Public Awareness Campaigns & Stakeholder Consultations:

The Case of the Malawi Telecommunications Limited
Workers Union

By Susan Banda
Information, Education & Communications Manager
The Privatisation Commission of Malawi
Blantyre, Malawi

About the Author...

Susan Banda works at The Privatisation Commission of Malawi as the Information, Education & Communications Manager. She is primarily responsible for the communications strategy, stakeholder consultations and is the spokesperson for The PC. She is also an IP3 alumnus.

Abstract

Malawi embarked on its privatisation/PPP program in 1996. Since that time, over 45 transactions have taken place in a variety of manufacturing, agricultural, tourism, banking, and industry sectors. In recent years, privatisation in Malawi has evolved to encompass the infrastructure service sectors, which require special consideration and special models. This case looks at one such transaction, in the telecommunications sector, and focuses on the role of public awareness and stakeholder consultation as means to help ensure a successful transaction. The author reviews the elements of the transaction and provides a "lesson learned" section.

I. Introduction: Emergence of a Public Awareness Strategy

The privatisation/PPP programme in Malawi began in 1996 with the passage of the Public Enterprises (Privatisation) Act by Parliament. The objectives of the programme include, in part, the following:

• To foster increased efficiencies in the economy
• To reduce monopolies and increase competition
• To enhance Malawian participation in public enterprises and the economy, and
• To raise revenue for the Government of Malawi.

When the programme first began, an effort was made to sensitize stakeholders and the general public about the privatisation programme. This was done primarily through ad hoc meetings, press statements and the various stories that appeared in the media about ongoing and completed transactions. There was no concerted effort however, to institutionalise or disseminate information or to provide for systematic stakeholder consultations. A direct result of this was increased opposition to the privatisation/PPP programme and negative media coverage. A significant amount of time was spent on crisis communications during this time.

In 2001, The Privatisation Commission (The PC), in recognising the need for a more coherent approach to sustained information dissemination decided to develop a communications strategy and a public awareness campaign. In 2003, The PC recruited an Information, Education & Communications Manager (IECM) to supervise the development of the communications strategy and to implement the PA Campaign.

Along with the new IECM, Du Chazal Dee Mee (DCDM) from Mauritius, in consortium with Ketchum and a local advertising agency, Top Advertising, were recruited to assist in the design of the communications strategy. The strategy had four main elements:

1. Intermediary outreach - this comprises of consultations and meetings with key stakeholders;
2. Media campaign - TV and radio dramas; timely articles in the newspapers; TV and radio discussions on privatisation issues; documentaries on privatised companies and other advertising;
3. Public-at-large outreach - literally a "travelling caravan" was created to go to trading centers around the country with musicians, a drama group and The PC officials to conduct Q & A sessions with audiences;
4. Transaction communications support

The main thrust of the strategy has been to increase awareness and to garner support for the privatisation/PPP programme.

A key element to this strategy has been how to communicate effectively with labour¹. Numerous articles and toolkits have been produced for dealing with labour issues in the privatisation process. It is important to note that labour unrest has often been as a result of workers not being involved in the privatisation/PPP process by not being informed of the objectives and the rationale for privatisation of a public enterprise.

II. Malawi Telecommunications Ltd: Strategic Equity Partner Sought

The reform process in telecommunications commenced in 1997/98 when the Government of Malawi embarked on a programme to formulate a Communication Sector policy statement. Mindful of the need to keep labour sufficiently informed, extensive consultations with union leaders started immediately. Labour was concerned, for instance, with the effects of the separation of the postal and the telecommunication business of the former posts and telecommunications corporation.

In 1999, the Government of Malawi mandated The PC to find a Strategic Equity Partner for Malawi Telecommunications Ltd, the only fixed line telephone operator in the country². The objective was to find a partner who would make the requisite capital and financial investments in the company. A critical element of this strategy was keeping union representatives fully informed of the need for privatisation and its effects. This initiative explains why, unlike other privatisations, the MTL labour union has supported the privatisation process.

Management at The PC Secretariat decided to ensure that the union was involved every step of the way. To illustrate this, the Secretariat invited MTL Workers Union to witness the process of opening the technical and financial bids. At the time of opening the financial bids, the Union was present during the whole process of determining the bid price offered by the two consortia and the determination of the preferred bidder. Once proposals had been received from prospective investors, The Union President and his Secretary General were invited to The PC to be told of the various stages that would have to be undertaken in order to bring the transaction to a successful conclusion. At this point in time, an action plan was devised in order to ensure that the Workers Union would act as a liaison between The PC and the employees of MTL.

The communications strategy that had been developed in collaboration with the consultants emphasized the active involvement of the Unions and employees in the privatisation process. This resulted in the development and implementation of an information campaign targeted to employees of public enterprises.

The first stage of the interaction was to establish points of contact for each institution. The General Secretary was to maintain contact with the Information, Education and Communications Manager of The PC. All communications were to be routed through the two individuals. Thus began two years of close contact on a weekly basis between the Workers Union and The PC.

Once the preferred bidder had been identified and the license negotiations were underway, The PC, in conjunction with the Workers Union, held a series of meetings to discuss some of the workers concerns and how these would be incorporated within the structure of the negotiations process. The Union was encouraged to hold discussions with members and employees and submit to The PC their main areas of concern. In addition, plans were made for The PC to undertake a series of meetings at the four divisions of MTL across the country in order to address all employees and answer their questions.

Once the negotiations began, The PC, in consultation with the Ministry of Finance, negotiated an agreement with the bidder that they would refinance some of the debt owed by MTL in order to use the proceeds for the payment of retrenchment liabilities for the employees³.

In April 2005, The Executive Director, The IEC Manager and the Communications Officer visited all four divisions of MTL, addressing the workers. The main objective of these meetings was to ensure that the employees felt a part of the process of privatisation and for them to understand that The PC recognised the employees as a key stakeholder in the success of the transaction. The meetings comprised of a presentation made by the Executive Director of The PC, and a Question and Answer session. Two key issues that were addressed included the rationale and objectives for this particular transaction (which included the need for capital investments and technical expertise to manage the operations of the company to ensure that the obligations for expansion and roll-outs in the new license would be met) and the fate of the employees ( the investor basically agreed to ensure that the majority of the expertise in the company would be retained after the transaction closed).

In addition to the meetings with the MTL Workers Union, The PC also addressed the Board and Executive Management of MTL on at least two occasions. On these occasions, The PC addressed concerns related to the objective and rationale of the privatisation of MTL, the consequences of privatisation and its impact on management and employees, and also the future of the company. Management was also a key part of the MTL Steering Committee that was responsible for overseeing the transaction itself.

By July, 2005, negotiations with the preferred bidder were completed. As part of the negotiations and stakeholder consultations, the consortium made available a copy of the draft Terms and Conditions of Service that would apply should the transaction be successfully concluded. These were made available to the Union for their comments. The next stage was to arrange for a meeting between the Union and the potential investor.

In their discussions with the media, the Union and the employees were in support of the transaction proceeding. They were able to articulate the rationale and reasons for the privatisation of MTL and the advantages that would accrue to them should the transaction be concluded. In media interviews, the Union members and employees were willing to point out that they had been in constant communication with The PC and were kept informed of each stage of the transaction⁴.

In a further effort to incorporate the concerns of workers in the privatisation process, The PC has held discussions with the International Labour Office in Harare, Zimbabwe to discuss a pilot programme that would provide training to those affected by retrenchment. The objective of this training would be to provide psychological and financial counselling, and business start-up tips. There have also been discussions with the prospective investor to offer "tug-boating" opportunities to employees. Due to the large number of employees, there are some within the enterprise who provide a service that is not core to the provision of communication services, for example, security services. An idea that has been proposed, for example, is those individuals involved in the provision of security services form their own company and provide that service on an out-sourced basis. This is being discussed further in detail with the investor.

III. Lessons Learned

There are several lessons learned from this particular transaction:

1. Bringing labour representations and the workers on board right at the beginning enhanced the ability of The PC to communicate the issues and disseminate information to employees. Once the Union felt a part of the process, and that they had a key stake in the success of the transaction, they became a constructive partner for The PC.
2. The importance of being factual and upfront with respect to the information and messages being disseminated. The PC was consistent in the information that was passed on and kept the lines of communication open, even in times when there was not much to report. The fact that the Union (and eventually all employees) knew who they could call The PC directly, at anytime, provided them with a measure of confidence in the operations of The PC and the privatisation process.
3. The PC spent a tremendous amount of effort in engaging the Union and employees. There could have been just as much effort directed at the Board and Management, even though these bodies knew that they could contact us at anytime. Management was, however, kept informed of all of our interaction with their employees.
4. As the shareholder, the Ministry of Finance was also kept fully informed of the process as well as the concerns of the workers with respect to the termination of their contracts and the payment of terminal/retrenchment benefits.

In conclusion, The PC recognized the importance of engaging early in the process with those that might be resistant to change. By address concerns of stakeholders who might resist the change, in this case, labour, The PC was able to successful close the transaction.

For additional information on the activities of the Privatisation Commission of Malawi, please visit www.privatisationmalawi.org. You may also contact the author, Susan Banda, at banda@privatisationmalawi.org

¹ See Kikeri, Sunita. 1998. "Privatisation & Labor: What Happens to Workers When Governments Divest?" Technical Paper 396. World Bank, Washington DC.

²Malawi currently has no more than 80,000 working telephone lines. This represents a tele-density of 0.80 (less than one main telephone line per 100 inhabitants) This is arguably the lowest tele-density in SADC, excepting the Democratic Republic of Congo (ITU Report, October 2003). The Africa average is 2.78, which means Malawi needs to add an additional 200,000 working telephone lines to reach the Africa average.

³MTL has approximately 2400 employees.

⁴MTL Union Secretary, Frank Jalang'ombe, Daily Times, August 8, 2005: "The MTL Workers Union knows that the privatisation process is at an advanced stage of being concluded since The PC and the union have been in communication."

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