ARAB-EU Quarterly

Autumn 2013

Union Tunisienne de l’Industrie, du Commerce et de l’Artisanat

By Mme Bouchamaoui, President of UTICA The current economic situation in Tunisia is not only a product of decisions made throughout the past three years but a product of the past thirty years of decisions and actions of the ruling governments before January 14 as well as post-revolutionary decisions and actions. Despite the socio-economic success in Tunisia after independence – for the large part due to an intelligent policy in the health and education sectors followed by the law 72 in the early 1970s that allowed for the development of off shore activities and for the birth of a new generation of entrepreneurs – the popular uprisings of January 14 made us aware of the limits to the development model adopted thus far. The high unemployment of graduates as well as the regional imbalances and the precarious situation especially pronounced in certain social categories ignored up until today, are testimony to the deficiencies of our economic choices and social policies. Conscious of its role as an essential institution in the economic and social decision-making processes, UTICA (Union Tunisienne de l’Industrie, du Commerce et de l’Artisanat) aspires to intervene in two ways. Firstly by creating a roadmap outlining the path to follow and the directions that should to guide the country in the coming years, and secondly by implementing the social contract project with the labour union UGTT(Union Générale Tunisienne du Travail) in order to guarantee social stability and a concerted industrial peace between employers and workers aspired in many countries.

Content

02 Editorial, UTICA 04 Developing a BMO 08 Inspiration from the Danish Labor Market Model: the road to industrial peace 10 Best practice from Egypt: Solar Heating Arab Mark and Certification System (SHAMCHI) 12 Current Focus of European Food Legislation 14 News & Events 16 About the Arab-EU Business Facilitation Network

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For 2020, UTICA thus strives for Tunisia to become:

a prosperous and united country with strong moral values and a competitive, dynamic and resilient economy

a country where work, effort, free enterprise and professional success are recognised as societal values

a place that performs through its enterprises, its business climate and its social environment

a country where equality of opportunity allows all economic activities, all social classes, all regions and all generations to take part in the creation of wealth

a country that reconciles its university, its school and its youth with its economy

a country that respects private and collective property and guarantees the citizen’s right to security of person and property

a country whose citizens are united and confident in their future UTICA will act to ensure that the Tunisian society values work and favours initiative, mobilises the entire nation for growth, assigns more serenity to the social environment, promotes an economy driven by value creation and innovation, and works for a regional convergence and stronger social cohesion. This is our greatest wish for our beloved Tunisia. We will protect it and we will succeed thanks to the efforts and willingness of employers and of our social partners.

Editorial

By M. Adel Hamani, Member of the Executive Board of UTICA. Recognizing the importance of the stability and the social peace in a Tunisia where the post revolutionary upheavals have limited the role of central government in the resolution of social conflicts, we have in cooperation with our partners in the UGTT, felt it was our responsibility to take control of the destiny of the private sector as far as concerns entrepreneurs as well as workers.

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A series of meetings between representatives of the two institutions have matured the reflection in the sense of an agreement between the social partners ratified by the government with the purpose of developing new bases for dialogue between UTICA and UGTT: this was the Social Contract. A contract that was signed January 14, 2013 at the headquarters of Constituent Assembly of Bardo between the three social partners (the government, UGTT and UTICA) is a first in Africa and in the Arab world. It aims essentially to establish industrial relations founded on “the institutionalisation of a permanent, regular and holistic tripartite social dialogue” regarding issues of interest of the three parties of production. As UTICA, we are confident and we believe that this contract is “the guarantor of peace and stability on the social level”. Moreover, we seek to ensure the right conditions to achieve economic growth and social development. The new social contract provides a set of commitments, guidelines and principals and consists of five main axes, namely:

“Economic growth and regional development”,

“Employment policies and vocational training”,

“Industrial relations and decent work”,

“Social protection”,

“Institutionalisation of tripartite social dialogue”. By means of these axes, we believe that UTICA is an essential social partner and represents a creative force in the interest of the country in general and of our members. We remain confident that in a period of transition and political, economic and social reconstruction, the success of our country inevitably happens through the consensus between the lively forces of the nation.

UTICA and the national dialogue Even though its mission is purely economic and social, UTICA has estimated that by its position as one of the strongest institutions in Tunisia it could not stay indifferent to the political stalemate against which the country is fighting. The economy is, whether we like it or not, closely linked to greater political visibility in the context of democratic transition. It is with the aim to give a new impetus to the negotiations between various political components, to push for a fast exit from the crisis, and to take part in constructive proposals of national interest, that UTICA has come together with its social partner UGTT, Bar Association, and Tunisian League Of Human Rights to sponsor and lead the National Dialogue. Ending the political crisis is the only way to restore the economy with all its force and guarantee its recovery. In UTICA, we believe in this and we are not the only ones.

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Developing a BMO

From the 23rd-25th of September 2013 the Confederation of Danish Industry (DI) welcomed a delegation from Morocco, Tunisia, Libya, and Jordan to discuss topics related to BMO development, labor market policies, and social dialogue. Discussions were undertaken and valuable networks were created and by the end of the three days the delegates and DI were inspired for the future collaboration. The present article summarizes the discussions on BMO management and development. Identifying the scope of a BMO and developing its services is a challenging task, entirely dependent upon the institutional framework and business environment of the respective country. Determining the mission and vision and refining the strategy are continuous tasks, influenced by the inflow of members, the governance structure, as well as external factors such as political development. However, the strategy formulation process for BMOs largely remains the same across all countries and can be summarizes as follows:

Each step in the pyramid involves numerous sub-steps and requires good work effort as well as clear communication methods. There are several negative effects of poor strategy development, some more obvious than others. Poor development of memberships means low number of members whereas poor organization and lack of strategy affects the quality of the services and lobbying effort. Moreover, the financial sustainability is intrinsically linked to the accounting practices. All of these parameters affect the ability and capacity of the BMO which is reflected in its reputation – which in turn affects the number of members. Altogether, the importance of strategy development should not be neglected. The following figure therefore depicts the pitfall of being trapped in a vicious circle of poor BMO management practices:

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Inherent in the strategy formulation process is the topic of provision of services to member companies. For business associations, policy advocacy and business services are on the two sides of the same coin. Business services should be organized in a way that supports policy advocacy as this helps members to utilize new legislation and opportunities. In this way the BMO conducts policy advocacy with knowledge about members and their way of creating competitiveness. Needless to say, the ability to successfully undertake policy advocacy is developed over time. It is closely linked to the development of the BMO which can be summarized in following four phases:

All in all, the delegates had time to discuss the importance of abovementioned topics during their stay in Copenhagen. The discussions and sharing of experiences gave inspiration and food for thought in the ongoing work of developing the respective BMOs.

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The delegation participated in DIs annual summit with the title, ‘The New Nordic Approach’ which is supposed to illustrate how Denmark needs to rethink its strengths in order to stay competitive on a global scale, in an era where economic and political balance of power is being turned upside down. Speakers included the CEO of DI, the Prime Minister, the leader of the main opposition party, and the summary of the Summit as well as the speeches can be found here.

Meeting with Director at DI, Mr. Bjarne Palstrøm, who discussed strategy formulation

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As a part of the program, the delegation visited the Danish Parliament. The Speaker of the parliament, former Minister of Foreign Affairs, Mr. Mogens Lykketoft, set aside almost two hours to meet with the guests and discuss topics of interest as well as conduct a tour of the Parliament.

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Inspiration from the Danish Labor Market Model: the road to industrial peace

As a part of the program for the delegation visiting Copenhagen from 23rd-25th of September, a social dialogue panel was arranged with the LO/FTF Council, the Danish trade union council for international co-operation, in order to discuss the importance of social dialogue and share best practice examples. The present article explains about the Danish Labor Market model which has contributed to industrial peace.

Social dialogue has by ILO been defined as, ”all types of negotiations, consultation, or simply exchange of information between representatives of government, employers and workers on issues of common interest”. The practice of social dialogue has a long tradition in Denmark and is built on the strong fundament of the Danish Constitution, signed in 1849. Besides securing civil rights, such as private property rights and freedom of speech it secured the right to form associations and the free right to membership of associations (section 78). Numerous strikes and disputes followed in the years after but ended in 1899 with the compromise which was reached with the signing of the Labor Market Constitution. The Labor Market Constitution settled the freedom of trade union associations as well as the companies’ prerogative to manage and divide the work incl. the right to hire and dismiss the labor force. It moreover established collective bargaining as the basis of employment law. This constitution has been known as a “peace obligation” as it implies that in the period between the collective bargaining it is absolutely prohibited to make strikes and lockouts. Section 2 says: “Where a collective agreement has been concluded, no stoppage of work (i.e. strike, picket, lockout or boycott) can be initiated during the period of the collective agreement’s validity in the sector covered by the agreement, unless warranted by the Standard Rules for Handling Industrial Disputes” This obligation of peace represents the most important event in modern Danish history in terms of developing the Danish society into a society of consensus and social dialogue. It has given rise to an impressive mutual trust which permeates the Danish labor market and it altogether represents the important corner stone in obtaining the industrial peace that Denmark enjoys today.

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In case of disagreement, the Danish framework is turned upside down compared to many countries: the dialogue to solve the conflict starts locally at the company, between the parties. If a settlement is not reached at this level the collective agreement partners meet and the final option is that the parties behind the main agreement meet.

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By Marianne Korsby Clasen Chief Advisor, DI

Best Practice from Egypt: Solar Heating Arab Mark and Certification Initiative

Egypt has launched a new SWH systems initiative which seeks to promote the adoption of standard quality measures and labels within the Arab region. SWH systems are great means to governments seeking less dependency on gas and electricity in heating water. SWHs can moreover reduce pressure on the national power system as they decrease energy consumption in the residential sector as one of the most energy consuming sectors in the Arab region.

Solar Water Heating markets in the Arab Region The SWHs markets in the Arab region vary significantly as there is no systematic and consistent approach to meeting the market potential. Consequently, the behavior of different market indicators differ from country to country: some are successful, while others are not. 10 years ago, low quality imported SWH systems invaded the markets in many Arab countries as well as other developing countries around the world. These cheap imported products affected the market development negatively, primarily for the following reasons:

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The reputation of the technology was seriously affected.

The local industries lost ground and could not compete.

Customers lost their confidence with this service. Moreover, the governments froze many of their programs to support the dissemination of the SWHs unless they had specific quality scheme to build on it. Altogether, the deployment of SWH systems across all sectors was heavily affected.

SWHs Certification At the End of 2011, the Arab Ministerial Council for Electricity (AMCE) raised a request to the Regional Center for Renewable Energy and Energy Efficiency (RCREEE) and the Arabian Industrial Development and Mining Organization (AIDMO) to work on standardization and certification program for SWHs. As a consequence, RCREEE established a SWHs Certification Program in order to develop an accreditation system and quality label for SWHs in collaboration with the University of Stuttgart in Germany. With the vision of increasing the usage of solar water heaters throughout the Arab world, the project aims at establishing and maintaining a certification program that ensures a specific quality for solar thermal products and services in the Arab region. This new strategy to promote solar thermal technology in the Arab region is similar to the Solar Keymark in Europe or the Solar Rating and Certification Corporation (SRCC) in the US. Its name is SHAMCI.

The Solar Heating Arab Mark and Certification Initiative “SHAMCI” SHAMCI is a quality certification scheme for the solar thermal products and services in the Arab region. It provides a regional industrial and regulatory compliance framework for policy makers, the industrial sector, and end-consumers. The project promotes adopting standard quality measures, accreditation systems, and quality labels across the Arab region. It is the first Arab certification scheme for solar thermal products and is built around specific characteristics and needs of Arab states in the Middle East and North Africa. Inspired by Solar Keymark (the European certification scheme) SHAMCI was initiated by RCREEE with the support of the Arabian Industrial Development and Mining Organization (AIDMO) based on the Arab Ministerial Council of Electricity (AMEC) of the League of Arab States request. The SHAMCI model was presented to the executive office of AMEC who blessed the establishment of the SHAMCI network, accepted SHAMCI certification rules, and supported the continuation in the implementation of the model for the Arab region. Members of the SHAMCI network can be energy authorities, industries, certification bodies, test laboratories, inspection bodies, consumer NGOs, and other concerned stakeholders. By the end of 2012, the 38 members of SHAMCI Network agreed on a certification model for solar water heaters.

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As of now, four Arab countries (Jordan, Tunisia, Lebanon and Egypt) have shown interests to implement the model on a national level.

SHAMCI Benefits In sum, SHAMCI represents the first regional solar thermal certification scheme for the Arab world as well as in developing countries. It has been created to present a trusted, regional-based and well-designed certification scheme for SWHs for the Arab region and the third world in order to reduce trade barriers as well as increase industrial effectiveness and efficiency through the promotion of high quality SWHs. It is thus the hope that SHAMCI facilitates a market transformation which will set the course towards green growth in the Arab region.

By Ashraf Kraidy Senior Advisor to the Energy Department - League of Arab States

Current Focus of European Food Legislation

One of the goals of the European Union is to harmonize the legislation related to foods and consequently, reforming the EU Control Regulation and the implementation of the Food Information to Consumers Regulation is of high priority these years. Moving from a focus on developing sector specific (vertical) legislation the EU has come far as horizontal legislation has been developed on most issues. Much more work remains to be done, however.

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Reforming the EU Control Regulation The work undertaken to reform the EU Control Regulation aims at establishing a harmonized, transparent and responsive legal framework for the activities related to official control services, such as a Member States responsibility, under continuation of the poven principles of the current Regulation (EC) No 882/2004. While these include the principle of a risk-based approach as well as transparency and solidity, it should also improve the efficiency of controls. Regulation 882/2004 is the basis for a uniform and transparent enforcement of food legislation at both European and national level. The practical implementation of the Regulation leads to the stabilization and strengthening of the food safety level in Europe. The new additional control responsibilities proposed in the field of animal health, plant health, and plant reproductive material controls will be a challenge for enforcement bodies which will need to be properly managed. The underlying element in the public control will continue to be based on risk assessment. Food Drink Europe representing the European food industry fully supports this and expects that the control in the future will be based on the activities already in place in the producing entities such as self control, HACCP and monitoring of plans, and be audit based. Although the legislation in the first instance is directed towards national authorities it has also important implications for the food industry at large. The final adoption of the act is expected in the second half of 2014. The draft proposal has already been notified to the WTO in case it poses technical barriers to trade.

Implementation of the Consumer Information Regulation Regulation (EU) 1169/2011 on the provision of food information to consumers (The Regulation) entered into force on 12 December 2012. It establishes a legal framework with regard to information related to foodstuffs provided to consumers by food business operators at all stages of the food chain, and aims to “serve the interests of the internal market by simplifying the law, ensuring legal certainty and reducing administrative burden” thereby benefitting citizens by “requiring clear, comprehensible and legible labelling of foods”. It applies to all foods intended for the final consumer, including foods delivered by mass caterers, and foods intended for supply of mass caterers. Areas that are covered by the Regulation are among others nutrition information, origin labelling, legibility and allergen labelling. The Regulation’s provisions will generally have to be complied with by December 2014, but for the provisions on nutrition labelling. Only if a business operator chooses to apply nutrition labelling after this date it must be in compliance with the Regulation. As of December 2016 it is mandatory for most foods to carry nutrition labelling according to the Regulation. In order to ensure a consistent implementation of the Regulation across member states the European Commission has developed Q&A’s to assist interpretation. However, many interpretation issues still persist and are not likely to be dealt with in a satisfactory manner in due time for the implementation. Furthermore, the Regulation demands or provides a possibility for developing 35 implementing measures of importance to a

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harmonized implementation of the Regulation. Origin labelling has special focus this fall with draft regulations on voluntary origin labelling on food in general as well as mandatory origin labelling on meat from swine, sheep, goats, and poultry.

Future perspective Despite progress in the harmonization of European food legislation it will still take a while before the task is completed. Just as important as completing the legislative framework, however, it will be to ensure a harmonized implementation of the framework. Only that way can barriers to trade be eliminated not only within the EU but also to the advantages of non-EU business operators entering the EU market.

By Mette Peetz-Schou Senior Advisor, Confederation of Danish Food and Drink Industries

News & Events

REMINDER: MENA-EU Business Salon in Sharjah, UAE, Nov. 19th-20th 2013 The third working group meeting of 2013 of the Arab-EU Business Facilitation Network will be held in connection with the MENA-EU Business Salon kindly hosted by the Sharjah Chamber of Commerce & Industry in cooperation with DI. The Business Salon will last for one and a half day on the 19th and 20th. The second half of day two will be dedicated to the Arab-EU Business Network to discuss the following:

The state of play of activities undertaken in 2013, including the content of the annual report

The forthcoming SME conference in Jordan in the spring of 2014,

The working agenda of 2014 for the network, including selection of key topics to discuss as well as previous issues for further implementation.

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A draft strategy for the network based on our discussions in Jordan

Presentation of a draft paper for a more formal organisational structure of the network for 2014.

On the third day a social program for the network will be arranged, including a tour into the dessert. While confirmation of attendance should be sent to Karen Panum Thisted, DI, on kapt@di.dk, inquiries related to assistance with visa should be directed to Mr. Omar Ali at the Sharjah Chamber of Commerce & Industry, Omer@sharjah.gov.ae.

Fruitful seminar on social dialogue in Morocco As part of the process of strengthening the Moroccan social and economic development in the aftermath of the Arab uprisings, Moroccan labour market parties met at a two-day seminar in September on social dialogue, mediation and conflict resolution. Gathering more than 40 participants, the object of the seminar was to reinforce the social dialogue in Morocco and thereby foster democratic development and economic growth. Among the participants were the Ministry of Employment, the Ministry of Public Administration, the largest Moroccan employers’ organisation, CGEM, and the five most representative unions, UMT, UGTM, CDT, FDT and UNTM. The seminar was organized by the Confederation of Danish Industry, DI, and the Danish labour union council, LO/FTF, and was facilitated by M. Charles Nupen, who is a labour market specialist formerly employed at the ILO and counsellor for the former South African president Nelson Mandela. M. Nupen took part in the transition of South Africa after Apartheid and thus the foundation of the South African democracy and the social dialogue. With the assistance of M. Nupen, the Moroccan parties identified means and ways to improve the Moroccan labour market. The seminar fruitfully contributed to strengthen the ties between the labour market parties in Morocco and constituted an important step towards a stronger social dialogue. It was also instrumental to an improved private sector climate as well as to commercial linkages and investments between Morocco and Denmark.

Consensus amongst Arab labour leaders about importance of social dialogue: ILO press release

Arab labour leaders concluded a three-day conference in Egypt on Thursday September 26th with a consensus to adopt inclusive pro-job development models that promote social dialogue, social protection and coherent labour governance. A joint initiative by the International Labour Organization and the Arab Labor Organization, and in collaboration with the Egyptian Ministry of Manpower and Migration, the conference Labour market governance in the

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context of changing Arab societies brought together 100 high-level government, workers and employer representatives and international experts. Conference delegates issued recommendations relating to development strategies, skills, social protection, labour administration, social dialogue and labour inspection. Read the full press release from ILO here.

About the Arab-EU Business Facilitation Network The Arab-EU Business Facilitation Network is an alliance of 15 leading Business Membership Organizations (BMOs) from the MENA region. Through the signing of a Memorandum of Understanding, the BMOs have pledged to work strategically together, promoting relevant policy issues within and between their respective countries. The purpose of the Network is to create a platform from which business associations from the region can discuss the challenges for businesses and identify shared solutions and policy recommendations. A specific emphasis is on improving access to the EU market for businesses in the region. Thus, the Network will contribute to a more enabling business environment for the benefit of growth and development in general.

The 15 BMOs are: Algeria: Forum des Chefs des Entreprises (FCE) Bahrain: Bahrain Chamber of Commerce and Industry

(BCCI) Egypt: Federation of Egyptian Industries (FEI) Jordan: Jordan Chamber of Industry (JCI) Kuwait: Kuwait Chamber of Commerce (KCCI) Lebanon: Association of Lebanese Industrialists (ALI) Libya: Libyan Businessmen Council (LBC) Morocco: Confédération Générale des Entreprises du

Maroc (CGEM) Oman: Oman Chambers of Commerce and Industry

(OCCI) Saudi Arabia: Council of Saudi Chambers (CSC) Syria: Damascus Chamber of Industry (DCI)

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Tunisia: Union Tunisienne de l’Industrie, du Commerce et de l’Artisanat (UTICA)

UAE: Federation of UAE Chambers of Commerce and Industry

Qatar: Qatar Chamber of Commerce and Industry Denmark: The Confederation of Danish Industry (DI)

Meetings and reports Several times a year – on working group meetings and on the Annual Meeting - the participants meet to discuss the outcomes and prospects of the projects in the AE-Network. All summaries of the meetings as well as Annual Reports can be found on the AE-network’s webpage.

Contact information Confederation of Danish Industry Industriens Hus H.C. Andersens Boulevard 18 DK – 1787 Copenhagen V Denmark www.di.dk