Veolia Water Contract Sent Back to Committee Over Concerns About Company's Reputation

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City leaders are no longer going with the flow on Veolia.
  • City leaders are no longer going with the flow on Veolia.

Seemingly overnight, the fortunes of a lucrative contract between the City of St. Louis and Veolia Water have been reversed.

Earlier this month, Daily RFT broke the news that the city's Water Division recently completed the bidding process for a consulting contract aimed at cutting spending at the utility. The winning bidder was Veolia, a French multinational company.

Water department workers were the first to contact Daily RFT about the contract, fearing that their jobs were in danger (both the official Veolia bid and the mayor's office have emphatically stated there will be no layoffs). But now a new group has come to the fore and after less than 24 hours of emails and phone calls to City Hall, the contract's approval has been stalled.

Veolia is the largest water services provider in the world and no stranger to controversy. As we wrote in early December, environmental groups have had their eye on the company for some time, and carefully track violations and lawsuits stemming from their involvement in municipal water treatment. Click here to read about those concerns. But conservationists and labor interests are not the only ones who have beef with the company.

A group known as the St. Louis Palestine Solidarity Committee has stepped into the fray. Identifying themselves as a "group of Palestinians, Israelis, Muslims, Jews, Christians...united by a commitment to a lasting peace in Israel/Palestine," their members began contacting city officials after learning that the contract, which has not been signed yet, was moving forward to the Estimate and Apportionment Committee. Approval by the E&A committee, made up of Mayor Francis Slay, Aldermanic President Lewis Reed, and Comptroller Darlene Green, is the final administrative step needed before the contract can be officially enacted.

The group's objection to Veolia centers around the operation of waste, water, and transportation services on disputed territory in the West Bank. Several Veolia subsidiaries are on contract to run busses, a tramway, waste disposal, a landfill, and water services for Jewish people making their homes in settlements on disputed land in the West Bank. The group argues that by making life comfortable in these controversial settlements, Veolia is prolonging the long and bloody conflict between Israel and Palestine for profit. They characterize the fact that Israelis can use the trams, busses, roadways, but Palestinians can not as a form of segregation. In 2010, the United Nations Human Rights Council declared that the tramway was a "clear violation of international law and relevant United Nations resolutions." STL-PSC is part of a much larger, global effort to convince governments worldwide to divest from companies that in any way support Israeli settlements.

"We learned of the Veolia negotiations and immediately decided this was something we wanted to make city officials aware of," says Sandra Tamari, a member of STL-PSC.

As soon as it became known that the water contract was on the agenda for approval at Wednesday afternoon's E&A meeting, members of STL-PSC sent a total of 180 emails to Green, Slay, and Reed, and began calling their offices as well. A spokesperson for Green's office says their lines were "flooding" with calls the morning of the vote. At the meeting itself, seven members of STL-PSC arrived at the mayor's office wearing handwritten "Investigate Veolia" stickers. Seating quickly ran out at what is usually an extremely brief meeting that includes no time for public comment.

The Veolia contract up for vote was for $250,000 for a preliminary four-month consulting phase. A second phase contract will be awarded if the city chooses to implement Veolia's cost-saving recommendations -- that phase could go as long as five years and Veolia projected it could save the city between $8.2 and $15.1 million.

President Reed was first to raise objections to approving the contract. Mayor Slay countered that the deal had already been approved by a selection committee made up of now-Chief of Police Sam Dotson, Reed's Chief of Staff Tom Shephard, Water Division Commissioner Curt Skouby, John Zakibe from the Comptroller's office, and Jim Kummer, a representative of the water division (vote for approval had gone 3 yays, 1 nay, 1 abstain).

"I don't think we should be taking this up today," said Reed, "in light of new information we've received about the company."

Slay said he was comfortable with Veolia since it has been operating the city's steam loop for the past six-and-a-half years, and that concerns being raised from outside groups have "nothing to do with the City of St. Louis." He also reiterated that Veolia is not in St. Louis to privatize the utility, a fear that was raised when company executives toured the utility two years ago.

"We're not selling our water department to anybody. They are not managing it. They are not operating our water department in any respect," he said. "They're giving us advice so we can save money...This limited contract at $250,000 would be well worth it."

"This was added to the agenda yesterday," said Reed. "The timing isn't right for me personally."

Reed and Slay butting heads is certainly nothing knew, especially in light of their upcoming battle for the mayorship. But when Green piped up, she sided with Reed, saying she was concerned by the fact that there was dissension on the selection committee.

"To me that really says let's investigate Veolia before we go further today," she said. "A lot of the public is sitting here...These are property-owning, tax-paying people that actively contribute...So I want to do it the right way. I don't want to rush anything."

She recommended that the contract be sent back to the committee to learn more about the allegations against Veolia.

"You want to do an investigation? Let's do an investigation," Slay conceded. "We're not going to take this up, I guess."

After the meeting, Reed confirmed that his office had also been hearing from "tons" of water division workers upset about the contract. For now, the contract is stalled.

Another member of STL-PSC, Anna Baltzer (author of the book A Witness in Palestine and a one-time Daily Show guest) says she was pleased with the outcome.

"I think it highlighted that there's a lot more under the surface of Veolia, and in a democracy these things should be transparent," she says.

She says she hopes that the city will build a hearing into the process of reinvestigating its contract to allow members of the public to speak about Veolia. The group is also planning to hold a public lecture about the company on January 10 for anyone who'd like to learn more. Information will be on their website.

She added that she is now also interested in taking a look at Veolia's work on the steam loop.

"We have a choice now. Are we going to continue to fund this corporation?" she says. "We hope that that contract will not be renewed."

Check out a copy of a press release put out by STL-PSC ahead of the meeting below. We forwarded a copy to Veolia North America's press department in Chicago for response and have not heard back.

PSC Veolia Contract Statement

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