Chris Christie Quietly Signs Water Privatization Law To Benefit His Donors–Media Ignores It


Once again, water is making news. On February 5, 2015 New Jersey Governor and Koch-backed GOP 2016 Presidential hopeful, Chris Christie, signed the oh-so-misleadlingly titled “Water Infrastructure Protection Act” (also known as WIPA) into law. This should be shocking front page news, but the media doesn’t seem to be covering it at all. Odd, especially since privatization is something Christie has been pushing for, for years.

In 2010 Christie formed a task force to determine whether or not to privatize water in New Jersey. The task force consisted of five people, three of which included:

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  • Dick Zimmer, former Congressman, who sponsored numerous bills seeking privatization and worked at Gibson, Dunn and Crutcher which advised governments on privatization
  • Kathleen Davis, a former lobbyist and a Director at New Jersey American Water, the state’s largest private water company
  • John Galandak, the President of the Commerce and Industry Association of New Jersey whose board of directors include the President of United Water

Not surprisingly, NorthJersey.com reports that the passing of this bill benefits water companies that have ties to Chris Christie:

American Water and United Water sit on the board of directors at Choose New Jersey, a tax-exempt organization that was created by Christie’s office in 2010 to help sell New Jersey as a business-friendly state but lately has been helping pay the governor’s expenses for overseas trips.

The bill was introduced in the 4th quarter of 2014 and was expected to pass. Since then American Water Works stock price has increased considerably. In April 2014 It was about $45 per share. In February 2015, when the bill was signed it increased to about $58 per share. In January 2015, right before the bill was signed into law, they petitioned for a 9.9% rate increase. Since 1990 American Water has raised their rates in New Jersey almost 200%.

United Water is a Harrington Park, New Jersey-based a wholly owned subsidiary of Suez Environnement and is traded on two of NYSE Euronext’s European markets under the ticker SEV for Paris and SEVB for Brussels. Their stock value has increased significantly as well–up over 36% in the past six months.

Food and Water Watch reports, among other things, that in 1996 “a state report uncovered that Dover Township in southern New Jersey had significantly higher rates of certain types of childhood cancers. After a massive five-year study, state and federal investigators linked drinking water from a specific United Water Toms River well field to leukemia in girls.”

Five days before the study was released, United Water Toms River and two chemical companies agreed to make undisclosed multimillion-dollar payments to 69 families of children with cancer. Several months later, United Water and one of the chemical companies reached another monetary settlement with dozens of other families. In total, United Water paid $12 million, after insurance reimbursements, to settle the $800 million claims for wrongful death and injury. Throughout the process, the company admitted no wrongdoing, but the families accused it of serving contaminated drinking water that caused the children to develop cancer.

In addition to water companies being on the board of Choose New Jersey, there are many other companies that benefit from privatization including Wakerfern Food Company (which has their own line of “private label” bottled waters), PSEG (Public Service Electric and Gas), Atlantic City Electric, New Jersey Resources, Jersey Central Power and Light, and South Jersey Gas.

Interestingly, New Jersey is the only state that requires bottled water to have an unnecessary expiration date on the bottle.  Water doesn’t expire. But since bottlers and distributors don’t want to be bothered with the extra work and expense for selectively labeling products for New Jersey, all products are distributed with an expiration date. This encourages people to discard perfectly good drinking water. And buy more.

Among those that are against the privatization are those that protect the citizens and the environment, and who do not profit from it at all.

Stefanie Brand, Director of New Jersey’s Division of Rate Counsel, which protects ratepayers against utility companies, states:

Investor-owned utilities won’t buy a system unless they think they are going to make money from it…  This bill… has the potential to allow investor-owned utilities to run wild with bid prices in an effort to submit the highest bid. Meanwhile, rate payers will be required to pay for the full purchase price in rate, and will pay for these higher bids.

Jim Walsh, Director of New Jersey Food and Water Watch also weighed in on the law:

It would remove the rights of local communities to determine what’s best when it comes to clean, safe water, and it would allow multinational corporations to profit off increased water rates with virtually no recourse for New Jersey residents.

The Pacific Institute released a report entitled “The New Economy of Water” where they weigh the pros and cons of water privatization. They go into detail about:

  • Water Provision Is A Basic Responsibility Of Governments
  • Privatization May Bypass Under-Represented and Under-Served Communities
  • Privatization Can Worsen Economic Inequities and the Affordability of Water
  • Privatization May Fail to Protect Public Ownership of Water and Water Rights
  • Privatization Often Fails to Include Public Participation and Contract Monitoring
  • Privatization May Ignore Impacts on Ecosystems or Downstream Water Users
  • Privatization May Neglect the Potential for Water-Use Efficiency and Conservation
  • Privatization May Lessen Protection of Water Quality
  • Privatization Often Lacks Dispute Resolution Procedures
  • Privatization of Water Systems May Be Irreversible

Amongst all the information in the report was the most obvious, basic human need for water. Much like air, we cannot survive without it. And it is the Government’s responsibility to see that we have access to both:

Governments have a fundamental duty to see that basic services, such as water, sewerage, and energy, are provided to their people. The failure to satisfy such basic needs, or at least provide the means to do so, must be viewed as irresponsible. Efforts of international lending agencies and development organizations have, in the past, focused on helping governments to provide these services. More recently, these organizations have begun to shift their efforts, pushing privatization as a new solution. We have serious concerns about this transfer of responsibility and the loss of control it implies.

 

Karen Bakker, Director of the Program on Water Governance, spells it out a little differently:

If water is reconceptualized as a tradable rather than public good, it follows that consumers of water are categorized as customers rather than citizens, who have access to water through their purchase of water as a commodity, rather than the right to a water supply service. Water provision is a business rather than a public service..  water is a “public” rather than “tradable” good, whose provision is best undertaken as a service by the state rather than as a business by the private sector.

If water is privatized, its price and availability could be subject to market fluctuations. The drought in California, for example, might make water unaffordable for many people. CNN reported in 2014:

Over the past 10 years the S&P 500 Global Water index has outperformed the bellwether gold and energy indices. In fact, water outperformed the stock market in the same period.

S&P 500 Global Water Index

 

Chris Christie, who will likely be running for President in 2016 has once again proven that he is owned by corporations and puts profits over people.

 

Privatization is one of the single biggest threats to clean water and public health. Privatization often leads to higher rates for services and worsen water quality. Studies have shown that when public services are privatized, corporate profits replace meeting the needs of consumers and the environment.
–Jeff Tittel, Director, New Jersey Sierra Club

Featured Image from “Christie Gone Wild” blog.

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