Public Services International (PSI) and CICTAR, together with the Colombian trade unions SINTRAISAGEN, ORGANISA, SINTRAE, SINEDIAN are launching the study Brookfield's ISAGEN: an example for demanding global tax changes on the economic impact and high costs in energy payments to citizens all caused by the sale of the majority stake of the electricity company ISAGEN in 2016 to a subsidiary of the Canadian investor Brookfield, which constituted the second largest privatisation operation in Colombia's recent history.

Since its sale, ISAGEN reduced investments and increased profits, and appeared to use debt write-offs to distribute income to Brookfield's Bermuda subsidiaries, resulting in low tax payments in Bermuda, and little investment in the company's workforce.

Brookfield Asset Management

·       Brookfield Asset Management is one of the world's largest investment managers, specialising in private equity, real estate and energy. Brookfield has over US$900 billion in assets in more than 30 countries - including US$59 billion in South America - and much of these investments come from workers' resources through public pension funds.

·       In 2023, Brookfield recorded revenues of US$96 billion. In the energy sector, Brookfield-controlled companies have an installed capacity of 33,000 megawatts (MW) worldwide, of which hydroelectric generation accounts for a quarter (8,275 MW) in 237 facilities.

·       Brookfield often buys public infrastructure. In 2016, it acquired the Colombian government's 57.61% stake in ISAGEN. It subsequently acquired 99.7% of the company's shares through several transactions.

·       ISAGEN is the second largest power generation company in the country, with 23.8% of the market (2022), and a net effective capacity of close to 3,000 MW.

·       Colombia faces an energy crisis, with threats of shortages and the cost of energy rising by 30.23% between January 2022 and October 2023.

·       Meanwhile, ISAGEN's profits almost tripled (198%) between 2021 and 2023, and the company has paid more than COP 3.4 billion (US$ 864 million) in dividends to its shareholders (who are 99.7% Brookfield).

·       It seems that the Colombian population is bearing the brunt of higher energy costs due to the climate crisis and the El Niño effect, while Brookfield is increasing its profits.

The energy and climate crisis in Colombia has put the privatisation of ISAGEN at the centre of the discussion. Both the privatisation itself, which meant the loss of public control of water and the impact on a market increasingly in private hands, and the use of the proceeds from the sale are being criticised by Colombia's president, Gustavo Petro. In times of crisis there are also opportunities for change. The Colombian population should not be the only ones to bear the costs of the crisis. Brookfield's ownership of ISAGEN requires re-evaluation.

"Through its work in over 150 countries around the world, PSI has experience and evidence of the impacts of privatisation of energy systems on access to communities and conditions for workers. This report reveals how the change in perspective of an entity's owner radically changes the company's strategies resulting in negative impacts for communities, workers and the state. We need to return to the public way, which is not only an issue of public ownership of energy systems, but also of a public ethic, a perspective towards the common good which needs participatory systems for communities and workers in the sector," Susana Barria, PSI Andean sub-regional secretary.

"The pattern of profit extraction and tax minimisation revealed in this report is nothing new. CICTAR's research, including previous research on Brookfield itself, shows that this kind of behaviour is common when governments put public services in the hands of private profit-driven companies. This is particularly worrying in the Global South, where inequalities are already high and there is an urgent need for quality public services," Livi Gerbase, CICTAR's Latin America and Caribbean researcher.

Oscar Alveiro Vallejo Giraldo, president of SINTRAISAGEN, states that since the privatisation of the company in 2016, the new administration of the company initiated an optimisation plan with the purpose of maximising its profits, i.e. to make the investment more profitable, and in that sense we workers have been exposed in some cases, such as: (i) higher workloads; (ii) hiring new workers with lower wages; (iii) limiting the possibility for workers affiliated to SINTRAISAGEN to improve working conditions; (iv) submitting us to an Arbitration Tribunal and; (v) continued anti-union practices that affect union organisation.

"SINEDIAN is the trade union of tax and customs workers in Colombia. It has members and a presence in 24 cities in the country and, together with its centre for tax studies, joins the fight for sustainable and fiscally responsible energy democratisation. For SINEDIAN, the fight for tax justice and transparency in multinational operations is complemented by monitoring the impact of energy generation on our planet. We believe that this work should be in the hands of the state to assume commitments to its people other than profit" Pedro Giovanni Caro

"CUPE has always opposed the privatization of public assets in Canada and around the world. We support the unions in Colombia in calling for a re-evaluation of Brookfield’s troubled privatization of a key electricity provider in Colombia and its impact on workers, communities, consumers and financing of public services," Mark Hancock, President of CUPE, the Canadian Union of Public Employees.