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Debate over water privatization pits economics vs. human rights
By Kenji Hall
Associated Press
03/18/03

OSAKA, Japan Among the world's water experts, privatization has become something of a dirty word.

Once thought of as the new frontier for private investors, the idea of letting corporations operate municipal and regional water systems has been criticized by environmentalists, international organizations, and governments alike as a flawed solution for getting water to the poor people who need it the most.

These days, even companies in the water business speak carefully. "We do not say privatization," said Gerard Payen of France's Suez, a leader in the industry, earlier this week.

Whether companies such as Suez and Vivendi of France and German energy conglomerate RWE can help countries run their water utilities is a topic that will dominate the agenda Tuesday at the World Water Forum in western Japan.

World Water Council vice president, William Cosgrove, said he expects the discussions to be productive, particularly since companies can teach governments a lesson in efficiency. "I don't think you'll find the positions entrenched," said Cosgrove, whose group is organizing the weeklong international conference.

Privatization lies at the heart of a contentious dispute in the water community over how to halve the number of people around the world without access to water by 2015, a target set at the World Summit on Sustainable Development last September in Johannesburg, South Africa.

The United Nations says 1.2 billion people lack clean drinking water and 2 billion are without sanitation, and that conditions could worsen over the next half-century as populations grow and nations industrialize. Scientists predict global warming will disrupt rainfall patterns and bring drought and rising sea levels.

U.N. agencies, the World Water Council, and other international financial donors stress the need for big spending and point to the benefits of public-private cooperation. In many cities of the developing world, more than half of the water is lost because of leaky pipes or pumps that governments can't afford to repair. Financial markets can make up for the shortfall in public coffers, those organizations say.

But environmentalists and NGOs contend that water is a basic human right and should be available to all, not supplied based on profits and performance. "We're not saying that the public sector is perfect. But at least they're accountable to the people," said Liane Greeff of the South African Civil Society Water Caucus, a civic group.

The reality is that privatization is a bit of a misnomer. John Briscoe, the World Bank's water coordinator, says in 95 percent of countries, there is a division of labor, with governments owning the water and corporations either providing services, such as collecting bills and managing water distribution, or financing the upgrades to pumps and mains, fixing sewers, and building new pipelines.

Market principles are at work on a much smaller scale in far-flung parts of south and southeast Asia and Africa.

International Development Enterprises, a Lakewood, Colo.based NGO, has helped build up a cottage industry around low-cost water pumps for poor, rural subsistence farmers. By teaching local masons how to build the so-called treadle pumps from available materials and by encouraging farmers to buy them, IDE has given farmers in Zimbabwe, Nepal, India, Vietnam, Bangladesh, and Cambodia a useful technology for watering their fields with underground reserves, said IDE's Michael Roberts, who is based in Phnom Penh.

"The goal is to alleviate poverty. The farmers can sell their crops and make income, which allows them to invest in education and medicines," Roberts said.

However, a few notable failures have stoked worries about what companies might do. Attempts at privatization in Buenos Aires and Manila collapsed partly because the French corporations asked to manage water services faced huge losses when the countries devalued their currencies.

In Cochabamba, Bolivia, a 2000 revolt over the U.S. company Bechtel's doubling of water rates left seven people dead and water services in a shambles.

The World Water Council's Cosgrove said he hopes emotions won't spoil Tuesday's debate. "The bottom line is to provide access to safe water for people," he said.

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