The day is not far off, when water will cost more than oil”, thundered a Syrian delegate at the first UN World Conference on Water and Sanitation in 1977. A quarter century later, it appears that if the `think tanks’ of the water sector have their way, we will soon be very close to such a social reality.
According to the report of the World Water Commission, only private firms can provide the enormous capital needed to fix the world’s water problems and usher in an era of plenty by the year 2025. Pursuing this privatisation logic further, the World Bank, states that there is now a global consensus that, “…the annual investment required by 2025 to meet the world’s needs for water for irrigation, industry, water supply and sanitation, and environmental management will increase to $180 billion, from the current $70–80 billion. Such a massive change can be achieved only if developing countries are able to create an investment climate conducive to the private sector and to absorb these investments. Both tasks will require political stability and attention to governance and institutions - particularly property rights, rule of law, transparency, and participation.”
This privatisation agenda has found its way into several national water policies of governments across the globe. For instance, the Indian government dutifully parrots this in the National Water Policy of 2003. Article 13 of the Policy reads, “Private sector participation should be encouraged in planning, development and management of water resources for diverse use, wherever possible”.
At the heart of the proposals, arguing for the privatisation of the earth’s water resources is the principle that, “Water has an economic value in all its competing uses and should be recognised as an economic good. Managing water as an economic good is an important way of achieving efficient and equitable use, and of encouraging conservation and protection of water resources.” A principle that is consistent with neo-liberal logic of the present phase of corporate led globalisation.
Today, water is big business. The entire water sector, including wastewater treatment, is estimated at $200 billion. According to a 1999 OECD summary of Environmental Business International statistics, water utilities account for $73.2 billion out of the total global environmental market of $453 billion for goods and services. However, these figures seem a gross underestimation if water is considered as an input to agriculture and other industrial applications. The industry estimates global trade in water to be close to $7 trillion.
Water, a source of life, and a social good for all is rapidly being reduced to an economic good as the logic of neo liberal globalisation sweeps across the globe in the developed north as well as in the South - in Latin America, Africa, Asia. The commodification and privatisation of the world's waters is now presented as the only ‘road map’ available to provide for the universal access to water and environmental sustainability.
This issue of Combat Law is devoted to some of the concerns that arise out of this overwhelming emphasis on the privatisation of the water sector, primarily human rights concerns on the fundamental right of every living being on this planet to adequate water. This paper, however, attempts to look at some of the questions that arise from recent developments in the water sector - especially the overarching trend of privatisation. First, to the nature of the global water crisis as it is constructed and presented; second as to what is the nature of the so called `global consensus’ on water privatisation. Lastly, to the implications and experience so far with this `chosen path’ to provide water for all. But first to the crisis.
The Nature of the ‘Crisis’
Some basic facts are well known. Only 3 per cent of the water on earth is fresh and most of it is locked away in the ice caps or is in deep underground aquifers. As a result only 0.3 percent of global water is available for human consumption. Over the next 20 years, it is estimated that the average supply of water worldwide per person is expected to drop by a third. Water scarcity or stress - or having less than 1,700 cubic metres of water a person a year - would affect about 40 per cent of the world population. Chronic water shortage now affects 8 per cent.
The Three W’s of Water
Three international organisations, play a critical and key role in shaping the world’s views, approach to the world’s water problems.
The first, The World Water Forum is a tri-annual gathering of water experts and aimed at solving the world’s water problems. The Forum is the brainchild of the World Water Council the second organisation, a private think tank established in 1996. Among the members who helped in the formation of this Forum are UN Agencies like UNCIF, UNDP, FAO, the World Bank, IUCN and water companies like the Lyonnaise des Eaux.
The first meeting of the Forum took place in Marrakesh (1997) and since then it has met twice, at The Hague (2000) and in Kyoto in 2003. The Forum is not a platform for presenting papers, but a venue for participants to share their experiences on actions and practices that facilitate solutions to water problems.
Third major international player in the water business is the Global Water Partnership, which is a working partnership among all those involved in water management, government agencies, private companies and multilateral development agencies. The Partnership serves as a mechanism for alliance building and information exchange on integrated water resource development.
The Council produced The World Water Vision as a comprehensive document providing a long-term vision of water, life and environment. It established the World Water Commission as a forum to translate this vision into reality. The report of the World Water Commission was presented to the world by the former president of the erstwhile Soviet Union Mikhail Gorbachev at the World water Forum at The Hague. The report outlines the steps to be taken to solve the world water problems, which include full-cost recovery, wiping out of subsidies and off course privatisation.
The Global Water Partnership was provided the task to develop and guide a `framework of Action’ to achieve these objectives.
The Global Water Supply and Sanitation Assessment estimated that 1.1 billion poor people still lack reasonable access to improved drinking water supplies and 2.4 billion lack reasonable access to improved sanitation. More than eighty percent of these “unserved people” live in rural areas.
In the last few years, a number of reports have come out dealing with the nature of water crisis. One such report, ‘Water for People, Water for Life: The United Nations World Water Development Report’ was produced by the collaborative efforts of 23 UN agencies, governments and others concerned with water issues in 2003, and offers a global overview of the state of the world’s water resources. The report outlines eleven challenges that form the basis of future actions on water. It is interesting that seven out of the eleven challenges that the report focuses on emerged from the World Water Council at the 2nd World Water Forum in 2000 and did not come out of a United Nations led process, as is the case normally.
Far more interesting is a report “Three Global Scenarios”, produced as a part of the World Water Vision process undertaken by the World Commission on Water. The report projects three future scenarios and the methods to deal with them which provide an insight into the thinking of the leading players in the water sector and the process by which they intend to address these critical issues. The future scenario painted is rosy- provided the `Technology, Economics and Private Sector ` option prescribed `road map’ is adhered to - the scenario by 2010 will be that public and pivate sector utilities will be applying full cost recovery in the water sector, water subsidies are added to the list of unecceptable subsidies in the WTO. And by 2025 the report projects that, “There will be no water scarcity on a wide spread basis because of the combined effect of water pricing, demand management, water saving technologies and bio-tech solutions to food production , having sharply reduced water intensity in most human activities.”.
But the problem with most of the documents on the water crisis and the international discourse on water - as Lyla Mehta argues - is not that water is increasingly seen as a `scarce resource’, which needs to be managed judiciously, but that `scarcity’ as it is constructed in global declarations and debates is often presented in absolute or monolithic terms, obscuring the complex nature of scarcity and its linkages with ecological, socio-political, temporal and anthropogenic dimensions. Thus in the international discourse on water resources management, water scarcity is taken to be given and starting point for policy agendas.
As Ramaawamy Iyer argues that the common bonding thread running through the global discourse on water is to, “ proceed from projections of demand to supply side solutions in the form of water resource development projects, estimate the massive investment funds needed; take note of the severe limitations of availability of resources with governments; point to private sector investments as the answer: and stress for the need for policy changes to facilitate this.” One is forced to conclude that analysts of the global water crisis are not concerned as much with analysing the problem but with providing a picture that lends itself to pre-determined solutions.
As the criticisms of the report of the World Water Commission pointed out by several NGOs and Civil Society organizations said, that the process by which the scenarios and the vision were developed, “has been controlled from the start by a small group of aid agency and water multinational officers, mainly from the Global Water Partnership, the World Water Council, the World Bank and the Suez-Lyonesse des Eaux. The key conclusion of the report that these is a global water crisis which can be solved only with a massive increase in private funding for water projects in developing countries backed up with guarantees from the World Bank and other Aid Agencies was predetermined.”
Argentina: The campaign against “Aguas Provinciales de Santa Fe” (APSF), a subsidiary of the French water multinational Suez, has been waged by a coalition called “Asamblea Provincial por el Derecho al Agua,” (Provincial Assembly for the Right to Water) consisting of consumers’ associations, environmentalists and citizen groups. APSF has a 30 year concession for the provision of water supply and sanitation services to 15 cities of the Santa Fe province in northern Argentina. The agreement was signed in November 1995 without any democratic participation of water consumers and has been characterized by continuous re-negotiation, price increases, downward revision of projected investments and operational targets, an opaque regulatory process and the neutralization of local shareholding.
In order to return water service to public control, the citizen coalition called a referendum in September to obtain the rescission of the concession to APSF. A provincial plebiscite was held on the right to water with direct citizen participation through 1,000 polling stations and 7,000 volunteers in 15 cities. The plebiscite was not covered by the major media. After the referendum, the coalition, along with many other groups in Argentina and around the world, sent letters to the Santa Fe governor asking him to rescind the contract with the company.
Uruguay: The National Commission in Defense of Water and Life has been fighting to prevent the privatization of water in Montevideo and other cities. During the Social Forum of Uruguay, in November 2002, the National Commission in Defence of Water and Life gathered widespread support of a proposal for Reform of the Constitution of the Republic that would ensure that water is protected as a common resource and a public good. The constitutional reform would emphasize the importance of viewing water as a natural resource essential to life, having all citizens decide collectively on the future of water management, and the need to discourage transnational corporations from seeking easy profits in Uruguay.
The constitutional reform would also protect against the privatization of water in Uruguay. It is widely believed by the people that privatization of their water infrastructure will lead to a loss of liberties in Uruguayan society and the loss of preservation of life and national sovereignty. The National Commission in Defense of Water and Life has undertaken a broad educational campaign to gather support for the constitutional reform to protect the nation’s water.
Mar Del Pata to Kyoto: Constructing the ‘Consensus’
At the last gathering of the World Water Forum in 2003, the privatisation agenda that was being promoted at the earlier forums was presented as the only possible solution to the water problems of the world. The Kyoto forum was founded on the vision that, `proposes a model for water management that relinquishes all control over water resources to the private sector through commercialisation, privatisation and large scale development’. On what basis was this model developed? How was this so-called ‘global consensus’ arrived at?
In the last quarter of the century, since the first UN World Conference on Water and Sanitation held at Mar Del Pata in 1977 several international forums and policy dialogues were organised to deal with the issue of water. While the Mar Del Pata conference was primarily concerned with task of providing clean drinking water and sanitation and outlined a plan of action for implementing the same, the rest of the international conferences from Dublin Conference in 1992 (held in preparation of UNCED at Rio) to the Kyoto Forum were steps in developing the privatisation agenda. The agencies that powered this agenda are not United Nations and Inter-governmental bodies, but three interrelated organizations - The World Water Council, the World Water Forum and the Global Water Partnership - with strong representation of multinational water companies and aid agencies with a pronounced privatisation bias.
The Dublin Conference of 1992 (in preparation for the UNCED, 1992) was a significant landmark in evolving the privatisation agenda. A set of principles emerged out of the Conference - the Dublin Principles - illustrate the shift and new perspective that most international organisations and multilateral funding agencies like the World Bank realigned to. One of the principle lays out in clear terms the new `dicta' for the Water Sector, “ Past failures to recognise the economic value of water has led the wasteful and environmentally damaging uses of the resource”. And the way out was to mange water as an economic good.
>> Vivendi: In Parana, Brazil, the company is getting kicked out for prioritizing profits and dividends over water quality and infrastructure development. Is also mired in lawsuits in the US and France for shareholder conduct under CEO Messier’s leadership.
>> Suez: North American subsidiary United Water got kicked out of Atlanta, USA, in January 2003 for their empty promises about savings, neglecting maintenance work (but charging for it anyway). Boil water advisories were commonplace.
>> Suez: Trying to squeeze the poorest of their last cent for a profit, Suez is installing pre-paid (automatic cut-off) meters in the poor townships of Johannesburg and hiking water rates.
>> RWE/Thames Water: Tried to hike rates by 35% two years in a row for dirty water in Jakarta, Indonesia. The company has been met with consumer protests, strikes, and lawsuits over unfair contract awarding practices connected to the Suharto regime
What is significant to note is that the United Nations which has historically played a leading role in facilitating such policy dialogues has been gradually marginalised, and given way to bodies like the World Water Council and the World Water Forum. These organisations have been criticised for being unrepresentative and undemocratic with direct links to multinational companies involved in water business. For instance, The UN World Water Development Report was presented not at a UN gathering but at the World Water Forum in Kyoto. It was also at the same meeting that a report of the “Panel on Financing Water Infrastructure” was presented and accepted. The Panel headed by the former chief of the International Monetary Fund, Michael Cemdessus (notorious for imposing the disastrous Structural Adjustment Programmes on the world) in its report (couched in altruistic lingo) presented a series of proposals, the real objective of which was to further the agenda of the global water corporations to reshape institutions structures to ensure that investing in `water markets’ is a profit making venture’.
At Kyoto, the final act in this long drawn out process of constructing this consensus was played out. The UN Millenium Development Goals developed by the United Nations Millenium Summit in 2000, which set specific targets for halving of the proportion of people without adequate access to drinking water and sanitation was adopted by the Forum along with the Cemedessus report. As one commentator observed, the Kyoto forum succeeded in the incorporation of the UN Development goals on water and sanitation for all into a framework of rules and regulations that will involve the private corporations to operate profitably in the water business.
Intricacies of the Water Business
After a decade of sweeping privatisation, 460 million people around the world are now dependent on private water corporations for their supply (up from just 51 million people in 1990). Water industry analysts expect the privatisation frenzy to accelerate and predict the number to reach 1.16 billion people in 2015. If current privatisation trends continue, the global private water market of the next decade will be firmly controlled by only a handful of giant corporations, all with headquarters in Europe.
European companies dominate the global water market. The world’s top two private sector water companies, Vivendi and Suez (both French), control 70% of all private water services between them. The third largest is Thames Water, now part of German utilities conglomerate RWE. Based on a solid (and protected) position in their French home market (where they control 85% of private water markets), they have successfully pursued international expansion throughout the 1990s’. The only company which may threaten the dominance of Suez and Vivendi is the German ‘environmental services’ and utilities giant RWE, which has expanded its global water portfolio through acquisitions of companies such as the UK’s Thames Water and American Water Works.
An investigation by International Council of Investigative Journalists (ICIJ) showed that six globally active water companies over a period of 12 years have increased their business from about a dozen counties to about 58 at present. The investigation also reveals that these companies work very closely with the World Bank, lobbying governments and international trade and standards organisation for changes in legislation and trade agreements to force privatisation of public works. The rapid global expansion of the European water giants would be impossible without the far-reaching support they enjoy from European governments, the European Commission and other international institutions.
The World Bank, in which European governments play a decisive role, has dramatically accelerated water privatisation in developing countries by making water supply and structural adjustment loans conditional on privatisation. Through its affiliate, the International Finance Corporation (IFC), the World Bank has been directly involved in promoting and shaping privatisation processes in Buenos Aires, Manila and many other cities around the world.
According to a report released by the Public Citizen recently. “ Despite the World Bank's insistence that it is no longer tying privatisation clauses to loans, a review of its lending patterns in the water and sanitation sector shows that approximately 90 percent of the loans included requirements promoting water privatisation. These range from requiring governments to consider contracts with private water companies to requiring full-scale privatisation of water systems. In 2000, 91 percent of loans included water privatisation clauses; in 2004,100 percent of loans included such clauses.”
European governments, particularly the French and British, are deeply committed to helping ‘their’ water corporations win new markets. The French government, for instance, played a very active role in helping Suez win the bid when the water supply in Buenos Aires was privatised in the mid-1990s’. Also, the European Union’s development aid spending on water in developing countries effectively subsidises the EU-based water corporations. Rather than supporting water infrastructure improvements, the aid budgets primarily go to ‘administrative restructuring’ and other costs related to introducing privatisation programmes.
This pro-privatisation bias is also at the heart of the EU’s Water Initiative, presented at the Johannesburg World Summit on Sustainable Development (WSSD). Boosting private sector involvement through subsidised Public-Private Partnerships is presented as a ‘win-win’ approach, however the only certain winners are likely to be Suez, Vivendi, RWE and other large EU-based water TNCs cashing-in on new water markets. The European Union is also using the negotiations on service sector liberalisation within the World Trade Organisation (GATS) to further the market expansion interests of large EU-based water corporations.
What the World Water Forums and its related bodies ignore is that the privatisation agenda has failed to deliver and in many places they were forced to withdraw and hand over the management to either public sector or to innovative and participatory cooperatives run by ordinary people.
Resistance & The Human Right to Water
Resistance and popular opposition to the ‘corporate led privatisation project’ emerging from all over the world is now backed by several international and regional campaigns and coalitions which have come together to counter the malicious agenda of the World Water Forum, the World Bank, IMF ,the Asia Development Bank as well as the major water corporations, such as Vivendi, Suez, Bechtel. The campaigns have succeeded in showing that these bodies speak for the water giants and not for the people, the millions and billions of the world's population who do not want the world's dwindling supplies of fresh water to be privatised and commodified and put on the open market for sale. There are several ongoing attempts now to organise and consolidate the struggles around the globe for the protection of water rights and liberation of water from corporate control.
The most well known is the experience in Cochabamba in Bolivia, where citizens mobilised against the disastrous water management of the US company Bechtel that raised the prices so dramatically that it went out of reach of majority of the citizens. Such examples can be found across the world and not only in the south. For instance, the Report, “Metered to Death: Experiment in Riots and Cholera” provides a chilling account of the operations of water companies in the Dolphin Coast of South Africa, where faced with rising costs of privatised water people were forced to use water from streams and water resulting in an epidemic of Cholera. The pattern repeats itself in Buenos Aires, in Manila and elsewhere.
Coca-Cola is already using ground water resources in a big way leading to protests and struggles in Kerala, Maharashtra and Uttar Pradesh. At present the company is banned from drawing any further water. On the other hand there are attempts to privatise rivers like Shoenath – which has been aborted - and Periyar against which people are protesting. Several metropolitan centers are on the verge of handing over the management of water services to private companies which, as experience shows will result in disaster. The Indian government has blindly incorporated the privatisation agenda into its National Water Policy. How much of this will change under the new government is open to debate. A critique of the national policy by Sanjeev Gogkte shows that the policy will not in any way help in achieving the development goals and will only help in furthering the interests of the private sector.
In November 2002, the UN in a General Comment on the Right to Water noted that, “The human right to water is indispensable for leading a life of dignity. It is a prerequisite for the realization of other human rights.” A General Comment is used by the UN from time to time to amplify the rights set out in its Covenants. In issuing the comment the UN was drawing attention to the right to water, which is contained in the UN Covenant on Social, Economic and Cultural Rights. Miloon Kothari takes us through the GC and its implications for the right to water.
It is interesting that the Kyoto edition of the World Water Forum, which happened soon after, avoided mentioning the UN comment and avoided the term human right, choosing instead to use the term `basic human need’. The difference between the two is critical, while a human need can be left to the market forces to fullfill, a human right on the other hand means that it is responsibility of the state to fullfill that right.
The right to water is emerging as an important rallying point for many struggles and campaigns seeking water justice. It is important because of the ongoing efforts in the WTO and in the discussions on General Agreement of Trade in Services to bring in water under services. The goal of bringing services into the WTO is to pursue "progressive liberalisation." This means moving toward privatisation of all services, including public services. It also means deregulation of services at the local, state and national levels and subjecting them to the WTO’s global rules for the benefit of transnational corporations (TNCs). Now the European negotiators want to include drinking water in the GATS agreement. The Europeans have large TNC’s like Suez Lyonnaise des Eaux which is involved in privatising municipal water services around the world, so it is in their interest to have water be part of the GATS. For these companies and their smaller competitors (most also European), GATS promises access to new markets and enhanced rights.
There is a feeling among analysts that the right to water as enshrined in the UN human rights instruments will conflict with the trade related provisions on rights as contained in GATS. This will be an area of contest between trade liberalisers and those defending fundamental human rights to water. But establishing water as a human right will be one way of strengthening the struggles in defense of water justice and providing universal access for all to this vital source of life.
Raajen Singh
Raajen Singh is an activist and researcher based in Bombay. He is associated with the Centre for Education and Documentation and the Adivasi Rights Resource Centre.
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