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Vivendi Embarrassed at UN Summit on Sustainable Development

Aug. 29, 2002

Vivendi Embarrassed at UN Summit on Sustainable Development

Tough Questions about New Orleans Spoil Water Giant?s Pro-Privatization Hype

JOHANNESBURG, SOUTH AFRICA ? Peppered with questions by Public Citizen and other civil society groups about why the world?s water supply should be privatized even as New Orleans citizens are battling to stave off corporate control of their water system, Vivendi Environnement today abruptly ended a meeting promoting water privatization.

Vivendi Environnement, a subsidiary of the debt-choked Vivendi Universal, is one of a handful of corporations on the forefront of the push to privatize the world?s water supplies and systems. Privatization has come under heavy criticism during the World Summit on Sustainable Development (WSSD) from environmentalists and world leaders who believe water is a human right, not a commodity.

Vivendi gathered delegates and other WSSD attendees to a meeting Thursday to announce the creation of its new institute, billed as “a platform for thinking and interchange around the world.” But when pressed to defend the company?s track record, officials unveiling the institute balked.

“This so-called institute isn?t being set up to provide an independent assessment of sustainable development, as Vivendi would like people to believe,” said Wenonah Hauter, director of Public Citizen?s Critical Mass Energy and Environment Program. “It was clear from Vivendi?s presentation that this is just another spin machine to support the corporation?s mission to seize control of and profit from the world?s water resources.”

In New Orleans, Vivendi?s subsidiary, USFilter, has exposed residents to several problems while managing the city?s wastewater system, including one instance in which raw sewage was diverted into the Mississippi River. Now, USFilter wants to take over New Orleans? water system as well and has made lofty promises of huge savings if only the private company could control the public?s water.

“New Orleans officials have since realized that handing over the water system to USFilter will save little or no money,” Hauter said. “It?s no surprise that of the three bids to operate the combined water and wastewater system in New Orleans, the one from the current public employees would offer the most savings. Publicly operated water systems exist to provide a public service, not a bulging bottom line, bloated executive salaries and tasty shareholder dividends.”

At the meeting in Johannesburg, Hauter tried unsuccessfully to obtain answers from Vivendi executives about Vivendi?s plans for New Orleans. Rather than answer the questions, Pierre-Marc Johnson, a former premier of Quebec tapped by Vivendi to serve on its new institute, said he was unfamiliar with Vivendi?s operations, and in the face of continued questioning, the meeting was brought to a halt.

The Sewerage and Water Board of New Orleans is scheduled to decide Sept. 24 whether to accept one of three bids to operate a combined water and wastewater system, or reject all three. New Orleans citizens have become increasingly wary of handing over the public water system to a private corporation headquartered overseas and have successfully demanded that any private contract must be approved in a public referendum.

Although the public employees? bid is the most attractive of the three, that bid, like those submitted by USFilter and the Suez subsidiary, United Water, was submitted under a flawed process that fails to account for the total future responsibilities and expenses of operating the system safely and efficiently. Public Citizen urges the board to reject all the bids and instead allow employees to comprehensively re-engineer the system to address all future challenges, based on the fundamental mission of providing the people of New Orleans safe, reliable and affordable water and sewer service.

“Why should the people of New Orleans, or anywhere else for that matter, cede control of their water service to a private corporation that so obviously puts profits ahead of public health?” Hauter asked.

Vivendi was also grilled in today?s meeting about why another of the company?s subsidiaries was recently ousted from Puerto Rico after a history of neglecting and bungling operation of the water and wastewater system. In Puerto Rico, Vivendi had been criticized for failing to provide running water in many areas ? although the company didn?t fail to send customers a water bill. Puerto Rico awarded the water contract to one of Vivendi?s competitors earlier this year, effectively running the company off the island.

“In Puerto Rico, Vivendi really showed everyone that it exists not to get water flowing to people, but to get money flowing from people,” said Tony Clarke, director of the Polaris Institute. “Why should people in the rest of the world buy into Vivendi?s sales pitch when the company was wholly discredited and run out of Puerto Rico?” Clarke asked. “The parent corporation is reeling under billions of dollars of debt and scrambling to sell assets to stay afloat. Don?t Vivendi?s financial troubles make it even more likely that the company will cut corners and shortchange customers to profit from water?”