This article is arranged by a secret group inside Iran called the “Khatunabad Workers’ Research Committee”. The committee conducts field studies in a wide range of areas including workplaces and marginalized slums. The purpose of these studies is to analyze how living or working in these areas can contribute to mass uprisings, based on the lessons learned from the past and ongoing activities through trade unions and other forms of political struggles. The committee was named in memory of the Khatunabad copper mine, whose strike in January 2004, in protest at the dismissal of 200 workers was violently suppressed by police. Police shot at the protestors, including from helicopters, and at least five workers and a student, who was the son of one of the workers were killed, and dozens were injured.
In Iran, frequent power outages significantly damage businesses and the normal routine of people’s lives. Consequently, the causes of these outages like worn-out power plant systems and widespread corruption around energy management receive a lot of attention. Political analysts speculate how the condition of cables, high electricity bills and the growth of bitcoin mining may contribute to an uprising. But what is the situation of workers in electricity power plants? What is the role of electricity producers in the political economy of Iran, and how does their privatization impact the class composition of the workers?
In the context of electricity production processes and how these impact the political economy of Iran, the importance of workers’ agency in these processes is often overlooked. A similar ignorance could hardly be sustained in the analysis of factory production processes. In this article, we suggest that an absence of workers’ subjectivity has enabled the privatization of electricity production, and how the body of the working class became fragmented due to the implementation of neoliberal policies in the electricity production industry. We will reflect on the workers’ silence in light of this history, and other challenges in our quest to find liberating alternatives.
In this article, we focus on the large “Shahid Mohammad Montazeri” (SMM) power plant. The corruption of its owners and history of strikes in this plant make it an ideal sample to examine the questions mentioned above.
The political economy of corruption and electricity generation
In 2011 the SMM power plant was handed over to Persian Steel Company in accordance with Article 44 of the Iranian Constitution, known as ‘the privatization article’. Persian Steel Company, established in 2002, is a family holding owned by the wealthy Falahtian family. Mehdi Falahatian, the most important member of the company’s board of directors, has already been sentenced to 10 years in prison for corruption in the Mellat and Parsian banks. Despite his conviction, he is rarely seen in prison, reportedly, and is still a member of his company’s holding board. Interestingly, Falahatian declared the SMM plant as his bail. The fact that a country’s power plant can be used as a prison bailout speaks for itself about the meaning of privatization of public property.
Currently, at least half of the country’s electricity generation is in the hands of the private sector. As a result, some of the main beneficiaries of turning Iran into a “crypto-currency paradise” are the private owners of power plants. For instance, three big power plants namely SMM, Salimi Neka and Ramin in Ahvaz had devoted part of their electricity generation to extracting cryptocurrencies. Several private and non-governmental sectors entered the cryptocurrency business. As a result of crypto mining, the demand for electricity increased which in turn incurs a high cost to consumers. Examples of the non-governmental sector include the Islamic Revolutionary Guard Corps (IRGC), the Martyr Foundation, the Social Security Organization and banks. On one hand, non-governmental/private companies acquired power plants in the form of government debt relief. However, the debts do not transfer in this acquisition, therefore, the Ministry of Energy still owes the plants’ debt. On the other hand, upstream industries while using energy in their production process, sell raw materials to downstream industries such as electricity, at a higher price than the world markets. In addition to not upgrading their power facilities, power plants also incur high prices on the government. The government also exerts this pressure on the price of electricity, regardless of the amount of consumption, for the workers and the capitalists. Nevertheless, private companies complain that tariffs for purchasing electricity from power plants have been almost constant since 2004, and have not been adjusted for inflation, and this has led to an increase in the cost of generating electricity.
In this debate, the cost of production is once again being blamed on the labour force, and wages are being cited as one of the reasons for the high cost of electricity generation.
What are workers at the power plant saying?
Contracts and employment
The number of workers in SMM fluctuates between 880 and 1000. About 380 of the workers are under indirect contracts (contractors and project-based hires), and the remaining 500 are directly hired by the power plant. According to the workers, since 2010/2011, none of them are permanently employed. All contracts are fixed-term, either one year or two annual contracts of 7 and 5 months.
Different contracts result in very different situations in regard to regulations that the employer must abide by, or not. For instance, contractors are subject to the rules of the Labor Administration. Permanent (also known as official) contracts are regulated by the Ministry of Energy. Thus, the dual “Ministry / Labor Administration” has made working conditions different and unequal for power plant workers. As a case in point, the level of annual wage increase dictated by the Ministry of Energy has decreased compared to the labor administration office. After privatization of the power plant, the wage gap between the two groups of workers has narrowed. However, this has provoked protests from both groups:
“In the past, workers were given occasional protein coupons, but this was removed and the paycheck was increased by 60%, which is worth less than the coupons, and the rest of the power plants pay the same.”
“But here (in SMM) they did not pay any of this, however after we went on strike, they added 60% to the workers’ paychecks.”
The workers mention the name of Sepahan Protection Company, which determines the time and conditions of the contract. The company of consultants and executives was founded in 1997 offering a broad range of services: physical protection; providing temporary manpower, workers and specialists, undertaking business affairs and commercial services; obtaining representation and distribution of any authorized domestic goods; foreign export and import; design and maintenance of electronic and mechanical facilities; partnership and investment with individuals and legal entities, and the establishment of agencies, use of banking facilities, and more. The late 1990’s was a boom time for this, and similar, parasitic human resource or management companies for factories and institutions. One of the goals of this labor “middleman” has been to weaken the bargaining power of workers to increase wages in these disunited conditions. In this regard, one of the workers says:
“One of the differences between our salaries (workers on casual contracts) and the direct contracts is the extra hardship payment which is not paid to us by our contractors.”
Another difference is the type of insurance provided in the contract. Indirect, casual contracts come under the aegis of the social security organizations, and those on direct contracts are insured by private insurance companies like Dana or Sina insurance.
Our research shows that these differences are specific to each plant. To clarify the issue, it may be helpful to consider the status of the distribution company as another subdivision of the Ministry of Energy. For the employees of the distribution companies, the main difference between formal and other types of contracts is based on an “extra allowance” component. This component is explained in Notes 2 and 3 of Article 18 of the Executive Instruction on Job Classification:
Text of Notes 2 and 3 of Article 18 of the Executive Instruction on Job Classifications.
Note 2: In addition to the benefits mentioned in Article 18, for specialized occupations whose field of work is in short supply in the labor market, or occupations with poor motivation and desire to hold due to the nature of the job, the type of duties, and the difficulty or unfavorable work environment conditions, depending on the job conditions and the need of the workshops for such jobs, benefits can be established and paid with the consent of management and the approval of Ministry of Cooperatives, Labor, and Social Welfare under the title of the extra allowance. In any case, the amount of this extra allowance should not be more than the wages of the job group. However, in the case of specialized jobs or at the level of management with proper justification, it can also be requested and approved for up to 2 times the wages of the job group. Any of the employees’ use of the extra allowance stipulated in this note is subject to meeting the complete eligibility criteria for the job in terms of experience and education.
Note 3: The management can, after receiving the license for the extra allowance or together with its application, prepare criteria for establishing, reducing, stopping, or increasing it up to the specified figures, and implement them after the committee’s agreement and the approval of Ministry of Cooperation, Labor and Social Welfare.
In this regard, it should be noted that for both formal employees and contractors, “employment exams” are held, one conducted by the Ministry of Energy itself and the other by the electricity distribution company. After the contractors pass this exam, the distribution company introduces a manpower contractor to them to go to for signing the contract. In this way the company relieves itself of the hassle of dealing with the workers, and they will be entirely accountable to the contractor. It is this relationship that blurs the line between private, government, and non-government corporations in the electricity industry. For example, even though 40% of the shares of electricity distribution complexes are government-owned and 60% of them are ordinary non-government shares, these companies are still quasi-government entities. But the government deems them as private with obligations to the private sector.
In the electricity distribution industry, there are 21,000 employees who have been through consulting companies. Since 2017, the condition of employment for consulting companies has changed. Those who were previously employed via these companies became mostly unemployed. A minority exception that had roles explicitly classified on the organizations, and enjoyed more than 5 years of continuous insurance history under the Ministry of Energy with a higher than 80% satisfaction rate, could keep their job. It is clear here that the financial burden of the workers’ status change for companies is the main driver of the emergence of the “exam”. This financial burden shows itself most clearly in the difference between the salaries of formal and contractual workers: the formals are effectively paid twice as much. The issue of financial burden becomes more apparent when we know that workers with the same working conditions in electricity distribution companies can have different employment conditions from one province to another. This means that companies are free to adjust the financial burden of manpower; the same worker can be employed as “corporate” in one city, but as a “consultant” in another.
Overtime and Hardship
Another issue is overtime work, which is not officially addressed, but when there is a shortage of manpower in some parts of the plant, workers are forced to accept working overtime to avoid what they call “stigmatization”:
“If you don’t stay longer, they stigmatize you for not cooperating. In general, they do not say you have to stay, but [if you don’t,] then they become strict and, for example, do not pay you the bonus options.”
Despite the proper safety of the factory, working conditions still contain contaminants and hazards for workers, including fiberglass and rockwool in the air, high magnetism, a harsh cacophony of sounds (so much that one cannot enter some units without headphones), high temperatures, working at high altitudes and on dangerous arduous roads, and steam leakage. All of this, however, does not entitle contract workers to receive hardship allowance, while formal workers do. In this regard, one of the workers says:
“If we pursue the hardship allowance, they will not renew our contract!”
No hardship payments, along with the reduction of salaries, benefits, and discount coupons since the privatization of power plants, are currently the main problems of workers.
Protest and strike
Workers are not aware of the presence of the workers’ delegate, the representatives of the Islamic Labor Council or trade association. The way they deal with the problems is by moving to different parts of the factory and in critical cases, going on strike. One of the workers points to a representative who is, however, unable to follow the workers’ problems. There are significant cases of worker protest, some of which resulted in success:
- In 2013 due to a change in managing director, workers went on immediate strike, leaving their food untouched in the dining hall.
- In 2018, workers went on strike demanding an increase in job benefits.
- In 2020, workers’ strikes led to dismissal of some managers.
We sought to get more information about these strikes, but failed. Despite this background, some workers think that ‘losing a job’ is a serious threat which has made a move to protest actions very difficult recently:
“They have ruined the unity among workers by threats and dismissal. For example, they prepared a three-month contract for those workers who were active in the last strike.”
Conclusion and Analysis
An ongoing stream of privatizations in Iran, ranging from car manufacturing through oil extraction to electricity generation. This logic is based on the maximum cut in the cost of production and maximizing the profit from every unit of production. And when it is not possible to cut the necessary costs of production, unorganized workers are primarily those subjected to the assault of pay cuts. This issue as well as the ease of dismissing oppositional workers makes the fear of losing their job like a sword of Damocles over the head of the workers who protest the status quo in the electric power industry. Nevertheless, a cut in the benefits of formally contractual workers by privatization as well as the discontent of casualized contractual workers made both groups deeply dissatisfied with the work condition, which in a way made privatization a proper mediation to unite the fragmented workers
The workers of Montazeri Plant often compare their conditions with those of Folad’s and Islam Abad’s workers. Isfahan’s power plant (at Islam Abad) is the oldest plant in Isfahan and also a subsidiary of the Power Generation Engineering Company of Isfahan (PGECI). This plant is owned by PGECI, a private joint-stock company that is essentially subordinate to the Ministry of Energy. The ambiguous, semi-public semi-private status of the subordinate companies of the Ministry of Energy confuses the workers. In fact, the workers in this sector do not know whether the state or the private sector is responsible for their conditions, and which type of ownership benefit them most.
Another problem the workers deal with is separation and fragmentation due to neoliberal employment policies. While initially the workers were included in the employment terms of the Ministry of Energy (and not the Ministry of Labor), later they not only lost this position but were deprived of pay benefits and legal status due under the Ministry’s labor code. Different forms of contracts and increasing economic pressure due to general inflation led workers to prefer the job contracts of the Ministry of Energy rather than those of the Ministry of Labor looking down on the latter. Regarding this comparison we can ask the following questions:
Doesn’t working under the employment terms of a specific ministry and taking advantage of the wage benefits harm the common fate of the workers as a class? In an imagined alternative future, will the inclusion of all workers into the labor code be acceptable for these workers or will they object to the principle of equal pay in the labor code in favor of pay benefits set by specific ministries?
These questions matter because the silence of workers in specific sectors such as power generation or the oil sector is worrying and can be criticized in terms of class solidarity. The sinister legacy of the neoliberal terms of employment for the workers is not only freezing of wages and the destruction of social supports. Also when it comes to pay benefits, we face increasing fragmentation of the workers of one sector, especially compared with the majority of workers in other sectors, which impedes a proper material ground for class solidarity. In this way, in terms of the demands, the workers will be more inclined to have a pay-based mentality rather than a mentality aiming at social support and the right to association.
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