Over the next 20 years, the average supply of water worldwide per person is expected to drop by a third, according to a United Nations report. But political and economic interests continue to dominate the issue, with scant resources devoted to water management and fair distribution. By Daniel Glicken

Living, as we do on the edge of the sixth largest body of fresh water on the planet, it’s hard to imagine not having an adequate supply of water. Yet over a billion people in 31 countries completely lack access to clean water. The issue of water access and privatization is being raised around the world.

Most of us have always held the belief that water is a human legacy and right. In strictly economic terms, a water system is a classic example of “a public good,” a large scale endeavor involving the whole community in its use and ownership.

However, the financial and industrial community do not speak of water as a “commons” or a “human right,” much less “sacred to life.” Water is now listed as an “investment” by NAFTA. WTO defines it as a “tradable good.” Even the UN calls water a “human need,” not a “human right.”

“This is not semantic. A human need can be supplied in many ways, especially for those with money. Nobody can sell a human right,” say Maude Barrow and Tony Clarke in their book, Blue Gold: The Fight to Stop Corporate Theft of the World’s Water.

Barrow and Clark report that the performance of water companies in Europe and the developing world are well documented: “huge profits, higher prices for water, cutoffs for customers who cannot pay, no transparency in their dealings, reduced water quality, bribery and corruption.”

They cite, among other examples, the ten million residents in townships surrounding Johannesburg and Durban in South Africa who had their water cut off since the government instituted a World Bank-inspired cost recovery program. Over 100,000 people in the Kwazulu-Natal province came down with cholera after water and sanitation services were cut off to local communities for nonpayment, an act which they say never occurred during apartheid.

Journalist Greg Palast investigated how International Water Limited (IWL) was brought to Cochabamba, Colombia, because 70% of the residents outside the city were unconnected to water. The Bechtel-controlled IWL made many deals with “well connected” Bolivians, but they never hooked up the unserved areas. Nearby, in Buenos Aires, 7,500 workers were laid off after the privatization, and the unattended infrastructure deteriorated.

The cartelization process is enabled by the world’s lending institutions. In 2001, Joseph Stiglitz left his post as chief economist of the World Bank and told Palast the confidential details of how privatization is accomplished. Among the approximate 100 conditionalities for a nation when the World Bank and the IMF give a loan, the first is that nations must sell off their water and electric utilities.

Countries have not always been responsible in their water resources management, and in theory, a little tough love could help. But Palast says in many cases there is no real development following privatization.

In Cochabamba, IWL set the price of water according to rates of the Misicuni hydro-electric dam project, at six times the price that the World Bank’s hydrologists planned for developing other sources of water. The reason IWL chose to go with the Misicuni project was that they owned it. The white elephant of a dam had not even been built yet.
The funds for development come from captive customers, not company share-holders, Palast reports.

This is not the market as we know it. The justification for profit is supposed to be a return on what a company creates. It’s paid back if it turns profit.

Under the IMF and World Bank arrangements, the companies are given a preexisting water company and infra-structure. It’s not just a company, it’s a monopoly on a platter. IWL was guaranteed a 16% return for taking over the water in Bolivia, which set the stage for rises in water charges between 35% and 200%. Enron made a staggering 35% return and raised prices 250% when it took over Wessex Water in Britain, even though a third of the water leaked into the ground.

Given the per capita income of developing countries, even the lower numbers are ruinous to family budgets. Thousands of people protested in the streets in Bolivia and six people were killed. The only report on the Bolivian demonstrations in the U.S. media was a brief mention in The Washington Post’s fashion and lifestyle section focused on the artwork on the walls of the protesters’ office.

What international lending institutions call a “loan” is not even a loan as we know it. It is certainly not how loans were defined when the World Bank was given its mandate in the 1940s. Bank loans are normally supposed to be given on a project basis, and the money is paid back as the project generates revenue. Profits from the privatized monopolies may be taken out of the country without legal recourse.

Getting foreign corporations into a country has been made just as easy. Corporations have many ways to sue governments to gain access to domestic water using the new international trade agreements. Once one domestic company is granted a permit to commercially export water, all foreign companies have the right to come in and set up operations.

There are already provisions for sharing energy resources traded between signatory countries, which means that the resources no longer belong to the country of extraction, but are shared resources. As Canada has found, this is already being applied to countries which try to ban the export of commercial water. WTO rules prohibit the use of export controls for any “good” or purpose. Even if a country imposes a quota for urgent environmental reasons it can be challenged as a form of protectionism. Tariffs are strictly forbidden.

If a nation should try to reclaim its public commons of water or pass environmental laws to regulate it, it is subject to the NAFTA “takings” doctrine, which allows international corporations to sue states and localities in secret tribunals for loss of potential profits. A public treasure of water is thus turned against its own people and government. This is the very plan Gingrich had for the U.S. before Bill Clinton blocked it.

Gouging Consumers over Limited Resources

How big is this issue in dollars? On top of the growth of population, per capita water use is doubling every 20 years. People are mining underground water faster than nature can replenish it.

Approximately 5% of the world’s water resources is already privatized. The world trade in water is already 40% of the total value of oil profits, which is around a trillion dollars, according to Fortune magazine.

Monsanto, the company that gave the world the “terminator” seed, plans to earn revenues of $420 million by 2008 in India and Mexico alone, and it’s not one of the biggest players in water, compared to the giants, Vivendi and Suez.

If you’ve noticed that supermarket aisles have a transparent gleam, it’s because close to 90 billion liters of bottled water were sold around the world last year. Massive pipelines, supertankers and giant sealed water bags can carry fresh water long distances for commercial sale.

The World Bank says that water “will soon be moved around the world the way oil is now.” This has already begun, and the movement is mostly from poor to rich areas.

Environmental Impacts from Water Redistribution

These mass movements of water can cause environmental impacts on a scale greater than China’s Three Gorges Dam, report Barrow and Clark. The flow of whole rivers can be reversed. All a company has to do is poke a hole in the ground or tap a stream and suck water from as far as the stream or the aquifer extends.

When Newport and New Haven, Wisconsin, fought off Perrier from pumping three-quarter million gallons per day from Big Springs, it was not just defending itself, but the region. T. Bone Picken’s Texas ranch is over the Ogallalla aquifer where he plans to plunk down water wells—this will affect the future of water in eight states.

This depletion of water is in addition to the pollution and damage done to the earth’s surface waters by factory farming, flood irrigation, construction of massive dams, toxic dumping, wetlands and forest destruction, urban and industrial pollution, and fish farming with chemicals in deep seas.

Even desalinization of water using current technology is not the solution once dreamed. The saline waste brine dumped back in the water at high temperatures is a lethal pollutant, and the energy-intensive use of fossil fuels contributes to global warming, causing further loss of fresh water.

Deteriorating Infrastructure

Most U.S. communities have utilities that are relatively much better off than developing countries. However, the systems still get leaky and old, and the public financing is often shaky. In a third of the nation’s municipalities, officials with troubled systems have experimented with various degrees of privatized solutions. If they can budget it, they hire private companies to assist with expertise or do special repairs or construction. Some contract out portions of their operations and maintenance. Others contract everything in the form of a concession to a company for a set period of time. If the deals sound good enough, some communities sell off their water and sewer systems outright—the final step away from the public commons of water.

The results of all stages of privatization have been mixed, according to Public Citizen’s 2001 report on 20 case histories throughout the U.S. Some attempts backfired badly. The difficulties included:

• Inadequate maintenance levels and poor condition of wastewater facilities in Lee County, FL
• Dry or inoperative fire hydrants in Atlanta
• Raw sewage backed up in New Orleans
• Lack of financial transparency in Jersey City
• A million-dollar-plus overestimate of expenses by United Water Resources in a buy-out bid in Florida
• Charges of millions in cost augmentations in Hingham and Hull, MA
• Unauthorized export of water from Huber Heights, OH
• Failure to upgrade in Pekin, IL
• Failure to promptly report a release of chlorine vapors in Peoria

When some problems became over-whelming, a number of municipalities had to spend large sums of money on legal fees and political maneuvers to get their water systems back. They could afford to do what the poor countries cannot. Unlike the Third World countries, they could still try to manage their water commons.

However, as municipal budgets are hit by the economic downturn, the rush to fast-track international trade agreements is coming home to roost. We in America are becoming as vulnerable to international corporate domination as developing nations.

Palast warns that when people like Ken Lay become literally part of the secretive administration, they can create problems where the cause cannot be determined. California was the first place to feel the full force of privatization in the area of electricity, when Enron launched a “siege.” Enron’s tactics were exposed only because of the greed and overreach of the company. Such attacks may be not as obvious next time.

So What Can Be Done?

I have listed the causes of damage to the earth’s surface water; these causes are well known. We also know how to reclaim despoiled water systems by replacing flood irrigation with drip irrigation. We can make infrastructure repairs and radical changes in production methods and water-shed management. Such steps can be taken around the world with real development loans or aid projects. A study of water aid projects by UK’s Loughborough University has shown the success of these approaches.

Barrow and Clarke explain that the main obstacle is still privatization because “it bases water management on principles of scarcity and maximum profit rather than long-term sustainability. It is more profitable to invest in chemical technology, desalinization, marketing and water trading than conservation.”

International corporations have prodigious technical resources that could also contribute to the solution of water problems. However, there must be a commitment to long-term sustainability; communities and nations must retain control of their commons of water resources. Past experience of some environmental groups has shown that continuing pressure can affect corporate practices.

The doctrine that neo-liberal economics is the only solution to world problems is known around the world as the “Washington Consensus.” Americans must decide if we want to operate under these rules. The people must lead in this change. It will take legislative battles to protect fresh water in each area.

Unlike a commodity like oil, there is no alternative to fresh water. Unless strong measures are taken to conserve this finite resource, the future looks bleak indeed.