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ICEM Update
No. 89/2000
16 Nov. 2000

South Korea faces a nationwide power strike from 24 November over plans to privatise the electricity sector.

Notice of industrial action has already been served by the Korea National Electricity Workers' Union (KNEWU), which will ballot members tomorrow. The union says it will launch the action if the Korean parliament presses ahead with legislation to split up and privatise the Korea Electric Power Corporation (KEPCO).

The parliament's Standing Committee on Industry and Energy is due to consider the draft law by 23 November. The KNEWU has publicly opposed the plans from the outset. A recent opinion poll showed 90.8 percent of KEPCO employees ready to take part in protests, and the scheme has also run into growing opposition from the public at large. In fact, the restructuring is already behind schedule because parliament pulled back from adopting the legislation last year.

KEPCO is one of South Korea's biggest public enterprises. By law, the government currently holds 52.6 percent of its equity. The corporation accounts for about 94.2 percent of the country's power generation, and has 44 GWh of installed capacity. It transmits, distributes and sells all of South Korea's electricity. In June this year, it employed 34,146 people.

The government has tabled a four-phase privatisation plan, starting with a split-up of KEPCO's generation side from this year onward and full privatisation of generation by 2002. Full competition would be introduced into the wholesale electricity market in the period 2003-2008, and the retail side of the business would be sold off. Competitive retailing of electricity would be brought in from 2009 onwards.

KEPCO's thermal and hydro generation units are already being hived off into five separate subsidiaries, as a prelude to privatisation. Its nuclear capacity will be kept as a wholly-owned KEPCO subsidiary for the foreseeable future. As in power sell-offs elsewhere, there may be few or no takers for the nuclear stations.

One issue is the debts run up by KEPCO, but the union points out that these are the result of the government's own policy of providing cheap electricity to industry and to low-income households. KEPCO has a public service ethic which includes support for rural communities, small and medium-scale enterprises and the domestic coal industry.

The union's fight against privatisation is "not just a matter of job security," said KNEWU representative Kim Chae-Ro. "Resolving KEPCO's debts through asset sales will destroy the company. The changes will lead to an industry where suppliers wield the sword."

Globally, the KNEWU is affiliated to the 20-million-strong International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM), which has declared full support for the Korean union's action.

"Your powerful campaign has so far prevented the sell-off of your national utility," ICEM General Secretary Fred Higgs emphasised in a message to KNEWU President Oh Kyung-Ho today. "In Europe, Asia-Pacific, Latin America and Africa, we are helping our unions to fight against destructive privatisation which has led to huge job losses, higher prices and declining health and safety conditions everywhere it has been carried out. In countries such as Mexico, Costa Rica, Hungary, Uruguay, Paraguay and Thailand, unions have campaigned successfully in favour of alternative models which safeguard the interests of workers, their families and the citizens. The ICEM strongly believes that energy is a social product. It should be produced and distributed for the good of all citizens, not just for the benefit of the few."

At special ceremonies across South Korea today, KNEWU officers had their hair trimmed down to a monkish minimum. It was a token of their readiness - and a cutting comment on a sell-off that could leave Korea shorn.