Socialists Are All Wet:Why Privatizing Water Utilities Is Good for Public Health and

the Environment

Elizabeth Brubaker

Environment Probe

“Water privatization is a disaster.”

– Council of Canadians, 2004

“The water we drink is simply too precious to trust to corporate hands, and too essential to rely on market forces alone to ensure equitable access and distribution.”

– Maude Barlow and Sara Ehrhardt Council of Canadians, 2004

“Water is not a commodity and must not be left to the whims of the market because no person or entity has the right to profit from it.”

– Council of Canadians and

Canadian Union of Public Employees

2003

“The primary role of business is not to provide accessible and quality water: It is to make a profit for its shareholders. Their objectives, and the needs of people and nature, are fundamentally at odds.”

– Maude Barlow, Council of Canadians, 2003

“It is essential that water remain in public control, properly managed by local and national governments in the public interest. Our future depends on it.”

– Claude Genereux Canadian Union of Public Employees 2003

“The private sector can’t match the quality, accountability and affordability of public water systems.”

– Judy Darcy, CUPE, 2003

“P3s are risky propositions, combining higher costs, reduced accountability, and poorer service.”

– Paul Moist

Canadian Union of Public Employees

2004

246

357

407

The Environmental Commissioner of Ontario, 2003:

• “The effluents of Ontario STPs are putting very serious pressure on the environmental quality of Ontario waterways.”

• “Despite an apparent problem with non-compliance at many municipal STPs, MOE very rarely prosecutes STP operators.”

• Capital

• Expertise

• Efficiency

• Accountability

Capital Needs:Cdn. Water & Sewer Infrastructure

• $89 billion over 15 years-- Canadian Water & Wastewater Association, 1998

• $79-$90 billion over 20 years-- National Round Table on the Environment and Economy,

1996

Private Capital

• Meet investment needs

• Free up public funds for other uses

• Offload risk

• Increase capital efficiency

Private Operators

• Tools– Experience

– Expertise; specialized skills

– Research and development

• Incentives– High quality service– Efficient operations

“The way [private water companies] stay in business is through cutting costs and charging ever-increasing user fees.”

– Maude Barlow and Sara Ehrhardt

Council of Canadians, 2004

Cost savings from privatization

Houston 43 percent

Seattle 40 percent

Indianapolis 42 percent

Milwaukee 30 percent

“The fear is that accountability will vanish, and the world will lose control of its source of life.”

– Center for Public Integrity, 2003

Conflicts of Interest

• Financial

• Operational

“When corporations take over your water, we lose control of it -- with potentially tragic consequences for your family.”

– Council of Canadians, 2004

Accountability Mechanisms

• Regulation– Enforcement

• Legal liability– Consequences of liability

• Contracts

• Markets

“When the primary interest is share-holder returns and market share, water for people and for nature will be left out of the picture.”

– Maude Barlow and Sara Ehrhardt

Council of Canadians, 2004

POPULAR PAIN DRUG RECALLED

Vioxx arthritis pills linked

to heart attacks and strokes;

investors punish Merck by

knocking its stock down 27%

– National Post, October 1, 2004

England 100 % privately owned

France 80 % privately operated

Spain 50 % privately operated

US 14 % privately owned plus 2,400 systems privately operated