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endesa, spain
When electricity was partially privatized
in 1998, local regulations prevented Endesa
from taking complete control of the newly
privatized energy companies. However, thanks
to various administrative devices Endesa has
since then effectively taken over electricity
generation, transmission, distribution, and
commercialization in Bogota.
Following Endesa’s energy ‘coup’ in
Bogota, there have been remarkable cases of
increased tariffs and numerous examples of
business favouritism. Overall, the situation
is generating serious social tensions,
especially in underprivileged areas of the
city.
In some cases, for example, household
electricity prices have increased by 500
percent from the average price. There have
also been arbitrary suspensions of
electricity services to homes, public
hospitals and community centers. Endesa’s
aggressive and exclusive policies in the
poorer parts of the city contrast sharply
with the benevolent image that the company
presents in wealthier neighbourhoods, where
it arranges financial plans for buying
appliances and discounts. Energy workers have
also been hard hit during the privatization
process. Forty percent of the personnel, a
total of 1750 people, left either voluntarily
or through forced redundancies following
privatization, and new vacancies were
subcontracted out under very bad conditions
of employment.
Whenever considering issues like this in
the Columbian context, it needs to be
remembered that the country has a history of
human rights abuses against union and
community activists. Since 1998, 27
electricity sector officials have been
murdered, 7 have been forced out of their
jobs and 230 have been threatened.
endesa’s influence
Endesa is the third largest energy company
in the world, and it plays a dominant role in
Latin American electrical service provision
in places including Buenos Aires, Lima, Sao
Paulo and Chile. The company is part of a
Spanish conglomerate with activities in the
financial, gas, electricity and petroleum
sectors. It has been influential in
multilateral liberalization negotiations and
has been involved in pushing for the
privatization of energy and financial
companies, particularly in Latin America. The
company enjoys an influential position within
the European energy lobby. Rafael Miranda
Robredo, CEO of the Endesa Group, is Vice
President of the European electricity lobby
group, Eurelectric. Eurelectric is the only
energy sector group in the influential
pro-liberalization lobby, the European
Services Forum. As Corporate Europe
Observatory has detailed, the ESF has a
highly privileged position in the European
GATS negotiations.
The potential for GATS to lock-in and
expand liberalization programmes which have
been initiated by the World Bank and
International Monetary Fund, like energy
privatization in Bogota, is no doubt one of
the reasons why the GATS is so forcefully
promoted by the United States and the
European Commission.
Colombia has yet to submit its offers for
services liberalization under the GATS 2000
negotiations, but there is pressure for the
country to serve up its entire domestic
electricity market for liberalization. The
European Commission, for instance, has asked
Colombia for full market access in ‘services
incidental to energy distribution’ and full
commitments in the trading of energy
products.
For members of the ESF and related
companies like Endesa, GATS is likely to open
up new areas for liberalization and ensure
that their massive gains cannot be reversed
regardless of the social or environmental
implications. In contrast, GATS will take
essential services further out of the reach
of ordinary people like those living in
Bogota.
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