Transcript Presentation on New Affiliation Fee System

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