations as well as trainings for the employees of organizations in the spheres of IT, business, finances, quality management, and public relations. Seven seminars were held for young people on formation of cooperation between LDDK and youth organizations (in Riga, Rezekne, Daugavpils, Jekabpils, Liepaja, Ventspils). Basing on the evaluation of the potential of the services market, the elaboration of 10 new services for LDDK members: n Representation of interests; n Consultations in the questions of labour rights and labour protection; n WEB services. Portal www.lobijs.lv;

n Elaboration and delivery of informative materials, notifications; n Organization of researches; n Administration of the public relations; n Organization of conferences; n Organization of field trips; n Assistance in project reparation and management; n Organization of trainings. In May, 2006 LDDK launched the portal of members www.lobijs.lv which at present in average is visited by 100 users per month, making total 2960 visits. The number of registered users is 210. During the year 2482 questions published in the portal (drafts of legislative acts, conceptions, etc.).

Employment and the quality of human resources Knowledgeable, skilled and hardworking people are not only the pride of our enterprises but are the guarantee for the future of Latvia. LDDK pays a lot of

Agreement on the social economic partnership (Cabinet of Ministers, LDDK, FTUCL) LDDK

LALRG

FTUCL

Agreement on cooperation

LDDK LDDK

Associations of emplyers’ industries

Emplyers Emplyer

Agreement on cooperation General agreement on basic principles of the social-economic relations

Industries agreements on social partnership

Collective labour co-agreements Work agreement

ABCL FTUCL Industries’ and professional trade unions Enterprises’ trade unions Employee

Based on “Law of employers’ organizations and unions”, “Law on trade unions”. Statistical data of FTUCL, 2006.

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Some Latvians Wanted* *Vajadzīgi Latvijas iedzīvotāji

Meeting with Ministry of Education and Science Republic of Latvia

attention to the improvement of the policy of education to facilitate the mobility of each individual, raise the competitiveness in the market and to ensure lifelong education for each inhabitant of the country. Achievements of 2006 n National level target of LDDK is the providing of the availability and the appropriate quality of the human resources. LDDK participated and protected the interests of employees in several work groups for the improvement of the system of education towards the needs of labour market. There LDDK concentrated on the issues concerning the improvement of the support system of the professional orientation and carrier and the development of the forecasting of the labour market. LDDK will continue the work in this sphere also in 2007; n Particular efforts were devoted to the planning and application of the EU funds for the years 2007.–2013. to provide effective investment of the financial means provided for the human resources and development of employment, improvement of the system of education and fosters the positive development of Latvia’s labour market. n It was achieved with the support and initiative of LDDK that in the draft of the new Law on higher education the requirement was introduced to reflect in the process of education and in the educational programs the current tendencies of the national economy and labour market development and the interests of employers. n LDDK insists on bigger state support to the development of the entrepreneurship, facilitation of self-employment and effective and purposeful use of the local work

force to ensure the competitiveness of Latvia in the same time reducing the departure of the work force. n By taking the part into the elaboration of the draft project of the migration policy in the context of employment, LDDK considers that the issues of economic migration and mobility of workforce should be fostered in the state level and the government should clearly define its position by working out the short term and long-term migration strategy policy planning the development of the industries of the national economy and analyzing the needs of labour market. LDDK objections have resulted into the reduction of the administrative obstacles and the costs of labour force attraction. Priorities of 2007 n To increase the role and responsibility of the tripartite coordination sub-council of the professional education and employment of the NTCC dealing with conceptual issues of the education in its new status of Sub-council of the education and employment with broadened objectives; n To elaborate the short-term, middle term and long term strategy of the migration policy where all the aspects of labour resources mobility and integration are included; n To take part in the drafting of the new legislative act on the professional education to ensure it reflects the topical development tendencies of the national economy and the labour market and the interests of employers, as well provides employers with possibilities to get involved into the process of education. n To get active participation in dealing with the issues of the employment and professional education in Latvia’s regions via regional councils of the professional education and employment and by cooperating with municipalities; n To defend and popularise more flexible working hours and the advantages of remote work or work from home (telework) what can help to solve the problems caused by labour resources shortage and more effectively use the modern IT and communication technologies, that way rising the productivity of work; n To take part in monitoring of the implementation of the basic statements of the lifelong education in order to provide for everyone the same possibilities for the education and professional development; n To get involved in the elaboration of the action strategy of the policy implementation of lifelong

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For the people education to provide people throughout whole life with availability of the education services which would develop their professional competencies and help to rise employment co partnership; n To get active participation in the completion of the development system of the standards of the professional education, education programs of the professional and higher education to ensure the observing of labour market interests in the processes of education; n To get involved into the elaboration of the laws and regulations concerning employment as well as the evaluation of their compliance towards the actual situation in the labour market; n In cooperation with the institutions of the professional education, to commence the update of the national qualification system of the professional education as well as accreditation process of those skills gained in informal way and during work-life; n To get involved in the processes defending the reduction of the illegal and unregistered employment (including the increase of the consultative function of the State Labour inspection).

Labour rights Achievements of 2006 n Amendments in the Labour law concluded twoyears long intense work. The change in the order of breaks assignment and maximal lengthening of the terms of part-time job contracts is the essential step to increase the flexibility of labour relations; n Essential are also the changes in the payout order of the compensation allowances for the employees dur-

Strengthening of the cooperation with the State Employment Agency

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Signing the agreement with the State Labour Inspectorate

ing the justified absence, by replacing the obligation to calculate and pay average wage with salary retention; n Amendments concern also the termination notice period for the employee who has medical confirmation for health incompatibility for the period of ten days to one month. At the same time with discussions on the amendments the dialogue is commenced for the possibility to pass to the state the payment for educational leave of the employees what could prevent essential unwarranted costs for employers; n Continuing the activities commenced in the previous years to facilitate the flexibility of labour relations, thanks to the initiative of LDDK the informative report “On the necessary proposals to ensure flexibility and safety in employment rights” was drafted and voted through the Cabinet of Ministers, according which amendments will be made in several legislative acts in the sphere of labour rights including the rules of the seasonal and fixed-date job contracts and the invitation order for guest workers; n Prevented the amendments in the law “On holidays, remembrance and special days” what expected to determine that if the holiday falls on Saturday or Sunday, the next working day is determined as free day. These amendments would cause essential losses for employers and employees as well as for the budget of the country; n LDDK and the Free Trade Union Confederation of Latvia has concluded the agreement with the help of which overtook the agreement of European social partners on telework. Agreement of the social partners is the alternative for the directive for the control of labour


Some Latvians Wanted* *Vajadzīgi Latvijas iedzīvotāji

n By participating in the elaboration of the financial perspective 2007. –2013. of the EU structural funds, it was ensured that during this period the resources for the risks’ assessment was attracted from the European Union Fund what will ensure considerable savings for enterprises; n LDDK and the Free Trade Union Confederation of Latvia concluded agreement that overtook European social partners’ agreement on the stress in workplace.

Signing of social partners’ agreement

legal relations determined by European Community foundation agreement. Namely, also in Latvia as EU member country these issues will be looked upon by accepting additional conditions what will help to control employers and employees legal relations, by allowing employers and trade unions themselves to look for the most appropriate solutions and by mutual agreements.

Labour protection Achievements of 2006 n Amendments are made in the control order of persons with long-term disability. The amendments determine the obligation for general practitioner after 60 days of patient’s disability to send him/her to the specialist who has to state if the disability should be terminated or continued, as well the obligation of the general practitioner to send the patient to the Health and disability experts’ commission which will diagnose the invalidity if the disability is longing already for six month. This is the first step to limit the unfair usage of disability lists and avoiding from job with the help of ungrounded disability lists; n The interests of employers were observed in complete spectrum by overtaking the 2004/40/EK directh tives (29 April, 2004) of the European Parliament and the Council on the compulsory obligations of safety and health protection in respect to employee’s subjection to the risk caused by physical factors (electromagnetic fields) in the regulations “Labour protection obligations for the protection of employees against the risks caused by electromagnetic fields at workplace” issued by the Cabinet of Ministers;

Priorities of 2007 in Labour rights and labour protection n The year of 2007 will be prominent for the fact that the basis will be laid for the further development of the labour rights as well as labour protection policy in the European Union. The Labour protection policy for the years 2007.–2012. and the Green book of the European Labour rights are the documents which will be in the centre of intense discussions in Latvia’s as well as European level. Therefore LDDK will devote essential attention to the exploration, consolidation and representations of employers’ interests; n The second essential priority will be the commencing the introduction of the legislative acts of labour rights and labour protection within the framework of the new funding perspectives of EU structural funds for the year 2007.–2013. Within the program it is expected to provide the essential support to employers for the risks’ evaluation of the labour environment, to elaborate human resources plans in several industries, to consult on the introduction of legislative acts, to issue methodological materials and guidelines and many other activities.

Forum on labour protection with the State Labour Inspectorate

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For the World


A nation with a sea is not a small nation. K. Valdemārs

2006 was proclaimed the year of mobility, during which Austria and Finland consecutively headed the EU presidency. Germany took over the office in 2007. Finland put competitiveness, foreign relations, the strengthening of freedom, security and the rule of law, transparency of institutional activities, and the effectiveness of resolutions at the top of the EU agenda. Special attention was paid to the development of the EU’s internal market, innovation policy, raising workforce productivity, and the ability to carry out a unified energy policy and to lessen the bureaucratic burden for businesses. Upon taking over the presidency, Germany outlined the challenged for the coming year by naming 2007 as the year of equality. In order to ensure sustained and stable growth and employment, during its presidency Germany has paid much attention to the strengthening of a unified EU market within the context of a new unified market strategy. In addition, development of the manufacturing and service industries and competitiveness of small and mid-sized businesses will be promoted. Another important issue this year is the development of an energy policy.

LDDK in Europe In order to stimulate international recognition of the Confederation and broaden of its partnerships, LDDK representatives and members took part in various international conferences and meetings in 2006. The most significant of these were: the Business and Industry Advisory Committee’s (BIAC) General

UNICE Competitiveness Day in Brussels

Assembly and the OECD forum “Balancing th Globalisation” (Paris), the 94 Session of the International Labour Conference (Geneva), and the meeting of the International Organisation of Employers (IOE) European members (Bucharest). The most significant activities of 2006 on an international level: n the EU Constitutional Treaty – the report at the EU summit; n the Doha Round of the World Trade Organisation (WTO); improvement of EU/Russia, EU/USA, and EU/China relations; n the future and modernisation of the EU social model; n the financial outlook for 2007–2013; n the internal market (REACH/services directives); n the improvement of UNICEF communication strategies; n LDDK took part in the European Manufacturers Federation directors’ conference for the first time; n LDDK devoted great attention to cooperation with Latvia’s closest neighbour, Russia. In February 2006 LDDK participated in the first official BUSINESSEUROPE (UNICE) delegation visit to Russia, during which time it supported Russia’s bid to join the WTO.; n LDDK signed a contract with the Russian Manufacturers and Businessmen’s Union (RSPP) for the stimulation of economic cooperation and an agreement with the Coordinating Council of Employers’ Unions of Russia (CCEUR/KSORR) for cooperation regarding the promotion of social dialogue;

Meeting with Latvian representatives at the EU

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For the World

Signing of agreements with Russian employers

Strengthening of cooperation with Maltese employers

n LDDK signed cooperation agreements with employers’ organisations in Israel and Malta and the Ukrainian Chamber of Commerce in the Baltics; n LDDK expresseed gratitude to the employees of Latvian diplomatic missions for their part in promoting economic cooperation.

n n n n n

BUSINES S E U R O P E P r io r it i es fo r 2 0 0 7 LDDK will direct the attention of the government, its cooperation partners, and its members towards a more active exploration of the opinions of Latvia’s employers. The goal is to consolidate and represent those opinions in the BUSINESSEUROPE Economic and Financial Affairs, Internal Market, Industrial Affairs, Social Affairs, and Social Dialogue committees, as well as for the implementation of the following priorities in the economic work groups:

Social Responsibility – The Global Compact

raising the level of employment; streamlining of the internal market; completion of EU government reforms; combating national protectionism; improvement of the system of social guarantees.

Adherence to the 10 principles of the Global Compact saves entrepreneurs much time, which would otherwise be spent undoing the consequences of not following the principles, and allows for a much more productive use of time. LDDK encourages all entrepreneurs to join the Global Compact, thereby showing a willingness on the part of the business to address corporate management issues. The European Commission considers that while businesses themselves lead the establishment of corporate social responsibility, they can best influence the development of social responsibility through their cooperation with employers’ organizations, trade unions, NGOs, local and national governments, and academic institutions. The promotion of corporate social responsibility reflects a need to defend common values and increase a feeling of solidarity and cohesion.

V. Vīķe–Freiberga and business leaders in Israel

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A nation with a sea is not a small nation. K. Valdemārs

It is significant that academic institutions also joined the Global Compact in 2006, thereby showing their commitment to and confirming the observance of the Compact’s principles. The Global Compact has also gained the attention of the ISO and is considered good practice and a sign of quality management. Of course, that does not diminish the voluntary aspect of the Global Compact, nor the need for initiative on the part of businesses.

th

An event aimed at promoting the 10 principle of the Global Compact – anti-corruption – took place in Latvia in 2006. This event, organised together with Transparency International Latvia (“Delna”), stressed the importance of the implementation of good business practice as laid out by the Global Compact, the development of social responsibility, and the promotion of honest competition (www.globalcompact.lv). LDDK thanks the 14 organisations that have joined and actively participate in the Global Compact movement. We i n vi t e a l l bu s i n es s l ea de rs to jo i n t he G l oba l Compact movement!

THE GLOBAL COMPACT – APPLICATION

______________________ (Name of business) We wish to support the ten principles of the Global Compact in the areas of human rights, labour, -Members have developed GC local networks the environment, and anti-corruption. -GC members, but no local networks yet We resolve to include the Global -Not GC members Compact principles in our business strategy, culture, and everyday activities and to clearly acknowledge that fact in our reports to our employees, partners, clients, and society at large. We support social monitoring and transparency and are ready to prepare public statements regarding our achievements. Contact information for further cooperation with the Global Compact office:

Signature _______________________________ Name, surname __________________________ Position ________________________ Date ________________________________

Send to: Vīlandes iela 12-1 Rīga, LV-1010, Latvia Fax: +(371) 67224469 lddk@lddk.lv

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LDDK biedri Members Association of establishments of the professional education of Latvia

Federation of farmers of Latvia

Association of the employers of healthcare of Latvia Association of the entrepreneurs of machinery manufacturers and metalworking of Latvia

Association of Municipalities’ employers of Latvia

Association of power industry of Latvia

Association of professional education and education for adults

Latvijas Ceļinieku asociācija Association of manufacturers of windows and doors of Latvia

Association of colleges of Latvia

Latvian Electrical Engineering and Electronics Industry Association


LLC «Ladeko», Association of Riga interregional fishermen cooperative, Riga Central Terminal, LLC «Dako», LLC «Latvija audzetu darzenu logistika», LLC «Benes Pateretaju biedriba», Association of technical experts, LLC «Alvos», Association of entrepreneurship development of Daugavpils, Association of passenger forwarders of Latvia, Association of manufacturers and merchants of Jelgava, JSC «Augstsprieguma tikls», LLC «Strelnieks B», National association of manufacturers of tobacco products, LLC «Raro centrs», LLC «Darba aizsardziba», LLC «Kugu remonta sabiedriba».


The LDDK Directorate Expresses its Gratitude The LDDK Directorate expresses its gratitude to its members for their active work in representing the opinions and interests of employers: Gu n tis To m s o n s (Adult and Vocational Education Association) Dace Šaitere (JSC “Grindex”) Arlita Sedmale (Latvian Federation of Food Enterprises) Aldis Baumanis (School of Business Administration “Turība”) I n g a Kola (State JSC “Latvenergo”) L in da Ma tis ā n e (JSC “Inspecta Latvia”) A g n e s e Ko l i g i n a (LLC “Latvijas Mobilais Telefons”) Zigmārs Brunavs (Association “Latvijas ceļu būvētājs”) Gaida Lāce (Latvian Municipal Employers’ Association) E dg ars Dā rzni eks (Association of Mechanical Engineering and Metalworking Industries of Latvia) Anda Būmane (JSC “Latvijas Finieris”)

A l e k s a n d r s G r i g o r j e v s (LLC “GRIF”) Pē t e r i s D r u ķ i s (JSC “Inspecta Latvia”) A r t ū r s N e i m a n i s (LLC “Rimi Latvija”) Irēna Upzare (State JSC “Latvenergo”) Inta Br āl ēn a (LLC “Latvijas Mobilais Telefons”) J ā n i s S p r o ģ i s (Association of Mechanical Engineering and Metalworking Industries of Latvia) Ba iba Siks ne (State JSC “Latvenergo”) G u n d a r s P r o l i s (Latvian Association of Hospitals) Māris Rēvalds (Association of Health Care Employers) An d r i s U z u l e ņ š (JSC “Ventspils Nafta”) Li n da B a l ti ņ a (JSC “Pasažieru vilciens”) Ieva Rozenberga (State JSC “Latvijas Pasts”) Laila Odiņa (JSC “airBaltic Corporation”) U l d i s Pē t e r s o n s (State JSC “Latvijas Dzelzceļš”) Vladimirs Cudečkis (Waste Management Association of Latvia) K ā r l i s K a d i ķ i s (Latvian Road Builders’ Association) J ā n i s M ā r c i ņ š (Latvian Association of Wood Processing Companies and Exporters)

First row from left: Eduards Filippovs (Executive Director of Labour Market Research, Consulting and Education Centre), Agnese Alksne (Adviser of Corporate Affairs), Edgars Korčagins (Deputy Director General), Elīna Egle (Director General), Vija Sebre (Accountant), Linda Jansone (Assistant to Director General). Second row from left: Mārcis Dzelme (Adviser of Economics and Financial Affairs), Ilze Nagle (Office Administrator and Member Service Supervisor), Ilona Kiukucāne (Adviser of Education and Employment Affairs), Kristīne Dolgiha (Adviser of International Affairs), Andrejs Šnepsts (Regional Social Dialogue Coordinator).

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For Business, People, and the World. Employers’ Confederation of Latvia