Learn from the Experience of Different Countries in Fighting Privatisation

What would happen if union leaders in Asia Pacific gathered in a room to share their knowledge on the impact of decarbonization policy on electricity sector, renewable energy, a just transition? Surely, there was an international solidarity and awareness to stop privatisation.

It was Public Services International (PSI), a global union federation of more than 700 trade unions representing 30 million workers in 154 countries, who held a workshop on PSI Energy Affiliate Workshop Fighting for Publicly Owned Renewable Energy Systems. The workshop was done online via zoom on Thursday (2/9/2021),
Opening the workshop, the Regional Secretary for Asia Pacific, Kate Lappin, express that she heard a report on the importance to shift away from fossil fuel to renewables sources. But unfortunately, there are many parties who turn it into a mask to privatisation.

“When the energy is controlled by market mechanism, in the end, they would not be able to provide affordable energy for the people,” said Kate. She criticized the adverse impact of energy privatisation.

Kate then took us to see experiences of different countries, the impacts of privatised energy. Departed from there, she asserted that PSI must do a strong campaign so that energy will stay in the public’s hands.

Private sector pushes privatisation. For example, what happen in Indonesia, the Philippines, and Vietnam. In their proposal, they would find renewable sources. But in practice, they did not entirely move away from fossil fuel.
“We have to prepare our steps. It is true that climate change in an integral part of public service. But it does not mean that we have to open public service to private sector,” she asserted.

This workshop, continued Kate, is an opportunity for us to collaborate. From here we can see some future agendas that we can work on to stop privatisation. Including to formulate a plan, what can we do post-covid 19.

There were four speakers in the workshop. They came from South Korea, India, Australia, dan Indonesia.
First speaker, Tae Sub Nam, the Head of FKPIU’s Strategic Planning Department, Federation of Korean Public Industry Trade Unions/Korean National Electrical Workers Union, said that so far there have been efforts to change the ownership of public energy in Korea. He said that this is a result of lobbies from main energy provider. From year to year the private ownership is increasing. This is one of the impacts of state electricity privatisation.

“There is a newly established company, 2019, that controls more or less 27%. This increases the privatisation ratio of private control over electricity, and increase the price of electricity as a public good,” he said.

This fact, said Tae Sub-Nam, shows that renewable energy must be in the hands of the public, not owned by the private.

In Korea, renewable energy is increasing over the years. It changed the market. The government also issued a policy that companies must reduce the carbon dioxide emissions by 2030. In addition to that, the government decided to implement the plan for renewable energy in 2025.

“There will be 11.000 jog loss if this really happen. Besides, it is estimated that there will be more energy related job that will be gone by then, he said.

Then what is the union’s respond? On national level, the government held a social dialogue with union representatives. Not only to decide what strategy is the most appropriate to address social inequality but also solution to the labor problems.

There are incompatibilities in labor market. One of them is education that could not match with the labor market demand. Therefore, the employment grow, and job loss will be equally big.

We will also encourage the policy of just transition, the policy to expand the renewables. It is believed that the grip of private sector on renewable energy will only resulted in energy crisis.

“What we do together with affiliates is to map out the just transition,” he said. He then continued that he already contacted ILO and other international organisations to push the just transition.

“This movement must be expanded to all over the world. We must share our strategies. We have to involve other elements of society, not only unions. We see the relation between climate crisis and social justice inequality. Therefore, we can expand our campaign,” he highlighted.

Meanwhile, Prema Walter, Vice President, Tamilnadu Electricity Employees and Contract Labourers Union, in India said that public controls energy service as much as 40%. The 60% is controlled by private. Main Energy generation source is geothermal, steam, and nuclear.

Prema also said that the state electricity company is in deficit. India’s electricity generation also moves very slow.
“There is a connection with monsoon. Geothermal generation during monsoon must be closed. Then, on other seasons, the generation will rely heavily on geothermal. The geothermal plants must work really hard during these seasons to produce electricity while other plants were closed down,” said Prema.

Renewable energies, through the years, are increasing. But today, most renewables are managed by private sectors. Because they receive subsidy from the government.

Some time ago, the federation of electricity union in India held a demonstration to reject privatisation. Unions also held dialogues with ministries and other stakeholders. “We will keep protesting and fighting against privatization,” she ended her sharing.

Meanwhile, Michael Wright, Assistant National Secretary of the Electrical Trades Union (ETU), shared the experience of unions in Australia in fighting against privatisation.

Electricity grid in Australia was managed by a state grid company. But then, there were pushed to do privatisation, by saying that privatised electricity will be cheaper.

Privatisation in Australia reached its peak in 2009. Since then, there has been oversupply of electricity. This profits a small group of people.

He told that in a state, in 1996, electricity was owned by the state. But then, electricity was privatised. Although the unions protested them, but the privatisation kept going.

“Previously, we had not had electricity crises. But then, there was bush fire,” he said. The fire killed 37 people, injured 400 people, and destroyed 2000 houses. This was a disaster.”

One of the reasons why this became a disaster was that we had terrible electricity assets. After the fire, the government built and paid compensation for victim families in a huge number. Including repairing the electricity grid. It shows clearly that the private companies prioritize profit over people.

Meanwhile, another part of the country, in 2015, had an elected state government who won the election and promised not to privatize the electricity. Unions held campaigns at grassroot level to fight against this policy. The campaign is called “Not For Sale Campaign.”

“It was a big campaign. We already had the government who was on our side. But it turned out having someone in the government who was on our side was not enough. Electricity is not only for the unions, but also for the people,” he said.

The government committed to not privatise the electricity. Including investment. Investment is to build new infrastructure. There is an increasing asset owned by the public, operated on renewable energy generation and owned by the public. This is a big victory for workers and communities.

“This asset will be managed well, or else we will see another disaster,” he asserted.

In relation to private electricity companies, there are several obstacles. First, in one of the private companies, we found a fact that workers were not paid enough. There are two workers who were brought from the Philippines and Thailand who were paid less that they should have been. The effort to build renewable energy, on the other side, also creates employment.

There has to be a comprehensive national workplan. However, the conservative government does not do anything. The failure to coordinate on national level does not stop the renewable energy. We have lost the opportunity to create jobs that have been the hopes for the people in energy sector.
There are also offshore energy generation. The number of workers is also big. Not only the construction phase, but also in the maintenance. Unfortunately, the federal government failed to do that.

The last speaker in the workshop was the General Secretary of Persatuan Pegawai Indonesia Power (PPIP) Andy Wijaya, from Indonesia.

Andy said that in Indonesia, fossil energy sources dominate the mix as much as 86,45%, while renewable is 13,55%. The composition of energy mix is 63,52% coal, 18,70% gas, 7,59% water, 5,63% geothermal, BBM+ BBN 4,23%, and other new renewables 0,33%.

“Per April 2021, the government controls 59,4% of generation. While the private or IPP (Independent Power Producers) controls 40.6%. This shows that private controls big share of generation,” he said.

Indonesia has 6 big islands and thousands of small islands. PLN (Perusahaan Listrik Negara or State Electricity Company) owns fossil energy as much as 56.166 MW. The private owns 6.237 MW. The comparison is 88% to 12%. On the renewables, PLN owns 7.626% and the private owns 2.864 MW. The ratio is 72%:28%.

The ratio, Andy said, shows that PLN owns more than 76%. However, the ratio will change as we are currently building 35,000 MW electricity project. Whereas now, there is oversupply of electricity as big as 36%. And there is still 72% that is not integrated into the grid.

With the addition of 35 thousand megawatt, the ratio will change. IPP will dominate. We can imagine if the private control 23 MW, the state’s plants will stop their production entirely.

IPP is protected by TOP (Take or Pay) 70% policy. PLN is obliged to buy 70% of the IPP’s capacity, regardless PLN will use it or not.

The use of fossil energy is still big. At the same time, Indonesia’s constitution mandates the state to provide affordable quality electricity. This is where TOP become a problem. PLN must buy the electricity produced by IPPs. The price will be higher, as privates also make profit from the electricity they sell to PLN.

The privatisation efforts in Indonesia have been going on for a while, since 1988. Related to that, PLN Workers Union (SP PLN) rejected IPO (Initial Public Offering), selling off shares of the company in 1998 and 2005. Unions fought against that. The IPO was cancelled.

Unions filed for judicial review of Law No. 20 of 2002 on Electricity. The unions won it. We also rejected the program of handing over government-owned power plants management to foreign. We also filed for judicial review when the Law of Electricity enable private ownership.

“Today, we filed for judicial review against Employment Creation Law, especially related to electricity cluster. We are also fighting against holding-sub holding and IPO,” said Andy.

After all speakers share their experience, there were some participants who gave comments and interventions. One of them was Youngbae Chang, Executive Director of PSI Korean Council don’t only talk about electricity, but also relate electricity with other issues.

There needs to be a specific approach to energy. Here, we need the democratic government. Therefore, we have enough time to reach our goals. Whatever we do we have to increase the ration of renewables. The government must participate in its management so that we will have just transition in our country and be role models in other countries.
Noh You Keun, External Relations of the The Korean National Electrical Workers Union (KNEWU), told that this year, the government created a carbon committee and encouraged the energy transition. Some politicians support this policy. However, companies still push for privatisation. Unions then held a social dialogue to create just transition and together with that, they did research and published a book on just transition.

Unions must do something with the privatization. Privatisation have been started 25 years ago, and it is proven to have adverse impacts. It increased subsidy. Renewables are better and cheaper.

Closing the workshop, David Boys, PSI Deputy General Secretary said that unions in energy sector is very strong and have a long history. The fight against privatisation in Thailand, India and Indonesia. It is exhausting. But so far, we won the fight.

One of determining factors in this win is affiliates reported any attempt of privatisation to PSI as early as possible. We have studies on energy privatisation. This is PSI’s capability in giving guidance to affiliates to fight against privatisation.
Unions use different ways. They also involve the public. Therefore, unions understand the danger of privatisation. There are so many studies done. The government must listen to testimonies of unions on the adverse impacts of privatisation. There is research that will be published soon on privatisation.

We need to see different strategies. We need to write them down and analyse them. For some of us, building an alliance is by seeing different perspective use.

PSI as a union for democracy that has members in energy sector, uses this analysis to prove that privatization is not in line with renewable energy.

David asserted that we must connect climate crisis with energy. Where we need a progressive policy and make it into priority.“We depend on our affiliates and energy sector to lead this struggle for our member and also the sustainability of our lives,” he ended his closing remark.

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