WEEK OF ACTION Against Illegitimate Debt, Unfair Trade & Worsening Poverty
17 October 2007
MANILA, Philippines – In observance of the International Workers Day of Action, workers-led contingent of the Freedom from Debt Coalition marched to the headquarters of the Asian Development Bank (ADB) today as they called for a halt to the Bank’s anti-labor policies and programs.
The International Workers Day of Action is part of the Week of Global Action against debt and the international financial institutions co-organized by international and regional debt activists led by the Jubilee South-Asia Pacific Movement on Debt and Development. It is also part of the week-long event in the Philippines dubbed as the Week of Action against Illegitimate Debt, Unfair Trade, and Worsening Poverty.
“ADB programs such as the privatization and restructuring of the power industry in the country has only led to further sufferings not only by the electricity consumers, but also by the workers,” said Milo Tanchuling, secretary general of the debt watchdog Freedom from Debt Coalition.
In 1998, the ADB signed a $300-million loan to the Philippines for the Power Sector Restructuring Program that paved the way for the passage of the Electric Power Industry Reform Act (EPIRA) in 2001 which, in turn, mandates the privatization of the National Power Corporation and the restructuring of the whole power industry in the country. Among the so-called primary aims of this program is to reduce government debt burden from the state-owned power corporation and to lower electricity rates – the 2nd highest in Asia at the time of the passage of the Act. The PSRP was co-financed by the Japan Bank for International Cooperation (JBIC) in the amount of $300 million.
The Philippines is among the first of ADB’s developing member countries to implement the Bank’s power sector restructuring program.
According to FDC, the government continues to incur huge debts and at the same time the electricity rates have doubled in the country six years after the passage of EPIRA.
“In fact, in 2006, the government incurred a total of US$750 million loan – $450 from ADB and $300 from JBIC – for the so-called Power Sector Development Program which is basically a new debt to repay past debts of NPC including obligations to oppressive power contracts with the independent power producers,” added Tanchuling.
Meanwhile, the Philippines now has the highest industrial electricity rates in Asia, according to the data of the Department of Energy.
“This does not only result in higher costs of goods and services, but has also become the justification by the employers for not increasing the wages of their workers as they claim to be losing caused by high operational costs largely due to high cost of electricity,” said Teody Navea of Bukluran ng Manggagawang Pilipino.
FDC together with other groups – Bukluran ng Manggagawang Pilipino, Alliance of Progressive Labor, Partido ng Manggagawa, PS-Link, Makabayan, BISIG, Kalayaan, Sanlakas – and the Jubilee South – Asia Pacific Movement on Debt and Development called not only for the cancellation of the debts that pushed the privatization of power industry and of other debts that pushed anti-labor policies and programs, but also demanded from the Bank to stop its privatization and labor flexibilization programs.
Flexibilization means re-organization of labor to maximize work force and extract greater profit through labor-only contracting, subcontracting, hiring of casuals and contractuals and apprentices.
The privatization and restructuring program also targeted the retrenchment of thousands of union members of the Napocor Employees Consolidated Union (NECU) and Napocor Employees Workers Union (NEWU). About 8,500 NPC employees have been illegally terminated in 2003 due to ADB’s failure of oversight and due diligence of its power sector restructuring program. Aside from this, the privatization of NPC power plants such as the recently bidded out Calaca plant gives no job protection/security to existing workforce.
“We were never consulted in the sale of these plants and there was no protection given to the workers,” said NECU President Abner Eleria.
In their complaint letter to ADB, NECU and NEWU claimed that despite ADB’s pronouncement that it has committed itself to respect core labor rights – including that of the right of freedom of association and the effective right to collective bargaining – NPC workers’ rights have been violated. These rights which ADB itself claims to be the key to winning the fight against poverty.
It was stated in the letter that in September 2006, the Supreme Court ruled that two NPC Board resolutions that terminated 8,500 NPC employees in February 2003 were “void and without legal effect” because these lacked the necessary number of votes for their adoption. This was decided with finality by the Supreme Court in January this year.
The illegal termination of NPC workers has resulted in NPC’s financial liability to its employees in the amount of P4.7 billion (about $102 million) – based on NPC’s own computation – for backwages and wage adjustment of employees. To date, these employees have not yet received such amount from NPC.
FDC is also one with the Global Call to Action against Poverty-Philippines in the call to end poverty in the country. GCAP-Philippines held a day-long event today dubbed as “Stand Up and Speak Out against Poverty” at the Quezon City Memorial Circle.