PHILIPPINES:

1. PHILIPPINES: Impact of Power Privatization to the National Power Corporation Employees ABNER P. ELERIA President NAPOCOR Employees Consolidated Union (NECU) NATIONAL POWER CORPORATION Quezon Ave., cor. Agham Road, Diliman, Quezon City Philippines

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

4. Massive job losses due to retrenchment, reorganization, termination • Retrenchment, reorganization • 1994: NPC has 17,000 employees • 1997: NPC has 13,500 employees • Termination (as provided by 2001 EPIRA law) • 2003: All NPC employees (8,530) terminated: > 3,800 employees rehired (with NPC) > 3,400 employees rehired (with TransCo) > 30 employees rehired (with PSALM) > 1,300 employees not rehired > 2,468employees as of Dec. 2011 (NPC) Note: Proposed Re-organization for CY 2012 will incur additional termination/retrenchment of employees.

5. Rehired NPC workers with lower working conditions & pay • NPC workers who were rehired after termination were forced to accept employment contracts at: • position grade levels lower than what they previously enjoyed • 25-30% reduction of salaries & benefits • Increase in contractualization, Job Order and service agreements at NPC

6. High Court: NPC employees were illegally terminated • Sept.2006: Supreme Court ruled that NPC Board Resolutions terminating NPC employees in Feb 2003 were ‘void and without legal effect’ because they lacked votes for adoption • Sept. 2008: Supreme Court (SC) ruled with finality: • Immediate reinstatement of NPC employees • Payment of P34.7B++ in backwages, wage adjustments to NPC employees • Still awaiting enforcement • August 17, 2009: Recognition by ADB that backwages and other financial claims of NPC workers as recognized by SC form part of legitimate costs of restructuring of Philippine Power Sector

7. Outstanding claims of NPC workers(to date) • Outstanding claims: 1. ‘DAMA’ (Supreme Court) case: P 34.7B++ 2. COLA: P 8.4B++ 3. WAIVE (step increment): P 594M++ TOTAL : P 43.694B++ TO DATE THE TOTAL AMOUNT INCLUDING INTEREST : P 54 B ++  Court cases still awaiting action • Damages due to illegal termination:  Based on remaining years of service: Average = 5 yrs / employee = P 50,000 (average salary / mo) x 12 mo / yr x 5 yrs / employee x 8,530 employees = P 26B (conservative estimate) Claims chargeable to ADB

8. Non-recognition of NPC unions • No full recognition by NPC management • Non-remittance of union dues since 2005 to date • Non-recognition of unions by PSALM • Lack of transparency & no consultation with unions: • NPC reorganization plans • Sale of NPC plants • etc

9. No workers’ protection in sale of NPC plants • PSALM does not recognize bargaining power of unions, weakening the unions • PSALM does not obligate buyers to retain existing workforce, hence more job losses • PSALM does not include Manual of Employees Benefits (MEB) as part of bidding documents, citing huge costs • But labor costs is only 3-5% of total costs • PSALM does not consult with unions before sale of any plant in violation of EPIRA • No overtime beyond 8 hrs in privatized plants a violation of Philippine Labor Laws

10. New OMA (Feb 09) • Feb 2009: NPC & PSALM signed Operations & Maintenance Agreement (OMA) • April 09: NPC unions filed case in court against OMA provision in violation of EPIRA • Still awaiting decision NOTE: To date, NPC Management continue to implement the OMA despite the agreement is terminated. No renewal of Agreement between PSALM and NPC.

12. THANK YOU FOR LISTENING!