Traveling Beans

Union Fenosa

People say that the true effects of corporations on government are most easily seen in third world countries. We talk about corporate control of the media, but mostly we talk about blatant corporate exploitation of resources, both human and natural, in reference to Free Trade zones, and distant places in the rest of the world.
Here in Nicaragua, there is currently an energy crisis that has given new meaning to corporate power in my book. In the 1990’s, the government sold control over the nation’s electrical system to Union Fenosa, a Spanish multinational. Union Fenosa inherited complete control over all of the electrical infrastructure in the country, and obviously, the right to distribute and charge for their services.
Prices for electricity in Nicaragua quickly skyrocketed, as Union Fenosa is the only supplier of electricity in the country (none of that competition that capitalists talk so much about here). They have reached a point that many Nicaraguans complain daily about energy costs, which approach first world prices in a country where many people are living on less that $2 a day.
Last month, Union Fenosa made a move to raise prices all over the country. Due in part to popular protests, the national Supreme Court somehow made a decision to deny the power company the right to raise prices in order to keep its high profit margin. In response to this, Union Fenosa has begun arbitrary power cuts for four to eight hours a day all over the country. This means that grocery stores, internet cafés, factories, hospitals, the international airport, not to mention private homes, are suddenly finding themselves without power in the middle of the day. Obviously, these blackout periods are wreaking havoc on the national economy, costing large and small businesses alike in time, resources, and money.
Union Fenosa says that the cuts are necessary, that they are valid, and that the government has no right to regulate their prices, or to determine what their profit margin should be. They have taken in upon themselves, then, to control the government through a sort of blackmail. So far, there seems to be no solution in the works, merely more dark days.
All this puts to mind however, the questions of who is in the right here? If the government does give in to the electrical company, are they responding to blackmail? As the builders of the electrical system through tax dollars, do the people still have the right to demand reasonable prices, despite the fact that the government sold the infrastructure to a private enterprise that has done little to no improvements and remains expensive and unreliable? Should a multinational corporation have this much influence over a national government and economy? Or should there be a limit?
In my opinion, people should be able to get reasonable service for a reasonable price. The company should NOT be allowed to blackmail the government into allowing a price increase, and someone should look deeper into what the profits of Union Fenosa are. Corporate accountability, where are you? That is another benefit of local control I suppose, that there is an office or a person to talk to, not merely a company spokesman who goes on TV and gives a statement but doesn’t answer questions; not merely an entity that has so many faces that no one has to or can step up and take responsibility for the bad things the company is doing. Hopefully I’ll be able to get this up before the power goes out again…

posted by Hilary King @ 3:34 PM