The Battle for Water
By Tony Clarke and Maude Barlow
Axis of Logic
We are taught in school that the Earth has a closed hydrologic
system; water is continually being recycled through rain
and evaporation and none of it leaves the planet's atmosphere.
Not only is there the same amount of water on the Earth
today as there was at the creation of the planet, it's
the same water. The next time you're walking in the rain,
stop and think that some of the water falling on you ran
through the blood of dinosaurs or swelled the tears of
children who lived thousands of years ago.
While there will always be the same amount of water,
we can render water unusable for ourselves and for the
planet. The growing scarcity of potable water stems from
a variety of causes. Per capita water consumption is doubling
every 20 years, more than twice the rate of human population
growth, which itself is exploding. Technology and sanitation
systems, particularly those in the wealthy industrialized
nations, have encouraged people to use far more water
than they need. Yet even with this increase in personal
water use, households and municipalities account for only
10 percent of water use.
Industry claims 20 to 25 percent of the world's fresh
water supplies, and its demands are dramatically increasing.
Many of the world's fastest growing industries are water
intensive. For example, in the U.S. alone, the computer
industry will soon use over 396 billion gallons of water
Nonetheless, it is irrigation that is the real water
hog, claiming 65 to 70 percent of all water used by humans.
Increasing amounts of irrigation water are used for industrial
farming. These water-intensive corporate farming practices
are subsidized by governments and their taxpayers, and
this creates a strong disincentive for farm operations
to move to conservation practices such as drip irrigation.
Along with population growth and increasing per capita
water consumption, massive pollution of the world's surface
water systems has placed a great strain on remaining supplies
of clean fresh water. Global deforestation, destruction
of wetlands, dumping of pesticides and fertilizer into
waterways, and global warming are all taking a terrible
toll on the Earth's fragile water systems.
The world is running out of fresh water. By the year
2025, there will be 2.6 billion more people on Earth than
there are today. As many as two-thirds of those people
will be living in conditions of serious water shortage,
and one-third will be living with absolute water scarcity.
Demand for water will exceed availability by 56 percent.
Water as a commodity
The combination of increasing demand and shrinking supply
has attracted the interest of global corporations who
want to sell water for a profit. The water industry is
touted by the World Bank as a potential trillion-dollar
industry. Water has become the "blue gold" of
the 21st century.
The move to privatize water coincides with the rise of
the Washington Consensus as the dominant world economic
philosophy. This philosophy calls for trade and investment
liberalization, and turning responsibility for social
programs and resource management over to the private sector.
In this case, it is an assault on the ancient commons
Global trade agreements have become perhaps the most
important tool for corporations trading in water and their
allies. All of the multinational governing bodies, the
North American Free Trade Agreement (NAFTA), the General
Agreement on Trade and Tariffs (GATT), and the World Trade
Organization (WTO), define water as a commodity. As a
result, water is now subject to the same rules and regulations
governing other commodities like oil and natural gas.
Under these combined international rules, a country cannot
prohibit or limit the export of water without risking
censure by the WTO. Nations are also restricted from denying
the import of water from any country. NAFTA's "proportionality
clause" means that if a country turns on the tap
to export its natural resources, it cannot turn off the
tap until it runs out of that resource.
In addition, the push to privatize water services will
be greatly enhanced by new rules governing cross-border
trade in services at the WTO, known as the GATS (General
Agreement on Trade in Services). Under the proposed GATS
rules, not only will governments face added pressures
to deregulate and privatize their water systems, but once
a city's water services have been taken over by a foreign-based
corporation, efforts to take these services back into
public hands will invite severe economic penalties under
Leading the charge for privatization are three big transnational
corporations based in Europe: Vivendi, Suez, and RWE.
All three have systematically bought out smaller rivals
to become the dominate powers in the business of water
all over the globe. The long-range strategy of these companies
began with their efforts to take over the public water
systems in Third World countries where they hoped to position
themselves as the saviors of the water crisis. Instead,
a series of private-sector fiascoes in the Third World
derailed their plans.
The case of Buenos Aires is especially instructive. Buenos
Aires was to be the flagship operation of Third-World
water privatization. Suez, through its subsidiary Aguas
Argentinas, took over the Buenos Aires water and sewage
system in 1992. A common argument for privatizing water
systems is that, unlike the cash-strapped public sector,
the private sector has the capital necessary to update
or refurbish aging water systems. But public sources like
the World Bank, International Monetary Fund, and other
smaller banks supplied 97 percent of the $1 billion necessary
for the Suez privatization experiment. Suez did expand
water and sewage service by a small increment, but failed
to meet its projected targets in both areas. Nonetheless,
the company managed to reap annual profits of around 25
percent in the mid-1990s. Recently, Suez announced that
it plans to pull out of Argentina because the country's
currency crisis has cut into its profits. There have been
other private-sector fiascoes in places like Johannesburg,
New Delhi, Manila, and most famously in Cochabamba, Bolivia.
The effort to privatize Third World water systems has
become a target of civil society protests. Representatives
of an international civil society network appeared at
a meeting of chief executive officers at the World Water
Forum in Kyoto, Japan, in March. The group took over the
microphones and offered a series of testimonials about
the impact of water privatization around the world. Toward
the end of the event, a water activist from Cancun, Mexico,
stepped to the microphone and held up a glass of pitch-black,
putrid-smelling water. He explained that he had taken
the water from his home tap in Cancun, where Suez runs
the municipal water system. He then requested that the
moderator pass the glass of black, smelly water up on
stage to the CEO of Suez, inviting him to drink it.
Targeting First World water
The big water companies are now changing their strategy
and concentrating their operations and their investment
on more secure markets in North America and Europe. Eighty-five
percent of all water services in the U.S. are still in
public hands. That's a tempting target for conglomerates
like Suez, Vivendi, and RWE. Within the next 10 years,
they aim to control 70 percent of water services across
the United States.
They have positioned themselves to move aggressively.
Vivendi, Suez, and RWE have bought up the leading U.S.
water companies, U.S. Filter, United Water, and American
Water Works, respectively. These water companies had largely
serviced small towns and communities, but under the tutelage
of the global giants they have become the engines for
privatization in the United States (see page 16).
When transnational water conglomerates take over a municipal
water system, it feels like a local problem, but because
the same corporate players are targeting communities all
over the world, we must build alliances and connections,
learn from one another, and start to build a frontal attack.
At the Polaris Institute, we propose a three-pronged
strategy. First, develop a water-alert network so we can
know where companies are operating and where they are
going next. How are they going to move? And how can we
get ahead of them?
Second, we need water-action teams that bring citizens
together to build local water-watch coalitions and develop
campaigns to protect their water supplies and services
from conglomerates. Then we should link those local campaigns
with the national campaigns of groups like Public Citizen
or the Council of Canadians.
Third, we need to offer alternatives. It is not enough
to say we want to defend our public water systems against
private takeovers. There are problems with public water
systems, and we must find new ways of revitalizing them
in our own communities through citizen participation.
Engaged citizens can act as watchdogs for their local
Our local actions should be informed by three global
principles. One is water conservation. We cannot kid ourselves
about water scarcity. Water may be abundant in one place,
but it's scarce in others. Water conservation must be
a top priority.
The second principle is that water is a fundamental human
right. People need water to live. Water must be provided
equitably to all people and not on the basis of the ability
The third principle is water democracy. We cannot leave
the management of our most precious resource in the hands
of bureaucrats in government or the private corporations,
whether or not they are well intentioned. We, the people,
must preserve this special trust, we must fight for it,
and we must take our proper role and demand water democracy.
Maude Barlow, national chair of the Council of Canadians,
and Tony Clarke, director of the Polaris Institute, are
co-authors of Blue Gold: The Corporate Theft of the World's
Water. This article is adapted from presentations made
by the authors at the Water for Life conference in New
York, September 2003, co-sponsored by Resurgence magazine
and the Omega Institute