The planned sell-off would place the majority (51 per cent) of the company’s equity in private hands – the official definition of a “privatised” company.
The trade union at Taiwan’s state-owned Chunghwa Telecom (CHT) threatened strike action recently over a plan by the DPP (Democratic Progressive Party) government to float another 17 per cent of the company on the stock market.
Laurence Coates met with the union’s president, Chang Hsu-chung, who explains the background.
Telecom workers fight privatisation
Currently it is the only non-privatised telecom company in East Asia, the president of the Chunghwa Telecom Workers’ Union (CTWU), Chang Hsu-chung explains. About 28,000 work in the company, (down from 35,000 in 2002) and these workers are now facing a renewed threat from the government – the start of “a warring era” in Chang’s words.
The formally pro-independence DPP is a party that has shot to the right, embracing standard neo-liberal economics, following its victory in the year 2000, which ended fifty years of rule by the Chinese Nationalist Party (KMT). In opposition, the DPP, which emerged as a national force in the struggle for democratic rights under the KMT dictatorship, advocated a “welfare state” and had many features of a social democratic party. “They talked about copying the Swedish and German examples,” Chang explains. But in practice, the DPP has continued and, in some respects, speeded up the anti-working class policies of the KMT leaders.
Under threat since 1994
This year, the government is planning to speed up privatisation of the banking sector and make a major attack on the pensions system. The struggle against privatisation at Chunghwa Telecom began in 1994 (i.e. under the KMT). The company was “corporatised” in 1996 – always a first step towards privatisation. “The government says privatisation will make the industry more competitive, but that’s not the real reason,” says Chang. “Three private competitors operate in Taiwan, but Chunghwa Telecom is the most successful”. In fact, it’s the most profitable telecom company in East Asia, he points out, although you would not guess this from the government’s propaganda. Their main motive for the sell-off, he explains, is to improve their own balance sheet. There is no doubt the company would be a juicy prize for private speculators, with its 13 million fixed line customers and 8 million mobile subscribers, with all this infrastructure having been built-up by public financing.
The CTWU have seen what happened in New Zealand, also under a “social democratic” government: from 20,000 employees in 1990 when New Zealand Telecom was sold to two US companies, there are only 2,000 left today.
Trade union shake-up
One problem cited by almost every trade unionist I’ve met here is the numerical weakness of the trade unions in Taiwan – only around 10 per cent of workers are organised – and the fact that, as a legacy from the dictatorship, union organisation is on a company by company basis, rather than representing workers across an entire industrial sector. As a result, Taiwan’s private telecom companies are all non-union.
One perhaps unintended result of this extremely undemocratic environment is that for organisations like the CTWU, the fight against privatisation is a matter of life or death. Should the company be sliced apart under privatisation as has happened in many cases elsewhere, the union itself would be decimated.
Chang tells me the last ballot of CTWU members, in December 2004, resulted in a 61 per cent vote for strike action in the event of a further sell-off. In June 2003, the union wrote to Dick Grasso, the head of the New York Stock Exchange, to “explain” that Chunghwa Telecom was facing a strike on grounds of the “improper stock flotation”. Such warnings to the “market players” have played a role in slowing down the juggernaut of privatisation.
Later the same year, 5,000 CTWU members and supporters protested in the Legislative Yuan [parliament] with the following message: “Rescue the whole people’s assets, object to a financial group running the country, and defend labourers’ rights and interests!”
The trade unions in Taiwan have undergone a massive shake-up in recent years. Formerly the only trade unions were stooge unions of the ruling KMT. In the early 1990s, in a similar development to that of South Korea, rank-and-file unionists opposed to KMT control of the main China Federation of Labour (CFL) set up a ”Labour side alliance” and challenged the leadership. This led to the formation of an independent trade union federation, the Taiwan Confederation of Trade Unions (TCTU). But in the space of just five or so years, the TCTU leaders have become closely linked to the pan-green (pro-independence) political alliance led by the DPP, and therefore in the eyes of many trade unionists a new version of the pan-blue leaning (anti-independence) CFL. The CTWU is affiliated to both union federations but, Chang insists, “We’re independent; we can’t be kidnapped by the political parties”.
Threat from China outsourcing
He believes this will be a crucial year in the privatisation struggle. The pressure from the “global market”, impatient at the Taiwanese government’s failure to proceed more quickly, is mounting. The fact that privatisation has slowed to a snail’s pace on several fronts is tied up with the parliamentary deadlock and fierce infighting between the pan-blue and pan-green camps, despite the fact that both advocate privatisation.
Another factor is the complex diplomatic dogfight across the Taiwan Strait. The capitalist class in Taiwan as well as foreign investors want to remove all the barriers between the two economies (many have already gone) regardless of the formal status of Taiwan. They see this as the best way to overcome the ”stubbornness” of Taiwanese labour. As Chang explains, should this happen, thousands of telecom workers’ jobs would be threatened by an inevitable wave of outsourcing to mainland China. Already one smaller private operator, Far East Tone, has opened a call centre on the mainland to exploit the much lower wages and longer working hours there. With the private capitalists calling the shots, such “integration” inevitably means a massive attack on the wages and conditions of Taiwanese workers.
See the CTWU website for more information, including a report of Laurence Coates’ meeting with the union leadership.