Globalization and open markets are the mantras of the new economy. After being introduced a few years ago for the specific purpose of stimulating the economy, deregulation (in telecommunications, transportation and electricity) and the globalization of markets are now a focus of international controversy because of their impact. Although the financial goals sought with open markets seem to be achievable, the same certainly cannot be said for the promises of lower costs and improved services. In fact, the public and workers are victims of this new economy. In an effort to achieve better protection for the public and workers, social groups have been created and unions have joined together.
The deregulation of electricity, which began in Europe, is now in full swing in North America. Its effects are already being felt in Central and South America. At the international level, the unions that represent workers in the electricity industry have decided to join together too.
The stakes are very high: beyond our jobs, it is the sustainable development of electricity for developing countries that lies in the balance. This development is one of the E-7s priorities but one that may be sidestepped, because of deregulation.
WHAT IS THE S-7?
In 1991, the chief officers of Hydro-Qub0065c and lectricit 0064e France proposed that the worlds leading power utilities join together to ensure the development of the electricity industry in a context of growing environmental concern.
France (EDF), Germany (BWE), Italy (ENEL), Japan (KANSAI and Tepco) and Canada (HQ and Ontario Hydro) created the E-7. Not long afterwards, the United States (Southern Edison) joined the consortium.
The waves of globalization, deregulation and privatization have brought the E-7s activities under closer scrutiny from various groups. With the failures of privatization in Great Britain and Australia and of deregulation in the air travel and telecommunications industries, the unions in the power industry decided to create a labour counterpart to the E-7, called the S-7 (S for syndicat, or union).
The movement was initiated by the unions here, in co-operation with the unions of the Fdration nationale des mines et de ln0065rgie (FNME) in France.
AMERICAS CONFERENCE OF U.N.I.-AFFILIATED ELECTRICITY UNIONS
Prior to the E-7 meeting, Argentina hosted the first international conference of powerworkers unions on September 28-29-30, 2000. A number of countries were invited, including Qub0065c.
Since Hydro-Qub0065c International is very active in that region, the QFL asked Brothers Richard Perreault, president of Local 1500, and Charles Paradis, CUPE staff representative, to represent the Qub0065c labour movement at this first Americas conference of electricity unions affiliated with UNI (an international network of unions).
At this meeting, there were delegates from the majority of unions representing power workers in South and Central America. The theme was How to organize as unions in the context of a deregulated power industry.
The first topic focused on the consequences for workers of globalization and the privatization of power utilities. There include immediate effects on collective agreements, as well as the massive job cuts that follow. In many cases, established unions disappear for good.
For the second session, each group summed up the situation in its country. In South and Central America, governments have spun off public utilities, leading to major job losses but not the lower hydro rates that the politicians had promised.
A British unionist came and gave a presentation on the current situation in Great Britain after ten years of deregulation and privatization.
Private companies have gradually reconstituted a monopoly; the promised rate reductions have not materialized; and the electricity holding corporations are investing more and more in the natural gas and telecommunications industries. And, of course, there have been widespread, massive job losses.
A US brother warned us against the WTO (World Trade Organization), which seeks to have the electricity industry exempt from any regulation, preventing governments from regulating their own industries. Indeed, during the meeting in Argentina, the Senate was debating the issue. Here at home, the impact of such a decision would be an end to inter-financing, or cross-subsidization, along with substantially higher bills for Qub0065c taxpayers.
The electricity industry is seen as having the greatest potential for economic development, outstripping even the computer industry and telecommunications. This is why the big multinationals are interested, and why they are applying steady pressure.
In conclusion, the conference made some recommendations to oppose the unwanted, unintended consequences of deregulation and globalization:
- that the international union network encourage exchanges between national and local unions;
- that unions engage in lobbying and bring pressure to bear to demand protection of workers rights in the context of globalization;
- that the big private monopolies be approached directly about playing an active role in protecting working conditions and jobs;
- that unions combat any dismantling of public power utilities;
- that negotiations be conducted with the big corporations that have subsidiaries around the world to establish decent working conditions for all workers, regardless of where they work.
The conference was very well organized, and brought home the importance of decisions made at the global level. International decisions strongly influence the decisions of our own government and corporation. The situation shows the need to organize as unions beyond our provincial structures if we want to combat these huge world monopolies.
On October 11-12-13, 2000, Qub0065c hosted the first international conference of powerworkers unions, held simultaneously with the E-7 conference in Qub0065c City.
The event, instigated by the three CUPE locals at Hydro-Qub0065c and chaired by Richard Perreault, was a success. Above all, though, it demonstrated the need for an international union coalition to improve our capacity to organize in a context of deregulation and globalization of the power market.
The president of Local 1500 kicked off the conference by reminding his fellow unionists that the main purpose of the meeting was to give the various unions an opportunity to exchange information, concerns and outlooks and to come to an agreement on a common union position with a view to creating a strong, dynamic voice for labour in the interests of all.
ELECTRICITY, A SERVICE FOR ALL?
The E-7s basic mandate is to promote the establishment of electricity distribution systems in developing countries in a framework of sustainable development.
Can this be done in a deregulated market? This was one of the issues considered by the E-7 members at their October meeting.
The experiences shared by trade-unionists from the countries represented in the E-7 indicated that deregulation was very incompatible with collective interests.
Here and elsewhere, electricity has become a market commodity, just as it was in Qub0065c before nationalization in 1962.
Back than, 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. Electricity was developed and distributed mainly on the basis of distances and, above all, profitability. Although essential to a decent quality of life, electricity was a commodity, a product to be bought and sold. Areas that were far away from the big centres did not have access to electricity unless they paid exorbitant rates.
The trend right now is for a return to the past. With the governments support, Hydro-Qub0065c will not develop new projects unless they are profitable. The government corporation applies the same approach at the international level, creating alliances with big financial partners a step that could be beneficial for world development. But the corporations participation is conditional on good economic returns and profitability. Were a long way from the social development of electricity. Electricity has now become a commodity that is developed in return for the promise of healthy profits.
UNIONS A NECESSARY PRESENCE
CUPE National President Judy Darcy sees clearly that unions have to ally with each other if they are to do better in countering the economic ambitions of the E-7 countries. She congratulated the Hydro-Qub0065c unions for organizing this type of conference, since we are in the midst of privatization and a move to open markets.
We have to develop our own vision and influence the decision-makers. This can only be done from a position of strength and with mobilization at both the national and international levels.
QFL president Henri Mass 0063ontinued in the same vein. The conference was a very good initiative, and we have to forge ahead and pave the way for the international labour movement. He reiterated that the powerworkers unions are the strongest and most influential, with the best resources: that it is crucial that we pay a part in tackling the great challenges facing the world; that these challenges enrich employers and shareholders at the expense of workers and human beings. For example, since the negotiation of the Free Trade Agreement, 40% of Canadian children live in poverty; and in Mexico, 40 million workers earn $1 a day while wealth accumulates steadily in North America.
He stated his conviction that every human being should have access to electricity. This is a humanitarian issue on which unions can have enormous influence. And we took immediate steps to bring that influence to bear the same evening.
A FIRST MEETING WITH THE E-7
Armed with a common international union position, the new S-7 met with the E-7. This position calls for:
- creating a formal forum for discussions between the E-7 and the unions in these corporations for the purpose of exchanging information and points of view, understanding and influencing;
- agreeing on a continuous exchange of information;
- announcing the creation of a union forum parallel to the E-7;
- discussing resources that the E-7 can provide for us to continue our activities.
We have to make sure that electricity remains in the service of human beings, and not the contrary. As well, the E-7 and its members have to know that we exist and that in the future they will have to come to terms with us.
The meeting took place on Thursday, October 12. The members of the E-7 received our demands and will follow up on them.
Deregulation is just beginning in North America. The consequences, if any, are barely perceptible. In Europe, though, open markets and privatization of the electricity industry are well entrenched, and from what our fellow unionists had to say, the results are a far cry from the Klondike promised by our politicians and senior management at Hydro-Qub0065c.
In practice, the era of privatization, globalization and deregulation has resulted in the loss of more than 250,000 jobs, including close to 100,000 in the power industry. There was overproduction of power, causing rates to drop and eliminating competition from small suppliers. Once the competition was gone, rates skyrocketed. Private monopolies replaced government monopolies, with a decline in the quality of services.
For the labour force, there were vast early retirement programmes, reducing the pool of expertise and know-how. Deregulation has not serve really served either the consumer (except perhaps at the outset, when rates dropped temporarily) or workers. The only ones it has served are the shareholders, who have made money at the expense of everyone else.
A dismal picture, perhaps, but very realistic!
This is what the three locals at Hydro-Qub0065c had to say.
Effects of deregulation on the public and on our members
EFFECTS ON THE PUBLIC (GOVERNMENTS)
In the short and medium term, our governments see deregulation as a way to reduce the deficit and the debt, by increasing revenue through partial or complete privatization of government corporations or separating these companies so that they compete with each other or increase their revenue from foreign markets. The government line of thinking is supported by both financial institutions and major corporations, who see very lucrative market opportunities, either by taking over the companies thus created or by putting pressure on the market with volume purchases.
EFFECTS ON THE PUBLIC (PEOPLE)
For the public, which constitutes a captive clientele that often has no choice about its source or means of supply, the problem remains unchanged: it can either support the government in the battle against the deficit and then hope that it will increase our income (and reduce our taxes) for the greater good of the collectivity (at least thats what they would have us believe), or else swim against the tide and preserve our public services in the service of the population. The basic debate is the same for all our public services: water, education, health care, waste disposal, transportation, etc., but what the public is often not told is that in the medium and long term, the pressure on residential rates would be intolerable. Our governments will again be telling us they can no longer provide the energy to heat and feed us at these rates, that they are losing money, and what is worse, if they dont cut rates for the big corporations even more, they will turn elsewhere because thats an option for them in a deregulated market. But the small consumer doesnt have that possibility! What is even more dishonest is their claim that the medium and large companies finance the supply of power to the residential sector. But unless Im mistaken, the residential sector largely paid for the financing of the autonomy of its electricity supply, at least in our country and in many others.
There is no lack of examples. Look at what has happened in the airline industry here: remote areas are no longer being served, or are only served at great expense. Or take the telephone industry: basic rates go up year after year at a dizzying pace, while the cost of long-distance calling for companies drops steadily. There are places where the privatization of drinking water has literally been the death of populations, by depriving them of this basic necessity of life. Privatization of power in some countries has converted government monopolies into private monopolies that have jacked up rates to disastrous levels for the public and eliminated thousands of jobs. These are just a few examples of a reality that is becoming more and more obvious.
EFFECTS ON WORKERS
The general consequences are the same as for the public, but the personal effects differ. Some see great new opportunities, new challenges: if I no longer feel an attachment to this company today, or to this or that one tomorrow, in the end Ill choose the one that offers me the most. Were told that in the not-very-distant future a worker will change careers up to seven times in a lifetime. For others, though, the changes are a disaster and the phenomenon is more and more distressing: disillusionment, burnout, loss of self-confidence, withdrawal at various levels, union structures that are overwhelmed, massive job cuts, reorganization of work, uprooting of families when both spouses are part of the labour market: these are just some of the symptoms. In the medium and long term, the impact on workers health and the public in general will be catastrophic, as more and more studies are showing.
And were supposedly going to help some countries move into a market economy, were supposedly going to help some developing countries to industrialize If at least our governments had the political courage to include certain clauses in their free-trade talks to force companies to abide by some minimal labour and environmental standards! As industrialized countries, I think we have a duty to ensure that our brothers and sisters around the world benefit from our experiences, to avoid making the same mistakes, for the greater good of all peoples. Thank you.
This conclusion is share by the majority of participants at this first E-7 conference.
Lower costs, increased production and the transfer of public facilities to the private sector have mobilized unions in opposition to deregulation. Stronger unions, better informed about the impact of open markets, countered the effects of staff streamlining.
For the public, the situation is more dismal. The anticipated drop in rates is not about to happen; in fact, residential bills will probably go up.
German workers have been faced with deregulation for three years now, and the consequences have been devastating: 10,000 MW of excess production, 60,000 jobs lost, vast early retirement programmes, reductions in billing rates aimed at eliminating competition. In short, deregulation has had the same consequences as in Great Britain and Australia.
Since electricity markets were opened up, the new companies have had strong growth in profits. But the reverse side of the coin has been the loss of almost 250,000 jobs in the power industry in France. Like everywhere else, environmental rules and considerations have been ignored, to such an extent that a tax has been introduced and passed on to French consumers.
Since last March, 28% of the retail (residential) market has been open to free competition. The first effects were felt in a sharp drop in electricity rates, especially as new players enter the Japanese market. Consumers saw Japanese companies reduce their rates in turn, to the extent that the viability of certain companies has been seriously jeopardized. In the short run, major corporations are expected to fail, leading to a private monopoly and massive layoffs, as well as a considerable decline in the overall remuneration of Japanese workers in the electricity industry.
So far, Italian unions have been able to protect their gains and jobs in a context of moderate deregulation. But recently, there has been growing pressure for a faster move to open markets. The union representatives of Italian workers fear they will suffer the same fate as their European colleagues. They intend to work with the latter to create a European fund to help workers in the power industry preserve their jobs.
This first international meeting was a success, and will be followed by others. We have to organize at the international level so as to be better prepared and defend ourselves if necessary.
Here is the closing press release from the conference.
CREATION OF AN INTERNATIONAL LABOUR FORUM ON THE POWER INDUSTRY
Qub0065c City, Friday, October 13, 2000 After two days of discussions at the International Conference of Powerworkers Unions, the 40-odd delegates from France, Italy, Germany, Japan, Ontario and Qub0065c endorsed common positions for responding to the impact of deregulation in the power industry, particularly in developing countries.
SUSTAINABLE DEVELOPMENT IN A NEW ENVIRONMENT
Created 8 years ago and composed of the worlds seven largest companies in the production and distribution of electricity, the E-7 has the mandate of promoting the establishment of electricity networks in developing countries on a basis of sustainable development.
Today, the E-7 is considering this mandate in an environment marked by deregulation, open markets, globalization and the pursuit of optimum competitiveness.
POWER: AN ESSENTIAL SERVICE, JUST LIKE WATER
So at the International Conference of Powerworkers Unions organized by the Hydro-Qub0065c unions (Locals 957, 1500 and 2000 of the Canadian Union of Public Employees CUPE-QFL), the unions in these corporations decided to create a parallel forum to the E-7.
Delegates also stressed that electricity, like water, must be considered an essential service, not a commodity.
THE WTO MUST WITHDRAW FROM THE POWER INDUSTRY
Consequently, no activity related to the electricity industry should be subject to arbitration by the World Trade Organization (WTO). Subjecting them to WTO authority would be a threat to various electrification projects in developing countries, whose populations obviously cant afford to pay the going rates in Northern countries. The powerworkers unions do not want this to aggravate the existing economic and social imbalance and gap between North and South.
FOR A LABOUR VISION OF SUSTAINABLE DEVELOPMENT
Ms. Judy Darcy, National President of the Canadian Union of Public Employees, emphasized the importance of this International Conference of Powerworkers Unions, not just to keep a close watch on the activities and decisions of the E-7, but also and above all to develop our own vision of sustainable development, a labour vision, a concerted, international labour vision.
We should never forget that the workers and peoples of developing countries have repeatedly said that they wont accept development at all costs, and certainly not at the cost of foreign control of their own resources, Ms. Darcy told delegates.
EVERY HUMAN BEING SHOULD HAVE ACCESS TO ELECTRICITY
QFL president Mr. Henri Mass 0069nsisted on the need for every human being around the planet to have access to electricity, arguing that electricity should be a lever for eradicating poverty in the world, and especially in developing countries.
We have to come up with projects that would result in the E-7 investing on the basis of social, labour criteria, in developing countries, while encouraging the emergence of modern communications and distribution systems, said the president of the QFL.
CREATION OF A FORMAL LABOUR FORUM FOR DISCUSSIONS WITH THE E-7
In summing up the two days of discussions among union partners in the power industry in different countries, Mr. Richard Perreault, conference organizer and spokesperson for the Hydro-Qub0065c unions, reiterated the desire of the various unions to pursue the initiative by creating a formal forum for discussions with the E-7.
The forum will allow for the exchange of information about E-7 decisions and actions while preserving the independent action of the unions involved. We know that some E-7 corporations are having problems establishing operations in the South, particularly with respect to the local populations perception of foreign control of their resources.
OPENNESS IS NECESSARY
If the E-7 is open about its activities and if the relevant information is transmitted to us, we think that this labour forum could make their work easier, providing that social criteria and our values as trade-unionists are taken into account in these development projects, concluded Mr. Perreault.
The international labour forum should meet as often as the E-7 does, and even before each E-7 meeting so that, as Judy Darcy said, we can impart our vision of sustainable development when the corporations make decisions.
A NATIONAL COALITION
Since several of the Canadian powerworkers unions were present, the creation of a Canadian Council of Power Workers was also on the agenda. After sound discussions, the Council was created on October 14, 2000.
In the context of merger after merger by employers, it is more necessary than ever to create a national coalition of power workers.
Joining together will help us organize more effectively and discuss employer orientations and union strategies.
All agree on the need to create such a movement. We have to find solutions so as to take a common stand on the move towards an open power market in Canada. We have to help each other and come up with pragmatic solutions to protect our members, who are increasingly confronted with contracting out, technological changes, and so on. We have to come up with solutions for building closer ties with the rank and file in a context of heightened competition. We also have to develop strategies within this new niche, identify the good and bad opportunities, innovate in bargaining strategies so as to obtain the maximum for our members.
Each Canadian union has its own expertise. We have to put it to use for the benefit of our fellow unionists across the country.
After good discussions, the Canadian Council of Power Workers was created on Saturday, October 14, 2000. Its another step towards protecting and enhancing our rights.