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Workers Contest the Process of Privatization in Guayaquil, Ecuador

Summarized from a report by Jorge Acosta, Centro de Derechos Economicos y Sociales, Ecuador

The process of privatization in Guayaquil, Ecuador began with the merging of the provincial and municipal water utilities in 1994. The joint company was named Empresa Cantonal de Agua Potable y Alcantarillo de Guayaquil (ECAPAG). The company operated for six years before being privatized. During the six years, the foundation for privatization was set. In particular, the Inter-American Development Bank provided a loan to the Government of Ecuador that included the requirement to privatize ECAPAG in order to "improve the provision of potable water and sanitation services to the city of Guayaquil."

International bids were solicited and International Water Services (the subsidiary is named Guayaquil Interagua C. Ltda.) won a thirty-year contract to operate in Ecuador. The company has had to confront a demand by the workers to maintain their positions because the privatization has meant the termination of all the workers of ECAPAG. The hiring of workers has been left to the discretion of the new administration. To appease the workers, the company began a process of negotiation and agreed to contract the majority of the workers of ECAPAG. Supported by loans from the Inter-American Development Bank, through the Worker s Transition Program, training would be provided to help the workers prepare to assume responsibilities in the new company or, for those that would not be re-hired, training to transition to other jobs. For those in the second category, training was provided in the management of microenterprises, and assistance in searching for jobs with other companies in the area.

It appears that this training program did not adequately complete the activities that were proposed. The privatization process moved forward without hiring back the majority of the ECAPAG workers. The workers have taken legal action saying that they were deceived because the new private company, Empresa Interaguas, has not hired the majority of the workers as they had promised. According to leaders of the workers, fewer than 20 percent of ECAPAG workers have been re-hired.

Jorge Acosta
Centro de Derechos Economicos y Sociales

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