1. Acting inconsistently with the rule included in the Environmental Policy, that the Bank will aim at securing that investments financed by it are non-burdensome for the natural environment, and designed in this way that they act in accordance with valid legal requirements.
2. Acting inconsistently with the rule that the Bank will actively try by means of financed projects to contribute to implementation of appropriate rules and regulations of the international environmental law (treaties, conventions, multilateral agreements). Granting the Kaufland Polska company with the loan means supporting a company that violated the guidelines of the Declaration on international investments and multinational companies of June 27th, 2000 (Chapter IV, point 5 and Chapter V point 7).
3. Acting inconsistently with the rule that the Bank will aim to accomplishment of strategic directions consisting in, among others, including the environment protection issues in the cycle of the project, promoting pro-environmentally oriented investments, and giving great importance to environmental issues.
4. Acting inconsistently with the rule that all projects are evaluated from a perspective of their environmental impact, and that every sponsor of a project is responsible for providing all information for satisfactory evaluation of environmental impact.
5. Not fulfilling the duty of recognising potential issues concerning environment protection related with the proposed project and assessing information on the environment necessary to define dangers, responsibilities, accordance with valid legal regulations, all negative impact of environment and all other potentially alarming issues. In this point the affected group accuses the Bank of violating the regulations included in the Bank's document titled "Environmental Procedures".
6. Acting inconsistently with the rule that the Bank promotes improvements in the field of environmental protection in all implemented projects, and that the Bank will recognise possibilities of improvement of the condition of environment in the projects invested by it.
7. Acting inconsistently with the aim of the environmental policy, that the Bank requires that all projects meet national legal regulations on environmental, health and safety issues.
8. Acting inconsistently with the aim of the environmental policy of the Bank, that the Bank requires that all projects meet legal regulations of the European Union on environmental, health and safety issues. (The Directive 93/104/EC of November 23rd, 1993 - Articles 3 and 5).
On December 9th, 2004 the European Bank for Reconstruction and Development revealed that it takes into consideration granting the Kaufland Polska company with the loan of up to 160.000.000 for development of the superstore net in Poland, in small and medium towns. As far as environmental issues are concerned, the Project Summary Document did not inform about necessity of taking any special actions concerning the issues of respecting the employees rights, safety standards and work hygiene. The document did not inform about occurrence of any irregularities in that issue.
There is high probability that the project financed by the European Bank for Reconstruction and Development will have a negative impact on environment, understood here as employees rights, safety standards and work hygiene. The project does not meet the criteria of the environmental policy of the European Bank for Reconstruction and Development, exposes the Bank to a risk of losing reputation and stands against the rule of promoting by the Bank the development of pro-environmental initiatives. The evidences collected by the affected group are strong enough to claim that inn result of the project future employees of the Kaufland net will suffer a harm, because the net does not respect the employees rights, safety standards and work hygiene.
Collected evidences prove that the Bank did not make reliable environmental analysis of the project. It causes that the Board of Directors while taking decision on financing the project did not have full information about the Sponsor, its attitude to employees rights, safety standards and work hygiene as well as about the history of the borrower's activity in Poland. There are justified factors to claim that the Board would not have taken the decision on financing the project, because the decision is related with supporting the company that for years has ignored employees rights, safety standards and work hygiene.
The Kaufland Polska company stated its activity in Poland in 2000. In March 2005 the State Labour Inspection revealed the results of the controls conducted in over sixty stores of the Kaufland net. Most common irregularities concerned unconscientious recording of working time, not reckoning payment for extra hours and working at night shifts, wrongly constructed job contracts, not giving holidays and offs, not preparing storehouses for goods, lack of means of individual protection, lack of work hygiene and safety training (Appendix 1). In result of the control 598 administrative commands have been issued and 5 notices to public prosecution service have been sent. The Regional Prosecution Service Wroclaw Krzyki-Wschod has been informed about committing a crime of the article 218 § 1 of the Criminal Code consisting in functioning of the w employees management system in the Kaufland net, foundations of which may be the cause of violations of the law of work regulations. Functioning of the system could not take place without agreement and acceptance of the Kaufland Polska Board.
As one of the causes of violation of the working time regulations the inspectors recognised the way of organising the stores of the Kaufland net. The existing structure made it impossible to employ extra workers and forced the managers to employ their own workers for extra hours exceeding the norms defined in the employment contracts. The majority of the Kaufland employees worked at part time - and of full-time. As far as the work safety and hygiene are concerned, the controls revealed, among others:
" insufficient knowledge of the work safety and hygiene rules and ignoring the cases of violation of these rules by management personnel of all levels;
" inappropriate planning of quantity and frequency of goods deliveries as far as the possibilities of their storage is concerned;
" not providing appropriate means of transportation adjusted to moving pallets.
The controls were conducted in February 2005.
In this state of condition the Bank decided yet to finance the development of the Kaufland net in Poland. Despite the activities of the State Labour Inspection, so crucial for the project, the Project Summary Document did not include any information on problematic environmental issues revealed by the Labour Inspection (Presently the document is not placed in the web site, and the affected group does not have its copy). The sponsor is obliged by the Bank to obey the Work Codex regulations and the rules of work safety and hygiene, but it violated them at the moment of acceptance the project by the Board and signing the loan contract. Unfortunately, it was not noticed by the Bank personnel responsible for the analysis of environmental issues concerning the project. The affected group possesses and transfers in the appendix the opinion of the Vice-Chief Work Inspector that European Bank for Reconstruction and Development has never requested the Labour Inspection for information on respecting the employees rights, safety standards and work hygiene in the Kaufland net before June 21st, 2005. (Appendix 2).
The affected group took a dialogue with the European Bank for Reconstruction and Development on the issue of the project. With the letter of June 28th, 2005, the "Inicjatywa Pracownicza" informed the Bank about the results of the control of the Kaufland net and applied for publishing an official statement of the Bank, defining its expectations from the Kaufland Polska concerning the issues of employees rights, stopping financing the project until the Kaufland corrects all irregularities, revealing the Environmental Analysis in the part concerning employees rights, safety standards and work hygiene, and conducting independent revision of the Environmental Analysis with participation of a trade union representative (Appendix 3). In response the Bank informed that it appointed an independent expert who verified information gained from the Inspection, met the representatives of the Inspection, the Kaufland net management and leading trade unions (Appendix 4). In result the content of the Project Summary Document has been changed. Other proposals of the "Inicjatywa Pracownicza" have not been taken into consideration.
The affected group's opinion is that the response provided by the Bank is unsatisfactory, and the actions taken do not guarantee that the Kaufland Polska will change its policy oriented at minimising the costs of activity at the expense of employees rights, safety standards and work hygiene.
The Bank treated the report of the control (and the very controls of February 2005) as a unique and exceptional event. The Bank declared focusing on fulfilling by the Kaufland Polska the decision of the Inspection to avoid irregularities presented in the report from 2005. It should be emphasised that controls in the Kaufland stores were conducted also in previous years (2002, 2003, 2004), and their results were not taken into consideration by the Bank. The after-control report of the State Labour Inspection, the Bank refers to, confirmed establishments of the controls conducted in the previous years by the regional work inspections. The results of the controls conducted in 2002-2004 revealed violations of the Work Codex and the safety and work hygiene standards in the Kaufland stores. Each time after a control, the management of the company was informed about the results and obliged by the work inspectors to eliminate the irregularities. Despite the fact that after each control conducted in 2002-2004 the work inspectors used legal means to eliminate the irregularities, in 2005 controls revealed that employees rights, safety standards and work hygiene are still violated by the Kaufland Polska on regular basis. The Kaufland Polska company did not realise the commands of the work inspectors from 2002-2004. Declarations of the company's management given to the Bank are thus unreliable. The Kaufland Polska does not intend to realise the commands of the work inspectors, because the company has not been realising it since at least 2002. The affected group transfers the possessed evidences proving the regular violation of employees rights, safety standards and work hygiene in the Kaufland stores since 2002 (Appendixes 5, 6, and 7).
On August 31st, 2005, the State Labour Inspection published the results of repeated controls in the Kaufland net conducted to check if the situation in the stores has been improved since controls in February and March 2005 (Appendix 8 - the article on publication of the results of the controls). The twenty-eight stores have been controlled. In result of the control 133 administrative commands have been issued and 6 notices to public prosecution service have been sent. This fact proves the Kaufland Polska company does not intend to change its policy as far as obeying the employees rights is concerned, and the actions taken are only of an apparent and short-term character. There are justified factors to claim that similar controls in future will reveal violations of the employees rights, safety standards and work hygiene.
Violations of the employees rights in the Kaufland stores are not results of individual cases depending on management of a particular store, but from the strategy of the company's headquarters. This is what the work inspectors emphasise. One of essential factors causing irregularities in working hours is the way of organising staff in particular stores, which is made on the basis of 'structurogramme' taking into consideration size of a store, number of employees and part-time/full-time proportion. Such principles a priori assume that store management is forced to unconscientious recording to accomplish defined work with minimal personal costs. Some types of irregularities are typical for the Kaufland net were recognised by the inspectors in 2002-2005, which proves that the central policy of the Kaufland company does exist. This policy has an impact on occurrence of many irregularities in obeying employees rights, safety standards and work hygiene. It should be stated that many irregularities are systemic character and have been occurring from the beginning of the activities of the Kaufland company in Poland. For example, one of the causes if unconscientious recording of working time is the system based on part-time workers. This system functions even now that is proved by advertisements announcing job opportunities placed on the web site of the Kaufland Polska (Appendixes 9 and 10). The Kaufland still employs only part-time workers.
The European Bank for Reconstruction and Development could have recognised problems occurring in the Kaufland Polska stores before publication of the report of the State Labour Inspection because all post-control reports of 2002-2005 are available on the basis of the Act on public access to information. Evaluating the hitherto activities of the Kaufland Polska the Bank did not analyse the post-control reports of 2002-2004, thus the Environmental Analysis presented to the Board of Directors was unconscientious. Information we were given by the representatives of the CEE Bankwatch Network who participated this year in the Annual Bank Meeting in Beograd, prove that the employees of the Bank knew about bad situation of the Kauflad workers and violations of their rights, but did not inform the Board of Directors about it. Providing the company the internal policy of which causes the necessity of violation of employees rights, safety standards and work hygiene with a loan is inconsistent with the Environmental policy of the Bank and environmental procedures. The affected group attaches also press articles proving that problems do occur in the Kaufland stores (Appendix 11).
Taking into consideration the arguments above, the affected group claims that the project does not meet conditions to be financed by the European Bank for Reconstruction and Development. The Board made a decision on financing the project because it did not have sufficient knowledge about the activities of the Kaufland Polska company. The environmental analysis was made unconscientiously because it did not include essential information about environment, which is available to the public in regional work inspections in Poland. The project has a negative impact on workers of the Kaufland stores because it sanctions violation employees rights, safety standards and work hygiene. The Kaufland Polska company does not meet the expectations as an enterprise using public finances.
Currently there are several prosecution trials conducted on irregularities in the Kaufland net. The European Bank for Reconstruction and Development should take into consideration all of them and stop financing the project at least until the moment of completing them. The Board of Directors should be informed about the whole situation related with the Kaufland Polska company and should have a possibility of new opinion on financial support for the Kaufland Polska. The affected group suggest that the presented evidences should be analysed carefully.
The registration document of the Nationwide Trade Union "Inicjatywa Pracownicza" is also attached to the complain (Appendix 12).
The list of appendixes:
1. The Report of the State Labour Inspection after the control of the Kaufland net from February 2005, placed in the web site www.pip.gov.pl
2. Opinion of the Vice-Chief Labour Inspector of August 23rd, 2005
3. The letter of the Nationwide Trade Union "Inicjatywa Pracownicza" and the Polish Green Network to the President of the European Bank for Reconstruction and Development of the June 28th, 2005
4. The answer of the Bank of July 25th, 2005
5. Reports, records and opinions of the regional work inspections related with the controls in the Kaufland stores in 2002
6. Reports, records and opinions of the regional work inspections related with the controls in the Kaufland stores in 2003
7. Reports, records and opinions of the regional work inspections related with the controls in the Kaufland stores in 2004
8. The article of August 31st, 2005, on publication of the results of repeated controls in the Kaufland stores in spring and summer 2005
9. Advertisement announcing job opportunities in Szczecin, placed on the web site of the Kaufland Polska on August 17th, 2005
10. Advertisement announcing job opportunities in Myslowice, placed on the web site of the Kaufland Polska on August 17th, 2005
11. Press articles from the 2003-2005 period
12. The registration document of the Nationwide Trade Union "Inicjatywa Pracownicza"
Marcel Szary Jaroslaw Urbanski
On behalf of and for the Nationwide Trade Union "Inicjatywa Pracownicza"