New waters or old boys network? Struggles around water Utilities Privatisation in the Upper Arno Water District, Italy

M.Sc. Minor Thesis by Rossella Alba

January 2013

Irrigation and Water Engineering Group

Title page pictures were taken during field work in the Upper Arno water district (September 2012). New waters or old boys network? Struggles around Water Utilities Privatisation in the Upper Arno Water District, Italy

Minor thesis Irrigation and Water Engineering submitted in partial fulfillment of the degree of Master of Science in International Land and Water Management at Wageningen University, the Netherlands

Rosella Alba

January 2013

Supervisors:

Dr.ir. Rutgerd Boelens Irrigation and Water Engineering Group Wageningen University The Netherlands www.iwe.wur.nl/uk

Acknowledgements

I would like to thank my supervisor, Rutgerd Boelens, that encouraged me during the research and stimulated my critical thinking.

Thank you to all the people that took part to this research for sharing with me their stories, experiences and opinions. I would like to thank the members of the Comitato Acqua Pubblica for their enthusiastic collaboration with this project.

Thank you to Eva, Stefano and all my friends that supported me during the months that followed my field work. A special thanks to Giacomo for his suggestions and sharp comments on my work.

Ultimately, I would like to express my gratitude to my family for their encouragement and support to my project.

II

Table of Contents

Acknowledgements ...... II

Introduction ...... 1

Chapter one: setting the scene...... 4

1. Research framework ...... 5

2. Problem statement ...... 11

3. Research objectives and questions ...... 12

4. Research methods ...... 12

Chapter two: the national, regional and local context ...... 15

1. The Italian context ...... 15

2. The Tuscany model ...... 20

3. The upper Arno contestation arena ...... 25

Chapter three: The disputes over Resources, Rules and Authorities and Discourses...... 32

1. Resources ...... 32

2. Rules ...... 34

3. Authorities ...... 36

4. Discourses...... 38

Conclusion ...... 45

Discussion ...... 48

1. Discussion on methods...... 48

2. Discussion on concepts ...... 49

References ...... 52

III

Introduction

During the first year of my master in International Land and Water Management, I have been trained to look at water as a contested resource and at conflicts over water access as a product of the interaction between social and technical elements, between nature and society. Often case studies from developing countries were the starting point to discuss the unequal outcomes of struggles over water control in the irrigation field. Often, during lectures I thought about Italian conflicts on drinking water privatisation as an exemplary struggle over control of water resources. This thesis represents an effort to expand the discussion over water conflicts to the drinking water field within the European Union (EU) and to discuss the impact of neoliberal policies and politics in Italy.

Since the 1990s, with the aim of allocating water resources, governments around the World have started to introduce various kinds of market-based water sector reforms, thereby increasing private sector participation in drinking water supply (Bakker 2003a). Proponents of private sector involvement argue that private companies have generally a higher performance in term of efficiency, water and service quality, access to finance, expertise and knowledge compared with the state’s possibilities. According to private model supporters, corruption, lack of government capacity and finance lead to the ‘state failure’ in drinking water provision (Budds and McGranahan 2003). On the other side of the debate, the opponents of water privatization claim ‘market failure’ in considering social and environmental implications related to water supply (i.e. pollution, health, equity) and their lack of investment in infrastructure (Bakker 2003a; Hall and Lobina 2004 ). The controversy of private involvement in water control becomes more complex with the shift from ‘government to governance’ that marked the last two decades. This process is characterized by the withdrawal of the state from decision-making arenas and the introduction of new actors such as NGOs, private sector, supra-national institutions (e.g. European Union, World Bank) and sub-national ones (e.g. regional governments, local administrations). The transfer of functions and responsibilities between different levels of government is not just a technical-organizational shift but it carries socio- political consequences as it involves re-arranging the relations of power between state and non-state actors. Furthermore, the shift from government to governance often is connected to ‘neoliberalisation of nature’, that entails the introduction of private sectors principles and models in natural resources management. (Swyngedouw 2004; Castree 2008a).

Historically, the Italian drinking water sector followed a similar trend. As other European countries, in the recent past, due to the pressure of European Union, Italy has moved towards an increased presence of private sector norms and principles in water management practices (Lobina 2005a). Currently, the Italian water sector is experiencing many changes that started with the introduction of a water reform in 1994 (l.n. 36/94, so called Galli law). The evolution of legislation on water management interrelates with more general legislation about public utilities management: it follows European

1 guidelines for the introduction of competition in the sector and installs a process of institutional decentralisation towards regional and local levels (Goria and Lugaresi 2004).

In particular, the passage of a law that forced privatisation of drinking water utilities led to the opening of a rather heated debate about drinking water governance. While the Italian Government supported the privatization of the drinking water operators, citizens opposed to it in various ways (through popular initiative laws, referendum, demonstrations, debates, etc.). Since the early 2000s, citizens have organized themselves at local and national levels in committees, forums and associations (Petrella and Lembo 2006; Bersani 2011). Water has been discussed not only as a natural resource but also as a way of expression of social power relations. The debate around water governance crossed the technical boundaries of engineering and economics and led to a process of re- thinking water as a politically contested resource. In 2011, a national referendum against drinking water management privatisation was promoted by the Italian Forum of Water Movements (Forum Italiano dei Movimenti per l’Acqua). The referendum aimed to abrogate some articles of different laws that governed water utilities, two questions regarded water. The first one was meant to stop the government’s plans to increase the presence of private operators in the water sector, the second query aimed at eliminating the return on invested capital that was previously guaranteed by law to the water providers. The referendum had a positive outcome for the Forum of Water Movements as more than 95% of the voters supported their stakes. The referendum campaign was based on water as a human right; as a common and not as a commodity; and on participatory practices in water resource governance.1 In Italy, water became the centre of a political debate about citizens participations and democratic practices, as the slogan adopted by the movement highlights: ‘si scrive acqua, si legge democrazia’ (in English, ‘we write water, we read democracy’, my translation). Currently, the Italian Water Movements are committed with the recognition and the implementation of the result of the referendum by the Italian government and the European campaign for the recognition of the right to water in the EU.

Italian conflicts over drinking water and sanitation governance represent the objects of my research. Specifically, I will analyse the struggles for the control over the natural resource and the strategies and the actions that civil society created and used to oppose the private model of water control. Due to the complexity of this problem and the various local consequences that the semi-privatisation of drinking water and sanitation governance entailed, the research is based on the development of a case study. The case of the upper Arno water district and of Arezzo, a city in Central Italy, is described and analysed. This area represents a ‘laboratory of practice’(Latour 1987) where the Galli law has been tested and contested for more than 10 years. The Arezzo case is the story of the establishment of Nuove Acque (literally meaning ‘new waters’), the first public-private partnership (PPP) in the supply of water and sanitation services in Italy, and the story of a group of citizens who, since the early 2000s, organized themselves in forums and committees in order to discuss, oppose and create an alternative to the privatization of the local drinking water provider.

1 From www.acquabenecomune.org.

2

The case study will help to understand how water became the mobilizing factor of a political debate over the participation of citizens in natural resource governance at local and national level. The research is a partial analysis of a complex process that involves social, political, legal, economic and environmental domains at local, regional, national and international scales. Thus, it does not pretend to be exhaustive. However, it aims at starting a discussion about conflicts over natural resources privatisation in Europe.

This thesis is organized as follows. The first chapter describes the theoretical framework that informed the research, introduces the problems that are addressed, the research objectives, questions and the methods. The national, regional and local contexts that surround the case study are presented in the second chapter. The third chapter zooms in on the actors involved in the case study area and analyses their disputes over water control according to different level of struggles: resources, rules, authorities and discourses. In the conclusion I will discuss the findings of the research in light of the questions that guided the study. Ultimately, reflections on the concepts and methods that guided the research are discussed in the last section.

3

Chapter one: setting the scene.

Since the beginning of the referendum campaign, the role of water as a mobilizing factor has triggered my personal curiosity and academic interests. At the time, I was a politically engaged student of Economics. In order to understand the debate on the drinking water sector, I was writing my bachelor’s thesis on Italian water utilities management. Meanwhile the Italian squares were crowed with initiatives in support of the referendum, Berlusconi’s government was putting in practice several tricks to discourage the participation of the Italian voters to the referendum. But on the 12th and the 13th of June 2011 almost 60 % of the electors voted. Researchers, journalists, politicians and activists gave several explanations for the high participation of the citizens. What stirred up my curiosity was the ability of water to trigger the national political debate, to encourage people’s participation, to mobilize a new language and discourse around ‘the commons’.

In order to better understand the relationship between water and participation and confront my perception with the scientific debate, I started a Masters course in Wageningen. During the first year, I deepened my knowledge on water conflicts. I studied the relation between water, equity and democracy, I discussed about it with my co- students and teachers. I came across several theories, concepts and frameworks that have constructed the bases of my research. I embraced a constructivist point of view that looks at objectivity as the ability to object, rather than as the definition of a scientific truth. My point of view changed, influenced by the epistemic community that surrounded me, among others, the Irrigation and Water Engineering chair group.

Finally, I decided to go back to Italy to challenge my knowledge and use it in order to analyse Italian drinking water conflicts. During the summer of 2012, I spent two months in the upper Arno water district (Fig.1). I met several people, collected their stories and discussed with them about water, politics, nature and society. With my presence in the water district, I became part of it and part of the conflict that is analysed in this research. The reader of this thesis will know the story of the upper Arno water district through my experience and knowledge. As a researcher I am also part of the research. On the one hand, this gave me the possibility to understand in-depth the local situations; on the other, due to the academic ‘glasses’ I am wearing, I perceived only part of the complexity of the conflict.

In order to deal with this, I further clarify my position in the first chapter. It presents the research framework that guided my thesis. In the light of the concepts introduced, I define the objectives and the problems that are investigated in the research and the questions that lead the study. Ultimately, the use of different research methods is described .

4

Fig. 1 – The case study area: Tuscany in yellow, the upper Arno water district in orange and the municipality of Arezzo in red. (my elaboration)

1. Research framework

In the following section I outline the concepts and theories that informed this research. First, I describe my vision on drinking water and sanitation networks and on water governance. Then, the creation and contestation of socio-political orders are discussed, focusing on neoliberal policies and practices. In the last part, water rights are defined and the framework I used for analysing them, the Echelons of Right Analysis (ERA) is described.

Water networks Drinking water and sanitation systems, like irrigation systems, are the result of the dynamic interaction between socio-technical and natural elements. A natural resource, water, is diverted from a source and through technology (i.e. purification plant, aqueduct, pipelines networks, treatment plant) delivered to people/users. Drinking water systems can therefore also be typified as water-networks (Bolding 2004). Indeed, water is the mobilising actor of a range of ordered relations that involve infrastructure, financial capital, labour, laws, rules, managers, politicians, users and non-users. In this network, 5 water circulation depends both on institution, practices and hydrological configurations, "it is not only physically produced, but also socially enacted" (Bakker 2003a:49). Thus, the water-network is a hybrid constituted of social and natural elements (Swyngedouw 2004).

In this research I shall illustrate the interaction between nature and society in the water district of the upper Arno. The district represents the physical space where drinking water provision takes place. Mountains, plains, rivers banks, artificial lakes and canals, regional and urban geographies shape the actual production, conduction and distribution of water (Swyngedouw 2004:36). At the same time, the social ‘space’ comprehends managers, politicians, engineers, lawyers, users and others that with their interactions influence the order that rules on the drinking water provision. Moreover, other artificial ‘things’ such as infrastructures, meters, rules, guidelines, contracts, court cases, demonstrations and newspaper articles constitute the water-network.

Water governance Water-networks are characterized by an order, that is produced, re-produced or counter- produced by the relation between the actors that constitute it. Now the question is, how does this happen? What are the ways that this order is produced? To answer this, it is useful to consider the shift from government to governance in the water sector since the early 1990s and how this influenced water policies and practices.

In Italy, because of its importance as a basic need, drinking water supply has been traditionally under public control. The central state together with other local authorities (e.g. municipalities) ruled on allocation of the resource between different uses, the construction of infrastructures for drinking water provision and the management of water distribution. This public involvement resulted out of several reasons. The state had the financial possibilities to construct and operate large scale infrastructures such as aqueducts and thus mobilize great volumes of water to meet the need of a growing population. Then, access to drinking water and sanitation was considered a basic citizens’ need that the modern state had to ensure. “Drinking water supply was conceived of as a public good, a necessary precondition to participation in public life” (Bakker 2003a :40), thus the drinking water and sanitation were defined as public services. The state controlled water resource management and allocation. In other words, for a long time the government took charge of the upstream and downstream users, of the water itself and the environment (i.e. quality and quantity, sources and uses), of the infrastructures (i.e. pipelines, treatment plants, dams) and also dealt with shortages, floods and other ‘natural’ events. Furthermore, the central government established relationships between these elements: between the users and the environment; the water and the environment; the infrastructure and the users; the possible events and the environment. The state was engaged in disposing the relation between things (i.e. potable water) and men/women (Foucault 1991).

Since the early 1990s, the presence of the state in water management and distribution has been declining in favour of new actors, new principles and new decision-making arenas. This process, that is often defined as a shift from government to governance, impacted especially the public utilities sector. It has been characterized by the rearrangement of the former relationship between state and non-state actors (Swyngedouw 2005) and the 6

“multiplication of power centres and decision-making scales” (Kaika 2003:302). In particular, these reorganizations follow two directions: a vertical upward shift “from nation-state to international public institutions with supranational characteristics such as the EU, the WTO” (Kersbergen and Waarden 2004:152) and a downward shift from national level to sub-national and regional levels of governance. This complex movement is not socially neutral as it implies the involvement of new actors and the exclusion of others, the change of socio-political relations and power distribution within society. For instance, in the case study area considered in this research, the municipal drinking water supply model was abandoned in favour of the inception of a public-private partnership and a local water authority that would manage water in a wider area corresponding to the upper Arno water district. This shift represents the outcomes of a process of decentralisation of water governance that took place in Italy in the late 1990s. Recently, a new regional water authority has been created that (should) replace other local water authorities. The birth of a new decision-making body reveals a discussion on the scale of water management in the area and the distribution of power between different institutions and organisations.

Governance entails the relationship between different state and non-state actors, their interests and their objectives. As Castro (2007) highlights, governance is not a neutral policy tool, it is indeed “a process of decision making that is structured by institutions (laws, rules, norms and customs) and shaped by ideological preferences” (Bakker 2010:44), it reflects a particular view of how society should be ordered according to ideas, values, discourses and power relations, what Law (1992) describes as ‘network ordering’. Thus water governance deals with the fundamental questions of how water is perceived, accessed, used and managed, how water-networks are organized, ordered and ruled in heterogeneous and highly differentiated socio-environmental configurations characterized by the confrontation of different and divergent interests and power- relations (Bridge and Perreault 2009). Water governance represents also the process of production and ordering of social and natural elements that constitute water-networks through the control over resources, rules, knowledge, authorities and people. The way these relationships are created, the practices and technologies that are used reflect the way government works, the art of government (Dean 1999) or governmentality, what Foucault (1991) defines as ‘the conduct of conduct’. If “government is the right disposition of things” (Foucault 1991:93), governmentality is the way this end is achieved, “the rationality of the government” (Bridge and Perreault 2009:489). It entails the tactics, activities and devices that are used to define and govern society, water and infrastructures. From this point of view, it is interesting to study “how the state is reorganised and mobilises a new set of ‘technologies of governing’ to respond to changing socioeconomic and cultural conditions” (Swyngedouw 2005:1992).

Actually, the order that governs the socio-natural relationships is not static. On the contrary, its production and re-production are dynamic processes which are embedded in the relationships of power between the actors that live a particular space (i.e. the water district, a city or a region). For instance, as a reaction to the first wave of contestation in the early 2000s, the municipal water service provider in Arezzo has been able to strengthen its position with a thoughtful strategy which comprehends the appointment of new people in key positions, the cooperation with the local political party, shutting off

7 water access to the people who refused to pay and other tactics that will be analysed in the next chapters. Meanwhile, the ways of contesting the PPP have been changing. From an initial popular haphazard protest, the people organized in a local committee and a national forum, they studied the company's strategy and performances, they appealed to courts and actively promote another water order.

The production of a particular order and its contestation represent the two sides of a medal, they together constitute the whole, they are inseparable and depend on each other. The arenas of contestation, where disputes over the control of water take place, represent both physical and social space, where different actors come together and perform “interesting and spectacular tricks, plays and games both on and off the stage” (Mollinga 1993:8). Drinking water governance is “a political process of contested resource use”(Mollinga 1997:19). This acknowledges negotiations, struggles and long term disputations that lead to a particular formulation of water governance according to the interests and the social-power relations that characterized the different individuals and groups involved in water control (Mollinga 2007). The study of arenas of contestation, such as the upper Arno water district, helps to understand “how political economic power relations fuse the physical and the managerial together in particular and invariably socially uneven ways”(Swyngedouw 2009:58).

Looking at conflicts over water governance aim at re-politicize the discussion among different ways of organizing drinking water supply. The mainstream debate on water governance is often focused of the technical aspects involved in water control leaving out ‘the political’(Swyngedouw 2011) “probably in the belief that depoliticising water management activities would provide opportunities for abating or at least controlling water uncertainty and conflict” (Castro 2007:112). Indeed, water management is often studied from a technical point of view that, depending on the discipline, looks at the economic efficiency, level of tariffs and investments, biophysical quality of water, quantity of water, size of pipelines, etc. In the upper Arno water district, even the water provider's survey of users' opinion is a technical matter that is ultimately expressed by a satisfaction index. Acknowledging the relevance of technical research, this study looks at the ‘politics of water’, seen as the “ability to debate, question and renew the fundament on which political struggle unfolds, the ability to radically criticize a given order and to fight for a new and better one” (Diken and Laustsen 2004:9 quoted in Swyngedouw 2009a:616).

Neoliberal water governance As I noted above, the shift from government to governance entails the redefinition of the relationship between state and non-state actors. The boundaries between the market, the state and civil society have been renegotiated “so that more areas of people's lives are governed by an economic logic” (Swyngedouw 2005; Castree 2008a:13; see also Bridge and Perreault 2009). Castree (2008a) uses the term reregulation in order to define the “the deployment of state policies to facilitate privatisation and marketization of ever- wider spheres of social and environmental life” (page 12). This process towards ‘neoliberalising nature’ affected economic, socio-political and natural spheres by a wide range of policies, practices and politics.

The research investigates particular configurations of nature and society derived from the introduction of neoliberal polices in the upper Arno district and their contestation. As 8

Castree (2008a) notices, there is a need for clarifying the ‘neoliberal elements’ in the research context. In particular, it is useful to distinguish between different processes, that often are interconnected, such as privatisation, commercialisation, corporatisation and commodification. For the purposes of this research, privatisation “entails a change of ownership, or a handover of management, from the public to the private sector” (Bakker 2005 :544, see also; Bakker 2007; Castree 2008a). Corporatisation, instead, regards the conversion towards a private business model of the organisational structure of a government department (e.g. the creation of publicly owned companies for public services provision). Commercialisation involves transformation in resource management practices with the introduction of commercial principles (e.g. efficiency), methods (e.g. cost-benefit assessment), and objectives (e.g. profit-maximization) (Bakker 2005). Other examples of commercialisation regard the introduction of market-based regulatory mechanisms instead of the law and the introduction of competition and full cost recovery as leading principles of managing a water utility. Commodification “entails the creation of an economic good through the application of mechanisms intended to appropriate and standardize a class of goods or services, enabling these goods or services to be sold at a price determined through market exchange” (Bakker 2005:54).2 Water is a typical example of the conversion of a natural resource into an economic good, as it is regarded as a scarce commodity “to which consumers have access via the allocative mechanism of the market” more than a public good “that individuals have rights to as citizens” (Bridge and Perreault 2009:487).

Following these definitions, Nuove Acque Spa, 3 the public-private partnership in the upper Arno water district represents a hybrid experience which resulted both from (partial) privatisation and (partial) corporatisation. Indeed, the ownership of more than 46% of the capital share belongs to a private consortium, Intesa Aretina, led by the French multinational Suez Environment. At the same time, part of the capital share of Intesa Aretina belongs to ACEA, former municipal water supplier of Rome. ACEA has been involved in a process of corporatisation from the early 1990s onwards as a public owned municipal company was transformed into a company operating under private law (Azienda Speciale, municipal corporation); it was registered in the stock market and part of the capital share was sold to private partners, such as Suez Environment. Furthermore, market culture and principles (e.g. full-cost recovery, economic efficiency and profit maximization) have been introduced in the drinking water and sanitation supply in Arezzo and more generally in Italy since the 1990s. However, these processes are not fully ‘completed’ as water, the physical natural resource, is a public good by law and the public sector still has a relevant presence in decision-making regarding water governance. The process of creation, implementation, contestation and reinforcement of this particular public-private partnership represents the ‘neoliberal element’ explored in this research (Castree 2008; Castree 2008a).

2 Commodification often overlaps with Marketisation; that is in more in general defined as “ the assignment of prices to phenomena that were previously shielded from market exchange or for various reasons unpriced” (Castree, 2008a:131).

3 The abbreviation Spa refers to societá per azioni, in English public limited company. From now on Nuove Acque Spa will be referred as Nuove Acque and ACEA Spa as ACEA.

9

Water rights Often the debate about drinking water rights focuses on the legal dimension and the property relations within water access and management. The discussion about privatisation looks at the ownership of the resource, the infrastructure and the management. However, the emphasis on the ‘property right regime’ simplify far more complex institutional, organizational and socio-political arrangements and so it forecloses other aspects related with water rights such as risks, responsibilities and obligations. As Boelens and Zwarteveen (2005) notice, "what a right is, ontologically, cannot simply be ‘read’ from legal texts and written laws" (page 740). For instance, the claim that water is formally a public good by law does not prevent its commercialization or commodification.

A broad question regarding “who is entitled to what quality, kind and what volumes of water and who should control, manage and/or decide how the hydro-social cycle will be organized” (Swyngedouw 2009:58) needs to be addressed. In order to answer this, it is necessary to consider a more comprehensive definition of water rights that looks beyond formal property rights. Following Boelens and Zwarteveen (2005) water rights can be explained by looking at three domains. First, from a socio-legal point of view a right represents an authorization of using a flow of water by a legitimized authority (i.e. the drinking water provider or the water authority). The recognition of the authority is a product of socio-political relations of power embedded in the organization of society. Second, water rights depend on technical infrastructures and technologies that deliver water to the users; without treatment plants, pipelines and taps the users will not see their water right materialized. Third, water rights rely on organizational structures and decision-making processes such as contracts, concessions, corporate organizations and other participation mechanisms. “Responsibility for these management tasks may lie with government or non-government agencies, with private companies, or community organizations, or with a combination of these”(Boelens and Zwarteveen 2005:741). These three domains are interconnected. For instance, in the case study area, users receive potable tap water from the drinking water provider by paying fees that are determined in water supply contracts which, in turn, are established following standards provided by the water authority. If users do not pay fees or the delivering infrastructure is broken, they do not get the water they demand.

The focus on the struggles regarding the creation and manifestations of water rights represents the way this study looks at Italian water conflicts. The Echelons of Right Analysis (ERA) will contribute to the investigation of conflicts and rights from a multidimensional point of view that considers the interaction and contestation among resource, rules, authorities and regimes of representation within the case study area (Boelens 2010). The first echelon refers to struggles over access and mobilization of resources such as water, technology, infrastructure, labour, financial means, knowledge, etc. The second level of contestation regards the content and the meaning of rules over water control, “the bundles of rights and obligations; categories, roles and responsibilities of users; criteria for allocation based on the heterogeneous values and meanings assigned to water; diverse ideas and constructs of fairness; etc.”(Boelens 2008:8). The third level looks at the regulatory control “the authority to formulate and enforce water rights, to command water management through binding prescriptions, to make decisions and sanction the implementation of user categories and their norms of conduct”(Boelens

10

2008:7). The last echelon of analysis involves the struggles between different regimes of representation. These refer to the ways particular policies and social orders are established, imposed and defended. They call attention to the discourses that are created and re-created in order to legitimize a particular distribution of resources, rules and authorities. “As powerful discursive practices, they make the moral, institutional and political linkages among the social and technical, human and natural, theoretical and practical water worlds, as if these bonds were entirely natural”(Boelens 2008:8).

2. Problem statement

In the time span of a few months in the late 1990s, the water governance in the district of Arezzo underwent some important transformations. New actors, new rules and new discourses accompanied the introduction of private sector participation and market- based mechanisms in the drinking water and sanitation services. As noted by Lobina (2005), the PPP experience in Arezzo carries many controversies in terms of transparency of decision making process, low service quality and investment, high tariffs for the users, conflicts between the local water regulatory authority and the provider and, among others, lack of public participation. The outbreak of the local protests show signals of the unequal outcome of the reform. Some people and groups have benefited from the controversial establishment of the PPP, others have experienced the negative consequences of the semi-privatisation (e.g. increased tariffs). This research does not argue in favour or against drinking water and sanitation privatisation, it rather looks at how the privatisation of water public utilities occurred. It shall discuss the main impacts of the new water governance model introduced in the upper Arno water district by looking at who benefited and who did not from the semi-privatisation of the drinking water and sanitation services and how did they benefited or not. Studying the contestation arena shall help to understand how resources, rules, discourses and authorities are mobilized by the actors involved in order to support their interests and claims.

Furthermore, the investigation of water conflict within Italian context tries to address another issue: the lack of knowledge and discussion about European water conflicts from a politically informed point of view that looks at them by using a water rights framework. Indeed, often the conflict around the access and materialization of water rights are discussed looking at developing countries, rather than European ones. However, even within European Union water conflicts are present; they are the product of European policies and international meetings held in EU. For instance, the International Conference on Water and the Environment held in Dublin in 1992 which led to the definition of the so called ‘Dublin Principles’, has profoundly influenced policy making in the water sector (Budds and McGranahan 2003). The four principles called for water as a finite and vulnerable resource, increased participation of non-state stakeholders, sensitivity to gender issues and the consideration of water as 'an economic good' (WMO 2012). Only by studying and analysing European water conflicts, such as the Italian one, it is possible to reveal and denounce the unequal distribution of resources and power in the EU countries.

11

3. Research objectives and questions

The first objective of this thesis is to discuss conflicts over water utilities privatization within the Italian and European contexts. The construction of a case study and the investigation of the strategies used by different groups to legitimate their claims over water governance in the upper Arno water district will allow me to analyse how conflicts over control of water resources are part of a wider debate on democratic practices.

The second objective of the research is to explore the use of a water rights’ point of view in the analysis of Italian water governance. This approach aims at overcoming the typical disciplinary attitude that is used by many studies about water governance (Castro 2007). These two main objectives gave rise to the following main research question:

What are the main strategies, in terms of resources, rules, authorities and discourses, that different actors with divergent interests deploy in order to support their claims and influence drinking water governance in the upper Arno water district?

And sub-questions:

Who are the principal (opposing) actors involved in the discussion about drinking water and sanitation governance in Arezzo’s water district?

How do these actors' interests and perspectives conflict with each other in terms of resources, rules, authorities and discourses?

What are the strategies and discourses that these actors deploy in order to legitimise and materialise their claims concerning resources, rules and authorities?

4. Research methods

The research is based on literature research and on the ‘construction’ of a case study. The first, contributed to the definition of the main concepts and their discussion in the academic domain. The latter gave me the chance to describe in-depth one of the conflicts on water governance that are taking place in Italy. This paragraph illustrates the research methods used in the thesis.

The construction of the case study followed several steps: the choice of the area, the definition of the boundaries of the case, the fieldwork and the analysis of the data. The bounds of the research arise from three criteria: 1) the drinking water system of the city of Arezzo from the sources of water to the treatment plants and the network (people, infrastructure, environment) that it involves; 2) the area controlled by the local water authority; 3) the administrative boundaries of the municipality of Arezzo. These interrelated criteria identify three geographical areas that partly overlap. Indeed, the main source of potable water for Arezzo, the artificial lake of Montedoglio, lies outside the administrative borders of the city, but it is still in the area controlled by the local water authority. The PPP provides water to 37 municipalities belonging to the area controlled by the local water authority. Arezzo municipality, the provincial capital, represents the leading one in decision-making as it is the most populated one in the water district. 12

I lived in the case study area for two months during the summer of 2012. During this period I drove by car up and down the water district, I hiked up in the mountains, walked along the banks of Arno river, I visited the lake of Montedoglio and the drinking water treatment plant of the city. I lived in a rural area, in a house not connected to the aqueduct, thus twice a week I used to go to a public fountain to get the water for drinking needs. I participated in several public initiatives (i.e. town fairs, one demonstration against the privatisation of drinking water, a meeting of the public water committee), that gave me the opportunity to have short informal talks with the people around me, mostly citizens living in the upper Arno water district, and get a general insight of what they think about the water governance in the area. During this time, I met activists, engineers, managers from the company, policy makers; I was open to hear and document all sides of the conflict. Furthermore, I clarified to them that I was taking in account the different sides of the controversy. I directly interacted with the people involved in the local conflict and their environment. In the thesis, several research methods were used in order to compare the data collected (e.g. interviews, observations, documents from different sources) and allow me to reflect on my position as a researcher.

Semi-structured and unstructured interviews were carried out between August and September 2012. At least one or two people for each interest group were interviewed both in formal and informal places. The interviews lasted about two hours and were conducted in Italian, the quotes in this report are from my own translations of the notes that I took. For privacy reasons the names are not mentioned. Questions were asked about the position they had as managers, politician, activists. The experience of the inception of the PPP in the upper Arno water district was re-constructed through the narratives of the interviewees. Then, semi-structured observations were collected. They included people both as individuals (i.e. during interviews) and in groups (i.e. during meetings). Participatory observations were also used as a research method. Particularly in two occasions, one meeting of the committee members and one demonstration, the use of semi-structured observations give me the possibility to reflect on my position as a researcher.

Furthermore, during the whole research period various documents about the case study were collected from several sources, both in Italian and English. I gathered documentary films, videos and newspaper articles, economic studies, environmental assessment, government rulings, laws and guidelines documents, symbols, flyers, radio programs and previous theses related to the case study. Furthermore, quantitative data were collected in relation to the performance of the water utility in term of efficiency, sustainability, quality of water, tariffs and financial situation. Most of the material used in this thesis was collected during interviews. Both the scientific and non-scientific documents supported the analyses of the conflict, in particular the study of discourse creation and knowledge production and legitimization. For instance, investment rate, return on capital invested and tariffs calculations are part of the conflict between the PPP and the local Arezzo’s water committee. In order to analyse the Arezzo case from an interdisciplinary point of view, data belonging to different field of study were collected. In particular, during the field work I gathered information about technical engineering aspects (characteristics of the network, main technological features), administrative aspects (role of municipality, local and national laws influence), environmental aspects (quantity and quality of water),

13 economic, managerial and financial aspects (number of users, water fees, investments of the company, annual profit, rules and regulations of the water provider). All these aspects are correlated with each other and are useful in order to understand the contestation of water governance. Eventually, when my research will be finished I would like to translate this thesis in Italian and go back to Arezzo to show and discuss my results with the people involved in the study.

14

Chapter two: the national, regional and local context

This chapter first describes how water utilities are organized at the national level both from a geographical and an institutional point of view (section 1). Then it focuses on the regional context of Tuscany and delineates the main characteristics of the regional model for water utilities governance, the so called ‘Tuscany model’ (section 2). The third section zooms in to the case study area. The water-network of upper Arno water district is described and the principal events that characterized the introduction of a new water governance order are discussed, as well as its contestation in the district. Ultimately, the main actors involved in the conflict are introduced.

1. The Italian context

Water management in Italy is highly complex in terms of territorial division and number of governmental and regional departments that influence and govern water within the country. First of all, the territory is divided in national, regional and inter-regional River Basins, each one with its own River Basin Authority. Second, since the introduction of the European Water Framework Directive, the River Basins have been organized in eight hydrographical districts (Fig. 1). Each district is characterized by an authority which develops a River Basin Management Plan following EU directives (Mistero dell’Ambiente, 2012). This division does not follow the provincial and regional administrative borders, but focuses on the hydrographical patterns of the country.

Since the introduction of the Galli Law, drinking water and sanitation governance have followed a specific geographical division based on Optimal Territorial Areas (Ambiti Territoriali Ottimali), from now on referred to water districts or ATO territory. The country was divided in 92 ATOs defined by regions according to geographical, hydrological, demographical, technical or politico-administrative criteria. From a spatial point of view, the districts were quite heterogeneous both in term of surface area and resident population. For instance, the Apulia district in the south-east covers 19.362 km2 with a population over 4 million inhabitants, while the Chiampo Valley district in the north-east entails an area of 266 km2 with a population of around 100.000 inhabitants (COVIRI 2011). Figure 2 shows the density of population in each water district. The most populated areas correspond to the biggest urban areas (e.g. Rome, Naples, Venice and Milan), the least populated coincide with the central-south regions and the islands. It is interesting to look at the density of population as it is considered one of the elements that highly affect the costs per capita related to drinking water and sanitation provision. Higher costs are related with less densely populated areas such as the upper Arno water district (personal communication, Director Ex-AATO4).

Within the hydrographical districts and the ATOs, water availability is not homogeneously distributed (ISTAT 2012). The hydro-geological characteristics of the territory, the 15 distribution and density of the population and the economic activities (agriculture, industry and tourism) influence drinking water availability and use. Per year, 9,11 billion of cubic meters of water are abstracted for potable uses from different sources: 85,6% from groundwater sources, 14,3% from surface water and 0,1% from sea water (ISTAT 2012). In average in Italy, 72,9 cubic meters of potable water are consumed per inhabitant, equal to 199,7 litres per inhabitant per day (ISTAT 2012). Furthermore, Italy is characterized by a high bottled water consumption, particularly in southern regions.

Fig.1 – The hydrographical Districts (Mistero dell’Ambiente 2012).

16

Fig. 2 – Density of population per drinking water district (COVIRI 2011).

The reform of the drinking water and sanitation sector During the 1990s the Italian drinking water and sanitation service was characterized by a high territorial and organizational fragmentation (Goria and Lugaresi 2004). Drinking water was provided at municipal level and sewerage coverage was quite limited; water utilities were characterized by a general underinvestment. In the same years, the crisis of public finances and of the political system influenced the country. Important corruption scandals were denounced, known as Tangentopoli, and political parties disappeared (e.g. Democrazia Cristiana and Partito Socialista Italiano) in favour of technical governments (Citroni et al. 2008). In these economic and political circumstances, in January 1994 a new water reform was passed, the so called Galli Law (l.36/1994).

The Galli Law aims at reorganizing the drinking water sector following few key principles such as the reduction of the fragmentation of water supply, the introduction of market- based principles for water distribution and the enhancement “of sustainable water use through demand management” (Lobina 2005a). Furthermore, the Law declared all surface and groundwater resources to be public and stated the importance of water and environmental protection. The reduction of the number of operators was achieved both through horizontal and vertical integration of water providers (Lippi et al. 2008). The first led to the establishment of water districts as basic units for drinking water provision. The second promoted the creation of a new way of representing water supply as an ‘Integrated Water Service’ (Servizio Idrico Integrato, SII), that combined in one provider

17 the management of the whole ‘water cycle’, from the source to the end-users and then to the wastewater treatment plant. The reform inaugurated a new end-user tariff policy based on full cost recovery principle, which included running expenses, maintenance, restoration, innovation investments, return on invested capital and coverage of previous debts. Thus, a new method for drinking water and sanitation fees calculation was introduced, the so called ‘metodo normalizzato’.

Moreover, the Galli law introduced a new model of water utilities governance based on the separation between service provision and its regulation. The regulator-provider model aimed at the introduction of competition for the concession of the water supply monopoly, while ensuring public interest through the creation of local public regulatory authorities. Drinking water supply, sewage collection and wastewater treatment were assigned through long-term concession contracts to public or private owned companies, the ‘service provider’(Fig. 3). While, regions were responsible for the definition of the water districts’ boundaries and the establishment of one regulatory authority for each district (Autorità di Ambito Ottimale, or AATO or A.A.T.O.). The regulatory authorities, composed of the representatives of the municipalities lying in the district, were in charge of drawing up an investment and tariff plans, awarding the concession of service provision and exercise steering and control over the provider (Lippi et al., 2008).

Fig. 4 - Water utilities governance framework after the Galli Law (Lippi et al. 2008).

Info

18

Since the Galli Law water governance has been devolved to regional and local arenas, what Bakker (2003a) describes as the ‘reposition of the state’. This process led to the introduction of new actors (e.g. the AATOs) and the reconfiguration of the old ones (e.g. existing drinking water providers). The regulator-provider model responded to the idea of separating ‘the political’ from ‘the technical’, the former allocated to the AATO, the latter to the providers. This choice was represented as a way to improve the effectiveness and the efficiency of the service leaving out the local political parties from the management activities, while ensuring the public interest via the authority control.

Furthermore, the introduction of this new water governance model resulted in the establishment of a new social, political and economic order. Indeed, it boosted the inclusion of management and market-mechanisms, principles (e.g. financial optimization of resources, cost-recovery, competition) and objectives (profit maximization) in water utilities management. In other words, it initiated a process of commercialisation of the water sector. It initiated a process of corporatisation and privatisation of water utilities. The service provider needed to follow a private business model and the possibility of the participation of private sector in drinking water and sanitation management was strengthened. Indeed, when referring to drinking water privatisation in Italy, does not refer to the privatisation of the natural resource or the infrastructure, it rather entails the privatisation of the providers. In 1994, the water district authorities could award the concession to a private-law company selected through a competitive bidding or grant the service provision ‘directly’ to a public-private joint venture company where the private partner was selected by a competitive tender or directly by a fully public-owned company (Lippi et al. 2008). For instance, in the case study area the AATO awarded the concession of the SII to a public-private company.

Following a general national tendency towards the liberalisation and privatisation of all the public utilities (energy, gas, water, transports, etc.), during the last ten years the presence of private sector in water management has increased. In 2009, a law forcing the privatisation of water service providers was passed, the so called Ronchi Decree (D.L. 135/2009). The approval of the law by the Parliament gave rise to a national campaign against the further presence of private sector in water utility management. The protest led to a national referendum, that repealed the Ronchi Decree (see also the box below).

With the referendum, another law concerning the calculation of the drinking water and sanitation fees was abrogated. In particular, the proponents of the referendum aimed at eliminating the return on investment previously included in the calculation of the tariffs and assured to the water providers, by law. As drinking water utilities carry a heavy infrastructure load, with low initial returns, this principle was added to attract private sector involvement in the sector. It would also mean that a private company was guaranteed to get profit, irrespective of their performance in operational, financial, social and environmental terms. Furthermore it also meant that drinking water, the most basic of all human needs, had by law become a commercial good.

19

THE REFERENDUM

While Italian governments, both left and right wing ones, have followed the path of the neo-

liberalisation of (water) public utilities, the protest against it has also started and developed throughout the years. The Forum has promoted the ‘ripubblicizzazione’ of water provision, that is the return of drinking water supply under fully public control, the retreat of market- based principles from water governance and the definition of water as a common resource rather than as a commodity. In particular, the debate around water governance has been concentrated on two aspects: the introduction of full-cost recovery principles in water tariffs and the separation between the regulator and the provider, focusing on the ownership and . management principles

During the referendum, held in June 2011, voters had the right to decide on the repeal or confirmation of four existing laws: two regarding the regulation of water utilities, one about the development of nuclear energy and the last one about the immunity of high government officials (Chiaramonte and D'Alimonte 2012). As the table below illustrates, all four laws were abrogated (Tab.1). Under Italian law referendum represents one instrument of direct democracy. Referenda are considered valid only if the quorum is reached, which means that half plus one of the electorate voted. The quorum was not met in the previous six referenda

held in Italy between 1997 and 2009.

Even though, the majority of voters supported the water movement stakes, Berlusconi’s government and the current technocratic government have not complied with the result of

the referendum, on the contrary in order to cope with the economic crisis they support neoliberal policies Tab. 1 – Results of the Popular Referendum 12-13 June 2011 (%) source: Italian Ministry of the Interior

cited in (Chiaramonte and D'Alimonte 2012).

Referendum Turnout Yes (repeal) No (confirm) Private management of water utilities 54.82 95.4 4.6 Return on investments for water utilities 54.83 95.8 4.2 Nuclear energy 54.79 94.1 5.9 Legitimate impediment 54.78 94.6 5.4

2. The Tuscany model

Tuscany is a region in central Italy with over 3,7 million inhabitants, 6,2 % of the Italian population. Most of the people live in small-medium size towns that characterize the regionalTab. landscape.3 – Results Theof the central Popular metropolitan Referendum area 12- 13 of June Florence 2011 (%) is the (source: most Italian densely populatedMinistry of the of region.the Interior Two-thirds cited in Chiaramonte of the territory and ofD’alimonte, the region 2012). is hilly, Finire! 25% is mountainous and only the 8% is flat. Tuscany's landscape and economy have been shaped by a long agricultural tradition based on wine and olive production; tourism and handicraft activities represent other relevant source of income (IRPET, 2012). From a hydrographical point of view, Tuscany contains several River Basins which are grouped in three hydrographical districts (the North Appennino, the central Appennino and the Pilot district of Serchio River Basin) as shown in Figure 5.

20

Fig. 5 – Hydrographical districts and sub-districts in Tuscany (Regione Toscana 2012).

Tuscany has been characterized by a consolidated tradition of the central-left wing political government, which led to a sort of hegemony of this party in the regional policy choices, thus also in water governance. Indeed, the political network set up during the left wing political history of the region permitted the diffusion of the ‘Tuscany model’. Especially during the first phase of the application of the Galli Law the regional government played an important decision-making role and the ruling regional council (with its political party) had the chance to influence the implementation of the reform in accordance with their interest and strategies (Citroni and Lippi 2006). As Lippi et al. (2008) notice, in the region “most of the municipalities are left-wing democratic party ruled – political homogeneity across the ATO territory, and between municipal, provincial and regional administrations have reduced complexities and conflict by means of consolidated relationship and shared goals, making agreements somewhat faster”. The authors defined the AATO as ‘virtual entities’ rather than actual ones, since they have acted in accordance with the decision, resources and interests of other level of government (ibidem, page 630).

Tuscany was the first region that promoted the implementation of the ‘new’ water governance scheme with a regional law (n.85/1995) which drew from the principles from the national law and adapted them to the regional context. In particular the regional decision-maker introduced two ideas that characterize the ‘Tuscany model’ of water governance. These regards, first, the creation of the water district which followed both an hydrographical and a political administrative criteria; second, the choice of public-private partnerships as water utility providers (Citroni et al. 2008). The Region was divided in 6 water districts (partly) following the hydrographical configuration of the region: the Arno

21 river Basin was divided in three water districts (upper, middle and lower Arno), one ATO covers the Ombrone River Basin, another the Serchio and Magra (North Tuscany ATO) and the last one comprehends the coastal areas (Toscany Coast). However, also a political- administrative criterion played a role in the delimitation of the water districts (Fig.5). The water districts’ boundaries did not follow the administrative provincial boundaries but respected the municipal ones. Citroni et al. (2008), highlight the implications of this choice as provinces were excluded from water control in favour of regional and municipal levels. The second feature of the ‘Tuscany model’ regards the characteristics of the drinking water and sanitation providers. According to the regional law, each water district had to be supplied by only one company. In this way, from 200 providers in 1995, now Tuscany has 6 providers, one for each water district which manages the complete water cycle (CISPEL 2003). Besides, the regulation of the drinking water and sanitation services in each water district was taken over by new local regulatory authorities, the AATO, which became a new arena for local political power plays and its contestation.

Fig. 5 – Water districts and provinces (my elaboration).

The implementation of the water reform followed a common path for almost all the 6 water districts: after the creation of the AATO, the pre-existing water providers were merged in one or a new joint-stock company (partly) controlled by local municipalities; 22

then the concession of the drinking water provision was awarded to the newly created company and ultimately, 40-45 % of the company's shares were conferred to a private partner (Citroni et al. 2008). Even though, this trajectory was not strictly provided by the regional law neither by the national one, it was supported by the public services trade association and ruling political party both at regional and local level (Lobina 2005; Citroni et al. 2008).

The outcome of this political process/project is represented by the configuration of the Tuscany water governance model: five public-private partnerships, one for each district work with six local water authorities to provide drinking water and sanitation service (Tab. 2). The provider of the North Tuscany water district is currently undertaking a process of privatisation.

Tab. 2– Configuration of the 6 water district providers. (Citroni et al. 2008)

Water district Providers Public Public Private Private Consortium share shareholders share shareholder shareholders 1- North Tuscany Gaia Spa 100 % 30 Municipalities 0% 2- Lower Arno Acque Spa 55 % Gea spa 45% ABAB spa ACEA spa Aquapur spa Suez Env. Cerbaie spa MPS Publiservizi spa Vianini Coad Lavori spa 2 Municipalities Dégremont spa (Suez) C.t.c. 3- Middle Arno Publiacqua 60% Consiag spa 40% Acque Blu ACEA spa Spa Publiservizi spa Ondeo (Suez 42 municipalities Env.) MPS SILM spa C.C.C. spa C.t.c. 4- Upper Arno Nuove 54% Cigaf 46% Intesa Suez Env. Acque Spa Coingas Aretina ACEA spa Gestioni MPS Valdichiana BPEL 34 municipalities 5- Coastal Tuscany ASA Spa 60% 25 municipalities 40% AGA spa AMGA spa Aquamet spa Galva spa Water district Providers Public Public Private Private Consortium share shareholders share shareholder shareholders 6- Ombrone Acquedotto 60% 56 municipalities 40% Ombrone ACEAspa del Fiora spa Acque Spa Toscane spa (Suez) MPS,SILM, C.C.C. C.T.C. C.M.I.T.

23

As it is possible to notice from the table above, the private share of the drinking water and sanitation providers is frequently owned by the same actors: ACEA, Suez Environment, two banks and some local small companies. According to Citroni et al. (2008:210) the presence of these four stakeholders follows an interesting scheme: ACEA provides the political network, Suez Environment/Ondeo guarantees the financial stability (also thanks to its international networks), the banks are sometimes involved in the investment in the districts and the local groups of artisans, construction companies are interested to the contract works (i.e. construction and maintenance of pipelines). In particular, the authors highlight the strategic alliance between the French multinational, Suez Environment, and the Italian ACEA. These two companies have already been fined by the national Antitrust Authority for anticompetitive behaviour in 2006, this sentence was confirmed by the National Council last September. The table above shows also the water-network that is present in the regions. Together with water and infrastructures, also political-economic relationships between national and international companies, banks, political parties, regional and local government constitute the Tuscan water-network.

Nowadays, Tuscany is going through a new stage of the water utilities’ reform. Since January 2012, the 6 water districts authorities have been substituted by a regional water authority, so called AIT (Autorità Idrica Toscana). The ultimate step of the regional (political) reconfiguration of the drinking water and sanitation services is represented by the merger of all the actual six providers in one unique regional public-private company that will manage water utilities of the whole region (personal communication, president of Nuove Acque).

While the ‘Tuscany model’ for water utilities governance was becoming a reality, the protest arouse. In 2003 the first Alternative World Water Forum was held in Florence, the regional capital, several Social Forum were organized (Stia and Piombino 2004) and a regional group that comprehended committees, associations, citizens against the privatisation of water utilities was set up. This Movement promoted a regional popular law4 with the aim to stop the privatisation of the water utilities, go back to fully public owned providers and encourage the participation of users in drinking water governance.5 The law was dismissed by the regional council in 2006. Since then, the regional movement has actively participated in the national anti-privatisation campaigns. The Tuscan Movement has been involved in a quite wide network of grassroots movements that oppose the neo-liberalization of natural and social goods (e.g. waste, landscape, nuclear power, education, etc.). This contributed to strengthening the socio-political power both of the regional movement and of the number of associations and committees that participate in it.

4 According to the Italian Constitution (art. 71) “The people may initiate legislation by proposing a bill drawn up in sections and signed by at least fifty-thousand voters”, this instrument of direct democracy is defined as popular law initiative (iniziativa di legge popolare). http://en.camera.it/4?scheda_informazioni=23

5 For more information see also: http://www.acquabenecomunetoscana.it/spip.php?article74 or http://www.acquabenecomunetoscana.it/leggepopolareacqua/index.php?id=c (in Italian).

24

3. The upper Arno contestation arena

This section focuses on the implementation of the Galli Law and the ‘Tuscany model’ in the upper Arno water district, the case study area. It will describe the physical features of the water district and the history of the current drinking water provider since its creation. Furthermore, the main actors involved in the conflict over drinking water and sanitation provision are presented.

The upper Arno water district The district includes the upstream part of Arno watershed (in Italian Alto Valdarno), which flows towards Florence, and a small upstream section of the Tiber watershed (Fig. 6). It covers an area of 3263 km2 with a resident population of 316.377, resulting in a density of 97 inhabitants per km2 (A.A.T.O.4 2008). The district contains 37 municipalities, 32 corresponding to the province of Arezzo and 7 in the Siena province.

Fig. 6 – Arno and Tevere in the Province of Arezzo.

25

Even though the name of the district refers to the hydrographical criterion that guided its creation, it is interesting to note that the Upper Arno water district follows (also) political- administrative choices. Indeed, the water district is a hybrid unit that contains an area between two hydrographical districts (the North Appennini and the Central Appennini), two main national rivers (the Arno and the Tiber) and two provinces (Arezzo and Siena). Following the discussion of Warner et al. (2008) as the river basin, the water district is a political unit, and thus the river basin becomes a “territor[y] of governance, immediately raising the question who will make decisions, and how” (page 134).

The district has been subdivided in five macro-areas (Casentino, Valtiberina, Aretina, Valdichiana, Senese) which are characterized by diverse hydrological and physical patterns. The north part is shaped by two valleys, the Casentino, crossed by the Arno river, and the Tiber Valley, crossed by the Tiber (Fig.7). Moving towards the south-west the mountains leave the space for a reclaimed plain (Chiana Valley) defined by a man made canal, the Chiana, which flows into the Arno. The central area of the district is the most populated one with 40% of the number of total users and 46% of the total drinking water consumption (A.A.T.O.4 2008). This area contains the city of Arezzo and seven other small municipalities.

Fig.7 – map of the district with the macro-areas. (source: my elaboration)

Within the district there are several water sources: 332 wells, 557 springs and 15 other intakes (dams, river’s intakes) (A.A.T.O.4 2008). Among others, the artificial Lake of 26

Montedoglio represents the main source of drinking water in the city of Arezzo as it conveys alone almost the 40% of the total water volume caught by the drinking water provider. The lake is placed in the upstream section of the Tiber watershed, in Valtiberina. It covers an area of 700 hectares. The lake was created by the construction of a dam built between the 70s and the 90s, it serves for drinking water and irrigation purposes both in the area of Arezzo and in the neighbouring region, Umbria. Currently it is managed by the EIUT (Ente Irriguo Umbro Toscano) who sells water to the users of both regions. According to the management plans, the lake will provide drinking water for many municipalities both in Tuscany and Umbria and water for irrigation uses to the Chiana Valley, the Tiber Valley and the Transimeno Lake in the south. In 2006, 10,9 million cubic meter/year of water were extracted from the lake (CISPEL 2008).

The drinking water provider of the upper Arno water district buys the water from the EIUT, then through a system of pipelines, the water is transfer from Montedoglio to Poggio Cuculo a hill just outside the city of Arezzo. In this place, the drinking water treatment plant was built before the introduction of the actual drinking water provider. Currently, the plant provides the city of Arezzo and other towns in the south-west of the district with approximately 260-300 l/s of potable water (personal communication, Engineer Nuove Acque). The plant is connected also to an intake in the Arno which is used in emergency cases. The water coming from Montedoglio is only subjected to basic treatment as the raw water is characterized by good quality from the source (personal communication, Engineer Nuove Acque). Apart of the Poggio Cuculo plant, the drinking water provider manages in totally 46 smaller drinking water treatment plants, 3.023 km of drinking water network, 1.436 km of sewage network and 75 wastewater treatment plants within the water district (Nuove Acque, 2012).

Events 1999-2012: thirteen years of history and contestation The Upper Arno ATO, represents the first district in Italy in which the Galli law has been introduced. A high level of contestation has accompanied the implementation of the water reform since its early years; this resulted in a great local and national political attention by the media and other grassroots movements and associations. Many of the national campaigns against the privatisation of water utilities were launched from the city of Arezzo. The next paragraphs aim at reconstructing the process of implementation of the reform through the description of the more relevant events of the last sixteen years.

Following the national and regional guidelines, between 1996 and 1998 the upper Arno regulatory authority (AATO 4) was created. The authority was formed by the 37 municipalities included in the water district. The Galli law allocated to the AATO the government of local water utilities. During the initial phases, the local authority was responsible for surveying the state of the infrastructure, defining the investment plan (‘Piano d’Ambito’, PdA) and deciding the water tariffs for the entire district. Then, the AATO was in charge of awarding the concession for drinking water and sanitation provision.

27

The regulatory authority

The AATO represented the privileged rule making body within the water district and “formally constitute[d] the political arena for water policy” (Lippi et al. 2008). The Assembly represented the main decision-making body of the Authority, it was composed by all the mayors of the 37 municipalities included in the upper Arno district. The municipalities’ participation both in term of voting power and funding was proportional to their respective population, the larger the population the greater the decision-making power. Thus Arezzo, with about 100.000 residents, was the leading township (Lobina, 2005). The Assembly of the members appointed the board of directors and the president of the AATO, who represented the highest decision- maker in local water governance. Ultimately, a general director and an executive body were in charge of functions of the authority.

In the district, drinking water and sanitation provision was quite fragmented as each municipality had its own aqueduct, pipelines, engineers and technicians managing the water-network. The lack of presence of a ‘strong’ local water provider opened up the space for the creation of a brand new company for drinking water and sanitation. Although the regional Law did not require a particular form of company, the municipalities members of the regulatory authority during the summer of 1997 agreed that the new drinking water and sanitation provider was going to be a public-private partnership with the majority of shares in public hands. Furthermore, they decided that the private operator would be selected with a competitive tender and they appointed a board which would finalize all the procedures. The public-private partnership was seen as a modern “instrument to improve service delivery under a strict managerial perspective (cost reduction, economies of scale, budget control and customer satisfaction) to make local governance more rational and efficient”(Citroni et al. 2011:25). The choice was supported by the centre-left coalition which won the municipal elections in 1995 in Arezzo and its new mayor. “A high level European competition, the first competition for the selection of a private partner [in the water sector] in Italy” (personal communication, Director ex-AATO) was called on the 3rd October 1998. Due to the restriction imposed by the tender rules only three consortia participated: one led by Suez, another by Vivendi/Veolia and a third one led by ACEA (Lobina 2005). Less than 4 months later (14th Jan 1999) Intesa Aretina, the consortium led by Suez Environment, was proclaimed the winner. During the first six months of 1999 the future of drinking water management in the water district radically and rapidly changed.

The political election programmed for June 1999 and the idea of being ‘the first’ to put in practice the water reform in Italy speeded up the implementation process (Citroni et al. 2008). Furthermore, the presence of one of the creators of the regional law discussed above, in the regulatory authority urged the implementation of the reform (personal communication, President ex-AATO). The business plan (‘piano economico finanziario’ or PEF) presented by the private partner was discussed and approved by the regulatory authority and the shareholder agreements were signed (so called ‘patti parasociali’). The new PPP, NuoveAcque was installed and, on the 21st of May it was awarded with a 25- years water supply and sanitation concession contract. From the 1st of June 1999 the new company started operating. 28

The drinking water provider: Nuove Acque

Nuove Acque is the public-private joint venture in charge of the drinking water and sanitation provision in the upper Arno water district. A slight majority of 53,84% of the total share is publicly owned; the remaining 46,16% is controlled by Intesa Aretina. Currently, the private partner is led by Suez Environment; with a participation of ACEA; and two local banks (Banca popolare Etruria e Lazio, Monte dei Paschi di Siena). The public share is divided between 37 municipalities, the province of Arezzo and other public local entities. The share owned by each municipality is proportional to their population (Lobina 2005).

The two principal decision making bodies within the company are the shareholder’s Assembly where both the public and private partners meet and the board of directors formed by 9 members. Among them, 4 are appointed by Intesa Aretina and 5 by the public shareholders. In the organization of the company, two positions play a strategic role: the managing director and the president. The regular and exceptional decision- making powers are concentrated upon the former, appointed by the private partner;

the latter has a crucial political role within the company. The president is appointed by the public partners, namely the mayors of the municipalities included in the

district.

According to the Galli Law, after awarding the concession of the water service provision, the AATO was in charge of the control of the provider operations, performances and fulfilment of the concession contract (Lippi et al. 2008). Nevertheless, this did not completely happen in the upper Arno water district. After few days from the creation of Nuove Acque spa, in June 1999, a new centre-right wing party won the political elections in the municipality of Arezzo. As Citroni et al. (2008) notice, this political shift undermined the leadership within the AATO as a centre-right mayor had to work together and drive all the other small municipalities, most of them characterized by centre-left mayors.

The people who live in the territory of ATO 4 since the inception of the new water governance modes have been subjected to the decisions and actions of the actors described above. In particular, the Region, the Province and the Municipalities, on behalf of their voters, have decided to create a public-private partnership for drinking water and sanitation provision. The new model of water governance has been introduced in the area with “very little public participation, if any at all” (Lobina 2005:22). As a result the citizens did not completely understand what was going on until Nuove Acque was completely established and started operating.

During the first year of concession, the AATO was not able to control the service provider which did not respect some of the deadlines defined in the contract (e.g. Nuove Acque did not set up the project financing). The company was accused of not following the concession contract, especially regarding attention to the lack of management, lack of investments and too high remuneration of the private-partner's know-how (‘prestazioni accessorie’). Meanwhile, following the investment plan, the new higher tariff was introduced in the whole water district. The sudden increase in water bills resulted in the 29 protest of the local citizens, particularly in the Tiber and the Casentino valley. In response to the refusal of some users to pay the increased water bills, Nuove Acque cut their water supply. Water became a highly topical issue in the local political debate. Citroni et al. (2008:170) define the period following the awarding of the concession as the ‘awakening of the mayors’. Indeed, when the mayors of the small municipalities realized that they lost the control over water management they supported the local citizens contestation against the provider. The escalation of the protests led to the symbolic occupation of the headquarters of the company and other public demonstrations. During this period, the double-role of the municipalities became clear. According to the concession contract, Nuove Acque had to pay concession fees to the municipalities. In 2002, Nuove Acque suspended the payment of concession fees in order to put pressure on the revision of the business plan by the AATO. In other words, the municipalities, who own the majority of the shares in the public-private provider, withheld themselves the concession fees in order to pressure the regulatory authority. However, the regulatory authority is controlled by the same municipalities. Thus, the municipalities cut their concession fees to convince themselves to adopt a new plan in favour of the provider (Lobina 2005). After the regulatory authority assembly approved a new business plan following the provider’s requests the concession fees were paid (Schiatti 2003).

The municipalities

The municipalities, in particular the mayors on behalf of their voters, have an ambiguous role in the actual water governance mode. They are on one side shareholders of Nuove Acque and at the same time they also take part in the regulatory Authority by funding it and influencing the general water policy objectives. The formal decision-making power of the municipalities is proportional to the number of residents. Moreover, the municipalities have the ‘political’ control both over the AATO and Nuove Acque as they appoint both the president of the Authority and the president of the company. The mayors politically represent the interests of their party and want to foster their political

consensus among the citizens.

Between 2000 and 2003 the provider and the regulatory Authority re-negotiated twice the investment plan and changed the articulation of the water bills. A new regulatory method aiming at monitoring Nuove Acque’s operations was introduced at the AATO. After investigations the regulatory authority issued official complains against the provider. As the director of the AATO explained during an interview, the 2003 events represented a changing point: “we had to decide whether to appeal against the contract and start a dispute with Nuove Acque for the lack of fulfilment of the obligations or if to review the situation together between the AATO, Nuove Acque and the municipalities to find a compromise and continue” (personal communication, director ex-AATO). The regulatory Authority was squeezed by the provider’s stakes on one hand and the political interests exercised by the municipalities and the leading regional party on the other. It was dependent both on the political and the management arena. The compromise was found. The president of the AATO resigned and a new president was appointed. At that point, the on-going official proceedings between the regulatory authority and Nuove Acque were suspended and the new business plan was signed. Furthermore, a project 30 financing was initiated in order to finance the required investments. A few months later, the former mayor of Arezzo, Paolo Ricci, was appointed as the new president of Nuove Acque. Since then, the conflicting relationship between the regulatory authority and the provider has been replaced by a collaborative one.

In the meantime, the contestation of the public-private partnership became more structured and organized. The initial movement took part in the regional and national initiatives (e.g. alternative water forum, regional popular law, national demonstrations) and in 2007 the Arezzo’s Public Water Committee (in Italian, Comitato Acqua Pubblica Arezzo) was formally created. Since then, the members of the Committee have collected information about the drinking water provider and the authority activities and promoted awareness campaigns within Arezzo and other municipalities in the water district.

The Committee

The Comitato Acqua Pubblica Arezzo, or the Committee, represents a group of citizens/users formally constituted in 2007. As it defines itself it is a non-profit, pluralistic, democratic, non-partisan centre of association (Comitato 2007). The group is characterized by its openness as the members’ number is unlimited and they can participate to the committee free of charge and without being paid. The Committee has a president, a treasurer and a secretary appointed by the members, who do not receive any compensation for their commitment. Thus, the first relevant difference between the Committee and the other actors is that everybody can participate, they are not paid for their activities and for sustaining the Committee’s claims. It assembles people from Arezzo and from other municipalities in the water district, the core group is made up of 15 people, many others participate in the initiatives that are organized (personal communication, member of the committee A).

The Committee has “a clear objective, non-negotiable: a non-profit public management” for water services (personal communication, member of the committee A), it pursues the ripubblicizzazione of the drinking water and sanitation services and the introduction of “an industrial management with a company under public law, whose goal is a balanced budget and not profit” (personal communication, member of the committee A).

Since its creation, the Committee’s members have used different strategies to reach their objective. They are actively involved in sensitizing the users’ awareness of the service and encouraging the citizens participation in issues regarding water management (i.e. level of tariffs and investment, ripubblicizzazione of water supply) through assemblies, public debates, campaigns, demonstrations, radio programmes, collection of signatures and stands at a local market. Furthermore, they sustain all the initiatives which aim at lowering water tariffs, improving the transparency and correcting in the user-provider relations. The Committee engages in denouncing the misbehaviour of the company and the regulatory authority to the press, also in front of the court tribunal. Until now, the Committee have won three court cases.

The drinking water and sanitation provider, the regulatory authority, the municipalities personified by the mayors, and the Committee represent the four main actors that are involved in the water conflicts. The next chapter analyses the struggle between them focusing on the resource, rules, authorities and discourse that they have mobilized. 31

Chapter three: The disputes over Resources, Rules and Authorities and Discourses.

This chapter will describe the strategies used by the main actors involved in the struggle over water governance in the upper Arno water district: the company, the regulatory Authority, the municipalities and the Committee. The analysis follows the ERA framework (Boelens 2008). The interaction and contestation between the groups is described by resource, rules, sources of authorities and regimes of representation that they have mobilized, in order to support their claims and interests. The actors will be investigated as a group; however, the roles of relevant individuals (i.e. presidents and directors) will be highlighted. Ultimately, at the end of the chapter a table summarize the features of the conflict.

1. Resources

Nuove Acque stands at the centre of the money circuit as it receives fees from the users, it takes out loans from the banks (i.e. a project finance of 70 million euro), it pays concession fees to the municipalities and it decides how to invest the capital. In particular the company represents the border between the public and the private money as it controls the flow of money between the municipalities and Intesa Aretina. Concerning this, the ownership of the shares represent a key resource to direct the cash flows. First of all, the amount of stocks held by each partner corresponds to the profit (or loss) that they receive every year. Second, the decision-making power of each actor within the company is based on the percentage of shares that it holds, the less it owns the less its decision- making power. This is particularly true for the public shares which are highly fragmented. The share owned by each municipality corresponds in fact to its size in term of residents and administrative relevance. Thus if the private partner, which controls 46,16 % of the total capital, and the mayor of Arezzo, who controls 15,89%, agree, they can decide for the all 36 municipalities. Meanwhile, the mayors of the small municipalities who in general own less than three per cent of the company shares cannot strongly influence water governance. As a result, they are stuck: too small to influence the water provider, the AATO and the political party decisions. In front of the citizens’ protests, they disappear from the contention stage and work behind the scenes.

The Committee does not have direct access to decision making regarding investments and profit shares, as it is not a shareholder of the company.

Access to financial resources means also access to infrastructures. In exchange of a yearly revenue, the municipalities have conveyed to the new provider the disposal of the infrastructures for 25 years starting from the creation of the company (Lobina 2005). Furthermore, the municipalities can influence the distribution of investments within the 32 water district and the construction and maintenance of infrastructure from inside the company. However, this represents a double-bladed sword as it creates a sort of dependence of the municipalities towards the provider, especially towards the private partner, which can blackmail the municipalities. Several interviewees hinted that if the mayors object to the provider performances, or take the side of the Water Committee, their municipality will receive less attention from the company or the investment will be ‘postponed’.

Even though the municipalities formally own the infrastructure, included the one constructed by Nuove Acque, the provider has the actual access to and control over drinking water and wastewater treatment plants, pipelines, offices and other buildings belonging to the drinking water and the sanitation system. Furthermore, the provider has the actual control over access to water. Through the collection of water fees the company regulates the access to drinking water and sewage system in the water district. In other words, if users do not pay, the provider first reduces the amount of water distributed, then it can suspend the water supply.

The access to money, water, physical infrastructure and the financial situation guarantee the provider a privileged position compared to the other actors. Indeed, Nuove Acque controls much of the information about the infrastructure and the financial situation of the company, making the job of the regulatory Authority more difficult. As the AATO itself asserts (AATO, 2010), the authority was characterized by the lack of personnel (6 to 9 employees), the lack of financial resources and the lack of knowledge compared to the possibilities of the water provider (personal communication, director ex-AATO) which weakened its ability to control water management. In general terms, during the first years, the regulatory authorities “[did] not possess the technical know-how needed to deal with the service provider companies, especially when these are (partly) owned by large national (former municipal enterprises) or are multinational (French, English and British) corporations” (Lippi et al. 2008) such as ACEA and Suez Environment. Citroni et al. (2008) give an interesting interpretation of the instruments that the AATO used for monitoring the providers’ performance as the outcome of a learning-by-doing process resulting from the evolution of the relationship between the provider and the regulatory authority. Indeed, the relationship between Nuove Acque and the AATO was characterized by a shift from a conflict to collaboration/consensus corresponding to the change of the key positions in the authority. As a result, often the stakes of the authority are in tune with the interests of the company.

Knowledge production and the availability of it represent an important aspect of the dispute over water governance. Since the creation of the PPP, the mayors and the Authority have been characterized by lack of expertise due to the lack of financial resources and competences. Indeed, not all the mayors are accountant or managers. As a consequence, they often rely on the expertise of the director of the Authority and its executive body. Within the company, the imbalance of the competence between the public partners and the private one becomes more marked . For instance, Suez Environment and ACEA have a greater know-how and managerial capacity compared to the mayors or the Authority, particularly regarding complex strategic plans such as the project financing (personal communication, managing director of Nuove Acque). Lastly, the provider thanks

33 to its financial resources, can count upon a wide variety of expertise, such as engineers, accountants, managers and lawyers.

The power of knowledge production and access to information is clear to the Committee’s members, who have been engaged in the study and analysis of the local water governance structure. They gave particular attention to the survey of the financial and legal consequences deriving from partial privatization of the service. They spent a lot of time reading the minutes of the board of directors assemblies, the regulatory authority assemblies, the national and international law regarding drinking water management and the strategies private operators used in other places (e.g. the privatisation of Buenos Aires drinking water by Suez Environment) . When I met them in their private house they showed me cabinets filled with material about the regulatory authority and Nuove Acque. As the president of the Committee suggested me, one key resource that they can count upon is a lawyer committed to their cause. They consulted experts in financial and administrative subjects and researchers (e.g. this thesis, phd research). Moreover, the Committee disseminates the information and clearly illustrates their claims during meetings, debates and the stand at the weekly market.

2. Rules

A bundle of rules and regulations govern the relationship between the private and public partners, between the provider, the regulatory Authority and the users. In order to support their claims, all the actors involved in the conflicts make use but also try to enforce and legitimize of different set of rules: national laws, regional laws, municipal regulations and local rules created by the AATO.

The relationship between the private and the public partners is based on the statute and the shareholders’ agreements which were signed in 1999. According to the Committee these documents clearly show an imbalance in favour of the private share decision- making role and power (personal communication, member of the Committee). For instance, they confer all the powers of ordinary and extraordinary administration to the managing director, who is appointed by the private partner. Apart from the contract and agreements stipulated in 1999, Nuove Acque is not directly involved in setting the rules, it rather has to comply with the regulations set by the Authority, Italian national laws and the European corporate laws and the rules regarding water management such as the Water Framework Directive.

The regulations introduced by the AATO followed the principles included in the Galli law and in the regional law. The authority control focuses on the annual budget of the company, its economic performances (i.e. efficiency, effectiveness, level of investment and profit maximization). The computation of the water tariff follows the cost-recovery principle introduced at national level and the polluter pays principle. Furthermore, the tariff covers part of the costs for the regulatory authority operations and the return on invested capital of the provider (A.A.T.O.4 2011). First an average tariff is calculated and then it is articulated according to the user category (private/domestic, commercial, industrial or public users) and the level of consumption (Tab.1). Thus, the tariff is

34 characterized by a variable part (the level of consumption) and a fix part (so called ‘quota fissa’).

Tab. 1 – Tariff articulation for domestic residential users in 2011 (A.A.T.O.4 2011)

Domestic residential use

Aqueduct tariffs €/m3 (from 0 to 100 m3) 0,624 (from 101 to 150 m3) 1,100 (from 151 to 200 m3) 2,586 (more than 200 m3) 3,550 sewage 0,591 treatment 0,119 Quota fissa € 60,717

The articulation and the level of the tariff is highly contested in the upper Arno water districts. While, the Committee denounces the high level of the water fees compared to other Italian cases, the Company shifts the blame to the regulatory authority. As several interviewees employed by the Company highlighted, the provider does not decide about the tariffs level “we just apply what the AATO establish” (personal communication, managing director of Nuove Acque). However, as I demonstrated above, the AATO decisions is greatly influenced by the provider.

The different uses of the rules by the actors are clear in respect of the implementation of the national laws, in particular regarding the outcome of the referendum. If the upper Arno water district was the first one that implemented the Galli Law and created the first PPP in Italy, it was not the first one that complied with the result of the referendum. According to the company and the AATO, the referendum did not imply any changes for the local water governance as the question about privatisation did not influence the concession contract stipulated in 1999 and the return on investment is not included in the calculation of water tariffs in the upper Arno district. However, the Committee has another position regarding the enforcement of the referendum results. First, they look at the outcome of the referendum as the expression of people’s demand to stop the privatisation of water utilities and as a request towards the ripubblicizzazione. Thus, they stress the political message signalled by the voters. Second, the Committee claims that the water tariff currently applied by Nuove Acque includes the return on investment and invited the municipalities and the Authority to take action in order to respect the new national law. In front of their indifference, the Committee have launched the Civil Obedience Campaign (Campagna di Obbedienza Civile). Since beginning of 2011, they have withdrawn the percentage of their water bills corresponding to the return on investment and they have invited citizens to follow them. According to the president the committee, the only way to push them to recognize the referendum results is to influence the money circle (personal communication, member of the Committee). The Committee promotes another water allocation mechanism that does not include the profit for the provider independent of the ownership. This is reflected in the debate around water tariffs which should not ensure the profit of the company. Not profit does not automatically imply not cost-recovery. Indeed, some members of the committee stressed that they do not claim

35 free water, rather a fair price for the service based on the real costs of provision and on solidarity principles (personal communication, member of the Committee).

The relationship between the users and the provider is defined by the standard supply contract and by the regulations and standards of service or ‘carta dei servizi’. The contract, the fees, the rules on water control are set up by the Authority (and the company).The access to drinking water is subjected to the signing of the contract, water rights are materialized through the payment of a sum of money corresponding to the amount of water consumed plus a fixed amount. No money, no water. The flow of potable drinking water has been transformed into a flow of money. Since the introduction of the water reform, the role of the people has changed: the citizens have been transformed in users and customers. However, an active role is requested from the customers from time to time (e.g. summer droughts, tap water campaigns).

3. Authorities

Formally the AATO represented the authority which formulated and enforced the rules regarding water governance in the water district. The legitimacy of the Authority in water governance was provided by the Galli law and supported by the regional law. The introduction of AATO represented a ‘political challenge’, as a new level of water governance above the municipalities, the typical actors that used to directly govern water distribution, was inaugurated (Citroni et al. 2008). The AATO operated as a new arena of representation constituted by the mayors democratically elected in the 37 municipalities lying within the district. Thus, it indirectly derived its legitimacy also from the voters.

Formally, the provider had to comply with the regulation made up by the water authority; in practice, the provider and the authority collaborated in the regulation activities. Indeed, the municipalities that took part in the AATO were at the same time shareholders of Nuove Acque. The mayors supported different stakes and strategies depending on the Assembly they assisted. Thus, they influenced the decision-making activities of the regulatory authority and the stakes of the company; they shaped water governance both from outside the company, as a governor of the AATO and inside the company governed by the AATO. This system was designed to work as a double control over the provider’s activities as the mayors, in the name of the citizens, can access the information regarding Nuove Acque’s performances and compare them with that received by the provider within the regulatory authority (Schiatti 2003). However, the multiple role of the mayors resulted into a complex conflict of interests. Exemplary is the debate around water tariffs. Formally, the water authority is entailed with the determination of regulations about water fees calculation, that then are computed and collected by the PPP. In front of the popular protest for the increase of the tariffs and the Committee claims on the illegitimate calculation of the fees, Nuove Acque denies its involvement and shifts its responsibility to the AATO. Thus, a high tariff is a decision and a problem caused by the public partners (thus, the mayors) not by the private one. At the same time, the mayors seeking votes supported the protest of the citizens against the increased tariff. To complete the circle, the mayors (partly) correspond with the members of the public shareholder in the company. Therefore, the mayors/municipalities are at the centre of a vicious cycle where 36 each actor passes its responsibilities to the other, while the users continues to pay and protest.

The ambiguous political role of the mayors was clear during the referendum campaign, when some of them publicly supported the Committee’s stakes. For instance, the current mayor of Arezzo signed in public in order to sustain the referendum and several times he supported the Committee during public speeches, but these actions have never been translated in practice as no efforts have been made towards the ripubblicizzazione of the drinking water and sanitation provision (personal communication, member of the Committee). This tri-face role gives the mayors the opportunity of using several strategies: they can defend the municipality’s interests, or the company’s interests or the natural resources present in the territory (i.e. springs and water sources) and then again they can defend their future candidacy and political carrier (Citroni et al. 2008).

The dispute between the mayor, the committee and the company is influenced by how they use the people’s opinion to legitimize their claims. The company quotes the positive results of a customer satisfaction survey carried out by the AATO, the mayors base their authority on the people that supported them in occasion of the elections and the Committee relies on the results of the referendum and the people’s participation in their initiatives. Furthermore, the way the three actors have used to endorse their authority distinguish them. On one side, Nuove Acque surveyed customers’ opinions through telephonic interviews; on the other, the Committee have built its support during public debates and meeting. Their stands at the weekly market in Arezzo and in other small municipalities give them the possibility to directly interact with people.

In order to strengthen its power and authority, the Committee have collaborated and created synergies with other committees and associations. At local level they have worked together with environmental organizations (Legambiente), religious association (ACLI, CARITAS), social and cultural leftist associations (ARCI). At regional and national level they have collaborated with a network of committees which promote the ripubblicizzazione of water utilities (i.e. ‘Forum Italiano dei movimenti per l’acqua’). At times, the Committee is supported by political parties, usually the opposition parties of the current administrations. Ultimately, the Committee’s authority in defending the common interests and to take legal action to protect those interests have been formally recognized by the Tuscan regional administrative court of law and confirmed by the Council of State (in Italian Consiglio di Stato). collaborate

The local political network highly influence the authority of each group. The support of the Democratic Party (Partito Democratico) the current ruling political party in the municipality and province of Arezzo and in Tuscany, to Nuove Acque have been a key resource for the provider, especially in turbulent periods. The composition of the board of directors of Nuove Acque, with particular reference to the representatives of the public shareholders, reflects the relations of power between different local politicians. Furthermore, the president of Nuove Acque has been typically connected with the Democratic Party (Partito Democratico). Exemplary is the appointment of the current president that, as reported by some local newspapers, was first approved by the local assembly of the Democratic Party and then formalized during the shareholder’s

37

Assembly.6 The former president, Paolo Ricci, was at the head of the company until last October. He used to be the mayor of Arezzo in 1999 when the public-private partnership model was introduced, after his mandate he was appointed as the president of the PPP. Citroni et al. (2008), describes him as the ‘deus ex machina’ of the entire semi- privatisation process. His central role in the creation of the creation and support of the PPP was confirmed during interviews with him, with the director of the water authority and with some members of the Committee. The previous president, the first one in the history of Nuove Acque, was at the head of the commission in charge of the selection of the private partners of the company (Forum Social Arezzo 2004). Indeed, as the cartoon underlines, there is strong link between the local politicians and the drinking water and sanitation provider. Furthermore, political disputes between mayors belonging to different political parties (in the area there are also right wing parties) and of different factions of the same party influence the power of the public partner within the company and the decision-making in the regulatory authority.

Fig. 1 – Cartoon published on the occasion of the appointment of the current president, “municipal aqueduct, the favourite swimming pool for the local politician” (www.informarezzo.com, last visited 21.11.2012)

4. Discourses

These last section of the chapter presents the discourse that the actors involve in the conflict use and created in order to support their claims. First, for each group the main discourse is summarized in few sentences and then the contestation between them is discussed following some key aspects.

6 La Nazione di Arezzo 24.10.2012: “ Paolo Nannini eletto alla guida di Nuove Acque: stamani la scelta dei soci Anche Ralli entra nel Cda. Una linea già decisa lunedì dai sindaci Pd.” http://www.lanazione.it/arezzo/politica/2012/10/24/791541-arezzo-nuove-acque-nannini- caroti-dindalini-meacci-pd.shtml last visited: 21.12.2012

38

 Nuove Acque

Water is a finite and scarce resource, thus we should all cooperate in order to manage it an efficient and effective way.

Since its creation, Nuove Acque have contributed with its knowledge, financial means and long-standing experience in water management to improve drinking water supply and sanitation provision.

The referendum results did not affect the company.

 Regulatory authority

Water is a scarce resource, thus we should all cooperate in order to manage it an efficient and effective way.

The objective of the regulatory authority is to ensure the distribution of good quality water at a fairly low price for users, that at the same time guarantee cost-recovery and economic efficiency.

The regulatory authority, together with the presence of the municipalities in the company’s shareholders, ensures the public interest by controlling Nuove Acque’s performances and annual budget.

 Municipalities

Municipalities lack of know-how and financial means, thus private sector support is crucial in order to manage water utilities in an efficient and effective way.

The public property of the infrastructures, the presence of municipalities both in the regulatory authority and in the company’s shareholders guarantee the public interest in water provision.

The referendum result are an important sign of the citizens’ will, however it is difficult to cope with them.

 Committee

Water is a basic need and a common good, thus no one should profit from it.

Private business models do not function in drinking water sector management. Thus, market principles cannot be used in drinking water management.

Nuove Acque represents an unsuccessful experience of water management, characterized by high water fees and low investment rates.

As it is possible to notice form the few sentence above, each group of interest represents the situation of the upper Arno water district from a particular point of view depending on the interests it supports in the conflict. The different representations of water are shaped by the epistemic communities that surround the actors. Furthermore, they make 39 use of some common elements in contrasting ways. Among others, they refer to the relations between public and private sectors, the environment and the reference to democracy to back their claims.

The discourse that supports the public-private partnership model in Arezzo is well- illustrated by the quote below:

“Arezzo was the first Tuscan ATO to complete the process of delegating the management of water services. Italy can now draw on the 10 years’ experience of Nuove Acque, a company that succeeded, before any other, in seizing the opportunity offered by the reform. Arezzo was able, ahead of the crowd, to plan a series of strategic interventions in the territory, improve the water services provided to the population, and start managing water according to an industrial logic based on efficiency and effectiveness.”(Suez Environment 2010)

Nuove Acque is described through its long standing experience in water service provision. The rapid creation of the company and implementation of the Galli Law in the upper Arno water district is often used as an explanation of the success of the company, the mismanagement of the early years (learning-by-doing) and the high level of contestation that accompanied the history of Nuove Acque. Particularly during the first years, the choice of the public-private partnership as a model for drinking water governance has been represented as a ‘modern’ alternative (personal communication, former mayor) to support the creation of a modern water industry. This also reflects in the choice of name for the company Nuove Acque, New Waters in English. Meanwhile, the protest against this model are depicted as ‘old-fashioned’ (personal communication, managing director of Nuove Acque). The presence of local banks and well-known international and national players in water service provision (such as Suez Environment and ACEA) has been used to promote the success of the company. At the same time, the presence of the French multinational company within the private partner (‘the French demon’) is one of the explanation for the contestation (personal communication, director ex-AATO). During interviews with the employees of the regulatory authority and of the provider, the Committee’s members have been represented in a negative way as a small bunch of local troublemaking losers. The Committee in turn describe Suez and the other components of the Intesa Aretina as crooks and uses cases fought around the world against the private partner as evidence to back up their claims. For instance, the experience of Buenos Aires drinking water privatisation or other South-American cities is often cited by the Committee’s members as an example of failed privatisation.

Another aspect that influences the discourse created in favour of the company regards the comparison between role of the private partner and the public one. The first is described by means of the know-how, money, contacts and international expertise that it brought, the second represented by the lack of financial resources and competences as a ‘socio- cultural condition’ (personal communication, managing director of Nuove Acque). The public partner represents itself as incapable both in management and financial terms; rephrasing an interviewee, as it has been convinced of being inefficient (personal communication, former mayor). Following this line of though, the private partner is there to address the lack of public resources (e.g. money and know-how) and meet the company objective: provide drinking water and sanitation to the ATO 4 in an efficient and cost- effective way. Furthermore, the public partners have been assigned the role of ensuring

40 the wellbeing of the public. Together with the presence of municipalities in the company, the local regulating authority has been represented as an assurance of the public control over the semi-private provider in a particular market such as the water utilities characterized by a natural monopoly (IRPET 2012). The separation between service provision and regulation is supported by a widespread epistemic community.

The attention for the environment is an element that is used by different actors to pursue their interests. The company and the authority claims that in order to cope with water, as a scarce resource, efficient management and high investments (e.g. in waste water treatment plants and to reduce leakage) are required; these can be especially provided by the private sector and the market-principles in water governance. Nuove Acque is engaged in awareness campaigns and initiatives together with environmental organizations and the regulatory Authority. For instance, together with Legambiente (the same organization that support the Committee), the participation of the AATO and the municipalities, the provider organized initiatives to promote the use of tap water instead of bottled water in schools and public offices. During last summer, the company was actively involved in sensitizing citizens’ awareness on water savings and on a responsible use of water. While stressing the importance of the conservation of the environment and natural resources such as water, the members of the Committee comes to an opposite conclusion than the company. According to one member of the Committee (personal communication), in order to profit more, the company has to sell more water, this market- principle that characterized private companies does not protect the resource and does not promote a water saving policy.

The Committee’s claim ‘we write water, we read democracy’ summarizes one of the key discourse that the Committee’s members mobilized to support their object. They portray the conflict over water governance as a conflict over democracy. Particularly after the referendum, the Committee calls for the respect of the result of the votes, thus the law. Water is seen as a citizens’ right that should be guaranteed to all people independently from their economic status; as basic need for human livelihoods and an irreplaceable common good. The transformation of water into an economic good, its allocation according to market-principles and private sector participation does not pursue the common interest. Thus, the result is the contestation of the presence of the private partners in Nuove Acque, but also protesting against the local mayors who are not committed to respect the referendum results. As the picture below shows (Fig. 2), the private partner of the provider (Suez Environment and Acea) are represented as two hands that tighten the water provision of the people, symbolized by the woman that holds a water pitcher. Nuove Acque is represented between the two Tuscan banks involved in the private share of the company (MPS or Monte dei Paschi di Siena and BPEL or Banca Popolare dell’Etruria e del Lazio). On the top of the picture, the mayors of the water district are represented, following the famous proverb ‘see no evil, hear no evil, speak no evil’. The sentence clarifies the position of the mayors that, according to the Committee, do not take actions to fulfil the popular will as was expressed during the referendum.

The table below (Tab.2) summarizes the principal conflicting perspectives and interests regarding resource, rules, authorities and discourses.

41

Fig. 2 – Representation of the drinking water network by the Committee.

42

Tab. 2 – The Echelon of Right Analysis. (my elaboration).

Resources Rules Authorities Discourses Nuove Acque Privileged position NA claims that the Company applies NA supports its authority by NA supports the need of the PPP in (NA) guaranteed by: the rules formulated by the AATO, referring to: order to reach efficiency and however NA has a privileged effectiveness of water provision. Money: position guaranteed by: - Nuove Acque unique successful -control over the flow of experience Water is a scarce resource and an money between public and -Influence on the content of economic good private partners shareholder agreements (more - International and national -collection of water fees power to the private shareholder) partners (Suez Env., ACEA) NA describes the company -access to financial resources experience as a successful one, -actual investment -Influence on the concession -Solid political network (support of despite Committee’s critiques. in infrastructure contract, business and investment the leading political party) plans (Nuove Acque controls the NA represents the committee as a Water: activity of the AATO) bunch of protesters (contested -control the actual access to relationship) water NA represents the AATO and the Infrastructure: mayors as a good partners -actual access (collaborative relationship)

knowledge NA partly deny the conflict that is -expertise occurring in the area and partly -control access to information classify the protests as old- about the company fashioned and agaist modern way of water utilities management (e.g. PPP) Municipalities Contested relationship with Mayors control over decision- Mayors are democratically elected Municipalities lack of funds and all the other actors making and rules content by their and act on behalf of their voters. expertise, thus they need private double-participation (provider + sector investment and knowledge. Mayors influence money AATO). flows and ensure their Mayors recognize the referendum interests (tariffs, investment, results, but it is not possible to public money) comply with them in the upper Arno water district. 43

Resources Rules Authorities Discourses AATO -The AATO is partly -Formally decide on the control -the AATO backs its activity by According to the AATO, NA have controlled by Nuove Acque over the content of the rules referring to the national laws (e.g. promoted investment in water due to its lack of knowledge (concession contract, fee Galli Law) and the regional one. supply and sewage collection while and financial resources calculation, relationship user- - the AATO supports its authority ensuring cost-recovery and compare with the Company. provide) influenced by Nuove with the local political network affordable tariffs. Acque (same members) (relations with the hegemonic party) The AATO promotes the representation of NA as a successful -The AATO is partly -Defend its function in controlling - the AATO contest Committee’s experience. controlled by the Nuove Acque performances, while authority municipalities (Public money) according to the Committee Nuove The AATO promotes collaboration Acque Control the AATO. between different parties to meet environmental needs (e.g. water scarcity), excluding the Committee. Comitato Acqua Oppose the Company, the Promote the respect of all the -The Committee promote its Water a common good, rather than Pubblica AATO and the mayors by National laws, including the legitimacy by referring to the a commodity. referendum. (the AATO and NA referendum results and the people -producing knowledge and assert the referendum does not will (also the mayors refer to the Water utilities should be managed sharing it have consequences for the upper people will during elections) outside private business model and Arno water district) market mechanisms (no profit). -experts that shares the -The Committee authority in Committee interests (lawyer) The content of the regulations defending common interest in NA represents an unsuccessful regarding tariffs calculation is water management is recognized by experience of water management, -fund-raising. wrong: now they guarantee the law. characterized by high water fees profit for the Company. (According and low investment rates. -interaction with citizens to NA the tariffs do not include the The committee created a local and during debates, weekly national network with other The referendum results market, open meetings. The Committee influence the movements, associations and demonstrate the citizens’ opinion content of the rules regarding tariffs groups to strengthen its authority on NA. According to the company by reporting to the authorities the and promote an alternative to the and the AATO the referendum Company and AATO misbehaviour. network used by the other actors. results do not prove the citizens’ opinion on NA, that is instead proved by the high customer satisfaction index of the Company.

44

Conclusion

Among other Italian experiences, the analysis of the history of the semi-privatisation of the upper Arno water district shows how the modern ‘Tuscany model’ for drinking water and sanitation governance has been applied and how it shaped the local water-network. New actors have been introduced (e.g. Intesa Aretina and the regulatory authority), old actors have reclaimed their role and conquered space in the control room (e.g. the mayors) while other actors have managed to claim their own space in the decision- making arena (e.g. the Committee). These groups, with their divergent interests, have shaped the local struggle over water governance. By looking at who are the actors involved and how they mobilize their strategies to arrange and structure their resource, rules, authorities and discourses according to their interests, I have been able to describe the local water-network and explain the relationships that link the actors together. In light of the analysis of the previous chapters, in this concluding section I will answer the main research question that guided me throughout my study of the upper Arno district.

Initially, when asked about their main objective, the members of the different groups of interest gave a similar answer that can be paraphrased as ‘guarantee good quality and good quantity of water to the people living in the upper Arno water district’. During the conversations, they showed to have opposing ways regarding the provision of drinking water and sanitation service. Controversies popped up and their strategic alliances became clearer.

Nuove Acque aims at providing water following AATO’s rules and achieving economic and financial balance. The company is constituted by two main shareholders, the private partner and the public ones, that together control decision-making and actual access to water. The board of directors represents the physical and social space where the corporate world and principles meet local public interests. This space is exclusive, only open to local (or international) elites but in the border between democratic elections and appointment. Particularly, the members of the board who formally represent the public shareholders are nominated outside the direct democratic control following the recommendations and the interests of the local political party. The powerful collaboration between the private and public shareholder is demonstrated by the fact that between 2002 and 2012, the board of directors of Nuove Acque has always voted unanimously (personal communication, former president of Nuove Acque). For all the actors it is clear (but formally denied) that even if the majority of share is publicly owned, actual decision making power together with access to knowledge, infrastructure and water is under private control.

The public role in water control is strengthened by the regulatory authority whose objective was to supervise the performances of the PPP (e.g. control that the provider makes profit, but not too much!) and guarantee the public interests involved in the provision of an essential service such as water (e.g. affordability of tariffs, environmental protection). The AATO was the authority that reinforced the rules decided by the local 45 government (e.g. the mayors) and the national one. It represented a ‘technology of government’ (Dean 1999) used by the mayors and the national government to order the water-network. Indeed, the AATO rules on the relationship between the public and the private (e.g. initial tender for the selection of the private partner ), the provider and the authority itself (e.g. concession contract) and the provider and the users (e.g. water supply contracts). The authority has been at the borderline between the ‘technical’ and the ‘political’. It was in fact designed as the political arena where the mayor discussed the policy objectives of the water provision and, at the same time, it was provided with an executive body entrusted with the technical control of the provider.

The municipalities have played the most controversial role within the contest arena as they have access both to the regulatory authority and to the company. The 37 mayors that form the Assemblies, on behalf of their municipalities (and voters), in each occasion can decide which stakes they support. At the same time, they are shareholder, regulators, votes’ seekers and political party members. They derive their authority from democratic elections and their decision-making power from the size of their municipalities. Thus, the mayors of small municipalities (few thousands inhabitants) are stuck in the conflict arena and easily blackmailed by the above mentioned actors.

The objective of the Committee, namely the ripubblicizzazione of the water utilities and the promotion of a non-profit water governance, opposes the other actors’ interests. The Committee claims conflict with the company main objective, that is making profit out of a basic need such as drinking water. Furthermore, the Committee struggles against the unclear role that mayors and other public shareholders’ representatives often cover; and promote a more active and strong public control over the private partners of Nuove Acque. The actual Committee represents the organized version of several years of struggle which started together with the creation of the public-private partnership. The Committee members derive their legitimacy from their direct relationship with people (e.g. stands at the weekly market) and from the result of the national referendum.

During interviews, the discussion often focused on money in terms of investment rate, business plans, tariffs, financial capital, public funds, infrastructures etc. Money is at the centre of the conflict more than water itself. Accumulation of power follows money flows. The Committee is also aware of this, as one of the members said: “the only way to stop the mechanism is to take out the money” (personal communication). The Committee denounces the lack of investment and the high level of water tariffs compared to other Italian experiences. On the other hand, the Company and the regulatory authority claim the high investment rate and defend the existing water tariff level through reports, benchmarking analysis with other Tuscan water utilities. The mayors are in between: they defend the company’s position, meanwhile they criticize an eventual increase in water fees. Apart from the monetary flows, the second element that shapes the water- network and the contested relationship between the actors is the role of the political network. The implementation of the reform, the actual configuration of the system and the conflict are subjected to the strategy of the local political parties and the people who belong to them (e.g. the mayors). Thus, the conflict over water is also a form of dissent against the local political elites that support the actual model of water governance and 46 against the formal (empty) political space. Thus, the Committee have opened up new spaces for discussion and opposition to the dominant political party. They promote a more transparent, well-informed, participatory, democratic water governance. The access to information and knowledge production represents another level of discussion. First, the comparison between the low competences of the public partners and the private partner’s know-how has been used in order to explain the necessity of privatization and subsequently it has been used by the private shareholder to control the water governance process. Furthermore, a generalized lack of information characterized the creation of the PPP. Together with the sudden increase of tariffs, this lead to the explosion of the protest. This trend has changed in the last few years as each group of interest is producing reports and studies in order to support their position (e.g. the Nuove Acque sustainability budget, AATO reports). Ultimately, they all involve experts to “prove” the good or bad consequences of privatisation.

The different actors use their resources, rules, authorities and try to arrange them in further convenient ways in order to construct a particular representation of the experience of the upper Arno water district. The provider and the AATO represent the company as a solid local industrial reality, as a successful example of a public-private joint venture that lead to a better water provision and sewerage coverage within the district. According to them, the tariffs are in line with the regional average and the level of investment follows the projection of the business plan. The conflict is often minimized and the Committee is described in a negative way. On the other side of the controversy, the Committee describes the public-private partnership as an unsuccessful experience that has handed over the control of a fundamental resource to the market and to private profit. According to the members of the Committee, ‘tariffs are among the highest in Italy, while the investments are among the lowest in Italy’(personal communication). These two opposite representations of reality coexist within the same water district. They talk to the citizens, but not directly to each other; the only lines of communication between the two are through lawyers in court tribunals or through the press.

When I started this thesis, I wished to understand why water has been able to mobilize people more than other issues. During this research I came to realize and have documented how in the upper Arno water district the conflict is not just about water but it brings into discussion the relationship between democratic practices and capital accumulation, between the ‘technical’ and the ‘political’. A pre-established order of and in society, created by political and financial elites, is challenged by an organized group of citizens.

47

Discussion

In light of the outcomes of the research, the following section provides further reflections on the methods that have been used and the research framework that guided the thesis.

1. Discussion on methods

The upper Arno water district, with its long and contested history, represents a good example of the Italian water conflicts. The choice of the district as a case study area followed some criteria. First, the experience of Arezzo is known for the level of conflict that accompanied the implementation of the Galli Law and the establishment of the first public-private partnership for water supply. Second, the PPP represents an interesting configuration of power relations between local actors (e.g. the mayors), banks, international players (e.g. Suez Environment), national actors (e.g. ACEA spa). Thus, the experience of the district shows the role of outside forces in shaping the local water- network. Third, the members of the local Committee have been willing to take part to the research since the first time I have contacted them.

The thesis describes and analyses the four main actors (the provider, the regulatory authority, the municipalities and the Committee) that have influenced water governance in the upper Arno water district. Each actor is constituted by a group of people who, for several reasons (e.g. job positions, political beliefs, political party membership), are associated with a particular field of interests. For instance, the Committee is formed by a variegate group of people who protest against the privatisation of water utilities, the provider is constituted by all the people that it has employed. Their claims have been condensed in few sentences. Indeed, the water network is far more articulate and complex than what has been possible to describe in this minor thesis. Particularly, time constraints limit the results of the research. In order to overcome these limitations several research methods were used. The history of the upper Arno water district was reconstructed starting from the data collected through interviews and observations. During the field work, at least three members for each group were interviewed in-depth; for each actors the spokesmen or spokeswoman were interviewed (e.g. the president of the committee, the president of the regulatory authority, the president and the managing director of the provider). Furthermore, these data were compared with the results of the European project ‘Watertime’ (Lobina 2005) which analyses the urban water supply in 29 European cities including Arezzo, and with the research on local water governance carried out by Citroni et al. (2008). Ultimately, the report compiled by some members of the Committee and the report drew up by the drinking water authority (A.A.T.O.4 2008) were used to corroborate the data.

As I already highlighted, my perspective, background and previous experiences influenced the research. Particularly, my study background in economics helped me to understand the claims of each group regarding money, level of investments and water fees calculation. In addition, the framework I used and knowledge gained during the first year of the 48

Master’s degree at Wageningen University guided me in the investigation of water as a contested resource. Since the first days of my field work, I have been looking for the most important and simultaneously contested elements that characterised the local water- network and the power relations that linked the actors. The semi-structured interviews and observations guided me through the network and shaped my participation in and towards the conflict. Indeed, the structure of the interviews helped me in the analysis of the context. In particular, during the Committee meetings and the demonstration I followed my observation guide in order not to get carried away by the Committee’s enthusiasm.

I observed the social environment from a politically engaged point of view. During the last years, I have explored the debate around drinking water privatisation both as an activist and a researcher. With my bachelor thesis I party studied the economic literature that support the public-private partnership model and I analysed water utilities through their level of economic efficiency. I was involved in activities in support of the referendum campaign, where I used my academic knowledge to explain the content of the referendum questions and the consequences of a further privatisation of water utilities. However, this thesis does not argue in favour or against drinking water and sanitation privatisation, it rather looks at how the process of water utilities did occur. Last spring, when I took part to both the 6th World Water Forum and the Alternative World Water Forum, I realized how both side of the debate, pro and anti-privatization, put in place their ‘laboratory of practice’ in order to create text, graphs, instruments, numbers and objects to support their claims and defend their models as “best practices” (Latour, 1987). The Upper Arno water district represented the local ‘laboratory of practice’ analysed in this research. The construction of the case study has given me the chance to analyse in-depth how the debate over drinking water privatisation influences the everyday life of the people who live in the district.

2. Discussion on concepts

The development of a case study represented an opportunity to analyse in depth the impacts of the introduction of a new water governance model and its contestation. As documented in this study, several ‘neoliberal’ processes are taking place in the upper Arno water district. The drinking water provision has been semi-privatized, commercialized and commodified. In addition, the presence within the private partner of ACEA, a former public-owned company converted into a public-private partnership, shows how the district is also experiencing a form of corporatisation of the water utilities. From an academic point of view, it may be useful to define each of these different processes and their outcomes and to compare them with other cases in order to look for commonalities and differences (Castree 2008; Castree 2008a) Often, all these processes are labelled with the term privatisation. Thus, the debate is reduced to the well-known dichotomies: private versus public or market versus state. However, as I describe in this thesis, the dispute around drinking water privatisation is far more complex. It questions the role of public actors (e.g. the national government or the municipalities) in 49 inaugurating the private sector participation in natural resource management and in establishing a particular social order hidden behind business plans, efficiency performances and levels of tariffs.

Governmentality or the ‘art of governance’ looks at the rationality of governors and thereby at the ways in which this dominant order is produced and re-produced. Indeed, with the Galli law the state control over drinking water supply has been reshaped in order to make the sector more productive and thus, suitable for the neoliberal society goals. Water provision has become a business “potentially profitable, rather than a public service; which (whether under public or private ownership) should have as its primary goal the maximization of economic efficiency rather than social equity” (Bakker 2003a:43). This process implies the need of private capital and know-how in order to compensate the lack of public finance and expertise. The state failure reflected in the municipalities' failure in providing public services is substituted by market mechanisms that would increase the efficiency and effectiveness of the service in favour of the users. As a consequence, new players (e.g. Suez/Environment) enter in water provision as expertise and financial resources holders. Meanwhile the role of the old providers (e.g. the municipalities) is re-configured to shareholders of the company and controllers of a public resource. Meanwhile, new geographical scales, the water districts, new centres of power, the local regulatory authorities, and new managing principles were introduced. The reorganization of the water governance represented a top-down process directed by the central state and the regional governments, heavily influenced by economically powerful private actors.

In the construction of the case study, defining water as a contested resource allowed me to understand how water reform in Italy has been at the centre of a wider conflict around the neoliberalisation of nature and the production of social order. Drinking water is a basic human need, that cannot be replaced by other goods. It is thus, a perfect terrain for capital accumulation and for its contestation. On one hand, the necessity of access to this non-substitutable good transforms water into guaranteed source of profit for companies. On the other hand, water represents a prominent field from where to start the struggle against neoliberal policies and reclaiming a space for participation, as people attach a special value to the resource.

The conflict in Arezzo has been analysed looking at water rights. The three dimensional definition of water rights provided by Boelens and Zwarteveen (2005) has been useful to analyse the struggle over drinking water. Indeed, the conflict is not only about the access to the resource but also about the access to the decision-making process. According to the first domain, water access depends of the authorization of using of a water flow. This research sought to find out in whose hands this authority lies. The municipalities and the provider have been authorized through the supply contract, to provide water to users in exchange of payment of fees; not following the prescriptions of the provider means that the users do not receive water. This authority is contested, but nonetheless still accepted. The physical infrastructure represents one of the key resources used by the different actors to back their stakes. The struggle particularly concentrates on the money that is invested in infrastructure’s construction and maintenance. Ultimately, the ways in which water access is materialized through rules and regulations, the organizational domain of water right, are also contested. As I documented, decision-making processes and 50 mechanisms (e.g. the contracts, the regulations, the mayor’s assemblies, the provider’s board of directors) are questioned not only in relation to water governance, but more in general in association with democratic practices in natural resource management.

The water rights point of view was sustained also in the analysis of the conflict through the Echelons of Right Analysis. This framework helped me to de-construct the disputes about water at different levels of struggle and the strategies of both sides of the controversy. Furthermore, it has been useful during the field work in order to formulate interview questions and to structure the observations.

Water governance has been discussed as a socially produced bundle of perceptions, rules and relationships between state and non-state actors. However, the concept of ‘water governance’ carries some limitations. First of all, the concept is susceptible to various and heterogeneous definitions well summarized by Kersbergen and Waarden (2004). Second, the vagueness and malleability of the term governance often “obscure[s] a broad range of interests and ideological positions” (Bridge and Perreault 2009:475; Swyngedouw 2005). Third, it was not always easy to talk about water governance outside the academic domain. Ultimately, the accessibility and understanding of the concept are also influenced by the fact that it does not have a proper translation in Italian. Indeed, often it is not translated or it is translated as ‘governo’ (government, in English) or more technically as ‘gestione’ (management in English).

The struggles over water control in the upper Arno water district represent only one of the numerous local conflicts that are occurring in Italy. The case is “unique but not singular” (Castree 2005:541). Even though the local conditions change, the arenas of contestation are formed by the same main actors: the provider, the regulatory authority, the mayors and a group of organized citizens. A process of neoliberalisation of water utilities, through the introduction of market based mechanisms and private sectors participation, has characterized the whole country during the last two decades. In response to top-down neoliberal polices supported by the Italian governments, local committees, grassroots movements and associations protested and organized themselves in order to promote a different way of governing natural resources. The Arezzo Public Water Committee represents only one of the several groups of citizens that at local level struggle against drinking water privatisation. The referendum results illustrate how widespread and significant this dispute is. However, Berlusconi’s government and the current technocratic government have not complied with the result of the referendum and thus with the popular will. On the contrary, neoliberal policies are governing ever wider aspects of both the social and natural life. Further research is needed in order to disclose how natural resources are at the borderline between capital accumulation and democratic practice not only in Italy but also within the European Union.

51

References

A.A.T.O.4. (2008). Il servizio idrico integrato nell'A.T.O. 4 Alto Valdarno. Dati sintetici dei primi 9 anni di gestione 1999-2008.

A.A.T.O.4. (2011). La tariffa del Servizio Idrico Integrato: analisi comparativa delle tariffe applicate all'anno 2011 nei sei A.T.O. della Regione Toscana.

Bakker, K. (2003a). A political ecology of water privatization. Studies in Political Economy, 70.

Bakker, K. (2005). Neoliberalizing Nature? Market Environmentalism in Water Supply in England and Wales. Annals of the Association of American Geographers, 95(3), 542- 565.

Bakker, K. (2007). The “Commons” Versus the “Commodity”: Alter‐globalization, Anti‐privatization and the Human Right to Water in the Global South. Antipode, 39(3), 430-455.

Bakker, K. (2010). Privatizing water: governance failure and the world's urban water crisis: Cornell University Press.

Bersani, M. (2011). Come abbiamo vinto il referendum. Dalla battaglia per l'acqua pubblica alla democrazia dei beni comuni. Roma: Edizioni Alegre

Boelens, R. (2008). The rules of the game and the game of the rules: Normalization and resistance in Andean water control: Wageningen University, The Netherlands.

Boelens, R. (2010). Water rights politics. In K. Wegerich and J. Warner (eds.), Water politics, (pp. 161-183), Routledge.

Boelens, R., and Zwarteveen, M. (2005). Prices and politics in Andean water reforms. Development and Change, 36(4), 735-758.

Bolding, A. (2004). In hot water: a study on sociotechnical intervention models and practices of water use in smallholder agriculture, Nyanyadzi catchment, Zimbabwe: Wageningen University, The Netherlands.

Bridge, G. and Perreault, T. (2009). Environmental Governance. In: N. Castree, D. Demeritt, D. Liverman and B. Rhoads (Eds.), A Companion to Environmental Geography, Wiley-Blackwell, Oxford, UK.

Budds, J., & McGranahan, G. (2003). Are the debates on water privatization missing the point? Experiences from Africa, Asia and Latin America. Environment and Urbanization, 15(2), 87-113.

Castree, N. (2008). Neoliberalising nature: processes, effects, and evaluations. Environment and planning. A, 40(1), 153.

Castree, N. (2008a). Neoliberalising nature: the logics of deregulation and reregulation. Environment and planning. A, 40(1), 131.

52

Castro, J. E. (2007). Water governance in the twentieth-first century. Ambiente & sociedade, 10(2), 97-118.

Chiaramonte, A. and D'Alimonte, R. (2012). The Twilight of the Berlusconi Era: Local Elections and National Referendums in Italy, May and June 2011. South European Society and Politics 17(3), 261-279.

CISPEL. (2003). Water services, the Tuscan model. Integrated water service management, combining public authority and industrial reorganisation. I quaderni di .net. Firenze.

CISPEL. (2008). Una strategia per l'approvvigionamento idrico in Toscana. I quaderni di .net. Firenze: CISPEL Confservizi Toscana.

Citroni, G., Giannelli, N. and Lippi, A. (2008). «Chi governa l'acqua?» Studio sulla governance locale: Rubettino Editore.

Citroni, G., and Lippi, A. (2006). La politica di riforma dei servizi idrici. Istituzioni, processi e poste in gioco, Le istituzioni del federalismo, 2, 239-275.

Citroni, G., Lippi, A. and Profeti, S. (2011). Representation through Corporatisation. Public Utilities as Arenas for Local Democracy: Emerging Oligarchy and Unintended Consequences in Italy. Paper presented at the ECPR General Conference, Reykjavik.

Comitato (2007). Statuto del Comitato "Acqua Pubblica".

COVIRI. (2011). Rapporto sullo stato dei servizi idrici. Roma: Comitato di vigilanza sull'uso delle risorse idriche.

Dean, M. (1999). Basic concepts and themes. Governmentality. Power and Rule in Modern Society. London: SAGE Publication.

Diken, B., & Laustsen, C. B. (2004). 7-11, 9/11, and postpolitics. Alternatives, 29(1), 89- 113.

Forum Social Arezzo. (2004). Un'altra acqua é possibile - piú partecipazione, maggiore conoscenza, diversa gestione. (marzo 2003 – aggiornato all’agosto 2004).

Foucault, M. (1991). Governmentality. In G. Burchell, C. Gordon & P. Mille (Eds.), The foucault Effect: Studies in Governmetality (pp. 87-104). London: Harvester Wheatsheaf.

Goria, A., and Lugaresi, N. (2004). The evolution of the water regime in Italy. In K.-N. I. a. S. Kuks (Eds.), The evolution of national water regimes in Europe : transitions in water rights and water policies (pp. 265-291). Dordrecht: Kluwer Academic.

Hall, D., & Lobina, E. (2004). Private and public interests in water and energy. Paper presented at the Natural Resources Forum.

IRPET (2012), Informazioni sulla Toscana. Accessible: www.irpet.it/index.php?page=informazionisullatoscana [Last visited: 29.11.2012]

53

ISTAT. (2012). Giornata Mondiale dell'acqua. Le statistiche dell'Istat: Istituto nazionale di statistica.

Kaika, M. (2003). The Water Framework Directive: a new directive for a changing social, political and economic European framework. European Planning Studies, 11(3), 299-316.

Kersbergen, K. and Waarden, F. (2004). ‘Governance’as a bridge between disciplines: Cross‐disciplinary inspiration regarding shifts in governance and problems of governability, accountability and legitimacy. European journal of political research, 43(2), 143-171.

Latour, B., 1987, Science in action. How to follow scientists and engineers through society, Harvard University Press, Cambrige Massachusetts.

Law, J. (1992), Notes on the Theory of the Actor-Network: Ordering, Strategy, and Heterogeneity, Systems Practice, 5(4), 379-393

Lippi, A., Giannelli, N., Profeti, S. and Citroni, G. (2008). Adapting public-private governance to the local context - The case of water and sanitation services in Italy. Public Management Review, 10(5), 619-640.

Lobina, E. (2005). D11: WaterTime case study-Arezzo, Italy. Accesible: http://www. watertime. net/docs/WP2/D11_Arezzo. doc[Last visited: 09/11/2012].

Lobina, E. (2005a). D10f: WaterTime National Context Report–Italy. WaterTime Deliverable.

Ministero dell'Ambiente (2012), ATTUAZIONE DIRETTIVA QUADRO SULLE ACQUE 2000/60/CE - Stato della pianificazione in Italia - Distretti Idrografici. Accessible: http://www.direttivaacque.minambiente.it/distretti_idrografici.html. [Last visited: 29.11.2012]

Mollinga, P. P. (1993). A lecture for the Zimwesi research group. lecture notes.

Mollinga, P. P. (1997). Water control in sociotechnical systems: A conceptual framework for interdisciplinare irrigation studies. Revised by Wester (2010). lecture notes.

Mollinga, P. P. (2007). Water Policy – Water Politics: Social Engineering and Strategic Action in Water Sector Reform ZEF working papers: Department of Political and Cultural Change Center for Development Research, University of Bonn.

Nuove Acque (2012). I nostri numeri. Accessible: http://www.nuoveacque.it/societa_dati.asp?menu=1 [Last visited 18.10.2012]

Petrella, R., & Lembo, R. (2006). L'Italia che fa acqua. Documenti e lotte per l'acqua pubblica contro la mercificazione del bene comune. Rome: Edizioni Carta.

Regione Toscana (2012), Accessible: www.regionetoscana.it [Last visited: 29.11.2012]

Schiatti. (2003). Sintesi della relazione del presidente all'assemblea del 31/10/2003 A.A.T.O.4.

Suez Environment. (2010). Arezzo and its region. Concession contract. Water Stories. 54

Swyngedouw, E. (2004). Social power and the urbanization of water: flows of power. Oxford.

Swyngedouw, E. (2005). Governance innovation and the citizen: The Janus face of governance-beyond-the-state. Urban Studies, 42(11), 1991-2006.

Swyngedouw, E. (2009). The Political Economy and Political Ecology of the Hydro-Social Cycle. Journal of Contemporary Water Research & Education, 142(1),56-60.

Swyngedouw, E. (2009a). The Antinomies of the Postpolitical City: In Search of a Democratic Politics of Environmental Production. International Journal of Urban and Regional Research, 33(3), 601-620.

Swyngedouw, E. (2011). Interrogating post-democratization: Reclaiming egalitarian political spaces. Political Geography, 30(7), 370-380.

Warner, J., Wester, P., & Bolding, A. (2008). Going with the flow: river basins as the natural units for water management? Water Policy, 10, 121-138.

WMO (2012), World metereological Organization. The Dublin Statement on water and sustainable development. Accessible: www.wmo.int/pages/prog/hwrp/documents/english/icwedece.html. [Last visited: 12/10/2012]

55