May 13, 2005
April 8, 2004: Stockton Record
What are the issues?
RWE/Thames, Suez/ONDEO and Vivendi (now Veolia) have been aggressively marketing their services to mayors in the U.S., after their hope to expand their market in developing countries hit major stumbling blocks. With 85% of the people in the U.S. now served by public water companies, these private companies see an opportunity to control 70-85% of the water services. Customers would pay the full cost of the service, plus a profit for the companies.
To create a platform for expansion in the U.S., these European transnational corporations bought the three largest private water service providers in the U.S.
RWE has now rung up $28 billion in debt. Suez/ONDEO is $29 billion in debt and Vivendi has spun off most of its profitable water division as Veolia in order to stave off bankruptcy following its Hollywood buying spree. This raises a question about the quality of services these companies can provide while paying off their debts and becoming profitable.
In Stockton, citizens gathered enough signatures to require a vote on contracting out their services, but then the Mayor got the City Council to do an end run around the citizens and vote for privatization before the vote could take place. Citizens responded by circulating new petitions requiring a vote. With limited resources, they were up against OMI-Thames-RWE which donated $75,000 in one week's time to defeat the petition drive. This raises serious question about corporations undermining the democratic process, all the more serious when a public resource essential to life itself is involved.
These European corporations are now trying to persuade Congress to require public utilities to "consider" privatization as a condition of receiving federal dollars for water infrastructure and are finding a sympathetic ear among those in Congress who want to shrink government. However, the National Research Council has concluded: "Except for short-term cash flow purposes, or the rare circumstances of low public credit, municipal debt will remain the most practical and least expensive form of financing."
Despite the fact that these corporations have lobbied hard with the U.S. Conference of Mayors, all is not going smoothly in their privatization plans. Atlanta, Georgia cancelled its 20-year contract with Suez/United Water –the biggest such contract in the U.S. — after just three years due to poor performance. Neighborhoods in Lawrence MA, primarily Spanish speaking, successfully organized to keep United Water out. And local businesspeople in Lexington KY have mobilized to buy their utility back now that RWE is the owner. Meanwhile the local union in Indianapolis is fighting to keep United Water from cutting workers’ pensions in order to show corporate profitability.
Back in Stockton, in December 2003 Concerned Citizens Coalition of Stockton, joined by the Sierra Club, won a court case in CA Superior Court to stop the takeover by OMI-Thames because of lack of compliance with California’s environmental law. OMI-Thames and the mayor then went to court for a new trial which the judge granted. CCCoS and the Sierra Club have responded with a petition to the State Court of Appeals.
"You have to start organizing as soon as you hear that privatization is being considered."
Be on the lookout
Research your rights
Require public votes
Resources for More Information
Food & Water Watch's Water for All Campaign
Polaris Institute Operation Water Rights
Public Services International/Research Unit
Corporate Europe Observatory (CEO)
Two outstanding documentaries have been produced:
Thirst will be shown on PBS July 13th. Sierra Club has written discussion guide for film. For more information, see www.thirstthemovie.org
Dead in the Water produced for Canada by CBC. Visit their web feature at www.cbc.ca/fifth/deadinthewater/index.html for all materials and wwww.cbc.ca/fifth/deadinthewater/america.html for "North America: Fixing the Aging Infrastructure in Atlanta, Georgia and Moncton, NB"
Books to Read
Blue Gold: The Fight to Stop the Corporate Theft of the World’s Water, by Maude Barlow and Tony Clarke, The New Press, New York, 2002
Every Drop for Sale, by Jeffrey Rothfeder, Tarcher/Putnam, 2001
The New Economy of Water, by Peter Gleick et al, February 2002, Pacific Institute
The Water Barons, by the International Consortium of Investigative Journalists, 2003
Mother Jones, Nov./Dec. 2002, "Water for Profit" by Jon Luoma (tells the story of Atlanta)
The Nation, Sept. 2/9 2002 "Who Owns Water?" by Maude Barlow & Tony Clarke
The New Yorker, April 8, 2002, "Leasing the Rain,” by William Finnegan
New York Times, 2/1/03, "As Cities Move to Privatize, Atlanta Steps Back"
Outside, "The Water Crisis-Special Report," August 2003
Yes! Winter 2004, "Whose Water?" (series of articles)
Photo courtesy Public Citizen.Up to Top