Brazilian workers aim to turn tide of water privatization in Fall election

Karin Jordan | CUPE staff

Brazilian water worker Ary Girota has not stopped fighting since the water utility where he works was carved up for privatization in April 2021. He is defending 2,500 members from mass layoffs and highlighting the dangers of for-profit water. He is equally relentless in calling out two Canadian pension funds for profiting from the selloff.

There is hope on the horizon. Girota and many others are organizing internationally to reverse the tide of privatization. They are also working to rebuild the country through the upcoming presidential election this fall.

A wastewater treatment worker for 28 years, Girota got involved in his union to fight privatization. In 2020, he was elected president of SINDAGUA-RJ, one of three unions representing workers at CEDAE, or Companhia Estadual de Águas e Esgotos. CEDAE is the country’s largest and most profitable water and wastewater utility, serving 12 million residents in 64 municipalities in the state of Rio de Janeiro.

In a video address to the 2022 CUPE Saskatchewan Convention, Girota told delegates that privatization of the successful public water utility is “a tragedy,” and part of a broader attack on public services and Brazilian society. He thanked CUPE members for their solidarity in a struggle that has a long history – a struggle that intensified with the 2018 election of far-right President Jair Bolsonaro.

“We’re in one of the most difficult moments, not only for us as CEDAE workers, but for the entire country. It is a fascist government that’s elected right now at the national level. They’re implementing proposals and laws that take away workers’ rights and attack the working class,” Girota told us in an interview.

The Bolsonaro government’s push to sell off Brazil’s public utilities and services specifically targeted public water and wastewater services, steamrolling over legal and jurisdictional roadblocks.

“They are burning everything to get short-term money coming into the budget,” says Ary Girota.

Cuts to the company’s maintenance and infrastructure budgets were “active sabotage” that primed the company for privatization, according to Girota. Adding to the chaos, privatization was rammed through during a brutal wave of COVID-19.

Auctioning off a human right

In April 2021, the profitable parts of CEDAE were auctioned off in a televised spectacle where Bolsonaro himself wielded the gavel. Brazil-based Iguá Saneamento snapped up the 35-year contract for one large chunk of the utility with a $1.7 billion bid. Iguá Saneamento is majority owned by two Canadian pension funds and already holds multiple privatization contracts in the country.

Girota was taken aback to learn Canadian workers’ retirement funds were helping bankroll CEDAE’s privatization. “This is ridiculous!” he thought.

He quickly realized it is “the investment managers who are controlling this, not the working class in Canada.” Together with global public sector union federation Public Services International, Brazilian workers organized with Canadian unions to target CPP Investments, which manages the funds of the Canada Pension Plan.

CUPE joined the fight, demanding CPP Investments immediately pull out of Iguá Saneamento and National President Mark Hancock called the scheme “socially harmful and economically risky” in a letter to the head of CPP Investments.

CUPE warned the deal threatens the human right to water and sanitation services, and cited the disastrous global track record of water privatization leading to skyrocketing rates, reduced access, declining quality and cuts in service and jobs.

Canada’s role goes beyond pension fund profiteering. The Canadian government is promoting Bolsonaro’s water privatization plan as a ‘socially and environmentally responsible’ business opportunity for Canadian corporations. One of Canada’s Brazil-based trade commissioners praised Bolsonaro’s policies for increasing “market access and competition in a sector that has traditionally been controlled by state‑owned companies.”

Promoters of CEDAE’s privatization also say it will increase access to water and wastewater services, a pressing situation for millions in the country. Girota dismisses these claims as “marketing,” saying corporate buzzwords can’t hide the fact that “this is an investment that will make people suffer.”

For-profit water woes

Girota speaks from experience when he says the private sector will not expand water access. He says 80% of Rio residents already have access to drinking water, after decades of painstaking work by the public utility.

To Girota, CEDAE workers are heroes and “really deserve to be recognized. In the two years of the pandemic, CEDAE never stopped for one single day. We never stopped delivering water to anybody!” he exclaims.

Meanwhile, water privatization in Brazil has meant a dramatic drop in workers’ wages, and difficulty enforcing health and safety standards. Private operators have dumped untreated sewage in lakes and rivers, and in the ocean, causing environmental damage.

Water prices are rising, which is also inevitable according to Girota. “The water bill for everybody starts to go up, of course, it does. It is the philosophy, it is the point of the private sector. But the problem is that nobody can live without water.”

He adds that delivering water and wastewater services to people living in informal settlements, including the favelas where more than 12 million Brazilians live, takes local know-how that private companies simply don’t have. Just as important, expanding access to unserved communities will not deliver the profits that private investors demand.

Public water authorities commonly provide access to clean drinking water and wastewater treatment for people who cannot pay.

“If there’s anybody that has the capacity and the will, the desire to deliver water to that last 20%, it’s the public authority. It is not the private actors. All our experiences with privatization in Rio have the same results. They don’t want to service the poorest communities,” Girota insists.

Organizing for a better future

With presidential elections set for October 2022, many see hope in the candidacy of former president and Workers’ Party leader Luiz Inácio Lula da Silva, known as Lula. Electing Lula could open the door to reversing Bolsonaro-era policies that have shredded the country’s social fabric, including water privatization.

“We understand that we want to get Lula elected, but we also understand that one person, one political figure, can’t do all of this,” says Girota.

He is clear that change won’t come just from the top, and that it will take people inside and outside the government working together for change.

“It is not only about changing the president. We need to elect others in Congress and build a critical mass of people who will take decisions that are in favour of the population,” he adds.

What is good for workers in Brazil could be damaging for Canadian pension funds. Investors face financial losses if CEDAE and other privatized companies return to public hands. CUPE highlighted the inherently risky nature of privatization in its campaign targeting CPP Investments and will keep raising the fundamental problems with pension funds owning, operating, and profiting from vital public services.

“What we need is all the power that we can put together collectively to change the situation. It is a really difficult, complicated moment in our history and there’s something very, very central about water and water treatment in all this,” Girota explains.

“Because when you cut off people’s water, you are cutting off people’s access to life,” says Ary Girota.

Girota is hopeful for Lula’s election: “What we’re trying to do is really feed and build people’s hope and capacity to dream and envision a different model,” he concludes.

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Keep our pensions out of privatization!

Two Canadian pension funds are profiting from water privatization in Brazil.

AIMCo manages the funds of several Alberta public sector pension plans, including the Local Authorities Pension Plan (LAPP), which most CUPE members in Alberta belong to. AIMCo first invested in Iguá Saneamento in 2018 and owns 39% of the company.

CPP Investments manages the funds of Canada’s public pension plan, which every Canadian worker pays into, and bought a 45% stake in Iguá Saneamento in March 2021.

The situation shined a spotlight on a widespread problem. Private capital, including pension funds, is in overdrive seeking to profit from public services and systems through privatization. CUPE has developed a toolkit to help members protect public infrastructure and keep their pensions out of privatization.

Visit cupe.ca and download Keep our pensions out of privatization: A guide for CUPE members, trustees and other pension representatives.