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Stop Privatizing Water, NGOs Tell Developed Countries
By Jim Lobe
Common Dreams

WASHINGTON - More than 100 non-governmental organizations (NGOs) from around the world have issued an "Evian Water Challenge" to leaders of the Group of Eight (G8) major industrial nations that will meet next week in Evian, France, demanding that they stop pressuring developing countries to privatize their water resources.

The statement, coordinated by Amsterdam-based Corporate Europe Observatory (CEO), is directed primarily at the European members of the G8--especially France, Germany, and Britain--which together dominate the global water market, a growth industry in many developing countries that have been urged by the World Bank and financial agencies to sell off rights to their water resources in order to replenish depleted treasuries and improve service.

But the NGOs, which hail from Europe, North America, Indonesia, Ghana, and Bolivia, insist that water privatization has proved a bad deal for many countries and consumers.

"The record of water liberalization and privatization around the world has been a disaster," according to Clare Joy of the London-based World Development Movement (WMD). "Many developing countries and impoverished communities have rejected the idea of providing water for profit, yet the European members of the G8 are pushing them into a trade agreement, lobbied for by business and negotiated in secret, that will lock in liberalization regardless of the cost to the poor and vulnerable."

She was referring to the General Agreement on Trade in Services (GATS) that is the subject of ongoing negotiations under the Geneva-based World Trade Organization (WTO). Launched in 2000, the accord would require countries to drop all barriers to private investment in a range of public services and utilities, from water systems to hospitals.

Such a provision would greatly benefit six major multinational companies, which between them account for virtually all private investment in water utilities in developing countries. They include the two largest, France's Suez and Vivendi Environment corporations; followed by Thames Water, owned by Germany's RWE AG; Saur, another French company; United Utilities of Britain, and Bechtel. Altogether private companies control about five percent of the global water sector.

Active in the water sector of only 12 countries in 1990, the six companies now operate in 56 countries and two territories. A World Bank report released at the Third World Water Forum in Kyoto in March predicted that global investment in water will have to double over the next 20 years to keep pace with demand, particularly if global targets for providing safe water supplies and sanitation to the two billion people living on less than US$2 a day are to achieved.

The European Union (EU) has been especially aggressive. They are demanding that 72 countries open their water sectors to foreign private investment in the GATS negotiations. The NGOs want the EU to withdraw those demands at the Evian summit, June 1-3.

In February, the Washington-based Center for Public Integrity and its Consortium of Investigative Journalists released a report that concluded that privatization had cut off millions of people from safe-water supplies, resulting, for example, in South Africa's worst-ever cholera outbreak, which killed nearly 300 people and infected more than 250,000.

The privatization of Bolivia's water system provoked major unrest in Cochabamba where skyrocketing rates threatened to cut off tens of thousands of people from their supply of safe water.

The companies themselves and the EU claim that private companies can generally supply water and sanitation more efficiently--and thus at cheaper rates over time--to consumers, including the poor, but activists insist that the record shows otherwise.

"The EU's push for water privatization in developing countries is covered in a layer of sustainable development rhetoric," according to CEO. "But the bottom line is to secure profitable markets for European water corporations."

Among the groups supporting the "Evian Challenge" are Britain's Save the Children and War on Want, Friends of the Earth Europe; the anti-globalization group Attac; Public Citizen of the U.S.; and Coordinadora de Defensa del Agua y de la Vida, a coalition which led a major campaign against a Bechtel subsidiary in Bolivia.

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