1
Water privatization in the EU and stakeholder interests on
international trade agreements
Second Chapter BatchTerry Kriz 6290787 Jasper Blom 22nd June 2018
Master Thesis Political Science – International Relations Words (excluding references): 17,075
2 Table of contents List of Abbreviations 3 1. Introduction 4 2. Relevance 7 3. Theoretical Framework 8
3.1 Two Level Theory 9
3.2 Regime Complexity 10
3.3 The EU’s Institutional Bodies 13
4. Methodology 17
4.1 Data Collection 17
4.2 Methods of Analysis 17
5. The Level of Conformity Between CETA and the ECI 18
5.1 Exclusions of Water and Sanitation in the CETA Document 19 5.2 Investor Protection and the Investor Court System 22
5.3 Conclusion 24
6. Influence of actors on CETA negotiations 25
6.1 Stakeholders 25
6.2 Timeline and Events Regarding the ECI and CETA 26
6.3 European Citizens’ Initiative and Concessions Directive 27
6.4 Response of EU Institutions 29
6.5 Public Interest and Civil Society Organizations 33
6.6 Member States 34
6.7 Corporate interest and lobbying 36
6.8 Conclusion 39
7. Final Conclusion 40
References 43
3 List of Abbreviations
CELA Canadian Environmental Association Canada CETA Comprehensive Economic Trade Agreement CEU Council of the European Union
ESF European Services Forum
EC European Council
ECI European Citizen Initiative
EESC European Economic and Social Committee EP European Parliament
EPSU European Federation of Public Service Unions EPHA European Public Health Alliance
EU European Union
FTA Free Trade Agreement ICS Investment Court System IIC International Investment Court ISDS Investor-State Dispute Settlement MEP Member of the European Parliament NGO Non-Governmental Organization PPP Public-Private Partnership TNI Transnational Institute
4 1. Introduction
Since the start of the 21st Century water re-municipalisation has become a trend both in developed and developing countries. The reasons for re-municipalisation are similar worldwide and include poor performance and service quality, under-investment in infrastructures, escalating water bills, disputes over operational costs and price increases and difficulties in monitoring and transparency by private companies. These and other problems are likely a result to the imperative of the private sector to maximize profits (Lobina 2015; 6-8). This trend of re-municipalisation might have been empowered by the recognition of the importance of water as a human right which was first acknowledged in 2003 by the United Nations Committee on Economic, Social and Cultural Rights who adopted General Comment No 15 on the right to water defining it as entitlement to sufficient, safe, acceptable, accessible and affordable water for everyone for both personal as domestic use (UN 2003). This right was in 2010 expanded by the UN General Assembly to also include sanitation through Resolution 64/292 which states that water costs should not exceed 3 percent of household income (UN 2010). In order to attain those rights it is essential that the provider of water and sanitation services considers these rights to be of first priority which was not the case with private companies at the time.
In contrast to this trend the Eurozone crisis resulted in a step back from this municipalisation trend as the European Commission, the European Central Bank and the International Monetary fund, also named the ‘Troika’, organized ‘rescue’ loans under the precondition that they follow budgetary policies that they privatised part of their public services, often including water services which was the case for Greece, Ireland, Italy, Portugal and Spain (Zacune 2013; 7-12). Despite these forced measures, there is no empirical evidence to suggest that privatisation of waste and water services lead to cost savings due to the natural monopoly these services construe (Bel, Fageda & Warner 2010; 573). Therefore the legitimacy of privatising water industries under this premise is put into question and in turn might harm the fulfilment of water and sanitation as a human right.
In 2012 these developments have led the European Public Service Unions (EPSU) to initiate the first European Citizens Initiative (ECI) on “‘Right2Water’: Water and sanitation are a human right! Water is a public good, not a commodity!” The key objectives of this ECI were (1) to oblige the EU institutions and member states to ensure the right to water and sanitation to all its inhabitants; (2) for water supply and management of water resources to be excluded from liberalisation and not subject to internal market rules; (3) for the EU to increase its efforts to achieve universal access to water and sanitation (Bieler 2017; 305). The ECI has successfully led to protests in the by the Troika affected countries which eventually resulted in (re-)municipalisation of water and sanitation services
5 in these countries. Also it led the European Commission to exclude water and sanitation services from the Concessions Directive (Bieler 2017; 307-312, Concessions Directive 2014; 7-25).
Aside from this success, the Commission did not proceed to satisfy the demands of the ECI by proposing new legislation that permanently excludes water and sanitation services from international trade agreements even when pushed by other EU institutions to make a proposal. This was met with criticism from both activists and other institutional bodies of the EU like the European Parliament (EP) and the European Economic and Social Committee (EESC). (Bieler 2017; 305, EESC 2014, EP 2015 & EPSU 2012). Instead, six months after the Concessions Directive was published, the first draft of the Comprehensive Economic Trade Agreement (CETA) was published, this international trade agreement is supposed to facilitate free trade between Canada and the European Union and was met with a lot of criticism from citizens and civil society groups (Maes 2017, Transnational Institute 2016). Both researchers and activists are afraid trade deals like CETA could create a web of interlinked trade deals that open up public sectors to promote competition and private capital which could lead to conflicts with domestic economies and regulations, namely that citizens’ rights to basic public services would be endangered (Bieler 2017; 315, European Water 2016 & Fritz 2015).
This paper aims to examine whether CETA causes a threat to public water and sanitation services and whether the European Commission takes into account the demands of the ECI in negotiating CETA. The focus of this research lies on the second demand of the ECI that asks for water and sanitation to be excluded from liberalisation and not subject to internal market rules (EPSU 2012). This paper aims to answer whether the Commission succeeded in satisfying this demand by excluding water and sanitation and also which actors have influenced the EU to have led to CETA being negotiated and signed a certain way in regards to water and sanitation services. These aims lead to the following research question:
How do national and international interests influence the negotiations and results of international trade agreements?
Important for this research is the role of the European Commission as it is the institutional body that does the negotiations for CETA and also excluded water and sanitation services from the Concessions Directive. The research question will be answered by dividing it into two sub-questions, the first one relating to the effect of any exclusion of water and sanitation services in the trade agreement and the second relating to the actors that played a role in influencing the negotiation process of CETA.
6 This research will address two theories that may help answer the research question: Two-level theory as a basis and regime Complexity as a possible addition to the first theory. In short, the two-level theory claims that international agreement negotiations are played on the international ‘board’ and national ‘board’ and alignment between each board must be reached in in order to be able to establish an international agreement. Reaching alignment depends on the interests of the different actors on each board and the negotiating actors’ ability to find common ground. Based on this theory it should not be possible to reach an international agreement when there are too strong clashes between the interests of different important actors (Putman 1988). By using Regime Complexity as an addition to two-level game theory it might be possible to explain how the international regulations are signed that do not align well with the wishes of actors within the EU. This theory states that regime complexity can lead to ambiguous laws that leave room for interpretation by different actors (Alter & Meunier 2010). As a result the following sub questions have been formed:
1. How much does CETA align with the expressed interests of the ECI?
This sub-question aims to answer whether the CETA exclusions on water and sanitations are in line with the demands of the ECI. Considering that the ECI should be a reflection of popular national demands, according to two level theory there should be some alignment between these demands and what is written in CETA. However, when there are multiple actors with different demands the results could also be framed more ambiguously relating to regime complexity.
2. How have different actors influenced the negotiation process and result of CETA?
When more is clear about the effect that CETA might have on water and sanitation services the next step is to understand which factors have led to the final product. Therefore it will be assessed which interest groups and stakeholders have been active at the international and national level and which changes have been made during the negotiation process. If there is a clear exclusion of water and sanitation then it is likely that the ECI and the national public interests have had an effect. In case there is no exclusion, a partial or unclear exclusion that could mean that there are actors with different interests active which could be explained by Regime Complexity.
In this research the unit of analysis is the EU. There is special attention paid to EU preferences and decision making concerning water privatisation. There are multiple levels on which the EU has to make its decisions and each level concerns different actors that try to influence the decisions made by the EU. The population is all of the documents and regulations produced by the EU’s different institutional bodies and other documents that were produced by other actors as a response to EU action. The case selection is the regulations the EU has produced concerning water
7 privatisation, in specific the regulations following the ECI and CETA. Although CETA encompasses more than just regulations concerning water privatisation, the choice for choosing the ECI and CETA is based on several factors: 1) the ECI and CETA affect interests on different levels which suits the two-level game theory, 2) they have been negotiated and signed during the same time period meaning that the EU has had to consider both levels during these negotiations, 3) the ECI is driven by human rights whilst CETA is driven by free trade which could cause a conflict of interest on how to regulate public services. It is unavoidable that there are actors involved that have different interests from what is demanded by the ECI which in turn could lead to regulations that do not completely align with the demands made. The main research focus is on finding out the degree to which CETA aligns with the ECI and which actors have been involved in influencing this result.
2. Relevance
At a societal level this research is relevant as water and sanitation have been declared a human right since 2010 by the UN (UN 2010). To make these facilities accessible to everyone is vital for human live and wellbeing. These services should therefore not be commodified nor provided in the pursuit of profit. Furthermore, there is proof that liberalisation and privatisation of water and sanitation services, even under circumstances of crisis, does more harm than good. The negative and sometimes disastrous results of water privatisation are visible both in the EU as in third world countries (Kishimoto et al. 2015; Vidal 2015). Therefore any method to understand the level of support of water municipalisation and discussion on how it is achieved can be considered useful.
The ECI is brought to live in order to give citizens a voice into how the EU is shaped and which regulations are made. The ECI ‘right2water’ was the first but not the last successful ECI. Therefore how the EU caters to the demands of these initiatives may be viewed as a reflection of how seriously it takes the wishes of its citizens and has an impact on its credibility as a democratic institution overall (European Commission 2018). Since there are several other industries affected by CETA and the likelihood that other transnational trade agreements between the EU and other regions will develop it will be useful to provide further insight into how different actors affect the negotiation process of these agreements.
Theoretically this research combines two theories, two-level game theory and regime complexity in a way that would make it better applicable to understand the process behind negotiating international trade agreements (Putnam 1988; Alter & Meunier 2009; 13). This case is representative for other cases where international trade agreements are expected to influence or conflict with national regulations. Also, the EU is a unique institution that possibly functions in a different way from other governments as it makes the regulations for all its Member States that
8 each has their own domestic regulations. On top of that the several institutional bodies that make up the EU add to this complexity. So although it can provide insight in how a governmental institution acts on a national and international level regarding international trade agreements regarding public services, there might be different factors of influence in EU governance than for other governments. This complexity could in turn give more insight into how two level game theory works in a complex environment which is something that is increasingly likely to occur more often in the future (Goff 2017; 550).
Lastly, at the time of research CETA has been provisionally ratified (EP 2017). Still an important part of this trade agreement has not been ratified yet which could influence the results described in this paper. This yet to be ratified part of CETA is the Investor-State Dispute Settlement (ISDS). This part of the agreement has received a large portion of the criticism on CETA and other international trade deals and describes the rules of a court system that corporations may use to take the government to court for loss of profits and has regularly been criticized to favour corporations and endanger the right to regulate of governments (Eberhardt 2016; 11). CETA has an alternative system called Investment Court System (ICS) that works in a similar way and therefore might pose a similar risk to public services which will be discussed later. If this part of the agreement is ratified it might have serious consequences for European and Canadian public services, especially since it is not yet ratified any analysis and discussion of this system could be useful in adding to the understanding of any risks that might be involved with this new court system.
3. Theoretical Framework
In this research the rules of two-level theory and regime complexity will be combined to analyse and describe the role and influence of different actors on the negotiation process of CETA and to understand the influence that CETA might have on public services. Since this case is based on an international trade agreement between the EU and Canada rather than two individual countries and the two-level theory concerns national and international level when talking about EU level will sometimes be categorized as national level whilst taking into account that there are differences between EU level and actual national level. Also, considering the complexity of the case and the CETA, most actors will have interests on both the national as international level which will make the differentiation between national and international actors all the more complex. In order to resolve this issue this paper will mostly focus on national and international interests rather than national and international actors. The first section will discuss two-level theory, the second will elaborate on Regime Complexity and how it could be a valuable addition to two-level theory. The third section will
9 explain the different institutional bodies of the EU and how they can be incorporated into the above mentioned theories.
3.1 Two Level Theory
Two-level theory explains what happens on a national and international level regarding international trade agreements and explains what considerations the EU has to make in order to reach an agreement. According to this theory, negotiating international agreements involves two levels of negotiation: 1) the national level involves domestic groups that pressure the government to adopt policies in their favour and politicians that construct coalitions amongst these groups in order to acquire power 2) at the international level national governments attempt to increase their potential to satisfy domestic pressures while trying to minimize negative consequences of foreign developments. The central decision-makers have to take into account both levels whilst their countries remain interdependent and sovereign. The domestic table is occupied by party and parliamentary figures, spokespeople for domestic agencies, key interest groups and political advisors. Meanwhile national political leaders appear at both game boards. On the international table are all playing foreign leaders, diplomats and international advisors. The complexity lies in that rational moves on one board may be irrational on the other board whilst there is a strong incentive to find consistency between the two games. On top of that, if a key player is dissatisfied with the outcome it will have negative consequences for the entire board and when a player is unable to satisfy the other players on the national board it may lose its place. By playing smartly and keeping an eye out for moves that may realign with other boards makes deals possible that are otherwise unachievable (Putnam 1988; 434).
In case of a parliamentary system which is common in Europe, ratification also plays a role. Ratification is dependent on how the executive estimates how voters perceive the agreement and what their reaction will be in the next election in case of ratification. Voters will not be able to change a ratified agreement but the parties must keep in mind that voters can punish the government by voting for another party (Kroll & Shogren 2008; 574).
In this case the EU is the central player making the final decisions whilst being under the pressure on both a domestic and international level and the outcomes of CETA and the ECI regulations resulted from this. The EU consists of different institutional bodies which means it consists of multiple actors that have different roles on each level and might have different preferences which will be discussed in paragraph 3.3. According to Putnam (1988; 434) regulations made on an international level should align with the national level as both boards have to be pleased
10 in order to reach an international trade agreement. The complexity of the EU institutions makes the achievement of this goal less likely as the chances of satisfying every actor is smaller due to the increasing number of actors involved.
The complexity of the EU is not the only factor that makes this case more complicated. Since Putman’s theory international trade agreements have changed significantly in scope and complexity. Traditional international trade agreements mainly existed as tariff reductions and border measures but the newer generation or international agreements go further than these basic measures and are multi-layered, include a very wide scope of provisions and focus on ‘behind-the-border’ trade rules which focus on domestic regulations. Such agreements are called ‘deep’ agreements (Goff 2017; 550). These agreements aim to create a full free trade area and include substantive provisions on services, investments, standards of goods and services, public procurement, competition and intellectual property rights (Dür, Baccini & Elsig 2014; 359). CETA is considered to be a deep trade agreement as it includes the above mentioned factors. CETA is the first international trade agreement in the EU that uses a negative list approach which means that any service or good that has not been actively excluded from the trade agreement will fall under its regulations. On top of that this agreement also opens up the possibility for businesses to conduct trade with municipalities and provinces, which deepens the scope of the agreement only further (European Commission 2017).
In addition to the number of actors involved and the complexity of deep trade agreements, Canada already has another deep trade agreement with the US which also needs to be considered in the negotiations for CETA, the same goes for any other trade agreements the EU has. This is not necessarily possible nor aimed at, the circumstances show that deep trade agreements such as CETA are likely to cause inconsistency across trade agreements and that officials are very much aware that the negotiation process is a form of two-level game with a twist (Goff 2017; 550-552).
The abovementioned factors all add to the complexity of negotiating trade deals and are likely to add to the ‘spaghetti bowl’ phenomenon that is used to describe the environment of increasingly overlapping trade agreements (Bhagwati 1995; 2). To manage the consequences of unavoidable overlap without causing direct conflict with other trade agreements or actors, policy makers have developed ways of formulating policies that are described in regime complexity theory (Alter & Meunier 2010).
11 As Goff (2017; 550-552) described, the process of negotiating deep trade agreements like CETA is extremely complex and likely to result in inconsistency across other trade agreements and national regulations resulting in an adjusted version of two-level game. Overlap in international commitments may occur due to several reasons: Spill over-effects may occur because discussion of one topic may open up discussion to other related topics, international agreements may be used as a starting point to be followed by subsequent agreements, sub-groups may want different cooperation than the whole leading to additional agreements, linkages across agreements may create packages that are overall more attractive to a diversity of participants and sometimes additional agreements may be negotiated to create ambiguity about how to interpret a single agreement (Alter & Meunier 2009; 14)
To get a better comprehension of what tactics policy makers use to minimize conflicts between new trade agreements and existing regulations and agreements but also to merge the interests of different actors the consequences of regime complexity must be explained. Alter and Meunier (2009; 13) have summed up the consequences of the increasing density of international regimes:
“…the proliferation of overlap across agreements, conflicts among international obligations, and confusion regarding what international and bilateral obligations cover an issue.”
These developments result in more concrete strategic phenomena explained by Alter and Meunier (2009): Law-fragmentation and rule ambiguity, forum-shopping, regime-shifting and strategic inconsistency.
Law fragmentation and rule ambiguity are the terms used for a decrease in clarity of legal obligation due to overlapping regulations. This occurs when states have diverging preferences. Clear rules usually occur when states have similar preferences whilst rules become more ambiguous when preferences diverge so that actors may select their preferred interpretation. As a result implementation politics define and redefine ambitious agreements across time and space (Alter & Meunier 209; 16). This may also be the case when the national and international levels do not align, regulations might have been stated more ambiguously so that each level can interpret these rules to their benefit.
Forum-shopping is a strategy actors use to elicit decisions in favour of their interests by selecting the (international) venues that they deem most likely to respond positively to their specific policy preferences. Forum-shopping focuses on achieving a certain outcome within the existing
12 regime whilst regime-shifting attempts to reshape the global structure of rules by turning to parallel regimes that have alternative priorities (Alter & Meunier 2009; 16-17).
Strategic inconsistency is similar to rule ambiguity in that it facilitates the possibility of actors to choose the most beneficial outcome but it differs in the chosen strategy. In strategic inconsistency rather than making ambiguous regulations, they become more vague than intended by making contradictory rules with the intention of undermining rules in another agreement (Alter & Meunier 2009; 17).
The abovementioned phenomena are considered to be the result of state strategizing in chessboard politics. In contrast, bounded rationality is a consequence of regime complexity that does not have to do with state strategizing but does have an effect on the results of trade agreement negotiations (Alter & Meunier 2009; 17).
Complexity leads to selective information processing and reliance on relations and heuristics to select from an overwhelming amount of information which makes the rational choice unclear, this also occurs when the time that politicians have to examine cause-effect outcomes is too short. These factors lead to bounded rationality. In cases of bounded rationality there is a higher change of unintended consequences and feedback effects help shape outcomes. Bounded rationality occurs when there is higher complexity and makes the state more permeable to the ideas of experts and non-state actors. It also appears that networks of experts work together in defining the problem and the necessary solution which can lead to non-state and sub-state actors monopolizing the information flow governments receive. There is a risk that bounded rationality may in fact advantage the rich and powerful, regardless of which type of actor they are, since they have the resources to influence problem framing and solving (Alter & Meunier 2009; 17).
The discussed theoretical framework leaves open the question to what degree two-level theory and regime complexity each play a role in the negotiations and ratification of CETA. There are several options that can explain the current developments which will be elaborated upon in the next section.
Operationalization
In this research the actors and stakeholders that have tried to influence the negotiation process of CETA or lobbied for or against regulations concerning water privatisation are the independent variable. The main focus will be on the demands of the ECI and the actors supporting it. The standpoint and influence of other actors like businesses, NGOs, citizen groups, governments and
13 other institutions will also be taken into account. Their existence is ascertained through their presence in the collected data and their influence is determined through the extent of their lobbying and how much their goals and positions align with the contents of the negotiation process and the final result of the regulations whilst considering the timeframe in which this happens.
The dependent variables are the regulations that the EU has proposed and signed regarding privatisation of water and sanitation as well as the sections of CETA that involve exclusions of water and sanitation services.
There are multiple options regarding the theory that could explain the actions taken by the EU. The exclusions and regulations regarding water privatisation proposed and signed by the EU will to some degree align or contradict with the ECI demands. This research aims to explore to which degree this happens and which actors have influenced the result. If the EU regulations align or mostly align with the ECI demands this could be in support of two level theory as that means the chief negotiator must have taken public demands into account negotiating these regulations. When there is partial to no alignment between the ECI demands and the EU regulations there are several possible options. When there is no alignment at all it could be argued that two-level theory does not hold up in this case because that would mean the chief negotiator did not take public demands into account in negotiating legislation. Partial or unclear alignment it would imply that the chief negotiator had to strategize between different interests, which will likely be the case in this research. In order to ascertain the role of two-level games and regime complexity it is necessary to include the role of other stakeholders on each level and whether any of the strategies and consequences of regime complexity can be linked to this case (Alter& Meunier 2009; 17, Putnam 1988).
3.3 The EU’s Institutional Bodies
The EU system consists of different institutional bodies that are each assigned their own role and tasks with varying degrees of influence on negotiation and decision-making regarding international trade agreements. Due to this diversity in roles it is possible that opinions differ between and also within each institutional body which results not just in pressures from outside but also from within the EU. These institutions can have interests on both the national as the international level. Either way, these institutions influence each other and are co-dependent of each other which adds to the complexity of this case. Figure 1 shows an overview of different institutional bodies in the EU that are active in decision making. The main bodies that appear to be active in decision making and stating their opinions are the European Commission, the European Parliament
14 (EP), the Council of the European Union (CEU), the European Economic and Social Committee (EESC), the and the Court of Justice of the European Union (CJEU). Their roles and functions will be described in more detail below and will be connected to the theory.
Figure 1. Institutional bodies of the EU involved in decision making (EU 2018) European Commission
The Commission is the EU’s politically independent executive arm. Its members consist of a ‘College’ of Commissioners of which one member is picked from each EU country. Its role is divided in four tasks: 1) Proposing new laws, 2) Managing EU policies and allocating EU funding, 3) Enforcing EU law and 4) Representing the EU internationally.
The Commission is the sole body that has the responsibility to draw up proposals for new legislation. Its laws are supposed to protect the interests of the EU and its citizens that cannot otherwise be dealt with on a national level; it consults experts and the public on using the proper technical details in their legislation. Also, it speaks on behalf of EU countries in areas of trade policy and humanitarian aid and negotiates international agreements for the EU. For this research, the role
15 of the Commission is especially important as it is responsible for proposing EU-level regulation and for the negotiations of international (trade) agreements. In light of the two-level theory the Commission is the chief negotiator that is unique in negotiating on both the national as the international board and has to play strategically with the players on each level (European Union 2018, Putnam 1988; 434). Also in terms of regime complexity this is the actor that can strategically use law-fragmentation, rule ambiguity and strategic inconsistency due to diverging interests of other stakeholders (Alter & Meunier 2009; 17).
European Parliament (EP)
The EP is responsible for passing EU laws and its members are directly elected by EU voters every 5 years. Its tasks are divided in three roles: 1) Legislative, 2) Supervisory and 3) Budgetary. Its legislative role encompasses working together with the Council of the EU based on the proposals by the Commission. Also it decides on international agreements and enlargements. Lastly it reviews the Commission’s work programme and may make requests to the Commission to propose legislation. The supervisory role entails monitoring all EU institutions and selecting and approving members of the Commission and its work. Other tasks are related to monetary policy, elections and examining citizens’ petitions and setting op inquiries. The budget role encloses the establishing and improving of EU budgets (EU 2018).
In this research the EP is important for several reasons: 1) It has the function to suggest legislations to the Commission, 2) It has to approve of the Commission as a body, question it and has the power to oblige the Commission to resign which makes it a powerful influencing actor on the international and national board 3) It has a direct role in examining citizens’ petitions, for example any ECIs which gives it the responsibility to take action regarding the demands of the petitions, 4) It decides on passing EU laws and international agreements such as CETA and 5) The members are elected by EU voters which means its actions will have consequences if they do not perform well on influencing the board as well. During negotiations of trade agreements the Commission systematically informs the EP on its progress. These reasons make the EP important influencing actor on the national as well as international board while the EP is also an actor responsible for taking into account the wishes of the public on the national level (EU 2018).
Council of the European Union (CEU)
The CEU works together with the EP on negotiating and adopting laws that are proposed by the Commission adopts the annual budget and coordinates and develops EU countries’ policies.
16 For this research it is important that the CEU concludes agreements between the EU and other countries or international organizations so its opinion about the content of the agreement should be important to the Commission. Also due to its responsibility to discuss and amend laws before adopting them the CEU influences ambiguity, fragmentation and inconsistency of regulations. During the negotiating process the Commission consults the Council and its Trade Policy Committee to help assist in negotiating tasks. These factors make the CEU an important player on the national and international board (EU 2018).
European Economic and Social Committee (EESC)
The EESC is the EU’s advisory body which comprises of representatives of interests groups, the main two groups being workers’ and employers’ organizations. It gives its opinions on EU issues and legislative proposals to the Commission, the Council of the EU and the European Parliament in aims of bridging the gap between EU’s decision-making institutions and EU citizens.
There are three main tasks the EESC is responsible for: 1) Ensuring that EU policy and law are suitable for economic and social conditions and serve the common good, 2) promoting participation in the EU by giving a voice to the interests groups and keeping a dialogue with them and 3) promoting the values of European integration, participatory democracy and civil society organizations. Thus, the EESC tries to assert influence on the legislations negotiated by other EU institutional bodies by stating their official opinions in order to make legislation in line with what is desired by interest groups and serves the common good and is therefore likely to consider issues proposed by the ECI and to review whether CETA has a positive impact on economic and social conditions in the EU. Therefore it is an important actor that tries to influence the chief actor’s decision making on national interests (EU 2018).
Court of Justice of the European Union (CJEU)
The CJEU is in charge of interpreting EU law to ensure each country applies it the same way. Also it is in charge of settling legal disputes within the EU. Although the CJEU is not a stakeholder on any of the boards its role is important as it is reviewing the ICS system in response to a request from the Belgian government to review it. Its decision decides whether the ICS system can be ratified or needs to be adjusted which might be of influence on rule ambiguity and law-fragmentation (EP 2017, EU 2018)
17 4. Methodology
4.1 Data Collection
For this research a combination of documents and interviews is used and analysed. The documents used for this research are found and selected through searching on “water”, “water services”, “ECI”, “CETA”, “trade agreement” and “public services” or a combination of these terms on the official European website, the right2water website, LexisNexis, google scholar, google and on websites that published articles that were previously found useful ore were referenced in these articles e.g. Corporate Europe Observatory, European Water, Canada Water, European Services Forum and the Transnational Institute (TNI). In order to find newspaper articles of specific papers both LexisNexis and the “site:” function from google is used to find all the relevant pages of each specific newspaper site. The selected newspapers for google are the Guardian, the Independent, the Economist and the Financial Times.
Regarding the interviews, the subjects that were contacted were people that were either working for organizations regarding water services or published articles relevant to this thesis. The contacted individuals or institutions were Andreas Bieler, Transnational institute (TNI), European Water, EPSU, Canadian Environmental Law Association (CELA), Corporate Europe Observatory and Aquafed. This has led to interviews with Andreas Bieler (University of Nottingham, Interview 1), Pablo Sanchez Centellas (EPSU, Interview 2), Satoko Kishimoto (TNI, interview 3) and Kerrie Blaise (CELA, interview 4).
4.2 Method of Analysis
The research design is a single case study with a deductive approach. This means a theoretical framework is used to provide an explanation of the observations made from the data. (Vennesson 2008; 227) The research is based on within-case analysis and process tracing which can be used to identify steps in the negotiation process that have led to the final outcomes of the regulations signed by the EU and also leads to higher internal validity. Then two-level theory and regime complexity are evaluated by identifying chains linking the independent and dependent variables with the goal of uncovering the relationship between possible causes and observed outcomes. (Vennesson 2008; 231)
The design is carried out as an exploratory, diachronic case study meaning it is analysed how the current regulations came to be over a selected time frame, namely since the start of CETA negotiations in 2006 up until June 2018, CETA entered into force on a provisional basis in September 2017 but not all parts are approved for application to this date (EP 2017). The ECI process has a
18 shorter timeline; the organizers started their preparations in 2008 and the collection of signatures took place between 2012 and 2014.
To prevent the researcher’s own interpretation from getting in the way of reliability the criteria of analysis and results are as transparent as possible. Qualitative content analysis makes it possible to determine patterns, meaning and underlying themes in documents which would otherwise be missed by doing quantitative research (Hsieh & Shannon, 2005; 1278). Documents and websites that are considered useful are then analysed by reading the entire document if this document is specifically aimed at public services or water and selecting the parts aimed at legislation or changes regarding water policy. More general documents like CETA and the Concessions Directive are analysed by doing a word search on “water” and “service(s)” and reading the sections that contain these words.
Interviews are generally more valid when unstructured and less valid when structured due to the possibility of the interviewee to give his or her own input and interpretations. Open interviews give the flexibility to change the direction of the interview when needed whilst structured interviews give a clear sense of purpose and ensure that the topics planned for discussion will be asked (Hsieh & Shannon, 2005: 1285). Since the purpose of the interview is to give a more in-depth insight by relevant actors, semi-structured interviewing methods are arguably the best fitting as it gives the expert room to give his or her necessary input whilst keeping enough structure to prevent undirected conversation with the risk of missing important topics, this also provides a decent balance between reliability and validity. Lastly, the interviewees are not representative of all stakeholders involved in these cases so their opinions about water privatisation will be taken in such context and is taken into account in the analysis.
5. The level of conformity between CETA and the ECI
As mentioned earlier the ECI states three main demands, because this paper focuses on water regulations in the EU the focus will be on only one of these demands that focuses on this topic. In the next paragraph it is analysed whether CETA aligns with the following demand: For water supply and management of water resources to be excluded from liberalisation and not subject to internal market rules (EPSU 2012).
The two level game theory suggests that the chief negotiator has to consider both the national and the international level when negotiating international regulations (Putman 1988). As CETA was met with a lot of criticism and protests it is questioned whether popular national demands were taken into account during CETA negotiations. To find out whether these demands were
19 considered in CETA negotiations a comparison is made between the demands expressed by the ECI and CETA. This question will be answered in two steps. First the CETA regulations will be analysed to ascertain if and how water is mentioned in the document and whether it effectively excludes water and sanitation services. Secondly when necessary the analysis will take into considerations what the interpretation of other relevant actors is and to what extend the regulations are interpreted in the same way by these actors which will then be integrated into the text.
In case the ECI demand of non-liberalisation is completely disregarded that would imply two-level game theory does not apply to this case. On the other hand if this demand is completely met and this is stated in a clear unambiguous manner that would mean regime complexity likely did not play a role in the negotiations of CETA. Lastly, partial or unclear conformity to the ECI demand of non-liberalisation could be a signal of both two-level game theory as regime complexity influencing CETA negotiations and needs to be analysed within the context of other stakeholder influence.
Paragraph 5.1 will analyse the parts of CETA that are specifically related to exclusions and provisions related to water and sanitation services. For this research it is important to note that CETA uses a negative list approach which means that if it is not actively excluded from the agreement it will be part of the agreement. Throughout the CETA document there are several chapters and articles that concern water services but in order to effectively exclude both water and sanitation from the trade agreement also needs to actively exclude water sources, water supply services, sanitation, sewage and waste water services.
Not all parts of CETA are included in the provisional application of CETA including parts related to investments and the new Investor Court System (ICS) that was especially designed for CETA to replace the Investor-State Dispute System. At the time of writing ICS is under analysis by the CJEU at the request of the Belgian government to ensure the system will function fairly (EP 2017). Whether ICS will be approved has consequences for the potential risks that CETA poses to public services. In order to give a complete reflection on the way CETA caters to the ECI demand of non-liberalisation ICS will be included into the analysis. Paragraph 5.2 will analyse the role of ICS and investor protection more thoroughly.
5.1 Analysis of the official CETA Document
The first article that mentions water is Article 1.9 that concerns the rights and obligations relating to water.
“1. The Parties recognise that water in its natural state, including water in lakes, rivers, reservoirs, aquifers and water basins, is not a good or a product. Therefore, only
20 Chapters Twenty-Two (Trade and Sustainable Development) and Twenty-Four (Trade and
Environment) apply to such water.
2. Each Party has the right to protect and preserve its natural water resources. Nothing in this Agreement obliges a Party to permit the commercial use of water for any purpose, including its withdrawal, extraction or diversion for export in bulk.
3. If a Party permits the commercial use of a specific water source, it shall do so in a manner consistent with this Agreement.” (CETA 2016; 8)
Article 1.9 concerns natural water sources and does effectively exclude water sources, both natural such as lakes and rivers and artificial like aquifers and water basins, from being regarded as a good or product (1) and that this agreement does not oblige a party to allow commercial use of water (2). Chapter 22 and 24 do not threaten this exclusion as they are concerned with sustainability and environmental protection (CETA 2016; 180-192). However, this article does leave open the possibility for parties to use water sources commercially as long as it is in line with the agreement.
In the case of water sources CETA largely caters to the demands of the ECI except that states are allowed to permit the commercial use of a specific water source. This can be explained by the Commission’s standpoint regarding public services and utilities, the Commission stated that public services are a national issue and that the EU is to remain neutral as to how each Member State supplies these services (European Commission 2014). Therefore leaving the option open for a Party to act either way is not necessarily against the ECI demands but rather a way of maintaining each party’s autonomy regarding public services.
According to activists this opening does have consequences regarding ICS because when a Party permits the commercial use of a certain water resource and wants to re-municipalise it risks being sued by an investor through ICS. If the investor wins the state will have to pay large amounts of money to make the water source public again (Patterson 2016). So, on one hand this is in line with the statement of the Commission that water is a national rather than an EU issue, on the other hand it fails to protect water sources that are already privatized or are privatized in the future (European Commission 2014). So for the public protection of water sources the Commission largely excluded the liberalisation of them but in case ICS is approved these same water sources may be at risk.
21 2. This Chapter does not apply to licensing requirements, licensing procedures, qualification requirements, or qualification procedures:
(a) pursuant to an existing non-conforming measure maintained by a Party as set out in its Schedule to Annex II; or
(b) relating to one of the following sectors or activities:
(i) for Canada, cultural industries and, as set out in its Schedule to Annex II, social services, aboriginal affairs, minority affairs, gambling and betting services, and the collection, purification, and distribution of water; and
(ii) for the European Union, audio-visual services and, as set out in its Schedule to Annex II, health, education, and social services, gambling and betting services, and the collection, purification, and distribution of water.” (CETA 2016; 90-91)
This part of the text broadly excludes water services that concern the collection purification and distribution of water what could be interpreted as drink water services which would also mean their exclusion from the agreement (CETA 2016; 90-92). However, the choice of words is quite vague and does not address the service sectors directly required to apparent understanding that water and sanitation services are excluded from the trade agreement. This article also refers to Annex II which might give a more clear understanding of the text.
ANNEX II (CETA 2016; 1294) gives the option to exclude certain public services from the trade agreement and indeed there are some reservations regarding the collection, purification and distribution of water stating that both Canada and the EU reserve the right to adopt and maintain measures regarding the collection, purification and distribution of water. The EU side of this reservation states it includes household, industrial, commercial or other users, including drinking water supply and water management (CETA 2016; 1206-1297). This would protect the supply and management of drinking water and water delivered to household and industrial, commercial and ‘other users’. Water supply services can therefore be said to have effectively been excluded from the trade agreement as demanded by the ECI. As mentioned for water sources, Member States are still free to manage their water sources privately if they find that this makes more sense but it appears that apart from that CETA does not pose a threat.
ANNEX 19-5 ‘Services’ describes the exceptions and exclusions of certain services and as the last services to be up for procurement in this Annex are sewage and refuse disposal, sanitation and similar services (CETA 2016; 408-409). Parties are allowed to exclude specific services but the only
22 country that did this for waste management, sewage and sanitation services was Germany (CETA 2016; 1378). Therefore sanitation and sewage services are with the exception of Germany not excluded from CETA which is against the demands of the ECI. Some researchers believe that this creates a risk for drinking water services as well since a lot of public service companies in the EU are multi-utilities that provide both water and sewage services which would leave only part of the company protected by exclusion (Fritz 2015; 32).
From these articles and annexes it can be concluded that only water sources and drinking water services are excluded from the agreement and CETA does not include sewage and sanitation which means CETA only partially complies with the demands of the ECI. There is some division on how to interpret this partial alignment to the demands of the ECI. Satoko Kishimoto (interview 3) claimed that the exclusion of water sources and services was symbolically important because it shows the acknowledgement that water is a natural monopoly that should not be liberalized whilst Pablo Sanchez Centellas (Interview 2) claimed it is an useless exception since it does not answer to the demands of the ECI and a partial answer does not help protect water services. Another actor states that some of the mentioned exclusions in CETA use vague language that is at risk of being abused and can be considered a form of rule ambiguity is this proves to be true in the future (European Water Movement 2016). The next paragraph will discuss the parts of CETA that have not been ratified yet and will be more concerned with the use of language.
5.2 Investor protection and ICS
Article 8 ‘Investment’ in the CETA document has been adjusted to change investor protection and to introduce the new ICS which was developed to replace the ISDS system because of issues of transparency and inequity; ISDS has been criticised to rule in favour of investors and lacking transparency. When the alternative investor system was first introduced in the CETA text of 2016 under section F in Article 8, the ICS was received by several politicians and media outlets as a fair replacement of the ISDS system (Eberhardt 2016; 14).
Indeed, there have been some changes made to decrease the chance of unfair settlements as the new ICS system will promote more transparency as mentioned in Article 8.36, government control of interpretation in Article 8.31, code of conduct for arbitrators in Article 8.30, early dismissal of unfounded claims in Article 8.32-33 and a loser pays the costs of trial in Article 8.39 (CETA 2016; 63-69, European Commission 2016).
Despite these claims critics were soon to point out certain issues since ICS operates under the same arbitration rules and they claim independence of courts is all but guaranteed (Eberhardt
23 2016; 18). A paper signed by several organizations stated that although the recognition of the flaws of the ISDS system and increased transparency are good developments, there are still concerns that make this new system unfit to protect and guarantee public interest. They argue for instance that the system is one-sided by allowing only investor claims, the right to regulate is not sufficiently protected as the formulation of the article is declarative and not legally enforceable leaving it up to the arbitrators to use it as a guideline (European Public Health Alliance 2016). Although these criticisms may be overly critical there are in fact some indications of rule ambiguity and strategic inconsistency throughout Article 8 which is the part in CETA that involves investment. The parts where this occurs will be further analysed here.
Article 8.9 is written for the purpose that Parties may continue to regulate within their territory to achieve legitimate policy objectives and may modify its laws even if it negatively affects an investor’s profits or its expectations and will not be considered a breach of obligation under this section (CETA 2016; 47). This part of the article ensures to a certain extent that the Parties have the right to regulate except that in the next part a mention is made on ‘legitimate expectations’. Article 8.10 ‘Treatment of investors and of covered investments’ states the following:
“4. When applying the above fair and equitable treatment obligation, a Tribunal may take into account whether a Party made a specific representation to an investor to induce a covered investment, that created a legitimate expectation, and upon which the investor relied in deciding to make or maintain the covered investment, but that the Party subsequently frustrated.” (CETA 2016; 48)
Section 4 of the Article 8.10 may pose a problem as it is not specified in the document what a legitimate expectation entails and leaves it open for other actors to interpret it and during a tribunal in an investment court it could make a difference (Interview 4). In the text from the Commission that aims to explain each section of Article 8 it is explained that a legitimate expectation is limited to a situation where the State makes a specific promise of representation (European Commission 2016; 2). However this is not specified as such in the actual legal document nor does it explain under which circumstances such a promise is legally binding. The combination of Article 8.9 and 8.10 show some form of strategic inconsistency as Article 8.9 assures that the state will be able to regulate and modify its laws whilst Article 8.10 possibly makes an exception for legitimate expectations. Also the unclear definition of legitimate expectation can be considered rule ambiguity, although the Commission states it does not want to leave it up to a tribunal to ascertain what it means, it nevertheless does (European Commission 2016; 2).
24 The mentioned critiques have not gone unnoticed as the Belgian government requested the CJEU to give an opinion on the compatibility of section F of Article 8 with EU law. The answer of the CJEU which will approximately take one to two years, will decide whether the ICS will be applied or not and will affect the legal application of CETA (Koninkrijk België 2016). Kerrie Blaise (interview 4) mentioned that there are already risks for public water and sanitation involved as is, but that the implementation of ICS would make this risk even more substantial which will potentially costs governments a lot of money if sued by investors and will jeopardize democracy as governments are limited to change their regulations if the court decides in the investor’s favour.
As mentioned there are some indications that this type of system poses a risk for public utilities and the future of public water and sanitation services, but not all stakeholders have the same opinion on the ICS which has been put into place due to demands of other actors to change the ISDS system. Therefore this is an useful part of CETA to analyse in regard to process tracing which will be discussed further in the next Chapter.
5.3 Conclusion
In order to answer whether CETA is in line with the demands made by the ECI it is necessary to divide the demands into three separate categories: water sources, water supply services, sanitation, sewage and waste water services. From the agreement it appears that water sources and drinking water services are in fact included in the agreement but there are still risks involved in the case when a party decides to privatize certain sources or services which would then fall under the rules of the agreement. Although the agreement attempts to protect drinking water and its management, it does not protect sewage and sanitation services from being privatized which could in turn harm public services that provide both drinking water as sewerage as mentioned by Fritz (2015; 15).
There have been some uncertainties due to the investor protections that are included in parts of CETA. These have largely not been ratified yet and it will likely take at least a year before a decision is made to ratify these parts or not (EP 2017). If these parts are ratified this could cause problems for governments in case they want to change laws that affect foreign investment profits due to the unclear language used in this part of the agreement.
Therefore the conclusion is that CETA only partially takes the demands of the ECI into account which could cause problems overall. Also there is evidence of ambiguity of the way these regulations are formulated as specific sectors are often not addressed and most referrals to water services are made in broad general terms. So although there are some cases where these regulations
25 will help protect water services, it is definitely not enough to protect them fully and in the long-term which goes against the demands of the ECI. It appears that the chief negotiator did take the ECI demands into account but not fully, also there is some evidence of rule ambiguity. The process behind these developments cannot be determined from just these regulations and will therefore be further analysed in the next chapter which aims to analyse the process and the influence of different actors that were involved in the CETA negotiations.
6. Influences of actors on CETA negotiations
This chapter will start with a stakeholders' map of all the actors that have been involved in influencing the Commission, the direction of the standpoint on water privatisation and CETA and on which level they are negotiating which is shown on figure 2. Next, table 1 shows a summary of the timeline during which CETA was negotiated and signed and when the ECI procedure took place and the official documents that came out regarding both parties. Next will be an analysis of the documents made by different EU institutions, an analysis of other documents and events concerning CETA and the ECI followed up with a conclusion on which actors have influenced CETA to be proposed and provisionally applied.
6.1 Stakeholders
Figure 2 shows a stakeholder map of the actors that have interests in water and sanitation services and how they’re regulated in CETA. The actors in red are privatisation, in blue are pro-public water and the two-coloured stand for neutral or mixed standpoints. In purple are the chief negotiators which are the European Commission and the Prime Minister of Canada. This paragraph will give a brief explanation of each stakeholder.
The map shows that the pro-privatisation groups are the corporate lobbying groups and the private water organizations. These are often large corporations with a strong lobbying influence such as Veolia, Suez and BusinessEurope (Fritz 2015; 32). Across from them are public water and organizations, these are public water providers and organizations like Aqua Publica Europa. The groups that are not strongly in favour or opposed of water privatisation are the EP, the Member States, CEU and the media. Except for the media these are all government institutions involved with decision making, possibly their neutral or mixed preferences about water privatisations are due to their own two-level games that they have to play at their own level which are influenced by actors that are for or against privatisation. The only governmental institution that is largely against water privatisation is the EESC since their main role is to accommodate a bridge between EU government interests and citizen interest. Lastly, the ECI, research institutions, citizens, civil society organizations and NGOs are all generally against water privatisation and tend to aim for the same goals.
26 Figure 2. Stakeholders map of actors involved in water and sanitation services regulations 6.2 Timeline and Events Regarding the ECI and CETA
To give an overview of the regulations and events table 1 shows a simplified timeline of the events and actors that have published documents regarding the ECI and CETA. A detailed description and analysis of these documents will be discussed in the next paragraph.
Date ECI CETA
06/2006 – 02/2012 CETA study, negotiations and meetings
2008 Preparation ECI procedure 03/2012 Start ECI signature collection 02/2013 1 million signatures reached 07/2013 Decision exclusion water
Concessions Directive
10/2013 Agreement reached
12/2013 ECI signatures given to Commission 02/2014 – 03/2014 Concessions Directive: specifically
excludes water services 08/2014 – 10/2014 EESC states formal opinion that
water services should be excluded from international trade
agreements Commission calls
27 municipalisation a national
responsibility rather than EU 04/2015 – 09/2015 EP urges the Commission to
exclude water from international trade agreements
Commission trade talk on ISDS
EESC opposes ISDS in CETA and calls for International Investment Court(IIC)
02/2016 – 10/2016 Completion legal review of the English
text and launch ICS
The Commission refers CETA to the CEU with a proposal
EU and Canada sign CETA
02/2017 – 05/2017 Both the EP and Canada approve CETA
09/2017 21st: Provisional application CETA
Belgium government requests opinion of ICS
Table 1. Overview of events and published documents
As can be seen in Table 1 the ECI and CETA started around the same time period with their preparations. Several events happened in a short time span in 2013: the signatures of the ECI were handed in to the Commission, the Concessions Directive was announced to exclude water and sanitation services and general agreement was reached for CETA. According to several sources, the start-up of the ECI already had consequences on water regulations within the EU as the Commission decided to exclude water services from the Concessions Directive in 2013 which was later officially proposed and signed in 2014. The final CETA document was published and signed in 2016 and the agreement was officially ratified and provisionally applied on September 2017 (Interview 1; 2; Concessions Directive 2014; Bieler 2017 & EU 2018).
6.3 European Citizens’ Initiative and Concessions Directive
The founders of the ECI started their preparations in 2008 with the goal of ensuring water and sanitation to be a human right for everyone and to ensure that it was deemed necessary to take water and sanitation services off the market since it is an essential public service for all (Interview 2). EPSU is the organisation that coordinated the ECI and has been involved with the fight for public water since before the ECI started. Before the start of the ECI there was already a longer period of re-municipalisation of water services both in and outside of Europe since there were many occasions
28 where private water companies caused problems in safety and affordability of their services (Kishimoto et al. 2015). Also the UN recognized water as a human right in 2002 and water and sanitation in 2010 on which the ECI was able to base their demands as well as give a foundation of legitimacy (UN 2010).
The collection of signatures of EU citizens started in April 2012 and led to 1.6 million signatures by 2013 which were handed in to the Commission in 2013 (European Commission 2014). This ECI is the first successful ECI and has led to water services to become part of public discussion. Despite its success, the response of the Commission was considered a disappointment and received criticism from the founders of the ECI, the public and also some institutions within the EU (Bieler 2017; 314). This chapter will connect the story of the ECI with that of CETA since the actors involved are largely the same and the influence of the ECI can provide a deeper understanding of the different stakeholders and the processes involved with CETA.
The ECI has led to protests in several EU countries such as Spain, Italy, Greece and Ireland. The main reason why protests were prevalent in these countries is because their public water and sanitation services were at risk of being sold to private companies after the Euro crisis as part of the Troika plan to give out loans (Fattori 2013; 377, Zacune 2013; 7-13). One exception where Troika and debt was not involved but where the ECI got a lot of support is Germany, as a result of the ECI many German politicians resolved to keep water and sanitation in public hands which later on also led to an EU wide exclusion of water and sanitation services from the concessions directive (Bieler 2017; 307, Concessions Directive 2014; 7). This chapter will first analyse the concessions directive and the response of other EU institutions to the Commission’s actions regarding the ECI, after this the effect of different stakeholders and developments of the process of negotiation and ratification of CETA will be analysed.
Concessions Directive
As a result of the ECI and in particular the support of the German government of the ECI the Commission put an exclusion for water services in the new Concessions Directive. Point 40 of the Concessions Directive states the importance of water as a public good of fundamental value to all Union citizens and that the water sector needs particular consideration in its arrangements as water networks are often specific and complex. According to the Concessions Directive that justifies exclusions made in the field of water which would cover works and services concessions to provide or operate fixed networks that provide services to the public connected to the production, transport, distribution and supply of drinking water to these networks. In addition disposal and treatment of
29 sewage, hydraulic engineering projects, irrigation and land drainage are excluded when more than 20% of the volume used or made available encompasses drinking water in case they are connected with an excluded activity (Concessions Directive 2014; 7). This is again repeated in Article 12 which states that the directive does not apply to concessions regarding: providing or operating fixed networks that exist to provide services to the public regarding production, transport or distribution of drinking water, the supply of drinking water nor does it apply to water in irrigation and sewage (Concessions Directive 2014; 25).
The exclusion would have been considered an important and valuable step when followed up with the same type of exclusion in CETA or a legislation that would exclude water related services from upcoming international trade agreements but this is not the case as only drinking water sources and services are excluded from CETA and the agreement still includes sewage and sanitation (Concessions Directive 2014). Moreover, one of the founders of the ECI stated that they did not ask for the exclusion in the Concessions Directive and that they communicated to the Commission during one of their meetings that although they are not against the exclusion they would prefer legislation that excludes water services permanently and internationally (Interview 2). Therefore it can be argued that the Commission’s step to exclude water from the Concessions Directive is not equal to answering to the demands of the ECI. As the Concessions Directive concerns the national interests one could argue that the Commission does take public interests at the national, or EU level into account by making this exclusion since the ECI sparked this public debate. However, since the Concessions Directive was published only months before the publication of the first version of the complete CETA text it is possible that the exclusion in the Concession Directive is due to strategic inconsistency; this step shows actors at the national level goodwill regarding their wishes to keep water services off the liberal market whilst at the same time opening up the possibility of water privatization at the international level through CETA (Alter and Meunier 2009; 17).
The actors involved with the ECI were not alone in demanding more concrete action from the Commission, as several EU institutions showed their support for the ECI demands after the first version of CETA was published.
6.4 Response of EU Institutions
European Economic and Social Committee
The EESC published an official own-initiative opinion on 15 October 2014 on the response of the Commission on the ECI which was almost unanimous as it was voted 151 to 2 with 5 abstentions (EESC 2014; 2). In this opinion paper the EESC declares the importance of water and sanitation to be
