Published on September 9, 2022

How might the new Silesian Transformation Fund misuse the just transition funds?

, Joanna Jakubowska (CEE Bankwatch)

The establishment of the Silesian Transformation Fund in Poland, which should finance the region’s just transition, has led to concerns among authorities and civil society due to its faulty consultation process and lack of information. 

Representatives of non-governmental organisations, activists and local government officials from the Silesian voivodeship met with the Polish press on 29 August to express their concerns regarding the new Silesian Transformation Fund.  

‘It is absurd that decisions about the transformation of Silesia are made in Warsaw without the participation of representatives of the region. And it is us, and not the inhabitants of the capital, who will face the consequences of this process’, said Patryk Białas, volunteer coordinator of the Climate Reality Europe team in Poland at the press conference. 

A defective social contract leading to a controversial Silesian Transformation Fund 

The draft act on the establishment of the Silesian Transformation Fund was prepared by trade unions in accordance with the provisions of the social contract signed in May 2021. The contract itself was also criticised by local non-governmental organisations, Client Earth and WWF for its lack of compliance with the EU’s and Paris Agreement’s goals, as well as for its empty promises to local miners. 

The trade unions’ bill establishing the Silesian Transformation Fund was sent to the Chancellery of the Prime Minister exactly one month later, on June 28, and soon it will be submitted to the Sejm, the lower house of the Polish Parliament. 

This is just the beginning of its legislative path, but Białas emphasises that his organisation will closely observe the next steps, act and keep everyone informed. 

Non-governmental organisations and local authorities fully marginalised  

Although consultations should be based on social inclusion and openness to a variety of local actors, Polish national authorities seem to understand the concept on their own terms.  

The controversial draft bill for the Silesian Transformation Fund is based on consultations to which only coal companies and business organisations were invited, and local and regional governments as well as non-governmental organisations and civil society were completely omitted. 

No one thought to ask local governments and non-governmental organisations, which have many years of experience in transforming this coal region. The national authorities also failed to include the local activists and people living in the region who will be the first to be impacted by the negative consequences of the transformation and who should have had a say in their future.  

‘We put in a lot of work into minimising the negative effects and preparing well for the transformation. It is difficult for me to understand that no one wants to use our experience and that important decisions regarding the transformation of our region are made without our participation’, commented Krystian Grzesica, the mayor of Bieruń. 

What are the main concerns about the Silesian Transformation Fund? 

According to the justification for the Fund’s establishment, it should support the transformation of the Silesian voivodeship ‘through activities aimed at changing the structure of the region’s economy, including the management of sectors with no growth potential, and activities aimed at increasing the competitiveness of the economy, using the existing potential and resources’. But according to Białas,  these are the main concerns regarding the current draft bill:  

  1. The Silesian Transformation Fund will operate in the form of a joint stock company with its headquarters in Katowice, and members of the management board and supervisory board will not be required to have any previous experience in managing state property, which could lead to misuse of the fund. 
  2. The planned sources for financing this fund remain unknown. 
  3. It has still not been indicated what potential projects could be financed through the company.  
  4. It will most likely mix financing from the state budget with EU fund allocations, which – considering the many uncertainties – could lead to double financing. 

There is a serious risk that the new company is counting on funds from the European Just Transition Fund and will become its main administrator. Such a move might result in a shortage of funds for local governments, who along with the region’s inhabitants will face the consequences of a badly managed transformation process. 

The European Commission should be aware of these moves, as they are not in line with the EU’s just transition guidelines, which clearly state that local stakeholders should be ‘fully mobilised’ and that they must ‘take ownership of the transition in their territory’.