Chapter 1

Norway: Bankruptcy sparks
more than 100 cases of
remunicipalisation
By Nina Monsen and Bjørn Pettersen

When one of Norway’s largest waste collection companies went out ofbusiness, Fagforbundet used it as a stepping-stone for taking waste
collection back into public hands. The waste collection company,
RenoNorden,1 declared bankruptcy on 19 September 2017. Since thenmore than 100 municipalities, alone or in cooperation, have taken public
control of their waste collection. The strategic thinking and hard workof Fagforbundet and its local unions and shop stewards played crucial
roles in this achievement. Before RenoNorden’s bankruptcy somemunicipalities were aware that the company faced difficulties in the
Norwegian market, especially after RenoNorden announced it would
terminate nine less profitable municipal contracts signed in 2015 and2016. Workers in commercial waste companies faced some of the worst
conditions in the country, according to county-level representative Anders
Kollmar-Dæhlin who was part of the project team working on getting
waste collection back in house. “Many of the employees in RenoNorden
had 90-hours work weeks. These over-worked drivers are driving on thesame roads that our kids use to get to school,” Kollmar-Dæhlin says.
In Norway, waste collection is financed with tax revenue. But privatecompanies contracted to deliver the services usually pay their employees
lower wages and pensions than municipalities that manage those services
in house. “The commercial companies make profit at the expense of thecommon resources of the municipality’s welfare services,” KollmarDæhlin adds. Kragerø municipality in southern Norway was quick to act

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Norway: Bankruptcy sparks more than 100 cases of remunicipalisationand negotiated with RenoNorden to terminate its contract. It became thefirst municipality to take back waste collection. The result was better pay
for employees and lower fees for residents (See Box II).

NORWAY OF CASES 42
TOTAL NUMBER

Remunicipalisation 39
Municipalisation 3

Health care &social services

Waste

19

18
Local government

5

Building cleaning and maintenance 4
Security and emergency services 1

Highlights• In 2017, more than 100 municipalities took public control over their waste
collection after RenoNorden's bankruptcy.
• Merging small towns into one municipality provided an opportunity for intermunicipal remunicipalisation or creation of an integrated municipal company
with public sector solidarity and capacity building.
• Remunicipalisation of care services (nursing homes, elderly care) and local
government services (staffing agency) are significant.
• Strong and strategic role of workers' unions in the process of remunicipalisation.

Box I

Fagforbundet
Fagforbundet, the Norwegian Union of Municipal and General
Employees, is the largest trade union in Norway. The union has
370,000 members. Our members work mainly in the public sector,
in local and county government and in hospitals, as well as in theprivate sector. Fagforbundet also represents 17,000 shopkeepers
across the country.

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Norway: Bankruptcy sparks more than 100 cases of remunicipalisation

A chance for success
Fagforbundet saw the demise of RenoNorden as an opportunity to bringwaste collection back into public hands in all 137 municipalities affected by
the company’s collapse. The day it declared bankruptcy, Fagforbundet’s
Secretary General Mette Nord sent a clear and direct message to local
unions in the affected municipalities: “To avoid a breakdown of waste
collection, the municipalities that had contracts with RenoNorden will
most likely have to take over the waste collection in the short term. Our
aim is to make this takeover a permanent solution.” Nord underlined that
Fagforbundet’s competence centres, which are regional support centres
on labour law and collective agreements, and county-level unions thatback and support the local unions would be prepared to give support andfollow-up to the remunicipalisation efforts. The union also provided
assistance for financial analysis and cost calculations.
Although there had been some reporting on a possible bankruptcy, itcame as a surprise to most municipalities. Some had started to consider
alternatives, but the local shop stewards and union representatives
were not sufficiently involved in these discussions. According toprocurement regulations, municipalities can enter short-term contracts
with other suppliers without tenders when a provider goes bankrupt.
Some municipalities outsourced to a new private company, but most
remunicipalised or even municipalised the waste collection, as they had
never provided the service in house before. To aid the process, a project
team of professionals from Fagforbundet’s head office and a union
representative from the county level went on the road to support affectedunions. By February 2019, 110 municipalities had voted to remunicipaliseor municipalise waste services either through inter-municipal companies
or on their own.

35

Norway: Bankruptcy sparks more than 100 cases of remunicipalisation

Keeping knowledge in house
There are many advantages to keeping waste collection in municipal
hands. Municipalities have better democratic control and can predict
costs. Municipal delivery keeps the knowledge in house, and provides
decent working conditions, better pensions and training opportunities
for employees. It also means equipment is put to better use and themunicipality has control over recycling and how waste is used. When
services are in municipal hands, it also lays a foundation for employeedriven innovation, which in turn leads to better services.
Case I: Kragerø
A good-news waste collection story
Kragerø was the first municipality to take its waste collection backinto public hands in connection to RenoNorden’s bankruptcy.
Employees and their shop stewards were on the lookout and alerted
the municipal administration that RenoNorden was not fulfillingits duties as a waste collection company. In an agreement with
RenoNorden, Kragerø terminated the contract before it went outof business. After a thorough analysis, the municipality decided totake waste collection back in house.
Kragerø is ruled by a political constellation of the Labour party andits allies on the left of Norwegian politics. According to the vicemayor of Kragerø, Charlotte Therkelsen Sætersdal, the analysis
showed it was more effective and cost-efficient to remunicipalise
waste collection and bring it under the control of the elected local
government. The fee for residents was reduced by 14 per cent after
remunicipalisation, even as wages and pensions for the employees
increased. The municipality saved money by avoiding expensive
tendering processes and benefited from having its own full-time
employees in waste collection who could also carry out duties inother areas of responsibility for the municipality.

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Norway: Bankruptcy sparks more than 100 cases of remunicipalisation

In addition to better pay, employees who went from RenoNorden
to the municipality as their employer are reporting improvementsin their work situation. Workers without formal training are being
offered support to obtain vocational education diplomas for theirskills. The number of part-time workers has gone down, andworkers are getting permanent contracts with more hours or fulltime positions.
“Removal of refuse and handling of waste are important tasks insociety. The service should be run by an organisation with a broader
mandate than making a profit,” says Vice-Mayor Sætersdal.2

Morgan Martini and Kjell Arne Isnes are two of the workers who were employed directly by the municipality when Kragerø took over waste collection. “Now we don’t have to worry whether we will have a paid job
in the future,” they said to Fagforbundet’s magazine Fagbladet. Byline/Photo: Morgan Andersen.

37Norway: Bankruptcy sparks more than 100 cases of remunicipalisation

A brief overview of the Norwegian model
Norway is a system of relatively free-market capitalism combined witha comprehensive welfare state that aims to provide universal social
services. This model delivers positive outcomes – Norway has high scoreson a variety of social indicators. Some might think Norway’s high oil
income feeds the economy, but Norway channels less than three per centof its return on oil investments into the annual state budget.
There is a high level of trust in Norwegian society, founded in social
dialogue and tripartite cooperation at the national and municipal levels.
Collective agreements and collective bargaining at the national level, withsome local adjustments, ensure a relatively small wage gap, especially inthe public sector. Small wage differences, a low unemployment rate and ahigh employment rate ensures strong purchasing power. Most residents
pay taxes because a large part of the population works or is on a pension
scheme. The combination of high private demand, fair taxation and aminimal informal economy is good for the overall economy.3
Approximately half of all employees in Norway are union members.
Eighty per cent of public employees are union members, whereas lessthan two out of five are union members in the private sector. However,
the trend in Norway, as in many European countries, is that of a decline
in the number of people organised in trade unions.
Box ll

Tripartite dialogue
The Nordic model of tripartite dialogue and cooperation has along tradition and has proven successful. Municipal tripartite
cooperation refers to constructive cooperation between politicians,
administrative leaders and trade unions. The aim is to work
together to create a culture of cooperation that promotes finding38

Norway: Bankruptcy sparks more than 100 cases of remunicipalisation

the best local solutions to the specific challenges facing themunicipality. By creating a forum to share ideas, suggestions
from employees and other more marginal voices are brought
forward and handled systematically by the management of themunicipality. Local tripartite cooperation is not a formal part ofpolitical decision-making; it is merely a part of the development
process. The rationale is that different views and perspectives lead
to better solutions.

Empowered shop stewards
Fagforbundet’s strength is founded on the principles of the Norwegianmodel, and comes from our many members, who make us the country’s
biggest union and ensure we have a broad representation. Our strengthis what let us be proactive when RenoNord was going bankrupt, turning
the situation into an opportunity for remunicipalisation. We haveempowered employees, represented by trusted shop stewards and goodpolitical and administrative systems to solve workplace challenges.
According to our basic agreement4 and labour regulations, shop stewards
have an obligation to react when they suspect breaches of our labour
regulations. In addition, Fagforbundet has shop stewards and tradeunion representatives at all levels of the country’s administration:national, county and municipal. Fagforbundet is made up of more than
550 local branches. Each local branch is a fully functional trade union
where members elect their local representative. Fagforbundet has nearly
17,000 experienced shop stewards across the country, and 18 countylevel organisations. Fagforbundet also gains strength from being under
the umbrella of the Norwegian Confederation of Trade Unions.

39Norway: Bankruptcy sparks more than 100 cases of remunicipalisation

Sirkula: an inter-municipal company takes backcontrol
Four municipalities northeast of capital city Oslo have taken waste
collection back as a joint endeavour. The four municipalities co-own aninter-municipal company, Sirkula, which is responsible for handling andcollecting waste from 41,000 households in the region.5
Sirkula had contracted out waste collection to RenoNorden with operations
starting on 1 January 2017. By 18 January 2017, a local newspaper revealed
that 800 complaints had already been received about the company’s lackof services. Before RenoNorden’s collapse, Sirkula already faced many
challenges with the private company.
Complaints grew and RenoNorden’s poor service received more local
media coverage. In response to the complaints, RenoNorden simply
imposed more loads and longer working hours on their employees.
Eventually the Labour Inspection Authority launched an investigationand documented massive use of overtime and violations of several labour
regulations. RenoNorden was denounced for violations of the Working
Environment Act.
When RenoNorden went bankrupt later that year, in September 2017, thefour municipal owners of Sirkula entered into a short-term contract withanother private company. But Fagforbundet’s aim was to end tenderingand have Sirkula take over waste collection. The union worked through its
local and regional branches to get the four municipalities to bring waste
collection back in house.
Fagforbundet’s project team of professionals from head office, along witha union representative from the county level, supported the local unionand other branches of Fagforbundet. The project team held meetings withtrade unions and union representatives in the four municipalities and40

Norway: Bankruptcy sparks more than 100 cases of remunicipalisation

ensured regular communication. The main objective was to influence themunicipalities to vote against new tender processes for waste collection.

Political influence on Sirkula owners
Local politicians in the Sirkula-owner municipalities guide the management of the company. Sirkula’s structure allows the local government ineach of the owner municipalities to elect a political representative to acommittee, which elects the company’s board of directors.
Widely sharing political, economic and professional rationales behindremunicipalisation is an important part of the strategy for taking backservices in inter-municipal companies. Thus, the local trade unions,with the support of the project team, met with all the political parties.
The union’s county level coordinated this work and the project teamensured that local unions and union representatives were equippedwith those political, economic and professional arguments. Local union
representatives took advantage of the media attention on RenoNorden’s
breaches of labour regulations and bankruptcy, providing interviews andcomments.
In April 2018, the supervisory board of Sirkula voted in favour of taking
over the waste collection. Although inter-municipal companies can seemout of the control of city councils and residents, the Sirkula case shows how
to ensure better democratic oversight of an inter-municipal company. It
also highlights that an inter-municipal company can efficiently take overa service that the municipality has not previously delivered on its own.

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Norway: Bankruptcy sparks more than 100 cases of remunicipalisation

New municipalities commit themselves toremunicipalisation
A new threat, in the form of structural reforms and municipal mergers,
may pave the way for privatisation by creating bigger and more attractive
markets for private companies in rural regions. This may have been oneof the reasons behind Norway’s government – a coalition of neoliberals
and conservatives – introducing an extensive structural reform in 2015.
Fagforbundet, in cooperation with allied political parties, managed toturn this neoliberal strategy to our advantage, using it to boost public
sector solidarity, capacity-building and efficiency.
Initially, Fagforbundet opposed the structural reform, arguing thatthe policy of merging municipalities should be based on facts andreferendums and should not be forced. But when parliament approved
the structural reform, Fagforbundet shifted gears to focus on making
municipal mergers an opportunity for remunicipalisation.
Municipalities established after the merger of smaller ones will be
operating as of January 2020. Several of these new municipalities
have already committed to remunicipalisation of public services. In
the government’s own words, one of the goals of the reform was tocreate “robust municipalities that can be assigned additional tasks andresponsibilities.”6
Opponents of the government’s policies saw the reform as preparation
for large-scale privatisation. But local union representatives turned
the argument upside down, saying that large, robust municipalities arestrong enough to provide all services on their own, without tendering
to private contractors. The new municipality of Asker is an example ofa municipal merger that will lead to several cases of remunicipalisation.
(See Case II)

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Norway: Bankruptcy sparks more than 100 cases of remunicipalisation

Case ll: New municipality of Asker takes services back into public hands
The merger of three municipalities into the new Asker municipality
will result in six inter-municipal companies closing down andwidespread remunicipalisation.
The new municipality will have 90,000 inhabitants and 6,000
workers. Anders Fosen, shop steward for Fagforbundet in thecurrent Asker municipality, is pleased that politicians have voted to
shut down inter-municipal companies and take the services backinto the new bigger municipality. Fosen told FriFagbevegelse, theNorwegian labour movement’s online magazine, that the process
has increased the level of trust among the workers:“We have established a well-functioning tripartite cooperationand dialogue. The unions have come together across the threemerging municipalities and we will have renewed strength in the
new municipality with 6,000 workers behind us.”
Six inter-municipal companies will close down. The services thatwill be taken over by the new municipality include water anddrainage services, property management and transport. Fosen
does not fear new tenders to private contractors in the newmunicipality:“After the ribbon-cutting for the new municipality, I do not expect
any politician to bring up controversial cases such as outsourcing
and tendering of public services. If they do, it will be very damaging
for the working environment and the quality of the services.”743Norway: Bankruptcy sparks more than 100 cases of remunicipalisation

Lessons learned
The lessons learned from this situation are not restricted to cases ofbankruptcy and waste collection. Fagforbundet has used the same
strategy successfully in many other cases, as the example of the ongoing
structural reforms in Norway shows.
Looking back, we would give ourselves and other unions the following
advice:•Make use of the skills and competence of the entire organisation at alllevels•Support the local shop steward, the local trade union and union
representatives taking part in the local political processes•

Contact the employees and shop steward in the private company,
regardless of their union membership, with the aim to get access tostrategic and financial documents in the company•

Find out if you have any potential allies among the board of directorsof the company•

Get in touch with the person responsible for the outsourced service inthe administration of the municipality•

Confront local politicians with the union’s viewpoints•

Use existing networks within the labour party and other political allies
to influence future decisions•

Try to influence representatives from parties outside the political ally
as well•

Adjust arguments to different target groups. Some key supporting
argumentsforremunicipalisation

are

more

relevanttothemunicipality’s administration, some to local politicians and some tothe local union. These arguments include:		•More flexibility when service needs change		•Better democratic control

		•Predictable costs		•Decent working conditions

44

Norway: Bankruptcy sparks more than 100 cases of remunicipalisation

		•Better pay and pension

		•The ability to train and keep skilled employees		•Better use of equipment

		•Improved environment for employee-driven innovation

		•The ability to benefit from recycling and to increase recycling

		

rates

•

Use local/regional media positively. Develop a media strategy andfollow it•

Social media must be part of any media strategy•

The union’s regional and/or national level must support the local
union and local union representatives with relevant information andknowledge•

The union’s regional and/or national level should ensure the local
level has the resources it needs

ABOUT THE AUTHORS

Nina Monsen is Advisor at the Restructuring Unit,
Fagforbundet. She has a solid experience in Nordic
cooperation, development aid and private sector
investments in developing countries.

Bjørn Pettersen is Head of the Restructuring Unit,
Fagforbundet. He has a broad experience in the
management of public development programmes.

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Norway: Bankruptcy sparks more than 100 cases of remunicipalisation

Endnotes
1

After the bankruptcy in Norway, the business people behind RenoNorden established a
new company, NordRen, to compete for the tenders to collect waste in Norwegian municipalities. RenoNorden ASA is still one of the largest waste collectors in the Nordic countries, with
branches in Sweden, Finland and Denmark. See the article in Fagforbundet’s magazine forshop stewards, 6 December 2018, by Ola Tømmerås (in Norwegian), https://fagbladet.no/nyheter/nytt-storselskap-kinesere-eier-det-spanske-selskapet-som-na-skal-kjore-soppel-i-51-norskekommuner-6.91.599935.fa1f968e0b. See also RenoNorden’s company website (in Norwegian),
http://www.renonorden.no/category/uncategorised/

2Interview in Fagforbundet’s magazine for shop stewards, 20 September 2018, by Nina Monsen(in Norwegian), https://www.fagforbundet.no/for-tillitsvalgte/omstilling/a/8904/renovasjon-i-egenregi-ndash-gront-og-lonnsomt/

3

SAMAK, the Nordic Labour Movement’s Organization, brochure on the Nordic model(2016) (in English), http://samak.info/wp-content/uploads/2016/09/THE_NORDIC_MODEL_FOR_
DUMMIES.pdf

4

In the Norwegian context collective agreements usually consist of two parts: a basic agreement which governs the relationship between organisations and sets predominant rules (stating both parties’ rights and duties, such as the employees’ right to access to information, andthe shop steward’s “obligation to react” to suspected breaches of labour law); and a national
agreement regulating wages and working conditions for a certain industry or sector.

5

Sirkula’s company website (in Norwegian), https://www.sirkula.no/6

Press release on the local government reform, 14 May 2014, on the Norwegian Government’s
website (in English), https://www.regjeringen.no/en/aktuelt/Local-government-reform-to-secure-future-welfare/id759493/

7Interview in the labour movement’s online magazine, 9 February 2018, by Bjørn A. Grimstad(in Norwegian), https://frifagbevegelse.no/nyheter/nye-asker-kommune-legger-ned-selskaper-ogtar-de-ansatte-og-tjenestene-tilbake-6.158.528533.b8b22df506

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