Veolia sells its shares in the Jerusalem Light Rail and completes withdrawal from the Israeli market
More than a decade after winning the tender for the construction and operation of the Jerusalem Light Rail (JLR), Veolia Environnement’s subsidiary, Transdev, has sold all of its holdings in the JLR to a group of Israeli investors.
The approval of the deal by the Israeli authorities and the completion of the ownership transfer, earlier this month, mark an end to Veolia’s operations in the Israeli market in general and to its involvement in the controversial JLR project in particular.
Israeli authorities’ approval and ownership transfer
Until August 2015, Trasndev, a Veolia Environnement subsidiary, held a minority interest (5%) in CityPass, a consortium tendered by the Israeli government to build the JLR, as well as full ownership (100%) of the train’s operator – Connex Jerusalem. The JLR was designed to connect the western part of Jerusalem with the illegal settlements surrounding the city. Operational since December 2011, the JLR crosses the Green Line and passes through the Palestinian neighborhoods of Shuafat and Beit Hanina.
On September 2nd 2014, Transdev (formerly: Veolia Transdev) signed a contract with the CityPass consortium for the sale of Connex Jerusalem and Transdev’s remaining 5% share in CityPass. The buyer, CityPass consortium, consists of three Israeli shareholders: The Ashtrom Group, IIF – Israel Infrastructure Fund and Harel Insurance.
Recent findings by Who Profits Research Center indicate that after almost a year- long negotiations between the companies, the Israeli authorities and the funding banks, the September deal was fulfilled and that the sale of Connex Jerusalem together with the 5% of CityPass shares reached completion.
On August 6th 2015, the Ashtrom Group – one of the buyers and a shareholder in CityPass, reported to the Israeli Stock Exchange that all conditions precedent in the JLR sale agreement with Transdev were fulfilled and that the agreement was completed. Ashtrom’s report also mentioned that on the same date, 1% of CityPass shares’ was passed into Ashtrom’s possession. For further information on the deal and necessary approvals, see Who Profits’ update from February 2014.
Later that month, on August 18th 2015, and according to the Israeli Companies’ Registrar, 100% of Connex Jerusalem shares’ were transferred from Transdev to an Israeli holding company jointly owned by the Ashtrom Group, IIF and Harel Insurance. According to the Registrar however, Transdev 5% share in CityPass still remained.
The Israeli financial newspaper – the Marker – has also confirmed the completion of the deal on August 2015. In an article (available in Hebrew), published on August 20th 2015, it was reported that Transdev received NIS 100 million for Connex Jerusalem. Contrary to Ashtrom’s report to the Israeli Stock Exchange and to the unaltered status of CityPass ownership in the Israeli Companies’ Registrar, The Marker reported that Trandev’s 5% share in CityPass was fully sold to IIF. Who Profits will continue to monitor the publications around the sale in order to determine which company is the current owner of Transdev’s former 5% share in CityPass.
Finally, Who Profits findings and analysis strongly suggest that the sale has been completed and that the formal ownership transfer of CityPass shares will soon show on public record.
The final step in a gradual withdrawal
The sale of the JLR is the final step in Veolia’s gradual withdrawal from the Israeli market and several illegal operations in the occupied Palestinian territory. Through its various Israeli subsidiaries, the company has engaged in multiple sectors of the local economy, including transportation, water, waste management and energy. Since the Israeli private sector, much like the Israeli government, considers the settlements as a legitimate part of Israel, Veolia’s Israeli subsidiaries operated freely beyond the Green Line. Their activities included the provision of public bus services to Israeli settlements in the West Bank, the operation of a landfill in the occupied Jordan Valley, wastewater treatment facility for settlements’ sewage, and finally the construction and operation of the controversial JLR.
In the last few years, Veolia Environnement sold its Israeli subsidiaries piecemeal. In September 2013, the company sold its local bus services subsidiary to Afikim Company and in April 2015, water, waste and energy activities in Israel were also sold to the US-based investment firm Oaktree Capital Management. At the same time, Veolia tried to distance itself from the JLR by decreasing its holdings in Veolia Transportation – the multinational’s transport services division. In 2011, Veolia Transportation was merged with Transdev UK, leaving Veolia with a 50% share in the new company. To further blur Veolia’s involvement in the JLR, the new subsidiary – Veolia Transdev, changed its name to Transdev.
Simultaneously, Veolia negotiated with the Israeli Ministry of Transportation its way out of Jerusalem. In 2010, the Ministry has effectively blocked Veolia’s attempts to sell its holdings in the light rail to the local Egged Company. It did so by demanding previous international experience form the replacing operator. Due to the controversy surrounding the light rail, it appeared that international companies were hesitant to take on Veolia’s role, additionally with an unexperienced local transportation sector, Veolia was unable to sell Connex Jerusalem and its minority share in CityPass for years. Apparently, negotiations have now ended with the removal of the Israeli government’s objection to an unexperienced buyer and the acceptance of the CityPass consortium as capable rail operator.
As of August 2015, Veolia Environnement is no longer active in the Israeli market and in the occupied Palestinian territory. Nevertheless, the company has left behind irreversible facts on the ground. The construction of the railway involved the expropriation of occupied land that was not done for the benefit of the occupied population, and hence contradicts international law and the Fourth Geneva Convention. The JLR continues to serve the Jewish settlement neighborhoods in occupied East Jerusalem and passes daily through the Palestinian neighborhoods of Beit Hanina and Shuafat, by doing so it will play a substantial role in the reinforcement of Israeli sovereignty over occupied East Jerusalem for years to come.
Only after a final determination of the owner of Transdev’s former 5% share in CityPass, Who Profits Research Center will remove the profiles of Veolia Environnement, Transdev and Caisse des Dépôts et Consignations(CDC) from its database.
Shu’afat, Occupied Palestine – On the 4th July 2014, at least 2,000 Palestinian mourners gathered in Shu’afat for the funeral of Mohammed Abu Khdeir, who was kidnapped last week.
His mutilated body was later found in a forest on the outskirts of Jerusalem. The autopsy indicates that he was burnt alive. It is widely believed that the murder was carried out by extremist Israeli settlers.
Mourners gathered by the mosque and marched carrying the body to the burial ground. Initially the funeral organisers formed a human chain to separate mourners and the police to prevent violence. Later on, Israeli police clashed with Palestinians for around 12 hours.
It has been reported that at least 30 Palestinians were hurt by rubber-coated bullets while dozens more were treated for the effects of tear gas. 13 Israeli police officers were also injured. A field of wheat was also partly destroyed by fire, probably caused by tear gas canisters.
Throughout the demonstration, undercover police agents, who were also acting violently towards the police, abducted and violently assaulted at least 11 Palestinians, including Tarek Abu Khdeir, Mohammed’s cousin, who was filmed being beaten by police.
Later in the evening, local Palestinian residents took steps to remove the illegal light rail system which runs through their neighbourhood. Two French companies, Veolia and Alstom, are subject to an international boycott and divestment campaign due to their involvement in the project. The tram primarily services illegal Israeli settlements in Occupied East Jerusalem and thereby facilitates Israel’s illegal policies of colonization and ethnic cleansing.
Local Palestinian’s pulled up bricks and cement that hold the tracks in place and damaged the tracks using an angle grinder. Many local residents gathered round to express their support for this act of civil disobedience. One Palestinian resident in his 60′s said that the tram “is for the illegal settlements. Israel takes our land and kills our people…we want them [the Palestinian protesters] to rip it up and take it away completely…we want rid of it”.
Ard Kanaan News Agency | March 12, 2014
Veolia is a French company specialising in environmental work in the fields of water, recycling, energy and transportation. The company has recently had a lot of media coverage given its contribution to supporting Israeli settlements.
The company has been registered by international activists concerned with the Palestinian cause on the Boycott, Divestment, and Sanctions (BDS) list since 2005, “due to their immoral work serving the occupation in various areas in Palestine”.
Currently it is involved in a railway project in Jerusalem that links the illegal West Bank settlements and Jerusalem which is considered one of the occupation’s main means and an important step in the context of the Judaisation of Jerusalem project and the expansion of settlements in the city. It not only transports Israelis passing through, but also facilitates access between the new Israeli settlements and the settlers as a means of easing settlements and outlining a mechanism and infrastructure for its expansion. This is considered a violation of the Geneva Accords which prohibit the occupation from transporting its citizens to occupied territories, so this is not only a clear violation of Palestinian rights, but also a violation of international agreements made in this regard.
Veolia’s activity ranges between environment workshops, water and transportation, as it works through one of its subsidiaries (T.M. M.) and Tovlan Landfill, near Jericho, as a report by Corporate Watch Research Group, specialising in monitoring the work of international companies, stated the violations made by Veolia with regards to the management of the landfill. Veolia buries the waste of 21 settlements in the landfill near the Jordanian border, this has many health and environmental “side effects” on neighbouring Arab villages such as Fasayil and Abu Al `Ajaj, leading to the displacement of the residents of the latter, the population dropping to 200 residents from thousands in 1999, the year the landfill was established.
There are also those who leave their homes during the summer only to return in winter when the smell from the landfill is not as strong. The livestock, which is the main source of income for locals, also suffered big losses.
The residents of these villages are also deprived of electricity, while the residents in settlements have electricity and water at discounted rates in order to motivate them to live in settlements. The recycling of the waste in the landfill contributes to the provision of electric energy by means of renewable energy.
Who works in the landfill? Palestinians work in the landfill and they are deprived of any labour rights, as their wages are half the minimum wages set for Israeli workers and they are deprived of work and health insurance.
The company also has shares in the bus routes, such as route 109 and 110, which provide transportation for settlers on Highway 433 in the West Bank running through the settlements. The occupation enforces apartheid/segregation rules on highway 433, as Palestinians are not allowed to use the highway.
Veolia is also involved in facilitating Israeli exclusion operations, as well as facilitating the transfer of settlement waste, transporting it to Palestinian areas and causing many long-term health and geographic problems. This has encouraged the indirect expulsion of Palestinians, all of which has contributed to the process of racial segregation in transportation in those areas.
Similarly, it has recently provided water and sanitation services to many of the Israeli occupation’s settlements in the occupied West Bank, including the Modi’in Ilit settlement located between Jerusalem and Tel Aviv in the occupied Palestinian territories.
This means that three out of Veolia’s four subsidiaries – water, waste and transportation – actively work to support settlements.
Veolia’s activities are considered a flagrant violation of international law, specifically Article 49 of the Fourth Geneva Convention which states that “Individual or mass forcible transfers, as well as deportations of protected persons from occupied territory to the territory of the Occupying Power or to that of any other country, occupied or not, are prohibited, regardless of their motive.”
International law also prohibits Israel from using occupied land for its own benefit and, therefore, burying waste from the settlements in the occupied territories is a violation of United Nations Resolution 63/201 dated January 28, 2009, which:
“Calls upon Israel, the occupying Power, not to exploit, damage, cause loss or depletion of, or endanger the natural resources in the Occupied Palestinian Territory, including East Jerusalem, and in the occupied Syrian Golan.
Calls upon Israel, the occupying Power, to comply strictly with its obligations under international law, including international humanitarian law, with respect to the alteration of the character and status of the Occupied Palestinian Territory, including East Jerusalem.
Also calls upon Israel, the occupying Power, to cease the dumping of all kinds of waste materials in the Occupied Palestinian Territory, including East Jerusalem, and in the occupied Syrian Golan.”
In addition to violating international law, Veolia’s acts violate the resolution of the Arab summit in Khartoum, in March 2006, which provides for the following:
The condemnation of the project aiming to link West Jerusalem to the occupied West Bank through occupied East Jerusalem and the stressing of the illegality of this project. It also calls on the two French companies [Alstom and Veolia] to immediately withdraw from the project and demands punitive measures be taken against them if they don’t comply. The Arab Summit also urged the French government to take the necessary measures in this respect to honour its obligations under international law.
To top this all off, Veolia’s activity in the occupied territories contradicts the company’s declared goals and strategies which aim to “reduce the negative environmental impacts of waste” and “help raise the citizens’ standard of living.”
It is clear that Veolia selectively applies these goals, as it only aims to raise the standard of living of the settlers, at the expense of the Palestinians and in violation of international treaties and the most basic human rights.
This company’s long history of racism and the oppression of the Palestinians’ rights was enough to convince the public opinion in different parts of the world to boycott it.
The campaign to reduce the company’s activity and completely boycott it was successful in impacting its work, which has suffered due to losses estimated at more than $12 billion over the past six years in order to prevent the renewal or signing of new contracts in many countries worldwide. These include Australia, Sweden, Norway, Netherlands, Ireland, Scotland and finally England. In addition to this, a coalition of boroughs in south-west London refused to bid on the tender offered by Veolia for a £1 billion waste removal deal last April. In January 2009, Veolia lost a contract worth €3.5 billion Euros to run the metro in Stockholm.
In addition to the efforts made globally to boycott this company and reduce its activity, French company Alstom, a company working in partnership with Veolia on the Jerusalem railway project, linking Jerusalem and the settlements, lost the second phase of the Saudi Haramain Railway project, which connects Mecca and Medina in Saudi Arabia. This is in spite of the fact that the company had previously won the contract for the first phase. The value of the second phase contract is about $10 billion.
Since the end of 2008, the BDS National Committee, along with its partners, have made popular, official and media efforts in order to convince the Saudi authorities to exclude Alstom from the Haramain Railway deal due to its involvement in the Israeli occupation’s projects aiming to Judaise Jerusalem. Many letters and documents to this effect were sent to official parties in Saudi Arabia from the BDS Committee, as well as several official, popular, Palestinian, Islamic and international parties in the context of a coordinated campaign targeting this company.
Veolia in Saudi Arabia
Despite all of the information mentioned above, all the background information, business links, relations with the Israeli occupation and settlement operations, as well as its direct involvement in facilitating the expansion of settlements and the Judaisation of Jerusalem, and in spite of the boycott exercised by British and other organisations and governorates against Veolia, it has continued to operate and make outrageous profits in Saudi Arabia for years.
The company’s work in Saudi Arabia is narrowed down to the fields of water, sanitation and water desalination. It exists in Saudi Arabia through the Veolia Water Solutions & Technologies, Saudi Industries Ltd, with branches in Riyadh, Jeddah and Dammam. Veolia also operates in Saudi Arabia under the Sidem Saudi Ltd, one of Veolia Water Solutions & Technologies, Saudi Industries Ltd’s subsidiaries, which has branches in Jeddah, Khobar and Jubail. Sidem specialises in designing and building large desalination plants.
Veolia Water Solutions & Technologies, Saudi Industries Ltd has landed many large contracts with the Saudi government in recent years. The two contracts worth noting are the desalination plant contract with the Power and Water Utility Company for Jubail and Yanbu, signed in 2007, and the management, operation and maintenance of the water and sanitation sector deal in the Saudi capital Riyadh, signed in 2008.
In 2007, Veolia signed a contract with the Power and Water Utility Company for Jubail and Yanbu to establish one of the largest water desalination plants in the world worth $945 million. One year before signing the deal, Saudi Arabia signed the Arab Summit resolution in Khartoum.
Furthermore, Veolia has landed 62 water desalination contracts in Saudi Arabia since 2007. In 2008, Veolia signed a large contract with the National Water Company to manage, operate and maintain the water and sanitation in the Saudi capital Riyadh. Veolia expects this deal to achieve a $60 million profit.
In December 2011, Veolia signed a contract with the King Fahd University of Petroleum and Minerals to establish research centres in the Dhahran Techno Valley.
While Alstom – Veolia’s partner in the Judaisation of Jerusalem project and the Jerusalem railway project, connecting Jerusalem to the settlements – lost the second phase of the Haramain Railway project worth about $10 billion, Veolia (in full partnership with Alstom) is signing contracts worth billions of dollars in Saudi Arabia, despite its blatant violation of international law and the rights of the Palestinians.
Veolia has been working in Israel before it entered the Saudi market, and its involvement in settlements began very early on, before it made any deals with the Saudi government.
It is both embarrassing and astonishing that Veolia’s involvement in the settlements was not taken into account when it was awarded these huge business deals in Saudi Arabia and that the vast global BDS campaign against Alstom and Veolia in 2011 did not impact Veolia’s operations in Saudi Arabia, as the company signed an agreement with the King Fahd University of Petroleum and Minerals in December of the same year.
It is also shameful that at a time when international companies and parties are taking a stance against this company for violating the most basic human rights in Palestine and its participation in the brutal Israeli occupation and settlement, the Saudi government is signing contracts with the same company in various business areas. This in a country which is supposedly a leader in the belief in Palestinian rights, as well as protecting such liberties and condemning all human rights violations during this serious Palestinian tragedy.
A company with such a shameful history of working to enhance Israeli settlements should not find a work environment that opens the doors to trading in a country like Saudi Arabia, which has a long history of supporting the Palestinian cause.
While Veolia is losing billions of dollars in contracts in Stockholm and London, it is signing a billion dollar deal in Jubail and making profits of up to $60 million dollars in Riyadh!
The least that is expected of Saudi Arabia is not to sign contracts with Veolia, to pressure the company and make it choose between carrying out its responsibilities in accordance with international law, stop supporting the settlements and violating the rights of the Palestinians or to get out of Saudi Arabia and cease all forms of business with it.
Translation by MEMO
As Veolia has become the target of worldwide campaigns in protest of its complicity in Israel’s violations of international law, costing it public contracts in several countries, the company has tried to evade responsibility. However, Who Profits — a project of the Coalition of Women for Peace in Tel Aviv — received confirmation from the Israeli Ministry of Environmental Protection in response to an application under the Freedom of Information Act on 17 January that Veolia subsidiary TMM is the sole owner and operator of the Tovlan landfill in the occupied West Bank — despite Veolia’s claims that it divested from the landfill in 2011.
The Tovlan landfill is located in the Jordan Valley of the occupied West Bank near the Israeli settlement of Masua. The landfill serves mainly the needs of the Israeli population in Israel and in illegal settlements in the West Bank. Three Veolia subsidiaries in Israel hold permits to transfer waste from Israel to the Tovlan landfill — including TMM — according to Who Profits.
Moreover, international law prohibits Israel from using occupied land for the sole benefit of its own civilian population. In Resolution 63/201 of 28 January 2009, the UN General Assembly called on Israel to cease the dumping of all kinds of waste materials on occupied Palestinian land.
Contrary to the confirmation by the Israeli ministry, Veolia has claimed numerous times it had sold its interest in Tovlan landfill to the Israeli settlement of Masua. By selling off the Tovlan landfill to Masua, Veolia would be entering into a business deal with an illegal Israeli settlement in the West Bank.
The US North Coast Coalition for Palestine has been campaigning for the exclusion of Veolia from a public transit contract in Sonoma County. The county’s Commission on Human Rights debated the issue on 24 July 2012. Ruth Otte, executive vice president, marketing and communications of Veolia Transportation North America, says the following about Tovlan landfill in the above video:
It was sold last year. I have no reason to doubt that. I have been told that by the top of our company. Now there is a required consultancy that Veolia has to do as the contract transitions. But the contract was sold. We do not have any ownership or interest as Veolia Environmental Services in that contract any more.
In a May 2012 letter, Antoine Frérot, CEO of Veolia Environnement, claimed the company sold its entire rights in the Tovlan landfill to Masua on 26 June 2011. At the same time, Robert Hunt, executive director of Veolia Environmental Services UK, made the same claim in a meeting with MP Julian Brazier.
In a June 2011 letter, James Good, president of Veolia Water North America, wrote that the agreement to sell the rights in Tovlan to Masua should be signed any day.
Israel’s recent confirmation that Veolia is the sole owner and operator of Tovlan landfill sheds a different light on the divestment claims by the Veolia bosses. Activists should therefore seriously question any information that Veolia provides for its defense.
- St. Louis Palestine Solidarity Committee Statement on Pending City Contract with Veolia Water (alethonews.wordpress.com)
- Veolia Withdraws from California Water Contract Bidding (alethonews.wordpress.com)
- Mayoral Candidates Take Sides over St. Louis Veolia Contract (alethonews.wordpress.com)
- Israel boycotts UN forum, first state in history to ignore human rights review (alethonews.wordpress.com)
Davis, California – The Davis Committee of Palestinian Rights (DCPR) is happy to report that Veolia Water North America has withdrawn as a prospective bidder on a $325 million dollar project that would provide treated water from the Sacramento River to residents of Woodland and Davis in Yolo County, California. The announcement came at the December 20, 2012 meeting of the Woodland-Davis Clean Water Agency (Water Agency), a joint powers authority between the University of California – Davis and the cities of Woodland and Davis. Veolia’s withdrawal followed efforts by citizens of Yolo County to prevent Veolia’s bidding due to the company’s involvement in the violation of Palestinian human rights.
Members of DCPR first contested the participation of Veolia Water as a prospective bidder in June 2011. Appearing before meetings of the Water Agency Board of Directors, DCPR provided substantial documentation of Veolia’s history of profiting from Israel’s illegal occupation and apartheid policies in Palestine, as well as the dissatisfaction of public agencies throughout the U.S. for Veolia’s mismanaged operations and poor performance, environmental permit violations and fines, and failure to make good on promised improvements.
On April 19th, 2012, DCPR testified before the Board charging that Veolia did not meet the Water Agency’s ethical criteria. Veolia’s involvement in the Jerusalem Light Rail Transit system, its operation of settler-only buses on segregated roads in the occupied West Bank for inhabitants of illegal Israeli settlements, and its operation of a landfill on land confiscated from Palestinians have been contested by Palestinians and international human rights activists throughout the last decade. Veolia has suffered the loss of more than $20 billion in contracts to date following this global outcry.
Within the U.S., the Friends Fiduciary Corporation, which handles investments for hundreds of U.S. Quaker institutions, recently divested from Veolia following requests by Quakers concerned about the violation of Palestinian rights. In December 2012 the City of St. Louis voted to suspend approval of a contract with Veolia Water until it completed an investigation of Veolia’s controversial labor, environmental, and human rights practices. There are ongoing campaigns protesting Veolia Transportation public contracts in Sonoma County and Los Angeles, CA; Baltimore, MD; Boston, MA; and beyond. The state-wide California Israel Divestment Campaign calls on CalPERS public pension system to divest from Veolia Environnement, Caterpillar and Elbit Systems.
Bids were initially due in December 2012, but following outcry from citizenry regarding the large impact of the project’s capital cost upon resident’s water bills, the City Council decided to postpone the due date and appoint a citizens’ advisory committee to investigate rate alternatives, revisit the water supply need-assessment, and consider other water procurement options. Veolia was the only company to withdraw from bidding.
CONTACT: Mikos Fabersunne, Davis Committee for Palestinian Rights, email@example.com
December 18th, 2012 | Published in Latest News and Action Alerts, STL-PSC Blog
What is Veolia?
According to a story broken by the Riverfront Times, St. Louis city lawyers have been negotiating a contract with Veolia Water North America to guide cost-cutting. Veolia Water is a major subsidiary of Veolia Environnement, a Paris-based multinational corporation and the largest water privatization business in the world. Veolia is infamous for:
- Failure to make good on promised improvements
- Anti-labor practices
- Privatizing public resources
- Irresponsible to disastrous environmental practices
- Corruption, bribery, embezzlement, and fraud
- Supporting and profiting from segregation and discrimination in Palestine
Worldwide, consumers report that Veolia consistently charges high rates, provides poor service, causes staff turnover, discourages water conservation, and fails to implement promised improvements. Its history reveals consistent prioritization of private profit at the expense of the environment and public welfare.
Unless otherwise indicated, the following is based on extensive research and documentation on Veolia’s practices by Water for All, Polaris Institute, Global Exchange, Novato Friends of Locally Operated Wastewater, Public Citizen, Public Water Works, and Food & Water Watch (here, here, here, here, here).
What happened in Indianapolis?
In its proposal to the St. Louis Water Division, Veolia extensively references its work in Indianapolis as a successful model that could inform Veolia’s guidance in St. Louis. If Indianapolis is any indication of Veolia’s practices, then our city would do well to steer clear. Veolia claims that the contract was completed and “focused on building a collaborative environment with all of the project stakeholders (union, government and the community).” In fact the company’s 20-year contract with Indianapolis was terminated by the city less than halfway through, by which time the following had ensued:
- Non-union employees claimed that the company cut retirement plans, health care and other benefits, costing the workers more than $50 million over 25 years. Hundreds of employees, many organized under a strong union, found themselves in a pitched battle with the company to preserve benefits and hold Veolia to its promises.
- Veolia was sued for breaking state contract law, and for overcharging 250,000 residents.
- Because the company lacked proper safeguards, a typo by an employee caused a boil-water alert for more than a million people, closing local businesses and canceling school for 40,000 students.
- An independent review uncovered lax oversight of the city’s contract with Veolia.
- Consumer complaints more than doubled in the first 10 months of the contract.
- In a study of 100 large U.S. cities, Environmental Working Group ranked Indianapolis drinking water quality #90 (i.e. 11th-worst overall). St. Louis ranks #9 — among the best in the country.
In 2005, a federal grand jury subpoenaed four Veolia Indianapolis employees as part of an investigation into allegations that the utility falsified water quality reports. The probe began amid accusations by Indianapolis council members that the company had cut back on staffing, water testing, treatment chemicals and maintenance. Though Veolia was never charged, the corporation sustained multimillion-dollar losses and dug its way out of this hole by finagling concessions, including a 2007 contract amendment shifting at least $144 million in costs from Veolia to the city. Ignoring public outcry from consumers and state officials, the city then tried to raise rates by 35% to pay for these additional expenses and more expensive capital improvement projects.
In 2010, with infrastructure needs mounting and Veolia demanding more than the city could afford, Indianapolis canceled the contract more than 10 years early, for which they were forced to pay Veolia an additional $29 million. The nonprofit Citizens Energy Group took over, positioned to save the city more money than multinational Veolia was ever able to.
If Veolia gives Indianapolis as an example of a success story, what could a failure possibly look like?
New Orleans — an Environmental Disaster, and Other Cities
In 2001 in New Orleans, an electrical fire at a sewer treatment plant operated by Veolia caused operators to divert raw sewage into the Mississippi River for two hours. In 2001 and 2002, the plant released sewage into the river a total of 50 times, often violating water quality standards and resulting in more than $107,000 in fines. The city’s Sewerage and Water Board Director and staff made numerous, repeated and documented complaints about Veolia reducing staff to inadequate levels, neglecting preventive maintenance, failing to notify city officials of environmental violations, and other problems. Veolia has a long track record of failing to communicate with New Orleans in connection with the contract. In 2002, the board rejected Veolia’s bid for a new water/wastewater contract following public outrage.
In Richmond, CA in 2006, the city and Veolia were sued for dumping more than 17 million gallons of sewage into tributaries that empty into the San Francisco Bay. The Baykeeper watchdog group said Richmond had one of the highest spill rates in the state. The city had given a 20-year, $70 million contract to Veolia, which promised to cut costs and develop and implement an improvement plan for the sewer and storm water systems. By the time of the lawsuit four years later, the company had not even finished designing the plan, much less begun the renovations. Richmond settled the lawsuit out of court by agreeing to pay for multimillion-dollar improvements to reduce sewer spills. In addition, Richmond taxpayers had to shell out $500,000 annually for years to compensate residents and businesses for property damaged. Even after the lawsuits, the problem continues: Veolia’s Richmond plant had 22 spills dumping more than 2 million gallons of sewage during the first two months of 2008.
Lynn, MA ended a wastewater overflow plant contract with Veolia because the company failed to stay adequately bonded for the project. While company officials lauded the continuing contracts with water and wastewater treatment plants in the community, the town rapped the company for cutting costs by refusing to properly treat wastewater with chemicals. As a result, the town was blanketed in a stench.
Angleton, TX terminated a Veolia contract for non-performance and took the company to court, charging that it breached its contract by failing to maintain adequate staffing levels, not submitting capital project reports and charging improper expenses to the maintenance and repair tab picked up by the city.
In Atlanta, Veolia tried to maximize revenue simply by slashing the work force in half, contributing to boil-water orders, maintenance backlogs and other issue that ultimately led to dissolution of the contract.
In Sauget, IL, right across the river, a related Veolia subsidiary operated a hazardous waste incinerator for over 10 years without a clean air permit. In 2005, “the owners agreed to pay $150,000 for alleged air pollution violations.” As of 2008, the facility had been fined more than $3 million,” mostly related to small explosions and releasing toxic chemicals, including carcinogenic dioxins, into the air.
For more examples, see: Burlingame, CA; Wilmington, DE; Port Arthur, TX; Cranston, RI; and others.
Bribery, Corruption, Embezzlement, Fraud
Corruption, bribery, embezzlement, and fraud appear to part of Veolia’s corporate culture. The president of a Veolia subsidiary was convicted of bribing a New Orleans sewer board member to support renewal of its contract (see background above) in 2002. The same year, the mayor of Bridgeport, CT was convicted on 16 counts including taking kickbacks, bribes and extortion along with 8 other defendants a contract proposal from Veolia (then called Vivendi). A forensic audit in Rockland, MA led to contract termination amid embezzlement charges involving a sewer department official and a local company executive charged with embezzling more than US$300,000. Veolia disclosed accounting fraud in the U.S. from 2007-2010 amounting to $120 million. The scandal took place in their Gulf of Mexico Marine Services unit. These are small examples of a pattern of Veolia replicated around the country and world.
Would this contract privatize the city’s water? No — not yet. But the contract would position Veolia — which specializes in water privatization — as a “brain-trust” of management expertise in reducing costs. Many view Veolia and focusing on privatizing services through long-term monopoly contracts rather than through outright ownership. These types of “advisory” roles can serve as a backdoor avenue toward eventually privatizing municipal operations.
Supporting Apartheid and Segregation in Israel/Palestine
Veolia is involved in Israel’s systematic ethnic discrimination against the Palestinians in many ways:
An Israeli subsidiary, Veolia Water – Israel, operates a wastewater treatment plant located in an illegal Jewish-only settlement called Modiin Ilit, built on Palestinian land in the West Bank. The owners of the land on which this settlement was built have been violently driven out. Two unarmed Palestinians from the Palestinian village on which Modiin Ilit was built, have been killed as they protested nonviolently against the ongoing confiscation of their land and resources. Veolia continues to service the settlement.
An Israeli subsidiary of Veolia Transdev, Connex – Israel, operates buses on segregated roads through the occupied West Bank, including two bus lines that use road 443, which is built partially on confiscated land with portions closed entirely to Palestinians. A separate but unequal Palestinian road system is made up of low grade roads cut by checkpoints and physical barriers restricting Palestinian freedom of movement. Last year, Palestinian Freedom Riders attempted to board buses operating on their own land and were violently removed and arrested. Veolia is profiting from segregation and discrimination.
Another Israeli subsidiary, Veolia Environmental Services – Israel, supervises, consults for, and operates the Tovlan Landfill in the occupied Jordan Valley, collecting refuse from illegal settlements. Israel renders it almost impossible for Palestinians in the Jordan Valley to gain permits to build homes, toilets, wells, animal pens, or other vital infrastructure for local communities, which has forced almost all Palestinian families out, with those remaining living in dire conditions. Some are left with no alternative but to work on settlements that have taken their families’ land, for pay far below the minimum wage, unable to take bathroom breaks, and denied any rights to unionize. Veolia takes captured Palestinian land and natural resources to service the settlements exploiting or driving out Palestinians.
UN Special Rapporteur Richard Falk recently recommended that Veolia “should be boycotted, until they bring their operations into line with international human rights and humanitarian law and standards.” Veolia’s extensive profiting from Israel’s illegal practices have provoked global outcry, costing Veolia more than $12.5 billion in lost contracts to date. Recently, the Friends Fiduciary Corporation, which handles investments for hundreds of U.S. Quaker institutions, also divested from Veolia.
Veolia already in Financial Trouble
With public opinion shifting negatively around the world, Veolia is paying a price. After a 25-year contract, Veolia’s home city of Paris declined to renew its contract in 2009. Cities around the world have done the same. Veolia’s profit margin has plummeted since 2008 and the company lost more than half its market value in 2011. Veolia’s CEO pledged to sell $1.8 billion of assets and to stop operations in at least 37 countries. In September 2012, Veolia’s debt stood at more than $19.7 billion.
Now, Veolia is trying to bring its risky and immoral business to our backyard.
- St. Louis Palestine Solidarity Committee Statement on Pending City Contract with Veolia Water (alethonews.wordpress.com)
- Veolia to end sponsorship of major UK photography exhibition (bdsmovement.net)
We are a diverse group of Palestinians, Israelis, Muslims, Jews, Christians, students, professors, artists, writers, environmental activists, union organizers, bakers, grandparents, and others in St. Louis united by a commitment to a lasting peace in Israel/Palestine based on freedom, justice, and equality, as part of a larger commitment to global justice.
We were shocked to learn about private city negotiations with Veolia Water on a contract to guide cost-cutting for the St. Louis Water Division. Veolia Water – North America is a subsidiary of Veolia Environnement (VE), a Paris-based multinational corporation and the largest water privatization business in the world. It is infamous for poor environmental standards, anti-labor practices, privatizing public resources, mismanagement, corruption, bribery, embezzlement, fraud, and illegal activities in Israel/Palestine. Worldwide, consumers report that Veolia consistently charges high rates, provides poor service, causes staff turnover, discourages water conservation, and fails to implement promised improvements. Its history reveals consistent prioritization of private profit at the expense of the environment and public welfare.
In Israel/Palestine, VE is involved in a myriad of ways with Israel’s illegal military occupation of Palestinian land and its systematic ethnic discrimination against the Palestinian people.
VE’s Israeli subsidiary, Veolia Water – Israel, operates a wastewater treatment plant located in an illegal Jewish-only settlement called Modiin Ilit, built on internationally-recognized Palestinian land in the West Bank. The Palestinian owners of the land on which this settlement was built have been violently driven out. Two unarmed Palestinians from Bil’in, a Palestinian village on which Modiin Ilit was built, have been killed by the Israeli army as they protested nonviolently against the ongoing confiscation of their land and resources. Leaders and people of conscience from around the world, including the South African anti-Apartheid leader Archbishop Desmond Tutu, have visited Bil’in to stand in solidarity with the dispossessed villagers, yet Veolia continues to service the settlement and others like it.
An Israeli subsidiary of Veolia Transdev, named Connex – Israel, operates settler buses on segregated roads through the occupied West Bank, including two bus lines that use road 443, which is built partially on confiscated land with portions closed entirely to Palestinians. A separate but unequal Palestinian road system is made up of low grade roads cut by checkpoints and physical barriers restricting Palestinian freedom of movement. Last year, a group of Palestinian Freedom Riders attempted to board buses operating on their own land and were violently removed and arrested. Veolia is not only profiting from segregation in Israel/Palestine; they are enforcing it.
Another VE Israeli subsidiary, Veolia Environmental Services – Israel, supervises, consults for, and operates the Tovlan Landfill in the occupied Jordan Valley, collecting refuse from illegal settlements. Israel renders it almost impossible for Palestinians in the Jordan Valley to gain permits to build homes, toilets, wells, animal pens, or other vital infrastructure for local communities, which has forced almost all Palestinian families out, with those remaining living in dire conditions. Some are left with no alternative but to work on settlements that have taken their families’ land, for pay far below the minimum wage, unable to take bathroom breaks, and denied any rights to unionize. Veolia takes captured Palestinian land and natural resources to service the settlements exploiting or driving out Palestinians.
Finally, VE has also been involved in the construction and operation of a tramway linking illegal settlements in East Jerusalem with Israel. The tramway not only institutionalizes the occupation, but it is a settlement in itself, given that it is settler infrastructure built on occupied land.
UN Special Rapporteur Richard Falk recently recommended that Veolia “should be boycotted, until they bring their operations into line with international human rights and humanitarian law and standards.” VE’s immoral practices and extensive profiting from Israel’s illegal discriminatory practices have provoked global outcry and made the company a target for boycott and divestment campaigns around the world — costing it $16 billion to date in lost contracts. Recently, the Friends Fiduciary Corporation, which handles investments for hundreds of U.S. Quaker institutions, divested from VE following advocacy from Palestine solidarity groups. Now, VE is bringing its risky and immoral business to our backyard.
Veolia Water is the U.S. arm of VE. As St. Louisans, we do not feel that our tax dollars and water payments should go toward supporting a company profiting from environmental destruction, unfair labor practices, and the bloodshed of and systematic ethnic discrimination against the Palestinian people.
The St. Louis Palestine Solidarity Committee stands in solidarity with public workers, water and environmental justice activists, and the Palestinian people threatened by this contract. We call on the Board of Estimate & Appointment not to approve this public contract with Veolia.
Click here for a Veolia Facts Sheet outlining the company’s history in environmentally hazardous activities, anti-labor practices, mismanagement, corruption, bribery, embezzlement, fraud, and failure to make good on promised improvements.
- South Africa’s ruling ANC officially endorses Palestine’s boycott movement (alethonews.wordpress.com)
- St. Louis City Board Votes to Investigate Veolia Following Public Outcry! (bdsmovement.net)
- Veolia to end sponsorship of major UK photography exhibition (bdsmovement.net)
- Pro-Palestine campaigners celebrate Veolia’s loss of £40million contract in Canterbury (bdsmovement.net)
On his visit to Switzerland, Hamas spokesperson Mushir al-Masri unequivocally condemned the Jerusalem Light Rail project. French companies Veolia and Alstom should stop assisting the occupier and leave Jerusalem, he said.
Al-Masri headed a delegation of members of the Palestinian Legislative Council (PLC) to the Inter-Parliamentary Union in Geneva. The Electronic Intifada reported on the first official visit of Hamas members to a European country since the 2006 PLC elections. I interviewed Al-Masri on Thursday, 19 January, about his views on the Israeli Jerusalem Light Rail project.
The first line of the light rail connects West Jerusalem with the illegal settlements of Pisgat Ze’ev and French Hill in occupied Palestinian East Jerusalem. Israeli settlements in the occupied West Bank and the annexation of East Jerusalem are illegal under international law. This status has been confirmed repeatedly by numerous UN resolutions and the 2004 advisory opinion of the International Court of Justice on Israel’s wall in the occupied West Bank.
I wrote about the negative impact of the light rail on Palestinian Shuafat in my blog of 14 December. The first line of the light rail – for which two thousand square meters of land belonging to Shuafat resident Mahmoud al-Mashni have been confiscated – has three stops in Shuafat.
Jerusalem Light Rail stop in Shuafat, 30 December 2011, 11.50 am (Ibrahim Yousef)
According to Al-Masri, “This a dangerous project, well planned by the occupier to maintain, strengthen, change the image of Jerusalem. To destroy the historical monuments of Islam. The aim is to link West Jerusalem to East Jerusalem and to make sure that Jerusalem will be the eternal capital of Israel. It proves that Israel does not believe in peace.”
When I inform him that Veolia repeatedly states that the light rail is important for the Palestinians because they use it, he responds: “Any company that assists the occupier does not contribute to peace. They should leave Jerusalem. They should respect the resolutions of international organizations. Companies that support the occupation violate international law. If Palestinians use the light rail, it is not an argument. They maybe have to use it because it is a means of transport that is available. Veolia should not look for excuses for the occupation.”
Through its spokesperson Al-Masri, Hamas has joined the protests and criticism against the Jerusalem Light Rail and the two French companies involved in it: Veolia and Alstom. Palestinian non-governmental organizations, the PLO, the Arab League, international law experts, solidarity activists, churches, trade unions, city councils, socially responsible investment advisers and pension funds have called on Veolia to end their involvement in Israeli projects in the Occupied Palestinian Territories.
However, Veolia has chosen to continue its collaboration with the Israeli authorities in a project that was developed to serve the needs of the settlers in East Jerusalem. Veolia has therefore been targeted by the Boycott Divestment and Sanctions movement.
Veolia Israel’s CEO Arnon Fishbein commented on Veolia’s attempts to sell off its shares in the light rail to Egged in the Israeli magazine The Marker on 26 January. “There were pressures inside Veolia, because there are many among the group who believe the company lost a lot of contracts because of this project”, he admits. “One way or another, we will never leave a contract in the middle”, says Fishbein. (Translated from Hebrew)
It is unlikely that the deal with Egged will be approved because Israel requires the operator to be a foreign and experienced company. According to The Marker, banks are not happy to entrust the project in the inexperienced hands of Egged.
Fishbein sums up Veolia’s commitment to the Jerusalem Light Rail: “We are not running away from any contract. We made a business agreement. If it would be approved, we’ll be happy to carry on with it. If not – we won’t stop the train.”
Instead of listening to the voice of the Palestinians and respecting decisions of UN bodies, Veolia Israel’s CEO expresses clearly the company’s dedication to a project of the occupying power Israel. The global BDS Movement will therefore continue its activism against Veolia.
- Veolia dumps Israel’s waste in Jordan Valley and wins Israeli army contract (alethonews.wordpress.com)
- Veolia Takes Severe Blow As It Fails To Win 485 Million Pound Contract In West London (alethonews.wordpress.com)
- Palestinian Freedom Riders to challenge segregation by riding settler buses to Jerusalem (alethonews.wordpress.com)