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Thursday, December 6, 2012

Watchdog Group Has Its Eye On Veolia, City's New Water Division Consultant

Posted By on Thu, Dec 6, 2012 at 11:36 AM


Earlier this week, we broke news that the St. Louis Water Division has chosen Veolia Water, a Paris-based company and the largest water services provider in the world, to guide cost-cutting at the utility. The final contract has not yet been awarded, but a longtime employee of the department provided Daily RFT with internal memos showing that Veolia won the bid in early November.

Workers at the water division say they're concerned that "cost-cutting" really means layoffs, despite repeated assurances from Water Commissioner Curtis Skouby to the contrary.

But job security is not the only reason why locals are giving Veolia the side-eye. The nonprofit group Food & Water Watch, based in Washington D.C., has put out a number of reports questioning the company's motives, its commitment to the environment, and its track record in other cities.

Veolia is an enormous multinational company which services water facilities in 69 countries and in 2011 reported about $16 billion in revenue, mostly from Europe. It is involved in 385 water treatment facilities around North America. In some cases, it has taken over and fully privatized a city's utility, in others it has entered into a public-private partnership. The company's North American operation is based in Chicago.

As such a large, global firm, it's not shocking that Veolia has faced controversy in the past. But Mary Grant, a researcher with Food & Water Watch, says the company's reputation in the U.S. is troublesome and cities such as St. Louis should think twice before signing up.

"We have seen examples where they've managed sewage systems and under their management there have been sewage spills," she says. "Also, a lot of private companies, in general, when they take over, they do engage in corner-cutting."

Grant highlights several stateside examples, such as Veolia's short-lived acquisition of the Indianapolis water department, which at the time was the largest privately owned water utility in the country. The city bought Veolia out of its contract after the company was sued for alleged unfair rate hikes and the U.S. Attorney stepped in to investigate the safety of the city's drinking water. Veolia was sued by the nonprofit Baykeeper in two California towns for illegally dumping millions of gallons of sewage into the San Francisco Bay. A Veolia subsidiary in New Orleans was even accused of bribing officials for contracts and dumping sewage in the Mississippi River back in 2006.

For a comprehensive look at Food & Water Watch's concerns both locally and internationally, take a gander at reports here, here, and here.

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