Metchocism: I don't know the answer, but I suspect you are right: a water treatment plant (in and of itself) would probably not be a "legitimate military target."

(However, sitting there presents a risk probably somewhere between being a shield and a "bomb-test-dummy.")

As for the criminal aspect of it: I think the answer lies more in operational aspects: You break, you fix: fast.

Here's another article on the subject (not answering the question): http://www.ccmep.org/2003_articles/Iraq/022403_human_shields_bed_down_in_the_ta.htm