PSPD in English Archive 2002-08-24   1313

Strike of Three Trade Unions, its Progress and Responsibility

1. Unilateral Privatization by the Korean Government

While privatization of the state-owned corporations has been implemented since 1980s, the Kim Dae-jung administration began to push the privatization policy in a full scale, which was demanded by the International Monetary Fund (IMF) heavily influenced by transnational corporations (TNCs) and Wall Street since 1997 economic crisis. As a result, the key public service sectors such as railroad, electricity, and gas, which are owned by the state, have been under pressure of privatization. With the agreement with the IMF, it was difficult for the Korean government to find another way to restructure the public corporations except of privatization. In the process of privatization, the government has attempted labor market flexibility without any agreement or consultation with trade unions. The government argued that competitiveness improved by privatization would reduce operation cost and rationalize management practices, and secure more profits. As a result, it said that the efficiency of the key public services could be so promoted that that the people get benefit.

But, the cases in and out of the country shows that privatization has hardly reduced operation cost and improved management practices for the public. We can see many cases that the key public services have been sold to monopoly capital such as conglomerates or foreign investors in the privatization. This has been damaging public interest and making public property commercialized.

Considering overseas cases, privatization of the key public services such as railroad, electricity and·gas, significantly affecting peoples’ life, should be openly discussed with the concerned parties, especially employees, not only because it could worsen working and living conditions of workers, but also it negatively influence a ‘national economy’. The current situation that the government has been unilaterally implementing privatization of the key public services is making a government-labor relations confrontational.

2. Workers’ Struggle against Privatization

l Railroad

In May 2001, new leadership was democratically elected by rank-and-file members in the Korea Railroad Union. The new union leadership promised that union struggle against privatization of the railway corporation owned by state in the union election. Since 2001 May, while the labor union had asked to withdraw privatization plan, the management had stuck to its position to continue it under the pressure of the government. As a result, the union announced a nation-wide strike, if privatization introduced, in December 2001. The union demanded to improve working conditions, secure health and safety facilities at work and reinstate the dismissed union activists as well as stop privatization in the negotiation. Although meaningful progress was made in the negotiation, management refused to stop privatization plan, giving an excuse that it is a business of the government and lawmakers.

In December, as the cabinet passed the railroad privatization bill and submitted it to the National Assembly, the labor union called on the National Labor Relations Commission to take a mediation procedure to deal with privatization of the Korea Railroad Corporation. The National Labor Relations Commission ruled that privatization should not be an agenda of collective agreement between management and labor union.

While the negotiation had been prolonged to 2002, the management and union did not make an agreement. Actually, the management did not have the right to determine privatization policy without any prior consultation with the government. In February 2002, union declared that there was no reason to continue the negotiation with the management due to its dependence on the government and started ‘legal struggles’ to directly pressurize the government. Finally, as the agreement was not made, the railroad labor union started their strike with other two public service unions, Korea Gas Corporation Union and Korea Power Plant Union on February 25.

l Electricity

In December 2000, as the electric power industry restructuring bill was passed the National Assembly, the Korean Electric Power Corporation union declared a strike against restructuring plan by the government aiming at step-by-step privatization. According to the passed bill, the corporation was divided into steam-generated power sector and hydraulic and nuclear power sector. While the government split the steam power sector into five individual corporations, workers of the five power plants established a national union of Korea Power Plant Workers Union in July 2001. Also, it launched new leadership democratically elected by rank-and-file members like the railroad union. The new leadership promised to stop privatization in the election. Although the legitimate union leadership was established, the managements were reluctant to recognize the union as negotiation partner under the pressure of the government.

In the collective agreement, the union demanded to increase wage by12%, to reinstate the dismissed union activists, and to improve working conditions as well as to stop privatization. But, the management had avoided sitting on the same table with the union, ignoring union’s demands.

In the negotiation deadlock, the government disclosed the ‘Basic Plan for Power Plants Privatization.’ In the plan, the government was to privatize two power plants in 2002. The union decided to stage a strike against privatization, if introduced, in the 2002 January congress and, finally, the negotiations had broken off in February.

As the company rejected withdrawing sales-off plan of power plants, the union went on a strike with other two state-owned corporation unions.

l Gas

The government disclosed a ‘Basic Plan for Restructuring Gas Industries’ in 1999. According to the plan, the purchasing-sales part the Gas Corporation was divided into three companies to be sold to private companies in the first half of 2002 and to be privatized later in the second half. Although the government identified problems of privatization of gas sector, it preceded privatization. (The Board of Audit and Inspection pointed out problems of the plan. in July 2001, that there are nine problems as follows; 1) supply-demand adjustment might fail, 2) competition in purchasing would be practically impossible, 3) an oligopoly can take place during sales, 4) new owners will tend to avoid providing gas to non-profitable areas, 5) customers will certainly be charged more, 6) private companies would not be willing to make contracts on purchase transit, 7) purchase is becoming less attractive, 8) confusion will be added when reselling the purchase·sale companies, and 9) privatization is becoming difficult as stock drops.

The gas union claimed that, if privatization materialized, gas supply would be unstable, gas prices go up, and ultimately cause insecure employment. Also, the union insisted that all the parties such as the public, government, management and union need to negotiate on the issue.

However, as the ‘Law on Promoting the Restructuring of Gas Industries,’ which means division and privatization of the corporation, was drafted by the government, the union requested the government to withdraw the bill. In the collective negotiation, the union demanded the corporation to improve wage system, to increase housing subsidy, to show a sincere attitude of the management to union. But, as the draft bill was passed in the cabinet and submitted it to the National Assembly, the union held a congress to determine staging a strike.

In February 2002, the National Labor Relations Commission issued a mediation, which was denied by the union because the rule unilaterally represented government’s position. As a result, the gas union went on a strike with other two unions.

3. Issues

l Privatization

The key reason of three unions’ joint strike was privatization. In the case of the Korean Railroad Corporation and Korean Gas Corporation, the ‘restructuring’ laws were to pass in an irregular session of the National Assembly last February. However, the strike of the labor unions stopped the passage of the laws. On the other hand, privatization of the Korea Electric Power Corporation was already decided on in December 2000 by law and its sale-off was slated for 2002. .

The government argued that an enormous deficit and ineffective operation in the key public services such as railroad, electricity, and gas be an actual reason of privatization. According to it, privatization would result in reducing ‘surplus’ workforce and flexibilizing employment which means improved services for customers and earning more profits.

On the contrary, the concerned unions argued that the main victim of privatization would be the public as well as workers and that privatization could make charges for public services higher and do supply of electric power unstable, outflow national assets overseas, and lose competitiveness of national economy.

The labor unions said “the key infrastructure such as railroad, electricity and gas owned by state which benefit to the people should not be sold out to the Chaebols and transnational corporations (TNCs), which negatively influence on people’s life”. Also, the labor unions referred to social problems resulted from unstable employment, deteriorated working conditions, intensified work-burden of public sector workers, which would damage the public’s interest, downgrading the quality of public services. The unions with an alliance with a variety of civic organizations urged the government to give up neo-liberal and market fundamentalism-oriented economic policy that would weaken a national economy.

l Reinstatement of the Dismissed

The unions of Korean Railroad Corporation and Korea Electric Power Corporation called on the managements to reinstate the dismissed ho had been involved in union activity. The railroad workers were dismissed in industrial disputes of 1988 and 1994 where unions demanded the managements to abide by the Labor Standard Law. The railroad union urged to reinstate 58 dismissed workers, which had been promised by the government and its management in the 2001 tripartite commission. On the other hand, the power plant union demanded to reinstate 3 union activists dismissed by the reason of ‘independent’ union business.

l Union Rights and Working Conditions

Generally speaking, both unions except the gas union had been dominated by dependent leadership on government and employer. Historically, they had been regarded as ‘yellow union’ in Korea. This means that they had functioned as a tool to control workers.

But, in 2001 the situation changed. The railroad and electric power workers directly elected their leaders, which resulted in democratizing union structures. This enabled unions to represent needs and interests of their members, and to be militant.

However, the employers of the corporations did not substantially recognize unions as dialogue partner. They have tried to weaken unions by supporting pro-employer unionists and ignoring the democratically elected leadership. Actually, these wrongdoings have been coordinated by the government. This kind of irrational labor relations in the public corporations has driven unions’ position into militancy.

Also, public workers, especially railroad workers have suffered form relatively worse working conditions such as long work-hours, massive layoffs, and 24-hour shift system. In 2001, over 30 railroad workers died at work. For this reason, the railroad union has urged the management to guarantee holidays, manpower supplements, and take countermeasures against industrial injury in the collective negotiation.

4. Lessons of Workers Struggles against Privatization and Tasks of Trade Union Movement

The gas union came to an agreement in four hours of strike. The railroad union did it and stopped strike on February 27. But, the power plant union had continued the strike until April 2 when the Korean Confederation of Trade Unions (KCTU) representing it made a ‘surrender agreement’ with the government. Roughly speaking, while the railroad and gas unions succeeded to stop unilateral privatization by the government, the power plant union failed to.

This struggle was the first ever experience for the Korean labor movement to organize a joint strike in the key public services that have an enormous influence on the Korean economy and peoples’ life. In socio-political aspects, the strike was successful in the sense that it stop the government from pushing unilateral privatization of key public services. The National Assembly suspended the railroad restructuring bill and the government had to slow down privatization process of power plants, which delayed their sales-off to private firms. Also, the gas union secured the right to engage in restructuring process as partner. The strike also raised political and social awareness regarding the problems of privatization.

On the other hand, the strike revealed some weakness and problems of the Korean trade union movement. Originally, three unions planned to stage a joint strike in the key public services. After they started the strike, the joint struggle was not fully implemented and negotiations proceeded separately. In addition, in case of the railroad and gas unions, though they made agreements with their management, it is not sure for the managements to implement them due to the pressure of the government. Considering the current ‘power relations’ between management and labor, the unions remains a long way to implement agreements. The pending agendas such as privatization, reinstatement of the dismissed, and improvement of working conditions have not been surely implemented and dragged out by the management.

Also, it is noted that the umbrella labor organizations such as KCTU (the Korean Confederation of Trade Unions) and FKTU (the Federation of Korean Trade Unions) failed to play a significant role in the struggle. They could not lead and coordinate the joint struggle and their political capacity proved to be weak and fragile. Especially, KCTU made a big mistake in the power plants negotiation with the government. Actually, it surrendered to the government without any meaningful achievements for power plant union. This has resulted in organizational confusion within the KCTU and damage of its credibility.

I think it is urgent for two labor national centers to restore their capacity to play a central role at national level of labor relations. In order to materialize it, they need to fundamentally transform their structures to represent needs and interests of the affiliates and develop human/organizational resources to deal with national agendas. And, They are to broaden a political and social alliance.

At a local level, three unions should take substantial measures to minimize organizational damage resulted from the strikes and strengthen their political capacity to control workplaces. In order to implement these tasks, the unions should evaluate on the strike strategy and tactics and analyze their organizations in terms of day-to-day union activity as soon as possible.

Last June, the government announced again that it would privatize a power plant in 2002. And, since April, the managements of three corporations have filed a lawsuit against unionists who had played an active role in the strike. Still, they are trying to weaken trade union organizations. The strike leaders were arrested and some of them are still in jail. The labor umbrella organizations are still suffering from political inability as a national center as well as organizational confusion. Moreover, the Kim Dae-jung administration has firmly stuck to neo-liberal economic policy.

Although the trade union movement stopped unilateral privatization by the government through the February joint strike, political, economic and social conditions are not still beneficial to workers and unions in the key public services. In this sense, now is the time for the Korean trade union movement to transform and recreate itself in order to cope with enormous challenges.

1998

February 6. Tripartite agreement between government, labor and business was made.

February 25. Kim Dae-jung administration was launched.

2000

December 4. Korea Electric Power Corporation Union cancelled a strike after the agreement of the National Labor Relations Commission.

December 8. The bill on structural reform of electric power industry was passed in the National Assembly.

2001

February 19. The government confirmed a plan for power industry structure reform to split KEPCO into several parts.

May 21. Kim Jae-gil was elected as chairperson of the Korean Railroad Workers Union.

May 29. Korea Electric Power Corporation Union decided to split itself into two sectors.

July 20. Lee Ho-dong was elected as chairperson of the Korean Power Plant Union.

September 25. The government announced a draft bill on gas industry structure reform.

November 15. Civic organizations alliance against privatization of power industry was formed.

December 12. The cabinet passed a draft bill on railroad industry structure reform and submitted it to the National Assembly.

2002

February 25. Railroad, power plant, and Gas unions went on a joint strike. Gas union cancelled a strike after the agreement.

February 27. Railroad union made an agreement and stopped a strike. Police arrested railroad union leaders including the chairperson Kim Jae-gil.

Mar. 13. The February 27 agreement was approved by railroad workers vote.

April 2. KCTU representing power plant union made an agreement with the government.

April 4. The government re-affirmed to implement privatisation of power plants.

April 8. KCTU leadership resigned, responsible for the April 2 agreement.

April 15. The draft bill on railway industry restructuring was again submitted to the National Assembly.

May 6. KCTU established an emergency commission at its national congress.

May 30. Railway union leaders were released from prison.

June 5. The acting leadership of power plant union was appointed.

June 25. Police arrested power plant union leaders including chairperson Lee Ho-dong.

July 22. Power plant union resolved to re-stage strike at central committee.

August 8. Railway union launched new leadership by election and Kim Jae-gil leadership resigned.

Yoon Hyowon(Editor-in-chief, Labor Society Bulletin, Korea Labor and Society Institute)

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