Korean Workers Prevent Water Privatization by Vivendi
Posted on December 12 2003 |
Yong Chang Jang
Member of KFEM volunteers group “Water Love”
Korean Federation for Environmental Movement (KFEM)
pdnote@freechal.com / www.kfem.or.kr
Summary
In 2002, 100 laborers at the Chilsu water filtration plant (in the city of Masan, on the south coast of South Korea) nullified the government's plan to sell their plant to Vivendi.
Situation at the water filtration plant
The plant provides water to one million citizens. The Korean government's policy of providing cheap water has resulted in wasteful use of this precious natural resource. Most filtration plants lose money because the water is sold too cheaply, not because of management problems or because the technology needs upgrading. Politicians fear that an increase in water prices to realistic levels would cost them votes in election years.
But in 2001, the Chilsu filtration plant recorded a profit of 10 billion Korean won (US$ 8.5 million), with a cost of just 0.1US$ and price of 0.2US$ per one ton of water, simply because they kept the cost of water lower than other plants by using advanced technology and good management practices.
Vivendi Korea’s business
Vivendi (a French multinational) is not so much a water company as it is an effective business lobby which hunts for overseas companies that it can exploit profitably. Vivendi came to South Korea in the late 1990's, and has been extremely profitable because of its skillful information gathering and lobbying.
In 1998, as the IMF crisis was peaking, the South Korean government urged Hyundai Electronics to sell its water purification plant that provides water for semiconductors. Later, everyone except Vivendi regretted the deal.
Since then, Vivendi has entered the waste water treatment business in a newly built city (near Incheon), because they recognize that it is difficult to drive out an existing company, and it is much easier to establish dominance in a new territory.
Vivendi continues to search for profitable businesses, while hiding behind a new corporate identity. Because the name Vivendi is known to Koreans as a company that cannot be trusted, the company does business in South Korea as Veolia Water Korea.
In addition, Vivendi avoids the public eye by partnering with a Korean company.
Vivendi attempts to take over Masan's water filtration plant
Throughout South Korea, the average water leakage rate (amount of water leaked from the pipe compared to the amount of water coming from the plant) is now 50% because the water pipes are so old.
The South Korean government agreed to provide funds to Masan City to lower this leakage rate. The government planned to pay a private company to upgrade Masan City's water system.
Vivendi learned that the central government's budget would be used for this project, and launched a campaign to win the contract so that the profit would come to them, not to Masan City. Vivendi selected the Korea Water Resources Company (KOWACO) as its partner -- a typical Vivendi strategy to escape public scrutiny.
KOWACO is notorious in Korea for hundreds of environmentally destructive dam projects. But public opposition to dams is increasing, and KOWACO is seeking to change its business focus to water and sewer systems.
Vivendi saw that the government's plan to make water delivery more efficient (by decreasing water pipe leakage) could be a profitable business for Vivendi. But when Vivendi recognized that the Chilsu filtration plant had recorded an annual profit of US$8.5 billion in 2001, Vivendi decided to acquire this profitable business. So Vivendi urged the Masan municipal government to sell the Chilsu filtration plant, too.
Vivendi's plan would have caused 100 skilled workers to lose their jobs -- all are public servants in the city of Masan.-
The workers resist Vivendi
But when one of the laborers learned of Vivendi's plan, he spread the news to his co-workers. They had already established an association similar to a labor union -- the "Workplace Conference Association" -- because public servants are prohibited from forming labor unions under Korean labor law. This association was at the center of the movement against the water privatization project.
Below is an outline of their major activities:
1) To spread knowledge of Vivendi's plan
The laborers notified both citizens and the Masan municipal assembly of Vivendi's plan.
Citizens learned how other nations had suffered from water companies such as Vivendi. The laborers made use of the information in Maude Barlow’s book, "Blue Gold," which exposed the strategies and practices of such multinational companies.
Funny thing is that the public servant (in the Masan municipal government) who cooperated with Vivendi in developing the company's plan actually denied the existence of this plan when he was first asked. The terms of sale would have been secret until the sale was completed. But the municipal assembly prevented this public servant from hiding the plan, and it became public knowledge.
(2) Analyzing the economic propriety of the plan After the laborers obtained Vivendi's plan (with the help of the municipal government), they analyzed it and found that there were no sound business reasons to adopt this plan.
The laborers verified that the problem was simply leakage from old water pipes, and that changing the water pipes would solve the problem. This project could be accomplished by the laborers.
Finally, the laborers studied the Vivendi plan thoroughly, and found that it omitted expenses and exaggerated benefits.
Citizen response
The laborers' efforts to educate citizens were successful. Masan citizens learned that dependence on a foreign company is dangerous.
The municipal assembly scolded the Masan public servants who had worked with Vivendi for manipulating the data when they developed this plan.
Result
In October 2002, the Masan municipal government nullified the Vivendi plan, and requested that the South Korean government provide the funds for changing the old water pipes.
Afterwards
Vivendi is still hunting for game.
As of October 2003, Vivendi is seeking to buy the sewer system in Daegu (a large city in the southeast of South Korea). But Vivendi will face major difficulties because now South Koreans know the dirty name of Vivendi as well as the danger of depending on a private company to deliver an essential public service.
Lessons
The struggle of the laborers at the Chilsu filtration plant is a good example of victory over water privatization. Following are the factors and strategies that led to this victory:
1. The solidarity of the laborers
The laborers were able to organize the movement easily because they had organized themselves already. This is the result of the beautiful history of the labor movement in South Korea.
2. The help of the municipal assembly
The help of the municipal assembly was essential in gathering information on the plan.
3. Gathering information
They could block Vivendi and minimize the damage because they knew the plan before it was executed.
4. Spreading the word about the dirty name of Vivendi
By publicizing what Vivendi has done in other countries, the laborers could obtain citizen support.
5. Analyzing the plan
Most of the privatization plan is based upon manipulation of costs and benefits. The laborers could persuade the citizens by carefully analyzing the plan and providing this information.
Conclusion
Water is our right!!!! No one should make a profit from the sale of water.
http://www.camo.or.kr/water is the main homepage of the filtration plant labor union, which is written in Korean.
|
|
|
about us 
