POLITICS-PUERTO RICO: Protest Greets Phone Company’s Privatisation

By IPS Correspondents Reprint | | Print |

Carmelo Ruiz

SAN JUAN, May 29 1998 (IPS) - Despite a heated and protracted campaign by labour unions, grassroots organisations and religions and nationalist bodies, the Puerto Rico Telephone Company (PRTC) has gone into private hands — at least partially.

This week, Governor Pedro Rossello announced the sale of the former government owned entity to the American GTE Corporation.

However, instead of selling the whole state company to a transnational corporation, as was the government’s original plan, Rossello announced in his televised message that once the transaction is finished, GTE will have 40 percent of the PRTC’s shares.

Five percent will go to Banco Popular, a major local bank; another five percent to a group of local investors; and three percent will be distributed to the employees, who will be able to increase their participation to six percent through an Employee Stock Ownership Plan. The government will then be left with 44 percent of the company.

PRTC workers responded to the announcement with a picket in front of the company’s main building, which lasted over five hours.

Five thousand of the 8000 telephone company employees participated, temporarily blocking traffic on a major avenue. When riot policemen tried to clear the avenue, a violent scuffle erupted. However, finding themselves vastly outnumbered by the irate picketers, they backed out.

“War has been declared. We, the telephone workers, will not back out a single inch,” said Annie Cruz, president of the Independent Brotherhood of Telephone Employees (HIETEL), which represents the company’s white collar employees. Cruz called on legislators, who will have to approve or disapprove the PRTC sale, to stop the privatisation.

“The sale changes nothing. The workers’ struggle will continue,” said Jose Valentin, who heads the Electricity Workers’ Union, reputed to be the most powerful in Puerto Rico.

“The government bureaucrats who negotiated the PRTC sale respond to those who are really in control of this country, the rich bloodsuckers who are only interested in enriching themselves,” said Jimmy Torres, organiser for the American Federation of Labour (AFL- CIO).

Torres has also indicated that AFL-CIO president John Sweeney fully supports the actions of the phone company workers.

There were fears among progressive sectors that the newly elected president of the Independent Union of Telephone Employees (UIET), Jose Juan Hernandez, would have been on the side of the government, that has not been the case.

“I’m opposed to any privatisation. I don’t care if it’s partial or total,” he said.

“This partial privatisation deal is just an attempt to placate the opposition, to quell the militancy of workers, students and the general public. But we will continue our struggle until the last consequences,” said the union leader.

Hernandez is not a new face in UIET. A PRTC employee since 1966 and co-founder of the union in 1968, he was UIET’s president in 1975, when the phone company’s workers went on strike for 102 days.

Meanwhile, economists have shown varying degrees of acceptance and rejection regarding the PRTC privatisation.

“The government’s deal could be beneficial, since it is definitely better than selling the whole company to a transnational corporation.

“It is a non-traditional form of privatisation,” said economist Hector Rios-Maury, who recently published a book on privatisation.

“The sale’s terms are very much in tune with the realities of the global telecom market. In privatisations in other countries, like Italy, Germany, France, Peru, Chile and Costa Rica, a percentage was given to local investors, employees and another percentage was held by the state.”

“At first, the government wanted to sell the whole PRTC to a transnational corporation, which demonstrated that the governor and his privatisation team were not aware of the prevailing trends in the telecom market, and of the social costs in terms of protests,” said Rios-Maury.

The economist believes that it was the buyers who persuaded the government to settle for a partial privatisation, “which demonstrates that (the buyers) are much more in tune with Puerto Rico’s reality than the government is”.

On Sunday, the members of UIET will meet in an assembly to decide whether they’ll go on strike. Both supporters and opponents of the PRTC’s privatisation are certain that they will vote to go on strike, and that HIETEL will follow along.