Workers
Must Control Economic Policy and Economic Outcomes
Canadian Workers' Pension Monies Used to Privatize Water in Brazil São Paulo,
Brazil, June 11, 2021.
One of the matters of ever greater concern
amongst Canadian workers is their lack of control over where their
pension monies are invested. These very large pools of money are put
into the hands of investment companies, financial institutions and
financial oligarchs whose job is to seek the highest return for
themselves
and sometimes but not always the safest bet, irrespective of where the
funds are invested. The workers exercise no control over the fact that
investments are done according to neo-liberal considerations and go
against everything Canadian workers on the whole stand for. The current
term for it is "financialization." It refers to a process whereby
financial markets, financial institutions and financial elites gain
greater influence over economic policy and economic outcomes. The
process transforms the functioning of economic systems at both the
macro and micro levels both at home and abroad in favour of these
narrow
private interests no matter what harm they cause to the social and
natural
environment. Under the guise that business is business, very harmful,
unacceptable nation-wrecking and anti-people investments are made.  Such
is the case with the investment made on April 30 of this year of more
than $900 million of Canadian workers' pension money to privatize water
and sanitation services in Brazil. A large section of Rio de Janeiro's
State Water and Sewage Company (CEDAE) was purchased at auction by a
private company 85 per cent owned by the Canada Pension Plan Investment
Board (CPPIB) and the Alberta Investment Management Corporation (AIMCo).
CEDAE was the most profitable water system in Brazil, bringing
in
$226 million a year, with part of these revenues used to subsidize
services in areas where costs were higher. AIMCo,
which says it manages the investments for 32 pensions,
endowments and government funds in the Province of Alberta, already
possessed a significant stake in Brazil's third largest private water
and sewage company, Iguá Saneamento, used to acquire part of
the public
utility. However it was a last minute infusion of some $270 million
from CPP Investments, giving it 46.7 per cent ownership of
Iguá, that
was decisive in allowing the company to win the bid for CEDAE.
In preparation for the auction CEDAE was divided into blocks
or
concessions. The most lucrative concessions were scooped up by private
interests, one of these being Iguá. The least profitable
ones remained
in the hands of the state, likely ending its ability to continue using
the profits from some to subsidize others. It will likely also push
rates
up for users already in the grips of a severe economic crisis.
Residents living in areas of Rio already serviced by private companies
are said to pay up to 70 per cent more for water than those serviced by
the public system.  Opposition
by unions and others in Brazil as well as Canada to the privatization
of water and sanitation systems was swift. Brazilian unions said 3,500
public sector workers stood to lose their jobs. The Brazilian National
Urban Workers Union applied for and won an injunction to delay the
auction. State legislators also voted out of concern
for it to be delayed. Both of them were overruled by a government
decree that ordered the auction to go ahead as scheduled.
The
auction took place in the midst of the terrible crisis Brazil was
going through thanks to President Jair Bolsonaro's reckless response
to the pandemic and the grim consequences of this for Brazilians. It
turns out the timing was likely deliberate. Bolsonaro's former
environment minister was secretly recorded urging colleagues at a
cabinet
meeting to take advantage of the pandemic and of people having other
preoccupations to get as many unpopular policies passed as they could,
as quickly as they could. Canadian Union of Public
Employees President Mark Hancock accused
CPP Investments of helping to legitimate Bolsonaro's privatization
agenda, saying "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." The
handing over of Canadian workers' retirement funds without their
consent, and over their objection, to pay the rich through schemes
geared to assisting private interests at home and abroad to line their
pockets is unacceptable. It is all the more repugnant when it is
defended in the name of high ideals to detract from the anti-social and
nation-wrecking consequence of the investments. The
facts reveal that workers must control economic policy and
economic outcomes. They must set the direction of the economy and end
the policies which pay the rich and destroy the social and natural
environment. 
Protest at Canadian
consulate in Rio de Janeiro, June 2021.
This article was published in
September 17, 2021 -
No. 84
Article Link:
https://cpcml.ca/WF2021/Articles/WO08841.HTM
Website: www.cpcml.ca
Email: editor@cpcml.ca
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