Bottom Line: There is no evidence that water birth is safe; case reports indicate that it may not be.
The gist of the article wrapped up in one quote:
If we are to feel confident regarding the safety of underwater birth for the neonate, we must be confident that a sufficient number of cases have been scientifically scrutinized in a rigorous fashion and that these cases demonstrate a reasonably low probability of harm as compared with the current standard of birth above water. Furthermore, if there is possible case report evidence of harm without demonstrable improvement in outcomes, we must question the rationale for continuing the practice of offering underwater birth. We found case reports of infants with pneumonias, hyponatremic seizures, Pseudomonas infections, and multiple freshwater drownings attributed to underwater birth. Have these reports been missed by others or simply ignored? Of importance, none of the reports we reviewed made any claim of underwater birth being better for the infant.