Veolia, aka Vivendi, aka Transdev, was originally founded as Compagnie Générale des Eaux by an imperial decree of Napoleon III. Some of its very first contracts were providing water and transportation to the French colonies.
Today the French corporate giant Veolia is the largest privatizer of water in the world and a lead privatizer in transportation and waste services. The company has long been a target of water justice activists for low bidding on public water contracts, driving up costs, reducing service, underinvesting in public infrastructure, contractual noncompliance, false reporting, turning public investment into private profit, jeopardizing public health and safety, poisoning entire populations, and covering up its own and government failures.
Veolia and Suez — another French company and the second largest privatizer of water in the world — have pointed to their operations in France to encourage cities worldwide to privatize public water service. But water privatization has been a disaster in France just as it has been elsewhere around the world. From 1985-2009 water tariffs went up by 265%, even while the private companies weren’t maintaining the water infrastructure as required. They were recklessly cutting costs and jeopardizing public health and safety at home, just as they do abroad. They declared profits of 6-7% but in actuality their profits were much higher. In 2010, Veolia and Suez lost the Paris contract they shared 50/50 for water supply and billing. The very first year after Paris returned the water contract from corporate to public management, there were savings of 35 million Euros and the cost of water to consumers was reduced by 8%. According to Food & Water Europe, “Paris is one of more than 40 French municipalities and urban communities that reclaimed public control of their water systems over the past decade to reduce prices and improve services.”
Veolia continues to win lucrative contracts and work with government actors to privatize resources and to solidify new laws and trade policies where they will have more power and be able to make more profit with less accountability. This is terrifying given Veolia’s track record of criminal negligence, public endangerment, poisoning entire populations and being responsible for other avoidable accidents that have cost so many lives. Also, Veolia is a lead union buster brought in by governments to enforce austerity measures against the poor, mostly black and brown folks.
One aspect of the Boston struggle that does not get enough attention: Union leaders were fired by Veolia Assistant General Manager of the Boston contract Jonathan Sanders — who shortly later resigned, changed his name to Jonathan Steketee, and in a blatant conflict of interest was appointed Transportation Director of Boston Public Schools, a position he still holds.
Evidence suggests that Veolia may have participated in the failure and coverup of the Flint lead poisoning crisis and Legionnaires Disease outbreak. Veolia has held a number of consultancies with the Michigan Department of Environmental Quality (MDEQ), including a contract to test the water quality in Flint, for which they were paid $40,000.
On March 12, 2015 Veolia released a report stating “The review of the water quality records during the time of Veolia’s study shows the water to be in compliance with State and Federal regulations, and, based on those standards, the water is considered to meet drinking water requirements.”
General Motors had stopped using water from the Flint River nearly six months earlier in October 2014 because the water was corroding engine parts. There is every reason to believe that the Veolia tests taken around the same time as city tests should have yielded high levels of lead in the water supply, as the city tests had. Veolia is one of six companies being sued by Flint residents for poisoning their children with lead in the water supply.
Veolia is very much tied to other failures of the undemocratic Emergency Management system forced on Michigan residents by Governor Rick Snyder. Seven cities or school districts in Michigan have been placed under Emergency Management, including Flint and Detroit. Cities are governed by high paid foreign managers appointed by the Governor who have the power to overrule local elected officials. Residents who are impacted are predominantly black and brown.
Michigan public disclosure laws protect unaccountable lawmakers more than they protect public disclosure. It will take a good deal of muckraking to fully piece together Veolia’s role in Governor Snyder’s Emergency Management across Michigan. We do know that Veolia was brought in to consult on privatization of water departments in Michigan and to conduct a peer review of the Detroit Water & Sewerage Department, which concluded October 2014. Detroiters Resisting Emergency Management believe that Veolia is behind the water cutoffs that began in April 2014, when Detroit entered into a two-year, $5.6 million contract with Homrich, a demolition company, to carry out 70,000 shutoffs in 730 days.
In Detroit, families are having their water cut for outstanding bills of $150, while a golf course, stadiums and other corporate enterprises have owed $30 million for water and never had their water access threatened. Today 91,000 people in Detroit are without water, and water cuts continue for a third summer in a row with 1 in 5 people at risk of having their water cut this summer.
The cost of water in public housing in Detroit is many times that of water in rich white suburbs of Detroit. Further tariff increases have been pushed through by emergency managers. Beginning in July another 4.3% hike added by the Great Lakes Water Authority will go into effect. Officials say these hikes are to account for high water losses in the old Detroit water network relative to the more efficient water supply networks in the newer suburbs. Public housing residents who do not pay their utility bills get kicked out of public housing, and the city sells the emptied lots to developers.
“In 2001 and 2002, the Michigan Department of Environmental Quality issued permits to Nestlé, the largest water bottling company in the world, to pump up to 400 gallons of water per minute from aquifers that feed Lake Michigan. This sparked a decade-long legal battle between Nestlé and the residents of Mecosta County, Michigan, where Nestlé’s wells are located. One of the most surprising things about this story is that, in Mecosta County, Nestlé is not required to pay anything to extract the water, besides a small permitting fee to the state and the cost of leases to a private landowner. In fact, the company received $13 million in tax breaks from the state to locate the plant in Michigan.” (“Michigan’s Water Wars: Nestlé Pumps Millions of Gallons for Free While Flint Pays for Poisoned Water”, Democracy Now, transcript February 17, 2016).
Residents of Flint were forced to pay for water that will cause lead poisoning in their families for generations to come. Residents of Detroit on public housing lost their housing permanently for being unable to pay 3-8 times the amount for water as residents in rich suburbs. But golf courses and stadiums never had their unlimited water access threatened despite owing millions of dollars and Nestle got 400 gallons of water per minute basically free plus $13 million in tax breaks. This is how privatization and austerity work.
The same month that Flint switched over to the Flint River — without basic textbook 101 precautions to prevent lead pipe corrosion — tests found that Veolia negligence was responsible for poisoning 3.6 million people in Lanzhou, China with extremely high levels of Benzene in the public water supply.
Residents who sued Veolia for the cost of medical treatment and bottled water were denied. “Su Kehong, deputy head of the court, admitted that Lanzhou Veolia’s lack of regulatory supervision led to the tap water crisis, but the court rejected the claims because the company had adopted remedial measures to deal with and compensate for the pollution, such as apologizing to the public, publishing water quality testing data, and cutting down water charges on locals.” (“Court rejects citizens’ compensation claims for tap water contamination”, Xinhua News Agency, Nov 27, 2015.)
In 2010, the same year as the Paris victory went into effect, a World Bank court ruled that the poor province of Tucuman, Argentina had to pay a Veolia subsidiary US$105 million in damages (an amount nearly equal to ten percent of the public debt of Tucuman province) because corporations have a right to make a profit off the supply of public water.
The Veolia subsidiary had raised the cost of water 95%. Meanwhile there were severe water quality problems, other areas of contractual non-compliance and 37.8% of the population had no ability to pay for water. Seven small cities formed a coordinating committee and established a consumer organization to provide legal support for a resident organized payment boycott.
But the World Bank’s International Centre for the Settlement of Investment Disputes (ICSID) ruled that the poorest province of a poor country had to pay a dishonest and incompetent international corporate state actor nearly twice as much as they were paying before for water that had become polluted and was running brown.
The local government was over-ruled and found not to have jurisdiction over the cost of public water in their province. Veolia was not held accountable for the poor quality of the water or for failing to fulfill its contractual obligations.
With the Trans-Pacific Partnership (TPP) in place, we the people — being occupied by the corporate police state — will have even less recourse.
Private corporations like Veolia who profiteer from public investments in basic services, like water, transportation and trash, will have more legal protections to get away with its mass poisonings of entire populations and other crimes. Not to mention that even when the corporation is violating its end of the contract, it will have increased legal and state protection to set whatever salaries they want and to embezzle in other ways, without calling this profit. Public municipalities will increasingly be required to foot the bill.
It’s time that we as a community come together and get real about corporate power, how it impacts our individual and collective struggles, and strategize to beat it.
The Boston School Bus Drivers Union USW 8751 Team Solidarity are at the forefront of this struggle!