Direct Democracy to Reverse Privatization

We Want Our Water Back!

In Berlin, water was partly privatized in 1999. The negative consequences of this decision provoked popular resistance. A citizens’ initiative was launched as a first step to bring Berlin’s water supply back into public hands.

In Germany the breakthrough to direct democracy on the local level happened in Bavaria in 1995. It was brought about by a citizens’ movement that was largely driven by the association Mehr Demokratie. It was a victory of the people against the established political parties and the media that supported them. Until 2005 direct democracy spread across the whole of Germany on the local and regional level. Although it does not yet exist on the national level, from today’s point of view, it seems only a matter of time until this will be done. However, the aim is not to just have direct democracy, but one that works well. To achieve this, strong opposition has to be overcome. Experience in Germany and elsewhere tells us that it is a rocky path that leads to a well working direct democracy.

The decision to privatize water services was taken in Berlin at the end of the 1990s, approximately at the same time as in Uruguay and Bolivia (See Related Links [1]). In the background there were public debts and the well-known ideological assumption that private companies are more efficient than public companies. In addition also personal interests of insiders and lobbying of politicians by the water business played a role. After the fall of the Berlin Wall, the divided city was reunited and became Germany’s capital again. This added to the duties and responsibilities of the city, but the main reason for the large public debts lay elsewhere. It was a consequence of the collapse of a bank (Bankgesellschaft Berlin) part-owned by the city, “the biggest banking scandal in the history of post-war Germany in terms of damage done to the public” (Frank Zimmermann, SPD).

In the 1990s Berlin was governed by a coalition of Social Democrats (SPD) and Christian Democrats (CDU). Water privatization was decided by a small group of key actors. The opposition parties, the party base of the SPD and the citizens were completely sidelined. Only the media provided information about the decisions that concerned all the inhabitants of the city. As is usual in privatization projects, decision-making was neither public nor transparent, and all public influence was considered as potentially detrimental. The privatization contract between the city and the water companies was not disclosed and only a very restricted number of politicians had access to it. According to Lanz and Eitner (see endnote [1]) secretive decision-making that excludes the public is in Germany still the normal currency. Decisions are prepared and taken behind closed doors and only afterwards the public is informed. If the people then start to resist, they are told that it is too late (this is a rather familiar pattern, and not only in Germany). Many politicians and officials still view ordinary citizens as outsiders and potential trouble makers. Lanz and Eitner attribute this attitude to an authoritarian Prussian tradition.

The consequences of water privatization were quite contrary to what was promised: the price of water rose, additional investments into water quality were suspended for commercial reasons, jobs were lost, tax money was used to secure the guaranteed profits of the private investors et cetera. Water privatization did not resolve Berlin’s financial deficits.

Citizens Resort to Direct Democracy

In response to the negative consequences of water privatization popular resistance increased. A citizens’ initiative was born: “No more secret contracts – we want our water back”. It proposes a law on the full disclosure of the agreement on the partial privatization of the Berlin Water Works (Berliner Wasserwerke) in 1999. This is seen as a first step towards the final aim which is the recommunalization of water, to transfer not only the ownership of water back into the hands of the citizens, but also the management and operation of water supply.

In 2007 people started organizing this initiative, on the last day of January 2008 more than 38 000 signatures were submitted to the authorities, and 36 000 were certified after verification. But the government of Berlin (Senate) declared the citizens’ initiative inadmissible. The citizens filed a complaint with the Constitutional Court of the Land Berlin. On 6 October 2009 the Court ruled that the citizens’ initiative was valid. Now it was the parliament’s turn to take a position, and it rejected the initiative.

This was the beginning of the second stage of the citizens’ initiative: 172 000 signatures (seven per cent of the whole electorate) had to be collected within four months in order to get a popular vote. Signature collection started at the end of July 2010, and on 27 October 320 000 signatures (of which 280 887 were valid) were submitted to the authorites. On 9 November 2010 Berlin’s electoral authorities informed the public that the citizens’ initiative was valid, and on 26 November Berlin’s government announced that the popular vote would take place on 13 February 2011.

Those in power had tried everything to stop the initiative: first rejection, then preemption, and finally silence instead of a campaign, hoping that not enough people would go to vote. But this time the quorum trap did not work, 98.2 per cent of the voters approved the proposed law. An unusual result in a democracy, but a valid one, because the number of YES -votes (665 713) was greater than the approval quorum (616 571 or at least 25 per cent of the whole electorate). A symptomatic result, because it shows that there is a wide gap between the people and the politicians. A great victory for the organisers of the citizens’ initiative which had very limited financial resources and felt that the referendum campaign had not been fair.

Legal Design Matters Greatly

Why did the citizens resort to direct democracy only in 2007 and not earlier? The main reason is probably the reform of direct democracy in 2006. In Berlin direct democracy existed between 1950 and 1974, but it was never used. It was reintroduced in 1995 when a new constitution came into force. But the legal design of direct democracy was not user-friendly and no one wanted to (or could) use it. A workable form of direct democracy emerged only later, in 2005 when local direct democracy was introduced, and in 2006 when the legal design of direct democracy was improved: the number of signatures was reduced, the time allowed for signature collection was doubled, it was permitted to collect signatures freely (this happened only in 2008 when the new referendum law came into force), the participation quorum was removed and the approval quorum decreased, and the list of excluded issues became shorter:

Land Berlin: Reform of the Legislative Citizens’ Initiative in 2006

Citizens’ Initiative Legal Design: Before Reform Legal Design: After Reform
Number of signatures 1st stage 25,000 20,000
Number of signatures 2nd stage 10% electorate (~ 242,000) 7% electorate (~ 172,000)
Time allowed, mode of collecting 2 months, controlled: in state offices 4 months, free
Turnout quorum (TQ) or approval quorum (AQ) TQ 50% or AQ 35% AQ 25%
Issues not subject to referendum Constitution, decisions with financial implications, others. Others.
The reform in 2006 made the citizens’ initiative workable but not yet user-friendly. The struggle to improve the legal design of direct democracy in Berlin continues.

A comparison of the legal design of the citizens’ initatiative in Berlin and Zurich shows that the differences at the local level are rather small and at the regional or state level rather big:

Citizens’ Initiative Number of Signatures Time to Collect
Land Berlin (state level) ~0.9 % (20,000) 1st stage;
7 % (~ 172,000) 2nd stage
6 months 1st stage;
4 months 2nd stage
Canton of Zurich ~0,7 % (6,000) 6 months
Berlin District (local level) 3 % 6 months
Zurich City ~1,4 % (3000) 6 months

The usability of direct democracy depends on the extent to which the preconditions of democracy are met, and on what kind of infrastructure and support for citizen participation exists. The quality and usability of direct democracy also depends on the legal design of the procedures. The aim of the legal design should be to put democracy into practice, that the citizens can form and express their political will freely and without distortion. No hurdles should be introduced which make a procedure impractical or worse, unusable.

The legal design of the citizens’ initiative in Land Berlin before the reform of 2006 was exemplary for how to design an unusable instrument by introducing high hurdles: a large number of signatures, a short time for signature collection, no free collection allowed, a long list of important issues that cannot be the subject of a citizens’ initiative. To crown it, the design was garnished with a turnout and an approval quorum: the result of the popular vote was valid only if at least half of all the eligible voters turned up to vote or if the YES -votes gained a majority that was equal to at least 35 per cent of the whole electorate. From experience we know that quorums kill direct democracy. For examle in Italy, where a 50 per cent turnout quorum is required, all referendums between 1995 and 2010 fell into the quorum trap and therefore were not valid.

Water Struggle in Italy

Also in Italy there is a broad movement that wants to protect water from marketization and commodification by declaring it a human right. In Uruguay this was achieved directly by means of a citizens’ initiative. In Italy there is only an agenda setting initiative but no citizens’ initiative. Therefore people in Italy resort to a referendum to abrogate legislation on water privatization, and they use the agenda setting initiative to invite the parliament to make the appropriate legislation for the protection of water. On June 12-13, 2011 there were four referendums, two of them against water privatization. Their success, it was hoped, would open the door to protect water as a common good and human right (referendum 1). In addition, the supply of water and sewage services should not be provided for profit (referendum 2).

Public Water, the Real Battle Starts Now.
In: Diritto di critica, 13 July 2011

Results of the Water Referendums in Italy, 12-13 June 2011

Issue YES votes NO votes Turnout
Referendum 1 25,935,372 (95,35%) 1,265,495 (4,65%) 54,81 %
Referendum 2 26,130,637 (95,8%) 1,146,639 (4,2%) 54,82 %
Source: Ministero dell’Interno, Italy.

The governments contempt for democracy became visible before and after the referendum vote. The prime minister announced that he would not vote and people were encouraged to do the same and go to the beach instead. The government tried all it could to keep the turnout below the required 50%. Italian television, largely under the control of Berlusconi, sidelined the referendum campaigns. But this time attempts to boycott and obstruct the referendum process didn’t work; in addition to traditional methods, campaigners made use of social media and the Internet to mobilize voters, and the referendum resulted in a great victory for them.

However, winning the vote is not enough, to make victory complete the decision must also be put into practice. After the vote starts the battle for implementation. Italian authorities and governments are known for their propensity to disregard the results of referendums. This time was no exception, only a few months after the referendum vote Silvio Berlusconi’s government presented an austerity plan that included proposals to privatize water. After the fall of Berlusconi the new government under Prime Minister Mario Monti did the same. After six months the result of the water referendums was still largely ignored; this gave rise to a new campaign, “Civil Obedience”, which demands respect for the democratic will of the people.

Water, Referendum Never Applied: Mobilization Restarts.
In: Diritto di critica, 28 November 2011

The Italian and German experiences with the referendum teach a clear lesson: badly designed direct democracy works badly and produces frustration among the citizens. A direct democracy that is not functioning properly is of little help to overcome the deficiencies of indirect democracy. In Italy there is no right to citizens’ initiative and in Berlin there is no right to citizen-initiated referendum. A real and well working democracy needs both: the right to citizens’ initiative and the right to citizen-initiated referendum.

Comparison of the Instruments

Related Links

|1] For thorough information about water privatization in Berlin see: ”WaterTime case study – Berlin, Germany”, Klaus Lanz and Kerstin Eitner, 2005. Download doc

Berliner Wassertisch
A civil society network of people, which have a common motto: “Water belongs to us all – water is a human right”. It is the main organiser of the citizens’ initiative No More Secret Agreements – We Want Our Water Back.

Forum dei Movimenti per l’Acqua
“We are those who want public water, those who believe that a fundamental universal good for life shall not be entrusted to the logics of the market and profit. Those who have collected around one and a half million signatures for starting 3 referendums for taking the water services completely into public hands.”
(One referendum was not approved by the Constitutional Court.)

Il Manifesto per L’ Acqua come Bene Comune. Download pdf
(La Commissione Rodotà, La Legge d’ Iniziativa Popolare dei Forum, ed il Referendum)
A cura di Ugo Mattei

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