Who Owns Water? (Page 2)

"Water promises to be to the 21st century what oil was to the 20th century: the precious commodity that determines the wealth of nations."    

Washington Consensus

Tragically, this global call for action comes in an era guided by the principles of the so-called Washington Consensus, a model of economics rooted in the belief that liberal market economics constitutes the one and only economic choice for the whole world. Competitive nation-states are abandoning natural resources protection and privatizing their ecological commons. Everything is now for sale, even those areas of life, such as social services and natural resources, that were once considered the common heritage of humanity. Governments around the world are abdicating their responsibilities to protect the natural resources in their territory, giving authority away to the private companies involved in resource exploitation.

Faced with the suddenly well-documented freshwater crisis, governments and international institutions are advocating a Washington Consensus solution: the privatization and commodification of water. Price water, they say in chorus; put it up for sale and let the market determine its future. For them, the debate is closed. Water, say the World Bank and the United Nations, is a "human need," not a "human right." These are not semantics; the difference in interpretation is crucial. A human need can be supplied many ways, especially for those with money. No one can sell a human right.

So a handful of transnational corporations, backed by the World Bank and the International Monetary Fund, are aggressively taking over the management of public water services in countries around the world, dramatically raising the price of water to the local residents and profiting especially from the Third World's desperate search for solutions to its water crisis. Some are startlingly open; the decline in freshwater supplies and standards has created a wonderful venture opportunity for water corporations and their investors, they boast. The agenda is clear: Water should be treated like any other tradable good, with its use determined by the principles of profit.

It should come as no surprise that the private sector knew before most of the world about the looming water crisis and has set out to take advantage of what it considers to be blue gold. According to Fortune, the annual profits of the water industry now amount to about 40 percent of those of the oil sector and are already substantially higher than the pharmaceutical sector, now close to $1 trillion. But only about 5 percent of the world's water is currently in private hands, so it is clear that we are talking about huge profit potential as the water crisis worsens. In 1999 there were more than $15 billion worth of water acquisitions in the US water industry alone, and all the big water companies are now listed on the stock exchanges.

Water Lords

There are ten major corporate players now delivering freshwater services for profit. The two biggest are both from France--Vivendi Universal and Suez--considered to be the General Motors and Ford of the global water industry. Between them, they deliver private water and wastewater services to more than 200 million customers in 150 countries and are in a race, along with others such as Bouygues Saur, RWE-Thames Water and Bechtel-United Utilities, to expand to every corner of the globe. In the United States, Vivendi operates through its subsidiary, USFilter; Suez via its subsidiary, United Water; and RWE by way of American Water Works.

They are aided by the World Bank and the IMF, which are increasingly forcing Third World countries to abandon their public water delivery systems and contract with the water giants in order to be eligible for debt relief. The performance of these companies in Europe and the developing world has been well documented: huge profits, higher prices for water, cutoffs to customers who cannot pay, no transparency in their dealings, reduced water quality, bribery and corruption.

Water for profit takes a number of other forms. The bottled-water industry is one of the fastest-growing and least regulated industries in the world, expanding at an annual rate of 20 percent. Last year close to 90 billion liters of bottled water were sold around the world--most of it in nonreusable plastic containers, bringing in profits of $22 billion to this highly polluting industry. Bottled-water companies like Nestlé, Coca-Cola and Pepsi are engaged in a constant search for new water supplies to feed the insatiable appetite of this business. In rural communities all over the world, corporate interests are buying up farmlands, indigenous lands, wilderness tracts and whole water systems, then moving on when sources are depleted. Fierce disputes are being waged in many places over these "water takings," especially in the Third World. As one company explains, water is now "a rationed necessity that may be taken by force."

Corporations are now involved in the construction of massive pipelines to carry fresh water long distances for commercial sale while others are constructing supertankers and giant sealed water bags to transport vast amounts of water across the ocean to paying customers. Says the World Bank, "One way or another, water will soon be moved around the world as oil is now." The mass movement of bulk water could have catalytic environmental impacts. Some proposed projects would reverse the flow of mighty rivers in Canada's north, the environmental impact of which would be greater than China's Three Gorges Dam.

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