Alternative Livelihood Options to Facilitate Coal Sector Restructuring
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TA4680-PRC Alternative Livelihood Options to Facilitate Coal Sector Restructuring Final Report March 2007 Asian Development Bank TA4680-PRC Alternative Livelihood Options to Facilitate Coal Sector Restructuring Disclaimer 1. This report is intended solely for the use of China National Coal Association (CNCA), Governments of Jiaozuo and China and Asian Development Bank (ADB) and should not be referred to or distributed for any other purpose without our written consent. 2. For purposes of the exercise, we have used primary data obtained from the Jiaozuo local Government and the Jiaozuo Coal Group as well as secondary data obtained from relevant sources, which we believe to be reliable and our assessment and recommendations are dependent on such information being complete and accurate in all material respects. We disclaim all liability to any third party who may place reliance on this report and therefore does not assume responsibility for any loss or damage suffered by any such third party in reliance thereon. 3. Assumptions on expected manning requirements against proposed projects during the 11th five year plan are indicative and have been based on benchmarking with current industry standards. 4. PricewaterhouseCoopers Private Limited (PwC) makes no representation or warranty as to the accuracy or completeness of the information used in this report and shall have no liability for any representations (expressed or implied) contained in, or for any omission from, this report. Furthermore PwC will not be bound to discuss, explain or reply to queries raised by any agency other than the intended recipients of this report. PricewaterhouseCoopers Contents 1. Executive Summary.................................................................................................................................... 1 2. Introduction ................................................................................................................................................ 8 2.1. Objectives of the assignment .............................................................................................................. 9 3. Methodology and Approach ..................................................................................................................... 11 3.1. Methodology..................................................................................................................................... 11 3.2. Our approach .................................................................................................................................... 12 3.2.1. Kick off meeting ....................................................................................................................... 12 3.2.2. First field visit to the city of Jiaozuo......................................................................................... 12 3.2.3. Inception Report........................................................................................................................ 13 3.2.4. Second field visit to the city of Jiaozuo .................................................................................... 13 3.2.5. First workshop with key stakeholders....................................................................................... 14 4. Setting the Baseline .................................................................................................................................. 16 4.1. Overview of Jiaozuo’s economy and industrial development .......................................................... 16 4.2. Coal Sector Restructuring in Jiaozuo................................................................................................ 18 4.3. Socio-economic profile of the displaced miners............................................................................... 19 4.3.1. Age Mix .................................................................................................................................... 19 4.3.2. Education Mix........................................................................................................................... 20 4.3.3. Income mix ............................................................................................................................... 21 4.4. Existing training facilities................................................................................................................. 21 4.5. Existing social protection policies .................................................................................................... 22 4.5.1. Old Age Insurance .................................................................................................................... 22 4.5.2. Basic Living Allowance............................................................................................................ 23 4.5.3. Unemployment Insurance ......................................................................................................... 23 4.5.4. MLSS........................................................................................................................................ 24 4.5.5. Medical Insurance..................................................................................................................... 24 4.5.6. Work Related Injuries Insurance............................................................................................... 24 4.5.7. Maternity Insurance .................................................................................................................. 25 4.5.8. Education for children............................................................................................................... 25 4.6. Assessment of socio-economic protection levels.............................................................................. 26 4.7. Existing environment regeneration policies...................................................................................... 28 4.7.1. Environmental baseline in Jiaozuo and opportunities............................................................... 30 5. Redeployment Options and Challenges.................................................................................................... 32 5.1. Proposed Jiaozuo Coal Group projects............................................................................................. 32 5.2. Other key projects in Jiaozuo as outlined in the 11th 5 year plan...................................................... 33 5.3. Tourism for Economic Development................................................................................................ 35 5.4. New projects in Henan and neighboring provinces .......................................................................... 36 5.5. Leveraging foreign direct investment (FDI) for economic development.......................................... 37 5.6. Supply side analysis.......................................................................................................................... 38 5.7. Summary of opportunities and challenges........................................................................................ 38 6. National and International Case Studies................................................................................................... 40 6.1. The Shanxi experience...................................................................................................................... 40 6.2. The Shanghai experience.................................................................................................................. 41 6.3. The Lorraine Experience .................................................................................................................. 41 6.4. British Coal Enterprise and restructuring of the UK coal industry................................................... 42 6.5. The Ruhrgebiet experience ............................................................................................................... 43 7. Recommendations .................................................................................................................................... 45 7.1. Augmenting economic development through FDI............................................................................ 45 7.2. Considering tourism as the sixth pillar of Jiaozuo’s economy.......................................................... 45 7.3. Redeployment and training............................................................................................................... 46 7.3.1. Redeployment strategy.............................................................................................................. 46 7.3.2. Retraining.................................................................................................................................. 47 7.4. Employment Resource Centre (ERC)............................................................................................... 50 7.4.1. Rational of setting up the ERC and the required institutional arrangements ............................ 50 PricewaterhouseCoopers Asian Development Bank TA4680-PRC Alternative Livelihood Options to Facilitate Coal Sector Restructuring 7.4.2. Scope of work for the ERC ....................................................................................................... 51 7.4.3. Manning requirements for the ERC .......................................................................................... 52 7.5. Jiaozuo Coal