ESCOM staff threaten industrial action Thursday if long outstanding dispute is not resolved

* We have followed all laid down procedures and regulations as stipulated in the Labour Relations Act

* The governance structures have shown blatant disregard to the tenets of social dialogue

* Dispute started last year over unbundling of of ESCOM in line with public reforms

* Staff Union is against setting up of new company, Power Market Limited

* As it contravenes Section 4 (2) of the amended Electricity Act (2016)

By Duncan Mlanjira

Electricity Supply Corporation of Malawi (ESCOM) Staff Union (ESU) has released a public notice in which they threaten to undertake an industrial action nationwide on Thursday, March 18 if some long outstanding dispute is not resolved.

The ESU discloses that the long outstanding dispute was against governance structures in ESCOM, Malawi Government, its Board of Directors and executive management which remains unresolved.

In a statement released on March 11 by ESU president Charity Harawa and secretary William Manyamula, the issues in dispute are Public Reforms in Energy Sector and Harmonisation of Salaries and other Benefits.

“As a Union, we have followed all laid down procedures and regulations as stipulated in the Labour Relations Act,”

“ESCOM staff are grieved that despite following the procedures to amicably resolve the grievances, the governance structures have shown blatant disregard to the tenets of social dialogue, leaving the Union with no any other option but to seek the remedies as provided in the Act.

“ESCOM Staff Union assured the public that it is totally committed to serve the public with all its zeal and diligence to the best interest of the citizenry.”

There was no immediate response from ESCOM executive management.

However, in October last year year, ESU issued a petition to the Ministry of Labour reporting that they are in dispute with its executive management over further unbundling of the power utility by setting up a new company, Power Market Limited (PML).

The PML — which is in line with public reforms — was set up to curve out ESCOM’s Single Buyer Function (SBF) to form an independent function under the new company.

According to the Union in the October petition, setting up PML is illegal as it contravenes Section 4 (2) of the amended Electricity Act (2016), that says: “A holder of a transmission licence before commencement of this Act, shall hold simultaneously licences for distribution, imports, exports, system and market operator and single buyer”.

The Union is of the strong view that the first unbundling process, that involved delinking power generation from ESCOM and setting up the Electricity Generation Company (EGENCO), resulted in a financially weaker ESCOM and increased in electricity tariff for the customer.

And with this further unbundling of SBF, it is set to increase overhead costs in the power sector and further increase the cost of supplying power to the customer, “which is unstainable”.

“The Union is aware that these steps with either lead to tariff increases — which most Malawians cannot afford — or will lead to job losses of our members,” said the petition that was copied to ESCOM’s Chief Executive Officer, Allexon Chiwaya; ESCOM Board and Comptroller of Statutory Corporations.

The Staff Union had reported that it met ESCOM executive management on September 18, 2020 in which their grievances were not favorably address and after several attempts to engage the Minister of Energy, Newton Kambala failed, they decided to channel their concerns to the Ministry of Labour.

The petition said the executive management informed the Staff Union that PML has been formed in line with public reforms.

“However, Executive Management could not address the illegality of the setting up of the said company which contravenes Section 4 (2) of the amended Electricity Act (2016).

“In our view, this means the Single Buyer Function (SBF) should remain within ESCOM,” the petition had said.

The Union further said the setting up of PML has not come up with safeguards to ensure sustainability of employment for ESCOM staff members as it will result in reduced revenues “whose tariff to the customer is not cost reflective and does not benefit from any subsidies from Government”.

“The Union has also noted with concern the power imbalance in the energy sector as the Secretary to the President is the chairperson of both EGENCO and PML Boards leaving ESCOM very disadvantaged.

“This set up will affect the employment or the terms of employment or the conditions of labour or the work done to to be done or the social and economic interests of ESCOM’s employees as witnessed during the time when the Chief Secretary to the Government was chairperson of the EGENCO Board and Malawi Energy Regulatory Authority (MERA).”

The Union further highlighted that even after the unbundling of ESCOM to set up EGENCO has not resulted in increased power generation in the country as envisaged by Government and other advocators of the model.

The Union and its members — some of whom are experts with vast experience in the electricity sectors — reportedly stated in 2015 that the increased power generation used to justify the formation of EGENCO would not be the case.

ESU had disclosed that the dispute had been a subject of its repeated endeavors to engage both the Government and ESCOM executive management to address them.

In that earlier petition, the Union had demanded that “ESCOM executive management should seriously consider and expedite the process of resolving our concerns to our satisfaction so that we can concentrate on our respective jobs and continue positively to the process of unbundling of ESCOM as expressed by Government”.

“Furthermore, an independent study on implication of SBF outside ESCOM should be immediately instituted, where ESCOM staff will be engaged.”

Soon after his appointment as Minister of Energy, Kambala visited ESCOM Power Station at Chichiri in Blantyre on a familiarization tour as well as for a comprehensive meeting with members of management and thereafter he told the media that Corporation was owing banks and other suppliers over K40 billion due to among other things, inadequate revenue generation caused mainly by low power generation as well as effects of COVID-19 pandemic.

One of the suppliers ESCOM owed money to at that time was EGENCO and when asked if this company was necessary, Minister Kambala had said there was need to assess if EGENCO is indeed serving its purpose well.

He had said the idea to delink ESCOM’s services was necessary at the point it was initiated but government might consider to evaluate if EGENCO is still needed.

However, Government went ahead to appoint a board of directors for EGENCO that has Secretary to the President and Cabinet, Zanga-Zanga Chikhosi as the chairperson with Betty Mahuka, Oswin Kasunda, Henry Kadzakumanja, Arthur Mandambwe and Evans Msiska as other members are.