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"Firms like Blackstone should be ashamed of this sinister investment strategy that contributes to catastrophe and rebuilds after it strikes," a report author said.
In yet another instance of disaster capitalism, private equity companies like Blackstone have found two ways to profit from the climate emergency: first by investing in fossil fuel infrastructure and then by buying up restoration companies that clean up after increasingly extreme weather events.
That's one of the main takeaways from a report released Thursday by the Private Equity Stakeholder Project (PESP) and Resilience Force titled Private Equity Profits From Disaster at the Expense of Workers, Communities, and Climate.
"Firms like Blackstone should be ashamed of this sinister investment strategy that contributes to catastrophe and rebuilds after it strikes," report co-author and PESP research coordinator Azani Creeks told Common Dreams.
"The investments Blackstone has made in both ServPro and its fossil fuel companies have long-term consequences that are borne primarily by already marginalized communities in the United States."
The report documents a shift that took place in the disaster recovery industry following Hurricane Katrina in 2005. Before that historic storm, cleanup work in a given area was usually done by smaller local companies.
"After the massive efforts required post-Hurricane Katrina and the increasing frequency and magnitude of climate disasters, private equity firms saw an opportunity to consolidate the market by buying up smaller companies," Creeks wrote in the report.
And the trend continues. Private equity firms bought 72 restoration companies between January 2020 and June 2023, with the number of purchases rising each year. They acquired 13 in 2020, 20 in 2021, 25 in 2022, and 14 during just the first six months of 2023. If that pace continues through the end of the year, the 2023 total will rise to 28, more than double the yearly purchases three years ago.
The report includes a list of 14 major disaster relief companies owned by private equity firms, five of which also invest in fossil fuels. For example, Blackstone, which owns ServPro, also bought Ohio's General James Gavin Power Plant—one of the leading single sources of coal pollution in the U.S.— in 2017.In another example, Louisiana-based disaster relief company the Lemoine Company also manages Lemoine Pipeline Services. The company is owned by the private equity firm Bernhard Capital Partners.
This profit-making strategy has major environmental justice implications.
"The investments Blackstone has made in both ServPro and its fossil fuel companies have long-term consequences that are borne primarily by already marginalized communities in the United States," Creeks told Common Dreams, adding that ServPro often hires immigrants and people of color who are vulnerable to unfair and unsafe labor practices like wage theft.
"Furthermore," Creek added, "Blackstone's financing of fossil fuel assets also inflicts direct harm on these same communities, who bear the brunt of toxic emissions and climate disasters."
Even if private equity firms aren't funding fossil fuels, their acquisition of restoration companies still means they have a responsibility to workers and communities, the report argues.
As disaster restoration companies have consolidated and gone national, they have organized themselves in a series of franchises and subcontractors. Of the 72 companies acquired in the last three years, more than 80% of them were instances of larger companies buying up smaller ones. These often-opaque corporate structures can make it difficult for workers to challenge their employers over issues like wage theft or unsafe working conditions. Undocumented workers are especially vulnerable, because any complaint may be met with a threat to contact immigration authorities.
"Though issues with wage theft and worker health and safety have long existed in the construction and disaster restoration industries, with an investment from the world's largest asset manager, you would expect to see these issues less frequently as more resources can be implemented to protect workers," Creek said. "Instead, the problems at ServPro and other private equity-owned disaster restoration companies persist, with even less mechanisms for accountability and public scrutiny than before."
One worker named Joél Salazar, who is also an organizer with Resilience Force, shared his experience ServPro subcontractor Royal Services. He said the company offered to pay his way from Florida to Colorado in early 2022 to help with wildfire recovery there, and promised him 40-hour workweeks and weekly paychecks when he arrived. But the travel costs never materialized, weeks started out closer to 20 hours, and the pay ended up being every other week instead.
"The company is stealing from me."
What's more, the payment was made via a Visa card. When Salazar said he had to return to Florida, the company canceled his card despite the fact that a significant amount of his earnings were still on it.
"The company is stealing from me," he said in the report.
Salazar said he wanted private equity firms and investors to be aware of what their companies were doing.
"Investors, I'm calling to ask you to consider worker safety at the companies you invest in, especially the private equity firms you rely on for profits," he said.
Another problem is unsafe working conditions. Companies owned by private equity firms racked up a total of 194 federal Occupational Safety and Health Administration violations between January 2015 and January 2022. The most common violations were exposing workers to asbestos and failing to provide them with respiratory protection, followed by failing to communicate dangers and protect workers from falls.
Recovery workers are organizing to protect themselves through the group Resilience Force, which says it is "building a strong, stable, inclusive, million-strong workforce that will be able to perform year-round climate preparation and adaptation work, as well as rebuild after disasters."
The group's founder and director Saket Soni said in the new report, "We must ensure that these companies, and their private equity backers who profit from disaster, pay and protect the resilience workers who are essential to helping communities adapt and recover."
What's better for workers will be better for the communities they help, as well. The report found that the private equity-owned firms engage in price gouging. For example, a ServPro franchise settled with the state of North Carolina for overcharging residents following Hurricane Florence.
The report highlights the legislative efforts of U.S. Rep. Pramilla Jayapal (D-Wash.), whose Climate Resilience Workforce Act would fund jobs and training through grants and make workers less vulnerable by providing a pathway to citizenship for immigrant workers and banning employers from asking about criminal history.
"The innovative Climate Resilience Workforce Act responds to the worsening climate crisis at the scale necessary by investing in a skilled workforce that is capable of not only responding to but preparing for the destructive impacts of climate change," Jayapal said when the bill was introduced in 2022. "As we create millions of good-paying, union jobs and center the very communities who are disproportionately impacted, we are finally building back better, greener, and stronger."
The report also issues recommendations to private equity firms to better protect the workers at the companies they own, such as setting up complaint lines, minimizing the use of subcontractors, funding programs to monitor their companies, and allowing their workers to unionize.
Finally, Creeks noted that firms like Blackstone manage public pensions, and have a responsibility to these workers as well.
"Public employees, such as teachers, nurses, and firefighters, have a right to know that their pension dollars are being used to purchase fossil fuel plants that are contributing to climate disasters all over the country," Creeks told Common Dreams. "In turn, their retirement capital is also being used to buy companies that profit off of these very disasters."
As we look forward to how we not only rebuild, but work to reduce the threat of these climate change-fueled disasters, we have to change who is leading this work.
In the wake of the Maui fires, Governor Josh Green moved to prevent the sale of land to outside investors in an effort to prevent disaster capitalism, a common pattern we’ve seen play out in the wake of disasters from Hurricane Katrina to the tsunami in Thailand. This is an important first step to prevent further displacement of Native Hawaiians, but it only scratches the surface of a deeper issue.
In the days after the devastating wildfires on Maui, we saw patients with burns, wounds, infections, chronic disease flare-ups, displacement and, overwhelmingly, mental health crises. Neither of us would have ever imagined experiencing such a tragic crisis as a physician or seeing the amount of devastation right here at home. Treating these patients—and hundreds of Native Hawaiians in our careers—brings to life what research shows: When Native Hawaiians’ connection to land is severed, we suffer.
This is because when the land is sick, so are we.
Centuries before European settlers arrived in Hawai‘i, Native Hawaiians developed an elaborate and highly sophisticated public health system based on socioreligious tenets to ensure equitable access, availability, and distribution of natural resources to help minimize, if not eliminate, starvation and illness across islands with finite resources.
Human-triggered climate change is the latest environmental injustice threatening Native Hawaiian health and wellness. The Maui fires make this clear. The causes of the fires are complicated, but climate change played a key part. Climate change causes stronger, more frequent storms and droughts, and we see that in Hawai‘i, which is suffering worsening drought conditions, despite being surrounded by ocean. Dry conditions and dangerous wind changes produced by Hurricane Dora fueled the fires.
In responding to this disaster and charting a path forward, we need to look to those with the greatest commitment to acting as stewards of Hawai‘i. Centuries before European settlers arrived in Hawai‘i, Native Hawaiians developed an elaborate and highly sophisticated public health system based on socioreligious tenets to ensure equitable access, availability, and distribution of natural resources to help minimize, if not eliminate, starvation and illness across islands with finite resources.
Colonization changed Hawaiʻi’s natural landscape, through deforestation for sugarcane, pineapple, and cattle. Water from mountains was redirected from natural streams and aquifers to flow instead through concrete irrigation ditches, feeding golf courses and hotels. Fire-prone invasive grass species replaced native vegetation.
As we look forward to how we not only rebuild, but work to reduce the threat of these climate change-fueled disasters, we have to change who is leading this work. An important solution is stewardship of land by Native people. Indigenous peoples maintain sustainable relationships with their environment and recognize and respond to environmental changes in creative ways, drawing on traditional knowledge and science to find solutions that can help society at large. When Native communities have sovereignty to take care of the land, it helps everyone.
This work of respecting Native Hawaiian leadership is already happening. We are both kiaʻi (stewards) of sacred places, like Loko Iʻa Pāʻaiau, a 400-year-old royal fishpond at Pearl Harbor that was contaminated with fuel from military operations. Restoration of Pāʻaiau is one example of how allowing Hawaiians to practice aloha ʻāina—to honor and advocate for land so it will sustain all inhabitants—leads to increased community well-being and resilience, as demonstrated by the return of healthy native plants, animals, human descendants, and relationships in the area. Restoration remains incomplete until the flow of freshwater from the mountains is restored, but stewardship efforts persist forward, through a collaborative community-based partnership with the U.S. Navy, Native Hawaiians, and the larger community, centered around a practice of aloha.
There is a lot of blame going around right now; we do need to look at how the Maui fires happened, but we must focus on moving forward. That can only happen when Native Hawaiians are central to the decision making surrounding how our land is treated.
Tradition teaches that Hawaiians descend from nature gods; thus, to heal Native Hawaiians, we must heal the 'āina that sustains us. Like our connections with those who love and nurture us, our relationship with ʻāina dramatically influences overall health and wellness. If we are able to progress with centering land practices around Indigenous knowledge and rights, Hawai‘i can model how to recover from climate-related disasters in ways that build safer, healthier futures for our children and future generations.
Preventing outsiders from buying land in Lāhainā is important, but only preserves a troubled status quo. We need to build a better future, one that is informed by Native Hawaiians’ shared history, knowledge, and connections with the land. We need Native Hawaiians on the land, and at the table.
"Justice is returning control of public resources like land and water to the people," wrote one activist. "For too long the strings of Maui and thousands of communities like it have been pulled by forces indifferent to their soul."
As Maui County faces a daunting recovery from the deadliest U.S. wildfire in over a century—with at least 115 confirmed deaths as of Tuesday, around 1,000 people still unaccounted for, and a rebuild expected to cost billions of dollars—fears and fights over land and water are highlighting the long history of colonialism and exploitation in the Hawaiian Islands.
"It's disaster capitalism at its finest," Hokuao Pellegrino, a seventh-generation Native Hawaiian farmer, educator, and president of the nonprofit Hui o Nā Wai 'Ehā, toldCNN in a Monday segment about Maui's current water battles.
Disaster capitalism, as journalist Naomi Klein explained in her 2007 book The Shock Doctrine, is "orchestrated raids on the public sphere in the wake of catastrophic events, combined with the treatment of disasters as exciting market opportunities."
Fire spread by hurricane winds earlier this month leveled Lahaina, a Maui tourist destination that was previously the capital of the Hawaiian Kingdom, before an 1893 coup led by American expatriates and sugar planters. The United States formally annexed the islands in 1898. Hawaii became a U.S. territory in 1900 and the 50th state in 1959.
"Disaster capitalism has taken many forms in different contexts," Klein wrote last week in a Guardian column with Kapua'ala Sproat, a University of Hawaii at Manoa law professor and director of the Ka Huli Ao Center for Excellence in Native Hawaiian Law.
"It's always a little different, which is why some Native Hawaiians have taken to calling their unique version by a slightly different term: plantation disaster capitalism," the pair continued. "It's a name that speaks to contemporary forms of neocolonialism and climate profiteering, like the real estate agents who have been cold-calling Lahaina residents who have lost everything to the fire and prodding them to sell their ancestral lands rather than wait for compensation. But it also places these moves inside the long and ongoing history of settler colonial resource theft and trickery, making clear that while disaster capitalism might have some modern disguises, it's a very old tactic. A tactic that Native Hawaiians have a great deal of experience resisting."
As Klein and Sproat detailed:
For over a century, water across Maui Komohana, the western region of the island, has been extracted to benefit outside interests: first large sugar plantations and, more recently, their corporate successors. The companies—including West Maui Land Co. (WML) and its subsidiaries, as well as Kaanapali Land Management and Maui Land & Pineapple Inc.—have devoured the island's natural resources to develop McMansions, colonial-style subdivisions, luxury resorts, and golf courses where cane and pineapple once grew.
This historical and modern plantation economy has taken a tremendous toll on water in particular, draining Indigenous ecologies of their natural moisture. Lahaina, once known as the Venice of the Pacific, has been transformed into a parched desert, which is part of what has made it so vulnerable to fire.
A few days after flames tore through Lahaina, Hawaiian state Attorney General Anne Lopez announced a probe into the formal response. Her sweeping investigation includes a five-hour delay in the state Commission on Water Resource Management (CWRM)—which is responsible for how much water flows through streams—approving WML's request to fill its private reservoirs that are not connected to local hydrants but the company was willing to make available to firefighters.
The delay was reportedly the result of unsuccessful attempts to reach a farmer of taro—or kalo, a root vegetable sacred to Native Hawaiians—affected by the diversion. Activists and officials have pointed out that wind would have prevented helicopter crews from reaching the WML reservoirs for firefighting. According to the Honolulu Civil Beat, "The company suffered no significant property damage in the fires."
A water official involved with the delay, Kaleo Manuel, was then reassigned to another Hawaii Department of Land and Natural Resources division—though the DLNR said in a statement last week that the shift was part of an effort "to focus on the necessary work to assist the people of Maui recover from the devastation of wildfires" and "does not suggest that First Deputy Manuel did anything wrong."
In a lawsuit filed Monday, Maui residents Kekai Keahi and Jennifer Kamaho'i Mather argue that the redeployment was illegal, and ask a Hawaii court to void the decision and affirm that any such move must be made in an open meeting to allow public testimony.
Hawaii Public Radioreported Tuesday that while decision has also "prompted serious concerns" from CWRM members, the state attorney general's office claims the case is "wholly without merit" and plans to file a motion to dismiss it.
"One thing that people need to understand especially those from far away is that there's been a great deal of water conflict on Maui for many years," Hawaii Gov. Josh Green said during a press briefing last week. "It's important that we're honest about this. People have been fighting against the release of water to fight fires. I'll leave that to you to explore."
The Democratic governor has faced criticism for the comments and for suspending the "state water code, to the extent necessary to respond to the emergency," through his recent proclamations relating to wildfires.
As the Civil Beatreported:
"No one's trying to oppose the use of water to fight fires," said Isaac Moriwake, an attorney with Earthjustice. "That was unfair for the governor to go there."
The real issue, Moriwake said, is that West Maui Land Co. is trying to use the fire as an excuse to gain control over the region's water supply.
Moriwake points out that Hawaii Board of Land and Natural Resources Chair Dawn Chang has agreed to amend—temporarily—several water regulations, at West Maui Land Co.'s request, pursuant to an emergency declaration related to the fire issued by Green. That included a provision allowing companies like West Maui Land to fill its reservoirs when fire was reported in the area.
"They should stop trying to use this tragedy for cheap advantage," Moriwake said.
Kamanamaikalani Beamer, a former member of the CWRM, also challenged Green's claims about community members fighting against the release of water for firefighting, tellingThe Washington Post that "in my eight years on the water commission, I never heard, in a single hearing, that testimony from anyone in the community."
Lahaina's Native Hawaiian community "has fought for literally generations to seek justice and balance for the streams and the community and other usages," added Beamer, a professor at the University of Hawaii at Manoa's Center for Hawaiian Studies.
According toThe New York Times:
Wayne Tanaka, director of the Sierra Club of Hawaii, said conservationists had supported the use of water for fire reserves. But he said he worried that water companies and large landowners use fire protection as an excuse to hoard water for commercial purposes.
"No one has opposed the need to reserve water for firefighting, but we want to know how much they actually use for that purpose," Mr. Tanaka said.
Sproat made similar remarks in an appearance on
Democracy Now! last week after her column with Klein was published.
"Plantation disaster capitalism, I think, is, unfortunately, the perfect term for what's going on in Maui Komohana, or in West Maui, right now," Sproat said. "The plantations, the large landed interests that have had control over not just the land, but really much of Hawaii's and Maui Komohana's resources for the last several centuries, are using this opportunity, are using this time of tremendous trauma for the people of Maui, to swoop in and to get past the law, basically."
"They're using the emergency proclamation that the governor put into place the day after the fires to, you know, ravage Lahaina, and they're using this as an opportunity to try to get their way, especially with respect to water resources, something they could not achieve when the law and Hawaii's water code, in particular, were in place," she explained.
During a Thursday interview with the Civil Beat, Green "defended his position that government, developers, and environmental and cultural activists need to work together to resolve issues," but also insisted that Lahaina's rebuild "will be done with direct input from fire survivors, the island, and its mayor," and "new construction will be primarily to house locals and not to favor large developers."
A coalition of community members gathered at Maui's Wahikuli Beach Park for a Friday press conference about rebuilding. Keahi—one of the residents behind the suit over Manuel's redeployment—said that "we don't want to hear the governor's office saying that we have a plan for Lahaina because none of us ever got to speak to the governor."
Reporting from the event, Hawaii Public Radioexplained that Nā 'Ohana O Lele—or the Families of Lele, in honor of Lahaina's ancient name—has three demands for Green: "One is to allow the community time to heal before rebuilding. Two is to let Lahaina lead the planning process. And three is to amend the emergency proclamation to ensure Hawaii's open meeting regulation or 'Sunshine Law' remains in full force."
Noting the group's demands, Kaniela Ing, a seventh-generation Native Hawaiian and national director of Green New Deal Network, wrote Monday for The Nation, "The vision is clear: The restoration of Lahaina should be by the community, for the community."
President Joe Biden and First Lady Jill Biden traveled to Maui on Monday to tour the destruction and meet first responders and survivors. In a pair of speeches, the president claimed that "we're going to rebuild the way the people of Maui want to build."
"It's time to rebuild this community the way you want it built—the way you want it—so it's still a community, not a group of beautiful homes, but a community," Biden declared at the Lahaina Civic Center, provoking applause from residents impacted by fires.
Still, Hawaiians stress that such words from government officials are not enough—action is also required. Ing wrote Monday that "political and legislative fights lie ahead to ensure that rebuilding efforts steer clear of the pitfalls of external influences, and that resources are channeled to foster local resilience and empowerment."
"True justice doesn't lie merely in acknowledging the climate crisis," he argued. "Justice is returning control of public resources like land and water to the people. It's about recognizing that for too long the strings of Maui and thousands of communities like it have been pulled by forces indifferent to their soul. It's acknowledging that survivors aren't just figures in a news report but the heartbeats of a resilient community that demands its rightful place in shaping its future."