German Commodities Sector  /

Employment and Social Affairs

Employment in the natural resources sector

The extractive industry offers good industrial jobs, with a variety of different professions and activities. At the end of 2019 over 64,000 persons1 were em- ployed in the extractive industry. This corresponds to around 0.2% of all employees in Germany who are subject to social insurance contributions. At around 59%, most of the employees worked in the quarried natural resources and other mining products sector, followed by coal mining (lignite and hard coal) at around 19%.

Compared to the 2016 reporting period (1st D-EITI report), the sector employed about 7,007 fewer workers, mainly due to the phasing out of hard coal mining by the end of 2018.

Employment under the mandatory social security scheme by economic sector

Persons employed under the manda- tory social security scheme as of the reporting date on 31 December 2019

No. of apprentices among these employees

Total

Men

Women

Total

Men

Women

Mining and quarrying in total; including:

64,067

55,429

8,638

*

Coal mining (lignite and hard coal)

10,862

9,418

1,444

558

473

85

Extraction of crude oil and natural gas

2,908

2,271

637

108

88

20

Ore mining

791

717

74

*

*

*

Quarried natural resources, other mining products

37,941

32,956

4,985

1,363

1,182

181

Services for mining and quarrying

11,565

10,067

1,498

269

222

47

Source: Federal Employment Agency 2019. For detailed source information see footnote 44

* For reasons of data protection and statistical confidentiality, numerical values of 1 or 2 and data from which such numerical values can be mathematically deduced are made anonymous.

Each direct job in the extractive industry is linked to 2 to 2.52 further jobs in upstream and downstream economic sectors. The employment effect of natural resources extraction in Germany thus totals around 155,0003 persons.

The role of legislation

The German economic system is characterised by the interaction of free market activity and State social policy. However, a pronounced social partnership also exists – especially in the natural resources sector – and it can be used to balance existing differences of interest between employers and employees.

In principle, German legislation regulates a uniform (minimum) level of protection for employees (e.g., working hours, holidays, protection against dismissal, protective rights for young people, pregnant women and severely disabled persons, as well as safety and health at work, etc.). Above this level of protection and within the framework of their collective bargaining autonomy guaranteed by Article 9(3) of the German Constitution, the social partners are free to regulate working conditions independently for the particular company or the respective sector.

The statutory social security system provides protec- tion against life risks such as unemployment, illness, the need for care, accidents, occupational disease and support in old age. Persons employed under the man- datory social security scheme are covered by social insurance; the self-employed are partially covered by this protection. Social insurance benefits are mainly financed by equal contributions from employees and employers. One exception to this, however, is statutory accident insurance, which is financed exclusively by the employer. Tax revenue is also used for financing in some segments of social insurance. The insurance companies are self-governing and guarantee the participation of the social partners.

The role and cooperation of the social partners

Co-Determination

One of the main pillars of the social market economy in Germany is co-determination, i.e. the right of em- ployees and their representatives to participate in operational or business decisions. The scope and form of co-determination differ according to the company’s size, legal form and industry.

Corporate Co-Determination is most extensive in mining4 (Montan Co-Determination; Montan- MitbestG [Coal and Steel Co-Determination Act]5 Montan-MitbestGErgG [Supplementary Co-Determi- nation Act]6): In this case the supervisory boards are composed equally of shareholder and employee rep- resentatives. A labour director responsible for person- nel and social matters is also appointed as an equal member of the management. Pursuant to the Mont- anMitbestG, his or her appointment is dependent on the approval of the majority of the employee repre- sentatives on the supervisory board.
For other companies which are managed in the legal form of a corporation and have more than 2,000 employees, the equal representation of employees and shareholders in the supervisory bodies also applies pursuant to the German Co-Determination Act (MitbestG). However, there are two important differences compared to Coal and Steel Co-Determi- nation. If votes result in a tie, the vote of the Chair of the Supervisory Board, which is generally assigned to the shareholder, has the casting vote. This double vote held by the Chairman of the Supervisory Board effectively overrides the parity between employees and the employer that formally exists. In addition to this, the labour director can also be appointed to the Supervisory Board against the votes of the employee representatives. For companies with 500 to 2,000 employees, the 1/3 participation of employee representatives on the supervisory board applies (DrittelbG7).

Company Co-Determination is regulated in the Works Constitution Act, which states that an elected works council has participation rights in economic, personnel and social matters. In principle, a works council can be set up in every company in Germany with at least five employees. A central instrument in works council work is company agreements, which – like collective agreements – are legally-binding agreements between the employer and the works council and regulate the employment relationship of the employees. Frequent topics are company regulations on working hours, data protection, health promotion, work safety and further training, all of which are tailored to the conditions prevailing in the company.

Tariff commitment

Freedom of association and the right to collective bargaining are guaranteed in Germany by the German Basic Law in Art. 9 GG. Collective agreements are concluded by one or more employers or employers’ associations with one or more trade unions. They are solely binding for their members (tariff commitment). However, it is common practice for employers bound by collective agreements to allow non-unionised employees to participate in the appropriate collective agreement by referring to individual collective agree- ments. Many companies that are not bound by collective bargaining agreements also orient themselves on existing collective agreements. In 20188 49% of the natural resources sector companies9 were bound by collective agreements; 41% by a regional collective agreement and 8% by a company collective agreement. However, the collective agreements only apply to 45% of the employees in the sector, with 39% being subject to the conditions of a regional collective agreement and 6% to those of a company collective agreement.

Training

The demanding activities of the extractive industry require well-trained specialist personnel. Approx. 72% of the employees have a recognised vocational quali- fication10, another 11% have an academic qualifica- tion11, e.g. in engineering.

Vocational training in Germany is essentially provided through the dual vocational training system, in which training takes place in parallel at two places of learning. The trainee concludes a training contract with the company and learns the necessary practical skills and competences on the job. The second pillar of the sys- tem is the vocational school, which provides general and job-related theoretical knowledge. The duration of the training depends on the profession involved and varies between 2 and 3.5 years. During this time, the trainee receives a training allowance from the company. The successful completion of the course qualifies the candidate to directly exercise his or her profession as a qualified specialist.

The industry trains personnel in a number of different professions, including e.g. mechatronics technicians, electronics technicians, industrial and process me- chanics, processing mechanics, mining and machine operators, mining technologists and industrial clerks. On the reporting date,12 there were 2,300 trainees among the employees of the extractive industry, which equates with a training rate of 3.6%, which was below the German average of 4.9%. A look at the indi- vidual sectors reveals a relatively differentiated picture for the extractive industry. For example, training rates in the quarried natural resources industry vary from less than 1% to 6.1% (2020), because the importance of training occupations varies and the proportion of semi-skilled workers varies accordingly.

Earnings level

Gainful employment plays a central role both in social and individual terms. There is no doubt that work is seen as the main source of livelihood, and that earn- ings are the most important component of personal income for employees. The average gross monthly earnings of full-time employees in the sector in 2019 amounted to EUR4,159 per month, and an additional EUR471 was paid monthly in special payments.13 The average monthly income in the extractive industry is thus a good 1% higher than the average in the manu- facturing industry and a good 5% higher than the average income of full-time employees14 in Germany as a whole. Due to the deductible income tax and the proportionate social insurance contributions to be paid, the individual net wages of employees are significantly lower than the gross wages.

The average paid weekly working time was 40.2 hours, which was relatively high compared to the manufacturing industry as a whole.

The principle of equality between men and women applies in Germany. This principle also applies to wage determination and it means that gender pay gaps in particular must be further reduced. The Act on the Promotion of Pay Transparency between Women and Men has been in force since 2017 (Act on the Promotion of Pay Transparency). This continues the principle of equal pay (equal pay for women and men for equal work and work of equal value) which is al- ready standardised in the General Equal Treatment Act (AGG) and includes an individual right to informa- tion for employees, reporting obligations for large companies and the request to large private employers to carry out company audits of the pay structure. The average gross monthly earnings of women in the extractive industry was EUR4,315, which amounts to 92.6% of the male employees’ earnings (EUR4,662) and is thus above the average ratio of 83% in the manufacturing industry as a whole.

Diversity and equal opportunities

Different life experiences and work horizons of employees make a significant contribution to the economic success of companies. By consciously pro- moting diversity, companies can tap into an important success and competitive factor that has a positive impact on both companies and their workforces.

Diversity can be measured by a number of quantita- tive indicators, such as the proportion of women in all workforces and management, the proportion of for- eign workers and the age structure of the workforce.

In 2019, the proportion of women among employees in the sector who are subject to social insurance contributions was 13.5%. The proportion of foreign employees was 6.3% of the total staff.15
The proportion of female supervisory board members in the industry is very low at 10.7%. Only 4.4% of the board members of German extractive companies are women. Compared to other sectors, the extractive industry must act to increase the proportion of women in the workforce and in management positions. It should be noted here that the employment struc- ture in the extractive industry has traditionally been characterised by male-dominated technical training occupations and courses of study.16

At 62% the 25 to under 55 age group represented by far the largest proportion of the workforce, followed by the 55 to under 65 group at 29.7%. 7.2% of the employees were in the under 25 group, while 11% were over 65. 

Equal opportunities are promoted in Germany by legal instruments such as the General Equal Treatment Act (AGG), which states that “Discrimination on the grounds of race or ethnic origin, gender, religion, beliefs, disability, age or sexual identity must be prevented or […] eliminated”17 both in working life and in civil law.

Climate policy and structural change

The Federal Government has committed itself to implement the climate goals of the Paris Agreement18. In support of this commitment, lignite production and coal-fired power generation in Germany will be phased out by 2038 at the latest, in addition to the cessation of hard coal production in 2018. The fall of the Berlin Wall brought profound changes to lignite mining in Germany’s eastern regions; the workforce in the lignite coalfields in the east was drastically reduced at the start of the 1990s.19 In order to find a socially just way to organise the decision to phase out coal and the associated structural change, one of the methods adopted by the Federal Government was to establish the Commission for “Growth, Structural Change and Employment”20, which examined propos- als on the organisation of the structural change in Germany from the point of view of energy and climate policy. The objective of the commission was to main- tain and create new, good jobs in the regions con- cerned that were covered by collective agreements, to ensure a secure and affordable supply of electricity and heat at all times, and to maintain and further develop the coal-mining areas into regions that would remain habitable and attractive.

The subjects covered in the Commission’s compre- hensive dialogue were the requirements of climate policy, security of energy supply and competitiveness. This social consensus on the use of coal was confirmed in July 2020 by the German Bundestag and Bundesrat and was subsumed in the Act to Reduce and End Coal-Fired Power Generation (Kohleverstromungs- beendigungsgesetz – KVBG). A societal compromise was thus achieved.

Coal mining and coal-fired electricity generation are usually located in structurally-weaker regions and account for a considerable proportion of industrial value added in these areas. One industrial job creates around two more jobs in the regional, industry-related or service sector.

The extraction of lignite through opencast mining influences the economic, ecological and social struc- ture of the municipalities it directly affects as well as the municipalities in the coalfield adjacent to the opencast mine. The principle of the polluter pays applies regarding the influence and use of infrastruc- tures. The mining companies must organise and pay for compensation and also relocation and resettlement. Since the start of German lignite production in the early 1920s, 120,000 people have been relocated.21 Villages are still affected by resettlement. The owners of the affected areas are compensated by the compa- nies for the resettlement. The same applies to property owned by the municipality. New municipal facilities are built in agreement with the municipalities affected. Rare cases of compensation for expropriation under mining law22 are set out in law (Art. 14(3)3 GG in conjunction with § 84 ff. BBergG).

The amount of compensation payments are deter- mined directly by the parties affected in the case of an agreement under private law; it is only in rare cases when expropriation/a surface lease is required that it is undertaken by the authorities after valuation by an expert. It can be examined by a court. The agreement on the path to phase out lignite influences the exten- sion and adaptation of opencast mines. New buildings envisaged for infrastructure purposes can be dispensed with, if applicable.

The lignite coalfields23 are being supported by the Structural Strengthening of Coal Regions Act24 that came into force on 14 August 2020 so that the coal- fields can still exist as successful economic areas and compensation is provided for the loss of employment (see chapter 8). Furthermore, the agreement between the government and the Federal States, which defined the details of the procedure for implementation, was signed in August 2020. The law plans up to EUR40 billion until 2038. This is made up, firstly, of funding for additional investments on the part of Federal States and municipalities, with EUR14 billion being earmarked for this (“Pillar 1”). Secondly, EUR26 billion is intended for measures in areas for which the Federal Government is responsible (“Pillar 2”). This includes, for example, funding for transport and broadband infrastructure (projects to improve an environmentally friendly local public transport system can be supported in Pillar 1, living labs or the development of research facilities. The Federal Government has also set itself the goal of creating up to 5,000 jobs in federal authorities and other federal institutions in the coal regions. To date, a total of 72 Pillar 2 projects have been agreed.25

The sites of the former hard coal power plants receive funding within the scope of the Structural Strength- ening of Coal Regions Act. Here up to EUR1 billion is planned by 2038. In addition, up to EUR90 million is being earmarked for the Helmstedt site. The Alten- burger Land district is receiving up to EUR90 million from the budget for the central German coalfield.

The new “STARK”26 funding programme, which is not directed towards investments, is intended to support the objective of transforming the coal regions in an economically, ecologically and socially sustainable way and to make the coal regions model regions with an international profile for greenhouse-gas-neutral, resource-efficient and sustainable development. For example, with the programme personnel and operat- ing costs can be subsidised. Applicants from both the public and private sector can receive funding. It is therefore possible, for example, for municipalities to create a post to manage structural change or ecological transformation and to finance this via STARK.

In order to cushion the social impact of phasing out coal, the Federal Government followed the recom- mendations of the Commission for “Structural Change, Growth and Employment” and also intro- duced an adaptation payment. This makes it easier for older employees to take early retirement.

Corporate responsibility

German companies are closely integrated into global supply and value chains. As a result, they bear a special responsibility to address the conditions under which natural resources are mined and to combine economic success with social justice and ecological compatibility, not only on a national level but also internationally. This is particularly true in international mining, which can be associated with high human rights, social and environmental risks. Legislation, the Federal Govern- ment and companies are meeting these challenges at several levels.

The National Action Plan (NAP) of the Federal Gov- ernment for the implementation of the UN Guiding Principles on Business and Human Rights contains a broad catalogue of measures for the protection of human rights. For the first time, the German govern- ment has also anchored the responsibility of German companies to respect human rights in the action plan.

On 11 June 2021 the Supply Chain Due Diligence Law (LkSG) was passed by the German Bundestag. The LkSG is closely aligned with the regulations in NAP and the core elements of corporate due diligence it contains. The LkSG is intended to protect human rights and improve certain environmental concerns in supply chains. From 2023 the law will apply to com- panies with 3,000 employees or more and from 2024 it will apply to companies with more than 1,000 em- ployees with their registered office or branch office in Germany.

For the first time, binding due diligence obligations for EU importers above certain thresholds of tin, tan- talum, tungsten, their ores and gold (3TG) from con- flict and high risk areas have now been introduced with the so-called Conflict Minerals Regulation (EU) 2017/821). The Regulation is aimed at preventing that the proceeds from the sale of these minerals are used to finance armed conflicts. It provides for numerous due diligence obligations with which importers of 3TG must comply from 1 January 2021. The national implementing law that came into force on 7 May 2020 will ensure the effective application of the Conflict Minerals Regulation in Germany.

The reporting requirements for companies in connec- tion with their corporate responsibility (often referred to as Corporate Social Responsibility (CSR)) have been increased. The CSR Directive Implementation Act, which implements the EU CSR Directive (2014/95/ EU) into national legislation, obliges companies – and especially large capital-market-oriented companies with more than 500 employees – to report on key environmental, labour and social issues, respect of human rights and on anti-corruption measures. In April 2021 the EU Commission published a proposal to revise these reporting obligations – the “Corporate Sustainability Reporting Directive (CSRD)” – which makes provision, among other things, to extend re- porting obligations to all large capital-market oriented companies under balance sheet law (exclusion: microenterprises).

An increasing number of initiatives for greater sus- tainability are also being introduced at industry level. For example, the Mining, Chemical and Energy indus- trial union and the Construction, Agriculture, Environ- ment industrial union compiled a joint declaration on the sustainable use of raw materials together with the German Building Materials Association and the German Nature and Biodiversity Conservation Union (NABU) in 2004.27 The high priority given to employee training is addressed in addition to the most environ- mentally-friendly mining of raw materials and the strengthening of biodiversity and resource efficiency. Employees and employers are also jointly committed to more sustainability in the industrial processing of natural resources. For example, the social partners (trade unions and associations) in the German cement industry founded the ‘Zement verbindet nachhaltig’ (Cement bonds sustainably) initiative as early as 2002. In addition to nature conservation and environmental protection measures, the main topics here include the safeguarding of domestic production, the economic interests of the companies and the social interests of the employees. The main objective of the sustainabili- ty initiative is dialogue between politics and society, as well as trade unions and employers.28

1 Federal Employment Agency (2019): Employment by economic sector (WZ 2008) – Germany, West/East and States (quarterly figures) – December 2019. URL: https://statistik.arbeitsagentur.de/SiteGlobals/Forms/Suche/Einzelheftsuche_Formular.html?nn=627730&topic_f=monatsbericht-monatsbericht (Accessed on 26 November 2021).

2 The employment impact varies between 94 and 2.66 in the individual sectors. Hillebrand, Elmar; Hans-Böckler Foundation (publisher) (2016): Sectoral analysis of the raw materials industry (Branchenanalyse Rohstoffindustrie). Study No. 315, Berlin, p. 71. URL: https://www.boeckler.de/pdf/p_study_ hbs_315.pdf (Accessed on 26 November 2021).

3 p. 62

4 as well as in the “iron and steel-producing industry”

5 Coal and Steel Co-Determination Act (MontanMitbestG). URL: https://www.gesetze-im-internet.de/montanmitbestg/MontanMitbestG.pdf (Accessed on 26 November 2021).

6 Supplementary Co-Determination Act (MontanMitbestGErgG). URL: https://www.gesetze-im-internet.de/montanmitbestgergg/MontanMitbestGErgG. pdf (Accessed on 26 November 2021).

7 One-Third Participation Act (DrittelbG). URL: https://www.gesetze-im-internet.de/drittelbg/BJNR097410004.html (Accessed on 26 November 2021).

8 Federal Office of Statistics (2018): Negotiated wages, tariff commitment URL: https://www.destatis.de/DE/Themen/Arbeit/Verdienste/Tarifverdien- ste-Tarifbindung/_inhalt.html#sprg262570 (Accessed on 26 November 2021).

9 Federal Employment Agency (2019): Employment by economic sector (WZ 2008). Phase

10 Recognised vocational qualification’ is the sum of ‘with recognised vocational training’ and ‘master craftsman/technician/equivalent technical college degree’.

11 Academic degree’ is the sum of ‘Bachelor’, ‘Diploma/Magister/Master/State Examination’ and ‘Doctorate’.

12 Federal Employment Agency (2019): Employment by economic sector (WZ 2008).

13 Federal Office of Statistics (2020): Specialised publication 16, series 3. Earnings and labour costs. Employees’ earnings 2020, p. 6. URL: https://www. destatis.de/DE/Themen/Arbeit/Verdienste/Verdienste-Verdienstunterschiede/Publikationen/Downloads-Verdienste-und-Verdienstunterschiede/ arbeitnehmerverdienste-jahr-2160230207004.pdf? blob=publicationFile (Accessed on 26 November 2021).

14 Ibid

15 Federal Employment Agency (2019): Employment by economic sector (WZ 2008).

16 Federal Government (2019): Report of the Federal Government on the representation of men and women at management levels and in the supervisory bodies of the private sector and civil service. URL: http://dipbt.bundestag.de/doc/btd/18/133/1813333.pdf (Accessed on 1 December 2021).

17 5 § 1 AGG. URL: https://www.gesetze-im-internet.de/agg/ (Accessed on 1 December 2021).

18https://www.umweltbundesamt.de/sites/default/files/medien/3521/publikationen/2018-07-25_climate-change_18-2018_beschaeftigte-braunkohleindustrie.pdf

19 https://www.bmwi.de/Redaktion/DE/Publikationen/Wirtschaft/abschlussbericht-kommission-wachstum-strukturwandel-und-beschaeftigung.html

20 Final Report of the Commission for Growth, Structural Change and Employment

21 Lausitz mining region (Federal States: Brandenburg/Saxony), Central German mining region (Saxony/Saxony Anhalt/Thuringia), Rhenish mining region (North Rhine-Westphalia), Helmstedt mining region (Lower Saxony)

22  https://www.bgbl.de/xaver/bgbl/start.xav?startbk=Bundesanzeiger_BGBl&jumpTo=bgbl120s1795.pdf#__bgbl__%2F%2F*%5B%40attr_-id%3D%27bgbl120s1795.pdf%27%5D__1621435753460

23 STARK stands for “Stärkung der Transformationsdynamik und Aufbruch in den Regionen und an den Kohlekraftwerkstandorten” (Strengthening the
transformation dynamics and development of coal mining regions).

24 https://www.baustoffindustrie.de/fileadmin/user_upload/bbs/Dateien/gem-rohstoff-erklaerung.pdf

25 https://www.zement-verbindet-nachhaltig.de/