Tripartite inspection of power plant shutdowns sought

MANILA, Philippines – Power plant shutdowns should be physically inspected by a 3-party panel composed of representatives from government, civil society, and the power sector to prevent collusion attempts by power players.

This is according to Trade Union Congress of the Philippines (TUCP) executive director Louie Corral, who noted the swiftness of the order of Labor Secretary Rosalinda Baldoz for a tripartite inspection of Valenzuela city factories following a massive factory fire that killed at least 72. (READ: Dire conditions found in factories around Kentex)

Corral said such inspections should be preventive rather than reactive across industries, not just in manufacturing.

He urged the Office of the President to allow consumers to be represented in the inspection of outages in power plants.

In a recent interview, the trade unionist said such a move would disable the artificial inflation of power rates. Corral cited the alleged jacked up prices of power distribution firm Manila Electric Company (Meralco), when it bought supply from the Wholesale Electricity Spot Market (WESM).

The whopping P4.15 per kilowatt hour (kWh) power rate increase became controversial in 2014 as Meralco was forced to source its power requirements from the WESM, which is subject to volatile prices. The Supreme Court has since issued a temporary restraining order on the price hike. (READ: SC extends TRO on Meralco rate hike indefinitely)

Bulk of the rate increase was due to generation charges or the cost of producing the electricity, which generation companies collect from power distribution firm Meralco. Meralco, in turn, passes on this cost to consumers.

The power distributor had to source power from WESM due to the scheduled maintenance shutdown of its main power source, the Malampaya gas field.

Meralco also had to contend with the simultaneous outages of the power plants it had existing power supply agreements with. These outages coincided with that of Malampaya which, Meralco explained, led to the record-high increase.

Meralco was accused before the High Court of inflating charges by selling to WESM at ceiling price the power it already bought from power generation company Therma Mobile Inc.

Meralco countered that it was merely a victim of WESM’s must-offer rule and of arbitrary bids that messed up pricing.

Corral told Rappler the tripartite inspection will partly address power shortages caused by the deliberate withholding of power supply by generation companies, noting the dubious simultaneous outages.

Physical inspection of the plants are a must during shutdowns to avoid reliance on mere paper work, he added.

He stressed the importance of stable power supply and low power rates in attracting foreign investors and ensuring the competitiveness of local businesses.

Tripartite inspection instead of joint assessments?

TUCP also urged tripartite inspections in the manufacturing industry to replace the current framework of joint assessments under the Labor Laws Compliance System (LLCS).

Under the LLCS, workplaces are jointly assessed by a labor law compliance officer from the labor department, a representative from among the workers in that workplace, and the employer or his or her representative.

TUCP spokesperson Alan Tanjusay said the workers’ representative would necessarily be afraid to reveal any labor standards violations for fear of losing his or her job. He said the workers’ representative should be a trade unionist instead, with no employer-employee relationship to the company being assessed.

In a statement Wednesday, June 24, TUCP claimed that compliance officers and labor leaders were offered bribes during the DOLE-ordered tripartite inspections in Valenzuela. Employers reportedly offered cash in an attempt to expedite the assessment and be granted a compliance certificate.

Tanjusay said the government needs to come up with an additional mechanism to deal with bribery under the LLCS.

Calls to overhaul the LLCS intensified in the aftermath of the fire that killed 72 people in the two-storey footwear factory of Kentex Manufacturing in Valenzuela City in May.

The deadly Kentex factory blaze is seen as a setback for the Philippine manufacturing industry, an industry that draws foreign investors partly due to cheap labor. 

Corral argues that the way to attract investors should be through lower utility costs and upgraded skills of workers, instead of lax labor standards and low pay. – Rappler.com