Dump Veolia: a nasty reminder of 21st century sales

Insight from Christopher Gasson, GWI publisher

Last week Veolia took a hit from the left field in St. Louis. It had won a competitive tender at the end of last year for a $250,000, four-month consulting contract which should have been the prelude to a longer-term performance-based contract with the utility. Then after a campaign by local Palestinian activists, they were told that the deal is on hold.

Palestinian activists derailing water projects in St. Louis, Missouri?

Back in 2000 at the time of the Oslo accords, Veolia took a 5% stake in the Jerusalem Light Rail Transit system. This has since become a much more divisive project because of the failure to move towards peace in Israel. Despite efforts to sell the interest, Veolia has become subject to an international Boycott, Divestment and Sanctions programme related to it. This has been gaining pace, even after Veolia has effectively divested itself of its transport division. In October last year they signed a deal with Caisse des Dépôts et Consignations to transfer “exclusive control” of Veolia Transport, including the 5% interest in the JLRT to CDC.

The fact that Veolia has essentially dumped its transport division doesn’t seem to have had any impact on the “Dump Veolia” cause. The campaigners claim that “Dump Veolia” has led to more than $7 billion of contract losses for Veolia, mainly on the solid waste side, and mainly in Europe. Even here in Oxford the students are campaigning to get Veolia dropped from the university’s waste collection contract.

Dump Veolia has been picked up in St. Louis and gained traction because mayoral primaries are taking place. The challenger, Lewis Reed, is supporting it as a way of unseating his opponent, the sitting mayor Francis Slay who was in favour of the Veolia contract. 80 protesters waving Dump Veolia placards piled into a mayoral committee meeting to support Reed’s efforts to kill the consulting contract, but they were pre-empted by the incumbent mayor who had already announced the contract was on hold, and therefore not on the agenda for that day’s meeting.

One can imagine that back in Veolia North America headquarters in Chicago, they were tearing their hair out. Having bent over backwards to come up with a proposition for St. Louis which addresses all of the concerns of their historic enemies – the anti-privatisation lobby – they then get hit by a protest campaign which they have absolutely nothing to do with.

The broader point I would make about this is that corporations – particularly those with public sector clients – have become incredibly vulnerable to internet-based protest movements. In the past, municipal water contracts were won and lost over the fourth bottle of wine as sales staff dined municipal officials in high-class restaurants. Today, they can be won and lost over the fourth re-tweet of some misconstrued information passed on during a mayoral campaign. Veolia needs to find a way of winning today’s way if it is to address the market weaknesses reported in today’s results.