Global consumption of water is doubling
every 20 years -- more than twice the rate of human
population growth. According to the United Nations,
more than one billion people on Earth already lack access
to fresh drinking water. If current trends persist,
by 2025 the demand for fresh water will rise by 56 percent
and as many as two-thirds of the world's population
will be living with serious water shortages or absolute
Around the world, the most common tactic
to meet increased water demand has been to divert rivers
and to build environmentally destructive dams. The number
of large dams worldwide has climbed from just over 5,000
in 1950 to 38,000 today. Only 2 percent of US rivers
and wetlands remain free-flowing and undeveloped, while
the country has lost more than half of its original
wetlands. In the US, 37 percent of freshwater fish are
at risk of extinction, 40 percent of amphibians are
imperiled and 67 percent of freshwater mussels are extinct
or vulnerable to extinction.
More than 30 countries already face water
stress and scarcity. The Earth's water system can support,
at most, only one more doubling of demand, estimated
to occur in less than 30 years. The US National Intelligence
Council, a group that reports to the CIA, warns that
water will become the main resource-scarcity problem
by 2015 and that the instability created by water shortages
"will increasingly affect the national security of the
Fortune Magazine notes that "water will
be to the 21st century what oil was to the 20th." Who
owns water and how much they are able to charge for
it will become the question of the century. The privatization
of water is already a $ 400-billion-a-year business.
Multinational corporations hope to increase profits
from water commodification even further by using international
trade and investment agreements to control its flow
and supply. One Canadian water company, Global Water
Corp., puts it best: "Water has moved from being an
endless commodity that may be taken for granted to a
rationed necessity that may be taken by force."
Over the last few decades, multinational
corporations have profited from the provision of water
through the Structural Adjustment Programs (SAPs) of
the World Bank and International Monetary Fund (IMF),
which used these economic restructuring programs to
give corporations access to the water systems of developing
countries. Today, corporations are using a new generation
of trade and investment agreements to gain ownership
over the world's ever-dwindling water supplies so that
they will become the suppliers of last resort.
The FTAA: At Your Service
In the past, governments unanimously
believed that access to basic human services such as
water, healthcare and education should not be included
in trade agreements because these were essential components
of citizenship. However, the North American Free Trade
Agreement (NAFTA) and the General Agreement on Tariffs
and Trade (GATT) began the process of eroding these
basic human rights. Today, the Free Trade Area of the
Americas (FTAA) is poised to take this process to a
whole new level.
The Free Trade Area of the Americas is
the formal name given to the massive expansion of NAFTA
["NAFTA for the Americas," Summer 2001]. The FTAA would
impose NAFTAs failed model of privatization and deregulation
on 34 nations in North, Central and South America and
the Caribbean, creating the world's largest free-trade
zone with a population of 800 million and a combined
GDP of $ 11 trillion.
The FTAA's "services agreement" grants
private corporations sweeping new authority to overrule
government regulations. Under the FTAA, all public,
services -- schools, hospitals, prisons -- would be
forced to open up for competition from foreign for-profit
service corporations. This agreement would forbid any
federal government or local government from giving preferential
funding to domestic providers of sewer or water services.
The FTAA would increase the number of
towns and cities forced into privatizing their water
systems and would reduce the ability of governments
to ensure that the privatized systems work to protect
the environment, consumers and workers.
As the water crisis intensifies, governments
worldwide -- under pressure from multinational corporations
-- are advocating the commodification and mass transport
of water. Proponents of water privatization say that
a market system is the only way to distribute water
to the world's thirsty. But experience shows that selling
water on the open market does not address the needs
of poor, under-served people.
On the contrary, privatized water is
delivered to those who can pay for it, such as wealthy
cities and individuals, agriculture and industries.
As one resident of New Mexico's high desert observed
after his community's water was diverted for use by
the high-tech industry: "Water flows uphill to money."
In cities and towns across the Western
Hemisphere, results of water privatization have been
almost universal: increased prices and a concurrent
loss of access to water, failed promises of infrastructure
improvement, loss of indigenous peoples' rights to water,
worker layoffs, lack of information on water quality
and big profits for the privatizing corporations.
In India, some households pay a staggering
25 percent of their income for water. Poor residents
of Lima, Peru, pay private vendors as much as $ 3 per
cubic meter for buckets of often-contaminated water
while the affluent pay only 30 cents per cubic meter
for treated municipal tap water.
The push to commodify water comes at
a time when the social, political and economic impacts
of water scarcity are rapidly becoming a destabilizing
force around the globe. In 1997, Malaysia, which supplies
about half of Singapore's water, threatened to cut off
its supply after Singapore criticized Malaysia's policies.
In Africa, relations between Botswana and Namibia have
been severely strained by Namibian plans to construct
a pipeline to divert water from the shared Okavango
River. In the water-starved Middle East, the late King
Hussein of Jordan once said that the only thing he would
go to war with Israel over was water because Israel
controls Jordan's water supply.
More than 5 million people, most of them
children, die every year from illnesses caused by drinking
poor-quality water. In the industrial maquiladoras along
the Mexico-US border, water is so scarce that Mexican
babies and children are compelled to drink Coca-Cola
and Pepsi instead.
Eighty percent of China's major rivers
are so degraded they no longer support fish. China is
facing the likelihood of severe grain shortages because
of water depletion and the shift of water resources
from agriculture to industry and cities. The resulting
demand for grain in China soon could exceed the entire
world's available exportable supply.
Today, the future of one of Earth's most
vital resources is being determined by those who profit
from its overuse. At the annual World Economic Development
Congress, corporations and financial institutions met
with government representatives from more than 84 countries
to attend panels on such subjects as "Overcoming Obstacles
to Water Investment." The agenda was clear: water should
be treated like any other commodity, with its use determined
by market principles.
The Global Water Power Play
The World Water Forum (WWF) held in The
Hague in March 2000 was chaired by World Bank Vice President
Ismail Serageldin. The WWF is part of the continuing
activities of the World Water Council (WWC), a coalition
of governments, international agencies and private-sector
interests. The WWC has formed close working partnerships
with private corporations, the Global Water Partnership
and Business Partners for Development. The websites
and reports of these organizations and corporations
make clear that some of the world's largest water privateers
are taking the lead in developing global water policies.
With the support of international trade
agreements, these companies are setting their sights
on the mass transport of water by pipeline and supertanker.
Several companies are developing technology to pump
fresh water into huge sealed bags to be towed across
the oceans for sale.
The US Global Water Corp., a Canadian
company, has signed an agreement with Sitka, Alaska,
to export 18 billion gallons of glacier water per year
to China. It would then be bottled for export in one
of China's "free trade" zones to take advantage of cheap
labor. The company brochure entices investors "to harvest
the accelerating opportunity ... as traditional sources
of water around the world become progressively depleted
The National Post called Canada's water
"blue gold" and Post business columnist Terence Corcoran
predicts that "The issue will not be whether to export,
but how much money the federal government and provinces
will be able to extract from massive water shipments....
Using the OPEC model, they will attempt to cartelize
the world supply of water to drive the price up."
Based on negotiating documents that have
been released, we can begin to paint a picture of the
threats to water that are likely to be included in the
Under the agreement, the goods that
are subject to the agreement's obligations include "waters,
including natural or artificial waters, and aerated
waters." In 1993, then-US Trade Representative Mickey
Kantor said in a letter to a US environmental group,
"When water is traded as a good, all provisions of [NAFTA]
governing trade in goods apply."
"National Treatment" is a standard trade
provision guaranteeing that countries do not "discriminate"
by favoring domestic producers over foreign producers.
This means that if a locality provides any portion of
its water supply through a private company, it cannot
favor a locally owned service provider that may have
a greater commitment to the area and may be easier for
the local community to oversee. Furthermore, once a
permit is granted to a domestic company to export water,
the corporations of all the other FTAA countries would
have the same access rights to the commercial use of
that water, For example, if a Bolivian company were
granted the right to export Bolivian water, US multinationals
would then have the right to help themselves to as much
Bolivian water as they wished.
NAFTA's "Investor State" provision (which
the US, among others, would like to see included in
the FTAA) gives investors, usually corporations, the
right to sue a foreign government directly.
Under this provision, if any FTAA country,
state or province permits only domestic companies to
export water, corporations in the other countries would
have the right to financial compensation for "discrimination."
NAFTA's Chapter 11 allows foreign corporations
to sue a country if a government implements legislation
that "expropriates" the company's future profits. For
example, if a country privatized its water services,
hired a foreign provider and then passed laws requiring
improved environmental protections or worker safety,
the client corporation could argue that the laws were
an expropriation of its profits and therefore illegal
under the FTAA.
Suing for the Access to Water
Corporations already have begun suing
governments to gain access to domestic water sources.
The first such NAFTA Chapter 11 case (Sun Belt Water
Inc. vs. Canada) was filed in the fall of 1998. Sun
Belt Water Inc. of Santa Barbara, Calif., filed suit
after losing a contract to deliver Canadian water to
California when British Columbia banned the export of
bulk water in 1991. Sun Belt is seeking $ 220 million
in damages. However, Sunbelt appears more interested
in access to BC's water than the $ 220 million. As Sun
Belt's CEO Jack Lindsay explained, "Because of NAFTA,
we are now stakeholders in the national water policy
Chapter 11 was also used successfully
by the Virginia-based Ethyl Corp. to force Canada to
reverse its ban on MMT, a toxic chemical gasoline additive.
In June 1997, Canada banned the cross-border sale of
MMT because it is, in the words of Canadian Prime Minister
Jean Chretien, an "insidious neurotoxin." Under NAFTA,
Ethyl sued Canada for $ 250 million in damages for lost
future profits and for damaging the company's "good
name." Rather than allow the case to go to a NAFTA tribunal
where it feared losing, the Canadian government reversed
its ban in July 1998 and paid Ethyl $ 13 million in
compensation for its "trouble."
In July 1999, Canadian-owned Methanex
Corp. sued the US for $ 970 million after California
Gov. Gray Davis mandated the removal of methyl tertiary
butyl ether (MTBE) from gasoline sold in the state by
December 31, 2002. The chemical has been associated
with human neurotoxicological effects and may cause
cancer. Methanex claims that California's ban violates
NAFTA by limiting the corporation's ability to sell
Water as a Human Right
In January 2000, thousands of citizens
of Cochabamba, Bolivia took to the streets to oppose
the takeover of their water systems by a company jointly
owned by the US-based multinational Bechtel and the
Italian utility Edison ["Bolivia's Water War Victory,"
Autumn 2000]. The rebellion, which shut the city down
for four days, was sparked after the foreign-owned water
corporation raised Cochabamba's water rates 35 percent.
Bolivian President Hugo Banzer was eventually
forced to lift martial law and Bechtel was compelled
to abandon its Bolivian water-privatization scheme.
An international "civil summit" of farmers,
workers, indigenous people, students, professionals,
environmentalists, educators and nongovernmental organizations
from Bolivia, Canada, India, Brazil and the US subsequently
gathered in Cochabamba to combine forces in the defense
of the vital right to water. At the conclusion of the
summit, they issued "The Cochabamba Declaration" which
reads, in part:
* Water belongs to the Earth and all
species and is sacred to life. Therefore, the world's
water must be conserved, reclaimed and protected for
all future generations and its natural patterns respected.
* Water is a fundamental human right
and a public trust to be guarded by all levels of governments.
Therefore it should not be commodified, privatized or
traded for commercial purposes. These rights must be
enshrined at all levels of government. An international
treaty must ensure these principles are non-controvertable.
For additional information on the FTAA,
contact Antonia Ajuhasz at the International Forum on
Globalization [162 Ft. Cronkhite, Sausalito, CA 94965,
(415) 561-3490, www.ifg.org].
Maude Barlow chairs the Council of
Canadians and was the founding co-chair of Action Canada
Network. She was one of Canada's leading voices in the
battle against the US-Canada Free Trade Agreement, NAFTA
and the Multilateral Agreement on Investment.