Canadian Trade Union Urges Pension Investor To Withdraw From Brazilian Water Deal

The Canadian Union of Public Employees (CUPE) has written to Canada Pension Plan Investments urging it to reconsider its involvement in a scheme to privatise one of Brazil's largest public water utilities Cedae, based in the state of Rio de Janeiro. The forthcoming auction is part of an ongoing selloff of public utilities by the government of Brazil's right-wing president Jair Bolsonaro.

“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,” said CUPE national president Mark Hancock.

In his letter, written on behalf of CUPE's 700,000 members, Hancock called on the CPPIB to "withdraw from this process immediately", arguing "it is well documented that water privatization often comes with skyrocketing rates, plummeting access, declining quality and cuts in service and jobs".

CPPIB's $220 Million USD stake in Igua is understood to strengthen Igua's bid for Cedae, according to a report in Reuters, as well as help fund another privatisation deal involving sanitation company Corsan.

Co-signatory to the letter, CUPE's national secretary-treasurer Charles Fleury, said: "“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."

CUPE is also concerned that the deal is "inherently risky and damaging to your reputation", pointing out that a change of government following Brazil's 2022 general election presents "a very real possibility that public infrastructure sold off during the current government’s term could be brought back under public control...exposing investors to losses".

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. On April 26, several unions won a temporary injunction blocking the auction of Cedae, because the public water utility had not negotiated with the workers about the mass layoffs.

Photo credit: CUPE