Whose Right to Water?

Corporate water giants seek to privatize this most basic of all natural resources. Consumers and communities are fighting back.

by Kevin Murray

Dollars and Sense magazine, November/December 2003

"[Water is] one of the world's great business opportunities. It promises to be to the 21st century what oil was to the 20th.

Fortune, May 2000

Arriving in Haiti by air provides a dramatic visual introduction to a country facing a long-term problem with water. From the sky, a few lush patches of green stand out against dry hillsides totally devoid of vegetation. The Haiti-Dominican Republic border appears as a sharp line where forest cover ends abruptly-on the Dominican side of the frontier.

Haiti receives enough rain that floods are common. But climate change is slowly changing rainfall patterns, and poor resource management policies mean that most of the rain that does fall rushes quickly back to the sea, taking with it large amounts of precious topsoil.

Topsoil erosion and deforestation have combined to put tremendous pressure on small-scale agriculture, still the only source of livelihood for millions of Haitians. Manielus Exil and his fellow members at the Kopa Koton agricultural cooperative face this pressure every day. But through learning and experimentation, they have slowly improved their management of local water and soil resources. For example, they have invested in a system that allows them to store water from a source located in the hills above their farmland. They use gravity to irrigate their crops in the dry season and have terraced their land to protect it from erosion during the rainy season. Now they are investigating the potential benefits of installing a drip irrigation system. They have established a tree nursery where they cultivate and then plant hundreds of saplings a year to reverse deforestation.

Still, the cooperative's members continue to live at the very margin of economic viability. By mid-2003, lack of rain threatened to push them over that edge. "We haven't seen hardly any rain for two years," explains Manielus. "Now the spring has almost dried up. No one remembers that ever happening before. Our water problem is getting worse." The cooperative faced catastrophic crop losses that would mean economic ruin and hunger bordering on starvation for co-op members and their families. What little food they had been able to store had long since been eaten.

Early-season rains did come to Papaye this year in amounts that allowed Kopa Koton and most of its neighbors to salvage some of their production. While they will be happy to have a harvest, cooperative members are under no illusion that their water problem has been solved.

Manielus Exil and his neighbors are not alone. One could tell a parallel story about the water woes of township dwellers in South Africa who face a cholera epidemic because they can no longer afford to pay for clean water. Local water authorities, under pressure from the World Bank to recover their costs, began metering water and hiked the price. In both rural and urban areas, chronic water shortage is a way of life for an increasing percentage of the world's population.

Why is this the case? We are using this resource much faster than it can be renewed, pumping aquifers dry in the process. The United Nations forecasts that, at current rates of population growth and water use, the per capita supply of usable fresh water will drop by one-third over the next 20 years. Even conservative projections suggest that one-third of the world's population will face serious water shortages by 2025.

The overall supply of water is not the only issue. Like most resources, water is unequally distributed within and among countries, making water equity an important issue. Part of this distribution problem is the "natural" result of population levels, climate, and ecological factors, but much of it reflects power relations and policy choices at national and international levels. Around the world, one in five people (1.1 billion) lack access to safe drinking water and over half (2.9 billion) lack adequate sanitation facilities-many in countries where national water supply is not a serious problem. Without safe water, people drink to their own death and disease. Each year there are 250 million new cases of water-related disease-mostly cholera and dysentery-and 10 million people die from those diseases.

Beyond drinking water, the world's water crisis is undermining millions of small-scale farmers across the globe. Agriculture accounts for 70% of world water use, but large-scale, corporate agriculture swallows up most of that water. As aquifers are pumped dry and water is diverted for commercial purposes, water tables fall and small farmers in many regions are finding it increasingly difficult to sustain their harvests.

THE GLOBAL CHALLENGE. THE MARKET RESPONSE

No one disputes the fact that our unsustainable use of water has created a global water crisis of overuse, pollution, waste, and lack of access. A widely shared sense of crisis opens up the possibility of real change, and the international community has taken some important steps. However, privatization of water resources threatens to exacerbate the problem and throw millions more people into the ranks of the "waterpoor."

At major international summits in 2000 and 2002, nations committed themselves to cutting the number of people without access to safe water or sanitation in half by 2015. Meeting these goals will require providing new water hookups for 300,000 people every year and new sanitation facilities for 400,000 per year. But most public water authorities are hard pressed to maintain existing services, let alone expand.

Enter Suez, Vivendi, Thames Water, and a small number of other corporations that have burst onto the global water scene over the past decade. These water giants offer to build large-scale water infrastructure in return for increased corporate involvement in the provision of water services via "public-private partnerships," a.k.a. water privatization. The private for-profit water industry has grown explosively over the past decade. Vivendi alone already supplies water to 110 million people. In 1990, private water companies operated in 12 countries; today they are in nearly 100. And industry analysts expect the private drinking water market to grow from its current level of about $500 billion to about $3 trillion in just the next five years.

The corporations typically sign long-term (2S to 30 year) contracts with a municipal or regional water authority that cedes to the corporation complete control over the water supply in question. The company sets rates and makes all investment decisions. Many contracts guarantee the private provider a minimum rate of return on investment, regardless of the quality of service. These contracts transfer control over a local or regional water supply to a single private company that is much more accountable to its shareholders than it is to any public entity or to water consumers.

The collapse of a public authority may drive the privatization process, but conditions placed on water loans by lenders like the World Bank have also played a key role. The Bank used to help countries build public water utilities, but, in a recent three-year period, 60% of Bank loans for water infrastructure carried conditions related to privatization. To date, most privatizations have occurred in Africa, Asia, and Latin America, but all of the water giants are now targeting Europe and the United States as priority areas for expansion.

The International Center for Investigative Journalism conducted an in-depth study of the track record of the water corporations and found that while privatization has improved service in some cases, "they [the companies] can be ruthless players who constantly push for higher rate increases, frequently fail to meet their commitments and abandon waterworks if they are not making enough money." For example, some residents of metro Manila greeted privatization as a miracle when two water companies were handed control over the city's water supply in 1997. Five years later, corruption charges, poor service, and the near collapse of one of the companies left the miracle more than a little tarnished. Suez pulled out of a celebrated agreement with the city of Buenos Aires, Argentina, when general economic collapse meant the company's profits did not meet expectations. And the city of Atlanta, Georgia, recently voted to cancel its $500 million contract with Suez's U.S. subsidiary, United Water, after widespread public complaints about poor service, declining water quality, and high user fees.

Privatization boosters point to a modest list of examples where water privatization has shown positive results. But they typically falter when asked to explain how privatization is going to bring water to the hundreds of millions of people who currently do not have access to it. Speaking to the Canadian Broadcasting Company, Gerard Payen, the architect of Suez's international expansion program, explained, "Water as a business is very effective when you look at the needs. We purify water and bring this water to your home. We provide a service, it has a cost, and somebody has to pay for it." Then how will the market bring water to people who can never afford to pay for it?

Privatization turns water, an essential common good, into a commodity like any other, to be owned, shifted across borders, and sold in search of the highest profit. For the corporate "water elites," water fits neatly into a vision of corporate-led global economic integration-along with sneakers, corn flakes, intellectual property rights, and the genetic material on which life is based. Water elites are often criticized for failing to recognize access to safe water as a right. But they clearly do have a rights-based perspective. Water corporations and their allies place a high priority on the establishment and protection of the unfettered right of corporations to own and trade the world's water as they see fit.

THE REAL RIGHTS SOLUTION

A growing network of social movements, community groups, and nongovernmental organizations supports a different notion of the right to water. National and cross-border networks like the Water for All Campaign, the Blue Planet Project, and the People's World Water Forum share with the water establishment a sense of urgency about water, but reject the notion that water is just another commodity or service. Instead, they consider it a fundamental human right. They share the water establishment's interest in conservation and limiting water waste, but question its reliance on large infrastructure projects, especially dams, and on water privatization.

The new water activists recognize the limitations of many public water authorities. Clearly, some water authorities are inefficient bureaucracies that politicians use to reward relatives and supporters. Even where water authorities are committed to providing water to all, public disinvestment and the "hollowing out" of the state over the past two decades have made their job very difficult. A massive public investment program is part of the solution to the water crisis; redirecting the subsidies and investment capital now flowing to private corporations would provide a good start.

Money alone, however, will not solve the water crisis. Public water authorities are going to have to become much more creative and democratic, finding new ways to turn water "customers" into active participants in the development of water policy. There are already plenty of examples of public water authorities-Porto Alegre, Brazil, and Bogota, Colombia, for example-that have built successful programs encouraging public involvement in campaigns against water waste and in the implementation of new technologies.

In many rural areas, water activists favor decentralized, community-based resource management, supported but not dominated by public authorities. Farmers all over the world are joining those of Haiti's Central Plateau in taking steps to become more effective stewards of water resources. Too often, those farmers end up facing the opposition of public water or power authorities interested in developing a dam or other large infrastructure project, or in giving a private corporation control over local resources. In a new vision of "public-public partnership," activists advocate public support for community-based watershed management rather than the hand-off of public water resources to private, for-profit corporations.

Adherents to radically different views of how to solve the water crisis are working to put their visions into practice in urban and rural communities all around the world. In some cases, the result has been creative solutions to local water challenges. In many others, local groups have challenged and blocked plans to increase private control over the water supply. For example:

In Mecosta County, Michigan, a determined citizen coalition has opposed the efforts of a bottled water subsidiary of the Nestle corporation to gain private control of important groundwater supplies. In 2001, the county licensed the company (then a Perrier subsidiary) to open a bottling plant in Stanwood, Michigan, for a fee of less than $100 a year. Almost before anyone knew about it, the company was pumping a half million gallons of water a day from an aquifer beneath a hunting reserve. After learning about the plan, Michigan Citizens for Water Conservation launched a direct action campaign against Nestle and sought a temporary injunction to stop the pumps while the court decided on the legality of Nestle's use of the water. The injunction has yet to be granted.

In Cochabamba, Bolivia, violent conflict broke out in 1999, when a Bechtel subsidiary signed a 40-year contract to operate municipal water services there. The private operator dramatically raised water fees during the first year. Well-organized public resistance led the municipality to rescind the contract with Bechtel, but the corporation sued Cochabamba for damages before a secret World Bank panel. The water is back in public hands, but the public authority still faces the same daunting challenges it faced before its flirtation with privatization. Plans exist to upgrade water services and extend them to more residents, but it is unclear where the authority will get the necessary $200 million.

In many locations, governments, power companies, and irrigation interests have promoted the construction of large-scale dams in response to water and electricity problems. Dams often flood out thousands of local residents and completely destroy regional watershed systems, but they continue to get political support because they supply electricity to power-hungry urban areas and facilitate large-scale irrigation projects supporting corporate agriculture. In August 2003, activists from the Brazilian Movement of Dam-Affected People (MAB) occupied dams throughout Brazil. Among other things, MAB was demanding reparations for Brazilians whose lives have been destroyed by dam projects.

KYOTO BLUES

In March 2003,24,000 government and U.N. officials, civil society activists, corporate executives, journalists, and water specialists gathered in Kyoto, Japan, for the third World Water Forum. Organized by the Marseilles-based World Water Council (WWC), the forum quickly became a stage for debate over the water crisis and potential solutions.

It was "asymmetrical warfare," given the enormous resources at the disposal of corporate representatives and their control over the forum agenda. Those promoting the notion of a universal right to water did, however, get their voices heard. Freely referring to corporate water giants by name,

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