1. Current PSI affiliation fee system Payment by Euro Fixed amount (0.87Euro/member/year) Minimum affiliation fee (650Euro/union/year) Index (100%, 75%, 50%, 25%, 10%)

2. Problem of payment by Euro Fluctuation of foreign exchange Fall of exchange rate = Increase of fee No union can forecast fluctuation Difficult to buy Euro Remittance charge is expensive

3. Exchange rate against Euro CountrySep.1 2002 Sep.1 2003 Sept.1 2004 Sept.1 2005 July 6 2006 Change Australia 1.78 1.70 1.73 1.64 1.72+ 3.4% Bangladesh 58.85 66.20 74.22 80.40 92.12- 56.5% Japan 116.40 128.46 133.02 136.57 147.00- 26.3% Malaysia 3.73 4.18 4.63 4.66 - 24.9% Nepal 78.80 85.01 90.62 89.70 97.65- 23.9%

4. Fixed amount system Fair to the unions in the same country Unfair to the unions in different countries Big burden to the developing countries Fixed and stable only for Euro countries

5. Minimum affiliation fee (1) Some unions dont have financial foundation to pay the minimum affiliation fee of 650Euro because; membership is too small, union due is too low, difficulties in collecting union dues from all members, etc. These problems are caused by their peculiar natural, historical, cultural, political and organizational backgrounds.

6. Minimum affiliation fee (2) Some unions tend to think it doesnt matter if they pay only 650Euro even if they can pay more. It happens occasionally where such unions request reduction. The unions who are intending to affiliate to PSI tend to apply with the membership whose affiliation fee is 650Euro despite having a bigger number of members.

7. Minimum affiliation fee (3) Unions who can not pay 650Euro have to submit the request for exemption or reduction till the system to be abolished. There are unions that have to give up affiliation to PSI because they are not able to pay 650Euro. This disturbs recruitment.

8. Minimum affiliation fee (4) Minimum affiliation fee has brought neither the merging of small unions nor the increase of the total income to PSI. In fact the income from affiliation fees fell even though the number of member organizations affiliated to PSI grew.

9. Minimum affiliation fee (5) Decrease of minimum affiliation fee can not resolve essential problems as long as it is fixed amount. Probability to expand further the gap between true membership and affiliated membership.

10. Index Difficult to reflect accurate solvency GDP might be more reasonable and clear Index of Australia = 100 Index of Nepal = 10 GDP of Australia = 25,370 GDP of Nepal = 1,310 Vague definition, no up-dating

11. Arrear 50% affiliates are in arrears in 2005 Many requests for exemption, reduction, delayed payment, etc. Difficult to reject the request to join PSI activities and to expel from PSI.

12. Less-registered membership Big gap between affiliated membership and true membership Increase free-riders Discourage unions from paying full membership affiliation fees Erode mutual trust and solidarity

13. Who really bears heavy burden? Need to investigate actual financial condition of affiliates Whose burden is heavier, Japanese or Nepali? What is the fair burden?

14. Principles of new system International solidarity Fairness Transparency

15. Our option Introduce fixed ratio system based on the average salary of members Pay by Euro Abolish the minimum affiliation fee Abolish the index

16. Conditions for introducing new system Definition of average salary Collecting and updating accurate data Register the true membership Proper ratio (reasonable and realistic) Secure enough income for PSI Strict rules for exemption and reduction Strict rules on arrears and expulsion

17. Trial calculation on Nepal Current formula 0.87Euro x 10,000members x 10% = 870Euro New formula ratio: 1 / 50,000, average salary: 612Euro 612Euro x 10,000members / 50,000 = 122Euro ratio: 1 / 40,000 612Euro x 10,000members / 40,000 = 153Euro

18. Trial calculation on Malaysia Current formula 0.87Euro x 10,000 members x 50% = 4,350Euro New formula ratio: 1 / 50,000, average salary: 3,447Euro 3,447Euro x 10,000 members / 50,000 = 689Euro ratio: 1 / 40,000 3,447Euro x 10,000 members / 40,000 = 862Euro

19. Trial calculation on Japan Current formula 0.87Euro x 10,000 members x 100% = 8,700Euro New formula ratio: 1 / 50,000, average salary: 40,816Euro 40,816Euo x 10,000 members / 50,000 = 8,163Euro ratio: 1 / 40,000 40,816Euo x 10,000 members / 40,000 = 10,204Euro

20. Actual burden ratio Nepal: 1 / 7035 (0.87Euro / 612Euro x 10%) Malaysia: 1 / 7,924 (0.87Euro / 3,447Euro x 50%) Japan: 1 / 46,915 (0.87Euro / 40,816Euro x 100%)

21. Other potential options Introduce fixed ratio system based on GDP and abolish both of index and minimum affiliation fees Probably any others

22. Discussion of Steering Committee (1) An extensive proposal for a coefficient for a fees level based on average wages The need for simple, fair fees system The need to use a system based on a single currency The possibility of two tiers of membership in PSI The need for any system to be based on trust The need for financial stability and sustainability for PSI The possibility of keeping the present system for those affiliates on the 75-100% indexed rates but to look for a simple and fair system for others – the majority of affiliates but the minority in terms of payment

23. Discussion of Steering Committee (2) The need to look for growth at the rich end of the membership The possibility of reviving the former Development and Aid Fund The need for PSI to present a better case to show the added value of PSI to affiliates, especially to the major payers Perhaps a consideration of setting different fees regionally

24. End Thank you for listening