Canada Pension Plan Must Scrap Water Privatization Deal

OTTAWA, Ontario--(BUSINESS WIRE)--CUPE is demanding Canada’s public pension plan abandon projects to invest in a major water privatization scheme in Brazil. The Canada Pension Plan Investment Board is taking part in a massive selloff of public infrastructure being led by far-right President Jair Bolsonaro, while the country is being ravaged by COVID-19.

The CPPIB has bought a 45 per cent stake in Igua Saneamento, a Brazilian private water and wastewater company. Igua Saneamento will use a portion of the CPPIB’s $270 million to buy a public water system being auctioned off in the state of Rio de Janeiro. The auction is scheduled to take place on April 30.

“It’s outrageous that our public pension plan is using workers’ retirement funds to profit from people’s need for clean water and safe sewage treatment. These are human rights that are essential for survival. Access to water services is already fragile and unequal in Brazil. Privatization will make things worse and we want it scrapped,” says CUPE National President Mark Hancock.

The current political environment makes any investment in Brazilian infrastructure inherently risky. The water services auction is happening in the runup to presidential elections in 2022 that could overturn the privatization. There are several legal actions before Brazilian courts that could delay or disrupt the auction, underlining the significant political risks associated with investments that are likely to generate social opposition.

On April 26, several unions won a temporary injunction blocking the auction, because the public water utility had not negotiated with the workers about the mass layoffs. The National Federation of Urban Workers (FNU), which represents affected water workers in Rio de Janeiro, says the privatization will mean thousands of workers will lose their jobs. The affected workers are calling on Canadians to help defend public water services.

“CUPE is strongly opposed to pension funds investing in, and profiting from, privatized infrastructure. We want our pension funds to make decent investment returns, but not at the expense of workers and the Canadian public, or workers and residents in other countries. The CPPIB must pull out of this harmful and risky privatization plan,” says CUPE National Secretary-Treasurer Charles Fleury.

Privately owned and operated water and wastewater services have a terrible track record. Water privatization often comes with skyrocketing rates, plummeting access, declining quality and cuts in service and jobs.

• Read CUPE’s letter to the CPPIB in English and in Portuguese

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