Regional and Local Implementation of NAP/inclusion: Lithuania. Third report. Prepared by

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1 Regional and Local Implementation of NAP/inclusion: Lithuania Third report Prepared by Arūnas Poviliūnas with the assistance of Vida Beresnevičiūtė and Rūta Žiliukaitė Vilnius, October, 2005 Contract VC/2005/0050 Title: Group of non governmental experts in the fight against poverty and social exclusion Lithuanian expert

2 Contents Executive summary... 3 Principles of the Cases Selection... 4 Local Cases The Activities against Unemployment of Polish Ethnic Minority in Šalčininkai Region Solving the Issue of Rural Social Exclusion A Case of Molėtai Municipality Promoting the Implementation of the Principles of Social Economy A Case of Social Enterprise (Social Enterprise UAB LIREGUS in Vilnius) Reduction of Social Exclusion of Roma People in Vilnius Region Facilitating Adolescents Transition from Education to Employment A Case of Alytus Region Conclusions References

3 Executive summary Key trends and challenges Analysis of the implementation of NAP/inclusion on local level demonstrates that despite the fact that NAP/inclusion and The Consolidated Nomenclature of the Measures For for the Implementation NAP/inclusion are not widely known as the public policy tools designed for social inclusion the different social inclusion policies are gaining momentum. As far as key trends are associated with implementation of the principles of the social economy (social enterprises, social partnerships, empowerment of local communities and NGOs, etc.), the main challenges are linked with the obstacles of cooperation and networking (shortage of information, deficit of trust, negative stereotypes, etc.). Strategic approach The successful cases of implementation of NAP/inclusion demonstrate the positive aspects of the Open Method Coordination approach that could be applied on the national and regional levels. These aspects are as follows (a) decentralised approach and conversion of common objectives of social inclusion into concrete policies on regional and local levels; (b) mutual learning, by active communicating of social innovations in the field of social policy; (c) active participation of all stakeholders in the development and the implementation of the processes of decision making and implementation of the decisions. The successful cases prove the shift of social inclusion policy towards communicative policymaking, towards the notion that improving of the decision making involves improving communication, understanding, trust, open discussion and cooperation between those involved in the social inclusion policy areas. Key policy measures Notwithstanding the specific objectives and activities each successful case of implementation of NAP/inclusion is based on a number of principles which include (1) organisation of a social partnership on the grassroots level with the participation permanent team of practitioners and representatives of target group; (2) involvement of relevant stakeholders; (3) successful attempts of empowerment of the representatives of the target group from the initial stages of the actions designed for social inclusion; (4) targeted public relation campaign aimed at destigmatization and social advertising of the target group; (5) multidimensional approach and a systematic search for links between actions, as part of an integrated strategy. Challenges Ahead and Plans for the Future In order to make NAP/inclusion social policy orchestrating tool it is necessary to raise the visibility of social inclusion policy. Social inclusion policy process ought to be reciprocal and well tuned with the other policy papers that tackle issues relevant to social inclusion. It is necessary to establish and implement an open and clear procedure how to include different stakeholders. Social inclusion policy must include the components assigned for changing negative stereotypes and promote tolerance towards vulnerable groups (destigmatization of vulnerable groups, social advertising, etc). 3

4 Principles of the Cases Selection The selection of five regional/local entities and on the key challenges for the analyses was based on the following principles: Priority was given to those regions which can serve as examples of good practice at national, but also at EU-level. The note was taken to the partnership arrangements involving civil society and aiming at the implementation of policies directed towards social inclusion at regional level. Thematic priorities represented by cases were selected in accordance with the Lithuanian country fiche of the Commission staff working paper Report on Social Inclusion The selection of the thematic priorities follows six key challenges that will be of particular importance over the next two years if real progress is to be made towards the eradication of poverty and social exclusion identified in part I of Report on Social Inclusion 2005 (European Commission, Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit E2 2005, p. 6): 1. Expand active labour market policies and develop coherent and comprehensive lifelong learning strategies in order to increase labour market integration, especially of the long-term unemployed and groups at high risk of poverty and social exclusion, and ensure more effective and efficient spending in this area so as to improve the quality of provision. 2. Ensure that social protection systems have sufficient coverage and levels of payment to guarantee an adequate minimum income for all to live with dignity, while at the same time removing disincentives to take up employment. 3. Strengthen policies to tackle child and family poverty and to protect the rights of children. 4. Improve access to decent housing and tackle homelessness. 5. Invest more, and more efficiently, in order to improve the quality of and access to key public services, particularly health and social services, education and training and transport. 6. Intensify efforts to overcome the particularly high levels of exclusion and discrimination experienced by some ethnic groups, especially the Roma, and other groups at high risk such as people in or leaving institutions or people with a disability. Targets of the analysis: 1. Different public policy contexts and their interaction (national regional local regional national) 2. Institutional and personal attitudes and modes of behaviour of the actors involved in the cases 3. Linkages between public policy contexts and action of the actors involved. 4

5 Local Cases 1. The Activities against Unemployment of Polish Ethnic Minority in Šalčininkai Region Ethnic minorities in NAP/inclusion Despite the fact that Lithuania is a rather uniform country in ethnic terms 1, differences between ethnic groups in terms of education and employment are particularly significant. The best and the highest levels of education are registered among the residents of Jewish nationality. Moreover, the level of education of the Armenians, Ukrainians, Russians, Germans and other nationalities is higher than the level of Lithuanians. The major part of those individuals is the residents of cities. The lowest level of education is registered among the Poles and the Roma people. The groups of nationalities also tend to differ in terms of unemployment and employment indices. Compared with the general level of unemployment in 2003 (12.4 percent), the unemployment rate among the Lithuanians reached 11.7 percent, the Russians 18.7 percent, and the Poles 13.9 percent. The level of employment among the Lithuanians (in the age group of 15-64) was the highest, at 61.3 percent; whereas the respective levels for the Russians and Poles were 57.8 percent and 59.6 percent respectively (Statistikos departamentas 2002, p ). These disparities are partially predetermined by the concentration of non-lithuanians at the territories, which are less developed socially and economically. Moreover, compared with Lithuanian nationals, unemployed representatives of ethnic minorities usually possess a lower level of general and professional education. One of such regions, in which residents of the Polish minority, which is the second largest ethnic group, are concentrated and comprise a majority (79.5 per cent), is Šalčininkai region municipality with the population of (Statistikos departamentas 2002). The issue of ethnic minorities is discussed in NAP/inclusion rather explicitly. Analysis of the core trends demonstrates that representatives of some ethnic minorities are disadvantaged in terms of educational attainments and employment. Current system of professional training is underdeveloped and unable to ensure accessibility and continuity of general professional training. Analysts note disproportions between the professional training, the need in improvement of professional skills and 1 In 2001 the Lithuanians comprised 83.4 percent, Poles 6.7 percent, Russians 6.3 percent of total population. Representatives of other nationalities (Belarus, Ukrainians, Jews, Germans, Tatars, etc.) accounted for an insignificant part of overall population. 5

6 possibilities to meet the need, uneven accessibility of professional information, imperfect system of vocational guidance and consulting, insufficient attention to individuals with special needs and vulnerable persons (disabled, youth, ex-convicts, language/ethnic minorities, persons of pre-pension age, long-term jobseekers). Such a situation poses obstacles for adjustment to the needs of the market to the individuals in pursuit of permanent employment, in particular to those in danger of social exclusion. The long-term objectives for elimination of poverty and social exclusion encompass creation of social, economic and political environment, which ensures possibilities of integration into Lithuania s society for refugees, immigrants and ethnic minorities. The focus is made on youth of ethnic minorities and their graduation and knowledge of the Lithuanian language to the level enabling to study, acquire professional skills and work without any hindrances. Assistance for persons that face difficulties with integration into the labour market is emphasized and aims the following: to expand the labour market with more individuals who encounter problems related with integration into the labour market or whose abilities to work are impeded by different social hindrances (including ethnic minorities among the other vulnerable groups), to expand the system for the development of employment abilities of local residents, focusing on persons with special needs and socially vulnerable individuals; to ensure the most favourable possibilities to coordinate professional and family life, application of flexible forms of work organization and remuneration, possibilities of telecommuting, support for business start-ups. Also, the measures foresee reduction of youth unemployment, development of the system of retraining for elder unemployed, to provide assistance for those returning to the labour market, to modify the approach of employers towards elder employees. Along with the integration into the labour market, the participation in cultural life is emphasized, especially of low-income residents, rural residents, disabled individuals and representatives of ethnic minorities, while providing support to the projects of ethnic culture according to set priorities. The priorities until 2006 include labour market capacity building, fight against all and any forms of the discrimination, to improvement of the network of professional guidance, to create the conditions for professional training for low educated, unskilled and lowskilled youth and adults, long-term unemployed, etc. With regard to education, the conditions to learn and study for children of ethnic minority groups are to be improved, as well as additional attention to educational needs of the limited number of ethnic communities, facilitation of the activities of Saturday and Sunday schools of ethnic minorities. In the field of culture, state financial support is foreseen for project of young artists aimed at towns with complicated social, economic, ethnical status (Visaginas, Naujoji Akmenė, Jonava, Mažeikiai, etc.). One of the most important documents Lithuania s Single Programming Document for spells out the priority spheres eligible for the funding from Lithuania and 6

7 European Union, and envisions the 5th Measure on Development of Labour Market, Education, Professional training, Science and Studies, and the Infrastructure of Social Services within the 1st Priority on the Development of Social and Economic Infrastructure. Moreover, the following measures have been spelled out under the 2nd Priority on Development of Human Resources: development of application of active labour market policy measures and enhancement of participation of the unemployed (in particular, long-term jobseekers or unemployed individuals in danger of long-term unemployment; young; unskilled) and persons in danger of unemployment in the measures; strengthening of social partnership; enhancement of integration of social risk groups (disabled; addicts; prisoners and ex-convicts; ethnic minorities) into the labour market; creation of conditions for the reintegration of women into the labour market, etc. The Consolidated nomenclature of the measures for for the implementation of the National Action Plan against poverty and social exclusion of Republic of Lithuania focus only on the knowledge of the state language abilities of the ethnic minorities students than would insure fluent education at the tertiary level. As the measures for this, the Integration of National Minorities into Lithuanian Society prepared by the Department of National Minorities and Lithuanians Living Abroad and the evaluation of the level of knowledge of the state language at the municipal schools with the instruction in other than the state languages (Tautinių mažumų departamentas 2004). Present situation Unfortunately, the Statistics Department stopped collecting unemployment data by ethnicity at the end of However, the unemployment rate in Šalčininkai region is higher than the national average, e.g. on 1 January 2005, it was 12.7 per cent, while the national rate in the 1 st quarter of 2005 was 10.2 per cent 2. Male unemployment is one of the highest (10.4 percent) in the region. Also, Šalčininkai region is characterized by a twice higher municipal budgets expenditure on social benefits: in 2004, the national average was LTL per capita and in Šalčininkai region 51.85LTL per capita (e.g., in 2001, and 52.76, respectively 3 ). This proves strong dependency of the residents of Šalčininkai region on social security system and social benefits. According to the Population Census in 2001, the Poles the largest ethnic minority significantly under-performs the national average in terms of educational attainment rates, with only half as many pupils per 1,000 inhabitants completing university level higher education as the Lithuanian majority. While this is linked in part to the fact that many Poles live in rural areas where educational attainment levels are typically lower, it is nevertheless an issue of considerable concern for the Polish minority. According to the data of the Population Census in 2001, 31 percent of Poles claim that they do not know the Lithuanian language. In respect of the age structure, there is a Regional statistics available the Regional Database of the Statistics Lithuania: 7

8 slightly higher tendency to have less knowledge of the Lithuanian language amongst the over 50s. The NAP/inclusion measures focus on the knowledge of the state language of the basic school students; however, the measures towards the knowledge of the state language of elder population are scare. On the other hand, lack of Lithuanian language proficiency should not be over-stated as an obstacle to labour market participation since many jobs do not require strong capabilities in Lithuanian, especially those of lower qualifications and especially in regions in which the minority population is concentrated. Programmes Implemented The Programme for the Integration of National Minorities into Lithuanian Society prepared by the Department of National Minorities and Lithuanians Living Abroad and Strategic Activity Plan for aim at the integrating of ethnic minorities representatives into the society. Despite the identified social cleavages and employment disadvantages, the measures of the Programme tend to focus more on cultural perspective and activities, such as, nurturance of ethnic identity, support for NGOs of ethnic minorities, development of cultural centres, and Sunday schools. Issues related to employment and other aspects of social inclusion are not even mentioned. Therefore, the development of flexible mechanisms of social integration of vulnerable groups, including the ethnic minorities, lags behind on the national level documents and has slight relation to the NAP/inclusion. In addition it is worth mentioning that this cultural perspective flourishes in the activities of the NGOs of ethnic minorities, including the Polish one, and in its own turn create closed social networks which are homogenous in their nature and have low affect on the present situation of minorities. According to the data of 2002, 80 percent of ethnic NGOs were of cultural, 5% of educational nature, 4% were involved in charity, 3% represented professional interests and only 3% dealt with social issues (Tautinių mažumų departamentas 2000). Most of these organisations operate in the largest cities and towns. Incompetence of identification and representation of social disadvantages and problems faced by minorities at present situation may contribute to lower social and civic participation of minorities grassroots organisations in activities related to the NAP/inclusion. Several projects and programmes that significantly contribute to the improvement of the situation of the ethnic minorities in Šalčininkai region could be distinguished. Still, they are developed on national and regional (municipal) levels. The local level is, however, underdeveloped and lacks stronger incentives in this field. The NAP/inclusion includes the project of Local Employment Initiatives (hereinafter LEI), which has been developed earlier to the NAP/inclusion. Implementation of first projects of Local Employment Initiatives (hereinafter LEI) was launched in Lithuania in and aimed at creation of jobs for the weakest and least protected persons. 8

9 The procedure for the implementation of local employment initiative projects was approved in The LEI project has to correspond the following key objectives: to create new jobs in pursuit of boosting of population employment and reduction of longterm unemployment; to offer greater possibilities for local residents to participate in economic activities via the adjustment of economic and social objectives, to assist the population in settlement of social and economic problems independently; to reduce vulnerability of structural reorganization of the economy of distinct locations, to enhance the opportunities for location development; and to assist the formation of more active and mature society able to settle its social and economic problems independently. The operations of labour exchanges are backed up by project selection and evaluation commissions representing the social partners. Projects that meet the requirements prescribed and gain the assessment of commissions are submitted to the Lithuanian Labour Exchange. LEI projects are funded from the national budget, the budgets of Employment Fund and local authorities. The project executor shall oblige to offer the new jobs for jobseekers and retain the jobs for the most vulnerable persons for a threeyear period. Since 2001, projects have been implemented each year at the high-unemployment territories with the unemployment rate exceeding the national average by 1.5 times. Within a three-year period (in ), the state subsidies led to the establishment of 1,240 jobs for the unemployed. In , 23 enterprises from Šalčininkai region took part in the LEI project. During the two years period, 261 new work places were created. Even in 2005, Šalčininkai region is among 19 territories, in which the LEI projects are continued. Worth mentioning that according to the Šalčininkai Labour Exchange Office, there is no enterprise that has a status of the social enterprise in the Šalčininkai region 4. Among the other good practices that are corresponding the current situation of ethnic minorities, the EQUAL Development Partnership (DP) The Establishment and Testing of Supportive Mechanism for the Integration of National Minorities into the Labour Market 5 should be mentioned. The project aims at creating and testing a supportive mechanism related to the integration of national minorities into the labour market, as well as establishing co-operation networks using the networks of non-governmental organisations set up by national minorities, evaluating human resources and impacts. The project targets national minorities in Vilnius, Klaipėda, Šalčininkai cities and regions and is managed by the Public Institution the House of National Communities. Along with others, the project objectives include raising the qualification level of the personnel involved in the integration process, implementing activeness and motivation programmes related to national minorities and influencing the policy by submitting proposals to the 4 Information about LEI in Šalčininkai region is available at 5 Information about EQUAL DP The Establishment and Testing of Supportive Mechanism for the Integration of National Minorities into the Labour Market is available at 9

10 politicians relating to the improvement of legal acts and spreading progressive information in practice. These two examples represent the good practices related to the NAP/inclusion and development of mechanisms of inclusion into the labour market. 2. Solving the Issue of Rural Social Exclusion A Case of Molėtai Municipality During past three years more than local community centres were established in rural areas of Lithuania, during the last year more than 33 Local Action Groups begun to function, and they encompass 95% of area of Lithuanian countryside. Rural and local developments have become the issue of national and local public policies. Therefore it is useful from the public policy perspective to take a look at the processes that are in accordance with the rural development policy elaborated in NAP. In Moletai county different organizations cooperate attempting to combat social exclusion and to elaborate and to implement the rural development policy on local level. These organisations are as follows, Local Community Centers (20 of them in different rural and local communities), Association of Local Community Centres, Molėtai municipality, group of Open Society Foundation Initiative Towards Digital Communities 6, Local Action Group that was established under the project LEADER+, Farmers Union, and Association of Organic Farmers. The multilevel and multisectoral cooperation, representatives of different stakeholders, soft management enables the evaluation of the situation depicted in NAP from the OMC perspective. Farmers and Rural Population in NAP/inclusion NAP/Inclusion report identifies several core trends that need to be addressed in public policy fostering regional development. At present, in Lithuania about one third of population lives in rural areas (according to data of 2003 rural inhabitants comprised 33.2% of total population). The most acute problems in rural regions of Lithuania are high rates of unemployment and low income of inhabitants. In 2003 one in two workers in rural areas was employed in the agricultural sector, which totalled to 51% of all rural employment. Agriculture in rural districts absorbs the surplus of labour force, which occurs on the back of shortage of jobs in other economic sectors. The situation creates the prerequisites necessary for the existence of small subsistence farming, which is the only source of food and living for the majority of rural residents. This type of farming fails to secure full employment and 6 Information about Open Society Foundation Initiative Towards Digital Communities is available at 10

11 manufacturing efficiency for farmers and their family members, and sufficient income for the family. In general, disposable income of rural residents stands below the urban average by approximately one-third. The need for structural changes in the agricultural sector is emphasized in NAP/inclusion: the structural changes are expected to bring about a decline in the number of workers employed in the agricultural sector, and a rise in productivity and income. In the sphere of education, the lack of pre-school establishments, closure of secondary schools, lack of youth schools, absence of adult schools at rural areas have to be indicated as an aspects to be taken into consideration analyzing social exclusion in Lithuania. Any rural resident pursuing further education is forced to move to another education establishment and another place of residence, which often leads to a number of social and economic problems. The cultural needs of rural residents are satisfied to considerably lower degree than those of urban inhabitant. Cultural services remain inaccessible due to high prices for many people living in rural areas. The primary healthcare system needs urgent improvement in rural areas as well. NAP/inclusion emphasized necessity to strengthen regional policies by creating more favourable conditions for the activities of private sector and encouraging investments, speeding up the creation of new jobs, promoting the trends of alternative rural activities, encouraging the diversity of new business and the development of their infrastructure at rural locations; strengthening the competitiveness and abilities of farmers and rural residents, fighting against rural poverty, encouraging the creation of social companies, holding on a regular basis training courses for farmers and people in the rural areas and provide them consultations on the following issues: organic farming, computer literacy, accounting, motivation of local communities, etc. As regards other rural problems, NAP foresee means to ensure low-income residents, rural residents possibility to use cultural services, to hold an information campaign for the residents on the implementation of healthy life style policies and the procedure of providing services in health care institutions, to supply county and municipal public libraries with computer and Internet facilities, provide training for the staff. The Role of Social Partnership in Rural Development Molėtai County is a prime example of regional and rural development based on cooperation of local governmental institutions, private sector and NGOs (among which the leading role is played by community centres). 7 The county is typical of the poorer rural counties of Lithuania: GDP per capita is about 20% less than the national average. The county s population is 25.6 thousand; an official unemployment rate amounts to 7 The crucial importance of the social partnership as a base of implementation of policy of rural development only recently was recognized at the national programs dealing with regional development: Lithuania s Rural Development Program for has already defined means, dealing with poverty and social exclusion in rural areas of Lithuania, based on close cooperation of governmental institutions, private enterprises and NGOs. 11

12 12%. Dairy farming is the most significant economic activity, prevail small and medium size farms (Juska A., Poviliunas A. & Pozzuto R. 2005, p. 2) In 2004 there was prepared Molėtai County Development Plan (Kauno technologijos universitetas 2004). The creation of this plan could be considered as a result of several year developments that took place in the county. The roots of cooperation of social partners in solving the problems of poverty and social exclusion could be traced back to activities developed by community organizations established in 2000 and later. Community organizations as it has been showed by a number of examples are important actors in rural development. In Molėtai county, for example, Community Center of Balninkai 8 village facing typical rural area problems of aging, high rates of unemployment, low-income of residents during four years of its activity implemented thirteen projects, related to cultural, educational and social needs of residents, which contributed significantly to improvement of the quality of life in Balninkai (Juska A., Poviliunas A. & Pozzuto R. 2005, p. 2). The centre succeeded in recruiting member of local community for their activities. An essential prerequisite for this success was consultations with the inhabitants in the initial phase of the activity of the organization when problems to be addressed by the centre were defined and the means to overcome them decided on. However, the example of Balninkai community centre also reveals, that the centres can not solve by themselves the most acute problems of unemployment and poverty, although they see it as one of their main goals. Community centres can not control many factors crucial for brining about desirable changes. As Juska, Poviliunas and Pozzuto are to notice, the rural development in Lithuania so far has been hindered by absence of comprehensive national and regional rural development policies, underdeveloped rural infrastructure, lack of access to fiscal and other resources, declining agricultural employment, growing migration from rural areas to the cities, declining rural birth rates and aging (Juska A., Poviliunas A. & Pozzuto R. 2005, p. 10). For overcoming these obstacles in rural areas the essential is formation of social partnerships at local and regional levels. Key Success Factors of Balninkai Community were as follows: 1. Effective leadership and management of the Community Centre 2. Support of the Church and participation of the Priest in the activities of Balninkai Community Centre (BBC) 3. Recognition of the BBC by the Balninkai community 4. Recognition by the members of BBC of the Importance of Strategic Planning 5. Success in the early stages of the process. 6. Effective and intensive public relation campaign lead by BBC inside the Balninkai Community (visiting every household with questionnaires, permanent dissemination of information about the events during the Church service, blessing by the Priest of the flowers seeds, the conference for the 8 More information about Balninkai village and Balninkai Community Centre could be found at 12

13 whole Balninkai community, various education programs ecological agriculture, computer literacy, etc.) 7. Effective public relation campaign on regional, national and even international levels. (a lot of publications in local and national newspapers, informative website broadcasts on Lithuanian Radio, broadcast about Balninkai on Euronews channel, active participation in various seminars, conferences, etc.) 8. Effective use of ICT for accessing and disseminating relevant information 9. Support of Municipality and Mayor. 10. Commitment to ongoing training and capacity building 11. Ability to initiate the appropriate structures and to involve new members at various stages of community development The first steps in development of social partnerships in Molėtai county were made in 2002 when Molėtai Municipality implemented the project Creation and Implementation of Effective Rural Development Policy Model funded by Open Society Fund of Lithuania (Atviros Lietuvos fondas 2002). One of the main tasks defined in the rural development policy model was creation of the group of social partners which would help to base whole rural development policy model on partnership of governmental and public institutions, private sector and non-governmental sector. As a result of the implementation of the project rural communities have become the partners of local government in formation of rural development policy. In 2004 the social partnership groups were already at work. At the local community level there were established 11 Small Local Action Groups (SLAG), which were comprised of community activist, leaders of NGOs, local entrepreneurs, and representatives of local government. As a result of cooperation of SLAG and Molėtai municipality and public institutions, in 2004 was established Local Action Group of Molėtai County, which prepared the Plan of Molėtai County Rural Development (Molėtų rajono vietos veiklos grupė 2003). The plan defined vision and goals of rural development, namely, further improvement of social partnership in the county (development of the partnership skills), fostering of social integration in rural communities (dealing with problems of socially vulnerable groups), fostering of social activity of local inhabitants (promoting the trends of alternative rural activities, encouraging new businesses), improving infrastructure of rural areas. Finally, in 2004 the detailed Molėtai County Development Plan for was created (Kauno technologijos universitetas 2004). Fighting rural social exclusion was identified in the plan as one of the main goals of rural development. According to the plan, the typical rural area problems, identified in NAP/inclusion, are to be solved not by national or regional government alone, but by cooperation of social partners. For example, Local Community centres are included into implementation of such means as optimization of network of social and public services in the county, renovation of buildings for public use, organization of cultural life in the community, organization of youth and children leisure time activities, etc. 13

14 3. Promoting the Implementation of the Principles of Social Economy A Case of Social Enterprise (Social Enterprise UAB LIREGUS in Vilnius) Social Enterprises in NAP/inclusion The NAP/inclusion stresses the legal framework for the establishment and activity of social enterprises in order to facilitate employment for people who have lost their professional and general working capacity and are unable to compete on the labour under equal conditions the disabled who are not working, particularly long-term (2 years and more) unemployed, people of pre-retirement age, people returning from custodial establishments, single mother or father with a child younger than 8 years of age. NAP/inclusion require to adopt the amendments and addenda of related legislation in order to create more favourable conditions for setting up and developing the social enterprises. These amendments are as follows: - to amend the Law on Administration, Use and Disposal of State and Municipal Property by providing that the social enterprises could be transferred the state and municipal property to hold in trust temporarily; - to amend the Law on Public Procurement by providing for simplified procurement from the social enterprises, i.e. via simplified negotiated procedure without publication of a contract notice and following the usual commercial practice. The Consolidated nomenclature of the measures for addresses the issue emphasizing the need to follow the legislation and at least 10% of public procurement provide from the social enterprises. The Law on Social Enterprise Lithuanian social enterprises have already accumulated some experience. In the June 1, 2004 the Lithuanian Parliament, Seimas, adopted the Law on Social Enterprises developed by the Ministry of Social Support and Labour. The purpose of the law coincides with the purpose stated in the NAP/inclusion, i.e. to employ persons who lost the professional and general working capacity, as well as persons, who are socially inactive and cannot equally compete in the labour market, encouraging their return to the labour market, their social integration and extenuating social disjuncture. Such people include the disabled, long-term employed, people of pre-retirement age, those who came back from the places of imprisonment, single parents with small children. One of the key objectives of establishing social enterprises is to support the return of such person into the labour market, facilitate their social integration and reduce their social exclusion. This 14

15 Law made base for legal persons seeking to obtain the status of social enterprise and also defined the target groups of persons who can be employed in that kind of company. Social enterprise is not a new legal form of companies. The status of social enterprise may be obtained by any legal person complying with the following requirements: 1. satisfaction of the requirements for a small and medium-sized business entities in the Law on Small and Medium-Sized Business; 2. employees, pertaining to the target group specified in the Law (e.g., disabled people who are not working; long term unemployed persons, who have been registered in the labour exchange for over two years and other), comprise no less than 40% of average annual number of employees recorded in employee list, however the number of persons pertaining to the target groups is not less than four; 3. aims of the company s activities relates to the employment of the persons pertaining to the target groups, training of their work and social skills as well as social integration; 4. the company is not engaging in the activities included in the list of activities of the social enterprises nor subject to support, or the legal person s income from such activities nor exceed 20% of the total income of the legal person. Specific type of social enterprises is social enterprises of disabled persons. Social enterprise of disabled persons is a social enterprise, where employees, pertaining to the disabled persons target group, comprise not less than 50% of average annual number of employees recorded in employees list, from which the disabled persons with the ability to work up to 25% and from 30% to 40% (former I and II disablement group) not less than 40% of the average annual number of employees recorded in employee list. Social enterprise of disabled has the rights and duties as of social enterprise; however it can receive additional support from the state. The Law provides for the financial support by the state to social enterprises in order to compensate additional expenses related to employees pertaining to the target groups lesser work productivity, limited efficiency, etc. Social enterprise may receive 3 types of state aid: 1. partial salary and social security contributions compensation; 2. work place establishment subsidy; 3. training subsidy. Additionally, social enterprises for disabled persons may receive other 3 types of benefits: 1. subsidy for the working environment arrangement to disabled persons; 2. subsidy for additional administrative and transport expenses; 3. subsidy for the compensation of assistant. 15

16 Amendments to the Law of Profit Tax, Law of Possession, Use and Disposal of State and Municipality Property and Law of Public Procurement were adopted together with this Law. According to the Supplement to the Law on Property Tax, the profit of the social enterprises is taxed at the rate of 0%, if: (a) during the taxation period employees of the company pertaining the target group specified in the Law of Social Enterprises, comprise not less than 40% of the average annual number of employees recorded in employee list, and (b) during the taxation period the company is not engaging in the activities included in the list of activities of the social enterprises not subject of the support, or the legal person s income from such activities during the taxation period is nor exceeding 20% of the total income, and (c) on the last day of the taxation period the companies have status of social enterprise. The Experience of Social Enterprise UAB LIREGUS The Law on Social Enterprises is functioning more than one year. From the 1 st of June of 2004 when Law of Social Enterprise was adopted till the beginning of October of 2005 Labour Exchange has registered 36 social enterprises and 16 of them have a status social enterprise for disabled 9. UAB LIREGUS 10 has a history of 65 years. LASS (Lithuanian Association of the Blind and Visually Handicapped) Vilniaus Company found in 1944 year. LASS 11 was founded in 1926 and is one of the strongest organizations of the disabled persons in Lithuania. LASS is member of the European Blind Union (from 1991) and the World Blind Union (from 1992). LASS has 6921 members in total (as of January 1, 2004), among them 2885 those with the 1st group of disablement (up to 25% ability to work), 3528 those with the 2nd group of disablement (30-40% ability to work), and those with the 3rd group of disablement (having risk factors). In January of 2004 LASS has registered 7785 persons that visually handicapped, 4250 (56%) of them are old age pensioners, 830 (11%) persons are active in labour market and 110 (13% of the employed) of them are working in UAB LIREGUS. LASS Vilniaus Company modes of life production start from various accessories. From 1965 year manufactured electronic installation accessories, nowadays company has 40 years experience of traditional mode of life, installation accessories production and development. Every year our company can introduce new methods into production, 6-8 new kind of accessories. From 1973 year till nowadays our production has full supporting AB Snaigė refrigerator electronic installation, lamp sockets year LASS Vilnius Company was reorganizing to UAB LIREGUS. Company has over 200 workers, 110 from them with 9 Information about social enterprises could be found at website of Lithuanian Labour Exchange 10 Information about UAB LIREGUS could be found at 11 Information about LASS could be found at 16

17 various degrees of visually disablement. The director of the company Mr Leonas Kirkilovskis is member of the Council of Lithuanian Association of the Blind and Visually Handicapped and very active lobbyist for the rights of blinds and visually handicapped. For example, in October 10 of 2005 The Committee on Social Affairs and Labour of Seimas (Parliament of Lithuania) has a special session in UAB LIREGUS. The experience of recent year of UAB LIREGUS demonstrates the positive changes in the implementation of the Law of Social Enterprise. If in the April of 2005 during the expert interview Mr L. Kirkilovskis was claiming that only one type of the benefits defined by the Law was functioning, namely, partial salary and social security contributions compensation, and that guaranteed only 20% of previous support, in the meeting of Seimas committee Mr. L. Kirkilovskis has reported the radical improvement of situation 5 of the 6 benefits defined by the Law enabled to get more than 75% of previous support. UAB LIREDUS in 2005 is absolute leader in regard of amount of received compensations ( thousand of Lt) and in regard of the number types of received benefits (5). UAB LIREDUS during the first three quarters of the 2005 has received following compensations (in thousands of Lt) 1. partial salary and social security contributions compensation (361.4); 2. work place arrangement subsidy (37.99); 3. subsidy for the working environment arrangement to disabled persons (19); 4. subsidy for the compensation of assistant (47.28); 5. subsidy for additional administrative expenses (3). No Types of subsidies State subsidies, in thousands of Lt 1. Partial salary and social security contributions compensation Work place establishment subsidy Work place arrangement subsidy Subsidy for the working environment arrangement to disabled persons 5. Subsidy for the compensation of assistant Subsidy for additional administrative expenses 3 7. Subsidy for additional transport expenses - 8. Training - Total Table 1. State subsidies for social enterprises (2005 I-III quarters) The table based on the data available at 17

18 Social enterprises for disabled during the I-III quarter of 2005 have received thousands of Lt, ordinary social enterprises thousands of Lt. The table 1 demonstrates the distribution of the state subsidies according types of benefits. But at the same time it must be mentioned that social enterprise for disabled is in the more favourable conditions than ordinary social enterprise. The strong lobbyists organizations and associations of disabled have succeeded to achieve more benefits for disabled persons. As typical example of productive lobbying activities could be mentioned the discussions and results of treatment of the 3rd group of disablement (ability to work more that 50%) in the Law of Social Enterprise. Since the argumentation of the additional benefits for the social enterprise for disabled persons was built on the arguments that this section of the Law must support integration to the labour market for the persons who suffer from disabilities most, the disabled persons of the 3rd group of disablement were treated by legislators as other vulnerable groups. This exclusion of the group of the disabled persons and its agitation with other vulnerable groups was hardly criticized by lobbyist of the disables and one of the arguments was that they do not deserve to be in one group with Roma people, drug addicts, victims of human traffic, etc. It should be noted that in public discourse success stories of social enterprises are most often associated with social enterprises for disabled persons. Disables persons are fighting for their rights, they have well-thought-out and reasonable demands, they have clear vision what they want and they are really institutionally strong. The process of social integration of disabled to the labour market itself and monitoring of the process of social integration to the labour market of the persons with disabilities are well institutionalized and include all relevant actors, all social partners (politicians, representatives of the Government, employers, organized representatives of the vulnerable groups, opinion leaders, lobbyists, etc.) that enabled social inclusion itself as well as permanent review of the social inclusion process. The analysis of the structure of employees of the social enterprises demonstrates that at least some of the social enterprises are going to become social enterprises for disabled. The main difference between social enterprises and social enterprises for disabled is the per cent of disabled employees. In the case of social enterprise for disabled the per cent of disabled employees answer the requirements of the Law of Social Enterprise, in the case of ordinary social enterprises this per cent is lower but main vulnerable group that enables the status of social enterprise are employees with disabilities. It means that at the present moment social enterprise is used mostly for social integration into the labour market of disabled people; other vulnerable groups are left aside. The number of social enterprises for disabled is growing faster that number of ordinary social enterprises. Ordinary social enterprise is in less favourable conditions. But at least one of the three additional benefits of the social enterprise for disabled persons is tested in some projects of EQUAL initiative. For example, social assistance is tested in the projects that are addressing human traffic victims and drug addicts. These vulnerable groups have less power and influence than persons with disabilities and some experts are claiming that the Law of Social Enterprise giving additional benefits to the social enterprises for disabled 18

19 persons discriminates other vulnerable groups. Hopefully that successful accomplishment of the projects of EQUAL initiative that are orientated towards improvement of social policy processes closely associated with the Law of Social Enterprise (for example, establishment of social assistance institute for other vulnerable groups) and mainstreaming of their results will influence further debates and amendments of Law of Social Enterprise that will be less contradictory and will improve conditions for social inclusion not only for disabled persons. But experience of LASS and UAB LIREGUS demonstrate that improvement of the conditions of social integration requires strong partnership and active lobbying. 4. Reduction of Social Exclusion of Roma People in Vilnius Region Different organisations cooperate attempting to reduce Roma social exclusion. They are as follows: EQUAL Development Partnership, Roma NGOs, Vilnius City Municipality, the Department of National Minorities and Lithuanians Living Abroad to the Government of the Republic of Lithuania, the Open Society Institute, Human Rights Monitoring Institute, etc. The multilevel cooperation, representation of different stakeholders, soft management enables the evaluation of the strategy and policy measures depicted in NAP from the OMC perspective. NAP/inclusion on Roma Issue The NAP/inclusion deals with Roma community as one of the most vulnerable residential group, the problem of social integration of which has not found its solution yet. Roma population in Lithuania is approximately individuals, the majority of whom have no identification documents, accommodation or regular job. Poverty flourishing in the numerous Roma families is closely related to unemployment. A total of 53 individuals of Roma nationality registered with the Vilnius Labour Exchange in Roma individuals took part in active employment programmes, however, only one of them managed to find a job. Education plays a large role in fight against poverty and social exclusion. The data of the Population census of 2001 evidence that the level of literacy among Lithuania s residents aged 10 and above made up 99.7 percent. The major challenge is posed by illiteracy of Roma people, as approximately 31 percent of representatives of this ethnic minority are illiterate. Moreover, Roma children are often late to start attending school or shun away from school overall. Almost one-fifth of Roma children abandon school and fail to gain elementary or basic education. In recent years Roma children were practically absent among the school leavers, thus, the majority of people from this ethnic group does not have any profession. According to the data of the Population census conducted in 2001, 19