Performance Report of the Project supporting the Regional Development of Ida-Virumaa (contract no. 43)

Compiled by Aksel Kirch with Juhan Sillaste, Marika Kirch, Tarmo Tuisk and Iris Brökling

March 1999



1. The aims and results of the Delphi panel expert questioning

2. Analysis of the focus-groups employees/workers in the oil-shale sector (miners and chemical workers at Kiviter) and municipality workers (Kohtla-Järve city government) in the County of Ida-Virumaa – which are the deficiencies and future visions

3. Today’s difficulties of employment in Ida-Virumaa – based on the analysis of employment statistics and of the worker-groups at risk

Analysis of employment statistics.

Summary of the interviews with the risk-groups of the Ida-Virumaa industrial centre (female workers at Kreenholm Valduse AS, unemployed single mothers in Sillamäe, workers at the Viru-Rand fish cannery).

4. Social development scenarios for the oil-shale sector 1999-2005.


Appendix (interviews with the focus-groups and other materials)

Appendix 1. Aims in the field of social and economic politics, to which the planned measures for the implementation of the scenarios contribute

Appendix 2. Delphi panel expert colloquium (verbal stage) February 9th, 1999 in Tallinn, at the Institute for European Studies (Tallinn)

Appendix 3. Chemical workers at Kiviter January 26th, 1999

Appendix 4. Miners of the “Ahtme” and “Estonia” mines February 1st , 1999

Appendix 5. City government of Kohtla-Järve February 1st, 1999

Appendix 6. Unemployed single mothers of Sillamäe January 19th, 1999

Appendix 7. Female workers at Kreenholm January 19th, 1999

Appendix 8. Workers at the Viru Rand fish cannery January 26th, 1999


1. The aims and results of the Delphi panel expert questioning

The Delphi method is used to explain the future of complex problems in the case, when analytical means are not appropriate for the explanation of problems of that gravity. Here it is important as an applicable result of the method to pub licate the conversation of the Delphi panel experts and by this achieving positive changes in society.

The results of the Delphi panel are gained through the gathering of opinions from different experts in an mutual interaction and through the continuous process of making the panel characteristics more precise. It is aimed at a concentrat ion of opinions and general agreement of the experts concerning the planning of measures directed to the future (which in multi-stage discussions is normally achieved). Concentration of opinions and general agreement is also aimed at concerning the achiev ement of indispensable technological and social aims.


In dealing with the given topic the aims of the Delphi expert panel were the following:

first, work through the detailed scenario-versions for the social development of the production sectors linked with oil-shale (further on called oil-shale sector) for the years 1999-2005. Here the social development of the oil-sh ale mining industry and of the energy and oil-shale chemistry industries are taken into account as well as influencing steps and

secondly, get the consolidated opinion of different experts (using the questioning methods applied in the course of the verbal and written stages).

The fulfillment of the mentioned task would give the decision-makers in Estonian oil-shale politics a reliable and concurrent forecast to make socio-political decisions for the development of the oil-shale sector in the years 1999-2005.

The verbal stage of the Delphi expert panel took place in Tallinn February 9th, 1999, in the rooms of the Institute for European Studies.

In the first round of the Delphi expert panel, discussions took place concerning the assessment of the different scenario-versions under the aspect of as low costs as possible – how the economic situation of the miners would not get too difficult at the closing of the mines.

In this round a consensus was reached, that of the three presented scenarios the first and the third should be further developed. These scenarios are called the “contract scenario” and the “compromise scenario”.

Because the steps planned for the “continuation scenario” do not justify in the light of today’s pressure in the Estonian economy, this second scenario is not examined further on.

We took as a starting point the technological forecast, that in the year 2005 the power plant in Narva and also the Iru plant in Tallinn are merged.

The experts became convinced, that until that date a liberal electricity market will be existing and that energy-electricity-plants (socalled combined plants) will be spread over different Estonian regions.

Scenario I: “contract scenario” would mean the organization of actions of all parts of the oil-shale sector on the basis of strategic cooperation contracts (advisably on the basis of the priorities of the Estonian Republic ).

With this, the compilation of the “social plan” as the social dimension joins the field of application and restructuring of human labour and the field of preparation and signing of the Territorial Employment Pact in Ida-Virumaa.

According to the “contract scenario”, a reduction of the production activity would take place in the oil-shale sector, but no too sudden break-through. In the course of the restructuring of the oil-shale sector some th ousand people will lose their jobs in the mines.

In addition to the miners, the number of workers in the oil industry has also considerably dropped: at the beginning of March 1999, 1350 people worked in the daughter firms of the Viru Keemia Group AS, the successor of Kiviter. After a possible re-nationalization at the beginning of the year 2000, AS Kiviter would continue the oil production approximately at half the production capacity of 1997; the consumption of oil-shale in the year 2000 would be ca. 1 million tons. The production of oil-shale will be organized through quotas fixed by the Estonian Government in order to fulfill the 90-day safety reserve demanded by EU-norms and in order to satisfy the demand of others consumers.

In the years 2000-2004, a process of rationalization and early retirement of almost 2500 people will take place in addition to the above-mentioned in the production field of the oil-shale sector. The production of oil-sh ale will reduce to 7 million tons in the year 2005. The forecast for oil-shale demand depends on the prices for oil-shale and corresponding calculations confirm the high importance of this price boundary.

Scenario II: the content of the “compromise-scenario" is the considerable reduction of oil-shale mining and the re-placement of labour together with the creation of a system of social guarantees for the “displaced” workers . The forecast for the reduction of labour in mining for the years 1999 to 2004 would be up to 4500 people.

The initial position for the strategy for oil-shale reduction is the second variant of the Estonian Oil-Shale Development Programm (worked out in May/June 1998 and so in a more favourable situation for the Estonian economy).

Since during the last six months the market for electric energy has declined considerably, the proceeding presented in the development plan of Eesti Põlevkivi (Estonian Oil-Shale) will take place at a higher speed and at the beginning o f 1999 they could, according to the estimation of academic Ilmar Öpik, already be close to the reduction graph of oil-shale production for the year 2003.

The social situation in Estonian oil-shale mining has the characteristics of a coming catastrophe, since first the wages of the miners are very low, secondly the mines are working under the condition of hidden unemployment in summertime and thirdly almost one quarter of the miners is in pension age or close to pension age.

The application of the “compromise-scenario” requires a decision concerning the provision of financial means for social guarantees in the course of the fast reduction of oil-shale of the Estonian Parliament. These supporting financial m eans should be concentrated in the hands of the board of the Ida-Virumaa Territorial Employment Pact.

The written stage took place in Tallinn from March 18th to 25th, 1999; the experts reached a consensus concerning the following political and social-economic steps to be taken.

Social development scenarios for the oil-shale sector 1999-2005.

The result of the two-stage Delphi expert panel was the following: according to the circumstances, which are dictating the probable application of the alternative scenarios, a well-balanced policy was worked out. The aims of this policy are to compensate the declining employment in the oil-shale sector as the result of the necessary restructuring by a rising employment in other branches of industry in Ida-Virumaa, amongst them fields related to transit.

The Delphi expert panel, the interviews of the six focus-groups and the analysis of social statistics in the field of employment resulted in a common opinion concerning those social measures, which would be indispensable to realize the a ims of the two alternative scenarios.

* Clear priority has the aim of avoiding social upheavals in Ida-Virumaa (impoverishment of the population accompanied by social anomy). The measures included in the two basic scenarios should point in that direction and the action would reach an effective result according to the estimation of all experts.

This aim is possible to realize as well through the contract-scenario as through the compromise-scenario. Although the experts expressed a somehow bigger preference to bring into life the application of the compromise-scen ario in developing the oil-shale sectors in Ida-Virumaa. So in the years 1999-2005 the ideas of the compromise-scenario should be applied in the field of oil-shale policies.

* In order to applicate the compromise-scenario, a political decision of the Estonian Parliament is very important concerning the concentration of financial means in Ida-Virumaa for the necessary social programs as a re sult of restructuring the mining industry and other “big industries”.

* It is necessary to create the collective organs founded with the Territorial Employment Pact and to give them corresponding coordination tasks, including the beginning of additional funding with social direction. Of the indisp ensable measures, the preparation of the employment pact in Ida-Virumaa would be of primary concern, also the joint discussion of concrete steps and the signing of the contract before the local elections. The Territorial Employment Pact of Ida-Virumaa wou ld be a joint plan, where all actors (and also non-actors) would be well-known to everyone.

* The very grave economic situation in the chemical firms of Viru Chemical Group AS (the former Kiviter) makes it very difficult to work out a forecast for the future. One development possibility presented to the experts was the re -nationalization of the oil-industry complex. In that case there would be a precedent in Estonia and without a special decision of the Estonian Parliament the juridic status of the Viru Chemical Group AS cannot be changed. At the same time a branch of ind ustry in a highly complicated situation is concerned.

* In the course of the discussion the experts expressed the opinion, that the key strategy is the combination of single social and economic measures and, if required, the use of already tested measures. Here, very much depends on an unexpectedly high number of situational factors, including psychological aspects. As well, one can only agree with the idea of Gunnar Okk, the chairman of the board of Eesti Energia, which was published in “Energeetika Uudistekiri” (1999, n o. 1), that in order to develop the Estonian energetic complex we have to “keep an eye on the need to minimize all social risks resulting from a possible re-organization. Special attention should here naturally be paid to Ida-Virumaa. This could probably be the only place, where we consciously speak of expenditures and activities not directly related to the main work of Eesti Energia. It is mostly about attracting investments, improving the economic environment and helping to create new work-places outsid e the system of Eesti Energia”.

* The idea of a Territorial Employment Pact for the County of Ida-Virumaa, proposed by the Institute for European Studies in October 1998, was given a positive reception. It was also included in the package of social measures presented by specialists of the oil-shale sector to the Estonian Government and taken as a basis for the decision of the Estonian Government of January 5th, 1999.

* The interviews with the six focus-groups in Ida-Virumaa confirmed our hypothesis, that the Russian-speaking population of Estonia is under very high pressure today. It is necessary to increase the ability for making socio-political decisions from the side of the Estonian state in Ida-Virumaa. The Estonian State must not let the management of the economy degenerate. The non-Estonian workers in the mines and energy plants trust the economic policy of Estonia, but there are socio-polit ical borders in front of this confidence and, summarizing, also in front of the internal loyality to the state.

The Institute for European Studies