March 1, 2002
The experience in privatisation in other countries is relevant to Thailand says Uta Collier from World Wide Fund for Nature (UK) and Gráinne Ryder of Canadian nongovernmental organisation (NGO) Probe International, speakers at the 2002 People’s Perspectives conference.
According to Uta, privatisation can have positive effects, but it is not just due to the process of privatisation, but also of government regulations: “We had a state-owned system that did not look after the people or the environment. Ninety-two per cent of the UK’s electricity used to be fuelled by coal. The new, liberalised system has been a benefit to the environment, but it is not because of liberalisation alone. New regulations from the European Union that set limits for sulphur dioxide and nitrogen oxide emissions, as well as lower gas prices and improved technology, the combined cycle [natural gas-fuelled power plant], all happened at around the same time.” “Under competition,” says Uta, “in the free market, companies will operate with whatever fuel and technology is cheapest. It is up to society to decide on the rules for pollution, what is acceptable. In the UK, the government introduced legislation that obligated generators to produce electricity from non-fossil fuels, initially to protect the nuclear industry, but this also benefited renewables and generation from renewable fuels has increased. And competition cannot solve the problem of energy efficiency, again, this needs specific government legislation.” According to Uta, “The lessons from the UK experience are that the system today is better than before but this is not just because of liberalisation. Government regulation, influenced by NGOs, worked hard to get the right system. It takes time. Liberalisation doesn’t just happen once and that’s the end of it. It needs regular review.” Gráinne Ryder of Probe International explains that “the experience in Canada with liberalisation is very different to that in the UK. The Canadian government does not respect the rights of consumers as opposed to the rights of private producers.” “If privatisation does not lower prices for consumers, then what is it for?” she asks, “In Canada, as in Thailand, there is a lack of public power – it is the government that has to approve projects rather than local communities. In Canada, the government is still not clear whose rights they’re supposed to be protecting. But we have to recognise that electricity is not a good like all other goods, it is a necessity. The government has to recognise its own responsibility in guaranteeing access to electricity. The question of community rights is crucial to outlining the path for the government to take in liberalisation.” The experience in Canada so far has been one of regulatory failure. According to Gráinne, none of the promises made by government have eventuated (see Table: Canadian electricity reform gone wrong).
Canadian electricity reform gone wrong
|Promise of Privatisation||Short-Term Results|
|Privatisation||Private profit, public risk|
|Regulation||Secret deal-making, no accountability|
|Cheap, clean power||Dirty, unsafe, high-cost mega-projects|
|Consumer choice||Little or no access for green power producers|
What is needed instead, asserts Gráinne, is an electricity system that is based on people’s rights and this will need strong legislation (see Table: Towards a rights-based electricity system).
Towards a rights-based electricity system
|Government legislation is required
that recognises the people’s rights to:
• Clean air, water, etc.
• Equitable, reliable service
• Generate power
• Appeal regulatory decisions
• Sue power producers [instigate legal proceedings
against power producers for redress
as remedy or reparation]
Watershed magazine covers ecological, livelihood and development issues in the Mekong Region and is published three times a year by TERRA (Towards Ecological Recovery and Regional Alliance). To visit TERRA’s Web site, please see: http://www.terraper.org.
Categories: Mekong Utility Watch