Privatization is Not a Solution

SP PLN group on August 23, 2021 invited Bro Josua Mata, the General Secretary of SENTRO through ZOOM meeting. Josua presented why the privatization in the electricity sector were failed? Andy Wijaya, the General Secretary of PP Indonesia Power as the moderator for the meeting highlighted that the promise of EPIRA (The Electric Power Industry Reform Act -EPIRA) when the privatization in the electricity implemented. The reality is, there’s no competition and the electricity price is getting expensive. The thing that happened is oligopoly, where a group of people dominating electricity and controlling it. The service is also not getting better. The fact is in Manila power outage is often happened. The electricity price even getting significantly increased since EPIRA implemented, which is 55%.

From what being presented by Josua, there are five lesson learned from the defeat in the Philippines. First, related to government attitude. Second, Philippines PLN (or NPC – National Power Corporation) viewed or narrated as an inffecient and corrupt company, so there’s no trust from the public. Third, the NPC entangled by big debt. Fourth, the congress (Philipines House of Representatives) getting bribed so they passed the EPIRA. And the last is lack of public support.

In this occasion, the General Chairperson of  SP PLN M Abrar Ali stated that currently state’s role in the electricity has been diminished. Meanwhile private role is getting bigger. Whereas should the state is no longer has control to the electricity, its people will bear the impact. The experience in Philippines proof that. Abrar confess that it’s not easy to fight for something that supposed to be under government responsibility to prosper the people. Especially now, when we see the integrity of law enforcement in Indonesia.

We used to put our trust to the constitutional court, that has ideological role by granting SP PLN for having a judicial review to challenge the privatization. But, in current condition, we’re a bit pessimistic. However, we will keep fighting to resist the privatization of the electricity.

We stand on the principle that the state is obligated to prosper its people. Therefore, the trade union coping workers in the electricity sector is part of the state in the electricity sector. Therefore we have obligation to oversee the constitution. Moreover PLN is in the same age as Indonesia, only 3 months difference. 

But the problem is that overtime, state’s role is getting diminished. This can be seen from the IPP (independent Power Producers) Contract in the private power plant or EBT (new and renewed energy) Project that keep being privatized. With the state managing it, electricity price is becoming affordable. This can happen since most of the cost bear by the government in the form of compensation and subsidy. But when later on goes to the private management, for sure there will be increase in price. Because what’s prioritize by the private sector is mere profit.  Together with other union in Gekanas, we also discuss about the role of private sectors that becoming more dominant and the decrease of PLN’s role. In the future, automatically there will be a price increase. The impact will include the electricity for the industrial sector. Should there’s increase in industrial electricity, then what will be more flexible to get cut is workers’ wage. It’s possible that if the electricity increase impacting the production cost and that can also causing a termination. These are the things we communicated with our brothers and sisters in other unions, so our fight in the internal union will be more intensive.

Brother Dewanto Wicaksono as the General Secretary of SP PJB questioning whether in Philippines the privatization happened in three electricity in three elements such as the power plant, transmission, and distribution. Then, based on what happened in there, the privatization practice implemented in those three elements should become the concern in all over states in ASEAN.  Moreover, currently the trend in the world is having an energy independence. Dewanto also asking advice from Josua to avoid privatization, what is the trick and that can be shared with the Indonesian’s friends. Answering the question, Josua firmly stated that the union should fight against privatization. In his opinion, all being promised with the privatization won’t come true. For that, it is important for us to make an analysis on what the real problem is.  

Neoliberal and free market and its supporter have ideological principles in the term of free market. For them, all problems can be dealt with free market. They believe that. From here we can identify, what is the problem for this system to not able function better, then questioning whether the solution is through privatization. Or state should be able overcome without the need to implement a privatization. Nevertheless, neoliberal will try to cut the debate by jumping into conclusion by offering deregulation. This is why it’s important for us to have a strong concept beforehand.

Josua stated that 20 years ago, NPC was not efficient, corrupt, and not reliable. But when the privatization implemented, currently the company handling electricity  is also not efficient and not reliable.

Therefore, what need to be done is that in the beginning we need to build some argumentation by drafting questions on what need to resolved. Here, we can focus to identify what need to be done to stop privatization.

Will renewable energy also getting privatized? What we believe in the energy democracy, the truth is if we let the private sector decide so they will not invest in the renewable energy sector since it’s not cheap. 

Next is Bro. PS Kuncoro from PPIP asking whether the privatization in Philippines conducted by dividing between power plant, transmission, and distribution. Then, after the people realized on the worse service of electricity, they do the class action. Responding to this question, Josua conveyed that there is bad impact when electricity being privatized. When talking about electricity industry, there will be separated company each for power plant, for transmission, and also for distribution. There’s supplier company. Even, the power plant owned by the state will be sold to the private. The transmission will be privatized. The private will come start from state asset through national company network cooperated with the company from China and then they will take over the transmission line. What is the impact to the workers? In the beginning, workers receive big salary.  Then they replaced by fresh graduate with similar wage or forced to accept lower salary, since under the law in Philippines when privatization happened all workers can be terminated.

When one company being privatized, for example the transmission network, we want to include the clause the company take over should respect the trade union and the CBA (collective bargaining agreement) but that’s difficult. This clause is not incorporate in the law, so what happened is when private sector take over, all of sudden termination happened.

Next Andy asked whether the public in Philippines didn’t support the  movement to hinder the privatization? Answering to this question, Josua stated that we were able to postpone the privatization for about 10 years. At that time the first law was created in 1993 but it passed in 2001. During those time, we were able to postpone it.  Public realized that if electricity being privatized, the price will be very expensive for all. But the problem is, as I stated previously, we will only get their support as long as they don’t need to bear the consequences or not angri with the electricity situation. The problem is that the government doesn’t care about the people since NPC is not working well. Electricity black out for days and this is the chance for them to say that should it be privatized there won’t be any black out or power outage. And the people can’t stand anymore.

That is why we need to keep working with the people and stated that the people have rights to electricity and shows that there are other solution can be taken other than privatization.

Next is The General Secretary of SP PLN Bintoro Suryo Sudibyo stated that the political climate in Philippines is very much alike with Indonesia. The modus to legalized privatization is also alike. Even using energy crisis issue, electricity to its economic price, to the free competition. on the other hand  the parliament and the executive are also almost alike. So the privatization can be implemented legally. Then what we’ve been doing is also the same as what’s being conducted by our trade union brothers and sisters in there. Starting with the judicial review to the rallies on the street, all of them being implemented. Including using media and seminar.

The question is, actually what make the privatization in Philippines can be stopped, besides what’s being conveyed? From there we can learn so then the privatization won’t be implemented in Indonesia. Does that actually the government intention or it’s purely the intention of the employer penetrating through the government, both executive and legislative? Responding to this question, Josua said that one of the biggest factor why we lost against the EPIRA is the fact that IMF, ADB and World Bank working together pushing to the Philippines to pass the law. 20 years ago, NPC had a big amount of debt. So the solution to get more loan from the IMF, World Bank and ADB is by following the recommendation IMP by privatizing electricity industry. So one biggest thing contributing to our lost is international pressure. 

On the other hand, since the people want to get better electricity, they also think that it should be privatized. This is the problem. Since the NPC itself also fail in providing sufficient electricity. However, now even IMF and the World Bank also disagree if this problems settled with privatization. The fact is that the privatization is not really solving the problems. For that, we should have a strong effort in fighting for privatization.

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