Uncovering the Veil over Polish Industry

Uncovering the Veil over Polish Industry

The fate of nearly half of the 1600 industrial plants that existed in Poland during the communist era is either partially veiled, or completely unknown and irretrievable. The documentation provided by, what one would imagine to be, the appropriate government agencies, is fragmented and chaotic. In fact, the datasets provided by the Ministry of Treasury are less comprehensive than ours. At that, plant-level information is nowhere to be aggregated, only leaving one to search for the fate of each plant case by case. Of the plants identified in our dataset, slightly over 60% remain active in at least some capacity. Some were liquidated shortly after transformation, while others were privatized and functioned on the market well into the 2000's before closing their doors. The information we were unable to find can be classified by some common characteristics. First, very little information is available about plants that were liquated early in the transformation process. Second, information available varied based on sector and industry. Last, regionality and plant size played a role in the search process, as plants in rural areas were often less well documented than their urban counterparts.1 All these trends of unfound information will have to be considered to ensure our analysis of privatization and liquidation adequately mirrors complete reality – not just a subset of it.

Considering the complexity of the privatization process and the importance it has played in recent Polish history, it may be surprising that so much about the fate and restructuring of communist era SOEs is veiled. Starting in March 2015 we set out to find the post-1989 fate of over 1600 Polish state-owned plants. While meticulous data collecting has left us with a dataset worthy of analysis, we simply could not find any information on many plants that existed in communist Poland. The shockingly high percentage of plants for which information was irretrievable leaves us with many questions about the basis on which the transition process has been analyzed up to this point by policymakers and the general public alike.

Plants liquidated in the early phase of transformation are often unaccounted for in public records. They are absent from digital records. Their presence in the court archives is also marked with chaotic recordkeeping. Since state-owned enterprises are archived separately from private firms, discontinuity of public records is commonplace. Additionally, legal records and court archives are only available on-sight and for the specific voivodship. Therefore, to have access to all the relevant public records, one would have to travel to all of the 16 regional courts. Given that the information from these archives that was relevant to our research project was almost entirely retrievable online, such a burden would not yield any dividends. Still, the disordered and inaccessible nature of the archived information leaves much to be desired.

The list of plants for which we have definitive information on does not include plants with a verified liquidation date (or year). Identifying a certain plant as liquidated in the early to mid-1990's was obvious through the lack of information about the plant after a certain time and the fact that it can be located and deemed vacant or demolished. Yet, the vagueness of the liquidation process forced us to omit such cases in our data. Since our intention is to identify common characteristics of plants that survived for a given amount of time, we simply could not include plants we only knew ceased production in a certain rough timeframe. For example, the end of many state-owned firms in the early 1990's was marked by the removal from the National Court Register (pl. KRS). This date, however, could deviate from the actual date of plant closure by even more than a year, given the bureaucracy and legal manners invoked by the liquidation process. In our dataset, the year of liquidation is verified as the year in which production in the plant ceased.

Information available also differed considerably across sectors. The fate of factories and plants associated with the building of large communist-era housing estates was most trivial. Pre-fabricated concrete panel housing construction (pol. “wielka płyta”) fell out of favor shortly after the fall of communism. Most plants associated with this era of construction, such as housing factories (pol. “fabryki domów” or “kombinaty budowy domów”) and pre-stressed concrete manufacturers (pol. “wytworni elementów wielkopłytowych”) were liquidated in the early 90's. Whether there were attempts of privatization or asset stripping following their closing could not be identified. Furthermore, little information was available for food production sector. Food production plants that could often only be identified as liquidated or existing were related to, among others, meatpacking, baking, fruit and vegetable production and animal food manufacturing. Additionally, printing was also a sector in which plants were left largely unaccounted for following their liquidation.

Regional differences that go hand-in-hand with the aforementioned sector variation were also problematic. Information about plants in less industrialized voivodeships was also harder to gather than in those with established industrial centers. Notably, the regions of the so-called “East Wall” did not feature considerable large-scale industrial production.2 Collectively the four Voivodships3 of this eastern region made up only 320 of the over 1600 plants we originally planned to find further information about. Our dataset features information on the fate of 131 of these 320 plants. Assumingly, these plants were on average considerably smaller than plants found in heavy industry sectors. Areas where heavy industry was based, such as Silesia, Mazovia, and western Poland were considerably easier to track down.

Despite the admitted shortcomings, our dataset is still by far the largest available collection of plant-level information on the fate of Polish SOEs. The aforementioned difficulties in retrieving the information do not make the dataset a directly representative sample. Still, the information will be very insightful when it is analyzed in the context of trends in Poland's free market transition. The unique data gathered will help unveil some of the truths of the transition phase while also debunking some preconceived notions many Poles may have about the privatization process in their country.

1. Our data includes SOEs that employed 50 or more workers. Any further reference to “smaller” plants still only regards plants above this threshold
2. For more on Poland's Eastern Wall, see The Economist's special report from June 2014↩
3. Warmia-Mazury, Podlasie, Podkarpacie, and the Lubelskie Voivodeships .

Source: PRIV