Having won the contract to privately operate water services, French multinational Vivendi performed so poorly that local residents started a campaign of civil disobedience, which eventually got the company’s contract revoked.TRANSLATIONS : italiano
In 1995 French company Vivendi won the contract to supply water and sewer services for the province of di Tucuman, a northern region of Argentina, using a subsidiary company called ’Aguas Del Aconquija’. Following this privatisation, household bills have risen by an average of 104 percent, while the quality of the water supplied has diminished. Residents in TucumÃ¡n started a civil disobedience campaign against ’Aguas Del Aconquija’ by refusing to pay their water bills. Vivendiâs contract was terminated and they appealed to the International Center for the Settlement of Investment Disputes (ICSID), which in August 2007 ordered Argentina to pay US$ 105 million compensation to the French multinational for damages based on loss of income.
In May 1995, Palito Ortega, then Governor of TucumÃ¡n province, signed the contract giving the French company’s subsidiary ’Aguas Del Aconquija’ control of the water supply. This was part of a privatisation process of public services that was taking place not just in Buenos Aires and Santa Fe, but in other areas of the world.
In short time water privatisation sees bills rising 104 percent on average.
While the water infrastructure does need improvement, the opposite happens and the quality of water supplied worsens.
For 20 day in a row, residents of TucumÃ¡n see muddy brown water pouring from their taps. This is due to high concentrations of manganese coming from a mining area and leaking into sewer pipes and the water supply.
’Aguas Del Aconquija’ has no investment plan to improve the water supply.
In 1993 Vivendi, formerly Compagnie GÃ©nÃ©rale des Eaux, won the contract to supply water and sewage services in the province of TucumÃ¡n.In May 1995 Palito Ortega, Governor of TucumÃ¡n, signed a 30 year contract giving ’Aguas Del Aconquija’, a subsidiary of French multinational Vivendi, control of water and sewage services.
January 1996: Deteriorating water services went hand in hand with price increases. For 20 days, residents in TucumÃ¡n found brown water coming out of their taps. Residents from the sugar cane producing area of TucumÃ¡n were the first to organise themselves into a consumer rights group called ADEUCOT, that united seven provincial cities. Protests began in poorer areas with strong experience of fighting for their rights. The steering committee decided that water bills should not be paid, asking for legal aid from the provincial authorities. By the end of 1996, the payment boycott left ’Aguas Del Aconquija’ with US$ 2.8 million a month in unpaid bills. They calculated that around 80 percent of bills had not been paid.
September 1997: Legal proceedings opened between the Province of TucumÃ¡n and the French company. Their contract to supply services was cancelled after TucumÃ¡n’s legal committee judges the original contract to be flawed. During contract renegotiations, Vivendi claimed that their original contract had been altered by the Provincial authorities and, threatened by the resident’s boycott, they would suspend all water and sewage services.
1998: The French give up their 30 year contract, while Vivendi complains about its loss of earnings to the International Center for the Settlement of Investment Disputes (ICSID), part of the World Bank, saying that the non-payment dispute is within the scope of the Bilateral Trade Agreement signed between Argentina and France.
1999: Consumers lost their legal rights when the new provincial governor, with the excuse of making amendments to the original document, withdrew the complaint upheld by the provincial tribunal and did not re-admit it. Residents in the sugar cane producing area stand to lose everything: their land, traditions, ways and means to survive.
November 2000: Initially ICSID ruled in favour of the province officials, saying that the matter fell under the jurisdiction of TucumÃ¡n’s legal tribunal. During this time Vivendi lobbied hard against Argentinaâs authorities.
2001: Two researchers from FLASCO, Azpiazu and Bonofiglio, publish a survey on water services in Argentina. According to their study over 20 million Argentineans are served by private water companies. The rest of the nation, some 56.6 percent, uses public services: from provincial companies (12.0%), to municipalities, co-operatives and city councils (31.3%). Instead, according to the survey, 86.6 percent of TucumÃ¡n’s residents have only one choice - private water services.
March 22, 2004: The Centre for Human Rights and the Environment (CEDHA) and the PROTEGER Foundation - Amigos de la Tierra organise Argentina’s first National Encounter seminar for those disadvantaged by mismanaged water services. The seminar took place in TucumÃ¡n the 2nd and 3rd of April 2004.
August 21, 2006: Complaints are made by farmers and residents of ConcepciÃ³n and TucumÃ¡n that the work of mining company Minera Alumbrera (part of Goldcorp) is contaminating the territories water. They complain that despite studies pointing to the accuracy of their claims, nothing has been done by the authorities.
2007: A study by IDB â The InterAmerican Development Bank - showed 14 cases of multinationals operating in Latin America (Argentina, Bolivia, Chile, Uruguay and Venezuela), six in Argentina alone and 2 in each other country. Among the six in Argentina are some of the biggest trans-national water companies: Suez and its subsidiaries, the Sociedad General de Aguas de Barcelona (AGBAR), French company Eaux (Vivendi, now Veolia), American Azurix, the English Anglian Water Plc, Spanish Dragados and, lastly, Saur International (French).
August 2007: ICSID made their final ruling, declaring that the province had violated not just Vivendiâs rights, but those of its subsidiary and investors. The Argentine government responded to ICSID’s ruling that Vivendi should be paid US$ 105 million by claiming a breach of contract and thereby voiding any agreement between them.
September 2007: An open letter is sent by over 160 organisations, protest groups and social networks around the world saying that they do not recognise the authority or neutrality of ICSID, and calling for ICSID’s general secretary to question its ruling. The letter underlines a lack of respect for the International Convention on Human Rights related to ICSID’s investigation. Signatories of the letter state their support for the International campaign to abolish ICSID.
December 19, 2007: The contract is formally cancelled by the Argentine Government.
May 22, 2008: The fourth arbitration tribunal on the dispute is formed. It is composed of President Ahmed Sadek EL-KOSHERI (Egypt), Andreas J. JACOVIDES (Cyprus) e Jan Hendrik DALHUISEN (Germany). The tribunal declares the contract null and void.
May 3, 2009: However, ICSID’s official site showing ’Aguas Del Aconquija S.A. - Vivendi against Argentina’ (ICID case ARB /97/3), and updated the 3rd May 2009, still lists the case as awaiting arbitration.
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