Last year, following an oil spill at a Suez-subsidiary-run water plant, Osorno, Chile residents had their water supply cut off for ten days. The local regulator recently issued the subsidiary, Essal, the largest fine in the sector’s history (roughly equivalent to $2 million) — a pass at accountability that falls far short of the community’s demands to end the contract. Essal has already indicated it plans to appeal the fine.
After the crisis, Osorno residents voted overwhelmingly to de-privatize Osorno’s water and the local regulator, SISS, took steps to potentially end the problematic contract. But, despite the revolutionary vote, Suez attempted to intimidate the Chilean government into keeping the contract. The corporation, notoriously litigious, threatened arbitration at the World Bank, whose arbitration court ICSID overwhelmingly favors corporate interests. This would be an immensely costly process at a moment where governments are trying to resource COVID-19 relief.
Now, Suez is trying to sell-off the local subsidiary entirely by the end of September — attempting to shield itself and avoid accountability for a crisis that left thousands without water for ten days.
Today, over 100 organizations from Latin America, the U.S., Europe, Africa, the Middle East, and Asia delivered a letter to the regulatory agency and high-level Chilean elected officials, echoing the demands of Osorno residents that the contract termination process be completed expediently and transparently, regardless of Suez’s threats.
It’s an unnerving dynamic: A transnational corporation based in France interfering in another country’s governance to advance its own agenda — during a global pandemic — and trying to keep accountability at bay until it can sell off the company and evade responsibility. Chile currently has some of the highest water privatization rates in the world and Osorno is one of the first water de-privatization attempts that has progressed this far and with this much support.
To view the letter in its entirety, click the orange download button above.