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Environmental Pollution
Business Standards
Price Increases
Bribery
Disputes
Over Abstraction
Health and Safety
Suez-Lyonnaise-des-eaux was formed from the merger of Compagnie
de Suez and Lyonnaise des Eaux. In 2001, it changed its name to
Suez. It is the world's largest water company and one of the ten
largest companies in the world. Its shares are traded on the French
and U.S. stock exchanges (1).
Environmental Pollution
Suez's subsidiary London Waste Ltd. was listed by the Environment
Agency as the third worst polluter in the UK in 1998. Environment
Agency director of operations, Archie Robertson said, "The
companies included in our Hall of Shame have let down the public,
the environment and their own industry" (2).
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Business Standards
Since 1993 Suez-Lyonnaise has been the major partner in the privatized
utility supplying water to Buenos Aires' 10 million inhabitants,
one of the largest water concessions in the world. According to
the first independent study of the utility, prices were raised
by more than 20% after privatization. It reported that many poorer
families - if at all connected to the supply - could no longer
afford to pay their water bill. The sewerage system, which was
to be renewed according to the contract, does not function. Ninety-five
percent (95%) of the city's sewage is dumped into the Rio del
Plata River, causing environmental damage that must in turn be
paid for with public funds (3).
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Price Increases
In Manilla, water prices are set to rise by over 50% after months
of bitter dispute. In October 2001, Maynilad Water Services Inc.
(MWSI) (partially owned by Suez) was given permission to increase
rates by up to 64%, despite the privatization project missing
its key target of providing 24 hour water supply to all connections
(4).
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Bribery
1. Water supply and sanitation in the city of Grenoble was contracted
to COGESE, a subsidiary of Suez-Lyonnaise, in 1989. The sanitation
service in the region of greater Grenoble was contracted in 1985
to a joint venture owned equally by Suez-Lyonnaise and Vivendi-GdE.
In 1994 French magistrates found that the water service was privatized
in exchange for contributions by Lyonnaise des Eaux (now Suez-Lyonnaise)
to the electoral campaign of Alain Carignon, ex-Mayor of Grenoble,
and other gifts, totaling over FF19 m (£1.8m/$2.8m), and
prosecuted Carignon, and two executives of Suez-Lyonnaise.
In 1995 Jean-Jacques Prompsey, a Lyonnaise des Eaux executive
(who by 1995 was chief executive of SITA, Lyonnaise's waste management
division) was convicted of paying bribes and sent to prison for
four years. Alain Carignon, (who by 1995 was minister of communications
in the French central government) was convicted of accepting,
and sentenced to one year in prison. The courts also ruled that
consumers could claim compensation of a total of FF 300,000 (£28,400/$44,000).
COGESE used various methods including fictitious accounting to
inflate the price of water charged to consumers. It has been estimated
that the total cost to the citizens of Grenoble was in excess
of FF 1bn (nearly £95m/$148m). In 2000 Grenoble city council
terminated the private contracts and replaced them with a municipal
service.
2. Suez-Lyonnaise, through its subsidiary Dumez International,
has been accused of bribing a top official in the South African
Lesotho Highlands Water Project in order to gain project contracts.
In August 1999 after the Lesotho government accused Masupha Sole,
the former CEO of the project, of taking nearly $2 million in
bribes from ten companies and two consortia. Dumez International
was formally charged with bribery (5). The
companies deny the allegations (6).
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Disputes
In September 1998, Thames Water and Suez Lyonnaise subsidiaries
were involved in a dispute with Jakarta City Council who claimed
that the water agreements held by the companies were unfair for
two reasons. Firstly, unfair to consumers due to high price increases
for people who were already facing economic hardship. Secondly,
unfair to Indonesian workers as the companies discriminated against
local employees in their wage structures (7).
By April 1999, Jakarta workers were taking strike action demanding
equal pay for all water workers and an end to privatized water
concessions in the city (8).
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Over Abstraction
In 1998, Suez-Lyonnaise subsidiary Essex and Suffolk Water were
fined £14,000 for over-abstracting water over a period of
three years at five sites in Suffolk (9).
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Health and Safety
1. Suez subsidiary Lancashire Waste Services Ltd. was prosecuted
and fined £12,500 in January 1999, after an employee fell
from the top of a skip. There was no safe system for working on
skips in place (10).
2. Suez subsidiary SITA Wastecare Ltd. was prosecuted and fined
£15,000 after an employee died when hit by a large skip,
which fell off a lorry. Even after a number of previous incidents,
SITA had not carried out adequate risk assessments (11).
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Notes:
(1) Information taken from PSRIU Report "Suez"
2001
(2) http://www.edie.net/news/Archive/915.html
(3) Alex Loftus and David A McDonald, Municipal Services Project,
May 4th 2001 'Lessons from Argentina: The Buenos Aires Water Concession'
Kingston, Ontario.
(4) David Hall and Emanuele Lobina, Private to Public: International
lessons of water remunicipalisation in Grenoble, France, August
2001.
(5) Business Day, Water project bribery trial to start, 2 May
2000
(6) Chris Laing et al, The Record of twelve European Dam building
companies, February 2000
(7) Public Services International Research Unit, Suez Lyonnaise
and Thames Water sued for illegal water concessions in Jakarta,
September 1998
(8) Public Services International, Jakarta water workers strike
over pay and privatization, April 1999
(9) Water News, 14/08/1998
(10) HSE prosecutions database: http://www.hse-databases.co.uk/
(11) HSE prosecutions database: http://www.hse-databases.co.uk/
Written by Hannah Griffiths
(with additional research by Sally Dean)
Friends of Earth - England, Wales and Northern Ireland
26-28 Underwood Street, London. N1 7JQ
December 2001
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