Presentation: Sandra Vermuyten (PSI) on 20 April in UNECE side-event

UN-ECE side event: “Putting people first in Public-Private Partnerships for the FfD follow-up” New York, 20 April 2016, 1:15pm to 2:30pm

Quality public services are the foundation of democratic societies and successful economies. They ensure that everyone has equal access to vital services, including health care, education, electricity, clean water and sanitation. When these services are privatized, maximizing corporate profits replaces the public interest as the driving force. As a result, the possibility of achieving the SDGs is endangered but also the human rights obligations of governments in terms of guaranteeing the human right to health, education and water.

We see a worldwide push to privatize healthcare and social services, which has become very aggressive in Europe. It is an important chapter in the TISA negotiation, while the TPP will limit governments’ ability to regulate healthcare providers and opens the way for private healthcare multinationals to have greater influence on health care policy.

While the UN ECE is developing a PPP standard on health, UN-DESA’s paper, “Public-Private Partnerships and the 2030 Agenda for Sustainable Development: Fit for purpose?”, indicates that “PPPs are less likely to deliver efficiency gains in the social sector such as hospitals and schools where access and equity are major concerns”[1].

“Why Public-Private-Partnerships Don’t Work” [2] by Public Services International Research Unit (PSIRU) assesses the PPP experiences in countries both rich and poor. It concludes that PPPs are an expensive and inefficient way of financing infrastructure and services, since they conceal public borrowing, while providing long-term state guarantees for profits to private companies. Implementing PPPs poses important capacity constraints to the public sector, and particularly in developing countries. PPPs suffer from low transparency and limited public scrutiny, which undermines democratic accountability.

Here is one example of a failed PPP in health in India, where in the state of Chhattisgarh a PPP project to outsource diagnostic services was halted, following months of opposition. A review team from central government “found that there are many problems in implementing the plan and that outsourcing diagnostic facilities is not the best option…. The team observed that the PPP model has a possible risk of false claims, denial of services and unfair intervention… [and] also carries the possible risk prescription of unnecessary tests. Nearly 1 million cases of tuberculosis are missed every year in India, mainly because private hospitals fail to carry out the procedures recommended by the WHO and endorsed by the Indian government. This “undermines efforts to control the disease” which causes 270,000 deaths per year in India alone [4].

PPPs do not deliver on their promise of cost, quality and service provision but can also have severe impacts on public health.

Therefore PSI proposes to avoid the promotion of PPPs for the provision of health care, while attempts at establishing standards for PPPs in health should be inclusive of all governments (including local authorities) and the major stakeholders (users of health services, health sector workers, and others). PSI also proposes that criteria be established for the evaluation and periodical review of existing PPPs in health.

We bring this message to the FFD Forum, but also at the UN ECE and the newly created UN Commission on Employment in Health and Economic Growth [4].

These proposals are in sharp contrast with the on-going work on a UN-ECE PPP standard for health, which has been conducted very quickly, with little stakeholder participation, other than a significant presence of private health providers (service, product and finance companies)[5].

We are concerned about conflict of interest in the UNECE work since Peter Ward, Project Leader for UNECE PPP standards in health, is also the health director at the John Laing Group, a private infrastructure corporation engaged in PPPs in health services, slammed for refinancing projects to create windfall profits and, as a result, endangering patient services. Before floating on the London Stock Exchange in 2015, the John Laing Group was owned by Henderson Infrastructure, a holding company registered in Jersey, a well known tax-haven.

PSI advocates for an overhaul of the corporate tax system, which currently sees corporations avoid over $3 trillion in tax per year, and could help to provide the much needed revenue to extend public services in line with the UN’s Sustainable Development Goals.

Putting people first – instead of profitmaking – is exactly what we want. What we need is a clear commitment and investment in public goods and democratic and transparent provision of public services that guarantee universal access and quality.

Thank you.

[1] http://www.un.org/esa/desa/papers/2016/wp148_2016.pdf

[2] http://www.world-psi.org/en/publication-why-public-private-partnerships-dont-work

[3] Down to Earth 30 November 2013 2.9 mln TB cases go unreported http://www.downtoearth.org.in/content/29-mln-tb-cases-gounreporte

[5] http://www.world-psi.org/en/psi-influencing-united-nations-policy-health-employment

[4] http://www.world-psi.org/en/private-sector-dominates-unece-forum-ppps

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