We would like to begin by thanking you for your comments. While we, too, would like to work toward solutions to address the water challenges that we face, we simply cannot accept the “water customer” approach that you have presented throughout this discussion. This approach presents water as an economic resource to be managed by market forces, and fails to acknowledge water as a shared social and environmental resource necessary for all life.

Although you have provided statistics around water-service business growth and a generalized look at contract renewal rates, you have not shown how the corporations you represent — who answer only to their contracts and their shareholders — are actually able to address citizens’ valid concerns regarding access, affordability, and accountability of water systems in our communities.

Maude Barlow, national chair of the Council of Canadians.

You noted that in our discussion we focused on the global water crisis and the failures of water privatization worldwide. We feel that it is imperative to raise awareness of the challenges being faced by developing communities today and of the role that we in the developed world can play in stopping the privatization programs of the World Bank and other international financial institutions and in promoting nonprofit, community-based solutions.

However, as you have shown, the same privatization experiment is occurring in our own communities in North America. In the United States, water privatization has led to rate increases, deterioration of water quality, lack of access to information, and staff layoffs in a number of communities. Last year, the International Consortium of Investigative Journalists released an extensive report outlining these issues and documenting several water-privatization failures in the U.S. The report describes failed public-private partnerships in Atlanta, Indianapolis, and Camden, N.J., and also refers to numerous cities that either have returned or are proposing to return flawed private contracts to public hands.

You have claimed that private water companies have a strong record of bringing efficiency, savings, and environmental responsibility to communities and municipalities. The citizens that we work with in American communities tell us a different story. They tell us that in the past, your association has been involved in lobbying Congress and the U.S. Environmental Protection Agency to refrain from adopting higher water-quality standards, and that you have requested that federal regulations be based on cost-benefit analyses rather than public health concerns and sound science. Although you have previously implied that the corporations you represent put funds back into communities through the taxes they pay, your organization has also persistently sought to pass proposals to decrease taxes for these same corporations. Within this context, the large water rate increases that are being proposed in the U.S. will only serve to line corporate pockets — doing nothing to improve the essential drinking-water service infrastructure in our communities.

In recent years, numerous communities in the U.S. have decided to either end the privatization experiment and return control of their water to public hands, or have rejected privatization outright to explore innovative public service delivery models. These communities have been rewarded with significant cost savings while maintaining citizen ownership and control. In Florida, a municipal buyout of United Water brought an average 25 percent rate reduction for citizens; in San Diego, a public program to enhance operational efficiency saved the utility $37 million in the first two years; in Ohio, the city of Washington Court House took their water system back into public hands and now enjoy a $500,000 annual surplus that they can reinvest in their utility or return to citizens.

Sarah Ehrhardt, national water campaigner of the Council of Canadians.

There is a growing body of knowledge suggesting that the imperatives of economic globalization that you appear to advocate — unlimited growth, a seamless global consumer market, corporate rule, deregulation, privatization, and free trade — are the driving forces behind the destruction of our water systems. Ninety-five percent of the world’s drinking-water systems are publicly owned; experimentation with privatization has entered our communities with little or no public debate around the implications of such a fundamental global shift of water governance and responsibility. I would encourage you and others to review information from Public Citizen, Alliance For Democracy, the Sierra Club, the Polaris Institute, Public Services International, and, of course, the Council of Canadians for facts on water privatization to supplement this exchange.

On these websites, you will find: reports of failed privatizations in the United States and throughout the world; documentation of the role that water corporations and their associations have played in lobbying to prevent improvements to drinking-water quality; stories of citizen resistance to water privatization in their communities; legal opinions around water privatization and the implications of international trade agreements; examples of successful public reengineering projects that have saved municipalities money while maintaining public control; and tools that citizens can use to join the growing global water movement and take action in their communities.

As we have asserted throughout this correspondence, water is simply too essential to rely on market forces and consumer principles alone to ensure equitable access and distribution. Never before has there been such an urgent need for citizens to take action in defense of water for people and for nature. We must move beyond private corporate interests and work together to declare water a human right and a public trust to be guarded by all levels of government; to share information and best practices on our public water systems; and to oversee and protect our public drinking water for future generations.

Sincerely,
Maude and Sara

Thank you for your reply. We, too, welcome this opportunity to further a public dialogue on what we see to be one of the most critical issues facing the world today: the global water crisis and the preservation of water as a public trust for all people and for nature.

We would like to begin by addressing some of your concerns around water privatization in the developing world. We agree with you that the water systems in Bolivia were largely in disarray prior to privatization. The developing world faces enormous challenges with regards to meeting the United Nations goal of halving the number of people who lack access to safe drinking water by 2015. However, it has been widely acknowledged that bringing in large multinational corporations with a thirst for profits has not solved the problems of access, affordability, or accountability in these communities.

Sarah Ehrhardt, national water campaigner of the Council of Canadians.

You mentioned an increase in water distribution in cities like La Paz but spoke nothing of the tremendous rate increases that prevent citizens from being able to afford this water. In Cochabamba, such rate increases ensured a minimum 15 percent profit margin that was guaranteed to the private company in its contract. You said in your last email there is “nothing immoral about making a profit,” but in these cases, the companies have maintained a profit at the expense of several thousands who have been unable to afford clean drinking water for their families. These families have had no choice but to resort to taking water from polluted streams or other means that can jeopardize health and safety. And although it is true that Bechtel was not the full owner of the private consortium that controlled Cochabamba’s water, it was the only foreign private holder, and the only one to file a suit for lost profits when the public took back control of the water system. In fact, Bechtel was able to use international trade agreements to seek compensation from Bolivia, one of the poorest countries in South America, for the profits it might have made over the entire life of the contract.

Unfortunately, the situation in Bolivia is not unique. Similar situations have arisen in countries throughout the world: Ghana, South Africa, Indonesia, the Philippines, Argentina, and many others. To truly begin to address the problems of access to water for the world’s poor, we need to stop the structural adjustment programs that the World Bank and other international financial institutions use to force privatization of water services in these areas. Instead, we must acknowledge a basic amount of water per person to be an essential human right that governments must provide to all citizens, and we must work with communities to make this happen. Rather than bringing in foreign for-profit corporations to control a service that is essential to life, we can instead help to finance nonprofit, community-driven solutions by canceling Third World debt and by increasing our overseas development assistance to the levels that we have been promising for decades.

It should be noted that the tragic situation in Cochabamba raises an alarming issue around the privatization of water services: Once a water utility is in private hands, it can become subject to the laws of international trade. The buyout of local water service providers by foreign multinational corporations has happened throughout much of North America and may leave our governments open to trade disputes in the future. In fact, some cities have been so concerned with this threat that it has become one of the reasons they choose to keep their water systems in completely public hands.

You have also mentioned several times that public-private partnerships save customers money and improve environmental compliance. However, citizens have seen time and time again that water privatization has led to staff layoffs, rate increases, foreign ownership of water systems, and less access to information on the water systems. Where cities have entered into public-private partnerships with water corporations around the operation of water and wastewater systems, citizens and city councilors have had difficulty accessing technical, operational, and financial information on their communities’ water systems. In many cases, changes to water-quality testing and standards and improvements to environmental regulations have been nearly impossible because of the contracts with the private companies.

Maude Barlow, national chair of the Council of Canadians.

You made reference to a statistic claiming that 97 percent of public-private water partnerships in the United States are renewed. This figure is misleading since it includes items such as chemical delivery and short-term contract work. Generally, water activists have minimal concerns with collaborations of this nature. However, we are very concerned with the large, multi-year contracts around the control, operations, and maintenance of our drinking-water and wastewater systems. It is our understanding that few contracts of this magnitude and nature have ever been renewed in North America; in fact, some have been terminated early and the systems have reverted to public hands. Corporations are requesting that the water privatization contracts last as long as 30 or 50 years, far longer than our municipal officials will ever be around. Who will our children hold responsible when they are faced with the consequences of what we have signed away?

You have acknowledged that public water systems can run effectively and efficiently. Looking ahead, it is apparent that there will be increasing conflicts over our water-treatment and distribution systems and scarce water resources. In the face of a global water crisis, it is our responsibility to keep control of our essential water and wastewater systems in public hands for future generations. We must ensure that our governments safeguard this, and begin to turn the debate to public-sector innovations, sharing best practices, and reinvesting in our public infrastructure.

We await your reply,
Maude and Sara

We would like to begin by telling you the story of one of North America’s first water systems, built in 1837 by a private contractor after a cholera epidemic. Just like our private companies today, that private contractor’s first interest was in making a profit, and so it was that only rich neighborhoods were connected to the pipe system. In the 1850s, the city council decided to buy into the company and collected taxes to fund an extension to the system, a set-up similar to the modern public-private partnerships that you describe. However, this system also failed to provide all of the people with safe drinking water, because it simply was not profitable to provide water for the city’s poor. After a second cholera epidemic, water management was finally taken into completely public hands, and a taxation system was established to fund the system. In less than three years, practically all citizens had access to clean drinking water.

Maude Barlow, national chairperson of the Council of Canadians.

Water is our most precious gift and is essential to all life. But all around the world, we have taken water for granted and massively misjudged the capacity of the Earth’s water systems to sustain the demands made upon it. Instead of taking great care of the limited water we have, we are diverting, polluting, and depleting it at an astonishing rate as if there were no reckoning to come.

You correctly mentioned in your email that water utilities are facing the enormous challenge of having to replace their aging pipes and other infrastructure. Private interests worldwide have seen these infrastructure needs as a huge opportunity to profit off our public systems. These companies rarely pay for the ownership or use of the public infrastructure that already existed before taking control of the system. The way they stay in business is through cutting costs and charging ever-increasing user fees to a public that will always be thirsty for clean water. You also mentioned that there are a number of privately owned water systems in the U.S., but you failed to make the distinction between locally owned, not-for-profit water systems, and the for-profit water systems that are increasingly being controlled by a few large multinational corporations.

This is an important distinction that should not be overlooked. The effects of this massive privatization experiment have been nothing short of disastrous. In Bolivia, thousands took to the streets in protest after drastic rate increases that a Bechtel-owned private company imposed after taking control of a city’s drinking-water system. In the Philippines, the government has had to buy back the system from another Bechtel-owned company after water rates increased by as much as 700 percent in some areas. In Argentina, a corporate consortium composed of French water giants Vivendi (now Veolia) and Suez reneged on a contractual obligation to build a sewage treatment plant, resulting in 95 percent of the city’s wastewater being dumped directly into a river. In a South African community, service fees tripled and thousands were cut off who could not afford to pay after a British company took over the water system.

As these same companies move into more and more small American communities, we see that the cities simply don’t have the legal and financial resources to compete when problems arise with the large multinational corporations that are buying up our water systems. During an attempt to seek compensation after a sewage spill in Hamilton, Canada, the city had to brave corporate buyouts, company financial meltdowns, and even the Enron scandal in order to receive compensation for its residents. These tragic scenarios make it clear: When the primary interest is shareholder returns and market share, water for people and for nature will be left out of the picture.

Sarah Ehrhardt, national water campaigner of the Council of Canadians.

You have said that the private sector is able to improve operating efficiency, access capital, and apply technical and managerial experience. But these can also be accomplished by a publicly controlled and operated water system. It must be emphasized that the vast majority of water systems in North America, and consequently the expertise about water and wastewater treatment, still lies in public hands. Many North American cities have considered and rejected water privatization to address their crucial infrastructure needs and have instead turned to existing public solutions and best practices. Communities like Miami-Dade, Fla., and King County, Wash., have saved money, rewarded employees, and enhanced services while maintaining or improving water quality and protecting the environment — and they have done so while maintaining ownership, operation, and control of their essential water services.

As citizens around the world share the negative experiences of water privatization in their communities, we realize that the decisions being made at the local level are linked to a global struggle around control of the world’s remaining freshwater resources. At stake in this is the whole notion of “the commons,” the idea that through our public water we recognize a shared human and natural heritage to be preserved for future generations. Citizens around the world are standing up to global private interests that would like to see our water privatized and commodified, and are fighting to take back control of their water systems for people and for nature.

Just as we learned with the first water systems in the 19th century, the water we drink is simply too precious to trust to corporate hands, and too essential to rely on market forces alone to ensure equitable access and distribution. The solution lies in declaring water as a human right and a public trust to be guarded by all levels of government; in sharing information and best practices on our public water systems; and in overseeing and protecting our public drinking water for future generations.

We await your reply,
Maude and Sara