Critics question proposed water services reform in Finland over foreign ownership concerns

Several members of parliament and experts have criticized a proposed reform of Finland’s water services law. According to critics, the draft legislation would allow foreign investors to own as much as 49 percent of water utility companies. Tapio Katko, an associate professor at the University of Tampere’s water services research group, expressed his disapproval, stating, “There should be a clear requirement for 100 percent public ownership.”

The water services legislative initiative is based on a citizens’ initiative that the parliament unanimously approved in 2021. The goal of this citizens’ initiative was to create a law preventing the sale of public water utilities to private commercial operators and to ensure domestic ownership of these vital services. However, the current proposal, according to experts, would grant excessive ownership rights to outside investors.

Katko questioned, “Why would we allow the cash flow from such an essential service to end up in the wrong hands?” He argued that keeping ownership local would be a better option for the operations and maintenance of water services. He noted that international examples show that investors often focus on extracting profits rather than reinvesting in water utilities, citing Tallinn as a cautionary example. Since its privatization in January 2001, Tallinn Water has reportedly invested very little in infrastructure but has distributed dividends.

The Finnish Environment Institute reports that around 400 water utilities are municipally owned, while the rest are cooperatively owned by customers. Katko points out that globally, privatized water services have been returned to public ownership in many instances; for example, Paris and Berlin have municipalized their water systems. Between 2000 and 2015, there were nearly 300 such cases across over 30 countries. In the United States, at least 60 cities were either planning or had already returned their water services to municipal management by 2017.