Water Remunicipalisation As a Global Trend
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HERE TO STAY: WATER REMUNICIPALISATION AS A GLOBAL TREND 180 Cases in 2014 3 Cases in 2000 1 Here to stay: REMUNICIPALISATION GLOBAL TREND 2000-2014 Number of cities that have remunicipalised water and sanitation services between 2000 and 2014 180 Total cases BY YEAR: worldwide 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 25 Global 20 136 Total cases on 15 High income countries 10 High income countries 44 5 Low and middle-income countries Total cases on Low and middle-income 0 countries France Belgium Germany 1 8 2 Canada 49 3 Ukraine Kazakhstan 2 Hungary 3 USA 2 2 Spain 12 Italy Turkey 2 1 1 Uzbekistan China 59 1 Lebanon Morocco 2 Albania 1 Jordan 1 India Cape Verde Mali 1 Vietnam Venezuela 1 1 Central African 2 Guinea 1 1 Republic Malaysia Colombia 2 2 1 Uganda Ghana 1 Tanzania 1 1 Indonesia 2 Bolivia 2 Mozambique 2 3 Uruguay South Africa 4 Argentina BY COUNTRY: Sources: PSIRU, Food & Water Watch, Corporate Accountability International, Remunicipalisation Tracker Authors: Emanuele Lobina, Satoko Kishimoto, Olivier Petitjean NOVEMBER 2014 Published by Public Services International Research Unit (PSIRU), Edited by Madeleine Bélanger Dumontier Transnational Institute (TNI) and Multinational Observatory Layout by Ricardo Santos Acknowledgements: We would like to thank Mary Grant from Food & Water Watch, and Corporate Accountability International for providing information on the US cases; Eloi Badia for contributing information on the Spanish cases; Lavinia Steinfort and Vladimir Popov for providing research assistance; and Nick Buxton and Olivier Hoedeman for reviewing the report. This white paper brings forward the key findings of a forthcoming book on remunicipalisation (2015). HERE TO STAY: WATER REMUNICIPALISATION AS A GLOBAL TREND INTRODUCTION Cities, regions and countries worldwide are is better placed to provide quality services to increasingly choosing to close the book on water citizens and promote the human right to water. privatisation and to “remunicipalise” services by Remunicipalisation refers to the return taking back public control over water and sani- of previously privatised water supply and tation management. In many cases, this is a re- sanitation services to local authorities or sponse to the false promises of private operators to public control more broadly speaking. and their failure to put the needs of communities This typically occurs after the termination of before profit. This paper looks at the growing private contracts by local governments or their remunicipalisation of water supply and sanitation non-renewal, but the process is not always services as an emerging global trend and pres- (or only) on a municipal scale. Regional and ents the most complete overview of cases so far. national authorities have considerable influence In the last 15 years there have been at least 180 over services funding and policy, and in some cases of water remunicipalisation in 35 countries, cases act directly as water operators, so the both in the global North and South, including high process unfolds within this broader context. profile cases in Europe, the Americas, Asia and Africa. Major cities that have remunicipalised Whatever its form and scale, remunicipalisa- include Accra (Ghana), Berlin (Germany), Buenos tion is generally a collective reaction against Aires (Argentina), Budapest (Hungary), Kuala the unsustainability of water privatisation Lumpur (Malaysia), La Paz (Bolivia), Maputo and PPPs. Because of the unpopularity (Mozambique), and Paris (France). By contrast, in of privatisation, private water companies this same period there have been very few cases have used their marketing propaganda to of privatisation in the world’s large cities: for encourage people to believe that concessions, example Nagpur (India), which has seen great op- lease contracts and other PPPs are quite position and criticism, and Jeddah (Saudi Arabia). Despite more than three decades of relentless distinct from privatisation; they are not. In promotion of privatisation and public-private fact, all these terms refer to the transfer of partnerships (PPPs) by international financial services management control to the private institutions and national governments, it now ap- sector. Policy makers must be aware of the pears that water remunicipalisation is a policy option high costs and risks of water privatisation, that is here to stay. Direct experience with common and as such they have a lot to learn from the problems of private water management – from experiences of public authorities who have lack of infrastructure investments, to tariff hikes chosen remunicipalisation and are working to environmental hazards – has persuaded com- to develop democratically accountable munities and policy makers that the public sector and effective public water operations. 3 KEY FINDINGS Water remunicipalisation Reasons to 1 is an emerging global trend 3 remunicipalise are universal As of October 2014, the global list of known water remunicipalisations that occurred from 2000 to 2014 As illustrated by the cases discussed in the features 180 cases. As the mapping of this process section below, the factors leading to water is still in its early days, we expect many more cases remunicipalisation are similar worldwide. to come to light as work progresses. This strong The false promises of water privatisation that remunicipalisation trend is observable both in the have led to remunicipalisation include: poor global North and the global South: 136 cases were performance of private companies (e.g. in Dar found in high income countries – where local author- es Salaam, Accra, Maputo), under-investment ities benefit from greater administrative resources (e.g. Berlin, Buenos Aires), disputes over and are less subject to the lending conditionality of operational costs and price increases (e.g. multilateral banks – whereas 44 cases were from Almaty, Maputo, Indianapolis), soaring water low- and middle-income countries. In the global North, bills (e.g. Berlin, Kuala Lumpur), difficulties the list of cities that have remunicipalised their water in monitoring private operators (e.g. Atlanta), services includes capitals such as Paris, France and lack of financial transparency (e.g. Grenoble, Berlin, Germany and major US cities such as Atlanta Paris, Berlin), workforce cuts and poor and Indianapolis. Beyond the symbolically powerful service quality (e.g. Atlanta, Indianapolis). cases of cities like Paris, many smaller municipalities are opting for public control as well: for example, in France alone more than 50 municipalities have terminated their private management contracts or Remunicipalisation decided not to renew them. In the global South, remu- 4 is more often initiated nicipalisation also involves former flagships of water through termination privatisation, including Buenos Aires (Argentina), La of private contracts Paz (Bolivia), Johannesburg (South Africa), Dar es Salaam (Tanzania) and Kuala Lumpur (Malaysia). In Most cases of remunicipalisation around the Jakarta (Indonesia), there is also a strong ongoing world have occurred following the termination of campaign to remunicipalise the city’s water services. private contracts before they were due to expire, with the exception of France where most local governments have waited until the renewal date Remunicipalisation is to end water privatisation. At the global level, 92 2 accelerating dramatically cases of remunicipalisation followed contractual termination, while 69 cases were non-renewals The number of cases in high income countries of private contracts after expiry. This means that shows a marked acceleration: 81 took place between in the great majority of cases, private contracts 2010-2014, while only 41 had occurred between proved so unsustainable that local governments 2005-2009. Thus the pace of remunicipalisation has opted to remunicipalise even though they knew doubled over the last five years. This trend is even that they may have to pay compensation. While stronger in some countries such as France: eight the best way to avoid the costs of remunici- cases between 2005-2009 compared to 33 cases palisation is not to privatize in the first place, since 2010. The high-profile 2010 remunicipalisation this also suggests that terminating a private in Paris in particular has influenced many other contract is feasible and often less costly than municipalities in and outside France such as Spain. continuing with privatisation in the long run. 4 Leading the remunicipalisation Remunicipalisation offers opportunities to build 5 trend are countries with long 7 democratic governance experience of private water management Remunicipalisation allows for strengthening accountability and transparency. In Paris and It is no accident that France, the country with Grenoble (France), the new public water opera- the longest history of water privatisation and tors have introduced advanced forms of public the home to the leading water multinationals, participation. First, civil society representatives sit presents so many cases of remunicipalisation. on the Board of Directors together with local gov- French local authorities and citizens have ernment representatives, and have equal voting experienced first-hand the “private management rights. This allows civil society to partake in deci- model” that Veolia and Suez have exported sions on the management of this most essential around the world. In the past few years, many public service, and to make operations responsive French cities have