Privatizing Water Supply and Sewage Treatment: How Far Should We Go?

Elizabeth Brubaker
July 6, 1998

From Journal des Economistes et des Etudes Humaines, Volume 8, Number 4, December 1998, pp.441-454
Prepared for Property Rights, Economics & Environment: Water Resources
An International Conference Organised by the Centre d’Analyse Economique and
The International Center for Research on Environmental Issues
Aix-en-Provence, France, July 6-8, 1998

Who should own municipal water supply and sewage treatment facilities? Who should operate them? Who should regulate them? To what extent should government be involved? What is the private sector’s role? In the following discussion of these questions, I will focus on four different approaches – four levels of government involvement – and explore the environmental implications of each approach. First, I will describe the Canadian approach: In Canada, virtually all water and sewage utilities are publicly owned and publicly operated. Then, I will discuss the French approach: In France, many municipalities contract out water and sewage operations to private companies. Next, I will turn to the British approach: England and Wales have fully privatized their water and sewage services. Finally, I will touch on the private approach – an approach in which government regulation is made unnecessary by competitive markets and property rights.(1)

Canada

In Canada, we face a number of water problems. Some of the problems concern water supply. Although we have nine per cent of the world’s fresh water (and less than one per cent of the world’s population), much of it is inaccessible: Sixty per cent runs north to Hudson Bay and to the Arctic. That water is not available to the 90 per cent of the population that lives in the southern part of Canada. Even where water is plentiful, we often do not have the infrastructure to get it to those who need it. In 1994, 17 per cent of Canada’s municipalities reported problems with water availability.(2)

Where water is scarce, low prices do not encourage people to conserve. Almost half of Canadians pay flat rates for water. Unmetered, they use a large volume of water – on average, 430 litres a day, or almost three times more than the typical French consumer uses.(3) Even metered customers can afford to waste water, which is uniformly cheap. The average Canadian pays under a dollar for a cubic meter of water and sewage treatment – less than a quarter of the average price in France.(4)

These low prices do not mean that the cost of our water use is low. In most cases, our prices and costs are unrelated. Our prices reflect neither the availability of water nor its value for domestic or alternative uses. Nor do they reflect the environmental impacts of sewage discharges. Our water prices often do not even reflect the full costs of treating and supplying water or of collecting and treating sewage; in fact, they may cover only a small part of the costs of operating, repairing, and upgrading our systems. Government subsidies cover the balance of the costs. In 1994, consumers benefited from Cdn$5.3 billion – over FF21 billion – in subsidies to water and sewage projects.(5)

The billions of dollars that governments – meaning taxpayers – pour into maintaining the pipes and plants have not produced a very good system. Sewage pollution is a serious problem across Canada. Approximately 75 per cent of Canadians are connected to sewer systems. Not all of those sewer systems, however, are connected to treatment plants. Seven percent of them simply carry the sewage, untreated, to the nearest lake, or river, or ocean. Over one and a half million Canadians dispose of their sewage in this way.(6) Another five million Canadians – almost a quarter our municipal population – have access to only primary treatment.(7) A conventional primary plant removes only 40 to 60 per cent of the suspended solids and only half of the total coliforms; it reduces biological oxygen demand by only 25 to 40 per cent.(8) Even the more common secondary plants may be too small, poorly constructed, ill maintained, or badly operated.

Hundreds of plants across the country fail to comply with provincial standards. In some provinces, non-complying plants are the norm: More plants violate the rules than comply with them. The polluters, however, are almost never punished: Although our laws look stringent, our governments rarely enforce them.(9) Indeed, when aggrieved citizens and non-governmental organizations have tried through civil suits and private prosecutions to stem sewage pollution, their attempts have frequently been foiled by governments intent on shielding offending municipalities.

Untreated or inadequately treated effluent has a number of environmental effects. It degrades aquatic habitat and is toxic to fish. Furthermore, it poses a human health hazard, both for those who swim in it and for those who eat shellfish contaminated by it. As a result, beach closures are common across Canada. Shellfish closures are also common. On the Atlantic coast, it is not unusual for thousands of square kilometres of shellfish grounds – more than a third of the region’s total – to be closed. Municipal sewage pollution is the sole cause of 20 per cent of these closures and contributes to over 50 per cent of them.(10)

Why don’t our governments take action against sewage polluters? The problem lies in the fact that governments are not merely the regulators: They also own, operate, or finance our sewage systems. Governments are therefore in conflicts of interest. If they decide to curb sewage pollution, they – meaning either the federal, provincial, or municipal governments, depending on the plant – will have to pay the bills. Governments understand that the bills will be enormous. A federal advisory committee suggests that over the next 20 years, Canada will need to invest Cdn$38-49 billion – FF155-200 billion – just to maintain its existing water and sewage infrastructure. In addition, it predicts, we will need to invest Cdn$41 billion – FF167 billion – in new stock. These investments will be required to meet existing standards; tighter standards would mean even higher costs.(11)

Governments are reluctant – and in some cases, unable – to foot bills of this magnitude. As populations grow and systems deteriorate, they are looking for help. Increasingly, they are admitting that the help will have to come from the private sector. Private sector involvement is attractive for a number of reasons. Private companies will be able to invest much-needed capital in infrastructure. They will insist on recovering their investments from their customers. Prices will rise to a more appropriate level. Subsidies can then fall – even disappear.

While privatization will change the parties bearing the costs of water supply and sewage treatment, the costs themselves should decline. The private sector has shown time and again that it is more efficient than the public sector. Jurisdictions in the United States have realized significant savings from water and sewage privatization. A study of water companies in California found public operations to be substantially less efficient than private operations.(12) Proportionally, they hire more than twice as many employees. They spend almost twice as much on maintenance to produce a product of the same quality. As a result, even though public operations enjoy tax exemptions and other subsidies, they cannot provide cheaper water. When subsidies are accounted for, water from public operations costs 28 per cent more than water from private operations.(13) Another US study found that contracting out water services to the private sector achieves cost savings of between 20 and 50 per cent.(14) While efficiencies are, of course, spurred by the profit motive, profit does not eat up all of the savings: Some can be invested back into the system. In Indianapolis, savings from sewage privatization allowed the city to invest US$90 million – FF539 million – in the reconstruction of a sewer system that was on the verge of collapse.(15)

It is reasonable to expect that privatization in Canada will likewise bring capital investment, rationalize prices, remove subsidies, and improve efficiencies, freeing up money for further investment. Lastly, privatization will remove the conflict of interest that now prevents governments from enforcing their laws. The environment should benefit from all of these changes.

The question is not whether we should privatize but how we should privatize. Water privatization will, inevitably, come to Canada. The form that it will take is far less clear. What form should it take? What form will best protect the environment, consumers, and taxpayers? Those are the questions that we are now asking. To help answer them, we are looking at the experiences of other jurisdictions. One of those jurisdictions is France, which is often held up as a model for water privatization.

France(16)

France has long enjoyed a mix of public and private water and sewage systems. Although all of the systems are publicly owned, many are privately built and operated. Water supply and sewage treatment are the responsibility of the communes, or municipalities. Often, a number of communes join together to provide water services. While there are 36,500 communes, there are about 15,200 water distribution networks. About 58 per cent of the communes, or joint ventures, contract out their water supply to the private sector. Contracts cover over 75 per cent of the population and 85 per cent of the water sold.(17) Private companies also provide 35 per cent of the sewage treatment services.(18) About a third of the larger communes – those with populations of more than 50,000 – have privately managed sewage collection networks, while approximately two thirds of their sewage treatment plants are managed by the private sector.(19)

For all that private sector involvement, the French system seems surprisingly public: The system is, in many ways, centralized, politicized, and insulated from market forces.

The French system is heavily subsidized. Both public and private operations receive subsidies from many levels of government and from one another. In other words, the privatization of the delivery of services has not led to the privatization of the financing of services.

Water consumers regularly subsidize other water and sewage consumers within their river basin. Water companies – meaning their customers – pay withdrawal and pollution fees to one of the six Water Agencies. In 1995, these fees amounted to FF9.4 billion.(20) The Agencies, which are river basin management authorities, then reinvest the fees in water and sewage projects. The fees support both grants and low-interest loans, either of which may cover up to 50 per cent of the capital cost of a project.(21) Subsidized water projects include dams, reservoirs, interconnections between systems, water intakes, and demand management programs; subsidized sewage projects include sewer systems, treatment plants, and outfalls.

All levels of government also provide subsidies. Communes contribute at least 20 per cent of construction costs.(22) Departments, which distribute national subsidies, provide over FF1 billion a year for water and sewage investments;(23) many have also established Technical Assistance Services for sewage treatment. Regions occasionally help fund some of the larger projects.(24) The national government subsidizes water projects in rural communities through FNDAE, the National Fund for the Development of Water Supply Systems. It collects money from water users through a surtax on water bills; it also collects money through PMU, the national tote betting system. In 1994, the federal government directed FF935 million to departments for water and sewage projects.(25)

In 1991, the water companies themselves funded only one third of that year’s capital expenditures on water and sewage.(26) It therefore appears that the French system contradicts the frequent claim that one of privatization’s great benefits is the removal of subsidies.

But what about the other advantages of privatization? How have consumers fared under the French system? Prices for both public and private services have risen dramatically in recent years, as companies have worked to comply with European Union standards. Interestingly, the private water companies generally charge higher prices than the public operations. In 1991, the price charged by private operators was 23 per cent higher than that charged by public operators. In 1996, the difference had fallen to 16 per cent.(27)

A number of factors may help explain these differences in costs. Higher prices in the private sector may reflect political costs that are unrelated to the actual provision of water and wastewater services. In the past, private companies frequently paid entry fees to communes; they subsequently recovered these payments – at times amounting to hundreds of millions of francs and going towards municipal budgets rather than water works – through elevated water prices.(28) In some cases, political contributions and even bribes have further increased the costs of doing business.(29) To the extent that such expenditures have been responsible for higher prices, recent legislation prohibiting entry fees(30) and limiting political donations(31) should reduce prices accordingly.

The private sector’s higher prices may also point to the limited nature of the competition within the French water sector. Three well-established companies hold over 96 per cent of the contracts for water supply.(32) France’s Court of Auditors has complained of a perennialization of the arrangements between municipalities and private providers of water services. The Court’s 1997 report noted that competition is often “organised” and that negotiations may take the place of competitive bidding, resulting, at times, in the entrenchment of particular companies.(33) One company has managed water services for Ile-de-France’s four million customers for over 47 years without competition. The company serving Dinard has, without competition, provided water since 1929 and will continue to do so until at least 2005.(34)

Alternatively, the higher rates charged by private operators may be explained by their providing a different kind of service. Communes may operate their systems when doing so is easy and inexpensive; they may turn to the private sector when they encounter technical difficulties or are required to upgrade – in other words, when operations become more costly.(35) Differences in accounting practices may also help explain the differences in prices. If municipalities do not count all of their costs, such as depreciation, they will appear to have fewer costs to pass on to consumers.(36) Because of these differences, it is impossible to draw any conclusions about efficiencies obtained by the private sector. Meaningful comparisons of staffing and operating costs at comparable public and private facilities are called for.

Of course, consumers are not interested only in how much they pay for water. They are also interested in its quality. How clean is drinking water in France? While it has improved in the last decade, it remains far from ideal: In 1995, 14.3 million people living in cities over 10,000 received water that did not conform to bacteriological standards. Of these, 500,000 people experienced repeated violations.(37)

What about water quality at the other end of the pipe? What are the environmental impacts of the water and sewage systems? Tremendous investments have been made in recent years, primarily to enable plants to comply with European Union requirements. These investments are beginning to pay off. One indicator is that beaches are cleaner than they have been in the past. In 1997, 85 per cent of France’s bathing sites met European standards – up from just 60 per cent in 1980.(38) Since these figures do not include permanently closed beaches, they do not tell the whole story. They do, however, suggest progress.

Progress or no progress, inadequate sewage treatment remains a problem in France. Seventy- seven per cent of the population is connected to sewage treatment plants; another 10 per cent is served by septic systems.(39) The remaining 13 per cent of the population – 7.5 million people – discharge their wastes, untreated, into local waters.

In fact, the problem is more serious than the above figures suggest. In 1995, in urban areas of more than 10,000 people, 38 per cent of the flow of oxidisable material – raw organic sewage from domestic sources and from industrial sources connected to municipal sewers – was not collected by treatment plants. This pollution – including waste from collection networks not connected to treatment plants and overflows of combined sanitary and storm sewers – was returned directly to the environment without treatment. Another 17 per cent of the oxidisable material reached the plants but was not removed. Either the plants were not big enough to handle flows, or they used old, unreliable equipment. Whatever the reason, treatment plants eliminated only 45 per cent of the organic sewage produced, while 55 per cent – equivalent to the waste from almost 32 million people – was released into the environment.(40)

And yet, those responsible for this sewage pollution are rarely prosecuted. Authorities in France, as in Canada, are reluctant to sanction municipalities.(41) In fact, France recently formalized its protection of some polluting municipalities: In 1996, it passed legislation limiting officials’ criminal responsibility for harm wrought by their non-negligent actions. The law was prompted in part by several prosecutions, of mayors, for sewage pollution. As the Minister of the Interior assured a gathering of high-ranking civil servants, the law was immediately applied to cases in progress and made it possible to exonerate some of their colleagues.(42)

As noted above, France is often held up as a model of water privatization. As a taxpayer, a consumer, and an environmentalist, however, I do not see the system as being entirely successful. The politicization of the system has contributed to its failure to become either financially independent or environmentally sound. To the extent that politics drives water subsidies and permits sewage pollution – to the extent, in other words, that the problems associated with France’s water system reflect government failure – only full privatization, or the complete withdrawal of government involvement from the finance and operation of the system, will correct the problems. The solution certainly merits further exploration.

England and Wales

In 1989, water supply and sewage treatment in England and Wales were fully privatized. That approach has produced results more in keeping with those we have come to expect from privatization.

The ten new water and sewage companies have invested enormous sums in infrastructure. The need for massive investment was a primary force driving privatization. In the 1980s, the government estimated that £24 billion – FF240 billion – would be required within ten years to repair the system and to meet new European standards. But the government did not want to borrow or to raise water prices.(43) The government’s promise, in 1986, that the new private water companies would be “released from the constraints on financing which public ownership imposes”(44) proved to be a dramatic understatement. The water companies have invested about £3 billion a year. When current programmes are completed, they will have invested £40 billion – over FF400 billion.(45)

Not surprisingly, these unprecedented investments have improved performance. Drinking water quality has improved steadily.(46) Fewer customers are threatened by water shortages.(47) Fewer are affected by sewer flooding.(48) Investments have also brought environmental improvements. In the first five years following privatization, the percentage of plants complying with their discharge permits increased from 87 to 96. During that period, the quality of more than 3,000 kilom

petres of rivers and canals improved significantly. In 1990, less than 48 per cent of the rivers and canals tested were classified as very good or good; by 1995, that figure had increased to 60 per cent.(49)

Privatization also made coastal beaches swimmable. Britain’s beaches had long been polluted by raw sewage. In 1975, when the European Community gave member countries ten years to clean up their bathing waters, the British government resisted, claiming that the country had only 27 beaches. The number of beaches in England and Wales has increased since then: It is now at 447. Compliance with European standards is also up: It increased from 66 per cent the year before privatization to 89 per cent in 1997.(50)

A number of companies are currently working to exceed European standards. Four companies have agreed to install full treatment plus disinfection at some or all of their sewage treatment plants. Some of these plants will meet guidelines that are twenty times stricter than European standards.(51)

Why are they doing this? In part, they are responding to public pressure. A number of environmental groups fight for cleaner rivers and oceans. They and their members monitor and report sewage pollution, rate beaches, lobby regulators, and launch legal actions against polluting companies.

More than the public’s attitude has changed: The government’s attitude has also changed. When the government owned polluting plants, it created what one former regulator called a “potent culture of government concealment.”(52) According to another regulator, Britain’s old system had been “designed with a view to avoiding . . . an excessive number of prosecutions of public organisations.”(53) In other words, Britain suffered from the same conflict of interest that now plagues Canada and France. The government acknowledged this. In 1987, the Secretary of State noted that in a publicly owned system, the government acts as both “poacher” and “gamekeeper.”(54) By separating the polluter from the regulator, privatization would free regulators to regulate.

This has certainly happened. Now that the government is not polluting, it does not have the same incentives to hide information. It can worry about protecting the public rather than protecting its own interests. As a result, it is enforcing its laws against pollution far more vigorously than before. Prosecutions for environmental offences – which were rare under the former public regime – are now the norm. Recent years have seen over two hundred successful prosecutions of water and sewage companies.(55) Unfortunately, the fines resulting from these prosecutions are often low.

Regardless, the environment has clearly benefited from privatization. But what about the consumers? Have the new water companies provided better service at lower prices? While service has improved, prices have by no means declined. Because of the huge investment in infrastructure required, average water and sewage prices doubled between 1989 and 1996.(56) The increases have frustrated consumers. With only 11 per cent of the households on water meters, most people can do nothing to keep their costs down.(57) Thousands have been disconnected for not paying their water bills. High prices and disconnections have made the water companies quite unpopular.

Other problems persist. The water system leaks badly: As much as 30 per cent of the water put into the distribution system leaks out.(58) Furthermore, sewage pollution remains common: In 1997, almost four million people who were connected to sewers received either no treatment or only preliminary treatment.(59) All collected sewage should be treated by 2005.(60) Thus there remains much work to be done. There is little doubt, however, that the work is more likely to be done under the new private system than it would have been under the former public system.

Privatizing Regulation

I have been discussing privatizing the operation and financing of water supply and sewage treatment services. I will now briefly explore the possibility of privatizing the regulation of these systems.

In Canada, provincial governments normally regulate water and sewage. In England and France, much regulation ostensibly occurs at the river basin level. However, national authorities may guide – and overrule – river basin decisions. Furthermore, the European Union sets standards that all member states must comply with.

Is such highly centralized regulation appropriate for water supply and sewage treatment? At what level should these services be regulated? And by whom? The European principle of subsidiarity is a sound – albeit frequently violated – one: Resource use should be regulated at the lowest reasonable level. Strictly local problems merit local solutions. Indeed, the principle can be taken further: Problems that affect a limited number of individuals can best be solved by those individuals.

The effects of sewage discharges tend to be localized – more localized, often, than the effects of water withdrawals. Often, the release of sewage into a river affects the people living immediately downstream and those who own fisheries in the river. Why not let these people negotiate solutions that suit them?

Under the English common law – a system that also exists in most of Canada – the people living along lakes and rivers and the owners of fisheries have strong property rights. They have rights to water in its natural state – water that has not been diminished or polluted. The French Civil and Rural Codes include some of the same protections. Unfortunately, governments frequently override these rights. They pass laws and regulations authorizing abstraction and pollution. These laws remove decision-making authority from those who are most affected and transfer it to government regulators.(61)

Restoring property rights to clean and plentiful water would partially privatize regulation. The change would not constitute de-regulation of the water supply and sewage treatment systems. It would simply encourage regulation by affected individuals rather than regulation by regional agencies or central governments.

How would citizen regulators handle their responsibility? Experience suggests that some would do very little. Some would sell their rights. And some would be very tough regulators – far stricter than governments have been. When armed with strong property rights, many people use them to protect their waters and the fish that live in them.

Private regulation is most likely to work in a system in which the financing, ownership, and operation of water and sewage has also been privatized. When those insisting on clean or abundant water are not facing the state’s power of expropriation, the playing field is more level and bargaining is fairer.

Property rights cannot replace all central regulation. Governments may wish to set minimum environmental standards to protect those who have an interest in – but no rights to – water resources. Under no circumstances, however, should governments set maximum environmental standards – standards that diminish individuals’ property rights. Decisions to sacrifice water quantity or water quality should be made by the rights holders themselves.

Of course, other kinds of regulation will remain in place. As long as companies have monopolies over water supply and sewage treatment, governments will want to regulate both the quality and the price of the services. Whether monopolies are inevitable is another question, the answers to which I must leave for another paper.

Notes

1. Environment Probe’s research into the privatization and regulation of water supply and sewage treatment has been supported in part by grants from the Earhart Foundation and the Helen McCrea Peacock Foundation. The views expressed in this paper are, of course, those of the author.

2. Environment Canada, Urban Water: Municipal Water Use and Wastewater Treatment, SOE Bulletin No. 98-4, 1998.

3. Ibid.; and Environment Canada web site: http://www.ec.gc.ca/water/images/manage/use/a4f4e.jpg.

4. Environment Canada, Water Works, web site: http://www.ec.gc.ca/water/en/info/pubs/FS/e_FSA4.htm#price; and communication between Henri-Benoit Loosdregt (Suez Lyonnaise des Eaux) and Craig Golding, June 1998.

5. National Round Table on the Environment and the Economy, State of the Debate on the Environment and the Economy: Water and Wastewater Services in Canada, 1996, p. 8.

6. Environment Canada, Urban Waterop. cit.

7. Ibid.

8. Martin Nantel, Sewage Treatment and Disposal in Quebec: Environmental Effects, Toronto: Environment Probe, 1995, p. 2.

9. Elizabeth Brubaker, “Bring Back Our Beaches,” The Next City, Vol. 2, No. 4, Summer 1997, p. 36.

10. Martin Nantel, Troubled Waters: Municipal Wastewater Pollution on the Atlantic Coast, Toronto: Environment Probe, 1996, p. 7.

11. National Round Table on the Environment and the Economy, op. cit., p. 10.

12. Kathy Neal et al., Restructuring America’s Water Industry: Comparing Investor-Owned and Government-Owned Water Systems, Los Angeles: Reason Foundation, 1996.

13. Adrian Moore, Clearing Muddy Waters: Private Water Utilities Lower Costs and Improve Services, Los Angeles: Reason Foundation, 1997, p. 1.

14. David Haarmeyer, Privatizing Infrastructure: Options for Municipal Water-Supply Systems, Los Angeles: Reason Foundation, 1992.

15. “Indianapolis extends United Water contract,” World Water and Environmental Engineering, Vol. 20, No. 12, December 1997, p. 8.

16. I am grateful to Environment Probe’s Craig Golding for his research into the French water supply and sewage treatment system.

17. WRc, International Comparison of the Demand for Water, prepared for OFWAT, 1996.

18. Jean-François Donzier, “La privatisation de la gestion de l’eau en France et en Angleterre: sous un même vocable, deux réalités bien différentes,” Revue Française de Géoéconomie, No. 4, Winter 1997 – 1998, p. 141.

19. IFEN (Institut français de l’environnement), “Gestion des eaux usées et des déchets: près de 100 milliards de francs en 1995,” Les données de l’environnement, No. 27, January 1997, p. 2.

20. OECD (Organisation for Economic Co-operation and Development), Environmental Performance Reviews: France, Paris: OECD, 1997, p. 146.

21. Blair T. Bower et al., Incentives in Water Quality Management: France and the Ruhr Valley, Washington: Johns Hopkins University Press, 1981, p. 107.

22. Mikael Skou Andersen, Governance by Green Taxes: Making Pollution Prevention Pay, Manchester: Manchester University Press, 1994, p. 113.

23. Bernard Barraqué, Les politiques de l’eau en Europe, Paris: Editions la Découverte, 1995, p. 124.

24. Ivan Chéret, “Managing Water: The French Model,” Valuing the Environment: Proceedings of the First Annual International Conference on Environmentally Sustainable Development, Ismail Serageldin and Andrew Steer, eds., Washington: The World Bank, 1994, p. 85.

25. IFEN, “La gestion des eaux usées 1990 – 1994,” Études et Travaux No. 10, September 1996, p. 41.

26. David Haarmeyer, op. cit., p. 18.

27. FNCCR (Fédération nationale dés collectivités concédantes et régies), La Lettre S des services des eaux, No. 103, April 16, 1997, p. 2.

28. Marianne-en-ligne web site: http://www.marianne-en-ligne.fr/97-07-28/dessus-c.htm, June 1998.

29. Ibid.

30. Ministère de l’Environnement, direction de l’eau, Gestion des services d’eau et d’assainissement: les reformes en cours, November 1995, p. 9.

31. “Water Music at Lyonnaise des Eaux in France,” Transparency International web site: http://www.transparency.de/newsletter/Mar96.html#france, June 1998.

32. Henry Buller, “Privatization and Europeanization: The Changing Face of Water Supply in Britain and France,” Journal of Environmental Planning and Management, Vol. 39, No. 4, 1996, p. 465.

33. Privatisation News, February 1997, quoted on Transparency International web site: http://www.transparency.de/newsletter/NLJune97-2.html#france, June 1998.

34. Marianne-en-ligne web site, op. cit.

35. Communication between Henri-Benoit Loosdregt (Suez Lyonnaise des Eaux) and Craig Golding, May 1998.

36. Ibid.

37. IFEN web site: http://www.ifen.fr/CHIFCLE/concom.htm, June 1998. Jean François Saglio (IFEN) points out that these lapses in water quality are not known to have caused any illnesses. Personal communication, July 1998.

38. European Union web site: http://europa.eu.int/water/water-bathing/report/fr97.html, June 1997; and Ministere de l’Emploi et de la Solidarité et du Secrétariat d’Etat à la Santé web site: http://www.sante.gouv.fr/htm/actu/34_980513c.htm, June 1998. According to the Ministry, France’s compliance rate in 1997 was 92.2 per cent.

39. OECD, op. cit., pp. 21, 58.

40. RNDE (Réseau National des Données sur l’Eau), L’Assainissement des Grands Villes, Limoges: RNDE, 1997, pp. 6-7.

41. OECD, op. cit., p. 156.

42. Jean-Pierre Chevenement, Speech to Assemblée générale de l’association du corps préfectoral et des hauts fonctionnaires, November 1997. Posted on Ministry of Interior web site: http://www.interieur.gouv.fr/pages/actual/minist/201197.htm.

43. David Kinnersley, Coming Clean: The Politics of Water and the Environment, London: Penguin Books, 1994, pp. 4, 60-1.

44. The Secretary of State for the Environment et al., Privatisation of the Water Authorities in England and Wales, Government White Paper, February 1986, pp. 1, 2.

45. Dr. Ted Thairs (Water UK), personal communication, July 1998.

46. Drinking Water Inspectorate, Summary of 1996 Report by the Drinking Water Inspectorate, DWI web site: http://www.dwi.detr.gov.uk/water/drinking/summ2.htm, June 1998.

47. Adrian Moore, op. cit., p. 3.

48. OFWAT (Office of Water Services), Summary of the Director General’s Annual Report, 1997, OFWAT web site: http://www.open.gov.uk/ofwat/summary.htm, June 1998.

49. Environment Agency, “The Quality of Rivers and Canals,” State of the Environment Report, EA web site: http://www.environment-agency.gov.uk, 1996.

50. Environment Agency, State of the Environment Report, EA web site: http://www.environment-agency.gov.uk, June 1998. The European Union, which publishes figures for all of the UK, gives a compliance rate of 88.4 per cent at 492 sites. See web site: http://europa.eu.int/water/water-bathing/report/uk97.html, June 1998.

51. Elizabeth Brubaker, “Bring Back Our Beaches,” op. cit., p. 38.

52. Kinnersley, op. cit., p. 202.

53. Lord Crickhowell, House of Lords Hansard, April 17, 1989, col. 579.

54. Kinnersley, op. cit., p. 53.

55. David Wallen, “Profiteering claims mark British privatization,” The Globe and Mail, October 17, 1996.

56. Water Services Association of England and Wales, Waterfacts ’95, p. 35.

57. Department of Environment, Transportation, and Regions, Water Charging in England and Wales – A New Approach, DETR web site: http://www.environment.detr.gov.uk/consult/watercharge, June 1998.

58. OFWAT, Leakage of water in England and Wales, May 1996, p. 4.

59. Water Services Association of England and Wales, Waterfacts ’97, p. 35.

60. Dr. Ted Thairs (Water UK), personal communication, July 1998.

61. Elizabeth Brubaker, Property Rights in the Defence of Nature, London: Earthscan, 1995; and Elizabeth Brubaker, “The Role of Property Rights in Protecting Water Quality,” Journal des Economistes et des Etudes Humaines, Vol. 7, No. 2/3, June/September 1996, pp. 407-14.

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