FDC hits ADB on power sector reforms, energy review process

The Freedom from Debt Coalition (FDC) today challenged the Asian Development Bank to admit that its Power Sector Restructuring Program that is being undertaken in the Philippines through the Electric Power Industry Reform Act (EPIRA) enacted in 2001 has created more social and economic problems than supposed benefits to the people.

FDC president Ana Maria R. Nemenzo blamed ADB's power sector restructuring and privatization program for the ballooning National Power Corporation and national government debts, higher power rates, unreliability of supply and lesser access by the poor.

FDC issued this challenge in time for the forthcoming ADB's sub regional "consultation" among stakeholders in Southeast Asia and the Pacific on July 13 at the Bank's main headquarters in Ortigas. This is the last of the four consultations on the Bank's draft Energy Strategy which is expected to be approved by September 2007.

The group likewise criticized the process of the energy review, citing the short period to study and make a more intelligent and substantive comment on the draft strategy.

"It took the ADB almost one and a half years to finish the draft and yet the Bank only gives the stakeholders only 60 days to study and comment on it. In other regions such as Central Asia, they only had 16 days to study the draft before the consultation on June 14," said Nemenzo, who is also the international convener of the NGO Forum on the ADB.

"Besides, a strategy is less binding because it does not require the approval of the board. Will the 1995 energy policy be maintained? What rule—policy or strategy—will govern other energy issues not covered by the strategy?" asked Nemenzo.

Nemenzo raised one of NGO Forum on ADB's questions regarding the issue on strategy: "Will the implementation of contentious provision such as the reduction of carbon emissions, adoption of clean technology, and implementation of ADB safeguards, among others no longer be subjected under the Accountability Mechanism, since it is only a strategy and not a policy?"

The draft strategy, which will guide the Bank's future operations in the energy sector, is expected to address key issues, including: energy security; global warming/climate change; sector policy reform and governance; and, energy efficiency.

Following the initial 1981 policy, the ADB Energy Policy was developed in 1995 and is subject for review every 5 years. The Bank undertook a review in 2000 and came up with a framework and strategy for its operations for the succeeding years. However, the next review supposedly to be undertaken by 2005 was delayed as the Bank failed to come up with the draft paper for consultation with the different stakeholders.

The framework policies and strategies set in 2000 after the review of the 1995 energy policy are: poverty reduction; addressing regional and global environmental impacts; promoting regional cooperation; and, promoting private sector involvement, which prompted the restructuring of the energy sector in the country and helped create an enabling environment for private investors.