Taking Our Public Services Back In-House Contents

ENGLISH APPENDIX -COMPENDIUM OF50REMUNICIPALISATION CASE STUDIES A REMUNICIPALISATION GUIDEFORWORKERSAND TRADEUNIONS Back In-house Public Services Taking our The global union federationThe global of workerspublic servicesin INTERNATIONAL PUBLIC SERVICES 2 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE CONTENTS

1. Energy 6 2. Health care 16 3. Infrastructure 21 4. Social care 22 5. Transport 23 6. Waste 29 7. Water 41 8. Catering 64 9. Cleaning 64 10. Education 64 11. Funeral services 65 12. Library services 65 13. Parking 68 14. Prisons 68

TAKING OUR PUBLIC SERVICES BACK IN-HOUSE A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS APPENDIX - COMPENDIUM OF 50 REMUNICIPALISATION CASE STUDIES This report was commissioned by PSI to Dr. Vera Wegmann, University of Greenwich ([email protected]) in March 2020 © Public Services International June 2020 © Cover illustration CC 2.0 Jeanne Menjoulet. Civil servants' strike & demo in Paris 10th October 2017.

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 3 : Appendix - Compendium of 50 : remunicipalisation case studies

his section offers an overview of remunicipalisation cases across sectors, drawing on research and Tinterviews, and identifying the main lessons learned.

TABLE 1: LIST OF CASES IN THE COMPENDIUM TO THIS REPORT

Sector Country City/region Status of insourcing 1 Energy Germany Berlin Successfully completed 2 Energy Germany Hamburg Successfully completed 3 Energy Germany Stuttgart Successfully completed 4 Energy Germany Wolfhagen Successfully completed 5 Energy Lithuania Vilnius Successfully completed 6 Energy UK Nottingham Successfully completed 7 Energy Tanzania Dar es Salaam Unsuccessful 8 Health Care Australia Victoria In progress 9 Health Care China Luoyang In progress 10 Health Care Denmark South Denmark Successfully completed 11 Health Care India Delhi Successfully completed 12 Health Care UK Hinchingbrooke Successfully completed 13 Health Care UK Somerset Successfully completed 14 Infrastructure Canada Montreal Successfully completed 15 Infrastructure UK Cumbria Successfully completed 16 Social Care Denmark Syddjurs Successfully completed 17 Social Care Norway Bergen Successfully completed 18 Social Care Norway Oslo Successfully completed 19 Transport Canada Fort McMurray Successfully completed 20 Transport UK London Successfully completed

4 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE Sector Country City/region Status of insourcing 21 Transport UK East Coast Successfully completed 22 Transport South Korea Seoul Partial success 23 Waste Canada Conception Bay South Successfully completed 24 Waste Canada Port Moody Successfully completed 25 Waste Canada Winnipeg Successfully completed 26 Waste Colombia Bogotá Reversed 27 Waste Egypt Cairo Successfully completed 28 Waste Germany Bergkamen Successfully completed 29 Waste Norway Oslo Successfully completed 30 Waste Spain León Successfully completed 31 Waste UK Sheffield Unsuccessful 32 Water Argentina Buenos Aires Successfully completed 33 Water Bolivia Cochabamba Successfully completed 34 Water Cameroon Yaoundé Successfully completed 35 Water France Grenoble Successfully completed 36 Water France Paris Successfully completed 37 Water Germany Berlin Successfully completed 38 Water Germany Rostock Successfully completed 39 Water Indonesia Jakarta In progress 40 Water Italy Turin Successfully completed 41 Water US New York Successfully completed 42 Water Tanzania Dar es Salaam Successfully completed 43 Water Turkey Antalya Successfully completed 44 Catering and cleaning UK Leicester Successfully completed 45 Cleaning UK Nottingham Successfully completed 46 Education India Kerala In progress 47 Funeral services Spain Barcelona Successfully completed 48 Library services UK Croydon Successfully completed 49 Parking Armenia Yerevan Successfully completed 50 Prisons New Zealand Mt Eden Successfully completed

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 5 ENERGY

CASE 1. GERMANY, BERLIN

Private company: Vattenfall (Swedish public company) Time as private: 1997 Drivers of remunicipalisation: Contract expiry in 2014, demand for green energy Process: civil society mobilisation

The fall of the Berlin Wall saw a wave of privatisation However, the referendum had an impact as Berlin’s sweep over the city in the 1990s. The energy sector government announced that it would initiate was no exception. In 1997, Berlin sold its energy grid remunicipalisation processes for the electricity grid to a private Consortium which the company Vattenfall through Berlin Energie, a new public entity, which took over in 2001.1 The move was highly profitable for had been created in 2012 as a subsection of the local

ENERGY the private providers. Vattenfall made €80million profit administration, but stopped short of being a totally from Berlin’s energy network in 2012 alone.2 independent public utility company (Stadtwerk). While Berlin Energie planned to take over the grid when the From late 2010, activists from Attac, Powershift and license expired in 2014, the process was delayed other organisations, aware that the contract with by Vattenfall initiating legal proceedings. Eventually, Vattenfall was to expire in 2014, came together to Vattenfall lost the court cases and the grid was passed launch the Berliner Energietisch (Berlin Energie over to Berlin Energie in 2019.6 Roundtable) remunicipalisation campaign.3 The Berliner Energietisch, organised using the principles While the successful remunicipalisation means that of participatory democracy, grew to be a coalition of Berlin Energie will own and control the grid for the 55 different civil society organisations. next 20 years, there is still private sector involvement. Berlin Energie entered a ‘consultancy’ PPP with Edis, in November 2013, on the eve of the contract expiry a subsidiary of E.ON, a leading private energy supplier, with Vattenfall, the Berliner Energietisch forced the around staffing and other issues. Edis may well view city to hold a referendum on the remunicipalisation this PPP as an opportunity to profit from Berlin’s energy of the energy grid. The aim was the creation of a market.7 The arrangement was viewed with skepticism democratic, transparent, independent utility company by the pro-remunicipalisation campaigners.8 It was that focused on green energy and combatting fuel also ironic that on the same day the Berlin Energie was poverty.4 But it failed. While over 80 per cent of announcing is cooperation with Edis, Vattenfall and votes were for remunicipalisation, only 24.1 per cent E.ON were taking the German government to court of the population voted, just short of the 25 per cent over its phasing out of nuclear power.9 participation a referendum needs in order to be valid.5

6 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE ENERGY

CASE 2. GERMANY, HAMBURG

Private company: Vattenfall (Swedish public company) Time as private: around 20 years (electricity grid 2000-2014; gas 1999-2019; long distance heating grid 2000-2020) Drivers of remunicipalisation: Expiry of contract, demand for renewable energy and environmental concern Processes: Referendum, large civilsociety coalition for remunicipalisation of the energy grid, as well as the creation of a new local public supply company, Hamburg Energie.

History of privatisation per cent of the population (125.000 people).15 Vattenfall still has the biggest market share in Hamburg. In 2016 it Until 1998, in Germany, electricity and gas sales were provided electricity to around 70 per cent of Hamburg’s operated by municipal utilities and other territorial population.16 suppliers. This was changed with the bill on the revision of the Energy Industry Law (EIL) that liberalised the German Campaign for the remunicipalisation of the grid electricity supply market. A few years later, in 2003, the gas market was also liberalised. The view behind the While Hamburg Energie is a successful example of EIL was that liberalisation would lead to reduced energy municipalisation through the creation of a public company, prices, yet the opposite was the case: average prices the progress in renewable energy was still not enough rose by over 75 per cent between 1998 and 201810, while for Hamburg’s citizens. As the type of energy supplied inflation was just 26 per cent over this 20-year period. depends on the management and capacity of the grid, Hamburg’s citizens demanded the remunicipalisation Four big companies (Vattenfall, RWE, E.ON, EnBW) were of the electricity and gas grids as well as of the long- created through mergers in 1997-2003. While liberalisation distance heating provision. led to more competition, and users could choose between around 100 different energy providers11, the ‘big four’ still The main motivation for the remunicipalisation was an en- dominated the market, with a market share of 68 per vironmental concern. It was argued that remunicipalisa- cent in 2013.12 The monopolisation of the energy market tion of the grid would enable the extension of renewable was facilitated by the fact that there were a few large energy, as it would give Hamburg more control over ener- power-generating companies and many small providers gy provision and also enable the local authority to make (municipal utility companies) which did not generate their the investments needed so that the grid would be ca- ENERGY own electricity.13 The liberalisation of the supply market pable of transporting renewable energy more efficiently. went hand in hand with the privatisation of the energy Moreover, it was argued that the profits from the provision grid. Hamburg privatised its grids for electricity, long of energy should benefit Hamburg and not multinational distance heating and gas around around the year 2000. companies. Interestingly, social and democratic concerns were only a minor concern in the coalition’s call for the Creation of a new public utility company referendum, as were high energy prices.17 (municipalisation) In 2011, a broad coalition of different civil society Despite their market share and their profitability, the organisations, including Attac, Friends of the Earth, parts ‘big four’ performed very poorly on renewable energy. of the Lutheran Church, the Customer Advice Centre and Vattenfall, the Swedish multinational that dominated a campaign group against the coal-fired power station the market in Hamburg, was no exception: it produced came together to launch a campaign for a referendum energy mainly through coal-fired power stations. to remunicipalise the energy grid. The campaign grew Aiming to increase renewable energy in Hamburg, the quickly and was supported by around 50 civil society Conservative-Green local government founded a utility organisations and many independent activists.18 company in 2009 called Hamburg Energie. Hamburg Energie is an autonomous subsidiary of Hamburg Vattenfall’s fightback waterworks, which were fully in public hands.14 Hamburg Energie supplies and produces green energy. While However, as the date of the referendum in 2013 came its user numbers are growing, it is only serving a small nearer, a counter-campaign emerged that tried to percentage of the population: by the end of 2016, 6.7 persuade people to vote against the remunicipalisation

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 7 of the energy grid. This campaign, while assumed to be price increase by its higher fees for the grid due to the initiated by the private providers, was backed by business remunicipalisation.26 This is a clear indication of a private associations and also the mayor and the main political sector fight-back and revenge strategy, that aims to parties, who all followed a neoliberal agenda at the time.19 make up for lost profits elsewhere while simultaneously damaging the reputation of the remunicipalisation. Vattenfall launched an advertising campaign in three main Consequently, in 2017 Hamburg was the third most newspapers (Bild, Hamburger Abendblatt and Die Welt) expensive region for electricity services.27 and across local transport about one month before the referendum. The adverts used a sentimental advertising Remunicipalisation as a stepping stone for the approach to praise Vattenfall as a traditional Nordic transition towards renewable energy company in order to tap into the Nordic identity of many Hamburgers and showcased Vattenfall as a safe energy The struggle over Hamburg’s energy supply is far provider. This advertising strategy was illegal. According from over. The referendum also included the option to to German law, the grid operator runs a monopoly and repurchase the long distance heating provision by the is therefore only allowed to advertise in moderation end of 2019. However, Vattenfall, which currently owns to maintain a good image. If the grid operator is also 74.9 per cent of the long distance heating grid, is still supplying and producing energy, the services are not trying to prevent its remunicipalisation. Vattenfall currently allowed to be mixed in the advertisement, so that the grid operates a profitable coal fire power station, Moorburg, operator cannot abuse its monopoly position. But this near Hamburg and aims to use Moorburg energy for long is exactly what Vattenfall did in its advertising campaign distance heating. Meanwhile, Hamburg wants to terminate before the referendum. Hamburg threatened the company this power station due to its negative environmental with fines up to €10 million.20 However, it seems that impact.28 Vattenfall considered this risk worthwhile, compared to the lucrative income stream over decades that the grid The coal-fired power station Moorburg generates an would provide.21 increasingly large share of Hamburg’s energy. In total, Hamburg used 10 million megawatt hours in 2016, of September 2013, success which 9.4 million megawatt hours came from fossil fuels. This is mainly from Moorburg, where the electricity for Despite the counter-campaign against the referendum 8.5 million megawatt hours was generated. This was 1.5 and Vattenfall’s illegal advertisement, the referendum for million megawatt hours more than in the previous year.29 the remunicipalisation of the energy grid was successful. In the same time renewable energy decreased by 16 However, it only won by a small majority - 50.09 per cent per cent. In 2016, only 0.5 million megawatt came from ENERGY - of the people voted for the remunicipalisation of the renewable energy in Hamburg, which is only 4.6 per cent energy grid, while 62 per cent of the people eligible to vote of the entire electricity consumption. However, Hamburg’s participated. The referendum took place on the same day citizens have not given up the fight against Vattenfall: a as the German national election, which facilitated the high referendum for Hamburg’s coal exit is already planned voter turnout.22 In 2014, the energy grid was repurchased for 2022 by Hamburg’s civil society coalition “Tschüss for €495.5 million. This figure includes a 2011 purchase of Kohle”.30 25.1%.23 In January 2018, Hamburg also acquired its gas distribution network for €275 million.24 Benefits from the remunicipalisations

Since the remunicipalisation, Hamburg has invested in the Since the remunicipalisation the city of Hamburg has infrastructure of the electricity grid to make it fit for the managed to achieve a healthy surplus, it is steadily paying transition towards renewable energy. It plans to further back the loan it took in order to buy back the energy grid, invest €2 billion over the next decade as the grid is old thus showing that the remunicipalisation was – in the long and needs to be maintained, modernised and extended run – a financially wise decision. Moreover, the Green to facilitate the transition towards increased renewable party in Hamburg gained in popularity in the February energy supply.25 2020 election. The remunicipalisation of the grid has arguably impacted on the election result, as the party On the other hand, Vattenfall, no longer in the lucrative listened to voters, demands for green energy.31 Hamburg position to reap profits through the grid, made up for thus showcases that remunicipalisation policies can this lack of income by raising electricity prices by 3 per facilitate the vitalisation of progressive parties. cent in April 2016. In its press release it justified the

8 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE ENERGY

CASE 3. GERMANY, STUTTGART

Private company: Energie Baden Würtemberg (EnBW) Time as private: 2002-2014 Drivers of remunicipalisation: contract termination, demand for renewables Process: civil society mobilisation

In 2002 the municipal energy grid in Stuttgart was privatised. A decade later, in 2011, Stuttgart city council created a municipal utility company, Stadtwerke Stuttgart (SWS), as a subsidiary of Stuttgarter Versorgungs- und Verkehrsgesellschaft, in charge of public transport. A few years later, in 2014, it took over the distribution networks (gas and electricity).32

An ambitious energy transition followed the remunicipalisation, which aims to make Stuttgart a zero-emission city of by 2050. In order to do so, Stuttgart plans to reduce primary energy use by 65 per cent and cover the remaining 35 per cent with renewable energy. Stuttgart offers energy efficient advice services and bonuses for the purchase of highly efficient equipment. Moreover, it is expanding the operation of renewable power plants in order to produce enough green electricity to cover the whole city’s demand by 2050.33

CASE 4. GERMANY, WOLFHAGEN

Private company: E.ON Time as private: 1996 - 2009 Drivers of remunicipalisation: demand for energy sustainability, renewables Process: community mobilisation

Wolfhagen, a small town of around 14,000 inhabitants34 number of shares a member can have is 40. This located in the middle of Germany, has been a pioneer model enabled the Stadtwerke to have more capital ENERGY of the energy transition (Energiewende) in Germany. In available for renewable energy projects while it also 2006 Wolfhagen remunicipalised the electricity grid, functioned as a stable investment for the members. when the 20-year-long contract expired. The transition But moreover, members could directly participate in had taken three years to negotiate with E.ON, the decisions and projects of the Stadtwerke through their multinational company that previously ran the services. general meetings. And the BEG is also represented in The already existing local utility company, Stadtwerke the governing body of the Stadtwerke Wolfhagen, which Wolfhagen, took over the electricity service. Just two consist of nine people, of which two are representatives years later, Wolfhagen won a prize for being the most of the BEG, one of the work council and six of the energy efficient city in 2008.35 municipality.37 In March 2018, the BEG had 850 members and managed about €4 million for its members.38 While In 2010, the Stadtwerke had the idea to widen this partnership between the cooperative and the public participation and to increase the capital for investment local utility company widened participation and involved in renewable energy by establishing a local cooperative the local residents in the decision making process, it that would partly own the Stadtwerke. In 2012 the excluded less well-off residents. Only people who could Bürgerenergiegenossenschaft Wolfhagen (BEG) afford to buy a share of the cooperative were permitted was founded with 264 members and capital of over to become members. A one-off payment of €500 was €800,000. It attained 25 per cent of the Stadtwerke.36 affordable to most people in the town, yet still a system Only electricity users can become a member of the which includes less affluent people. cooperative by buying a share of €500. The maximum

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 9 ENERGY

CASE 5. LITHUANIA, VILNIUS

Private company: Vilniaus Energija, a subsidiary of the French multinantional Veolia Time as private: 2002-2017 ENERGY Drivers of remunicipalisation: contract termination Process: state-led campaign with regulators

Vilniaus Energija, a subsidiary of the French multinational demanding about €100 million in compensation for what Veolia, transferred the Vilnius district’s heating grid back it said was unfair state behaviour and appropriation of its to the municipal heating supplier Vilniaus Silumos Tinklai investments in Lithuania.41 after its 15-year leasehold of the assets expired in late March 2017.39 Meanwhile, in September 2016 the energy market regulator in Lithuania found that Vilniaus Energija Vilniaus Energija supplied heating to about 80per cent of generated an unlawful excess profit of €24.3 million in buildings in Vilnius, which accommodate about 90 per the 2012-2015 period.42 And after the remunicipalisation, cent of the city’s population.40 in March 2017, the city of Vilnius submitted a claim worth around €200 million to Veolia and Vilniaus Energija The process preceding the remunicipalisation was seeking compensation for damage caused to the assets long and conflict-ridden. In early 2016, Veolia took the during the lease period.43 And then decided to turn to Lithuanian government to the International Centre for the Stockholm ISDS arbitration court to demand the Settlement of Investment Disputes in Washington, compensation.44 The court cases are still ongoing.

10 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE ENERGY

CASE 6. UK, NOTTINGHAM

Time as private: energy supply privatised since 1990 Drivers of remunicipalisation: fuel poverty Process: local authority initiative to create a public supply company

In 2015 the Nottingham City Council launched Robin not-for-profit energy company, White Rose Energy, in Hood Energy, which was the first not-for-profit energy 2016. In 2017, Liverpool followed with Liverpool Energy company run by a local authority in the UK.45 and Community Company (LECCY), Derby and the Rest of the Midlands with RAM, the Borough of Islington Robin Hood Energy’s priority is to tackle fuel poverty. followed with Angelic Energy in the UK’s capital, Sussex Fuel poverty means that the household’s income would with “Your Sussex Energy” and Doncaster with Great fall below the official poverty line if spending the actual Northern Energy.56 amount that is needed to heat the home and its energy costs are higher than typical for its household type.46 Within three years, by the beginning of 2018, 118,000 Figures from 2015 show that in England alone, 11 per cent people had signed up to Robin Hood Energy and its of the population (2.5 million people) were living in fuel partner companies.57 It currently employs 180 people poverty.47 This figure has been rising constantly over the and is an accredited living wage employer, which means last few years.48 Nottingham was one of the areas the that all employees are earning at least the living wage most affected with 15 per cent of the population living in (£8.75 in 2018), which is adjusted every year in November fuel poverty.49 in accordance with the calculations made by the Living Wage Foundation. Most of the Robin Hood Energy staff Robin Hood Energy succeeded in making energy are on permanent contracts and nearly all (90 per cent) cheaper. On average, Nottingham residents save £315 a are employed in Nottingham directly by Robin Hood year if they use Robin Hood Energy. Robin Hood Energy Energy.58 buys the energy in bulk from the National Grid, one of the world’s largest investor owned utility companies, Learning from the success of Robin Hood Energy, which owns the electricity transmission system in Scotland is now planning to set up a public energy England and Wales and the gas transmission system in company by 2021.59 Like with the other municipal energy 50 60

Great Britain. To start the public company, Robin Hood providers, its aim is to reduce fuel poverty. ENERGY Energy borrowed the money from Nottingham Council at commercial interest rates and broke even by April 2018.51 However, the public sector trade union, UNISON, raised Moreover, between April 2016 and April 2017 almost 30 concerns that that these municipal companies could per cent of Robin Hood’s supply came from renewable end up being just a cheaper alternative of the big six energy, which is higher than the UK average which lies energy companies – which employ thousands of UNISON below 25 per cent.52 members. Instead of setting up competing municipal energy companies in a liberalised energy market, A year later the municipality in Bristol followed with Bristol UNISON proposes the nationalisation of the big six Energy53 which also aims to extend the local renewable energy companies in the UK, which dominate the market. energy production in the future.54 They currently source Currently, the big six serve 75 percent of the costumers 40 per cent from renewables.55 Other cities followed, in the UK. The nationalisation of the big six could benefit mostly aided through a white label partnership with Robin workers and service users alike. It also would provide an Hood Energy that allows other councils to launch their opportunity for redistribution, as currently the poorest own energy suppliers. The partnership means that the customers pay the highest electricity prices, as they pay tariffs and customer service will be provided by Robin through pre-paid meters for which the charges are higher Hood Energy and that the council does not need to get than when paying through a monthly bill.61 their own license. In this way Leeds set up its own public

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 11 ENERGY

CASE 7. TANZANIA, DAR ES SALAAM

Private company: Richmond Development Company (RDC), then Dowans Holdings, then Symbion Time as private: 2006 until now Drivers of remunicipalisation: corruption, poor service (the remunicipalisation failed) Process: failed government litigation, continues as private due to ICC ruling

Following the 2006 drought that reduced the country’s was first thought that Dowans would sell the power plants hydro power production capacity, Tanesco, the Tanzanian to state-owned Tanesco at a cost of $60 million. But state utility company, responsible for the generation, some MPs suggested the plants were fake or dubious transmission and distribution of electricity, signed a and also the World Bank procurement procedures short-term emergency energy contract with Richmond prohibited the government from buying used equipment Development Company (RDC). The contract was worth and machinery. Consequently, the nationalisation was $179 million. It turned out that RDC was unexperienced prevented, as it was decided that Tanesco would not buy in delivering electricity though generators and unable to the machines from Dowans.68 provide the electricity. So, towards the end of 2006, RDC passed on the contract to Dowans Holdings,62 without Dowans Holdings took Tanesco to the International informing Tanesco first.63 Chamber of Commerce (ICC), alleging breach of contract and claiming compensation. In November 2010 the ICC In early 2008, a parliamentary committee investigated ruled in favour of Dowans. The arbitration tribunal found the contract, and produced the ‘Mwakyembe Report’. It that, even though RDC had transferred the contract found that the RDC was an unsuitable provider because to Dowans without the approval of Tanesco’s Tender it “lacked experience, expertise and was financially Board, this did not invalidate the contract itself. The ICC incapacitated”.64 The contract had overlooked key legal arbitration tribunal ordered Tanesco to pay $123.6 million provisions, showed evidence of influence peddling by (about Sh185.5 billion) to Dowans in settlement of its senior government officials, and involved corruption.65 claim.69 The enquiry also found evidence of political interference at a senior level in the government in support of RDC The ICC decision caused public anger, and many and granting the company favourable credit terms in demanded the government should not pay the award. A contravention of national regulations and those of the IMF demonstration was initiated but banned at the last minute ENERGY Multilateral Debt Relief Initiative fund that it was using for by the police because of security fears. Human rights this purpose. After the release of the Mwakymbe report, activists and Tanesco appealed against the ruling, arguing the Tanzanian Prime Minister, Edward Lowassa, who that paying the compensation to Dowans was against the was said to have made the final selection of RDC, and public interest. But all the appeals were lost.70 Instead of two other ministers resigned, prompting the Tanzanian remunicipalising the service, the US registered company President to dismiss his entire cabinet and to form a new Symbion then acquired the generator plant from Dowans government.66 in May 2011 and has been operating it since.71

Despite the Mwakyembe report’s condemnations of the contract, considerable public pressure was still required to force the new government to try and terminate it.67 It

12 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE 1. RBB 24 (05 March 2019) Vattenfall muss Stromnetz 15. Hamburg Energie. (no date) Wir sind Partner für ans Land Berlin zurückgeben. RBB24. Available at: die Energiewende. Hamburg Energie. Available at: https://www.rbb24.de/wirtschaft/beitrag/2019/03/ https://www.hamburgenergie.de/privatkunden/ stromnetz-senat-berlin-berlinenergie-vattenfall-ver- ueber-uns/unternehmen/ gabe.html 16. Kreutzer Consulting (31 May 2016) Aktuelle 2. Berliner Energietisch (n.d.) Volksbegehren Kundenzahlen: Vattenfall mit 70% lokalem zur Rekommunalisierung der Berliner Marktanteil Trotz Kundenzuwächsen bei GASAG Energieversorgung. Berliner Energietisch. Available un Hamburg Energie. Kreutzer Consulting. at: http://berliner-energietisch.net/argumente Available at: http://www.kreutzer-consulting. 3. Berliner Energietisch (n.d.) Über Uns. Berliner com/energy-services/energy-news/energy-blog/ Energietisch. Available at: http://berliner-energie- energy-blog-beitrag/aktuelle-kundenzahlen-vat- tisch.net/ueber-uns tenfall-mit-70-lokalem-marktanteil-trotz-kundenzu- 4. Spiegel Online (03 November 2011) Berliner Strom- waechse-bei-gasag-und-hamburg-energie.html Volksentscheid gescheitert. Der Spiegel. Available 17. Unser Hamburg unser Netz (n.d.) Abstimmungstext. at: http://www.spiegel.de/wirtschaft/unterneh- Unser Hamburg unser Netz. Available at: http://un- men/berliner-strom-volksentscheid-gescheit- ser-netz-hamburg.de/abstimmungstext-2/ ert-a-931545.html 18. Unser Hamburg unser Netz (n.d.) Akteure. Unser 5. Ibid. Hamburg unser Netz. Available at: http://un- 6. Berlin Energie (no date) Ueber Uns. Berlin Energie. ser-netz-hamburg.de/die-initiative/akteure/ Available at: https://www.berlinenergie.de/ueber-uns 19. Becker, S. (2017) Our City, Our Grid: The energy 7. Email exchange with Grüne Fraktion in the Berliner remunicipalisation trend in Germany. In: Kishimoto, Senat early June 2018. S. and Petitjean, O. (eds) Reclaiming Public services. 8. Ibid. Transnational Institute (TNI). Available at: https:// 9. Rogalla, T. (15 March 2016) Die Rekommunalisierung www.tni.org/files/publication-downloads/reclaim- wird reprivatisiert. Berliner Zeitung. Available ing_public_services.pdf at: https://www.berliner-zeitung.de/berlin/ 20. Hamburger Abendblatt (12 September 2013) die-rekommunalisierung-wird-reprivatisiert-23733216 Hochbahn stoppt Vattenfall-Werbung zum

10. Haffert, C. (34 April 2018) Vom Verbraucher zum Volksentscheid. Hamburger Abendblatt. Available ENERGY Kunden: 20 Jahre Strommarkt-Liberalisierung. Heise at: https://www.abendblatt.de/hamburg/arti- Online. Available at: https://www.heise.de/newstick- cle119972287/Hochbahn-stoppt-Vattenfall-Werbung- er/meldung/Vom-Verbraucher-zum-Kunden-20- zum-Volksentscheid.html Jahre-Strommarkt-Liberalisierung-4029326.html 21. Diekmann, F. (16 August 2013) Vattenfall-Werbung 11. Ibid. provoziert Ärger mit Netzagentur. Spiegel Online. 12. Greenpeace (2015) Die Zukunft der grossen Available at: http://www.spiegel.de/wirtschaft/ Stromversorger. Greenpeace: Available at: http:// service/vattenfall-droht-wegen-stromnetz-wer- www2.alternative-wirtschaftspolitik.de/uploads/ bung-in-hamburg-aerger-a-916951.html m0815.pdf 22. Zeit Online (23 September 2013) Hamburger stim- 13. Ibid. men für Rückkauf der Energienetze. 14. Becker, S. (2017) Our City, our Grid: The energy Available at: http://www.zeit.de/wirtschaft/2013-09/ remunicipalisation trend in Germany. In: Reclaiming hamburg-rueckkauf-energienetze-volksentscheid Public Services. In: Kishimoto, S. and Petitjean, 23. Becker, S. (2017) Our City, Our Grid: The energy O. (eds) Reclaiming Public services. Transnational remunicipalisation trend in Germany. In: Kishimoto, Institute (TNI). Available at: https://www.tni.org/ S. and Petitjean, O. (eds) Reclaiming Public services. files/publication-downloads/reclaiming_public_ser- Transnational Institute (TNI). Available at: https:// vices.pdf www.tni.org/files/publication-downloads/reclaim- ing_public_services.pdf

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 13 24. Hamburger Abendblatt (19 July 2017) Hamburg 35. Schroder, J. (26 August 2014) Direkte kauft Anfang 2018 das Gasnetz zurück. Hamburger Bürgerbeteiligung am kommunalen Stadtwerk – Abendblatt. Available at: https://www.abendblatt.de/ Demokratisierung der Energiewende. Stadtwerke hamburg/article211295331/Hamburg-kauft-Anfang- Wolfhagen GmbH. Available at: http://www.die-linke- 2018-das-Gasnetz-zurueck.html thl.de/fileadmin/lv/dokumente/Themendokumente/ 25. Stomnetz Hamburg (12 November 2014) das-oeffentliche/20140826-fachtagung/140826_ Stromverteilung bleibt in städtischer Arnstadt_SW-Wolfhagen.pdf Hand. Stomnetz Hamburg. Available 36. Ibid. at: https://www.stromnetz.hamburg/ 37. Ibid. stromverteilung-bleibt-staedtischer-hand/ 38. Email exchange with the board of the BEG 26. Stromauskunft (13 February 2017) Vattenfall erhöht Wolfhagen on the 26 March 2018. Strompreise in Berlin und Hamburg. Stromauskunft. 39. The Baltic Times (4 May 2017) Vilius to Available at: https://www.stromauskunft.de/service/ turn to Stockholm arbitration over France’s energienachrichten/14182986.vattenfall-erhoe- Veolia. The Baltic Times. Available at: ht-strompreise-in-berlin-und-hamburg/ https://www.pressreader.com/latvia/ 27. Verivox (n.d.) Verbraucher- Atlas: Strompreise in the-baltic-times/20170504/281805693835066 Deutschland. Verivox. 40. Baltic News Service (22 September 2016) Available at: https://www.verivox.de/ Lithuania’s Vilniaus Energija ungroundedly gains EUR verbraucheratlas/strompreise-deutschland/ 24.3 mln (more updates). Baltic News Service. 28. Carini, M. (6 December 2017) Hitzköpfe unter sich. 41. Reuters (27 january 2016) Veolia seeks compen- Die Tageszeitung. Available at: http://www.taz. sation from Lithuania for subsidy cuts. Reuters. de/!5468022/ Available at: https://www.reuters.com/article/us-ve- 29. NDR (4 October 2017) Energiewende: Hamburg olia-environ-lithuania/veolia-seeks-compensa- macht Rückschritte. Nord Deutscher Rundfunk. tion-from-lithuania-for-subsidy-cuts-idUSKCN0V- Available at: https://www.ndr.de/nachrichten/ 52CY hamburg/Energiewende-Hamburg-macht- 42. Baltic News Service (22 September 2016) Rueckschritte,energie350.html Lithuania’s Vilniaus Energija ungroundedly gains EUR 30. Energie Zukunft (12.04.18) Tschüss Kohle“ nimmt 24.3 mln (more updates). Baltic News Service. erste Hürde. Energie Zukunft. 43. Baltic News Service (30 March 2017) Vilnius submits Available at: https://www.energiezukunft.eu/ EUR 200 mln claim to Veolia. Available at: Vilnius umweltschutz/tschuess-kohle-nimmt-erste-huerde/ submits EUR 200 mln claim to Veolia. Baltic News 31. Oltermann, P. (22 Feburary 2020) Getting priva- Service. tisation undone puts centre-left in good shape in 44. The Baltic Times (4 May 2017) Vilnius

ENERGY Hamburg. Available at: https://www.theguardian. to turn to Stockholm arbitration over com/world/2020/feb/22/getting-privatisation- France’s Veolia. The Baltic Times. Available undone-puts-centre-left-in-good-shape-in-ham- at: https://www.pressreader.com/latvia/ burg?CMP=Share_iOSApp_Other#maincontent the-baltic-times/20170504/281805693835066 32. Stadtwerke Stuttgart (no date) Die Stuttgart 45. Hellier, D. (7 September 2015) Robin Hood Energy: Netze bringt den Kessel zum Leuchten. Nottingham launches not-for-profit power firm. The Stadtwerke Stuttgart. Available at: https:// Guardian. Available at: https://www.theguardian. www.stadtwerke-stuttgart.de/stuttgart-netze/ com/environment/2015/sep/07/robin-hood-ener- konzessionsverfahren-strom-gas/ gy-nottingham-council-launches-not-for-profit-ener- 33. Energy Cities (n.d.) Local Energy Ownership in gy-company Europe. Energy Cities. 46. Department of Energy and Climate Change (2017) Available at: http://www.energy-cities.eu/IMG/pdf/ Annual Fuel Poverty Statistics Report. UK govern- local_energy_ownership_study-energycities-en.pdf ment. Available at: https://www.gov.uk/government/ 34. Stadtwerke Wolfhagen (01. January 2018) statistics/sub-regional-fuel-poverty-data-2017 Einwohnerzahlen. Stadtwerke Wolfhagen. 47. Ibid. Available at: http://www.wolfhagen.de/de/ 48. Ibid. rathaus/zahlen_fakten/einwohnerzahlen. php?navanchor=1110036

14 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE 49. Department for Business, Energy and & 61. Weghmann, V. (2019) Going Public: A Decarbonised, Industrial Strategy (2017) Sub-regional fuel Affordable and Democratic Energy System for poverty data 2017. UK government. Available Europe. The failure of energy liberalisation. European at: https://www.gov.uk/government/statistics/ Public Services Union (EPSU). Available at: https:// sub-regional-fuel-poverty-data-2017 www.epsu.org/article/going-public-decarbon- 50. National Grid UK (n.d.) Our networks and assets. ised-affordable-and-democratic-energy-system-eu- National Grid UK. Available at: https://www.national- rope-new-epsu-report grid.com/uk/about-grid/our-networks-and-assets 62. Peng, D. and Pundineh, R. (2016) Electricity pric- 51. Robin Hood Energy (n.d.) What a year! Robin Hood ing for Tanzania. The Oxford Institute for Energy Energy. Available at: https://robinhoodenergy.co.uk/ Studies. Available at: https://www.oxfordenergy.org/ news/what-a-year/ wpcms/wp-content/uploads/2016/07/Sustainable- 52. Robin Hood Energy (n.d.) What fuels are used to electricity-pricing-for-Tanzania-EL-20.pdf generate my electricity? Robin Hood Energy. 63. Niekerk, S. and Msechu, S. (2012) Tanzania: cor- Available at: https://robinhoodenergy.co.uk/ ruption in the energy sector. Public Services home-help/fuels-used-generate-electricity/ International Research Unit (PSIRU). Available at: 53. BBC (4 May 2017) Council-owned Bristol Energy http://www.psiru.org/reports/tanzania-corrup- aims to be in profit by 2021. BBC. tion-energy-sector.html Available at: http://www.bbc.co.uk/news/ 64. Ibid. uk-england-bristol-39803173 65. Ibid. 54. Bristol Energy (n.d.) About us. Available at: https:// 66. Ibid. www.bristol-energy.co.uk/about-us/our-fuel-mix 67. Ibid. ttp://www.energy-cities.eu/IMG/pdf/local_energy_ 68. The Citizen (30 May 2015). Richmond, Lowassa and ownership_study-energycities-en.pdf the race to Ikulu. The Citizen. Available at: http:// 55. Bristol Energy (n.d.) Our fuel mix. Bristol Energy. www.thecitizen.co.tz/News/Richmond--Lowassa- Available at: https://www.bristol-energy.co.uk/ and-the-race-to-Ikulu/1840340-2734086-bk2tpwz/ about-us/our-fuel-mix index.html 56. Agerholm, H. (18 October 2017) London gets ‘first 69. Niekerk, S. and Msechu, S. (2012) Tanzania: cor- not-for-profit energy provider in more than 100 ruption in the energy sector. Public Services years’. The Independent. Available at: http://www. International Research Unit (PSIRU). Available at: independent.co.uk/news/uk/politics/london-is- http://www.psiru.org/reports/tanzania-corrup- lington-council-energy-provider-not-for-prof- tion-energy-sector.html it-a8007136.html 70. Ibid. 57. Robin Hood Energy (n.d.) What a year! Robin Hood 71. Peng, D. and Pundineh, R. (2016) Electricity pricing Energy. Available at: https://robinhoodenergy.co.uk/ for Tanzania. The Oxford Institute for Energy Studies. ENERGY news/what-a-year/ Available at: https://www.oxfordenergy.org/wp- 58. Robin Hood Energy (n.d.) What a year! Robin Hood cms/wp-content/uploads/2016/07/Sustainable- Energy. Available at: https://robinhoodenergy.co.uk/ electricity-pricing-for-Tanzania-EL-20.pdf news/what-a-year/ 59. Vaughan, A. (27 Ocotber 2017) Publicly owned energy minnows take on big six in troubled UK market. The Guardian. Available at: https://www.theguardian. com/business/2017/oct/27/publicly-owned-energy- minnows-take-on-big-six-in-troubled-uk-market 60. Scottish Housing News (22 December 2017) Not-for- profit energy supplier ignites fight against fuel poverty in Scotland. Scottish Housing News. Available at: http://www.scottishhousingnews.com/19116/ not-profit-energy-supplier-ignites-fight-fuel-poverty-scotland/

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 15 HEALTH CARE

CASE 8. HEALTH CARE, AUSTRALIA, VICTORIA

Private company: Ramsay Health Care Time as private: 2000-2020 Drivers of remunicipalisation: contract termination, unsatisfactory service Process: civil society mobilisation.

In 2019, the Victorian Government announced that it will take over management of the state’s only privately- run public hospital. Ramsay Health Care had operated the Mildura Base Hospital since it opened almost 20 years ago under a PPP scheme. The remunicipalisation was the result of a strong community push after standards of patient care dropped.

Box 1: Australia’s “People’s Inquiry into Privatisation” 2016

ublic service privatisation in Australia has been aggressively promoted and implemented since The Inquiry’s partners approached three independent Pthe 1980s. In 2016, ahead of a looming threat of rapporteurs from progressive think-tanks, who accept- even more public service privatisation by the conserva- ed to run the inquiry on a totally voluntary basis under tive government then in office, Australian public service the condition they would have total control over the unions joined forces with civil society organisations and content of the final report. They identified appropriate launched a participative, transparent and democratic city targets, focussing on large and strategic agglomer- assessment of the consequences of 20 years of public ations, but also on rural towns and intermediate cities to services privatisation to shift the dominant political dis- ensure a full coverage of the diversity of privatisation’s course and public opinion over public service. This is impact on people, including in different regions and how Australia’s “People’s Inquiry into Privatisation” was economic background. born.

HEALTH CARE To keep the inquiry as independent and neutral as pos- In Australia’s “People’s Inquiry into Privatisation”, pub- sible, the coalition decided to use hotel halls as venues, lic sector trade unions2 joined forces with civil socie- instead of e.g. union venues or churches that carried a ty groups,3 communities and public services users to partisan connotation. Unions and some of the civil soci- redress the power imbalance with pro-public service ety organisations provided in-kind and human resourc- privatisation corporate lobbies and to counter the ne- es support with staff that would help the panellists with oliberal narrative that private public services manage- the practical organisation of the public hearings (flights, ment is more effective. The Inquiry was a way to build a logistics, booking of venues and accommodation, revision around a new generation of public services with freshments, hearing transcripts, etc.); digital commu- people’s needs and welfare at their heart, not profit. nication, grassroot mobilisation via calls and flyers and The Inquiry’s partners adopted the typical methodology social media work to encourage community participa- used by the Australian government to issue recommen- tion. Unions also contributed financial resources to pay dations for future policy and legislation though a pub- for the rental of the venues (hotel halls), refreshments, lic inquiry consisting of a series of public consultations panellists’ travel and accommodation expenses and for whose conclusions would be captured and published a professional editor and graphic designer for the final in a public, independent report. The Inquiry’s partners report. especially insisted on the participatory, transparent and grassroot approach of the consultations, which ran for Participation in the public hearings was encouraged 18 months. via the creation of a dedicated website describing the

16 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE purpose of the inquiry and encouraging people to make public submissions about their experiences and recommendations over privatised public services in Australia. The page was connected to related social media pages (Facebook and Twitter) and coalition members’ activists spread the word via calls, leafleting, email groups, and via grassroot work talking to their contacts and communities about the inquiry, using the same principles of door-to-door political campaigning and union organising.

While extremely labour intensive, this approach turned out to be necessary and the most effective in rural towns and intermediate cities, whereas digital communication worked well in cities such as Adelaide and Melbourne. Big cities were also where the unions had lots of members who could do the outreach. People wishing to contribute and speak at the public hearings in front of the panellists could sign up on the website as well as at the venue, and would be given five minutes each, followed by 10 minutes discussion, had they a favourable context in which to reclaim public service made a submission or not. ownership and management for the public.

An obstacle was the confidentiality clauses some of The final Inquiry report was strategically released ahead the public service workers were bound by so that they of two state elections and was used to inform the feder- could not share their full experience, whereas users al election campaign. It created a solid factual advocacy did not have that same constraint. The communication and policy basis that glued the different organisations’ HEALTH CARE team featured a press release after each hearing with part of the campaign together and helped them devel- the main highlights and conclusions from the session, op a way of working together for the common objective and the biggest stories were disseminated among the of promoting public services in public hands and for mainstream media. the people. It was also critical to influence the policy of Australia’s national centre (ACTU), which in turn could The Inquiry enabled Australian trade unions to leverage influence policy makers seeking labour support and their key asset - their membership - in communities and helped educate and rally support from private sector on shop floors. It provided the education, the solid ar- unions on publicly held public services. guments and cases needed to build up the confidence to articulate why public service privatisation was harm- Source: M. Whaites, PSI ful for people, users and communities and argue that viable public solutions existed. It unveiled the concrete ways in which public services privatisation had nega- tively impacted service users’ and workers’ lives, such as in the case of failing disability children’s services.4 It helped build a different narrative that went against the dominant neoliberal pro-privatisation dogma, creating

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 17 HEALTH CARE

CASE 9. LUOYANG, CHINA

Time as private: 2011-now Drivers of remunicipalisation: benefits of privatisation failed to materialise. Process: state reversal of process

In 2011, the local government transformed 14 public hospitals into private, employee-owned, non-profit hospitals. The employee ownership was divided between ordinary staff that owned 49 per cent of the shares in each hospital, and management, which were given 51 per cent of the shares. However, the employees were not happy with this ownership system as no bonuses were awarded and there was no clear correlation between working harder and gains in employees’ salaries. The system proved to be especially problematic for already retired employees. Eight years later, in 2019, the local government took steps to reverse the process as the privatisation clearly failed. The government therefore decided to regain control of the local hospital systems by bringing it back into public ownership.5

CASE 10. DENMARK, SOUTH DENMARK CASE 11. INDIA, DELHI

Private company: Bios Drivers of remunicipalisation: cost-saving HEALTH CARE Time as private: 2015-2016 Process: decentralised control from central Driver of remunicipalisation: government to local company went bankrupt, service failure Process: state reversal of process In 2015 the newly elected local government of the Aam Aadmi Party began to set up affordable primary healthcare In August 2014 the regional council of Southern community clinics across Delhi. These clinics, which are Denmark decided to outsource ambulance services called Mohalla (community centres), consist of a doctor, a to the newly created Dutch-Danish company, nurse, a pharmacist and a lab technician.7 The clinics are Bios, starting on 1st September 2015. Soon after of a small size and are situated in pre-fabricated portable the privatisation, problems emerged, including a cabins that can be easily set up virtually anywhere. They reduction in the speed of response rate which put cost only 2 million rupees (approximately €250,000) patients at risk. Consequently, Bios had to pay penalty much cheaper than government dispensaries which cost fees for not meeting its contractual obligations. approximately €360,000.8 The government promised to Moreover, Bios had an increasing amount of debt to set up a 1,000 Mohallas. By November 2017, 162 clinics service and was forced to declare bankruptcy in July had been established.9 The clinics offer 110 essential 2016. In September 2016 it stopped paying its staff. drugs and 212 diagnostic tests to people free of cost.10 By mid-August the region’s public Syddanmark took The government claims that between the second half of the ambulance services back under its control.6 2015 and 2017, 2.6 million people have been treated in Mohallas.11

18 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE HEALTH CARE

CASE 12. UK, HINCHINGBROOKE CASE 13. UK, SOMERSET

Private company: Circle Case 13. Health Care, UK, Somerset Time as private: 2012-2013 Private company: Vanguard Healthcare Drivers of remunicipalisation: unsatisfactory Time as private: 2014-2014 service, failure Drivers of remunicipalisation: unsatisfactory Process: company withdrawal service Process: National Health Service terminated In 2012, Circle won a ten-year contract to run the contract NHS Hinchingbrooke hospital, a small district general hospital in Cambridgeshire, with some 250 beds and In Somerset UK, the Musgrove Park Hospital contract- nearly 1,500 staff. It was the first NHS hospital in the ed out eye operations to private company Vanguard UK to be handed to a private management firm since Healthcare in 2014.18 Vanguard agreed to perform 20 the NHS was established in 1948.12 cataract operations a day, which were at least six more than the hospital’s own surgeons would usually under- Not even one year later, in January 2013, the UK’s take.19 Within days the private failure became obvious. parliamentary public accounts committee expressed Half of the patients, to be precise 31 out of 62 treated concerns that Circle’s bid to run Hinchingbrooke patients, had suffered problems.20 Some patients said

hospital had not been properly risk assessed and they felt the procedures were hurried, complained of pain HEALTH CARE was based on overly optimistic and unachievable during the operation and claimed they were shouted at savings projections.13 The following year, in 2014, by medical staff. Consequently, the hospital’s contract the Care Quality Commission (CQC), the independent with Vanguard Healthcare was terminated after only four regulator of health and adult social care in England, days. One patient, who lost his eyesight, entered legal inspected the hospital and gave it an overall rating of procedures to claim for ‘substantial damages’. The patient ‘inadequate’. It found a catalogue of serious failings is expected to be awarded tens of thousands of pounds that put patients in danger and delayed pain relief. The – paid for by the NHS and thus the taxpayer and not the hospital was put into special measures; this was the private company.21 first time the CQC had taken such a step.14

Circle handed back the hospital to the NHS in March 2015.15 Circle cited financial considerations when announcing its withdrawal but conceded that the CQC report had also been a factor in its announcement.16 Circle left behind a deficit well above the level that it contractually committed to cover, leaving the taxpayer to pick up the rest of the bill: Circle’s deficit for the first nine months of 2014–15 was £7.5 million, which is beyond the £5 million cap on losses for which Circle is made liable under contract.17

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 19 1. Testa, C. (22 August 2019) Mildura Base Hospital 13. House of Commons Committee of Public Accounts management set to return to public hands. ABC (18 March 2015) An update on Hinchingbrooke News. Available at: https://www.abc.net.au/ Health Care NHS Trust. Parliament UK. Available at: news/2019-08-22/mildura-base-hospital-manage- https://publications.parliament.uk/pa/cm201415/ ment-set-to-return-to-public-hands/11439488 cmselect/cmpubacc/971/971.pdf 2. Nurses and Midwives’ Association (NSW), CPSU, 14. BBC (2 February 2015) Hinchingbrooke Hospital: CPSU-SPSF, Australian Services Union, ETU, and Circle to hand back to NHS by end of March. their global union federation PSI BBC. Available at: http://www.bbc.co.uk/news/ 3. ActionAid and PerCapita. uk-england-cambridgeshire-31104003 4. Taking back control. A community response to 15. Ibid. privatisation. People’s Inquiry Report https:// 16. House of Commons Committee of Public Accounts d3n8a8pro7vhmx.cloudfront.net/cpsu/pag- (18 March 2015) An update on Hinchingbrooke es/1573/attachments/original/1508714447/Taking_ Health Care NHS Trust. Available at: https://publica- Back_Control_FINAL.pdf?1508714447 tions.parliament.uk/pa/cm201415/cmselect/cmpu- 5. Yan, L. and Xuan, T. (15 August 2019) In Depth: bacc/971/971.pdf Chinese Cities Struggle With Public Hospital 17. Plimmer, G. (9 February 2015) First private- Ownership Reform. Caixin. Available at: https:// ly-run NHS hospital seeks £10m taxpayer bailout. www.caixinglobal.com/2019-04-15/in-depth-chi- Financial Times. Available at: https://www.ft.com/ nese-cities-struggle-with-public-hospital-owner- content/770804fc-b070-11e4-a2cc-00144feab7de ship-reform-101404145.html 18. NHS Support Federation (2017) Time to end the 6. BT (31 March 2017) OVERBLIK: Konkursboet Bios NHS experiment with the market. NHS Support kørte ambulancer i under et år. BT. Available at: Federation. Available at: http://www.nhsforsale.info/ https://www.bt.dk/politik/overblik-konkursboet-bi- uploads/images/contract%20report%20dec%20 os-koerte-ambulancer-i-under-et-aar 2017%2028_12_17%20.pdf 7. Kuruvilla, B. (2017) Against the grain: New path- 19. Morris, S. (16 October 2014) Leaked report into cat- ways for essential services in India. In: Kishimoto, aract surgery revealed. The Guardian. Available at: S. and Petitjean, O. (eds) Reclaiming Public ser- https://www.theguardian.com/society/2014/oct/16/ vices. Transnational Institute (TNI). Available at: leaked-report-cataract-surgery-revealed https://www.tni.org/files/publication-downloads/ 20. NHS Support Federation (2017) Time to end the reclaiming_public_services.pdf NHS experiment with the market. NHS Support 8. Ibid. Federation. Available at: http://www.nhsforsale.info/ HEALTH CARE 9. Raja, V. (27 November 2017) Here’s a Look at What’s uploads/images/contract%20report%20dec%20 Making AAP’s Mohalla Clinic a Hit in the Capital. The 2017%2028_12_17%20.pdf better India. Available at: https://www.thebetterin- 21. Morris, D. (19 February 2016) Botched Vanguard dia.com/122432/aap-mohalla-clinics-delhi/ eye surgeries at Musgrove Park Hospital costing 10. Ibid. taxpayers tens of thousands of pounds. Sumerset 11. Kuruvilla, B. (2017) Against the grain: New path- County Gazette. Available at: eyhttp://www.som- ways for essential services in India. In: Kishimoto, ersetcountygazette.co.uk/news/14286992. S. and Petitjean, O. (eds) Reclaiming Public ser- Botched_Vanguard_eye_surgeries_at_Musgrove_ vices. Transnational Institute (TNI). Available at: Park_Hospital_costing_taxpayers_tens_of_thou- https://www.tni.org/files/publication-downloads/ sands_of_pounds/ reclaiming_public_services.pdf 12. Plimmer, G. (29 January 2012) Private company to run NHS general hospital for first time. The Financial Times. Available at: https://www.ft.com/ content/10721664-4aa3-11e1-8110-00144feabdc0

20 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE INFRASTRUCTURE

CASE 14. CANADA, MONTREAL CASE 15. UK, CUMBRIA

Private company: n/a Private company: Capita Time as private: 201--2014 Time as private: 2001-2011 Drivers of remunicipalisation: unsatisfactory Drivers of remunicipalisation: unsatisfactory service service, corruption and cost saving opportunities Process: termination of contracts after an inquiry Process: contract expiry

In 2013, several boroughs in Montreal, such as In 2001, Cumbria County Council signed one of the first Villeray–Saint-Michel–Park-Extension, Rosemont–La major PPPs for highway and road maintenance in the Petite-Patrie, and Côtes-des-Neiges–Notre—Dame- UK. When the contract expired in 2011, Cumbria decided de-Grâce, decided to insource the maintenance and to take the services for highway and road maintenance construction of sidewalks. The public insourcing took back in-house. It is estimated that Cumbria has saved place after a public inquiry had exposed province- £1.8 million a year since it ended the PPP. Moreover, the wide corruption and collusion in the construction local authority can respond better to natural disasters industry. Companies had been awarded contracts such as floods, which are not uncommon in England’s at highly inflated prices. According to the mayor of Lake District.2 Villeray–Saint-Michel–Park-Extension the quotes of the private contractor were 25-44 per cent higher than expected. INFRASTRUCTURE Consequently, the sidewalk maintenance was brought back under public ownership in 2014. Through the public sector insourcing substantial cost savings could be achieved, for example Rosemont–La Petite- Patrie saved $150,000 (or 18 per cent of the budget) in 2015.1

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 21 SOCIAL CARE

CASE 16. DENMARK, SYDDJURS CASE 18. NORWAY, OSLO

Private company: Forende Care Private Company: Norlandia Time as private: 2012-2016 Time as private: ended 2017 Drivers of remunicipalisation: deterioration of Drivers of remunicipalisation: company failure service and working conditions Process: termination of contract Process: contract expiry and non-renewal After various scandals about the private failure of Norlandia In 2012 in Syddjurs, Forende Care, a Danish Private in running care homes in Oslo, the city council decided to healthcare provider, took over the running of the take back the care homes in-house in January 2017. The care home Søhusparken. Soon after the company decision to remunicipalise the care homes translated into took over the contract the service deteriorated and pay rises of 40,000-50,000 NOK (€4,100-5,100) in 2017 the working conditions worsened. When the contract per worker.8 The trade union Fagforbundet had lobbied expired after four years the municipality chose not to hard to put remuncipalisation on the national policy renew it and brought the care home back under public agenda. ownership. 72 employees were taken back in-house. After the remunicipalisation, the city council invested 3 SOCIAL CARE NOK 900,000 (€120,000) to train staff.

CASE 17.NORWAY, BERGEN

Time as private: ended in 2016 Drivers of remunicipalisation: working conditions Process: trade union campaign

In Bergen, Norway, two care homes for the elderly were remunicipalised in May 2016. The staff benefited from the remunicipalisation. Wages increased, and a new pension scheme was introduced that left workers better off.4 Despite the additional costs of nearly 4 million NOK (€400,000) for higher wages and pensions, both care homes managed to be debt free within eight months after the remunicipalisation. The one in the area of Soreide even managed to make savings of 5 million NOK (€500,000).5

There are around 40 nursing homes in Bergen. Since 2016, all are either municipal or run by private nonprofit organisations.6 The process of remunicipalisation was initiated by the trade union Fagforbundet, which started to meet regularly with the Labour Party from 2014 onwards to prepare for the upcoming 2015 municipal elections, thus putting remunicipalisation on the political agenda. When the Labour Party came into power as part of a local coalition government their lobby work paid off.7

22 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE TRANSPORT

CASE 19. FORT MCMURRAY, CANADA

Private companies: Tok Ltd Time as private: 2013-2015 Drivers of remunicipalisation: company failure Process: termination of contract

In 2013, the company Tok Ltd won a 15-year contract to run the standard and specialised bus transit services in Fort McMurray, Canada. Shortly after the privatisation, services started to deteriorate. Within the first six months of 2014, there were 1,853 delays and 59 missed trips reported. Consequently, user complaints rose drastically. Just two years after the privatisation, a public audit found that Tok Transit Ltd was not fulfilling staffing requirements, had not kept to the timescale for constructing a bus facility and that user complaints had risen to an unacceptable level. Moreover, the local government’s transit service branch was not in a position to monitor the private contractors’ finances and system utilisation.9 TRANSPORT Following the results of this audit, in February 2015 the Regional Municipality of Wood Buffalo exercised a contract provision allowing for cancellation without reason at 90 days’ notice. The fares and the bus schedules remained the same after remunicipalisation. The workers, who were transferred to the municipality, supported the decision to take the service back in-house.10 After the remunicipalisation the quality of the service improved.11

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 23 London Charing Cross station ©A. Bicalho CC BY-NC-ND 2.0 ©A. station CC Bicalho BY-NC-ND Charing Cross London

TRANSPORT

CASE 20. UK, LONDON

Private companies: Metronet BCV, Metronet SSL and Tubelines Time as private: 2003-2008 & 2003-2010 Drivers of remunicipalisation: company failure Process: local transport authority terminated contracts

London remunicipalised some of the tube and light rail shareholders.15 TfL and the government had to buy back network in 2007 and 2008. Just a few years prior, in 95 per cent of all Metronet’s debt obligations in February 2003, three large PPPs had been set up to modernise 2008. The national statistics office estimated that the

TRANSPORT and maintain the underground’s infrastructure. Metronet overall cost to the taxpayer of this collapse was between BCV, Metronet SSL and Tubelines were awarded a 30- £170 million and £410 million.16 year-long contract worth over £1.7 billion. Metronet BCV and Metronet SSl (collectively referred to as Metronet) In 2010 the PPP with Tubelines was also terminated. were owned by a consortium of Balfour Beatty plc, This was after Tubelines had a funding gap of £1.35 Bombardier Inc., WS Atkins plc, EDF SA and Thames Water billion for major repair work on two main tube lines. TfL plc.12 The major of London at the time, Ken Livingstone, challenged the cost estimates and won the arbitration opposed the PPPs and unsuccessfully tried to prevent award. Consequently, Tubelines could not continue and the planned privatisation through the courts.13 Instead TfL bought the company for £310 million.17 The then he advocated for the financing of Transport for London mayor of London, Boris Johnson, revealed that lawyers’ (TfL) through government bonds secured against future fees came up to £400 million over the course of the fare revenues.14 contract.18

In 2007 Metronet went into administration as it had Since the termination of the Tubelines PPP, the work has accumulated a deficit of over £1 billion and TfL refused been refinanced through bonds and carried out in-house to cover the loss. However, prior to the bankruptcy by workers directly employed by TfL. Through this TfL it managed to hand out generous dividends to its saved billions of pounds.21

24 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE TRANSPORT

CASE 21. UK, EAST COAST

Private companies: Great North Eastern Railway (GNER), National Express, Stagecoach and Virgin Time as private: 2005-2009 & 2015-now Drivers of remunicipalisation: repeated company failures, poor service Process: renationalisation.

The privatisation of the UK’s East Coast rail franchise, However, in 2015, the Conservative-led Coalition which connects London with Scotland, failed three Government chose to ignore the train line’s success times. On being made private, it was first awarded to under public ownership and reprivatised it. A partnership Great North Eastern Railway (GNER) in 2005 on a 10- of Stagecoach and Virgin won the eight-year contract year contract. However, GNER abandoned the contract for £3.3 billion. Stagecoach was the majority owner with TRANSPORT when passenger numbers were lower than expected and 90 per cent of the shares, and Virgin held the rest. Yet its parent company, Sea Containers, went bankrupt. So, again, the expected revenue growth did not materialise. in 2007, UK transport multinational, National Express, Stagecoach lost around £200 million of its own funds took over management of the train line. However, two and breached a financial covenant. Consequently, the years later the company had accumulated unsustainable East Coast train line had to be renationalised for a second amounts of debt related to the franchise and likewise time in 2017. abandoned the contract.20 The move was ultimately advantageous to the failing In 2009, after the second contract failure, the then companies, which avoided the many payments they still Labour government decided to nationalise the franchise. owed on the contract and were still allowed to bid without It established an organisation, Directly Operated Railways, penalty for other rail franchises.22 Shortly after the East to manage the line under public ownership. The service Coast line contract failure due to financial reasons, Virgin improved significantly. User satisfaction and punctuality and Stagecoach shared £51.2m worth of dividends increased, and the state-owned operator - which no from the West Coast main line railway which they also longer had to dish out dividends to shareholders - was operated.23 While the franchise is currently publicly run, more financially successful than the private companies. the government expects to reprivatise it again in 2020.24 It even managed to return £1 billion to the government.21

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 25 TRANSPORT

CASE 22. TRANSPORT, SOUTH KOREA, SEOUL

Private companies: Metro9 Time as private: until 2038 Drivers of remunicipalisation: poor service, price rises. Process: union and civil society campaign which removed a layer of outsourcing but failed to fully remunicipalise service.

Seoul’s metro is the world’s longest in terms of passen- workers have yet to be fully integrated into the work ger-route length, it is comprised of nines lines, of which structure of the public Seoul Metro Corporation, which one is privately operated, line 9. The other lines are op- technically took over operations. Thus, a full remunici- erated by a public corporation called Seoul Metro. Line 9 palisation has not yet been achieved and the trade union was built in three phases. The Phase 1 section, complet- campaign is on-going.25 ed in 2009, stretches 25.5km and connects Gangnam and Gangseo, Seoul. The Phase 2 and 3 sections were Line 9 was constructed through private investment by a opened in 2015 and 2017 respectively. The Korean Public public-private partnership (PPP) using the Build-Transfer- Service and Transport Workers’ Union (KPTU) cam- Operate (BTO) model that transfers the ownership of the paigned to end the outsourcing of the line’s operations. facilities to the Seoul metropolitan government after the The workers of the privatised line 9 were employed under completion, but that allows private investors to gain ben- significantly inferior working conditions than the workers efits from investment for 30 years of operation in accord- of the publicly operated lines. Due to the campaign, one ance with the agreement with the Seoul Metropolitan layer of subcontracting in the operation of phase 1 was Government. taken out when the local government decided to terminate its contract with the French private operators RATP The initial construction of Phase 1 was carried out by Dev and Transdev. In phase 2 and 3, strikes and cam- Metro9, a special purpose company (SPC) owned by paigning forced the Seoul City government not to renew a private consortium led by Hyundai Rotem and the the contract with a private operator, but Phase 2 and 3 Australian firm Macquarie as its two largest shareholders. It outsourced the operation of this phase to the Seoul TRANSPORT Line 9 Operation Company, a joint venture between the two French companies RATP Dev and Transdev.

However, the original contract with Metro9 shifted a lot of financial risk onto the government. The contract included a ‘minimum revenue guarantee’ (MRG) which meant that for 15 years, the government would guarantee most of a projected annual after-tax revenue of 8.9 per cent of the capital invested.26 The Metro9 consortium further enjoyed the freedom to renegotiate and raise fares.27 As a result of this imbalance, and protests from citizens and workers, in 2013, the Seoul government undertook an ex- pansive and costly restructuring of the project.

26 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE The main changes included a replacement of Metro9’s density of 90 per cent, which is very high, especially shareholders, recovery of fare setting rights by the Seoul when considering that South Korea’s average union den- government, and a cancellation of the MRG agreement. sity is only 10 per cent.28 It was also decided that Phase 2 and 3 of the line should be operated by the public corporation, Seoul Metro. As Since 2017, the union has been campaigning together a result, Metro9 became a joint venture between Veolia with a coalition of civil society organisations to achieve Transport Korea and Hyundai Rotem, which continued to remunicipalisation of line 9. Their campaign has included contract out the operation and management of Phase 1 various protest actions including a six-day strike at the of the line to the Seoul Line 9 Operation Company. end of 2017 with the threat of another in 2019, outreach

to and surveys of passengers, press and media work, TRANSPORT According to KPTU, the Line 9 transport service quali- and lobbying of the city government. Line 9 workers also ty and working conditions were significantly inferior to received international solidarity from workers facing sim- publicly operated lines. Aggressive cost-cutting and ilar conditions in other countries.29 shareholder profit-extraction policies led to curtailed rest hours for metro drivers and lack of investment in coach- As a result of these efforts, the Seoul City government es, infrastructure and staffing, putting passenger safety and Metro9 announced cancellation of the operation at risk. Line 9 also became increasingly overcrowded contract with the Seoul Line 9 Operation Company. Line and congested: pickpocketing, episodes of violence 9 Phase 1 will now be directly operated by Metro 9 with and harassment became a regular occurrence, so much greater oversight from the city government.30 As such, so that passengers renamed it “the subway from hell”. one layer of outsourcing was removed. However, a full re- Workers felt they could no longer put up with these con- municipalisation could not be achieved. Metro 9, the in- ditions; they organised themselves and reached a union termediary private company, holds a contract until 2038.

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 27 1. CUPE (2016) Back In-house: Why Local 15. Hall, D. (2014) Why Public Private Partnerships Governments are Bringing Services Home. CUPE. don’t work. The many advantages of the public Available at: https://716.cupe.ca/files/2016/07/ alternative. Public Services International (PSI). Back-In-House.pdf Available at: http://www.world-psi.org/sites/ 2. Presser, L. (2 March 2016) Why have councils default/files/rapport_eng_56pages_a4_lr.pdf fallen out of love with outsourcing vital services?. 16. National Audit Office (4 June 2009) The failure The Guardian. Available at: https://www.theguardi- of Metronet. National Audit Office. Available an.com/society/2016/mar/02/councils-outsourc- at: https://www.nao.org.uk/wp-content/up- ing-cumbria-public-private-partnership-in-house loads/2009/06/0809512.pdf 3. Ask, H. (4 February 2016) Omstridt plejecenter er 17. BBC (27 June 2010) Transport for London com- igen kommunalt. Available at: https://stiften.dk/ pletes Tube Lines purchase. BBC. Available at: syddjurs/Omstridt-plejecenter-er-igen-kommunalt/ http://www.bbc.co.uk/news/10428409 artikel/296828 18. The Lawyer (5 September 2010) Does failure of TfL 4. Pettersen, B. and Monson, N. (2017) Norwegian deals spell the end of the line for PPP bonanza? municipalities bringing social services. In: The Lawyer. Available at: https://www.thelawyer. Kishimoto, S. and Petitjean, O. (eds) Reclaiming com/issues/6-september-2010/does-failure-of-tfl- Public services. Transnational Institute (TNI). deals-spell-the-end-of-the-line-for-ppp-bonanza/ Available at: https://www.tni.org/files/publica- 19. Hall, D. (2014) Why Public Private Partnerships tion-downloads/reclaiming_public_services.pdf don’t work. The many advantages of the public 5. Geard, K. (22 September 2016) Trives som kom- alternative. Public Services International (PSI). muneansatt. Fagbladet. Available at: https://fag- Available at: http://www.world-psi.org/sites/ bladet.no/nyheter/trives-som-kommune-ansatt- default/files/rapport_eng_56pages_a4_lr.pdf 6.91.409748.9e3d1babb3 20. Jupe, R. (05 June 2019) The East Coast fran- 6. Ibid. chise debacle: only the latest problem arising 7. Email exchange with Fagforbundet. from rail privatization. LSE blogs. Available 8. EPSU (n.d.) Remunicipalisation brings pay boost at: https://blogs.lse.ac.uk/politicsandpolicy/ for care workers. Available at: http://www.epsu.org/ the-east-coast-franchise-debacle/ node/9745/networks/public-services 21. Ibid. 9. Wood Buffalo (October 2014) Municipal Transit 22. Ibid. Service. Summary of Audit Findings and 23. BBC (14 October 2018) West Coast rail: Virgin Recommendations. Regional Municipality of Wood Trains and Stagecoach net £51.2m in dividends. Buffalo. Available at: https://www.rmwb.ca/Assets/ BBC. Available at: https://www.bbc.co.uk/news/ Departments/Legislative+and+Legal+Services/ business-45854824 Audit/AIT_MunicipalTransitService.pdf 24. Jupe, R. (05 June 2019) The East Coast fran- 10. CUPE (2016) Back In-house: Why Local chise debacle: only the latest problem arising Governments are Bringing Services Home. CUPE. from rail Privatization. LSE blogs. Available Available at: https://716.cupe.ca/files/2016/07/ at: https://blogs.lse.ac.uk/politicsandpolicy/ Back-In-House.pdf the-east-coast-franchise-debacle/ 11. Wood Buffalo (n.d.) FAQ: New Era For Transit in 25. PSI (30 January 2019) KPTU wind termi- Wood Buffalo. Regional Municipality of Wood nation of contract for Seoul metro Line Buffalo. Available at: https://www.rmwb.ca/ 9. Public Services International (PSI). Municipal-Government/municipal_departments/ Available at: http://www.world-psi.org/en/ Public-Operations/Wood-Buffalo-Transit/New-Era- kptu-wins-termination-contract-seoul-metro-line-9 FAQ.htm 26. Hong, S. (2016) When does a public–private 12. National Audit Office (4 June 2009) The failure partnership (PPP) lead to inefficient cost man- of Metronet. National Audit Office. Available agement? Evidence from South Korea’s urban rail at: https://www.nao.org.uk/wp-content/up- system. Public Money & Management. Vol. 36, no loads/2009/06/0809512.pdf 6, pp. 447-454. 13. Stewart, H. (22 July 2007) How Metronet came 27. Ibid. off the rails - and why investors lost £350m. The 28. Public Services International, Remunicipalisation Guardian. Available at: https://www.theguardian. Workshop, December 2018; and subsequent email com/society/2007/jul/22/localgovernment. exchange with the Korean Public Service and business Transport Workers’ Union (KPTU) in February 2019. 14. Butcher, L. (2012) London Underground PPP: 29. Ibid. background. House of Commons Library. Available 30. Ibid. at: https://researchbriefings.parliament.uk/ ResearchBriefing/Summary/SN01307

28 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE WASTE

CASE 23. CANADA, CONCEPTION BAY SOUTH CASE 24. CANADA, PORT MOODY

Private companies: Private company: Newfound Disposal Systems Ltd International Paper Industries (IPI) Time as private: 30 years from 1981 Time as private: 1998-2008 Drivers of remunicipalisation: Drivers of remunicipalisation: Poor service quality, rising costs poor service quality, contract expiry Process: Union campaign Process: Union campaign working with local authority

Conception Bay South is a fast-growing city in In 2008, Port Moody’s five-year solid waste collection Newfoundland and Labrador with a population of nearly contract expired. During the ten previous years of 25,000. In 2011, the city decided to end 30 years of privatised waste collection, the city had faced rapidly privatised waste collection service when the contract escalating costs, unmet recycling targets, as well as came up for tender. The move was a result of poor an unsatisfactory service causing many residents to customer satisfaction, rising costs and sustained efforts complain. Consequently, the local authority faced to bring the work in-house by the Canadian Union of intense pressure to rethink its service delivery model. Public Employees (CUPE). In 1998, the decision to outsource had been based on The CUPE local representing the town’s workers two competing reports. A report from the City Council’s had worked tirelessly over the years to convince management listed the benefits of lower payroll and management and council that public worked best, first savings from not replacing the city’s trucks under bringing bulk waste pickup back in-house, and building privatisation. In contrast, a report prepared by the a solid case to end privatisation once and for all. In 2016, Canadian Union of Public Employees (CUPE) argued in it was decided to keep the service public, and the local favour of keeping the service in-house, citing employee authority saved $1.15 million CAD during a successful loyalty and investment in new trucks as a way of five-year in-house trial period.1 lowering operating costs. Based on the two reports, the municipality opted to outsource.

In a recent survey of town residents, waste collection WASTE topped a list of what residents liked about their In 2008, a different approach was chosen. Instead community, with nearly 82% of people choosing the of producing competing reports, the City Council’s service first.2 The service became more personal as management and CUPE formed a joint task force. A waste collectors got fixed routes, often building up team, with an equal number of management and union customer relations with the residents. representatives, built trust through joint research and decisions made by consensus. Based on the research Wages increased as a result of the remunicipalisation, conducted by the taskforce, the municipality voted to and working conditions improved. Workers are now paid insource the service. The waste service in Port Moody sick pay and enjoy better health and safety practices, improved significantly and it is provided on a rate lower as the municipality provides more and better equipment. than fees charged in neighbouring communities. Moreover, waste workers have to lift almost 5 tons less or 40 per cent less during their working day.3 In preparation for the transition to the new public collection system, the municipality educated residents about recycling. It even won an award from the Solid Waste Association of North America (SWANA) for its communication strategy. Recycling rates increased to 73 per cent in 2011 from less than 50 per cent when the service was delivered by a private contractor three years prior. Port Moody is now one of very few Canadian communities that achieved a recycling rate above 75 per cent.4

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 29 WASTE

CASE 25.CANADA,WINNIPEG companies exploited the vulnerabilities of a marginalised workforce. Some workers were daily labourers, only Private company: Emterra knowing on the day if they would get work. Workers had Time as private: 2006-2020 to implement very tight refuse pick up shifts and they would have their daily job renewed on condition they Drivers of remunicipalisation: contract expiry, had stuck to these schedules. Consequently, they would exposure of the failure of privatisation do a lot of heavy manual lifting of the trash bins instead Process: The trade union successfully lobbied the of using the mechanical arm lifter of the trucks as that local authority to pilot the remunicipalisation of took longer. This type of work exposed them to risks of the service serious musculoskeletal injuries.

The Winnipeg Municipal Council has decided to bring Proposing the in-house alternative back in-house a part of the city’s municipal waste The publication of the report promoted reactions from the services in 2020. While this initial project only involves Winnipeg City Council as it faced reputational damage. hiring a small number of city employees, if the model The evidence contained in the report made a strong case proves successful, there is potential to bring back in- for bringing Winnipeg waste services back in-house. house 200 or more waste collection jobs, which includes CUPE used it strategically to lobby the Council and both truck drivers and waste workers. politicians to convince them to reverse the privatisation. CUPE also approached other Canadian municipalities Trade union membership loss following the privatisation that had fully or partially (like Ottawa) kept municipal The city of Winnipeg privatised its municipal waste service waste services in-house. Instead of just focussing on refuse collection in 2006. Prior to the privatisation, the the price-only performance (a traditionally conservative service was a public municipal utility, with a trade union pro-privatisation rationale), CUPE successfully made presence. Following the privatisation, the trade union, an argument that it is the overall performance of the CUPE, lost bargaining status for the service and a lot of service that matters, including social and service quality problems followed. considerations. Following the privatisation, working conditions and the The lobby efforts worked and the Mayor and the city service quality decreased significantly. While some of the council decided to take steps towards the insourcing of workers sought help from CUPE, it was very hard for the the service. They also realised that after over a decade WASTE trade union to represent these workers due to the lost of privatised municipal waste services, the city of bargaining agreement after privatisation. As the company Winnipeg had lost the tools (for example trucks) and the relied heavily on subcontracted workers to carry out the competences (staff) to do deliver the service. Knowing municipal waste services in Winnipeg, their employment this, the contractors were using that to significantly raise status was extremely precarious. their prices. Consequently, the municipality decided to turn the tables and to engage with the process of Exposing the failure of privatisation remuncipalising the service. An investigative journalist documented the situation and aired a reportage on TV publicly denouncing the labour Piloting remunicipalisation conditions of Winnipeg waste collection services. This While CUPE aimed for the full remunicipalisation of the was an opportunity for CUPE. The trade union approached service, the city council remained cautious and opted a progressive research think-tank, the Canadian Centre for insourcing only a part of the service as a pilot test. for Policy Alternatives-Manitoba (CCPA-MB), to prepare The pilot programme starts in in 2020, when the contract a primary research report documenting in depth the with the private company comes to an end. A big part labour conditions of the privatised waste service. The of the challenge will be to re-build the technical and report exposed the precariousness, poverty wages and physical capacity of the city to implement waste pick up poor working conditions, including limited Occupational and recycling services after 14 years of privatisation. It is Safety and Health (OSH) standards, endured by these a mid- and long- term financial investment that the city workers daily. It also shed light on the ethnic and social has to make. CUPE is working closely with the city to re- segregation this situation had caused, as the wide majority build that capacity again. Workers in the remunicipalised of subcontracted workers were indigenous workers and/ service will become CUPE members and will be or workers with a criminal record having trouble in finding covered by CUPE’s waste services collective bargaining better quality employment. In other words, the private agreement.

30 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE WASTE

Recicladores en Bogotá : ¡Nuestro trabajo es un servicio público! ©WIEGO 2017

CASE 26. COLUMBIA, BOGOTA

Private company: various - Time as private: 1996-2012 and 2018-now Drivers of remunicipalisation: failure in recycling, job loss and exclusion Process: ongoing political campaign by waste-pickers association and a progressive major won a partial remunicipalisation but failed to prevent reprivatisation WASTE

From informal recycling to landfill with private companies awarding a seven-year contract to private companies. The private companies then excluded the recicladores In Bogotá, which has a population of eight million, 6,300 from the system, as the contractors were paid per ton of tons of waste are sent to Dona Juana, Bogotá’s only waste trucked to the landfill - a system that discourages landfill.5 Before it gets there, around 21,000 waste- recycling.8 pickers (also called recicladores) sift through the waste for recyclables. According to a 2015 case study, through The waste-pickers of Bogotá fight back but are blocked their work, around 1,200 tons of recyclables are turned away from the landfill daily.6 Historically, the waste pickers However, over the next years, the ARB fought back against worked on an informal basis and were not paid for their this injustice. In 2003, when the waste management job, but survived by selling the recyclable material gained service came up for tender again, the ARB bid for it. from the waste. In 1990 the Asociación de Recicladores However, the organisation was excluded from the tender de Bogotá (ARB) was founded by three recicladores as by law only companies listed on the stock market cooperatives to resist the closure of their dump. Colombia could bid. Moreover, direct experience of providing has a tradition of recicladores cooperatives, with the first waste management in the previous five years was also one formed in Medellín as early as 1962.7 a requirement for being able to bid. The ARB challenged these exclusions and won: The Constitutional Court ruled The local government has been involved in the collection in 2003 that waste pickers cooperatives could not be and disposal of waste in Bogotá since 1875, but not in excluded from competing for these contracts. But before recycling. Over a hundred years later, despite strikes and any measures by the Court could be taken, Bogotá had resistance of the municipal workers, the local government already closed the tender process.9 privatised the waste management service in 1996,

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 31 The zero-waste programme: formalisation of waste competition and had caused an environmental crisis as pickers and remunicipalisation efforts a consequence of the uncollected rubbish.15 The ARB and other inhabitants of Bogotá demonstrated against the In 2011, when the contract again came up for renewal, the mayor’s ousting. A long legal battle followed. Eventually ARB was again side-lined by the city. But through another president Santos, in the hope of gaining political support court case the ARB managed to block the tender as the for the upcoming elections, initiated a legal order by the Constitutional Court ruled that waste pickers must be national court that restored Petro into office in April 2014.16 included in the city’s solid waste management system.10 In 2012, Colombia’s Auditor General found that the four Petro returned to office and continued to develop his zero- waste management companies contracted by Bogotá waste plan through educational campaigns on recycling recorded profit margins of 23 per cent by overcharging and waste reduction17 and by formalising more and more residents by 20 per cent.11 In the same year, a new mayor, recicladores, who were paid an amount per kilogram Gustavo Petro, supported by the waste pickers, won the collected.18 By December 2014, 8112 recicladores became election to become mayor of Bogotá.12 His zero waste registered and approximately doubled their income to US$ campaign envisioned that the previously informal waste 200 a month.19 pickers could deliver formal government services - and therefore be paid by a fixed rate - and that most of the The new mayor cancelled the zero-waste programme

WASTE waste disposal business would become remunicipalised. He aimed to extend the private contracts temporarily for In 2016, Enrique Peñalosa, the new centre-right mayor, six months, whilst developing the municipal capacity to announced his intention to cancel the zero waste provide the service in-house. programme implemented by Petro, but the ARB and the recicladores stopped this from happening through active The private companies fight back mobilisation on the streets.20 However, Peñalosa ordered a new tender for the waste management and excluded the However, the private providers who wanted to be assured public company Aqua de Bogotá from bidding. Five private of new long-term contracts put pressure on the mayor companies (SIMA - LIME - Ciudad Limpia - Aseo Urbano - Petro by stopping the service.13 Rubbish was not collected Aseo Capital) won the contract and started operation on for four days. This forced the mayor to compromise. the 12 February 2018.21 The contract has a combined value The old private contractors retained 47 per cent of the of 4.8tn-peso (US$1.6bn) and is set to last eight years.22 collection and disposal of municipal solid waste, whilst a public company, Aqua de Bogotá, took care of over half The reprivatisation led to an indefinite strike of 3,200 of the service and included the work of the ARB. Through municipal waste collectors previously employed by Aqua the remunicipalisation of half of the city’s waste collection de Bogotá over feared job losses. Rubbish in 12 out of service, Petro managed to reduce the waste budget by 11 Bogotá’s 20 districts was not collected. In one day alone, per cent in 2013.14 2,700 tons of waste were not collected, forcing Peñalosa to announce a ‘state of sanitary and environmental However, in December 2013, the Inspector General emergency.’23 The mayor tried to break the strike by Alejandro Ordóñez Maldonado banned Petro from holding sending riot police. Several Aguas de Bogotá workers office for 15 years citing, as his reasons that the decision were injured when clashing with police.24 to bring the waste management in-house violated free

32 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE WASTE

CASE 27. EGYPT, CAIRO

Private company: Veolia, FCC and Urbaser, AMA Arab Environment Time as private: 2002/2003-2017 Drivers of remunicipalisation: poor service, bad charging and failure to recycle Process: Zabaleen union campaign and citizen mobilisation

Cairo’s community-led green waste management

In the 1940s, the Zabaleen, who are a Christian The Zabaleen community is estimated to be 70,000 community, migrated from Upper Egypt to the outskirts of and they are believed to sort 15,000 tons of waste daily, Cairo,25 and over time established a waste management which is approximately 2/3 of Cairo’s overall waste. The system that achieved an astonishingly high recycling Zabaleen make most of their income by selling the 26 rate of 85 per cent. By means of comparison, the recycled waste, but a monthly collection fee from the WASTE average recycling rate of municipal waste in the EU-27 households from which they collect their rubbish also and Norway in 2014 was 43 per cent, with Germany adds to their income.32 achieving the highest rate with 64 per cent.27 The Zabaleen also set up recycling systems in Alexandria, The term Zabaleen is rooted in the Egyptian Arabic word Egypt’s second largest city, and in Giza. However, until zebāla which means waste. The Zabaleen collect rubbish recently, the Zabaleen recycling system has never been through a door to door system in Cairo - a mega-city with officially recognised by the Egyptian government and 18 million inhabitants. The recyclers work collectively, even been marginalised by the authorities.33 and each person is allocated a specific part of the city. They then take the waste back to the Zabaleen’s local Privatisation area, which is located near the historical centre of Cairo. The area where the Zabaleen live is also often referred In the early 2000s, a series of contracts with multinational to as “Garbage City” or Zabaleen City. In Zabaleen City waste companies were signed for waste management in the waste is sorted and organised into 16 different types Cairo, Alexandria and Giza, which collectively were worth of waste every day.28 There are 750 small and medium- around $75 million annually. Other smaller municipalities sized enterprises (SMEs) related to waste management also privatised their solid waste management systems. in the city.29 Men usually recycle plastic and metal and The multinational companies were only required to women recycle food waste.30 Pigs are also an essential recycle 20 per cent of the waste, the rest of which component of their recycling and sorting system, as the would go into landfill. This stands in stark contrast to the food waste is fed to them. The pigs are eaten by the unrecognised work of the Zabaleen who were able to community but also provide an income, as pork can be recycle more than four times as much.34 sold to hotels and other tourist locations in Egypt.31

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 33 Table 1: Privatisation of waste management in Egypt, main municipal contracts

City Year of Value of contract Length of Company Remunicipalisation privatisation contract Alexandria 2000 $446 million35 15 years CGEA Onyx, In 2011 Veolia terminated a division the contract (four of Vivendi, years early). The which later public sector company became Veolia Nahdet Misr, which Environment is a subsidiary of the state owned enterprise Arab Contractors, is now in charge of waste management. Giza (Dokki, 2002 $7.6 million36 15 years FCC and Agouza, Urbaser and Imbaba districts) Cairo (eastern 2003 $25 million a year 15 years FCC and Contract terminated and western Urbaser in 2015 and was not zones) renewed Cairo (North) 2002 $11.5 million a year 15 years AMA Arab Contract terminated Environment in 2015 and was not Company renewed (AAEC)

Source: Van Niekerk, S. and Weghmann, V. (2019) Municipal Solid Waste Management Services in Africa and Arab Countries. Public Services International. The privatised waste management system was very different from the Zabaleen door to door collection complaints of irregular collection and inadequate street

WASTE system. The private companies did not collect the sweeping.42 waste from the narrow streets or tall buildings, instead they set up central collection points by putting large As the private companies charged the citizens for the bins in the streets, in which residents could deposit waste collection service through the electricity bills, their waste.37 Residents were charged for the waste many users feared that by not paying their bills for collection through their electricity bills.38 The contracts an inadequate service their electricity might be cut. awarded to the private companies gave them ownership Consequently, in 2003, hundreds of citizens in Cairo of the waste that they collect. Though most of the and Giza filed lawsuits against the government to get companies promised to give the Zabaleen communities the waste collection fees off of their electricity bills. The around 50 per cent of the waste in return for their help case was won by the consumers with the administrative in sorting, that was only a fraction of what the Zabaleen court ruling that city residents do not have to pay any had before.39 In other words, through the privatisation fees for garbage collection that are held in contracts the Zabaleen lost access to waste, and with it, their endorsed by the Greater Cairo Company for Electricity livelihood. Some Zabaleen saw as much as a 75 per cent Distribution (GCCED), the municipal sector responsible decrease in earnings as a result.40 for the distribution of electricity for Cairo and Giza. This ruling also led to the cancellation of the billing system in The privatisation was contested by the Zabaleen Alexandria.43 community and consumers. In Giza, hundreds of Zabaleen demonstrated in February 2003 against the Due to the failure of the privatised waste service, many influx of foreign companies.41 In Cairo, just six months residents went back to paying the Zabaleen for their after starting to operate, the companies Urbaser and services from December of 2004.44 FCC incurred municipal fines of $2 million due to citizen

34 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE The swine flu epidemic and the pigs Eventually, in 2017, the Egyptian government was forced to accept that their grand multinational experiment had In 2009, at the height of the swine flu epidemic, the failed miserably. When the 15 year-long contracts with Mubarak government had roughly 300,000 pigs the private companies came to an end, the government slaughtered against the World Heath Organization’s chose not to renew them. Instead they gradually (WHO) advice. The slaughtering of the pigs destroyed implemented a ‘new’ system based on Zabaleen a key element of the Zabaleen recycling system as it door to door collection. The streets of Cairo became was no longer possible to recycle organic waste. As much cleaner in the areas where the new system was a consequence, food lay rotting in the streets. The operational.48 warnings about swine flu were thus replaced with warnings about typhus.45 Moreover, as pork was The city government allocated $17 million for the new an important element of the Zabaleen diet, signs of waste collection system to purchase the necessary malnutrition reportedly appeared amongst Zabaleen equipment and to pay wages to the Zabaleen.49 Already children as pig meat had been a major source of protein before the contracts of the private companies expired, for them.46 the government agreed to give the Zabaleen uniforms and vehicles and, for the first time, granted them an Remunicipalisation official role in the city’s waste processing system. By 2015 the government, in cooperation with the Zabaleen’s Waste became an increasingly political issue in Egypt. trade union, registered 44 local disposal companies with In 2012, the President Mohamed Morsi made the failed a labour force of 1,000 families.50 municipal waste management an election issue and promised to clean up the streets in 100 days. But he failed.47

WASTE WASTE CASE 28. GERMANY, BERGKAMEN

Private company: Remondis - Time as private: until 2006 Drivers of remunicipalisation: cost-saving Process: local authority decision

In January 2006, Bergkamen, a city in West Germany with 50,000 inhabitants, created their own utility, Entsorgungsbetrieb Bergkamen’ (EBB), and remunicipalised their waste collection and street cleaning services. Previously, the waste collection service was operated by Remondis, one of the largest waste multinationals in Europe. The decision to remunicipalise was not driven by a dissatisfaction with Remondis’ service delivery, but by costs. A local authority working group calculated that in-house provision of waste collection would eventually reduce costs by 30 per cent. The reduction was indeed achieved in 2010, within four years of remunicipalisation, while the service quality remained the same. The price drop was achieved as the EBB runs on a non-profit basis.51

At EBB, wages were on average 18 per cent higher than in private waste management companies. Nonetheless, workers earned more at Remondis as they were working six days a week and paid more for overtime at the weekend. At EBB, workers were employed for 5 days a week.52

The working conditions under EBB improved. More attention was paid to education and health and safety training, as well as equipment of higher quality and better clothing. This had a positive impact on the employees’ wellbeing, and there was a reduction in time off for sickness. Employees report a positive working environment which is also reflected by much higher staff retention.53

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 35 WASTE

CASE 29. NORWAY, OSLO

Private company: Veireno, RenoNorden - Time as private: 1997 - 2017 Drivers of remunicipalisation: poor service, bad working conditions, company failure Process: local authority decision, union campaigns

In February 2017, Oslo remunicipalised its waste In the same year, another Norwegian waste company, collection services after 20 years of outsourcing. The RenoNorden, also went bankrupt. The company had decision to remunicipalise was caused by private failure. provided waste management services to nearly 140 In 2016, under the last provider, Veireno, thousands of municipalities, managed through 28 inter-municipal complaints were received about uncollected waste; 20 contracts. Most of these municipalities decided to per cent of service users voiced their concerns.54 In sign contracts with other private providers, however, addition, workers got a rough deal with the company: 13 municipalities decided to remunicipalise and four of the workload was extremely hard with some workers these decided to do so permanently. By law in Norway, working up to 70 hours a week, with shifts lasting from in the case of service failure, local authorities must sign 6am to 10pm.55 a new ad hoc contract directly with a new operator for 18 months without following normal procedures for In January 2017, Veireno filed for bankruptcy, despite tendering out. After this, the municipality can decide if it still paying out dividends and operating financially viable wants to tender out or remunicipalise.57 companies in other Northern European countries, such as Denmark and Sweden. Oslo was then forced to After the bankruptcy of RenoNorden, the trade union remunicipalise, as the workers would otherwise not have Fagforbundet put remunicipalisation on the agenda. been paid their salaries. After Oslo took over, working Fagforbundet lobbied politicians, engaged in a press conditions for the 170 employees improved, and workers campaign highlighting the private failure, put forward gained pension rights and higher wages.56 arguments for public ownership, and trained union activists on remunicipalisation.58 WASTE

CASE 30. SPAIN, LEÓN

Private company: Urbaser - Time as private: until 2013 Drivers of remunicipalisation: cost saving Process: local authority decision with union involvement

In 2013, León, Spain, remunicipalised its cleaning and waste collection services. The costs of the services decreased from 20 to 10 million euros annually. After a long negotiation with the unions UGT and CCCO, 224 workers received public employment contracts.59

36 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE Sheffield Incinerator after rebuilding after Incinerator Sheffield management. Veolia and under Commons CC Creative 2007 ©Talltim

WASTE

CASE 31. UK, SHEFFIELD

Private company: Veolia - Time as private: 2001 – present (with a threat to terminate early in 2017) Drivers of remunicipalisation: inadequate service, failure to meet recycling targets, work conditions WASTE Process: Local authority decision and union campaign. Failed to remunicipalise but renogiated contract.

In 2017 in Sheffield UK, the council voted for an early end of the city’s 35 year contract with Veolia, which was agreed in 2001 and is due to expire in 2036. The contract was no longer perceived to meet the city’s waste management needs, and the council wanted to remunicipalise the services.60

The GMB union alleged that Veolia had been diverting recyclable household waste to its incinerators. This increased pollution and prevented Sheffield from meeting its recycling targets, and also meant that workers missed out on the bonuses they would have received if recycling targets were met. Veolia employees had taken part in several strikes, sparked by pay disputes, complaints of “aggressive” tactics by management, and an excessive number of gross misconduct cases. However, due to very high compensation costs, the council ended up renegotiating the contract with Veolia on more favorable terms rather than full remunicipalisation.61

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 37 1. Plus Media Solutions (9 June 2017) Promoting the 13. Samson, M. and Parra, F. et al (10 March 2014) inclusion of labour and environmental clauses in Bogotá’s mayor trashed for remunicipalizing local and national public procurement policies and waste . Municipal Service Project. Available practices at: http://municipalservicesproject.org/blog/ 2. PSI (28 February 2017) Waste collection in Canada: bogotas-mayor-trashed-remunicipalizing-waste When private goes public – community wins. Public 14. Samson, M. (2016) Old trash, new ideas: public Services International (PSI). Available at: http:// waste management and informal reclaimers. In: www.world-psi.org/en/waste-collection-canada- McDonald, D. (ed.)Making Public in a Privatized when-private-goes-public-community-wins World. The Struggle for Essential Services. Zed 3. Ibid. Books. 4. CUPE (2016) Back In-house: Why Local 15. Samson, M. and Parra, F. et al (10 March 2014) Governments are Bringing Services Home. CUPE. Bogotá’s mayor trashed for remunicipalizing Available at: https://716.cupe.ca/files/2016/07/ waste. Municipal Service Project. Available Back-In-House.pdf at: http://municipalservicesproject.org/blog/ 5. Simon, R. ( 5 June 2017) How Bogotá’s reci- bogotas-mayor-trashed-remunicipalizing-waste cladores are picking a fight (for inclusion). 16. Gallini, S. (2016) The Zero Garbage Affair in Bogotá. Resource. In: “A Future without Waste? Zero Waste in Theory Available at: https://resource.co/article/how- and Practice,” Mauch, C. (ed). RCC Perspectives: bogot-s-recicladores-are-picking-fight-inclu- Transformations in Environment and Society. No. 3, sion-11893 pp. 69– 77. 6. Stern, R. (12 April 2016) Talking trash: Bogota’s 17. Samson, M. (2016) Old trash, new ideas: public recyclers fight for justice. Deutsche Welle. waste management and informal reclaimers. In: Available at: http://www.dw.com/en/talking- McDonald, D. (ed.) Making Public in a Privatized trash-bogot%C3%A1s-recyclers-fight-for-jus- World. The Struggle for Essential Services. Zed tice/a-19180145 Books. 7. Samson, M. (2016) Old trash, new ideas: public 18. Gallini, S. (2016) The Zero Garbage Affair in Bogotá. waste management and informal reclaimers. In: p. 75. In: “A Future without Waste? Zero Waste McDonald, D. (ed.)Making Public in a Privatized in Theory and Practice,” Mauch, C. (ed). RCC World. The Struggle for Essential Services. Zed Perspectives: Transformations in Environment and Books. Society. No. 3,pp. 69– 77. 8. Ibid. 19. Samson, M. (2016) Old trash, new ideas: public

WASTE 9. Ruiz-Restrepo, A. and Barnes, S. (2010) WIEGO waste management and informal reclaimers. In: Report on the policy environment of informal McDonald, D. (ed.) Making Public in a Privatized urban waste pickers and artisanal mine workers in World. The Struggle for Essential Services. Zed Colombia. WIEGO. Available at: http://www.wiego. Books. org/sites/wiego.org/files/publications/files/Ruiz- 20. Stern, R. (12 April 2016) Talking trash: Bogotá’s Restrepo_Policy_Environment_Informal_Workers. recyclers fight for justice. Deutsche Welle. pdf Available at: http://www.dw.com/en/talking- 10. Gallini, S. (2016) The Zero Garbage Affair in Bogotá. trash-bogot%C3%A1s-recyclers-fight-for-jus- In: “A Future without Waste? Zero Waste in Theory tice/a-19180145 and Practice,” Mauch, C. (ed). RCC Perspectives: 21. Business News Americas. (21 December 2017) Transformations in Environment and Society. No. 3, Five firms lead Bogotá cleaning services tender. pp. 69– 77. Business News Americas. Available at: https:// 11. Samson, M. and Parra, F. et al (10 March 2014) www.bnamericas.com/en/news/5-firms-lead-bogo- Bogotá’s mayor trashed for remunicipalizing waste. ta-cleaning-services-tender1 Municipal Service Project. Available at: http:// 22. Business News Amaricas (4 January 2018) municipalservicesproject.org/blog/bogotas-may- Bogotá awards US$1.6bn waste mgmt contracts. or-trashed-remunicipalizing-waste Business News Americas. Available at: http://www. 12. Gallini, S. (2016) The Zero Garbage Affair in Bogotá. bnamericas.com/en/news/bogota-awards-us- In: “A Future without Waste? Zero Waste in Theory 16bn-waste-mgmt-contracts1/?position=718063 and Practice,” Mauch, C. (ed). RCC Perspectives: 23. Noticias Financieras English (3 February 2018) Transformations in Environment and Society. No. 3, Garbage collection in Bogotá. Noticias Financiera. pp. 69– 77.

38 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE 24. Gill, S. (7 February 2018) Public service meltdown: 37. Wael Fahmi, W and Sutton, K (2010) Cairo’s Bogotá in despair over 3,000 metric tons of gar- Contested Garbage: Sustainable Solid Waste bage. Columbia Reports. Available at: https://co- Management and the Zabaleen’s Right to the City. lombiareports.com/public-service-meltdown-bo- Sustainability. Vol. 2, no. 6. Available at: http:// gota-despair-3000-metric-tons-garbage/ www.mdpi.com/2071-1050/2/6/1765/htm (last 25. Guénard, M. (19 November 2013) Cairo puts its accessed: 17/04/17). faith in ragpickers to manage the city’s waste 38. Kingsley, P. (27 March 2014) Waste not: problem. The Guardian. Available at: https:// Egypt’s refuse collectors regain role at heart www.theguardian.com/world/2013/nov/19/ of Cairo society. The Guardian. Available at: cairo-ragpickers-zabaleen-egypt-recycling https://www.theguardian.com/global-de- 26. Newsweek Middle East (24 May 2017) Cairo’s velopment/poverty-matters/2014/mar/27/ Treasures of Trash. Available at: http://news- waste-egypt-refuse-collectors-zabaleen-cairo weekme.com/cairos-treasures-trash/ 39. Leven, R. (2006 The Pharaoh’s Garbage: Growth 27. European Environment Agency (n.d.) Waste recy- and Change in Egypt’s Waste Management cling. Newsweek Middle East Available at: https:// System. NIMEP insights. Available at: http://tiglar- www.eea.europa.eu/data-and-maps/indicators/ chives.org.s3.amazonaws.com/sites/default/files/ waste-recycling-1/assessment resources/nimep/v2/INSIGHTS06_Leven.pdf 28. Egyptian Streets (27 July 2016) Cairo 40. Egyptian Streets (27 July 2016) Cairo Leads European Cities in Recycling. Leads European Cities in Recycling. Egyptian Streets. Available at: https:// Egyptian Streets. Available at: https:// egyptianstreets.com/2016/07/24/ egyptianstreets.com/2016/07/24/ cairo-leads-european-cities-in-recycling/ cairo-leads-european-cities-in-recycling/. 29. Newsweek Middle East (24 May 2017) Cairo’s 41. Leven, R. (2006 The Pharaoh’s Garbage: Growth Treasures of Trash. Newsweek Middle East. and Change in Egypt’s Waste Management Available at: http://newsweekme.com/ System. NIMEP insights. Available at: http://tiglar- cairos-treasures-trash/ chives.org.s3.amazonaws.com/sites/default/files/ 30. RT Documentary (15 May 2016) Zabbaleen: Trash resources/nimep/v2/INSIGHTS06_Leven.pdf. Town. A whole community in Egypt that lives on 42. Ibid. rubbish. RT Documentary. Available at: https://www. 43. Ibid. youtube.com/watch?v=D0s7WsoC528 44. Ibid. 31. Wael Fahmi, W and Sutton, K (2010) Cairo’s 45. Wael Fahmi, W and Sutton, K (2010) Cairo’s

Contested Garbage: Sustainable Solid Waste Contested Garbage: Sustainable Solid Waste WASTE Management and the Zabaleen’s Right to the City. Management and the Zabaleen’s Right to the City. Sustainability. Vol. 2, no. 6. Available at: http:// Sustainability. Vol. 2, no. 6. P. 1174. Available at: www.mdpi.com/2071-1050/2/6/1765/htm (last http://www.mdpi.com/2071-1050/2/6/1765/htm accessed: 17/04/17) 46. Wael Fahmi, W and Sutton, K (2010) Cairo’s 32. Ibid. Contested Garbage: Sustainable Solid Waste 33. Ibid. Management and the Zabaleen’s Right to the City. 34. Environmental Justice Atlas (n.d.) Multinational Sustainability. Vol. 2, no. 6. Available at: http:// takeover threatens the livelihood of the Zabbaleen, www.mdpi.com/2071-1050/2/6/1765/htm Egypt. Environmental Justice Atlas. Available at: 47. Guénard, M. (19 November 2013) Cairo puts its https://ejatlas.org/conflict/zabbaleen faith in ragpickers to manage the city’s waste 35. Leven, R. (2006 The Pharaoh’s Garbage: Growth problem. The Guardian. Available at: https:// and Change in Egypt’s Waste Management www.theguardian.com/world/2013/nov/19/ System. NIMEP insights. Available at: http://tiglar- cairo-ragpickers-zabaleen-egypt-recycling. chives.org.s3.amazonaws.com/sites/default/files/ 48. Egypt today (5 October 2017) Cabinet allocates resources/nimep/v2/INSIGHTS06_Leven.pdf LE 300 million for Cairo waste collection. Egypt 36. Leven, R. (2006 The Pharaoh’s Garbage: Growth today. Available at: https://www.egypttoday.com/ and Change in Egypt’s Waste Management Article/1/26112/Cabinet-allocates-LE-300-million- System. NIMEP insights. P. 60. Available at: http:// for-Cairo-waste-collection. tiglarchives.org.s3.amazonaws.com/sites/default/ 49. Ibid. files/resources/nimep/v2/INSIGHTS06_Leven.pdf

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 39 50. Global Risk Insights (12 June 2015) Cairo’s 56. Pettersen, B. and Monson, N. (2017) Norwegian ‘Zabaleen’ garbage collectors: Egypt’s diamond municipalities bringing social services. In: in the rough. Global Risk Insights. Available Kishimoto, S. and Petitjean, O. (eds) Reclaiming at: https://globalriskinsights.com/2015/06/ Public services. Transnational Institute (TNI). cairos-zabaleen-garbage-collectors-egypts-dia- Available at: https://www.tni.org/files/publica- mond-in-the-rough/ tion-downloads/reclaiming_public_services.pdf 51. Kramer, G. and Weingarten, J. et al. (2017) 57. Briefing paper from Fagforbundet for EPSU and PSI Branchen Analyse Abfallwirtschaft. Hans Böckler on the RenoNorden Bankrupcy Stiftung. No. 354, pp. 165-72. Available at: https:// 58. Ibid. www.boeckler.de/pdf/p_study_hbs_354.pdf 59. Petitjean, O. (25 November 2017) Can Cities 52. Ibid. and Citizens Reinvent Public Services? 53. Ibid. Green European Journal. Available at: 54. Esmerk Aftenposten (29 May 2017) Norway: Oslo https://www.greeneuropeanjournal.eu/ Municipality struggles with waste collection. can-cities-and-citizens-reinvent-public-services/ 55. Pettersen, B. and Monson, N. (2017) Norwegian 60. Holmes, E. (11 January 2017) Sheffield could scrap municipalities bringing social services. In: Veolia contract 19 Years Early. Resource. Available Kishimoto, S. and Petitjean, O. (eds) Reclaiming at: http://resource.co/article/sheffield-could- Public services. Transnational Institute (TNI). scrap-veolia-contract-19-years-early-11603 Available at: https://www.tni.org/files/publica- 61. Cole, R. (3 August 2017) Veolia Confident of tion-downloads/reclaiming_public_services.pdf Avoiding Sheffield Waste Contract Cancellation. Resource. Available at: http://resource.co/article/ veolia-confident-avoiding-sheffield-waste-contract-cancellation-12011 WASTE

40 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE WATER

CASE 32. ARGENTINA, BUENOS AIRES

Private company: Suez Time as private: 1993 - 2006 Drivers of remunicipalisation: failure to invest, prices rises Process: termination of contract

In May 1993, a Suez-led consortium started operating a 30-year water supply and sanitation concession in Buenos Aires, Argentina. According to a 2001 study,1 having been offered a 10 per cent shareholding in the private concessionaire Aguas

Argentinas, the main trade unions softened their resistance and turned into supporters of the privatisation - convinced WATER of its inevitability. From May 1993 to January 2002, average household bills increased by 88.2 per cent in nominal terms as opposed to a 7.3 per cent increase in the Consumer Price Index. Not only did water charges increase significantly above inflation, Aguas Argentinas also failed to deliver the originally agreed investment of US$746.39 million. When considering investment targets set by the 1997 renegotiation of the contract, Aguas Argentinas failed to realise 39 per cent of projected expansions in the water supply network and 59.7 per cent of projected investments in the expansion of the sewerage network.2

In March 2006, the Argentinian government revoked Aguas Argentinas’ concession on grounds of failure to provide the promised levels of investment and service quality, and renationalised water and sanitation services by appointing the public operator AySA.3

After the change from private to public ownership, AySA was 10 per cent owned by trade unions like Aguas Argentinas used to be. The trade unions were initially skeptical about the remunicipalisation, as the workers feared losing this benefit after the insourcing. However, the fact that the shareholding remained the same enabled them to proactively engage in the 2006 remunicipalisation process.

Also, like its private predecessor, AySA involved residents in expanding water access in low-income neighborhoods. However, the practice of financing investments in the extension of the service changed following remunicipalisation. In October 2006, a long term investment plan of $5.69 billion was approved to achieve full service coverage, 52 per cent of which was to be financed through tariffs and the remaining 48 per cent by the central and local governments.4

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 41 WATER

CASE 33. BOLIVIA, COCHABAMBA

Private company: Consortium led by Bechtel - Time as private: 1998 - 2000 Drivers of remunicipalisation: significant price rises Process: mass civil society campaign and international solidarity

In 1997, the World Bank declared the privatisation of water In response, Bechtel and its Spanish co-investor as conditional to further water aid. A year later, the IMF Abendoa filed a $50 million compensation claim in made the privatisation of Cochabamba’s water agency, the International Centre for Settlement of Investment SEMAPA, a condition for the approval of a $138 million Disputes (ICSID). The legal dispute lasted four years, lMF loan for Bolivia. As a result, in 1999, an international despite International protests and press campaigns consortium “Aguas del Tunari”, led by the US company demanding that the companies drop the claim. In Bechtel, was granted the concession to supply drinking January 2006, the companies gave in and settled the water and sewerage services to the city of Cochabamba. case for a token payment of 2 bolivianos (30US$ cents). The contract was made in secret and there was only one This was the first time global public pressure had forced bidder. Within weeks, Aquas de Tunari had raised water a large multinational corporation to drop a case before prices by over 50 per cent.5 the ICSID.6

The price hike led to a wave of protests by the However, whilst the water war was won, the struggle Coordinadora de Defensa del Agua y de la Vida (Coalition for accessible water continues. Over a decade and for the Defense of Water and Life), a broad alliance a half after the renationalisation, almost half of the of farmers, factory workers, rural and urban water Cochabamba population (45 per cent) still lack access committees, neighborhood organisations, students, and to the formal drinking water system.7 This is especially middle-class professionals against water privatisation. the case in the South of the region. Some of the people The movement, which became famous worldwide as the who lack access to water provided by SEMAPA have to Cochabamba Water War, was later joined by the militant buy water from water trucks. The water is often of poor federation of coca growers from the Chapare, led by then quality, much more expensive, and can be contaminated WATER labour leader Evo Morales. The government reacted by with bacteria.8 To get around this issue, there are also sending the police and the army to the demonstrations around 700 neighborhood community water systems and opening fire. Hundreds were wounded and one that are financed without state support by the people high school boy, Victor Hugo Daza, was killed. However, themselves, NGOs, and other donors.9 Despite being eventually the government capitulated. They abrogated publicly-owned, SEMAPA’s water management model the contract with Aquas del Tunari in the year 2000 and prioritises water for the use of mining and the industrial the water services returned to public control: SEMAPA agriculture sectors. While the constitution of Bolivia took over the water services again. acknowledges water as a human right, in reality it is treated as a commodity for extractive activities.10

42 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE WATER

CASE 34. CAMEROON, YAOUNDÉ

Private company: Camerounaise des Eaux (CDE) - Time as private: 2008 - 2018 Drivers of remunicipalisation: water shortages, failure to invest Process: did not renew contract WATER A new public asset-holding company Outsourcing operational management

Cameroon Water Utilities Corporation (Camwater) It was announced in 2007 that a consortium of the was created in 2005 to facilitate the establishment Office National de l’Eau Potable (ONEP), the national of a Public Private Partnership (PPP)11 and attract water supply company of Morocco, and the Moroccan investors into Cameroon’s water system.12 Camwater companies DELTA HOLDING-INGEMA, had won a was to manage the infrastructure, while the private 10-year lease contract with Camwater to manage partner would be responsible for service delivery.13 operations.16 Through this PPP, the consortium, named Camwater, which started operating on 31st March Camerounaise des Eaux (CDE), became responsible 2006, was put in charge of the managing, financing for managing water supply, while Camwater remained and construction of all the infrastructure for the in charge of running the infrastructure.17 The contract capture, production, transport and storage of water, as between CDE and Camwater was signed on 2nd May well as control over water quality. As such, Camwater 2008 and was to expire in May 2018. It was hailed by took over the activities of National Water Supply the World Bank as “the first example of a true South- Company of Cameroon (SNEC, Société Nationale South PPP in the (Western and Central African) region” des Eaux du Cameroun), apart from maintenance and and constituted one of the largest water PPPs in the operation activities, as well as its assets, liabilities and region by population served.18 employees.14 Through Camwater, the Cameroonian government intended to invest over two hundred billion CFA (€30.6 million) in the extension and rehabilitation of water supply networks in the country in the following ten years.15

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 43 Private failure take over CDE and from then onwards, it will be in charge of water supply.29 CDE employees are expected to be In April 2016, Cameroon’s President Paul Biya announced transferred to Camwater.30 that the 10-year contract would not be renewed.19 CDE had requested an extension of the contract for five The termination of CDE’s lease contract in Cameroon adds more years.20 While no official reason was given for the to previous failures of water privatisation in the region, decision,21 it was made in the context of acute drinking including the termination of PPPs in the Central African water shortages.22 For more than five years, both Republic and Guinea-Conakry in 2003, Cape Verde and consumers and the authorities had been criticising CDE Mali in 2005, and Ghana in 2011.31 The Ghana PPP was for poor services and overbilling.23 The water shortages a management contract with two public companies were in part due to a failure to build new infrastructure – Vitens of the Netherlands and Rand Water of South to match a rapidly growing urban population and expand Africa. Like Ghana, the Cameroon PPP demonstrates in rural areas.24 CDE had failed to invest enough, even that for-profit PPPs with public water companies can be when in receipt of subsidies.25 The PPP made limited just as problematic and prone to failure as contracts with progress in access expansion despite receiving a US$10 private water multinationals. million funded programme for 50,000 new connections. The programme was funded with a US$5 million grant Public ownership delivers better results from GPOBA, a multi-donor trust fund that aims to foster access to basic services for the poor, with co-financing It is safe to assume that the water services will improve from both Camwater and users.26 once back under public ownership. Greater progress in expanding access to drinking water in Cameroon was According to the newspaper Reperes, CDE responded achieved when the service was under public rather to the non-renewal of the contract with a demand for than private management. The UNICEF and World Health compensation for the ‘breakdown of the economic and Organization’s (WHO) Joint Monitoring Programme financial balance’ and financial losses due to unpaid for Water Supply and Sanitation (JMP) estimates that water bills. In total, CDE claimed 101 Billion CFA (US$19 access to drinking water in Cameroon rose from 50% million) in compensation.27 As demonstrated in some in 1990 to 74 per cent in 2008, prior to the privatisation of the other cases, private water operators often claim that year. Around 8 million people gained access to compensation when operations are remunicipalised or improved sources of drinking water over this period.32 33 renationalised - a sobering reminder that the best way to In the seven years after privatisation, between 2008 and avoid the social costs of water privatisation and conflicts 2015, access to improved drinking water rose only by 2 WATER with the private sector is not to privatise water in the per cent to 76 per cent.34 first place.28 On 1st May 2018, Camwater will officially

44 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE WATER

CASE 35. FRANCE, GRENOBLE

Private company: Suez - Time as private: 1989 - 2001 Drivers of remunicipalisation: corruption, high prices Process: political campaign

The city of Grenoble, which had good quality water After some years of political campaigning, it was resources and a satisfactory network, experienced an eventually terminated in 2001 when water supply was intense period of change from the mid-1980s. These remunicipalised under a new public operator.36 events were initiated by the technical need for a new wastewater treatment plant, personal political ambitions With the new municipal operator REG, investments and connections, and proposals from private companies. in maintenance and renewal increased threefold as The operation of both water supply and sewerage were compared to the previous private operator. At the same privatised under “gestion déléguée” and awarded to time, tariffs were kept at a lower and more stable level. Lyonnaise des Eaux (now Suez) subsidiary COGESE An advanced form of public participation in decision- (Compagnie de Gestion des Eaux du Sud-Est) in 1989. making was adopted by the new public enterprise, with The company won the tender through financial support a third of members of the Board of Directors being civil for political parties and a mayoral election campaign, society representatives, and the remaining two-thirds which was subsequently judged to be corrupt.35 city councillors.37

In 1996, the city renegotiated the contract. A PPP The decision on the legal status of the new municipal between the council and Suez was agreed. In May enterprise was influenced by the municipal government’s 1996, the city council decided to transform COGESE assessment of the implications on workers’ pay and into SEG (Société des Eaux de Grenoble). But SEG then conditions. They chose a form of municipal enterprise immediately sub-contracted water supply and sanitation called a régie à autonomie financière et personnalité to the Suez subsidiary SGEA (Société Grenobloise de morale (an entity from the municipality, fully owned l’Eau et de l’Assainissement) for the duration of 15 years. by the municipality and enjoying financial autonomy And while SEG was established as a mixed economy and distinct legal personality). This form facilitated WATER enterprise (“société mixte”), with 51 per cent owned by the transfer of the staff working for the former public- the municipality, SGEA was 100 per cent owned by Suez. private joint venture into the new public body while preserving the same treatment and pay conditions that After the privatisation, service users faced price rises. all staff enjoyed under the previous employer.38 Other In the meantime, the legal validity of the contract was organisational forms presented the risk that workers uncertain. The renegotiated contract was controversial, might lose their status or suffer a salary reduction. not only because of potential corruption, but also due to lack of transparency and excessive pricing.

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 45 WATER

CASE 36. FRANCE, PARIS

Private company: Veolia and Suez - Time as private: 19th century until 2010 Drivers of remunicipalisation: cost-saving, public accountability, worker representation, reduction of water poverty. Process: contract expiry, local authority decision

In Paris, France, the water supply was remunicipalised in In 2014, France’s Regional Court of Auditors published January 2010. The decision of the municipal government two reports - an assessment of Paris’s water policy and to remunicipalise was not only of a political nature, but an audit of the performance of remunicipalised public was seen as a way to put an end to the lack of financial water utility Eau de Paris – both of which turned out to transparency and accountability surrounding the private be generally very positive. In particular, the audit of Eau

WATER operations, which had been repeatedly criticised by de Paris stressed that remunicipalisation allowed for a public auditors.39 In the first year of operation, the new reduction in the price of water, while maintaining a high public municipal operator, Eau de Paris, made efficiency level of investment. The audit on policy commended savings of €35 million, which allowed for an 8 per cent the Paris administration for its implementation of a reduction in tariffs. This contrasted with a 260 per cent water policy that goes beyond the smaller water cycle tariff increase under private operation from 1985 to 2008. and takes into account issues of water conservation, Eau de Paris also increased its financial contributions to sustainability and democracy.41 In June 2017, on the poor households (of over €3 million per year), launched occasion of Public Services day, Eau de Paris was a water saving campaign resulting in social housing awarded the United Nations Public Service Award. This tenants saving an average of €50 per year, and refrained award, which aims at rewarding excellence in the public from cutting off water supply in squats. Transparency, sector, was given to Eau de Paris in recognition of its accountability and public participation in decision- “efforts to promote transparency, accountability and making were considerably strengthened. While eleven integrity in public service”. 42 members of the Board of Directors of Eau de Paris were city councillors, the other members were two workers’ representatives and five civil society representatives. In addition, two civic organisations sat as observers on the Board of Directors.40

46 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE

©VerDi website berliner- website ©VerDi wassertisch_14.5.2013_Alex

WATER

CASE 37. GERMANY, BERLIN

Private company: RWE and Veolia - Time as private: 1999 - 2013 Drivers of remunicipalisation: prices rises and lack of accountability Process: civil society mobilisation

Reunification costs were stretching Berlin’s budget in the The privatisation of Berlin’s water was supposed to be a 1990s. In line with the neoliberal consensus of the time, showcase for water privatisations, not only in Europe but privatisation was the quick and easy answer for both fi- also globally for Veolia.46 But the privatisation turned out nancial recovery and effective public services. Alongside to be highly controversial. The explosion of water prices its other public services, Berlin launched the process to after 2004, when water prices rose by 21 per cent from privatise its water services in the mid-1990s. The workers 2003 to 2006, led to public resistance, which eventually from Berlin’s waterworks, Berliner Wasser betriebe (BWB), – after persistent social mobilisation – led to the remunic- with the support of their trade union Ver.di, highly contest- ipalisation of Berlin’s water services in 2013. ed the water privatisation plans. But their voices were not WATER heard. Berlin part-privatised its water in 1999. However, The campaign the union resistance led to a strong collective agreement, which meant that pay and working conditions remained The rising water prices and the secret contracts with the the same after the part-privatisation and the employees private providers caused public anger, and the privati- had their employment guaranteed until 2014. In other sation of water became a topical issue in Berlin. In that words no involuntary redundancies could be made.43 context, the anti-privatisation movement Attac initiated a campaign for the remunicipalisation of water. In May RWE and Veolia get a 30-year secret contract 2006, the Berliner Wassertisch (Water Roundtable) was and hike prices launched, a grass roots campaign to take Berlin’s water back under public ownership. The contractors in Berlin’s privatisation of water services were RWE and Vivendi (now Veolia) who bought 49.9% of The first demand of the Wassertisch was to make the se- the BWB for €1.8 billion, each company receiving a share cret contracts transparent, to gain more clarity on how of 24.95 per cent.44 The contract period was 30 years. As the water tariffs were calculated and how much profits part of their contractual obligations, the private compa- the private companies, RWE and Veolia, were making nies had to guarantee that no prices would increase un- from the water services in Berlin. It mobilised a petition til 2003 and that they would invest €2.5 billion within 10 to this end (Volksbegehren). According to German law, years, so €250 million per year. However, the full details if a Volksbegehren has collected the signatures of 7 per of the arrangement were not known, as Berlin and the pri- cent of those eligible to vote within four months, the vate companies agreed to keep the contract, which was city is obliged to hold a referendum (Volksentscheid).46 called ‘consortium agreement’, confidential – not even The city of Berlin tried to prevent the Volksbegehren by parliament was able to view the full contract.45 arguing that the companies have a right to privacy and

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 47 commercial confidentiality. However, the Senate lost received in profits until the end of the contract in 2028, the court case and the Volksbegehren was successful – namely over €1.2 billion in total. within a few months 660,000 signatures were collected, which was much more than the 170,000 needed to hold Prices come down post-remunicipalisation a referendum. After the remunicipalisation, the competition regulator One strategy of the Wassertisch for the collection of sig- and Berlin reached a settlement that tackled the exces- natures was to recruit individual people to become “sig- sive water prices charged by Berlin’s water utility BWB nature collectors”, which helped immensely not only for between 2009 and 2011. As a result, BWB had to reduce collecting a great number of signatures swiftly, but also water prices by an average of 17 per cent throughout the for raising the public consciousness about the failure of period 2012-2018, as compared to 2011. The price reprivatised water. By making use of and delegating to ex- duction would correspond to savings of more than €440 isting local community networks, the Wassertisch also did million for Berlin water users in the same period, show- not need to collect so many signatures itself.48 ing the extent to which water prices had been inflated by the semi-privatised utility. In its investigation, the Federal The campaign wins its referendum in 2011 competition regulator compared water prices in Berlin with those in Hamburg, Munich and Cologne – where wa- In February 2011, the Wassertisch mobilised for the ref- ter is supplied by utilities operating under similar technical erendum, which opened the path for the remunicipalisa- conditions to those in Berlin – and found that there was tion of Berlin’s water: 98.2 per cent voted for the remu- no justification for the high prices in Berlin.50 As such, nicipalisation of water services. The turnout was 27. 5 per despite the remunicipalisation, Berlin had to pay signifi- cent, so above the 25 per cent needed to make the ref- cantly, not only during the years of part-privatisation but erendum valid. One day after the referendum, the secret also afterwards, to acquit itself for the failures of privatisa- contracts were made public and it became known what tion. The case of Berlin demonstrates, once again, that it many expected: the treatment was very favourable for the is better not to privatise in the first place. private sector and included a guaranteed return on equi- ty of 8 per cent.49 That meant that, for instance, in 2010 Better investment and workers’ agreement maintained alone, the water services made €270 million profit to be shared between the municipality and the private provid- After the remunicipalisation, the BWB invested more in ers. It was therefore no surprise that Berlin had the most Berlin’s waterworks. While the agreed investment of €2.5 expensive water in the whole of Germany. billion within 10 years was made during the privatisation, WATER this was significantly less than what was needed in Berlin. The private companies withdraw By the time of the remunicipalisation, Berlin’s water network suffered from a ‘severe underinvestment’. How se- As public concern for the rising water prices rose in Berlin, vere this underinvestment is, is still unclear, as the condi- the leftwing Senator Harald Wolf (Die Linke) called on the tion of the waterworks was not fully assessed before the competition regulator to investigate Berlin’s water prices. remunicipalisation. By the time of remunicipalisation, the Despite sitting on the board of managers that controlled BWB estimated that 23 per cent of the sewerage system the BWB, Harald Wolf did not find himself in the position to is in need of rehabilitation measures.51 Consequently, the invoke the decision to reduce the prices. In March 2011, BWB committed to double the investment needed for the the competition regulator suggested a price reduction rehabilitation measures to €94m annually in the period of 16 per cent. The BWB appealed against the decision. from 2013-2020. In 2012, before the remuniciplaisation, However, the prospect of tariff cuts enforced by the com- only €47m were spent on rehabilitation measures.52 petition regulator made Berlin’s water sector much less attractive for the private companies. The reduced profit- For the BWB’s workers, the strong collective agreement ability and the public pressure which damaged the com- they achieved through their struggle in the 1990s re- panies’ images led RWE to withdraw and sell its shares mained valid. But while no redundancies were made un- back to BWB. Veolia was far less keen to sell, and even der the privatisation, also no new workers were employed took RWE to court to prevent Berlin from acquiring RWE’s when people left. This led to a decrease of employment shares. However, Veolia lost the court case and conse- levels of nearly 35 per cent from 6,012 workers in 1999 to quently also agreed to sell its shares back to Berlin. But 4,475 in 2010 (in full-time equivalents).53 the water remunicipalisation did not come cheap. Berlin agreed to pay RWE and Veolia what they would have

48 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE

WATER

CASE 38. GERMANY, ROSTOCK

Private company: Eurowasser – a subsidiary of Remondis - Public company: Nordwasser Time as private: 25 years (1993-2018) Drivers of remunicipalisation: Expiry of contract, cost-benefit analysis Process: non-renewal

History of privatisation Rostock, the Rostocker Versorgungs und Verkehrs- Holding (RVV) developed concrete proposals for the In Rostock, in the beginning of the 1990s, the mantra remunicipalisation of water and stimulated the debate WATER of privatisation was everywhere. There seemed to be around remunicipalisation. The RVV proposed to provide no alternative but to privatise water. It was argued that water through a municipal company, and demonstrated privatisation would lead to stable prices and better through cost-benefit analyses that Rostock would investment. Negotiations with Suez were held, which benefit financially by doing so. Two years later, in 2014, saw Rostock as an entry point for the East German the local parliament decided to remunicipalise the water market. A counterproposal by the public utility, water services. A municipal company, Nordwasser, was Stadtwerke Rostock, was also considered, as some local subsequently created.55 politicians were opposed to the privatisation process. However, the public utility was only given four weeks to Role of trade unions come up with this counterproposal and, in the end, it was rejected. The local parliament decided by a small The main water trade union nationally, Öffentliche majority to privatise water services in Rostock, and Suez Dienste Transport und Verkehr (ÖTV) - which later won the contract for 25 years. The contract was kept became part of Ver.di - tried to prevent the privatisation secret. In 2011, Suez passed the contract to Eurowasser, of water by involving the media and by lobbying for the a subsidiary of Remondis.54 counterproposal of the public Stadtwerke Rostock. However, the trade union movement was divided. For Process of remunicipalisation historical reasons related to Germany’s reunification, two trade unions represent the water sector in Around 2012/2013, the idea of remunicipalisation gained Germany. While most water workers were part of the momentum, as the 2018 expiry date for the contracts ÖTV, local water workers in Rostock were organised in approached. In consultation with Ver.di union officials, the Industriegewerkschaft Bergbau, Chemie, Energie the umbrella organisation of all public enterprises in (IGBCE), which advocated privatisation. Later during

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 49 the remunicipalisation process, the IGBCE also opposed When Eurowasser realised that the remunicipalisation remunicipalisation, against the will of its members, as it of water was back on the agenda, it tried to increase only represents workers in the private sector. Hence, its existing offer to make the renewal of the contract remunicipalisation would cause a loss in membership. more lucrative for the city. When Rostock’s parliament nonetheless decided for the remunicipalisation of Disappointed with their union, IGBCE workers started water services, the German Federal Association of to organise themselves in the trade union Ver.di, which the Energy Industry initiated a complaint procedure at supports remunicipalisation, to negotiate their terms the European Commission on behalf of Eurowasser.56 and conditions after the remunicipalisation. During the Remondis sued the city, as the newly-established public process of remunicipalisation and after the move to Ver. company, Nordwasser, was given the contract without di, unionisation increased rapidly, by around 30 per cent. a European-wide open tender. The legal proceedings Now roughly half of the 320 workers are unionised. lasted for two years, but eventually Remondis withdrew Through Ver.di, the workers managed to secure a the lawsuit in the hope of brokering a secret deal to collective transition agreement which guaranteed deliver water services below the market price57 and that their pay and working conditions remained the prevent the remunicipalisation.58 However, this attempt same. They also received a bonus on the day of the was unsuccessful, as the offer was made when the remunicipalisation. procurement deadline had already passed.

Further negotiations between Nordwasser and Ver. When it became clear that the remunicipalisation could di are scheduled in order to integrate the workers into no longer be prevented, Eurowasser did everything in its the collective agreement for public utilities (Tarifvertrag power to obstruct a smooth transition from Eurowasser Versorgungsbetriebe TV-V) by 2020. This will leave the to Nordwasser. For example, it denied Nordwasser workers up to €300 better off per month. Furthermore, access to the information it needed for the takeover, it will give them a six-year-long protection against including the human resources data. It then spread fear dismissals and protection against outsourcing without among the employees that Nordwasser was not able the consultation and approval of the trade union. Ver.di to provide responsible HR management. Of course, also initiated the establishment of a workers, council at Nordwasser could not do so without having the HR Nordwasser, through which the workers are represented data. In response, Ver.di facilitated a smooth transition on Nordwasser’s board. by encouraging the workers to register with Nordwasser before the transfer. Private sector fightback WATER Remunicipalisation benefited workers and users alike. Eurowasser, which is a subsidiary of the German It was not only the workers who benefited from the multinational waste company Remondis, tried until remunicipalisation. The 36,000 users59 of Nordwasser shortly before the remunicipalisation to prevent the in Rostock and its surrounding areas also benefited, as transfer into public ownership. Rostock was of strategic water is now 24 per cent cheaper and wastewater 14.4 importance for the company’s marketing strategy, as it per cent cheaper.60 seemed to be a blueprint for the company to enter the water business.

50 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE WATER

In 2017, the Indonesian Supreme Court declared the contracts privatising Jakarta Water invalid on the basis of the human right to water, and directed the public utility to take control of water distribution.

CASE 39. INDONESIA, JAKARTA

Private company: Moya Indonesia (previously Thames Water, Suez) Time as private: 1997 – ongoing, due for renewal 2023 Drivers of remunicipalisation: working conditions, failure to invest, lack of transparency Process: trade union and civil society campaign has so far failed to achieve municipalisation WATER The false promises of privatisation Consultants were appointed to advise Jakarta’s water provider, PAM Jaya, in a process that paved the way for The population of Jakarta might have had high hopes private sector involvement. The plan was presented as when private companies Thames Water and Suez a solution to the failure of Jakarta’s pubic water delivery signed a PPP contract in 1997 to deliver the city’s and unequal access. water supply. Yet promises that 70 per cent of Jakarta’s population would have piped water by 2002 were never Following negotiations, in 1997, the supply of drinking materialised. Instead, today most of the city’s population water was handed to two private operators, with whom has no access to clean, piped water, and the public PAM Jaya signed PPP contracts to provide water to water utility PAM Jaya has suffered huge financial losses. both east and west Jakarta (hereafter Jakarta Water). Meanwhile, the private sector companies that took part They were leading multinationals: France’s ‘Suez’ and in the PPP in 1997 have reaped financial rewards. As of Britain’s ‘Thames Water’ , and the contracts became 2018, both original companies had sold either all or part effective from February 1998 for a 25-year period. of their stakes in the project – a project which has had To enter the market, both companies brokered deals far-reaching, negative consequences for the citizens with the political elite. Suez formed PT PAM Lyonnaise and government of Jakarta. Jaya (Palyja). Meanwhile, Thames Water62 created the company that would become Aetra Air Jakarta (Aetra). The history of water privatisation in Jakarta Both benefitted from favourable contracts that were not put out for public tender.63 In 1991, the World Bank kicked off its plan to improve water services in Indonesia’s capital, Jakarta, with a Despite an attempt to retake water back into the public $92 million loan for infrastructure improvements.61 sector, and a series of strikes, a new agreement was

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 51 signed in 2001. In 2006, Suez sold 49 per cent of its The partnerships lacked transparency and accountability. shares to Indonesian company PT Astratel Nusantara The contracts did not grant PAM Jaya access to the and Citigroup Financial Products Inc.64 In the same year, consortium’s financial records, undermining its ability to Thames Water sold all its shares to a Singapore-based oversee implementation of the PPPs.71 They were also company.65 In 2007, the PPPs received the backing hidden from public sight, until 2013 when the Jakarta of international financial institutions. The World Bank’s government considered terminating the contracts with Global Partnership on Output-Based Aid approved a US$ the private providers.72 5 million grant, to “(expand) access to water services to low income households”, and “(pilot) an innovative Broken promises: the financial cost approach to ‘illegal’ community service access”.66 The Asian Development Bank also approved a U$S 50 million The contracts were designed to be lucrative for the private sector loan to partially fund its capital expenditure private partners. Jakarta Water received a fee based programme for 2008-2012.67 on volume of water supplied and calculated on a rate of return of 22 per cent.73 This provided a guaranteed Ambitious targets through privatisation profit, and protected them against the uncertainties of raising water tariffs. The contract also included a According to the World Bank68 in 1996 PAM Jaya “management know-how” fee to the parent companies, recorded just 45 per cent tap water coverage, and 57 and a safeguard for the private partner against any risk per cent of non-revenue water (water lost to leaks or from foreign exchange or interest rate movements, as stolen). For this reason, the PPPs had two main goals: (a) they were compensated by the government.74 to expand service, with an emphasis on poorer residents and neighbourhoods; and (b) to improve the quality of Therefore, most economic benefits were to be reaped service in poor neighbourhoods and the overall quality by the companies, and risks borne by the government. of the water. The risks materialised during the Asian financial crisis,

WATER when PAM Jaya accumulated additional debt. Given that Ambitious targets were set: Jakarta Water committed to people were already facing rising costs, the government achieving universal coverage by 2023, and to supplying instructed PAM Jaya to hold tariffs steady for the first clean water by 2007. The contract required 732 billion three years of the contract.75 Meanwhile, inflation Indonesian Rupiah (US$318 million at the 1997 exchange spiralled to 120 per cent. PAM Jaya was squeezed on rate) over the first five years of the project, used to both sides—unable to increase tariffs, while having expand the existing pipeline; add 1.5 million users; to make grossly increased payments to the private increase the water supply; and reduce non-revenue operators, which meant taxpayers’ subsidised tariffs. water. With these additional users, over 70 per cent of Finally, PAM Jaya broke with government policy and Jakarta’s population would have access to piped water increased tariffs three times in under three years.76 From by 2002, and water losses were to be reduced to less 1998, water tariffs increased 10 times, amounting to a than 35 per cent by 2003.69 300 per cent increase.77

The PPP contracts established that the assets, The contracts resulted in significant losses for PAM Jaya, including network, treatment plants and equipment, paid for by taxpayers. In 2011, the financial loss of PAM were transferred to the private companies with the Jaya was IDR 154.3 billion (US$ 18 million), in addition agreement that they would be returned by 2023, at the to a significant decrease in the value of assets.78 The end of the concession. The two private companies took President of PAM Jaya is quoted as saying the PPP charge of the raw water supply, cleaning the raw water, contracts “would sink the public water utility into huge pipe network and user service. PAM JAYA remained financial losses (up to IDR 18.2 trillion [USD 2.4 billion]) responsible for setting the tariff applied to consumers. if the cooperation agreement continued as planned until For these services, it pays a ‘water charge’ to the two its expiry date in 2022.”79 companies while users pay ‘water tariffs’ to PAM Jaya.70

52 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE KMMSAJ (the People’s Coalition Against Jakarta Water Privatisation) filed the Citizen Lawsuit in 2013 accusing the privatisation project of being unlawful under the Indonesian constitution, which defines water as a human right. © Transnational Institute

The consequences for the people of Jakarta wells.85 This is serious, as it means Jakarta is sinking faster than any other big city on the planet.86 Forty per According to the Amrta Institute for Water Literacy, PAM cent of the city is already below sea level. In one decade, WATER Jaya says the service coverage ratio in 2013 was targeted North Jakarta, which hosts millions of residents, could at 66 per cent, but the private operators reached 59 per be under water.87 The excessive use of groundwater is cent. The leakage level is 44 per cent, while the Interior also a major public health issue, because it is dirty and Ministry’s regulation specifies that it should not be highly polluted due to the lack of an adequate sewerage higher than 20 per cent.80 And the poorest continue to system.88 miss out. Only 25 per cent of new connections between 1998 and 2004 were to low income households. In Also, the workers were affected. The privatisation of 2003, over 85 per cent of networked connections were water services in Jakarta created a two-tiered workforce. for middle income and rich households.81 Although Out of the 3,000 workers before the privatisation, 2,800 PAM Jaya implemented a subsidy to lower the monthly utility workers were transferred to the private companies, bill of poor families, this was still not always affordable. but their contractual situation remained unclear. After Residents often rely on groundwater from community the privatisation, new workers were recruited that were wedge wells, or buy water in jerry cans, which can cost given better pay and better working conditions than the as much as half a person’s daily income.82 old workers.89

People covered by the piped water network are not The future of Jakarta’s water – Is there an alternative free of challenges. Cuts are frequent and in 2013, to PPPs? nearly 40,000 complaints were registered about water deficiencies.83 Also, the water often smells, causes Trade unions and civil society groups have for decades skin irritations and is sometimes muddy.84 Consequently, demanded water management be returned to public hotels and wealthier residents have dug their own private ownership.90 The resistance gained momentum in 2011,

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 53 when the Coalition of Jakarta Residents Opposing 95 per cent in 2016 – twice as much as Jakarta Water94 Water Privatisation (KMMSAJ) was launched. KMMSAJ – and water is much cheaper. The Amrta Institute has organised rallies and public discussions, and also calculated that the average price of water in Jakarta is opened policy dialogues on water privatisation. triple that of Surabaya.95 Surabaya accumulated a net In November 2012, the coalition prepared a class profit of over US$ 14 million (IDP 280 billion) in 2017.96 action lawsuit to annul the 1997 contract with the two Lobina and Hall (2013) have also shown that public companies on the basis that the partnership had failed to operations enjoy an advantage over the private sector.97 serve the people in the city. After years of litigation, the Indonesian Supreme Court ordered termination of water Jakarta is a typical story of water privatisation. Water privatisation and restoration of public management to prices skyrocketed while around half of the population ensure the human right to water.91 However, it has not was left with no access to clean water, and those lucky issued a clear order to cancel the agreement. As such, enough to be covered by the piped water network had it is questionable whether a complete remunicipalisation to endure frequent water cuts for hours, and at times can be achieved before the contract expires in 2023.92 even for days. The contract with the private providers, the cooperation agreement, which guaranteed the Meanwhile, the private company Moya Indonesia, private providers a profit equivalent of 22 per cent of the which now owns Aetra, recently acquired two water Internal Rate of Return,98 was concealed from the public PPPs in the surrounding areas of Jakarta – Bekasi and for a decade and a half, and only disclosed when the Tangerang – for 25 years. Moya Indonesia aims to provincial government of Jakarta began to consider the renegotiate Aetra’s Jakarta contract into a Build, Operate termination of the contracts with the private providers.99 and Transfer contract, which presumably will also be of While the authoritarian Suharto regime (1966–1998) a long duration.93 offered fertile ground for corruption, with its lack of transparency, Jakarta is not an isolated case in the This is despite success stories showing public water global water business. Berlin, for example, had a similar supplies can work. Surabaya, the second largest city experience. in Indonesia, has a public water supply covering over WATER

54 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE WATER

CASE 40. ITALY, TURIN

Private company: Turin Metropolitan Water Company - Time as private: until 2017 Drivers of remunicipalisation: no need to pay dividends, more accountability Process: An inter-municipal enterprise changed from being a private to public legal entity.

In early October 2017, the city council of Turin (Italy) voted Reaffirming the results of the 2011 referendum was the main to change the legal status of its local water provider - the motivation for civic groups demanding to change SMAT’s “Turin Metropolitan Water Company (SMAT)” - from a legal status. Right-to-water activists also denounce that – publicly-owned joint stock company governed by private under private law - SMAT has behaved as a private water law to an inter-municipal enterprise governed by public law. company, even if it was publicly-owned. For instance, a SMAT subsidiary had won a water concession in the A shift from private to public law province of Palermo, which soon became problematic. As The decision is a major victory for the local chapter of the concession did not meet profitability targets, in 2010 the Italian right to water movement, because the change SMAT’s subsidiary sought compensation for damages from of its legal framework from private to public law has local authorities and demanded tariff increases before the important implications for SMAT’s corporate governance. concession was terminated. Activists also point out that For example, under public law, the new inter-municipal – while under private law - SMAT prioritised the payment enterprise will no longer be subject to an obligation to pay of dividends to its municipal shareholders over social and

dividends to its public shareholders (over 290 municipal environmental considerations, such as the reduction of WATER governments in the Turin metropolitan area) and will be user tariffs, investment in infrastructure and maintenance, subject to tighter public oversight. The main operational and fixing leaks. It was only in May 2014 that Turin city and strategic decisions concerning the utility will now be council agreed, as a partial concession to activists, to subject to the approval of the municipalities, and there will provide for 80 per cent of SMAT’s post-tax profits to be be scope for greater public participation. reinvested instead of being used to pay dividends.

SMAT’s workers will remain under private law and collective An opportunity for enhanced public scrutiny and agreements, ensuring that they can keep their jobs and democratic participation employment conditions under the new legal regime, and With this decision, Turin joins Paris and a growing list of will not have to be dismissed and then re-hired pending cities that have chosen to bring back their water and a public competition, a requirement for permanent public sanitation utilities into full public ownership to ensure that sector employment in Italy. the provision of water services to local communities is under public control, is of high quality, guarantees cost- A victory for the Italian “right-to-water” movement efficiency and transparency, and has democratic oversight The Turin city council’s decision does justice to years through inclusive public participation mechanisms. In the of campaigning for the implementation of Italy’s 2011 case of Paris, remunicipalisation has allowed for progress referendum, when over 27.6 million Italian citizens said towards more affordable and accessible water, and the “no” to the privatisation and commercialisation of water appointment of workers and civil society representatives services. The Italian government has so far proved to the board of directors of the new public utility. It unwilling to enforce the people’s decision and this has led remains to be seen how this principle will be implemented to renewed social mobilisation at local and national level, in SMAT. in a struggle to make water as a common good a reality.

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 55 WATER

CASE 41. USA, NEW YORK

Private company: Veolia - Time as private: 2011 - 2016 Drivers of remunicipalisation: job losses, costs Process: contract expired and was not renewed after a union and civil society campaign

In 2011, New York commissioned the multinational Veolia to supervise its wastewater systems. Within five years, Veolia had been paid US$60 million to oversee New York’s Department for Environmental Protection (DEP).100 The contract was similar to the contract in Pittsburgh that would allow the company to keep half of all the money it saved the city. In June 2016, the city decided not to renew the contract with Veolia to manage its 14 wastewater plants.101 An extension of the contract was already pending, but trade unions and civil society groups successful mobilised against the renewal of the contract. The trade unions were angered as Veolia cut the sewage treatment workers by 20 per cent; 120 workers were made redundant. The disaster in Flint, Michigan, where Veolia was paid $50,000 in 2015 to test the water but failed to detect the lead contamination, fuelled the public outrage and consequently a coalition of civil society groups got organised and successfully prevented the renewal of the contract.102 WATER

56 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE WATER

CASE 42. TANZANIA, DAR ES SALAAM

Private company: City Water Services - consortium with Guaff and Biwater, Superdoll Time as private: 2003 - 2005 Drivers of remunicipalisation: service failure, failure to invest, corruption Process: termination of contract

In Dar es Salaam, water services were privatised in 2003 fixing the leaks, DAWASCO managed to bring the leaks rate as part of an IMF and World Bank condition for debt relief. down by 20 per cent by 2009, yet the leak rate, at 56.5 The World Bank spearheaded a US$164.6 million fund to per cent, was still very high. DAWASCO also managed to carry out the privatisation. City Water Services (CWS), increase the coverage by 12.7 per cent between 2006 a consortium of the German company Gauff, the British and 2009. Improvements were also made in billing and Biwater and the Tanzanian company Superdoll won a 10- metering: in 2006, 45 per cent of the connected users year contract for delivering water and sewage services in were metered but by 2009 this had increased to 67 per Dar es Salaam. The contract was a lease through which cent.110 However, the situation for the employees did CWS had the responsibility for billing, tariff collection, not improve after the re-nationalisation. One third of the general management and routine maintenance, while employees were retrenched in 2007, and the remuneration assets remained in public ownership.103 The privatisation did not increase. Consequently, corruption continued to process was very secretive, with not even the Tanzanian be a major issue as most illegal connections appear to be parliament being able to see the contract.104 performed by DAWASCO employees and the retrenched ex-employees, who are thought to be earning money this Immediate problems way years later.111

As soon as CWS started to operate, the service problems As a consequence of the renationalisation of Tanzania’s arose. Within months of the start of the contract, CWS water service, Biwater and Gauff went to the World stopped its monthly fees to the Tanzanian government. Bank’s International Centre for Settlement of Investment Also, investment targets weren’t met, with CWS only Disputes (ICSID) and the United Nations Commission on

injecting half the US$8.5 million it agreed to invest. The International Trade Law (UNCITRAL) to seek compensation WATER company’s revenue dropped by a third between August of $20 million - $25 million from the Tanzanian government. 2003 and March 2005.105 Moreover, fewer people Although the government of Tanzania was found guilty were billed for their water than before the privatisation, of illegally terminating the contract, it was not ordered as the new billing software was introduced slowly.106 In to pay financial compensation. Instead UNCITRAL found addition, there was a high level of water leakage reported; that water and sewerage services had deteriorated under it was estimated that 76 per cent of the water leaving City Waters Services management and ruled £3 million in the treatment plans was lost due to leaks.107 According damages to DAWASCO, which were never paid because to a report by Tanzania Water Aid, the CWS employees, CWS had gone bankrupt.112 whom CWS took over from DAWASA, were badly paid, ill qualified, and not adequately supervised. This led to The nationalisation happened quickly and DAWASCO had widespread corruption, with employees generating their not long to prepare for this. Nonetheless, since 2005 income in other ways. CWS then proposed to reduce over DAWASCO has managed to extend coverage and improve 40 per cent of its employees (450 staff). But before this water service delivery in Dar es Salaam. In 2015/16, over could happen, the government terminated the contract half, to be precise over 55 per cent, of the population had with CWS due to its lack in performance.108 direct access to water services.113 This marked a 8.6% increase in comparison to 2011/12, when over 46 per cent Return to public operation of the population were covered by direct water services.114 This is a significant increase when considering that Dar es In 2005, a new public operator took over the water Salaam’s population is estimated to have grown by around service delivery, called Dar es Salaam Water and Sewerage 1 million during this time, from 4.3 million people in 2012 Corporation (DAWASCO). DAWASCO took over CWS’ entire to 5.4 million in 2016 (Based on 2012 Population and company structure including the employees.109 Prioritising Housing Census).115

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 57 WATER

CASE 43. TURKEY, ANTALYA

Private company: Suez - Time as private: 1996 - 2002 Drivers of remunicipalisation: pricing, company bankruptcy Process: local authority takeover

As part of an agreement with the World Bank, Antalya’s and Suez declared bankruptcy in February 2002. municipal water utility company, ASAT, privatised its water Despite withdrawing from the contract, Suez resorted and sewage in 1996. Suez, one of the leading global to international arbitration, claiming compensation of multinationals in the water sector, was contracted to US$30 million. ASAT’s legal response was to demand deliver the water services for the period of 1996-2007. counter compensation of US$40 million from Suez. In Within six years, water prices rose by 600 per cent, 2005, the court ruled that both sides would obtain lower investments in the infrastructure were not made and amounts of compensation than they had asked for but Suez only provided a minimum of free water for collective the exact details are unknown.117 facilities, such as fire protection. Moreover, around half of the utility company’s employees lost their jobs after Since 2002, the water and sewerage provision has Suez took over, and were consequently transferred to been back in the hands of the municipality. After the other municipal jobs.116 remunicipalisation, prices dropped significantly, but are still higher than before the privatisation.118 Conflict between ASAT and Suez escalated when Suez insisted that the municipality should double water prices and sewerage prices tenfold. The municipality refused, WATER

58 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE 1. Loftus AJ et al (2001) Of liquid dreams: a political Monetary Fund. Available at: https://www.imf.org/ ecology of water Privatization in Buenos Aires. external/pubs/ft/scr/2006/cr06260.pdf Environment and Urbanization. Vol. 13, no. 2, pp. 13. Water Supply and Sanitation in Cameroon. (no 179-199. Available at: http://journals.sagepub.com/ date) An AMCOW Country Status Overview. Water doi/pdf/10.1177/095624780101300215 Supply and Sanitation in Cameroon. Available at: 2. Lobina, E. (2005) Problems with Private Water https://www.wsp.org/sites/wsp.org/files/publica- Concessions: A Review of Experiences and tions/CSO-Cameroon.pdf Analysis of Dynamics. International Journal of 14. Services du Premier Ministre du Cameroun Décret Water Resources Development, Vol. 21, No. 1, pp. N° 2005/494 du 31 décembre 2005 portant créa- 55-87. tion de la Cameroon Water Utilities Corporation. 3. Lobina, E., Hall, D. (2007) Water Privatization Available at:http://www.spm.gov.cm/documenta- and restructuring in Latin America, 2007. Public tion/textes-legislatifs-et-reglementaires/article/ Services International Research Unit (PSIRU). decret-n-2005494-du-31-decembre-2005-portant- Available at: http://www.psiru.org/sites/default/ creation-de-la-cameroon-water-utilities-corpora- files/2007-09-W-Latam.doc tion.html 4. Azpiazu, D. and Castro, J. (2012) Aguas Públicas: 15. Africa News (23 March 2006) Cameroon; Gov’t to Buenos Aires in Muddled Waters. In: Pigeon M, et Make Potable Water More Accessible. Africa News. al. (eds) Remunicipalisation: Putting Water Back Available at: https://www.nexis.com/docview/ into Public Hands. Transnational Institute (TNI), getDocForCuiReq?lni=4JJ8-JSV0-TX2J-N1Y4&c- Available at: http://corporateeurope.org/sites/de- si=8399&oc=00240&perma=true fault/files/publications/remunicipalisation_web_fi- 16. Water Supply and Sanitation in Cameroon. An nal.pdf AMCOW Country Status Overview. Water Supply 5. The Democracy Centre (no date) Bechtel vs and Sanitation in Cameroon. Available at: https:// Bolivia: Details of the Case and the Campaign. The www.wsp.org/sites/wsp.org/files/publications/ Democracy Centre. Available at: https://democra- CSO-Cameroon.pdf cyctr.org/archive/the-water-revolt/bechtel-vs-bo- 17. Fonjong, L. and Fokum, V. (2017) Water Crisis and livia-details-of-the-case-and-the-campaign/ Options for Effective Water Provision in Urban 6. The Democracy Centre (no date) Bechtel vs and Peri-Urban Areas in Cameroon. Society and Bolivia: Details of the Case and the Campaign. The Natural Resources. Vol. 30, Iss. 4, P. 8. Available at: Democracy Centre. Available at: https://democra- https://www.researchgate.net/profile/Lotsmart_ cyctr.org/archive/the-water-revolt/bechtel-vs-bo- Fonjong/publication/313467496_Water_Crisis_ livia-details-of-the-case-and-the-campaign/ and_Options_for_Effective_Water_Provision_

7. Busnel, R. and Fletcher, S. (2017) After the Water in_Urban_and_Peri-Urban_Areas_in_Cameroon/ WATER War: Co-Managed Water Services in Cochabamba. links/59fb1f75458515d070605c5d/Water-Crisis- Participedia. Available at: https://participedia.net/ and-Options-for-Effective-Water-Provision-in- en/cases/after-water-war-co-managed-water-ser- Urban-and-Peri-Urban-Areas-in-Cameroon.pdf vices-cochabamba#_edn1 18. Fall, M. and Martin, P. (et al 2009) Reforming 8. Booth, A. (9 June 2016) The communities of Urban Water Utilities in Western and Central Africa: Cochabamba taking control of their own water Experiences with Public-Private Partnerships. supply. The Guardian. Available at: https://www. International Finance Corporation. Water Sector theguardian.com/global-development-profession- Board Discussion Paper Series. Vol. 13, pp. 6, als-network/2016/jun/09/communities-coch- 11-12. Available at: http://www.ifc.org/wps/wcm/ abamba-taking-control-water-supply-bolivia connect/31d1eb804ba99afa8df8ef1be6561834/ 9. Ibid. WaterPPPvol1.pdf?MOD=AJPERES 10. Lopez, A. (23 April 2015) Bolivia, 15 years on 19. Business in Cameroon Cameroon (17 April 2017) from the Water War. The Democracy Centre. Moroccan company ONEP could lose its contract Available at: https://democracyctr.org/article/ for the distribution of drinking water in 2017. bolivia-15-years-on-from-the-water-war/ Business in Cameroon Cameroon. Available at: 11. Africa News (13 April 2006) Cameroon; https://www.businessincameroon.com/public-man- Privatization: Irreversible. Africa News. Available agement/1704-6146-cameroon-moroccan-compa- at: https://www.nexis.com/docview/getDoc- ny-onep-could-lose-its-contract-for-the-distribu- ForCuiReq?lni=4JPR-XTN0-TX2J-N252&c- tion-of-drinking-water-in-2017 si=8399&oc=00240&perma=true 20. Le 360 (16 August 2016) Le contrat d’af- 12. IMF (2006) Cameroon: Poverty Reduction Strategy fermage de l’ONEE au Cameroun ne sera Paper Third Annual Progress Report. International pas renouvelé. Le 360. Available at: http://

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 59 afrique.le360.ma/maroc-autres-pays/econ- https://www.journalducameroun.com/en/diary/ omie/2016/08/16/4844-le-contrat-daffer- camwater-officially-takeover-cde/ mage-de-lonee-au-cameroun-ne-sera-pas-renou- 30. Le 360 (21 February 2018) Cameroun. Eau pota- vele-4844 ble: l’Etat tourne la page du consortium marocain. 21. Le 360 (10 June 2017) Cameroun. distri- Available at: http://m.le360.ma/afrique/maroc-au- bution d’eau: le Marocain ONEE sera rem- tres-pays/economie/2018/02/21/19172-camer- placé par Camwater. Le 360. Available at: oun-eau-potable-letat-tourne-la-page-du-consorti- http://m.le360.ma/afrique/autres-pays/ um-marocain-19172 economie/2017/06/10/12540-cameroun-dis- 31. Kishimoto, S. et al. (eds.) Our public water future: tribution-deau-le-marocain-onee-sera-rem- The global experience with remunicipalisation. place-par-camwater-12540 Transnational Institute (TNI) Available at: https:// 22. VOA news (24 February 2014 Cameroon Capital www.tni.org/files/download/ourpublicwaterfuture-1. Suffers Water Shortage. VOA news. Available at: pdf https://www.voanews.com/a/cameroon-capital-suf- 32. WHO/UNICEF (2010) Progress on Sanitation and fers-water-shortage/1858215.html Drinking-Water. UNICEF. Available at: https://www. 23. APA News (6 Juni 2017) Cameroun: la renationali- unicef.org/eapro/JMP-2010Final.pdf sation du secteur de l’eau potable confirmée. APA 33. Water Supply and Sanitation in Cameroon (no date) News. Available at: http://apanews.net/index.php/ An AMCOW Country Status Overview. Water Supply fr/news/cameroun-la-renationalisation-du-sec- and Sanitation in Cameroon. Available at: https:// teur-de-leau-potable-confirmee. www.wsp.org/sites/wsp.org/files/publications/ 24. VOA news (24 February 2014 Cameroon Capital CSO-Cameroon.pdf Suffers Water Shortage. VOA news. Available at: 34. WHO/UNICEF (2015) Progress on Sanitation and https://www.voanews.com/a/cameroon-capital-suf- Drinking Water – 2015 update and MDG assess- fers-water-shortage/1858215.html ment. UNICEF Available at: http://apps.who.int/ 25. Fall, M. and Martin, P. (et al 2009) Reforming iris/bitstream/10665/177752/1/9789241509145_ Urban Water Utilities in Western and Central Africa: eng.pdf?ua=1 Experiences with Public-Private Partnerships. 35. Lobina, E., Hall, D. (2007) Experience with private International Finance Corporation. Water Sector sector participation in Grenoble, France and les- Board Discussion Paper Series. Vol. 13, p. 38. sons on strengthening public water operations, in Available at: http://www.ifc.org/wps/wcm/con- Utilities Policy, 15, pp. 93-109. nect/31d1eb804ba99afa8df8ef1be6561834/ 36. Ibid. WaterPPPvol1.pdf?MOD=AJPERES 37. Ibid.

WATER 26. Fall, M. and Martin, P. (et al 2009) Reforming 38. Lobina, E. (2006) D21: WaterTime case study - Urban Water Utilities in Western and Central Africa: Grenoble, France, Deliverable D21, 10 March 2006. Experiences with Public-Private Partnerships. Research Project on “Decision making in water sys- International Finance Corporation. Water Sector tems in European cities” (WATERTIME), European Board Discussion Paper Series. Vol. 13, p. 29. Commission, 5th Framework Programme, 2002- Available at: http://www.ifc.org/wps/wcm/con- 2005. Contract No. EVK4-2002-0095 (http://www. nect/31d1eb804ba99afa8df8ef1be6561834/ watertime.net/docs/WP2/D21_Grenoble.doc). WaterPPPvol1.pdf?MOD=AJPERES 39. Pigeon M (2012) Une eau publique pour Paris: 27. Le 360 (09 November 2017) Cameroun. CDE: con- Symbolism and Success in the Heartland of Private ciliation pour le retrait du consortium marocain. Le Water. In: Pigeon M, McDonald DA, Hoedeman 360. Available at: http://m.le360.ma/afrique/ma- O, Kishimoto S (eds) Remunicipalisation: Putting roc-autres-pays/economie/2017/11/09/16374-cam- Water Back into Public Hands. Transnational eroun-cde-conciliation-pour-le-retrait-du-consorti- Institute (TNI). Available at : http://corpo- um-marocain-16374 rateeurope.org/sites/default/files/publications/ 28. Lobina, E. (2015) Introduction: Calling for progres- remunicipalisation%20web%20final.pdf). sive water policies. In: Kishimoto, S. et al. (eds.) 40. Lobina, E. (2014). Troubled Waters: Misleading Our public water future: The global experience with industry PR and the case for public water. remunicipalisation. Transnational Institute (TNI) Corporate Accountability International. Corporate Available at: https://www.tni.org/files/download/ Accountability International. Available at: https:// ourpublicwaterfuture-1.pdf www.corporateaccountability.org/wp-content/ 29. Journal du Cameroun (n.d.) CAMWATER to officially uploads/2014/11/CAI_TroubledWaters_Web-rev-2_ takeover CDE. Journal du Cameroun. Available at: FINAL.pdf

60 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE 41. Petitjean (2015). Taking stock of remunicipalisation Wasser-Deal: Der Lockruf der Millionen. in Paris. A conversation with Anne Le Strat. In: Ostsee Zeitung. Available at: http://www. Kishimoto, S. et al. (eds.) Our public water future: ostsee-zeitung.de/Mecklenburg/Rostock/ The global experience with remunicipalisation. Wasser-Deal-Der-Lockruf-der-Millionen Transnational Institute (TNI). Available at: https:// 55. Ibid. www.tni.org/files/download/ourpublicwaterfuture-1. 56. Ostsee Zeitung (19 May 2018) Bis zu 24 Prozent: pdf Wasser wird billiger. Ostsee Zeitung. Available 42. (26 June 2017) Eau de Paris receives the UN Public at: http://www.ostsee-zeitung.de/Mecklenburg/ Service Award. Aqua Publica. Available at: https:// Rostock/Bis-zu-24-Prozent-Wasser-wird-billiger www.aquapublica.eu/article/members-activities/ 57. NNN (19 November 2016) Eurawasser zieht eau-de-paris-receives-un-public-service-award. Millionen-Joker. NNN. Available at: https://www. 43. Interview with Ver.di on the 30.05.2018. nnn.de/lokales/rostock/eurawasser-zieht-mil- 44. Fraktion Bündnis 90/Die Grünen (2011) Berlin. Wie lionen-joker-id15301636.html weiter mit dem Wasser. P.12. 58. Ostsee Zeitung (09 November 2016) Wasser- 45. Bauby, P. et al. (2018) Water Service Streit: Remondis bietet Rostock Millionen. Remunicipalisation: Paris and Berlin. CIRIEC. Ostsee Zeitung. Available at: http://www. Available at: http://www.ciriec.uliege.be/wp-con- ostsee-zeitung.de/Mecklenburg/Rostock/ tent/uploads/2018/10/WP2018-07.pdf Wasser-Streit-Remondis-bietet-Rostock-Millionen 46. Interview with Allianz der öffentlichen 59. Nordwasser (March 2018) Pressemitteilung. Wasserwirtschaft e.V. 28.05.2018 Available at: https://www.nordwasser.de/fileadmin/ 47. Berlin (n.d.) Volksbegehren und Volksentscheid. Inhalte/Presse/NW_PI0318_Willkommen_final.pdf Berlin Municipality. Available at: https://www. 60. Ostsee Zeitung (19 May 2018) Bis zu 24 Prozent: berlin.de/sen/inneres/buerger-und-staat/wahl- Wasser wird billiger. Available at: http://www. en-und-abstimmungen/volksinitiative-volksbe- ostsee-zeitung.de/Mecklenburg/Rostock/ gehren-volksentscheid/volksbegehren-und-volk- Bis-zu-24-Prozent-Wasser-wird-billiger sentscheid/artikel.24015.php 61. The World Bank (1990) STAFF APPRAISAL 48. Interview with a representative of the Wassertisch REPORT. INDONESIA SECOND JABOTABEK URBAN in Berlin 28.05.2018 DEVELOPMENT PROJECT (JUDP II). The World 49. Händel, T. (2013). Against Commodification: Bank. Available at: http://documents.worldbank. Market logic is threatening the status of water as a org/curated/en/893051468044100943/pdf/mul- fundamental human right. The European. Available ti-page.pdf at: http://www.theeuropean-magazine.com/ 62. Harsano, A. (12 March 2012) Water and politics

thomas-haendel--2/6626-water-as-a-human-right in the fall of Suaharto. International Consortium WATER 50. Bundeskartellamt (2012) Bundeskartellamt of Investigative Journalists. Available at: https:// orders Berliner Wasserbetriebe to cut drink- www.icij.org/investigations/waterbarons/ ing water prices by a total of 254 million eu- water-and-politics-fall-suharto/ ros for the period 2012-2015, 5 June 2012. 63. Varagur, K. (19 October 2017) Massive Water Bundeskartellamt. Available at: http://www. Privatization Program to End in Jakarta After 18 bundeskartellamt.de/SharedDocs/Meldung/EN/ Years. VOA. Available at: https://www.voanews. Pressemitteilungen/2012/05_06_2012_Wasser- com/a/water-Privatization-to-end-in-jakar- Berlin.html?nn=3591568). ta/4077224.html 51. Jungen-Kalish, W. and Paust-Lassen, P. (2014) 64. Colbran, N. (2017) Piped Water in Jakarta: A Anforderungen an eine nachhaltige Sanierung des Political, Economic or Social Good? In: Langford, Wasser- und Abwassersystems in Berlin – Elemente M. et al. (eds) The Human Right to Water: Theory, zur Entwicklung eines Investitionsmonitorings. Practice and Prospects. Cambridge University Stiftung Baugewerbe. Available at: http:// Press. docplayer.org/7114215-Anforderungen-an-eine-na- 65. Global Water Intelligence (October 20006) Thames chhaltige-sanierung-des-wasser-und-abwas- continues Asian exit plan. Global Water Intelligence. sersystems-in-berlin-elemente-zur-entwick- Available at: https://www.globalwaterintel.com/ lung-eines-investitionsmonitorings.html global-water-intelligence-magazine/7/10/general/ 52. Ibid. thames-continues-asian-exit-plan 53. Taz (8 November 2010) Die Wasser-Privatisierung 66. World Bank (2006) GPOBA Commitment im Faktencheck. Tageszeitung. Paper: OBA for improved access to water ser- 54. Ostsee Zeitung (11 November 2016) vices in Jakarta. The World Bank. Available

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 61 at: http://documents.worldbank.org/curated/ 80. Ibid. en/661641468038719298/pdf/492900PAD0G- 81. Ibid. POB101OFFICIAL0USE0ONLY1.pdf 82. UNDP (November 2012) Jakarta, Indonesia. 67. ADB (September 2013). Extended Annual Review Case Study Water. Special Unit for South South Report Cooperation. Available at: https://www.esc-pau.fr/ 68. Loan. West Jakarta Water Supply Development ppp/documents/featured_projects/indonesia.pdf Project Indonesia. Asian Development Bank. 83. Zamzami, I. and Ardhianie, N. (2015) An end to the Available at: https://www.adb.org/sites/default/ struggle? Jakarta residents reclaim their water files/project-document/79157/41913-014-ino-xarr. system. In: Kishimoto, S. et al. (eds.) Our public pdf water future: The global experience with remunic- 69. The World Bank (1998) Implementation Report. ipalisation. Transnational Institute (TNI). Available Republic of Indonesia. Second Jabotabek Urban at: https://www.tni.org/files/download/ourpub- Development Project. The World Bank. Available licwaterfuture-1.pdf at: http://documents.worldbank.org/curated/ 84. Ibid. en/266251468039271153/pdf/multi-page.pdf 85. Interviews with various stakeholders in Jakarta 70. UNDP (November 2012) Jakarta, Indonesia. 5-12 July 2018, Interviewer: Vera Weghmann. Case Study Water. Special Unit for South South https://www.voanews.com/a/water-privatiza- Cooperation. Available at: https://www.esc-pau.fr/ tion-to-end-in-jakarta/4077224.html ppp/documents/featured_projects/indonesia.pdf 86. Kimmelmann, M. (21 December 2017) Jakarta Is 71. Amrta Instiute (March 2012) Dried Water Tap, Sinking So Fast, It Could End Up Underwater. The or Change. Amrta Instiute. Available at: http:// New York Times. Available at: https://www.nytimes. amrta-institute.org/attachments/article/150/ com/interactive/2017/12/21/world/asia/jakar- Jakarta%20Water%20Privatization%20Today.pdf ta-sinking-climate.html; 72. UNDP (November 2012) Jakarta, Indonesia. 87. Ibid. Case Study Water. Special Unit for South South 88. Zamzami, I. and Ardhianie, N. (2015) An end to the Cooperation. Available at: https://www.esc-pau.fr/ struggle? Jakarta residents reclaim their water ppp/documents/featured_projects/indonesia.pdf system. In: Kishimoto, S. et al. (eds.) Our public 73. PSI (January 2015) The Impact of Water water future: The global experience with remunic- Privatisation in Jakarta. Public Services ipalisation. Transnational Institute (TNI). Available International (PSI). Available at: http://www.world- at: https://www.tni.org/files/download/ourpub- psi.org/sites/default/files/documents/research/ licwaterfuture-1.pdf fact_sheets_2_the_impact_final.pdf 89. Ibid.

WATER 74. PSI (January 2015) The Unfair Cooperation 90. Ibid. Agreement on Water Privatisation. Public Services 91. TNI (17 October 2017) Indonesian Supreme Court International (PSI). Available at: http://www.world- Terminates Water Privatization. Transnational psi.org/sites/default/files/documents/research/ Institute. Available at: https://www.tni.org/en/ fact_sheets_3_the_unfair_final.pdf article/indonesian-supreme-court-terminates-wa- 75. Leong, C. (2015) The Devil Shift in Water ter-privatization Privatization in Jakarta. Review of Policy Research. 92. Marwa, M. and Herdiawan Tobing, D. (8 February Vol. 32, iss. 5, pp. 600-621. Available at: https:// 2018) Jakarta’s plan to get more public pow- onlinelibrary.wiley.com/doi/full/10.1111/ropr.12138 er in water sector might not work well. The 76. Ibid. Conversation. Available at: https://theconversa- 77. Ibid. tion.com/jakartas-plan-to-get-more-public-power- 78. PSI (January 2015) The Impact of Water in-water-sector-might-not-work-well-89320 Privatisation in Jakarta. Public Services 93. Interview with a shareholder in Moya in Jakarta on International (PSI). Available at: http://www.world- the 27th of July 2018. psi.org/sites/default/files/documents/research/ 94. Pamungkas, A. et al (2017) A Conceptual fact_sheets_2_the_impact_final.pdf Model for Water Sensitive City in Surabaya. IOP 79. Zamzami, I. and Ardhianie, N. (2015) An end to the Conference Series: Earth and Environmental struggle? Jakarta residents reclaim their water Science. Available at: http://iopscience.iop.org/ system. In: Kishimoto, S. et al. (eds.) Our public article/10.1088/1755-1315/79/1/012037/pdf water future: The global experience with remunic- 95. PSI (January 2015) The Reliable Performance ipalisation. Transnational Institute (TNI). Available of Public Water Services. Public Services at: https://www.tni.org/files/download/ourpub- International (PSI). Available at: http://www.world licwaterfuture-1.pdf psi.org/sites/default/files/documents/research/

62 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE fact_sheets_4_reliable_final.pdf Remunicipalising Water Systems in Dar es 96. Perdana, D. (14 December 2017) Profit PDAM Salaam, Tanzania. In: Pigeon, M. and McDonald, Surya Sembada pada 2017 Mencapai Rp280 D. et al (ed.) Remunicipalisation: Putting Miliar. Kelankota. [Translated via google translate] Water back into Public Hands. Municipal Available at: http://kelanakota.suarasurabaya.net/ Service Project. Available at: http://www. news/2017/196950-Profit-PDAM-Surya-Sembada- municipalservicesproject.org/publication/ pada-2017-Mencapai-Rp280-Miliar remunicipalisation-putting-water-back-public-hands 97. Hall and Lobina (2013) Water Privatisation and 110. Ibid. Remunicipalisation: International Lessons for 111. Ibid. Jakarta. Public Services International Research 112. Seager, A. (11 January 2008) Tanzania wins £3m Unit (PSIRU). damages from Biwater subsidiary. The Guardian. 98. PSI (January 2015) The Unfair Cooperation Available at: https://www.theguardian.com/busi- Agreement on Water Privatisation. Public Services ness/2008/jan/11/worldbank.tanzania International (PSI). Available at: http://www.world- 113. EWURA (2016) WATER UTILITIES PERFORMANCE psi.org/sites/default/files/documents/research/ REVIEW REPORT FOR THE FY 2015/2016. Energy fact_sheets_3_the_unfair_final.pdf and Water Utilities Regulatory Authority (EWURA). 99. PSI (January 2015) The Impact of Water Available at: http://www.ewura.go.tz/wp-content/ Privatisation in Jakarta. Public Services uploads/2015/04/EWURA-REGIONAL-WATER- International (PSI). Available at: http://www.world- REPORT-2015-16.pdf psi.org/sites/default/files/documents/research/ 114. Ibid. fact_sheets_2_the_impact_final.pdf 115. Tanzania National Bureau of Statistics (2016) 100. DC 37 (18 March 2016) The union wants to send a Tanzania Total Population by District - Regions French multinational water management profiteer -2016-2017. Available at: https://nbs.go.tz/nbs/tak- back to Paris. DC 37. Available at: https://dc37blog. wimu/Abstracts/Statistical_Abstract_2016.pdf wordpress.com/2016/03/18/the-union-wants-to- 116. Water Remunicipalisation Tracker (2015) Antalya. send-a-french-multinational-water-management- Water Remunicipalisation Tracker. Available at: profiteer-back-to-paris/ http://www.remunicipalisation.org/#case_Antalya 101. Ibid. 117. Ibid. 102. Ibid. 118. Ibid. 103. Pigeon, M. (2012) From Fiasco to DAWASCO. Remunicipalising Water Systems in Dar es Salaam, Tanzania. In: Pigeon, M. and McDonald,

D. et al (ed.) Remunicipalisation: Putting WATER Water back into Public Hands. Municipal Service Project. Available at: http://www. municipalservicesproject.org/publication/ remunicipalisation-putting-water-back-public-hands 104. Ibid. 105. Ibid. 106. WaterAid Tanzania (2008) Why did City Water fail? The rise and fall of private sector participation in Dar es Salaam’s water supply. WaterAid. 107. Pigeon, M. (2012) From Fiasco to DAWASCO. Remunicipalising Water Systems in Dar es Salaam, Tanzania. In: Pigeon, M. and McDonald, D. et al (ed.) Remunicipalisation: Putting Water back into Public Hands. Municipal Service Project. Available at: http://www. municipalservicesproject.org/publication/ remunicipalisation-putting-water-back-public-hands 108. WaterAid Tanzania (2008) Why did City Water fail? The rise and fall of private sector participation in Dar es Salaam’s water supply. WaterAid. 109. Pigeon, M. (2012) From Fiasco to DAWASCO.

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 63 CATERING

CASE 44. UK, LEICESTER

Private company: Interserve - Time as private: 2013 - 2016 Drivers of remunicipalisation: job losses and conditions, poor, dangerous service Process: termination of contract

In 2013 in Leicester, several local NHS trusts partnered When Interserve took over the services it transferred the up and signed a 7-year-long contract with Interserve around 2,000 workers to zero-hours contracts.4 A zero- for facilities management services, such as cleaning, hours contract means that the employer is not obliged to catering and security. The contract covered 550 NHS provide any minimum working hours for the employee. As buildings and properties worth £300 million.1 In 2016, four such, one can be officially employed but still be without years before the end of the contract, the local NHS trust work, if the employer has not offered any hours. terminated the partnership and took the services back in-house due to major problems and poor standards. For When transferred back to the NHS, ex-Interserve workers example, Interserve combined the cleaning and catering earned half of what the NHS contracted staff were being roles, which meant that not only did over 100 workers paid.5 This was because the workers, who worked for lose their jobs, but also cleaning and catering services Interserve previously, were transferred on their existing deteriorated.2 In one hospital, patients received their contracts to the same conditions, while newly employed meals three hours late. The catering quality improved workers were given better conditions and paid a higher rapidly after the service was taken back under NHS wage, sometimes double the rate of what the new control.3 workers on NHS contracts were getting.6

CLEANING EDUCATION

CASE 45. UK, NOTTINGHAM CASE 46. INDIA, KERALA

Private company: Carillion Private company: various - Time as private: various Time as private: 2014 - 2017 Drivers of remunicipalisation: failing companies OTHER PUBLIC SERVICE SECTORS Drivers of remunicipalisation: Process: local authority decision after people’s poor standard of service movement for public education Process: termination of contract In May 2016, the State of Kerala in India remunicipalised In Nottingham, UK, Carillion had won a £200 million primary education. The decision made by a newly contract for estate and facility services with the elected coalition of left-wing parties came on the Nottingham University Hospital Trusts in 2014. After poor back of a people’s movement for public schooling. cleaning standards were reported, which meant that At the time, there were 1,000 private, but publicly nurses had to clean the hospital, the local NHS issued subsidised, schools that were facing closure due to a warning in 2016 and finally terminated the contract financial difficulties. The government remunicipalised in the beginning of 2017. Eight months after the NHS some of them and changed the Kerala Education rules brought the services back in-house, the hygiene ratings to ease the remunicipalisation of private schools which increased from the lowest rating to the highest.7 are running a deficit. Consequently, in August 2017, student numbers went up for the first time in a decade: 12,198 more students enrolled in year 1 and 16,710 more students joined years 2-9 compared to the previous year. Previously student numbers had been in decline.8

64 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE FUNERAL SERVICES

CASE 47. SPAIN, BARCELONA

Private company: various Time as private: various Drivers of remunicipalisation: affordability Process: creation of public funeral company

Barcelona is the city in Spain with the highest funeral costs. While the average national cost for a funeral is €3,600, in Barcelona the price is €6,500, almost twice as much. Two companies dominate the market. The Barcelona city council has therefore decided to create a public funeral company to guarantee affordable prices and to offer people a dignified end of life process.9 The company will start providing services in 2019 and cut prices by approximately 35 per cent.10

LIBRARY SERVICES

CASE 48. UK, CROYDON

Private company: Carillion - Time as private: 2012 - 2018 Drivers of remunicipalisation: company failure OTHER PUBLIC SERVICE SECTORS Process: local authority takeover

Croydon council has announced it will start running its libraries itself after years of unsatisfactory service. They Just one day after Carillion’s collapse, Croydon an- were formally run by Carillion (see Box 2), which went nounced it would take the borough’s 13 libraries back in- into compulsory liquidation on the 15th of January 2018. house rather than outsourcing them to another private The company was responsible for scores of government provider. Even before the Carillion liquidation, Croydon contracts, including the management of library services was looking for opportunities to get out of the contract in several London boroughs. as it was disatisfied with Carillion’s services. Problems included missing funds to pay for basic supplies such Like other local authorities around the UK, Croydon was as paper and photocopier engineers. Staff had to pay forced into outsourcing their library services in 2012 out of their own pockets for activities, such as craft to a company called John Laing Integrated Services materials for children. The staff will receive a pay rise as because of budget cuts. The contract was for eight the Croydon borough is a Living Wage employer.11 years and supposed to end in 2020. Just one year later, John Laing Integrated Services sold the contracts on to Carillion.

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 65 Box 2. Carillion: The collapse of a giant private contractor

he British multinational Carillion was founded £43m with the firm in 2016 and £10m in 2017, with a in 1999 following a de-merger from the total spend across the six years of £136m,21 Carillion construction and building material company expanded internationally too: It had contracts in Canada, T 22 Tarmac plc. Carillion took over the construction side the Middle East and the Caribbean. of the business, while the building material business remained with Tarmac. Carillion soon expanded beyond With so many contracts for essential services, Carillion construction into various other areas. One of its main seemed too big to fail. However, on 25th January 2018 areas became facility management. In the UK, Carillion the company went into liquidation and left behind a host managed several libraries, 900 schools,12 half of the UK’s of unfinished and ongoing public sector contracts. At the prisons13 and it was involved in at least 14 hospitals,14 time of the collapse, Carillion employed 19,500 people either as the main contractor or for the delivery of in the UK and a further 23,500 in other countries.23 specific services, such as cleaning or catering. Carillion The collapse of the company caused thousands of job also maintained the 50,000 homes for the Ministry of losses and further damage down the supply chain. For Defence15 and it was contracted to bring broadband to example, the company Vaughan Engineering was owed remote communities in Devon.16 £650,000 for works it had completed for Carillion and had a £1.1m contract for further works in the first three In short, Carillion was a key supplier to the government months of 2018. Vaughan Engineering is now preparing with 450 contracts in total.17 The contracts with the UK to file for administration and its 160 staff are expected to OTHER PUBLIC SERVICE SECTORS government made up 38 per cent of Carillion’s revenue lose their jobs.24 in 2016,18 which equates to £1.9bn.19 Both central government and local authorities relied on Carillion Carillion never officially revealed what exactly caused for the delivery of essential services. There were 38 its collapse. It is likely that it was the consequence of different ‘buyers’ from the government, with the Ministry numerous factors, not least corporate greed, which of Defence being the biggest customer of Carillion, made the company expand too widely, too quickly. followed by the Department of Transport and the The company relied on large contracts, some of which Department of Education.20 Between 2011 and 2018, all turned out to be far less lucrative than assumed, so it but one of England’s 27 county councils had a contract accumulated debts. To pay its lenders and suppliers, with Carillion. In London, 30 out of 32 borough councils Carillion relied on new contracts. had contracts with Carillion. During this six-year period, 149 local government bodies spent £1.3bn on services In 2017, CEO Richard Howson optimistically declared with Carillion. While the largest local government client that Carillion had made ‘an encouraging start to the year’ of Carillion was Oxfordshire county council, which spent with ‘increased revenue visibility’.25 Two months later,

66 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE he resigned after Carillion issued its first profit warning.26 generating £159m in net cash during the same period.33 Despite – or possibly because of -– the profit warning, In order to do that, Carrion accumulated more and more the UK government kept awarding Carillion with debt. Despite having financial difficulties, the executives contracts: Carillion was part of a consortium that won a were rewarded handsomely. On his resignation, Richard £1.4 billion contract for the High Speed 2 (HS2) rail link – Howson, the former CEO of Carillion, was still paid for the largest infrastructure project in Europe. And the day an extra year’s service. The remuneration committee of after that, the Defence Infrastructure Organisation gave Carillion was expected to pay him his annual salary of the company two contracts worth £158 million.27 The £660.000 per year plus other contractual benefits until contracts had in effect become a legal ‘Ponzi scheme’ October 2018.34 In 2016 he received £1.5m, including – a (fraudulent) investment operation, where returns on a £122,612 cash bonus and £231,000 in pension older investments are paid by new investors, which leads contributions. But he was not the only one in Carillion, to revenue growth but not profit.28 Two further profit who was paid handsomely. The former finance director, warnings followed in the same year.29 When Carillion Richard Adam, who retired at the end of 2016, also collapsed in January 2018, it had £2bn in liabilities but received more than a million – £1.06 million – in 2016.35 just £29m in its bank account.30 As if these remunerations weren’t high enough, Carillion even considered in 2016 increasing the maximum The financial difficulties of Carillion were noticed by bonus level to 150 per cent of pay, but as shareholders hedge funds as early as 2013, as Carillion’s 2012 financial expressed concern, it was forced to back down.36 OTHER PUBLIC SERVICE SECTORS statement revealed that it took Carillion a long time to pay The rest of the non-executive board members shared its subcontractors. They started short-selling Carillion’s another £450,000 between them in 2016.37 shares to profit from future failures.31 In 2014, when Carillion failed to take over Balfour Beatty, bets against Since Carillion’s collapse, a civil servant, David Chapman, Carillion increased. Carillion became the most shorted working for Insolvency Services, has been appointed company on the London stock exchange. Investors are as a liquidator. He is advised by the accounting firm, believed to have made around £200 million by betting PricewaterhouseCoopers (PwC).38 The advice services on Carillion.32 of the accounting firm have not been cheap for the government. Just for the first eight weeks of its work, Carillion’s failure was also a story of personal greed, the accountant firm charged £20.5m, with the special and demonstrates what happens if private companies manager of PwC charging an hourly rate of £865.39 put dividends and executive bonuses before ensuring the company’s financial stability. Between 2012 and 2016, Carillion paid out dividends of £376m, while just

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 67 PARKING PRISONS

CASE 49. ARMENIA, YEREVAN CASE 50. NEW ZEALAND, MT EDEN

Private company: Parking City Service Private company: Serco Time as private: 2013 - 2016 Time as private: 2011 - 2015 Drivers of remunicipalisation: Drivers of remunicipalisation: Complaints, poor service, lost revenue poor treatment of staff and prisoners Process: Termination of contract Process: termination of contract

In 2013, the Armenian government contracted the private In 2011, the government of New Zealand handed over company Parking City Service (PCS) to introduce and the management of MT Eden prison in Auckland – enforce a new parking system through street cameras one of New Zealand’s largest prisons – to the British and electronic billing in its capital, Yerevan. However, outsourcing company Serco. In 2015, after serious due to numerous complaints about the frequency scandals regarding weekly organised fight clubs, drug of fines street users received, and the high revenue consumption, understaffing, and neglect of the guards, that benefited the private provider and not the city, the government renationalised the prison. Speaking out the government decided to re-nationalise the parking against the privatisation of prisons, the government’s system in 2016.40 spokesperson argued that private companies such as Serco have little incentive to support prisoners’ rehabilitation if they are profiting from large numbers of prisoners.41

After the government’s Department of Corrections took over the management of the prison, there was a 55 per cent drop in serious assaults between prisoners. Prisoners reported that they felt a lot safer after the renationalisation. The Department of Corrections employed 50 additional staff.42 While the government managed to terminate this contract, it is unable to terminate a contract with Serco in Auckland South, where the contract ends in 2040.43 OTHER PUBLIC SERVICE SECTORS

68 TAKING OUR PUBLIC SERVICES BACK IN-HOUSE 1. Interserve Press Office (3 January 2013) New 11. Sian, C. (17 January 2017) London librar- Contract brings quality and service improvements ies assess impact of Carillion collapse. for NHS patients in Leicester, Leicestershire The Guardian. Available at: https://www. and Rutland in 2013. Interserve. Available at: theguardian.com/books/2018/jan/17/ http://vawww.interserve.com/news-media/ london-libraries-assess-impact-of-carillion-collapse press-releases/press-release/2013/01/03/new- 12. BBC (15 January 2018) Where did it go wrong for contract-brings-quality-and-service-improve- Carillion. BBC. Available at: http://www.bbc.co.uk/ ments-for-nhs-patients-in-leicester-leicestershire- news/business-42666275 and-rutland-in-2013 13. Buchan, L. (15 January 2015) Government faces 2. NHS Support Federation (2017) Time to end the questions over Carillion contracts as crisis talks NHS experiment with the market. NHS Support go down to the wire. The Independent. Available Federation. Available at: http://www.nhsforsale. at: https://www.independent.co.uk/news/busi- info/uploads/images/contract%20report%20 ness/carillion-crisis-latest-administration-govern- dec%202017%2028_12_17%20.pdf ment-talks-construction-company-schools-pris- 3. Healthwatch Leicester (8 August 2017) Patients ons-a8158576.html review food at Leicester’s Hospitals saying: “It is 14. Mathews-Kings, A. (16 January 2018) Alarm in hos- better than I get at home!” Healthwatch Leicester. pitals as NHS triggers emergency plans in 14 trusts Available at: http://www.healthwatchleicester. after Carillion collapse. The Independent. Available co.uk/patients-review-food-at-leicesters-hospi- at: https://www.independent.co.uk/news/health/ tals-saying-it-is-better-than-i-get-at-home/ carillion-latest-nhs-contingency-plans-hospi- 4. GMB (10 February 2016) GMB welcome ear- tals-triggered-contracts-trusts-liquidation-govern- ly end of Interserve contract. GMB union. ment-a8161881.html Available at: http://www.gmb.org.uk/newsroom/ 15. Thomas, D. (15 January 2018) Where did it go early-end-of-interserve-contract wrong for Carillion. BBC. Available at: http://www. 5. NHS for Sale? (n.d.) Private Providers. NHS for bbc.co.uk/news/business-42666275 Sale? Available at: http://www.nhsforsale.info/pri- 16. Devon Live (15 January 2018) How the Carillion vate-providers/interserve.html collapse will affect Devon - including jobs, Exeter 6. Leicester Mercury (21 December 2016) Upset as Prison and broadband. Devon Live. Available hundreds paid half that of new workers. at: https://www.devonlive.com/news/business/ 7. Cooper, B. (15 December 2017) Hygiene standards how-carillion-collapse-affect-devon-1068465 at Nottingham’s hospitals increase from the lowest 17. Construction News (16 January 2018) Retendering to the highest rating. Nottingham Post. Available Carillion public contracts ‘could take months’. at: http://www.nottinghampost.com/news/notting- Construction News. Available at: https://www. ham-news/hygiene-standards-nottinghams-hospi- constructionnews.co.uk/companies/contractors/ tals-increase-929306 carillion/retendering-carillion-public-contracts-cou 8. Shaju, P. (14 August 2017) More students, tech in ld-take-months/10027089.article OTHER PUBLIC SERVICE SECTORS class: how Kerala govt turned its schools around. 18. Cabinet Office (15 January 2015) Government The Indian Express. Available at: http://indianex- protects essential public services as Carillion de- press.com/article/education/more-students-to- clares insolvency. [Press release]. UK Government. tech-in-class-how-kerala-govt-turned-its-schools- Available at: https://www.gov.uk/government/ around-4795390/ news/government-protects-essential-public-ser- 9. Ajuntament de Barcelona (n.d.) A new municipal vices-as-carillion-declares-insolvency funeral company to guarantee quality and prices. 19. WIRED (17 January 2018) Here’s the data that Ajuntament de Barcelona. Available at: http:// reveals the scale of Carillion’s big-money govern- ajuntament.barcelona.cat/treballieconomia/en/ ment deals. WIRED. Available at: http://www.wired. noticia/a-new-municipal-funeral-company-to-guar- co.uk/article/revealed-carillions-billion-pound-gov- antee-quality-and-prices ernment-clients 10. Ajuntament de Barcelona (n.d.) Public leadership 20. Ibid. for more competitive funeral services. Ajuntament 21. Ibid. de Barcelona. Available at: http://eldigital.barce- 22. Lethbride, J. (23 February 2018) Learning lona.cat/en/public-leadership-for-more-competi- the lessons of Carillion. Red Pepper. tive-funeral-services_491188.html Available at: https://www.redpepper.org.uk/ learning-the-lessons-of-carillion/

A REMUNICIPALISATION GUIDE FOR WORKERS AND TRADE UNIONS 69 23. BBC (4 March 2018) Carillion ‘aggressively man- s3-eu-west-1.amazonaws.com/wp-content/up- aged accounts’, report says. BBC. Available at: loads/2017/12/1046KS-section-430-2b-of-the- http://www.bbc.co.uk/news/business-43275605 companies-act-2006---richard-howson--original. 24. Financial Times (23 March 2018) Engineering pdf company becomes first casualty of 35. Carillion (2016) Making tomorrow a better place. Carillion collapse. The Financial Times. Annual Report and Accounts 2016. Carillion. Available at: https://www.ft.com/content/ Available at: http://www.annualreports.co.uk/ b279ada4-2e82-11e8-9b4b-bc4b9f08f381 HostedData/AnnualReports/PDF/LSE_CLLN_2016. 25. Financial Times (15 January 2018) Why pdf Carillion has gone into liquidation rath- 36. Partington, R. (26 March 2018) Carillion bosses er than administration. The Financial Times. displayed ‘greed on stilts’ MPs claim. The Guardian. Available at: https://www.ft.com/content/ Available at: https://www.theguardian.com/busi- a4dd80be-f9f1-11e7-a492-2c9be7f3120a ness/2018/mar/26/carillion-bosses-displayed- 26. Financial Times (10 July 2017) Carillion chief greed-on-stilts-mps-claim quits and shares tumble after profit warning. The 37. Carillion (2016) Making tomorrow a better place. Financial Times. Available at: https://www.ft.com/ Annual Report and Accounts 2016. Carillion. content/4ca80d5a-6537-11e7-8526-7b38dcaef614 Available at: http://www.annualreports.co.uk/ 27. Financial Times (17 July 2017) Crisis-hit Carillion HostedData/AnnualReports/PDF/LSE_CLLN_2016. secures role to help build HS2. The Financial pdf Times. Available at: https://www.ft.com/ 38. Kollewe, J. (15 January 2018) Carillion: what content/43057b2a-6ab9-11e7-bfeb-33fe0c5b7eaa went wrong and where does it go from here? 28. Financial Times (15 January 2018) Why The Guardian. Available at: https://www. Carillion has gone into liquidation rath- theguardian.com/business/2018/jan/15/ er than administration. The Financial Times. carillion-what-went-wrong-liquidation-staff Available at: https://www.ft.com/content/ 39. Partington, R. (21 March 2018) PwC charges more a4dd80be-f9f1-11e7-a492-2c9be7f3120a than £20m for first eight weeks of Carillion col- 29. Long-Bailey, R. (16 January 2018) Carillion issued 3 lapse. The Guardian. Available at: https://www.the- profit warnings. So why was it still getting gov- guardian.com/business/2018/mar/21/pwc-charg- ernment contracts?. New Statesman. Available es-20m-eight-weeks-carillion-collapse-final-bill at: https://www.newstatesman.com/politics/stag- 40. Movsisian, H. (2016) Yerevan To Nationalize gers/2018/01/carillion-issued-3-profit-warnings- Parking Management Firm. Available at: https:// so-why-was-it-still-getting-government www.azatutyun.am/a/28121424.html 30. Financial Times (23 March 2018). Engineering com- 41. Furley, T. (31 March 2017) It’s haere rā to Serco as pany becomes first casualty of Carillion collapse. Mt Eden Prison contract ends. RNZ. Available at: Financial Times. Available at: https://www.ft.com/ https://www.radionz.co.nz/news/national/327855/ content/b279ada4-2e82-11e8-9b4b-bc4b9f08f381 it’s-haere-ra-to-serco-as-mt-eden-prison-contract- OTHER PUBLIC SERVICE SECTORS 31. Financial Times (15 January 2018) Why Carillion has ends gone into liquidation rather than administration. 42. Ibid. Financial Times. Available at: https://www.ft.com/ 43. Cheng, D. (5 November 2017) Govt wants to axe content/a4dd80be-f9f1-11e7-a492-2c9be7f3120a new prison and lower prison muster. NZ Herald. 32. The Times (15 January 2015) Hedge funds made Available at: http://www.nzherald.co.nz/nz/news/ £200 million short-selling Carillion shares. The article.cfm?c_id=1&objectid=11940296 Times. Available at: https://www.thetimes.co.uk/ article/hedge-funds-made-200-million-short-selling-carillion-shares-sh5cgblv7 33. The Times (26 January 2018) Carillion ran up debts and sold assets to fill £217m dividend gap. Financial Times. Available at: https://www.ft.com/content/ f5bbf3a2-01e0-11e8-9650-9c0ad2d7c5b5 34. Carillion (n.d) Section 430 (2B) of the Companies Act 2006 – Richard Howson. Carillion. Available at: https://carillionplc-uploads-shared.

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