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The Private Water Service Industry Foreign Investment

Privately Owned Drinking Water Utilities

• Some of NAWC’s members are owned by companies based in other countries. Such Foreign investment in the U.S. water industry is a sign of strength for the industry and its maturing place in the world economy. According to the U.S. Department of Commerce,

“The United States has always provided foreign investors a stable and welcoming market. The American workforce is the best educated, most productive, and most innovative in the world. As a place to do business, the U.S. offers a predictable and transparent legal system, low taxes, outstanding infrastructure, and access to the world’s most lucrative consumer market.”¹

• Foreign investment is good for America, our economy and our workers.

“Direct investment in the United States by foreign firms contributes to productivity growth, provides a source of financing for the current account deficit, and generates high-paying jobs for American workers.”²

• Global companies that have invested in U.S. water utilities bring their experience in more than a hundred countries to work here. Their world-class operations, technology and research (some of the largest research facilities in the world) are working to provide ever safer and more reliable water service to Americans at reasonable and affordable rates.
  
  
• Privately owned water utilities are among the most strictly regulated businesses in the United States. This regulatory oversight is the same for a water utility that is owned by a foreign company.
  
  
• All applicable state and federal environmental and health regulations pertain to utilities operating in the United States, regardless of ownership, whether foreign or domestic.
  
  
• The economic regulation of privately owned utilities on the state level by the various State Public Utility Commissions (PUCs) is not in any way adversely affected should the utility be owned by a foreign company. In most states, foreign acquisitions must be explicitly approved by the relevant PUCs after formal proceedings that almost always include public hearings.
  
  
• All long-term water resource decisions, including water allocation and extraction decisions are overseen and made by public sector regulators.
  
  
• In this era of increased terrorist fears and water security concerns, global companies bring to the United States world-class experience in cutting-edge water infrastructure security, having operated water utilities for decades in some of the world’s most persistent hot spots. Their real experience has been put to work to protect the U.S. water supply.
  
  
• None of the international agreements the United States is a party to have an affect on any U.S. water regulation, neither environmental nor economic. The World Trade Organization (WTO) is on record calling international trade agreements irrelevant to water issues, regardless of ownership. The WTO also correctly states “It is of course inconceivable that any government would agree to surrender the right to regulate water supplies, and WTO members have not done so.”³ This fact has been backed by other studies of the North American Free Trade Agreement (NAFTA) and the General Agreement on Trade in Services (GATS). ⁴

BACK

1. U.S. Department of Commerce, International Trade Administration
2. U.S. Department of Commerce, International Trade Administration
3. The World Trade Organization, GATS Fact And Fiction, Misunderstandings And Scare Stories: The WTO Is Not After Your Water
4. University of California, Santa Barbara, A Framework for Evaluating Water System Ownership and Management Alternatives, April 2005