First of all, I should say that I think this is the start of a process of thinking and analysis that is simply the beginning of a collective awareness that will help each of us in our respective unions to understand certain decisions made by our corporations, to react and to establish shared strategies so as to better defend the members we represent and to ensure that human beings are always taken into account in economic decisions.
In a framework of deregulation, can the E7 play the role that it has defined for itself? i.e., use its experience and resources to contribute to sustainable development of electricity around the world?
Its a big question, and one thats hard to answer. In this presentation, I can only speak from our own experience here in Qub0065c, from what we know of our governments decisions, the actions and direction of Hydro-Qub0065c, a public corporation that is the only electricity company in Qub0065c, and recent decisions that substantially change the way our hydroelectric resources are managed.
On this basis, Ill attempt some answers.
To start with, a brief history of the development of electricity in Qub0065c:
Before 1960, electricity was a private and unregulated industry in Qub0065c. The big urban centres were electrified, while rural areas still relied on oil lamps for lighting. The cost of electricity depended on how close or far away the generating stations were, and it was impossible to electrify other areas unless the U.S. or English-Canadian monopolies decided it could be profitable. At the time, electricity was a commodity, a trading item.
In the mid-1960s, under Ren 004cv0065sque, the nationalization of electricity was associated with a slogan that still echoes clearly: Mat0072e chez-nous, Masters in our own house.
Political determination resulted in electricity becoming a basic necessity supplied as a public service. Hydro-Qub0065c was created with the mandate of providing electricity to all citizens of Qub0065c at the lowest possible cost.
It was the start of what was called the Quiet Revolution: the choice of hydroelectricity, vast engineering projects, rural electrification and standard low rates for all citizens resulted in significant economic development, collective wealth and the establishment of social policies and programmes in Qub0065c that are envied by many.
At the time, regulation, nationalization, public utility and sustainable development went hand in hand to ensure a better life for all Quebecers without jeopardizing the future.
There were a few mistakes along the way, due mainly to the enthusiasm for a new social project, since the First Nations were not part of the development. But this mistake was subsequently corrected during the construction of the James Bay hydroelectric development.
What is the situation now? Our power industry is being transformed by deregulation, profits, the threat of a change in Hydro-Qub0065cs status as a public corporation, and legislative changes to force Hydro-Quebec to meet the demands of a commercial, profit-making environment.
Some gains seem to be under attack: standard rates, Qub0065c ownership, and priority to development projects that meet the needs of Quebecers all in the name of freedom of the market.
Under pressure from a more right-wing government, pressured by the advocates of the globalization of markets, Hydro-Qub0065c is gradually being transformed into a full-fledged commercial enterprise. It now manages in the language of yields, shareholder returns, exports, electricity markets, competitiveness, North American rules, market share, etc.
Today, although they realize the importance of Hydro-Qub0065c for Quebecers, Hydro-Qub0065c and the government see a substantial share of the power generated as a for-profit commodity.
New generating facilities are only developed when the cost of the new power is lower than the North American market price; its a far cry from the social development of electricity.
In the wake of this commercial policy, Hydro-Qub0065c has expanded its international operations to take advantage of the deregulation of the industry and strong growth in the global demand for electricity.
It is creating alliances with other countries alliances that could be beneficial for international development. The problem is that Hydro-Qub0065cs participation in projects in Senegal, Peru, Panama, Guinea, Argentina and so on is conditional on the promise of economic returns and an attractive rate of profit.
Electricity has now become a commodity that is developed if there is a promise of worthwhile profits.
As for sustainable development, electricity in Qub0065c is generated using hydraulic resources. In response to the demands of First Nations, the inhabitants of producer regions and other ecological groups, the Qub0065c government has obliged Hydro-Qub0065c to abide by strict environmental rules. In this area, I think the company has fulfilled its mandate.
In addition, it has decided to that its five-year plan will include research and facilities based on alternative soft energy sources, such as biomass and in particular wind power. But here again, unless there is public pressure the decision will only be made if the initiatives are judged to be profitable.
Where there is less unanimity about Hydro-Qub0065cs operations is in the development of transmission lines and generating facilities destined solely to serve the export market. While the population of Qub0065c is ready to tolerate economic development projects required for its own growth, it is less tolerant of export projects.
In short, and in response to the question raised at the outset in relation to Qub0065c i.e., can Hydro-Qub0065c, as a member of the E7, use its experience and its resources to contribute to sustainable development of electricity in its own province? I think it was only because of the existence of this regulated framework, the spirit of public service and the vigilance of the government and the public that the corporation was able to provide Qub0065c with power that serves the needs of the population in accordance with the criteria of sustainable development.
In recent years, though, in the context of a free-market economy and deregulation, electricity as a trade commodity is playing a larger and large role and is shaping the companys economic actions and decisions.
In light of this, can the E7 honour the commitments it has made to the worlds population?
The members of the E7 want to develop or have developers benefit from their expertise in all areas of the power industry, in the framework of sustainable development.
In 1987, the World Commission on Environment and Development defined sustainable development in these terms:
Development that meets the needs and aspirations of this generation without compromising the capacity of future generations to meet their needs.
Based on this definition, sustainable development should take into account all the repercussions of the development of the power industry, i.e.:
- the environmental impact;
- economic growth;
- the expansion of social welfare programmes.
Electricity is a vital tool for economic development and a better quality of life. Like water, electricity is a basic necessity belonging to all inhabitants of the planet.
Those who see themselves as the leaders of this industry should shape their action with this in mind, and in a spirit of international solidarity.
What are they doing about deregulation and globalization? Are they trying to adopt the model imposed by the evangelists of the new economy? Are they taking advantage of the situation to become princes of the world economy at the expense of those they are supposed to help?
These are very disturbing questions, because these companies are operating in an industry that must be the first to develop in order for certain countries to ensure their own growth and pave the way for economic and social development worthy of the 21st century.
It is improbable that in an environment focused solely on profits, increasingly run and controlled by economic might, the E7 can, even if it wants to, play its intended role taking into account social values and jobs with acceptable working conditions in a world that does not shun the exploitation of dire poverty, childrens work and highly mobile corporations.
I can only talk about what Hydro-Qub0065c has done. But after a few examples of development projects involving workers and local governments, the corporation, through its international subsidiary, is a frequent investor in privatization projects imposed by the World Bank or the IMF, forcing governments to sell off their public resources for a pittance.
In association with other public or private monopolies in the electricity industry, profitability remains its main consideration.
The first steps taken are always to downsize and roll back of working conditions. Even if, in the best of cases, they work with local populations, often at the cost of a reduced quality of living for the latter.
In this brutal, free-market competition, how can the E7 take environmentally friendly development, or better social welfare programmes, into account for local populations, since such projects are often seen as less profitable? Without international rules, I dont think any group can do this.
It becomes even harder if electricity becomes a commodity subject to rules dictated by the World Trade Organization.
At the present time, these dictates are being challenged. After Seattle, many people are beginning to react to globalization and the imposition of a single model. In the United States, the population has begun to question competition in the power industry and is asking public authorities to resume playing their role.
Many groups are mobilizing and demanding the establishment of new arenas for discussion, and the inclusion of unions, NGOs and other groups in the big organizations that shape international policies.
Some of those who preach globalization are even beginning to fear a reversal for that model in the face of growing protest.
The promised Eldorado is fading from sight with the weak economic returns from industries producing goods and services.
In light of this trend, I think that the only way to exercise leadership in the electricity industry would be for the E7 to take a firm stand against the current model and develop a network of global solidarity that would include human, financial and technical resources made available to governments and local populations. The E7 should create an advisory committee composed of unions, social groups and peoples representatives so as to truly take into account the interests of all.
In conclusion, and at the risk of sounding chauvinist, I think that the model that prevailed in Qub0065c in the 1970s, when commercial considerations were excluded from hydroelectric development, could serve as a starting point. This is the only way we can meet the 21st centurys energy requirements in the interests of the men and women of the planet.
Our role is clear: to ensure that human beings are all that matter, and that techniques, capital and natural resources such as electricity serve them alone.