This is a CTP of initiative: RIPESS/ Groupe Terre (Belgium)
In 1994, the founding father and President of Groupe Terre, William Wauters, died. He was replaced by his son (bearing the same name), who had been working for the group for 10 years. This loss had tremendous effect on the industrial and political project of the group, as explained by his son: “my father was the lighthouse of the group. From an industrial point of view, we lost the business leader and he was not easy to replace. From the political project point of view, we lost the person who was guiding us. On these two points, we needed 10 years to rebuild ourselves”. Even though changes were needed from the economic and political point of view, the first measures were economic in nature, since most of the activities of the group were not cost-effective or even profitable at the time. The underlying idea of this strategy of prioritizing economic decisions was that, without economic development, the group would probably not survive.
Priority was given to the textiles, paper and cardboards collecting activities in order to revive them. Regarding the textile collections, they decided to reduce its cost by rationalizing processes: instead of organizing door-to-door pick-ups, they decided to progressively switch to a container system, in order to be able to collect higher volumes of textiles while reducing operation costs, and, by this means, to avoid lay-offs. The first objective was to achieve the settlement of 1000 textile containers in Wallonia.
Regarding the paper and cardboard collections, it was less easy, since this activity had been managed by William Wauters (father) himself: “The collection of paper and paperboard was managed by my father alone. As a consequence, we did not know these markets. Some contracts had to be renegotiated but no one was prepared for that. Some work was needed to rehabilitate this activity”. The rise of recycling in the mid-1990s (see “co-production” part) gave opportunity for increasing those activities. The group also acknowledged the fluctuating feature of the paper markets by trying to transform this material into a finished product, aka insulating boards. Even though the insulating boards had been made by the group since the 1980s, it is during the 1990s that efforts were made in order to enhance their trade. Amongst all, they had to learn how to sell a finished product, by implementing a distribution network. As our interviewee recalls “this was one of the many challenges we had to face”.
During the 1990s, the waste sector was exposed to fundamental changes, to which Groupe Terre had to adapt. Before the creation of Fost-plus in 1994, a private initiative aimed at collecting household packaging, separate collections did not exist in Belgium. They were legally formalized in 1998 though a cooperation agreement between the 3 Belgian regions and Fost-plus became the entity in charge of collecting and recycling in the country.
These changes had negative side-effects at first for Groupe terre, since the agreements they had negotiated with municipalities regarding waste collections were cancelled: “Our collections of paper and paperboards suffered from these changes because we had negotiated with over 250 municipalities in Wallonia a floor price in order to protect ourselves from the large price fluctuations of these materials. When entities like Fost Plus were created in order to finance selective collections, the municipalities we had an agreement with decided to break our contracts [...] If we did not want to lose this activity and the correlated jobs, we had to find a solution. The solution was to respond to calls of proposals for the collection of papers and paperboards”. However, they were rapidly faced with a legal issue, since the entity doing the collections of the group was an association, and associations could not, in principle, respond to public procurements. This is why the group created Recol’terre, “a front company” which subcontracted the association. In other words, they created a public limited company whose majority shareholder was the association in order to be allowed to participate in call for tenders. As François Malaise (the Deputy-Director of Groupe Terre) summarized in another interview: “During this period, there was a multiplication of legal forms so as to respond to market needs”.
This multiplication was facilitated by the emergence of the status of public limited companies with social goal (ie. “société anonyme à finalité sociale”) in 1995. The starting point for this new status was to make clearer the distinction between social companies and associations because of the rise of social enterprises, which tended to blur this distinction. This status was thought as a compromise between associations, which could not make profits and traditional companies, aimed at profit distribution. In that sense, it filled a legal vacuum. This new status would allow former associations to conduct business operations on the condition that they served a social objective, included in its status. Even though this social objective was not defined in this piece of legislation, case-law has given some tracks on its meaning: usually, it refers to the application of a participative management system and to the aim of provision of services to the members or to the community (instead of profit-making). Moreover, as any enterprise, public limited companies have a protected capital, offering some guarantee to creditors. This helps explaining why the group decided to make some of its entities switch to this status. Today, the group has 5 public limited companies with social goal.
As mentioned in the “Content part”, priority was given to the re-invigoration of economic activities. In fact, it is much later (as from 2010) that substantive efforts were provided in order to revitalize the political project of the group, accompanied with a reorganization of the latter. Ironically, it is precisely the economic development that acted as an incentive for reasserting the social and political objective of the group. Indeed, this economic development was accompanied with a substantive increase in recruitments, bringing new employees not necessarily aware of the historical political and social project guiding those economic activities. Moreover, there had been a push during the 10-year period following the death of the founding father of Terre towards more autonomy for structures in order to allow them to be more responsive and efficient when fostering their place on the markets. This enhanced autonomy had to be counterbalanced by a sense of common destiny.
Members of the group decided that the redefinition of their political objective would take the form of a Charter, drawn-up in a participative manner in 2011. This Charter sets up a vision (ie. participation to the creation of a democratic and solidarity world), 4 missions (ie. insertion in the society, promotion of social and solidarity economy, development of local and international solidarity, preservation of the environment), 5 strategies (concentration on the work market, development of economic activities based on participative management, capacity-building, development of sustainable production chains, local and international partnerships) and 3 values (responsibility, dialogue and solidarity).
The underlying idea was to ensure that, despite the multiplication of entities, everyone was going in the same direction. As our interviewee recalls, “there was a real threat that, through their own general assemblies, each association or entities would go separate ways [...] There was a lot of thinking about ways of reorganizing the group to maintain cohesiveness and unity, with the Charter acting as a lighthouse for all the entities of the group”. The Charter was accompanied by restructuring and new organizing, in order to guarantee autonomy for each entity while ensuring cohesiveness between their activities: “We made the legal structure of the group evolve, by creating a third association which is called ‘Groupe Terre’ and which is the umbrella association”. Concretely, the General Assembly of Groupe Terre was made the main decision-making body of the group. It means that it acts as the sovereign power for every entities of the group. On top of that, they also made sure that entities are not only symbolically but also legally interlinked, as the William Wauters explains: “Groupe Terre asbl is the major shareholder of every public limited companies of the group and the legal entities became members of every General Assembly of every other association except Groupe Terre”.
As we have seen, one of the main strategies adopted by the group to revive economic activities consisted in responding to call for tenders. Given its financial implications during several years, responding to public calls for proposals means entering in a competitive field with economic actors of various sizes, and especially for-profit enterprises. In order to exemplify this statement, we will take the example of a public contract won in 2008 by Recol’Terre, one of the public limited companies with social goal of the group.
Intradel is an inter-municipal entity which deals with household waste management in the region of Liege (around 1 million inhabitants). They launched a call for tender in 2008 for household separate collections and household residual waste. Recol’Terre applied only for the separate collections because there was a provision according to which they could not apply for a contract that represented more than the double of their financial turnover. However, they were first on 9 out of the 10 lots, which was a surprise, not only for the group, but also for the multinationals which had also applied. Their response was quick: “One of our competitors (a multinational) which was surprised that we gained this significant share of public procurement, tried rapidly to undermine us. One of their representatives had very good relations with a trade-union representative. Consequently, we had a series of controls. One of them addressed the joint committee in which Recol’Terre was, and we had several controls of the inspection of social laws”. Indeed, joint committees are entities composed of employer organizations representatives and trade-union representatives. Each enterprise depends on a joint committee based on its activities. The employer contributions vary depending on the committee. Here, the financial contribution of Recol’Terre would have nearly doubled if they had to switch committee, from the non-qualified workers committee (dealing with insertion) to the cleaning committee. Recol’Terre was doing both, even though they considered insertion as their core activity.
Even though the successive control reports kept stating that Recol’Terre was in the relevant joint committee, the Directorate General of collective labour relations (an administrative part of the federal Ministry for Employment, Work and Social Dialogue) and then the National Social Security Office decided to bring this issue to Court. The case went to the highest Court in Belgium (ie. the Court of Cassation), and after six years of struggle (from 2009 to 2015), this Court sided with Recol’terre, acknowledging that insertion was its principal activity and that, as a consequence, it was in the good joint committee. Even though the outcomes were finally positive, the costs of the legal proceedings were high, needless to say.
This period is characterized by both non-anticipation and anticipation. First, it seems that the consequences of the departure of the founding father of the group were not understood at the time. As William Wauters recalls, there was just one meeting 6 months before during which few names were thrown on the table for replacement. It is only when he left that they realized that they would have to adopt a strategy to save the boat. And if they perceived the necessity of growing economic activity on the grounds of survival, members of the group did not necessarily realize that they might have to engage in new activities in a progressive manner; as a matter of fact, they came to realize afterwards that a sudden economic growth could have unexpected side-effects, including on their political project.
Indeed, responding to large public call for tenders can also mean sometimes a sudden flow of money and increase in the financial turnover, as well as the necessity to deal with quick recruitment. As our interviewee recalls, they felt a bit overwhelmed when they won the separate collections call for tender in 2008: “When your activities double overnight, this means that you need twice more workers and twice more trucks. It is not easy to deal with that. You need to recruit and train people. There are new workers arriving but they not know the culture of the group, the culture of the enterprise. They come here because they are looking for a job but they do not come in order to contribute to a project”. Moreover, the call for tender included the collection of CMP and glass, on top of paper and paperboards. The group had never been involved in the collection of CMP and glass, and they came to realize that, if CMP collection was similar to paper collections, glass collection worked very differently.
Recol’Terre members had to learn very quickly a new job that they had not done before, in a very busy context since the previous enterprise was leaving the country and had not done the glass collections the month before. The glass containers were overflown: “you should know that if there is a difficult period for glass collections, it is the one between December 15 and January 15 because people drink a lot during holiday season. We took over the market as from January 2 2009 and the containers were overflown but it wasn’t our fault. [...] On January 3, the alderman in charge of public waste management requested our dismissal in the press on the grounds that we were unable to do the job. When you just take over a market and that, the day just after, you are publicly attacked in the media, this forces you to work twice or three times as hard: we worked during three months from 6am to 11pm to learn the job and clear the backlog”. Fortunately, after 1 month of hard work, the backlog was cleared and criticism became less vivid.
The first lesson is that, retrospectively, it was a pivotal period which could have led to the end of the group: “This period of time made us stronger but I must admit that we were lucky because it could have led to the disappearance of Terre”. The strategy adopted, essentially economic in nature, borne fruit and led to a substantive increase not only in the financial turnover of the group, but also in the number of employees (around 350 in 2017). This growth gave more weight to the group and strengthened the objective to insert more non-qualified workers on the employment market. On the other side, it nearly led to a loss of identity, which was overcome later-on, with the formalization of a Charter to which each employee has to adhere.
This was also a pivotal period because it led to deep changes in the functioning of the group, so as to reduce the dependency on one or several people: “After his death [William Wauters is talking about his father], things were structured so as to ensure a different functioning. Today, if anybody left the group, we would not be endangered since the responsibility is shared. One of our main strategic axes today is that if we want our political message to be strong, we need to develop the group. And if we want to develop the group, we need each enterprise to be more autonomous regarding its management. Everything does not rest on a small group of people”. This autonomous management was counterbalanced however by a stronger coordination between all the entities of the group, and the strengthening of participative management (for more information on that point, see the other CTP called “Strengthening participative management”).
A final lesson is that the period was characterized by a constant adaptation to the societal, political and legal developments happening at the local, national or international level. As we have seen, the rise of recycling, coupled with the willingness of public authorities to deal with a limited number of operators, forced not only changes in the legal status of entities (switching from the association status to the public limited company with social goals one) but also the development of new economic activities (such as PMC and glass collections). This period also acted as a strong incentive for strengthening lobbying activities during the next decade (for more information, see CTP “insertion into networks) so as to take a more proactive stance and not only adapt but also induce favourable legal changes.
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