Presentation is loading. Please wait.

Presentation is loading. Please wait.

ADB’s Role in Power Sector Reforms & Its Accountability Mechanism ALNI / Philippines Forum on “Key Union Issues in Napocor Privatization” VIOLETA P. CORRAL.

Similar presentations


Presentation on theme: "ADB’s Role in Power Sector Reforms & Its Accountability Mechanism ALNI / Philippines Forum on “Key Union Issues in Napocor Privatization” VIOLETA P. CORRAL."— Presentation transcript:

1 ADB’s Role in Power Sector Reforms & Its Accountability Mechanism ALNI / Philippines Forum on “Key Union Issues in Napocor Privatization” VIOLETA P. CORRAL September 2009

2 Power privatization is part of the structural adjustment program of the international financial institutions. Power privatization is part of the structural adjustment program of the international financial institutions. Even before the drafting of the Power Bill in mid-1990’s, the government had already embarked on efforts to privatize the industry, through the Build-Operate-Transfer power projects with the Independent Power Producers (IPPs). Even before the drafting of the Power Bill in mid-1990’s, the government had already embarked on efforts to privatize the industry, through the Build-Operate-Transfer power projects with the Independent Power Producers (IPPs). Privatization of Philippine Power Industry

3 ADB loans to power sector 20 loans (US$1.6B) and a partial credit guarantee of JPY 12B to NPC for power generation and transmission projects. 2 program loans to National Government for power sector restructuring and debt liabilities management (US$300M + $450M). Partial Credit Guarantee to PSALM (US$500M) 35 technical assistance grants to power sector for institutional strengthening and various studies (~US$15.5M) [Source: Zhai Yongping, ADB, Oct 2008]

4 ADB-assisted Power Sector Restructuring & Napocor Privatization (CLOSED) 1998: Power Sector Restructuring Program –ADB - $300M; JBIC - $300M –9 policy objectives & 59 conditions tied to ADB loan inc: »Legal framework (EPIRA) »NPC unbundling & privatization –Financed ‘adjustment costs’ inc debt burden, separation payments to NPC employees 2002: Partial Credit Guarantee (PCG) –on Yen Bonds issued by PSALM for up to US$500M equivalent

5 GENERATION Restructured Power Industry TRANSMISSION DISTRIBUTION (wires) & supply CONSUMER TRANSCO (formerly NPC) NPC NPC IPPs (PSALM) Priv. IPPs private utilities (e.g. MERALCO, VECO) electric coops. residential commercial industrial WESM Power trading (PEMC) sell Buy min. 1MW buy dispatch SUPPLY * aggregator FDC

6 More ADB loans to Power Sector Reforms & Napocor Privatization 2002: Electricity Market & Transmission Development 2002: Electricity Market & Transmission Development – to allow privatization of electricity generation companies –Establishment of Wholesale Electricity Spot Market (WESM) to allow privatization of electricity generation companies 2006: Power Sector Development Program 2006: Power Sector Development Program –$450M loan to National Government –Support for continued power reforms, NPC privatization & debt liabilities management –[Closed in June 09] 2011: Power Sector Development Program (Subprogram) 2011: Power Sector Development Program (Subprogram) – –$200M loan (proposed) 2012: Power Sector Development Program (Subprogram) 2012: Power Sector Development Program (Subprogram) – –$350M loan (proposed)

7 ADB Loans to Private Sector Jan 2008: Acquisition and Rehabilitation of Masinloc Coal Fired Thermal Power Plant Jan 2008: Acquisition and Rehabilitation of Masinloc Coal Fired Thermal Power Plant – –$250M loan to AES (Masinloc) June 2008: Privatization and Rehabilitation of 600-MW Calaca Coal-Fired Thermal Power Plant June 2008: Privatization and Rehabilitation of 600-MW Calaca Coal-Fired Thermal Power Plant – –$120M loan & $90M Political Risk Guarantee to Calaca HoldCo (Suez) for purchase of Calaca plant (cancelled) Sep 09: Visayas Base Load Power Sep 09: Visayas Base Load Power –Proposed $120M loan to KEPCO-Salcon for construction of 200M coal-fired in Naga (Cebu) »Concerns raised by GLACC, Bishop Navarro

8 ADB-Assisted NAPOCOR privatization Inflicted Harm on Workers & their TU rights Employees’ (illegal) termination in Feb 2003 Employees’ (illegal) termination in Feb 2003 Lower working conditions / contractualization Lower working conditions / contractualization Non-recognition of unions Non-recognition of unions No workers’ protection in sale by PSALM of NPC plants No workers’ protection in sale by PSALM of NPC plants Etc etc Etc etc >> MAKE ADB ACCOUNTABLE FOR HARM DONE

9 ADB’s Accountability Mechanism Formerly called ‘inspection’ (Ombudsman function) Formerly called ‘inspection’ (Ombudsman function) Aims to help solve problems and investigate alleged violations of ADB’s own operational policies and procedures ADB-assisted ‘project affectees’ can file a ‘request’ or ‘complaint’ if they are actually or likely to be adversely affected by ADB-funded projects ADB-assisted ‘project affectees’ can file a ‘request’ or ‘complaint’ if they are actually or likely to be adversely affected by ADB-funded projects Consists of two complementary & related functions Consists of two complementary & related functions –‘Consultation Phase’ (Problem-solving) –Compliance Review Phase

10 ‘Consultation Phase’ Focus is not on identification and allocation of blame, but on finding ways to mitigate harm brought about by ADB-assisted projects Focus is not on identification and allocation of blame, but on finding ways to mitigate harm brought about by ADB-assisted projects ‘Complaint’ should be filed with Office of Special Project Facilitator (SPF) or to Management or any Department of ADB ‘Complaint’ should be filed with Office of Special Project Facilitator (SPF) or to Management or any Department of ADB If deemed ‘eligible’, SPF will implement Course of Action for mutually acceptable solution to complaint If deemed ‘eligible’, SPF will implement Course of Action for mutually acceptable solution to complaint SPF reports to ADB Management SPF reports to ADB Management Complainant can walk away if not satisfied with process Complainant can walk away if not satisfied with process

11 Compliance Review Panel (CRP) People who are or likely to be directly, materially and adversely affected by an ADB-assisted project can file a ‘Request’ to investigate non-compliance with ADB’s operational policies and procedures People who are or likely to be directly, materially and adversely affected by an ADB-assisted project can file a ‘Request’ to investigate non-compliance with ADB’s operational policies and procedures The conduct of ADB, and NOT other parties (borrowing country, executing agency, borrower, or private project sponsor) is the subject of investigation CRP makes recommendations to ‘bring ADB project into compliance’ and/or mitigate any harm CRP makes recommendations to ‘bring ADB project into compliance’ and/or mitigate any harm CRP reports to ADB Board of Directors

12 Experience of ADB’s Accountability Mechanism: SPF Of 22 complaints since SPF started operations in May 2004: 8 cases were deemed ‘eligible’ 8 cases were deemed ‘eligible’ 12 cases were deemed ‘not eligible’: 12 cases were deemed ‘not eligible’: 6 - Complainants never addressed problem to Operations Department6 - Complainants never addressed problem to Operations Department 1 - Issues initially raised with SPF have been addressed by government1 - Issues initially raised with SPF have been addressed by government 1 - Operations Department's efforts to address concerns are underway.1 - Operations Department's efforts to address concerns are underway. 1 - Complainants are not materially and adversely affected by the project1 - Complainants are not materially and adversely affected by the project 1 - Procurement related matters are not eligible for complaints1 - Procurement related matters are not eligible for complaints 1 - Project Completion Report has been approved for the project1 - Project Completion Report has been approved for the project 1 - Complaint deemed premature1 - Complaint deemed premature o 2 cases not decided yet (complaints received only in Sep 2009)

13 Most Common Complaints No Access to Information No Access to Information No Consultation & Participation No Consultation & Participation Weak Social Impact Assessment Weak Social Impact Assessment Non-implementation of ADB’s ‘Safeguard Policies’ Non-implementation of ADB’s ‘Safeguard Policies’ No complaint has been filed to date due to non-compliance with CLS, or by trade unions No complaint has been filed to date due to non-compliance with CLS, or by trade unions

14 ADB’s Policy on Info Disclosure ADB’s Public Communication Policy (2005) ADB’s Public Communication Policy (2005) ADB “shall share information with affected people early enough for them to provide meaningful inputs into project design and implementation” ADB “shall share information with affected people early enough for them to provide meaningful inputs into project design and implementation” Time Limits for Responses to Requests for Current Information: – –ADB must acknowledge receipt of information request within five (5) working days – –Within 30 calendar days, ADB must either provide information or otherwise cite reasons as to why they cannot release said information – –(copy furnish whenever you request for documents from project

15 ADB’s Policies on Consultation and Participation (C&P) C&P is supported by virtually all of ADB's sector and thematic policies, its business processes, and staff instructions C&P is supported by virtually all of ADB's sector and thematic policies, its business processes, and staff instructions ADB should hold consultations with key stakeholders, inc trade unions where a ‘labor participation strategy’ should be developed ADB should hold consultations with key stakeholders, inc trade unions where a ‘labor participation strategy’ should be developed There should be prior informed consent of stakeholders before any project approval There should be prior informed consent of stakeholders before any project approval

16 ADB’s “Safeguard Policies” 3 Safeguard Policies: 3 Safeguard Policies: –Environment –Involuntary Resettlement –Indigenous Peoples Mandatory that (i) impacts are identified and assessed early in the project cycle; (ii) adverse impacts are avoided, minimized, or mitigated; and (iii) affected people are consulted. Mandatory that (i) impacts are identified and assessed early in the project cycle; (ii) adverse impacts are avoided, minimized, or mitigated; and (iii) affected people are consulted.

17 No Complaint yet Filed vis CLS, Social Protection ADB’s 2001 Social Protection Strategy ADB’s 2001 Social Protection Strategy ADB’s 2006 CLS Handbook ADB’s 2006 CLS Handbook –ADB commits to ‘comply with CLS in design and formulation of its loans’ –‘Formally adopted CLS as part of its 2001 Social Protection Strategy’ –‘CLS have been an integral part of ADB’s development mission’

18

19 FOA ‘Checklist’ (From: ‘Discussion Points on Freedom of Association & Collective Bargaining’, CLS Handbook, ADB, p. 96) Are there mechanisms for voluntary collective bargaining? How many trade unions are registered? Are there trade unions active in the sector of the economy concerned by the ADB activity? Does the government or employer put obstacles in the way of organization and collective bargaining? How many disputes are there relating to freedom of association and collective bargaining? Have any complaints been made to ILO? Do collective agreements cover aspects of CLS and, if so, which aspects?

20 … FOA ‘Checklist’ Are there free and independent workers’ and employers’ organizations at the national level? Are there tripartite bodies at the national level with representatives from the social partners? If so, are the workers’ and employers’ representatives selected by their own organizations or appointed by a government body? At the enterprise level are there bipartite arrangements, such as joint worker-management committees, to deal with disputes? Does the disputes procedure follow conventional stages? Are any such joint structures balanced so that neither mgt nor workers dominate in terms of a majority? Are worker and employer representatives appointed without outside interference? Have any worker or employer representatives been penalized for carrying out their activities related to freedom of association and collective bargaining?

21 CONCLUSION Trade unions can file a test case at ADB’s accountability mechanism if they feel they are actually or likely to be harmed by ADB-assisted projects, as in the case of NAPOCOR privatization & its harmful impacts on NPC workers. Trade unions can file a test case at ADB’s accountability mechanism if they feel they are actually or likely to be harmed by ADB-assisted projects, as in the case of NAPOCOR privatization & its harmful impacts on NPC workers. If aim is to mitigate harm brought about by ADB-assisted project, then a ‘Complaint’ can be filed at SPF/Management. If aim is to mitigate harm brought about by ADB-assisted project, then a ‘Complaint’ can be filed at SPF/Management. If the focus is to also highlight ADB’s non-compliance with its own policies & procedures in implementation of ADB-assisted project (e.g. Social Protection, CLS, C&P, Info Disclosure, Safeguard Policies, etc), then a ‘Request’ can be filed at CRP/Board. If the focus is to also highlight ADB’s non-compliance with its own policies & procedures in implementation of ADB-assisted project (e.g. Social Protection, CLS, C&P, Info Disclosure, Safeguard Policies, etc), then a ‘Request’ can be filed at CRP/Board. To bring such a challenge to a huge institution like ADB, solidarity from TU movement & like-minded groups should be mobilized to ensure that ADB does not ignore or take lightly workers’ complaint / request. To bring such a challenge to a huge institution like ADB, solidarity from TU movement & like-minded groups should be mobilized to ensure that ADB does not ignore or take lightly workers’ complaint / request.


Download ppt "ADB’s Role in Power Sector Reforms & Its Accountability Mechanism ALNI / Philippines Forum on “Key Union Issues in Napocor Privatization” VIOLETA P. CORRAL."

Similar presentations


Ads by Google