Unenforceable social contract

The report analyzes the legal and economic feasibility of a social contract intended to restructure Poland's hard coal mining sector. It concludes that the contract lacks direct legal effect and violates EU competition law, particularly regarding subsidies for operating mines. The author argues that the European Commission is unlikely to authorize new state aid for coal production given the European Green Deal, and that the sector's continued preferential treatment hinders Poland's energy transition.

• The social contract between the Polish government and hard coal mining representatives does not have direct legal force and requires the adoption of new national and EU regulations to be implemented.
• The contract is non-compliant with EU competition law because current EU regulations do not allow for subsidies to cover the operational losses of active mines.
• It is highly improbable that the European Commission will authorize new state aid to prolong coal activities, as such aid would conflict with the objectives of the European Green Deal.
• While aid for the general operation of mines is unlikely, the European Commission may approve aid of a strictly social nature for employees, provided it does not improve the market position of the coal enterprises.
• The draft contract proposes several measures that the author deems unfeasible, including subsidies for unprofitable mines until 2049 and the use of EU funds (such as Next Generation EU and the Modernisation Fund) for 'clean coal' technologies like IGCC and CCS.
• The Polish hard coal mining sector is in severe financial distress; the Polish Mining Group (PGG) reported a loss of approximately PLN 2 billion in 2020, and the state-owned sector's total net loss was PLN 4.3 billion.
• The continued preferential treatment of the coal mining industry is identified as a significant barrier to Poland's broader energy transition.

APA

Kukula, W. (2021). Unenforceable social contract. ClientEarth. https://www.clientearth.org/media/505img3i/2021-04-16-unenforceable-social-contract-analysis-of-the-government039s-negotiations-with-mining-industry-trade-unions-ce-en.pdf

Chicago

Kukula, Wojciech. Unenforceable social contract. ClientEarth, 2021. https://www.clientearth.org/media/505img3i/2021-04-16-unenforceable-social-contract-analysis-of-the-government039s-negotiations-with-mining-industry-trade-unions-ce-en.pdf.

Wikipedia

{{cite report |last1=Kukula |first1=Wojciech |title=Unenforceable social contract |publisher=ClientEarth |date=May 2021 |url=https://www.clientearth.org/media/505img3i/2021-04-16-unenforceable-social-contract-analysis-of-the-government039s-negotiations-with-mining-industry-trade-unions-ce-en.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{kukula2021unenforceable, author = {Kukula, Wojciech}, title = {{Unenforceable social contract}}, institution = {ClientEarth}, year = {2021}, month = may, url = {https://www.clientearth.org/media/505img3i/2021-04-16-unenforceable-social-contract-analysis-of-the-government039s-negotiations-with-mining-industry-trade-unions-ce-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }