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Current PSI 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

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Current PSI affiliation fee system

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  1. 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%)

  2. 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

  3. Exchange rate against Euro

  4. 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

  5. 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.

  6. 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.

  7. 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.

  8. 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.

  9. 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.

  10. 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

  11. 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.

  12. Less-registered membership • Big gap between affiliated membership and true membership • Increase free-riders • Discourage unions from paying fullmembership affiliation fees • Erode mutual trust and solidarity

  13. 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?

  14. Principles of new system • International solidarity • Fairness • Transparency

  15. Our option • Introduce fixed ratio system based on the average salary of members • Pay by Euro • Abolish the minimum affiliation fee • Abolish the index

  16. 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

  17. 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

  18. 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

  19. 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

  20. 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%)

  21. Other potential options • Introduce fixed ratio system based on GDP and abolish both of index and minimum affiliation fees • Probably any others

  22. 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

  23. 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

  24. End Thank you for listening

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