Keeping Control of the Tap-Is
Privatization the Best Way to Manage the Shortage?
The private sector was the first to notice: The planet
is running out of fresh water at such a rate that soon
it will be the most valuable commodity on Earth. Thirty-one
countries are facing severe water stress and more than
1 billion people have no access to clean water. Every
eight seconds a child dies of water-borne disease. And
the crisis is getting worse.
By 2025, with an ever-greater number of people sharing
the Earth's finite supplies of water and its per capita
use having more than doubled, two-thirds of the world's
people will not have enough water for the basics of life.
On Saturday, the third World Water Forum (WWF) will begin
in Kyoto, Japan. The World Water Council, a think-tank
whose membership includes the World Bank, global water
corporations, the U.N., governments and the International
Private Water Association, sponsors the WWF.
They will decide whether transnational corporations or
governments and local communities will control the Earth's
The second WWF took place in The Hague three years ago.
Designed as a showcase for public-private partnerships,
it sought to create a "consensus" among the
5,400 participants that privatization is the answer to
the water crisis.
The World Water Council presented a prewritten "world
water vision" endorsing an aggressive for-profit
future for water and declared that it is not a basic human
right but a need that can be delivered by the private
When the forum closed, a coalition of environmentalists,
human rights and anti-poverty activists, small farmers,
unions and local communities fighting water privatization,
called the Blue Planet Project, issued a strong condemnation
of both the process and the prearranged outcome of the
meeting. Since then, these activists have protested alongside
the poor in South Africa, Bolivia and India.
Water for profit takes several forms.
Backed by the World Bank and the IMF, a handful of transnational
corporations are seeking to create a cartel to control
the world's water delivery and wastewater systems.
Already Vivendi and Suez of France deliver private water
services to more than 200 million customers in 150 countries.
Now they are moving into new markets in the Third World,
where debt-struck governments are forced to abandon public
water services and hand over control of water supplies
to for-profit interests.
These companies have huge profits, charge higher prices
for water and cut off customers who cannot pay. There
is little transparency in their dealings, they produce
reduced water quality and have been accused of bribery
Based on the policy known as full-cost recovery (charging
for the full cost of water, including profits for shareholders)
the water companies are able to impose rate hikes that
are devastating to millions of poor people who are forced
to use cholera-laced water systems instead. In Ghana,
just the prospect of World Bank-imposed water privatization
resulted in a 95 per cent increase in water fees.
A new type of water consortium has emerged in Germany
that may be a prototype for the future.
Companies such as AquaMundo put together giant investment
pools using overseas government aid, private bank investments
and public utility funds in the recipient country. In
an arrangement called cross-border leasing, they hire
local contractors to run the water services.
Some investment companies keep their money in tax havens,
avoiding national taxes, and offer a deal to cash-strapped
In these public-private partnerships, the private investor
is guaranteed huge profits from the public purse for many
years, and if the company or investment pool disappears,
the local government is left holding the bag.
The bottled water industry is growing at an annual rate
of 20 per cent. Last year, nearly 100 billion litres of
bottled water were sold around the world, most of it in
Fierce disputes, mostly in the developing world, are
being waged between local communities and companies such
as Coca-Cola and Nestlé, aggressively seeking new
supplies of "boutique water."
Perrier is being taken to court by citizens in Michigan
and Wisconsin in a dispute over licences to take huge
amounts of aquifer water that feeds the Great Lakes.
In India, whole river systems, such as the River Bhavani
in Tamil Nadu state, have been sold to Coca-Cola even
as the state is suffering the worst drought in memory.
As one company explains, water is now a "rationed
necessity that may be taken by force."
Corporations are now involved in the construction of
massive pipelines to carry fresh water long distances
for commercial sale, while others are constructing supertankers
and giant sealed water bags to transport vast amounts
across the ocean to paying customers.
The World Bank says that "one way or another, water
will soon be moved around the world as oil is now."
All of these forms of water privatization are protected
in international trade regimes like the World Trade Organization.
A recently leaked document showed that the European Union
has put water services high on its list of demands of
other countries in the ongoing General Agreement on Trade
in Services talks.
This should come as no surprise, as the European water
companies are powerful players in the service industry
lobby and advise governments and trade negotiators alike
in the drafting of these deals.
These are the issues that will dominate the WWF and over
which a battle for hearts and minds will be waged. The
stakes for a world running out of water have never been
Maude Barlow is a co-founder of the Blue Planet Project
and the author, with Tony Clarke, of Blue Gold, The Fight
to Stop Corporate Theft of the World's Water (Earthscan).