In the News

Water Agency Brings Forward Companies to Build Water Project With Questionable Practices

September 3, 2011
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Veolia-boycott Back in early June, the Clean Water Agency announced that, in an RFQ (Request for Qualifications) process, "three firms have been identified as the most highly qualified to receive the project RFP [Request for Proposal]." According to the minutes from the meeting, the three firms are CDM Constructors, CH2M-Hill and Veolia Water. Almost from the start there was controversy.  Three Davis residents, Mikos Fabersunne, Mary Wind and Mike Pach, spoke and argued that they "wanted


Back in early June, the Clean Water Agency announced that, in an RFQ (Request for Qualifications) process, "three firms have been identified as the most highly qualified to receive the project RFP [Request for Proposal]."

According to the minutes from the meeting, the three firms are CDM Constructors, CH2M-Hill and Veolia Water.

Almost from the start there was controversy.  Three Davis residents, Mikos Fabersunne, Mary Wind and Mike Pach, spoke and argued that they "wanted to ensure that companies with whom the City of Davis and the Agency do business with, have corporate codes of ethics that serve as a guide for socially responsible behavior as corporate citizens and follow such codes in their conduct of business."

The minutes continue: "They read and submitted a statement that was critical of Veolia Environment, which is the parent company of proposer Veolia Water North America."

In a letter to the Directors of the JPA dated July 18, Mr. Fabersunne, et al, argued, "Contracting with firms that are actively complicit in human rights violations or environmental damage, would dishonor the City of Davis and violate the ethical principles encompassed by the nine statements of Function and Purpose of the Davis Human Relations Commission (DHRC)..."

The opposition to Veolia stems from support for a bus line operation. They claim the company is operating buses "solely for Jewish passengers traveling on Jewish-only roads" that travel into the Occupied West Bank of Palestine.

They write, "As you are probably aware, settlements constructed for citizens of an occupying nation-Israel in this case- and built on occupied land (the West Bank) are illegal under international law, in violation of the 4th Geneva Conventions and the advisory opinion of the International Criminal Court."

"Given the complicity of Veolia in Israel's violation of international law, and, therefore, Veolia's violation of its own code of conduct, as well as its violation of the non-discrimination principles established by the Human Relations Commission, we request that the Board of the Clean Water Agency disqualify Veolia from participating further in the bidding, design and construction process," they continue.

The issue apparently was raised at the time of the meeting (though the letter is over a month later).  The minutes reflect, "Director Dote asked if Eric Mische could get an answer to the question of whether Veolia Water actually owns the transportation system or if they are just operating the system for the government in Israel, as mentioned earlier in public comment."

The minutes do not reflect an answer on this matter.

A letter dated June 16 to Jim Yost from James Good, President of Veolia Water North American Operating Services, responds that the statement regarding Veolia's operation of Jewish-only bus lines is "without merit. Veolia Transport operates the 109 and 110 bus lines without any discrimination between the Israeli and Palestinian populations."

He adds, "Road 443 serves both Israeli and Palestinian vehicles and is open for free use and movement to all."

He further responds, "Veolia made it clear from the beginning that participation in the operation of this light rail system was conditional upon all parties observing a non-discriminatory policy, as well as compliance with international law."

To illustrate how far behind on such issues the local Davis media are, the issue made a blog on August 24 entitled, "Veolia keeps silent about two bus services to illegal settlements," and the author was Adri Nieuwhof.

Among other things, Adri Nieuwhof argued that the claim "that Route 443, which is used by the two bus lines, 'serves both the Israeli and Palestinian populations' is false."

Nieuwhof sites "Israeli human rights organization B'tselem writes about Road 443 on its website," which claims, "[T]he army continues to improperly discriminate against Palestinians, whose use of the road is greatly limited, while Israelis are permitted to travel along it freely."

Moreover, Kairos Palestine coordinator also commented on the non-discrimination claims and wrote, "Palestinians live under apartheid in the most technical definition of the word. It is impossible to 'avoid' discrimination when the entire occupation is predicated on it. Using the language of 'discrimination' whitewashes the reality of occupation itself, which is a matter of colonialism, not simply prejudice. In any case, the state of Israel systematically discriminates against Palestinians; a company cannot distinguish itself from the rules and workings of the state."

Nieuwhof further reports, "Veolia tries to throw dust in the eyes of Davis City by stating that the company 'does not operate other bus services in the West Bank.' "  In fact, "Who Profits found that Veolia operates two other bus services to settlements in the West Bank. Bus service 7 runs from Modi'in to the settlements of Hashmonaim and Kfar Ha'oranim."

Whichever side you fall on the Israeli-Palestinian issue, the involvement of Veolia in such a polarizing issue is troubling, as is their apparent lack of forthrightness as to their true level of involvement.

To make these matters more complicated, according to Lynanne Mehlhaff of the Clean Water Agency, while CDM, CH2MHill and Veolia are the lead firms, "Each of the three teams is comprised of at least two large firms that specialize in various aspects of the design, build and/or operation processes."

United Water is part of the CDM team.

An August 18 letter from UWUA Info (who are apparently the Utility Workers Union of America) brings attention to a 26-count federal indictment issued last December against United Water and two of its managers for alleged environmental felonies at a wastewater treatment plant in Gary, Indiana.

According to the letter, which was widely received, "The company and the two managers have pleaded not guilty in the case, and United Water asserts that the charges are 'unfounded.' "

"We are also writing to advise you about internal company emails recently released by prosecutors showing that certain other United Water managers were aware of evidence of improper E. coli sampling practices at the Gary plant as early as 2003.  Even so, prosecutors allege that United Water management in Gary continued those practices until 2008, when federal agents executed a search warrant at the facility," they write.

According to a December 8 federal grand jury indictment, "United Water and two of its managers at the Gary plant intentionally manipulated water quality monitoring results at the facility over a five year period between 2003 and 2008.  The indictment charges the company with 25 counts of Clean Water Act violations and one count of conspiracy to defraud the U.S. Government by tampering with E. coli bacteria monitoring results."

According to the letter, "The indictment alleges that United Water engaged in a scheme to routinely reduce chlorine levels used to keep E. coli concentrations in wastewater discharged from the plant within federal limits.  According to the indictment, the company temporarily increased chlorine levels shortly before taking daily monitoring samples, and then reduced the levels after taking the samples.  Prosecutors allege United Water did this to cut its chlorine chemical costs."

The Gary Sanitary District terminated its contract with United Water earlier in 2010, stating the City would save money by operating the plant itself.

United Water responded to the letter, with President Robert Iacullo stating that "the government's claim is, at best, a disagreement about operating and monitoring methods, with no allegation of environmental harm."

The UWUA letter indicates, "In our view, this effort to discount the seriousness of the allegations contained in the indictment is deeply disturbing.  United Water stands accused by federal prosecutors of having intentionally tampered with E. coli monitoring tests at the Gary plant over a five year period in order to boost its profits.  If convicted, the two indicted managers could face decades in prison, and the company subjected to a significant fine, probation, or both."

They add, "We believe that, if true, these allegations represent far more than a mere 'disagreement' about 'operating and monitoring methods,' as claimed by the company."

A June 2003 email was released by federal prosecutors in which one manager wrote, "In my opinion, this procedure is a recipe for disaster - ethical issue - best effluent all of the time.  If IDEM [the Indiana Department of Environmental Management] or EPA [the U.S. Environmental Protection Agency] takes a grab sample outside the higher hypochlorite feed time you would definitely have a problem!"

Two days later, the United Water manager receiving that email wrote to the company's project manager in Gary: "I have heard that there is a proposed modification on dosage during testing.  This is contrary to the 'rules of the game' and should not be modified for short durations.  Call me if you have questions."

In August 2003, a United Water supervisor wrote to the Gary project manager under instructions from United Water manager Tom Brown: "Tom Brown had asked me to investigate the e-coli exceedence that was observed in Gary last week. . . .  Best management practices would dictate that a dosage be established and allowed to remain in effect throughout the day.  This data would indicate that the chlorine is adjusted higher somewhere around 8:00 am when the e-coli sample is taken and adjusted back down after the compliance sample is taken.  Can you explain why the residual chlorine varies so much in the contact tank on a daily basis?"

The supervisor forwarded this email to Brown, who then wrote to the Gary manager: "This is very disturbing.  I want a complete explanation why these chlorine residuals spike every day."

In our view, Veolia's practices in the occupied territories in Israel and CDM's involvement with United Water make both unsuitable for Davis, as a progressive and environmentally-conscious community.

That leaves just one company, who at this time appears not to have controversy surrounding it.  That leaves us without a competitive bid process.  It would seem that a new RFQ should be sent out.

This matter came before the Davis Human Relations Commission back in July, my first meeting as an alternate member, and the HRC recommended the City of Davis look into its ethical policies regarding the companies who bid on various projects that come before the city.

At the time, the minutes from June reflect: "Vice-Chair Souza asked about RFP language regarding consideration of business ethics. Richard Shanahan, Agency Counsel, said he would check with attorney Eric Peterson who is part of the Facilities Procurement Committee for the RFP process."

Furthermore, "Director Dote stated she supported putting in language in the RFP on considerations of business ethics.  She also would like to see this project benefit the local labor pool and that language be included in the RFP regarding employment of local labor."

There was a provision passed at the behest of Mayor Krovoza, that "once the RFP is released and if one of the three short-listed bidders drops out, could the fourth ranked firm be allowed to step in. Staff responded that they could invite the fourth ranked team, Balfour Beatty, to submit an RFP if they wish after a team drops out."

However, given the records of two of these companies, perhaps the RFQ process should begin again.

---David M. Greenwald reporting

September 3, 2011
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