A debate on water privatization, part four
Everyone knows that water is the stuff of life. But is it best viewed as a commodity or as part of the commons? Should providing safe, affordable water be the role of governments, corporations, or partnerships between the two? On Tuesday, July 13 (dates may vary for local stations), the PBS show P.O.V. is airing “Thirst,” a documentary by Alan Snitow and Deborah Kaufman that addresses these and other issues about water privatization. In partnership with P.O.V., Grist is hosting a week-long debate on the merits of water privatization between Peter Cook, executive director of the National Association of Water Companies, and Maude Barlow and Sara Ehrhardt, anti-privatization activists with the Council of Canadians.
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.
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.
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