Top 10 Reasons to oppose water
Canadian Democratic Movement
The World Bank has predicted that by 2025, two-thirds
of the world s population will run short of fresh drinking
water. Given such a grim outlook, it comes as little surprise
that Fortune magazine recently defined water as "the
oil of the 21st century." Poised to capitalize on
this crisis are private companies, many of which are multinationals
whose tentacles are probing the planet for opportunities
to turn the misery of water-starved regions into profits
for their executives and stockholders.
Instead of protecting existing supplies, enhancing conservation
efforts, helping vulnerable populations, curbing pollution
and raising public awareness, more and more government
officials throughout the world are turning to privatization
transferring the control of this precious resource from
the public sector to the private sector.
It is no underestimation to say that the very survival
of untold millions of people could rest on decisions
being made today largely behind closed doors in corporate
boardrooms and government offices throughout the world.
With each drop of water that falls into the hands of private
interests, any sustainable solution to the global water
crisis moves further and further from the public s grasp.
Privatization Leads to Rate Increases
Corporations have utilized rate hikes to maximize profits,
which, by definition, is their bottom line. This bottom
line often comes at the expense of water quality and customer
service, but not at the expense of maintaining inflated
executive salaries. Among the more unseemly aspects of
handling water as a marketable commodity, rather than
a basic human need and a natural resource, is that the
poor are often denied access. Because living without water
is not an option, people are often forced to consume unsafe
water, lest be faced with going without food, medicine
Privatization Undermines Water Quality
Because corporate agendas are driven by profits rather
than the public good, privatization usually results in
the compromising of environmental standards. The National
Association of Water Companies (NAWC), which represents
the U.S. private water industry, intensively and perennially
lobbies Congress and the Environmental Protection Agency
to refrain from adopting higher water quality standards.
The NAWC also persistently requests that all federal regulations
be based on sound cost-benefit analysis, which means
that public health is compromised for the sake of higher
Companies Are Accountable to Shareholders, Not Consumers
In many cases, deals that government agencies make with
water companies include exclusive distribution rights
for 25 to 30 years, effectively sanctioning a monopoly.
Companies are under little pressure to respond to customer
concerns, especially when the product in question is not
a luxury item that families can do without if they are
dissatisfied with the performance of the only provider.
Privatization Fosters Corruption
The very structures of privatization encourage corruption.
Checks and balances that could prevent corruption, such
as accountability and transparency, are missing at every
step of the process, from bidding on a contract to
delivering water. Contracts are usually worked out behind
closed doors with the details often still kept secret
after the contract is signed, even though it is the public
that will be directly affected by the conditions of the
contract. This situation opens itself up to bribery, which,
if recent scandals throughout the world are any indication,
is not an uncommon occurrence.
Privatization Reduces Local Control and Public Rights
When water services are privatized, very little can be
done to ensure that the company be it domestic, foreign
or transnational will work in the best interest of the
community. Furthermore, if a community is dissatisfied
with the performance of the company, buying back the water
rights is a very difficult and costly proposition. Again,
the prime directive of the water companies is to maximize
profits, not protect consumers.
Private Financing Costs More than Government Financing
There is a false perception that when water services
are privatized, the financial burden will shift from the
public to the private sector, which will save taxpayer
money by assuming the costs of repairing, upgrading and
maintaining infrastructure. In reality, taxpayers simply
wind up paying for these projects through their monthly
bills. Tax-free public financing translates into lower-cost
projects, while taxable private financing results in higher
interest rates. As a result, consumers are also forced
to make these higher payments on company loans.
Privatization Leads to Job Losses
Massive layoffs often follow in the wake of privatization,
as companies try to minimize costs and increase profits.
At times, service and water quality are put at risk due
to understaffing. As a result, layoffs can be devastating
not only to the workers and their families, but to
consumers as well.
Privatization is Difficult to Reverse
Once a government agency hands over its water system
to a private company, withdrawing from the agreement borders
on the impossible. Proving breach of contract is
a difficult and costly ordeal. And multinational trade
agreements provide corporations with powerful legal recourse.
A private company, for example, can use the North American
Free Trade Agreement s secretive tribunals to contest
challenges to privatization. And in World Bank loan deals,
which often makes water privatization a condition, companies
are usually guaranteed cash payments if a government agency
returns its water system to public control.
Privatization Can Leave the Poor with No Access to Clean
Contrary to public assertions, World Bank and International
Monetary Fund privatization schemes in the developing
world usually result in reduced access to water for the
poor. "Structural adjustment" programs foisted
upon governments seeking loans often include water privatization
as a condition. Impoverished, politically enfeebled countries
are hardly in a position to refuse these conditions, as
doing so would cause them to default on their debts.
As a result, the World Bank and IMF are able to provide
lucrative and virtually risk-free contracts for multinationals,
due to guaranteed rates of return and investment protection
Privatization Would Open the Door for Bulk Water Exports
Fully aware of bleak water supply prognostications, corporations
are in a mad dash to obtain access to fresh water that
they can sell at huge profits, as high as 35 percent.
It goes without saying that those who control water supplies
will exercise economic and political power at almost unimaginable
degrees. Bulk water exports transporting water from water-rich
countries to water-poor countries could have disastrous
consequences. Massive extraction of water from its natural
sources can result in ecological imbalance and destruction.
Disrupting aquifers by over-extraction often damages the
environment and socioeconomic standards. Groundwater is
being over-extracted as it is, and once aquifers
are emptied or polluted, they are almost impossible to