Restructuring and Privatisation in Nepal:
Developing Union Strategies for Industrial Policy

May 7-8, 2002, at Nepal Tourism Board Hall, Kathmandu, Nepal.

General Federation of Nepalese Trade Unions (GEFONT) conducted two days National Seminar on "Restructuring and Privatisation in Nepal: Developing Union Strategies for Industrial Policy" jointly with International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM) and the Friedrich Ebert Stiftung (FES)-Nepal. The seminar held on May 7-8, 2002, at Nepal Tourism Board Hall, Kathmandu, Nepal.

Com. Mukunda Neupane-Chairman of GEFONT who was presiding the inaugural session underlined the importance of the programme. "What is restructuring? What is the Privatisation? Would there be any correlation between these two words? Which side we trade Unionists should follow?" Com. Neupane questioned to the audience mentioning the on-going discussion in Nepal's Electricity sectors privatisation.

"Our 12 years experience has proven that the privatisation drive in Nepal has totally failed"- said Comrade Neupane-"This is not my conclusion nor the unison; this is the conclusion drawn by the numbers of research institutes, the scholars and intellectuals having their political inclinations 'the left, centre & the right'." Com. Neupane maid his point clear-" If some one ask us how to carry out privatisation? We have counter question here-why is the privatisation? However, indicating mismanagement, inefficiency, corruption, overstaffing, political interference and so on, if someone questions whether we are in favour of 'restructuring', we have immediate answer- why not let do it now!" Com. Neupane warned- "the financial giants are playing foul aiming privatisation of PEs, they are lauding word restructuring."

As one of the co-organiser Dev Raj Dahal of FES-Nepal underlined basic principle of FES as Freedom, Social Justice and Solidarity. Mr. Dahal correlated Nepal's statue with its economic policy. " Nepal's Constitution is a Social Democratic Constitution; western world some times terms it as liberal constitution. The preamble of constitution has gureented right to work, public-private partnership and people's right to information." Mr. Dahal was opinion that economic policy is the Neo-liberal. " Politics & economy should move hand in hand. It would narrow the gaps between haves & haves not. But Nepal's economy rejects or say further weakened the Spirit of constitution."

Mr. Dahal was in opinion that in democracy democratic institution should be strengthened. However, he was saying-"class based institution is being weak." Mr. Dahal said-" Politician determines energy policy, who would be benefited by it? Thus, Energy itself is a politics." His opinion was-"There should be mutual co-existence between labour and capital. Burden to workers and freedom to capital is injustice". Mr. Dahal concluded with saying-"No one's hegemony should be expected, it will even polarise development process. Politics should bring in proper position where there is role of working class."

Next speaker was Ms. Elizabeth Cotton- the Education officer of ICEM. Ms. Elizabeth briefly explained what the ICEM is and what does Global Union Federation means? "ICEM is one of the GUF having 20 millions membership from 400+ affiliates of various countries of the world." Ms. Elizabeth said- this seminar would help to formulise future strategies for our 3 Nepali affiliates in particular and union movement as a whole in general. This seminar will help to chart-out the programme how the unions will response the challenges?"

Speaking on the occasion ILO country Director Ms. Leyla Tegmo-Reddy shed lights importance of the seminar. She mentioned ILO organised South Asian Seminar on Privatisation of November 1999 and specific programme on the very subject of December last year. "This seminar has further sectoral dimensions" ILO director mentioned Decent Work Agenda, which has been carrying out since 1996.
As the guest speakers DECONT President Rajendra B. Raut and NTUC General Secretary Pushkar Acharya also addressed the inaugural session.

This is the first ever workshop on Energy sector with special focus on hydro-electric power in Nepal, participating by all the three trade union centres and some of the independent federations like Inter-corporation Employee's Federation and Inter -Banking Employee's Federation. Various Public Sectors unions affiliated to GEFONT, NTUC, DECONT and independent federations including of Nepal Electricity Authority were the participating unions.

The Business Session

First session was started with presentation of GEFONT Chief of DFA Umesh Upadhyaya. Com. Umesh Discussed different aspect of Nepal socio-political situation and elaborated that how the Nepali Trade Unions are fitting themselves.
"Two distinct classes before unification of Nepal in second half of the 18th Century, on the one side - kings, landlords, bureaucrats, military officers, mukhiyas and jimmawals, priests and priest associated Brahmins, on the other side - Kamaras, raitis and untouchable castes. There were small states and constant fight among the ruling class." Com. Upadhyaya further opined-"At present, while viewing the structure of Nepali society, separate analytical angles have to be adopted for rural and urban society. Workers are being in the forefront in all political processes and movement for democracy and social justice. After the restoration of democracy, workers movement has been focused towards workers issues and political part has become secondary. Trade union intervention in post democracy period is highly visible through legitimate forums of both governmental and non-governmental structures in policy and implementation matters."

Next presentation was the principal one. Presenter was by Dr. Govind Nepal, who was one of the resource person of the session. Dr. Nepal presented his paper entitle- Developing Union Strategies in the Context of Restructuring and Privatisation of Electric Power Sector in Nepal.

"The Nepal Electricity Authority (NEA) has still a lion share in the generation, transmission and distribution of electricity." Dr. Nepal forwarded a question- " What does Privatisation of the Electricity Sector mean in Nepal? " His answer was-" it means, Leasing out of NEA run Small Hydropower Plants, Joint Ventures with Public and Private sectors, Private sector participation and Cooperatives and community management of Micro-hydropower." Dr. Nepal analysed minutely what are the impact of privatisation on workers in the electricity sector as well.

Following Dr. Nepal, Com. Gino Govender-Mines & energy Officer of ICEM made a presentation on Global Trends in the Energy Industries.

"Energy multinationals have adopted global convergence strategies combining oil, gas, electric power, renewable, coal and energy services, becoming full-scale global energy conglomerates. They adopt global strategies and extend their activities and investments into all parts of the world. In the drive to dominate market share, we see the rise of multinational companies taking over strategic assets, planning production and distribution chains on a global scale restructuring their organisations, cutting costs, laying off workers and contracting out all possible operations." said Gino Govender.

Enron is a Lesson from the Free Market, he further said-" The dramatic collapse of Enron, once the USA's seventh largest company with operations in forty countries will form an interesting case study in business schools round the world for a number of years. Through its very strong connections with high profile politicians, it changed the once tightly knit US wholesale electricity system in which suppliers were no longer responsible for reliability and security of electricity supply. Armed with just over $7 billion of taxpayer funding from the World Bank and Overseas Private Investment Corporation, Enron marched into developing countries' energy sectors as part of the privatisation brigade."

"The cause and effect of the Enron Collapse and the Californian energy crisis has lead to poor countries such as India, and Mozambique re-evaluating and assess what consumers might end up paying for the sins of the company and their decision makers. The price could be very high. The victims suffering the most are workers who, encouraged by company executives invested their life and retirement savings into company stocks. Those executives who cashed in their shares walked away from the company will millions of dollars in their pockets."

Energy as a Social Product and Public Service: Presentation on the ICEM Action for Social Energy and Introduction to the World Energy Conference was also discussed on the occasion.

Third principal presenter was Dr. Pravin Sinha of FES-India. Dr. Sinha detailed on South Asian Trends in the Energy sector and elaborated much the Indian experience.

"There was bigger share of private owners pre-freed India; this was however reversed by realising social needs in post-freedom war period. Many of the Public Service Unit established through the Federal as well as State Government of India." Dr. Sinha further opined that power-monger politicians misused Indian PEs. The distributed populist dream such as-electricity will be freely distributed if they or their band success to throne into the power. From this point India fell into the mess, all kinds of unwanted games played with fate of the PEs.

"Comrades, we all have similar experience; only the extent and magnitude might be different" Dr. Sinha concluded his presentation mentioning various laws & regulation of Indian power & energy sectors.

Following the presentation, Focus Group Discussions was held in order to assess the Social and Economic Impact of Industrial Restructuring and Privatisation. Following were the key points for discussion:

• What are the key concerns of workers?
• How are these being dealt with in collective bargaining?
• How are Shop Stewards dealing workplace restructuring?
• What organising strategies are required in the short, medium and long term?

• Developing a union agenda for restructuring
• Education and Publicity required supporting union campaigns
• How will unions mobilise support for their proposals
• What international support is required for a national campaign?