Read statement in Spanish or French.
Released May 5, 2006

Open letter to all Suez shareholders, the Suez board of directors, and Suez CEO Gerard Mestrallet

 
We, the undersigned organizations from around the world, write this letter to demand that Suez immediately end the legal proceedings and withdraw all claims brought before the World Bank affiliated International Centre for the Settlement of Investment Disputes (ICSID). 

The legal claims of Suez have no ethical foundation and are merely designed to threaten governments and to protect the unjust and illegitimate earnings of the company and expand its profits.  Around the world Suez has placed profit over the human right to water by raising water rates, cutting off the water of people unable to pay, refusing to extend services to poor neighborhoods, violating water quality standards, and contaminating public waters.

All Suez cases pending before ICSID should be immediately terminated.  These include the following cases:

1.    Aguas Provinciales de Santa Fe S.A., Suez, Sociedad General de Aguas de Barcelona S.A. and Interagua Servicios Integrales de Agua S.A. v. Argentine Republic (Case No. ARB/03/17)

2.    Aguas Cordobesas S.A., Suez, and Sociedad General de Aguas de Barcelona S.A. v. Argentine Republic (Case No. ARB/03/18)

3.    Aguas Argentinas S.A. Suez, Sociedad General de Aguas de Barcelona S.A. and Vivendi Universal S.A. v. Argentine Republic (Case No.ARB/03/19)

TOTAL AMOUNT

Suez, a multinational corporation with total revenues in 2005 increasing 9% to EUR 41.5 billion, should not be using ICSID to demand payments of US$2.11 billion from a country like Argentina whose debt is already more than 75% of GDP.  Increasing Argentina’s debt with spurious legal claims like those Suez has filed with ICSID would only further deprive the country of needed social investments in basic services such as education, health care and clean water. 

We respectfully demand that Suez drop all ICSID legal claims and refrain from filing all such cases in the future.

Food & Water Watch, US
Grupo de Apoyo a los Movimientos Sociales (Bolivia)
Global Justice Ecology Project, Vermont, US
Prof Dennis Brutus, Jubilee South Africa
Asamblea Provincial por el Derechoa al Agua - Santa Fe - Argentina
Unión de Usuarios y Consumidores - Rosario – Argentina
Centro Humboldt, Nicaragua
Comision Popular por La Recuperacion del Agua, Cordoba, Argentina
Sindicato del Personal de Obras Sanitarias (Si.P.O.S), Argentina
Friends of the Earth Canada
Polaris Institute, Canada
Association France Amérique Latine
CADTM-Belgium
Secretario General FENTAP, Peru
CENSAT Agua Viva, Colombia
Amigos de la Tierra Colombia
Khana Wayra, La Paz, Bolivia
Observatorio Ciudadano de Servicios Publicos, Ecuador
Movimiento Mi Cometa, Guayaquil-Ecuador
Centro Cultural Social y del Medio Ambiente Ceibo, Chile
The Mexican Action Network on free Trade (RMALC: Red Mexicana de Accion frente al Libre Comercio)
Coalición de Organizaciones Mexicanas por el Derecho al Agua (COMDA)
FIAN, Mexico
Association Pour la Paix, La Justice, et le Development Messianique et Charismatique des Peuples
Nicaragua Center for Community Action. Berkeley, CA, US
SOBREVIVENCIA, Amigos de la Tierra Paraguay, ASUNCION-PARAGUAY
Amigos de la Tierra España - Miembro de Amigos de la Tierra Internacional
Corporate Europe Observatory (CEO), Amsterdam Netherlands
Haiti Survie, Haiti
Kentucky Interfaith Taskforce on Latin America and the Caribbean, US
Maryknoll Office for Global Concerns, US
Cumberland Countians for Peace & Justice, Tennessee, US
Caney Fork Headwaters Association, US
Network for Environmental & Economic Responsibility, United Church of Christ, US
Cooperativa de Agua y Alcantarillado Coopagal LTDA., Bolivia
Sisters of Mercy -Detroit Regional Community, USA
Institute for Global Networking, Information and Studies, IGNIS, Norway
Dra. Sonia Davila-Poblete, Investigadora independiente, México
REDES Amigos de la Tierra (FoE) Uruguay
CERDET-Amigos de la Tierra (FoE) Bolivia
CODEFF-Amigos de la Tierra (FoE) Chile
Amigos de la Tierra (FoE) Argentina
ATALC-Amigos de la Tierra (FoE) América Latina y Caribe
Cecilia Lezama, profesor investigador, Universidad de Guadalajara, México
Bloque Popular-Red VIDA, Capitulo Honduras
El Instituto Mexico para el Desarrollo Comunitario (IMDEC), A.C.
Coordinadora de Defensa del Agua y de la Vida, Bolivia
Federacion de Trabajadores Fabriles de Cochabamba, Bolivia
Escuela del Pueblo Primero de Mayo, Bolivia
Asociacion Ambientalista GUERREROS VERDES A.C., Mexico
Coordinadora de Residentes de Tlatelolco, México
Alternativas y Procesos de Participación Social A.C., Mexico
Solidarity Africa Network, Kenya
Friends of the Earth, Ghana
Taller Ecologista, Argentina
Freedom of Expression Institute, South Africa
Center for International Studies, Managua, Nicaragua
Association québécoise pour un contrat mondial de l'eau (AQCME), Canada
World Development Movement, UK
Blue Planet Project/Council of Canadians
Ecologistas en Acción, Spain
Plataforma por la Defensa de los  Servicios Públicos, Spain
Corporate Accountability International, US

APPENDIX I

SPECIFIC DEMANDS REGARDING SUEZ CONCESSION IN SANTA FE

1.- Suez should withdraw the claims that it has presented in ICSID. Suez requested that the operation bonds be in pesos, which was conceded, but it is then hypocritical to try to dollarize the consumer water rates, especially as the entire contract was originally in pesos except for the bonds.

2-. Suez should return the 13.85% tariff increase charged to consumers since 4-28-99. This tariff increase was supposed to be set aside for projects to expand service into the poorest neighborhoods, which never happened.  Although the grantor postponed certain projects in accordance with its obligations, Suez was never authorized to withdraw from the concession without completing these projects

3. – Suez should pay legal compensation to the residents of Villa Gobernador Galvez who during the summers of 2003, 2004, and 2005 suffered from general lack of water pressure, and for the third of the city who had their water service completely cut off.

4. -  Suez should pay legal compensation to the residents that requested water meters from 2002 onwards and whom were systematically ignored by the company in order to continue to charge them for higher rates.

5. – Suez should pay legal compensation to the city of Rosario for the deterioration of public roads, because Suez did not fulfill its contractual obligation to rehabilitate the central water main, which caused the streets to flood after regular precipitation.
 

SPECIFIC DEMANDS REGARDING SUEZ CONCESSION IN LA PAZ/EL ALTO,  BOLIVIA

The Bolivian social movement demands that the company Aguas del Illimani Sociedad Anónima (AISA), subsidiary of Suez, abandon its concession in the cities of La Paz and El Alto without demanding legal compensation and without suing the Bolivian state.  The company should recognize that for each million dollars that the State must spend in legal fees or settlements, there are at least seven thousand poor families living in the most abandoned regions who do not have potable water or sewage.

The partners of Suez should know that a large amount of the investments that the company made in the cities of La Paz and El Alto were done with financial contributions from the residents themselves.  And the worst is that in all the process of evaluation of investment, there was no financial audit.  There was no transparency in the bookkeeping for the company’s investments, given that it was company managers and trustees themselves who did the external audit.
 

SPECIFIC DEMANDS REGARDING SUEZ CONCESSION IN CORDOBA, ARGENTINA

The water concession in Cordoba, Argentina has been, since 1997 in the hands of Aguas Cordobesas, subsidiary of SUEZ ONDEO, and the current composition of shareholders is Suez, Aguas de Barcelona (AGBAR) 56%, Banco de Galicia 12% and Grupo Roggio Invesora 16%.  After a long process of renegotiation the company imposed on the province of Cordoba a law passed December 28, 2005 that extended the contract for 27 years more and granted Suez a consumer rate increase of 100% to 500% or even more in some cases, dividing the city into 7 zones according to criteria that made the operation most profitable for the company.   This unjust rate structure was disguised as a cross-subsidy that would benefit the poorest sectors of society.  The neoliberal government of the Province of Cordoba, working closely with the company, then granted Suez a pardon for its non-payment of taxes from 2002 to 2006 and an extension for 2 years beyond the date of renegotiation (from 2006 to 2008).

The new tariff structure and the unjust conditions of the contract ensured that its practical application would be impossible.  However, when it appeared that this law would be forced into effect in 2006 the Popular Commission for Reclaiming Water organized a succession of mobilizations and neighborhood assemblies that caused the government and the company to concede and withdraw the tariff increases.  The Governor was forced to revise his proposal reducing the increase to between 15% and 18% and to substitute this tariff hike with a subsidy of 9,600.000 pesos annually for the next 2 years.  However the Law 9279 that originally authorized the consumer rate hike and the concessions to Suez has, at this time, still not been repealed although the withdrawal of Suez in an “orderly” fashion has been announced.

Noncompliance with the original contract (July 1997 to December 2005)

1.    The contractual offer presented by Suez was conditioned (contrary to the terms outlined in the request for bid documents) in such a way as to permit unilateral alterations by the company which enabled it to decide independently on projects, quality levels, etc. and outline goals and objectives without identifying the means.

2.    The system of treatment and purification of the water implemented by Suez was inadequate and dangerous in relation to the health of the population and generated trihalometano that has carcinogenic effects.  The situation was so serious that event the official consultant disqualified Suez because of the unilateral conditions in the contract and the water treatment purification system proposed.

3.    Although Suez promised to reduce consumer water rates this obligation was avoided by changing water bills from bi-monthly (every 2 months) to monthly in such a way as to double water rates.  This was a way of dollarizing the payments.

4.    Suez avoided necessary rehabilitation of the water system by reducing the water pressure of the network in large areas arounf the city.

5.    Suez denied responsibility for years to integrate into the network marginalized neighborhoods that were poorly served by cooperatives or small private businesses.