The National Association of Water Companies (NAWC) has launched a new campaign, truthfromthetap.com, to undermine advocates who want municipal water systems operated and owned by local, democratically elected councils—not by big companies accountable to shareholders.
But the truth is, the private water operators behind the site have a poor track record when it comes to serving communities. Company executives drive the management decisions, not locally accountable water boards, and they have a financial incentive to cut service, cut maintenance and cut the workforce. This often results in delayed repairs and slow responses to customer service requests. There is ample evidence that maintenance backlogs, wasted water, sewage spills and service problems often follow privatization. In fact, poor performance is the primary reason that communities demand their local governments reverse the decision to privatize and resume public operation of previously contracted services.
For many communities, frequent and massive rate increases are the most pronounced consequence of privatization. On average, private sector companies charge higher water and sewer rates than local government utilities. For example, a 2010 survey of the largest water utilities in the Great Lakes region found that privately owned systems charged more than twice as much as municipal systems. The researchers attributed this difference to private companies’ taxes, profits, higher overall service costs, and ratemaking practices.
You don’t have to look far to find examples of failed privatization efforts:
- Within a year of Veolia taking over the water system in Indianapolis, thousands of residents experienced billing problems and consumer complaints more than doubled. In 2005, because the company lacked proper safeguards, an error caused a boil-water alert for more than a million people, closing local businesses and canceling school for 40,000 students.
- The privatized system in Gladewater, Texas violated federal water quality standards 16 times, and residents described the water as “dark brown” and “foul.” The company failed to perform work required by its contract, and its water plant operators were lacking the necessary certification.
- In Gary, Indiana, after United Water downsized the workforce, residents experienced numerous service problems. In May 2008, a state inspection found that the district, under United Water’s management, violated discharge limits 84 times from 2005 to 2007.
- The New Jersey State Comptroller’s Office issued a scathing audit of United Water’s Camden, NJ It found that inadequate contract supervision and the company’s poor performance cost the city millions of dollars.
Read one of Food & Water Watch's latest reports on water privatization.
Lifting the veil on industry attacks of advocates
It’s no wonder that communities get wary when they hear their local water system may be considering some form of privatization. To combat this resistance, the water industry’s latest PR campaign asks, “Why are activists meddling with your water?” The strategy appears to be to confuse people by equating the relatively meager resources backing public interest groups to the massive resources of industry.
Financial support from our more than 70,000 members keeps us independent of corporate and government influence—enabling us to take uncompromising positions and win strategic fights that threaten industry interests.
The growing numbers of industry-backed attacks on Food & Water Watch actually underscore our effectiveness, and are a good example of why some donors do not want their names publicized. It is their right to remain anonymous, and we guard our members’ privacy in order to protect them from harassment. GuideStar, a top source of information about nonprofit transparency and best practices, recently gave us their GuideStar Exchange Seal, demonstrating Food & Water Watch’s commitment to transparency.
What’s not so transparent is how the water industry lobbies to secure their interests. Comprised of large U.S. water companies and the U.S. subsidiaries of multinational corporations like Suez, the NAWC has been a member of the controversial American Legislative Exchange Council (ALEC), alongside Koch Industries and ExxonMobil. ALEC works to ensure that state legislation is modeled to support its industry-friendly policy goals, including deregulation and privatization. One of its bolder resolutions has been one to dissolve the Environmental Protection Agency. ALEC has even backed restrictions on voting.
Some companies, such as Amazon, Coca-Cola and more recently, Google, have backed out of ALEC because of its reactionary agenda. But in 2012 NAWC publicly defended its membership in ALEC, and, as journalist Sarah Pavlus noted, it’s not the industry’s only dubious association: American Water’s Pennsylvania subsidiary and Aqua America have partnered with the oil and gas industry on a lobbying effort to expand fracking (water companies sell the industry water used in fracking operations, and also recognize that the treatment of wastewater from fracking is a lucrative business opportunity.)
Instead of promoting private involvement in municipal water systems in the form of public private partnerships, the federal government should adequately fund water infrastructure projects. It’s understandable that communities consider private investment to improve crumbling systems: much of our country’s water infrastructure is nearly a century old, and many community leaders look to lease their water systems out to address budgetary shortfalls.
However, instances of water privatization are still pretty rare in the U.S. As of 2012, only six percent of local governments contract their drinking or wastewater services to private, for-profit entities. Since 2000, major water companies have lost 169 contracts in the United States.
That’s because communities have learned the hard way that they can do better. Part of democracy is asking local and federal leaders to stand up for what’s right when it comes to the things we can’t live without. We cannot live without water.
The real truth from the tap
These brazen water industry attacks underscore that advocates and communities are being effective in their work every day to protect our essential resources. They also present an opportunity to talk about how big companies attempt to sway the debate around important issues like how our water should be managed.