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SAMWU Biwater campaign targets Dutch firm NUON

SAWU press statement
27 March 2000

Report by Anna Weekes (SAMWU Media Unit)
Published: 27/03/00

Dear Comrades

South African Municipal Workers Union: Reporting back from the World Water Forum in the Hague last week

As you are probably aware, this was a 130 governments-big business-World Bank sponsored conference where NGOs and Labour were sidelined. The event did not go off without protests though - from Spanish anarchists protesting building of dams and others.

Two SAMWU comrades attended - Lance Veotte (national water co-ordinator) and Xolile Nxu (first vice-president). They had some success in that they were able to get a platform to make a presentation on the public alternatives to privatisation. Apparently a major French transnational, Lyonnaise des Eaux walked out in disgust.

Another mission for SAMWU was to meet with NUON. This is a Dutch municipal water company - kind of a corporatised public entity but still completely in the hands of the public sector. A few weeks ago, SAMWU heard that NUON had invested US$ 130 million in Biwater. This is a 50% stake in the company!

You may remember that this was a hotly contested privatisation which eventually went ahead in October 1999 under protest from the unions. Already Biwater has contracted out meter reading to Mann & Mann, people’s water bills have gone up although they have never seen a meter reader in their community, and both companies refuse to comment to the press when asked about these problems.

There are also international problems everywhere Biwater is found, especially in the developing world. They are detailed in the draft letter below.

SAMWU was very angry that NUON, a public company, had invested in a privatisation like this. The union called on NUON to disinvest and set up public-public twinning between them and Nelspruit municipality - “twins on an equal basis – both in the public sector, according to the Dutch model, with neither making a profit out of the other.” (Terry Bell wrote about this in Inside Labour 17/3/00).

However, NUON dismissed all SAMWU’s concerns in the meeting last week saying that Biwater was a good company and that our allegations were only rumours. They acted more like private company execs. Staring blankly and smugly at SAMWU, they said that nothing would stop them from investing in Biwater.

This means that we are left with no choice but to flood NUON with e-mails and faxes from all over the world. SAMWU is also hoping that Dutch public sector union, Abvakabo (post@abvakabo.nl) will call on NUON to disinvest.

Please assist! Send an e-mail of protest to NUON and a copy to the press. If you are in Europe and you can fax, please do so. The details, including a draft letter (if you don’t feel like writing your own) are below. Please send SAMWU a copy. The union will really appreciate this gesture of solidarity. Please copy to the press in your country.

Any queries, contact the Media Unit at samwu@wn.apc.org

To NUON Executives
Frans Duynstee, Director: Human Resources frans.duynstee@nuon.com
Tob Swelheim, CEO Fax +31 35 543 44 99
Jos C. van Winkelen, Director of Water Division jos.van.winkelen@nuon.com

CC: Ismail S. Jinnah, Senior SABC Producer jinnahis@sabc.co.za

Dear Sirs,

It has been brought to my attention that you, as managers of a Dutch municipal water company, have made a very bad judgement in deciding to invest millions in a controversial South African privatisation deal concluded by British Biwater, in Nelspruit South Africa.

It is abundantly clear that you are not aware of Biwater's track record and the suffering they have caused to millions of people around the world. For example, in January 1999 Biwater was given a water supply contract for Bangalore, in the state of Karnataka, southern India. The contract was rushed through the day before the state elections! A member of the legislative assembly uncovered bribery in the tender process and called for the suspension of the contract. It was later discovered that Biwater did not have the money it had promised to invest when it won the tender and was looking for 75% of the money from local equity partners! The new government said on 19th Feb 2000 that it would also investigate allegations of bio-waste pollution by Biwater and possibly scrap the contracts.

In April 1999,12 months after winning the concession to provide water to Laguna Alta, Aguas de Panama - a subsidiary of Biwater - sought changes to the contract it signed, in potential violation of the national law on public procurement. Meanwhile, as of July 1999, no work had begun on the project despite the fact that, according to the contract, 70% of the project should have been completed by the end of 1999.

In Panama, Biwater subsidiary Aguas de Panama stands to earn $55 million guaranteed profit over the period of the 30 year concession. Despite opposition from the director of the state water company IDAAN (Institute of National Aquaducts and Sewer Systems), and from two consultants who contested Aguas De Panama’s figures, the contract was awarded.

In Britain, Biwater’s Bournemouth Water was ordered legally in January 1997 to construct a new disinfectant plant to prevent further breaches in water quality standards, and to protect the public drinking the water in the local area. They finally complied with this order only two years later.

These are but a few of the examples of Biwater bad practice around the world. For NUON to be investing public money in a company which specialises in contested and clearly risky privatisation ventures all over the developing world is nothing less than colonialism of the 21st century.

We demand that you disinvest immediately otherwise an international campaign will be taken up against NUON.

Yours sincerely,