There once was a time when water fell freely from the clouds in the sky and bubbled from the springs in the hills… when the rivers, streams and lakes were full to the brim… when ancient underground aquifers flowed like great veins beneath the continents… when water nurtured our people, like babes sustained by their mother’s milk.
Today, water has become a scarce resource. Climate change has wreaked havoc with the weather, and the clouds no longer pour their tears of life upon our great forests. Vast agricultural lands suck rivers and streams dry. Our lakes are choked with dead fish which have been suffocated by industrial pollutants. The bowels of the Earth are constantly relieved of their waters, millions of years old. Experts predict that by the year 2025 our world will be suffering from the dramatic effects of hydrological poverty. There will be great disputes and even wars over water. “Failure to act could damage the planet irreversibly, unleashing a spiral of increased hunger, deprivation, disease and squalor.” Thankfully, action has been taken – at the highest level – to avert this apocalyptic nightmare.
By declaring water a commodity – an economic good, to be measured, apportioned and regulated by corporations – the tide of disaster will be stemmed. This momentous decision has been made for us by a handful of transnational corporations and members of the United Nations system of organisations. This self-appointed group have mandated themselves the custodians of the world’s water resources. They concede that the full-cost pricing of water, for domestic, agricultural and industrial use, will be a painful adjustment for humanity. But they argue that this is a small price to pay for water security, for their guardianship of our most precious resource.
With the blessing of national governments, a vigorous and dynamic agenda to privatise the world’s water supplies is being pursued. Traditional and indigenous rights are acknowledged, then cast aside. National sovereignty is affirmed, then eroded. Access to water – a God-given or a human right – is recognised, then suspended.
The old economy has been fuelled by oil. The new economy will be fuelled by hydrodollars. A globalised trade in water is being created and we, the people, are to become the consumers in this multi-trillion-dollar market.
The zero hour for water
Academics, scientists, politicians and hydrological experts are today in agreement that the world faces a grave water crisis. Using mathematical modelling, they have been able to predict that by 2025 at least 40 per cent of the projected world population of 7.2 billion may face serious problems with agriculture, industry or human health if they rely solely on natural endowments of fresh water. Severe water shortages could strike particular regions of water-rich countries such as the USA and China.
Already, 26 countries have more people than their water supplies can adequately support. Tensions are mounting over scarce water in the Middle East and could ignite during this decade. Competition for water is intensifying between city dwellers and farmers around Beijing, New Delhi, Phoenix and other water-short areas.
All the evidence points to the first quarter of the 21st century being the “zero hour” for water in some parts of the world. The possibility of a water scarcity has been raised before, but only in the last few years has the language of crisis become all-pervading.
International discussions about the world’s water supplies began in 1977 when the United Nations held the first World Water Conference in Mar del Plata, Argentina. The Conference declared the 1980s to be the “UN International Drinking Water Supply and Sanitation Decade”. The altruistic goal was to ensure all people in the world had access to adequate water supplies and sanitation within a decade.
Ten years later, the Brundtland Commission told the world that our approach to development was unsustainable – but it had little to say about water. Then, in 1992, the Rio Conference on Environment and Development, in its “Agenda for the 21st Century” (known as “Agenda 21”), addressed fresh water in chapter 18 of its report.
In 1996, the World Water Council, a private think-tank, was formed. The founding members were Egypt’s Ministry of Public Works and Water Resources, the Canadian International Development Agency and the French transnational water corporation Suez Lyonnaise des Eaux.
The World Water Council set about developing its vision for our future: a comprehensive document, The Long Term Vision for Water, Life and Environment, better known by its subtitle: World Water Vision, Making Water Everybody’s Business.
At a 1998 meeting held in Washington, DC, the World Water Council appointed a group of commissioners to turn the World Water Vision into reality.
Crisis or business opportunity?
Awareness of the impending water crisis has been heightened due to the international World Water Forums, the triennial public meetings of the World Water Council. A number of agreements and principles from the Forums have become the basis upon which corporate control of water is being effected.
More than 4 000 luminaries from around the world attended the World Water Forum at The Hague in March 2000. Scientists, water experts, government and business leaders and greenwash organisations were on hand. The World Water Vision was formally presented to the Forum by Mikhail Gorbachev’s organisation, Green Cross International.
The six-day meeting concluded with 130 government representatives issuing “The Ministerial Declaration of the Hague”, a four-page document calling for all relevant organisations to get involved in “integrated water resources management” to ensure “that every person has access to enough safe water at an affordable cost”. Hidden among the warm, fuzzy, double-speak of the Declaration was the real agenda:
Valuing water: to manage water in a way that reflects its economic, social, environmental and cultural values for all its uses, and to move towards pricing water services to reflect the cost of their provision.
The March 2000 Forum was presented to the world as part of a democratic participative process for water management, when in fact the process was designed by powerful multinationals and elites without taking into account the basic needs of the people.
The world’s top transnational corporations were well represented, and they released a three-page special joint CEO Statement during the Forum. Nestl? and Unilever (the world’s first and third largest food corporations respectively) joined forces with Heineken, ITT and the global water companies DVH, Azurix, CH2M Hill and Suez Lyonnaise des Eaux to declare:
“Water is an economic good and its economic value should be recognised in the allocation of scarce water resources to competing uses. While this should not prevent people from meeting their basic needs for water services at affordable prices, the price for water must be set at a level that encourages conservation and wise use.”
Water is already a US$400-billion global business, yet privatised water so far only accounts for 10 per cent of the world’s water utilities. The World Water Commission argues that only private firms can provide the enormous capital, which it estimates at US$180 billion a year, needed to fix the world’s water problems. This entails eliminating generalised subsidies for water and replacing them with prices which offer an attractive return on investment.
The world bank: “a world full of poverty”
Several years ago, Dr Ismail Serageldin, Vice-President of the World Bank, said that the wars of the 21st century will be about water. To respond to the escalating crisis, the World Bank has adopted a policy of water privatisation and full-cost water pricing. The basis of the Bank’s policies are outlined in the 1992 paper “Improving Water Resources Management”, which discusses the importance of pricing and other incentives which encourage consumers to adopt efficient water use practices based upon the relative value of the water:
Charging fees for domestic and industrial water supplies is generally straightforward. In most cases, use can be metered and fees can be charged according to the volume and reliability of water used.
Economic efficiency would be obtained by setting water charges equal to the opportunity cost of water. However, immediate adoption of such prices often proves to be politically difficult. Thus, given the low level of cost recovery at present and the extent of underpricing, fees that establish the water entity’s financial autonomy would be a good starting point to ensure the entity’s independence and the sustainability of operations. Both public and private entities should pay for the costs of the water and sanitation services they receive.
The World Bank believes that making water available at no cost, or low cost, does not provide the right incentive to consumers. Its research and experience indicate that:
”…when water services are reliable, the poor are willing to pay for them, and that when service is not reliable, the poor pay more for less, typically from street vendors.”
As pointed out in the World Development Report 1992, the poor need to be provided with a wider range of options so they can choose the level of water services for which they are willing to pay, thereby giving suppliers a financial stake in meeting the needs of the poor. Fee schedules can be structured so that consumers receive a limited amount of water at a low cost and pay a higher fee for additional water.
Fees set in this manner can correspond to efficiency prices for incremental consumption, even as they provide low base rates that benefit the poor. However, the schedule in aggregate should provide for full-cost recovery; otherwise, the financial viability of the water entity is endangered. Another form of subsidy to the poor, which may be handled through one-time budgetary transactions, is a subsidy for connecting households to the water supply and sanitation network.
The World Bank’s matter-of-fact approach to the full-cost pricing of water is a testament to its grandiose illusions, bloated budget and quest for control of people and their resources. Apart from its funding to support water privatisation, the Bank is the world’s greatest single source of funds for large dam construction. It has provided more than US$50 billion (1992 dollars) for the construction of more than 500 large dams in 92 countries. The importance of the World Bank in major dam schemes is illustrated by the fact that it has directly funded four of the five most significant dam projects in developing countries outside China, three of the five largest reservoirs in these countries, and three of the five largest hydro-electric plants.
Engineering crops to be less thirsty
In the early 1970s, there was a global surge in irrigation development. Irrigation was the lead factor in the Green Revolution, which resulted in the high-yield rice, wheat and maize varieties which are dependent upon the liberal use of inorganic fertilisers. The new crops of the Green Revolution displaced local foods, and the diets of many people in the world became dangerously low in iron, zinc, vitamin A and other micronutrients. Transnational chemical companies which supplied the petrochemical-based fertilisers, pesticides and herbicides that fuelled the Green Revolution expanded their control and influence in the agricultural sector.
Today, 70 per cent of the world’s water is used for crop irrigation. As the population grows, irrigated land is expected to become increasingly significant in feeding people.
But the impending water crisis will push many croplands to the brink of disaster, as there will be insufficient water to irrigate our food crops. Compounding the problem is the fact that further expansion of agricultural lands cannot be sustained due to the effects of agrichemicals (soil erosion, salinity, poisoning of water, etc.).
Over the last 10 years, agrichemical companies have been shifting their interests from chemicals to the life sciences, where the future profits lie. The revolution in biotechnology has been dubbed the “Double Green Revolution” by its advocates, who claim that it will not only provide more food for more people (the same argument that fuelled the original Green Revolution), but that seeds can be genetically engineered to be less thirsty.
This is a critical development which will see corporations turn the crisis of pollution and depletion of water resources (which they helped create in the first place) into a business opportunity, as control of the world’s seed stock and water resources becomes the new frontier for private investors.
The chemical giant Monsanto has already positioned itself as a major player in the life sciences via its control over seed, the first link in the food chain. In a report for the organisation Corporate Watch, Dr Vandana Shiva describes Monsanto’s new interest: water. She cites a Monsanto strategy paper which outlines the company’s plan for corporate control of water:
First, we believe that discontinuities (either major policy changes or major trendline breaks in resource quality or quantity) are likely, particularly in the area of water, and we will be well positioned via these businesses to profit even more significantly when these discontinuities occur. Second, we are exploring the potential of non-conventional financing (NGOs, World Bank, USDA, etc.) that may lower our investment or provide local country business-building resources.
For Monsanto, “sustainable development” means the conversion of an ecological crisis into a market of scarce resources:
The business logic of sustainable development is that population growth and economic development will apply increasing pressure on natural resource markets. These pressures and the world’s desire to prevent the consequences of these pressures if unabated will create vast economic opportunity.
When we look at the world through the lens of sustainability, we are in a position to see current and foresee impending resource market trends and imbalances that create market needs. We have further focussed this lens on the resource market of water and land.
Monsanto projects revenues of $420 million and net income of $63 million by 2008 from water resource developments in India and Mexico alone. The Monsanto paper states: We are particularly enthusiastic about the potential of partnering with the International Finance Corporation (IFC) of the World Bank to joint-venture projects in developing markets. The IFC is eager to work with Monsanto to commercialize sustainability opportunities and would bring both investment capital and on the ground capabilities to our efforts.
The perils of privatisation
According to Maude Barlow, author of Blue Gold: The Global Water Crisis and the Commodification of the World’s Water Supply: “The privatisation of municipal water services has a terrible record that is well documented. Customer rates are doubled or tripled; corporate profits rise as much as 700 per cent; corruption and bribery are rampant; water quality standards drop, sometimes dramatically; overuse is promoted to make money; and customers who can’t pay are cut off…
When privatisation hits the Third World, those who can’t pay will die.”
This brief summary demonstrates the extent of commodification so far, and highlights some of the failures.
Programs which transfer existing government-managed water systems to private firms, financially autonomous utilities and water user associations are being implemented in Latin America (Argentina, Colombia, and Mexico); Asia (Bangladesh, Indonesia, Nepal, Pakistan, The Philippines and Sri Lanka); Africa (C?te d’lvoire, Madagascar, Morocco, Niger, Senegal and Tunisia); and Eastern Europe (Hungary).
In some countries, such as Indonesia, Nepal, The Netherlands and Sri Lanka, the tradition of farmer-managed water service systems is centuries old.
The state-run water company Obras Sanitarias de la Naci?n was sold to Aguas Argentinas, a private company owned by Suez- Lyonnaise des Eaux of France. Aguas Argentinas expanded the water network to 600 000 new residents. Aguas Argentinas has promised to cut prices by 27 per cent and to invest US$4 billion in improving services over a 30-year period. The International Finance Corporation (a subsidiary of the World Bank) provided a $172.5 million loan to Aguas Argentinas in 1994.
Some people in the centre of Buenos Aires have benefited from the privatisation, but those outside the capital say water is more expensive and the service has not improved.
“On many days there is no water,” says Marcelo Paoletti, an activist from an Argentine group called the Ecologist Workshop. He lives in Rosario, the country’s second largest city. Paoletti’s bills add up to 24 pesos (R140.00) a month, more than when the water supply was publicly managed.
Aguas Argentinas has also been criticised a number of times by the state regulatory authorities for corporate misconduct and failure to provide acceptable service standards.
As Maude Barlow explains, in 1998 the World Bank: “…refused to guarantee a US$25-million loan to refinance water services in Cochabamba, Bolivia’s third-largest city, unless the government sold the public water system to the private sector and passed on the costs to consumers. Only one bid was considered, and the utility was turned over to a subsidiary of a conglomerate led by Bechtel – the giant engineering company implicated in the infamous Three Gorges Dam in China, which has caused the forced relocation of 1.3 million people.
“In January 1999, before it had even hung up its shingle, the company announced the doubling of water prices. For most Bolivians, this meant that water would now cost more than food; for those on a minimum wage or unemployed, water bills suddenly accounted for close to half their monthly budgets.
To add insult, the World Bank granted monopolies to private water concessionaires, announced its support for full-cost water pricing, pegged the cost of water to the US dollar, and declared that none of its loan could be used to subsidize the poor for water services. All water, even from community wells, required permits to access, and peasants and small farmers even had to buy permits to gather rainwater on their property.”
On 10 April 2000, hundreds of thousands marched to Cochabamba in an anti-government protest. The government backed down, ordered Bechtel out of Bolivia, and revoked its water privatisation legislation.
A report, A Vision for Australia’s Water Resources 2025, was prepared for the World Water Forum 2000 by Integrated Resource Management Ltd under contract from UNESCO. The Australian report recommends water pricing related to volume and timing, as well as the elimination of subsidies.
Australia has already undertaken a program of far-reaching changes in the way the water sector is organised and managed, with an increasing role for the private sector.
In 1994, the Council of Australian Governments (COAG) declared that “business as usual” in the rural water industry was not a viable option for irrigators – or the environment.
They are now implementing changes which will affect pricing, water allocations, institutional arrangements and environmental management. These reforms are to be implemented together, as a package, this year. The reform package includes a COAG agreement to introduce full-cost recovery pricing in rural areas by 2001. This means current prices paid for water are likely to rise. In some cases, prices have escalated already. Many local governments in Australia have made rainwater tanks and recycling of grey water illegal.
Since the privatisation of water services in Britain during the Thatcher Government, prices skyrocketed by up to 450 per cent, averaging an increase of 67 per cent. Thousands of people, unable to pay their bill, had their water service cut.
As a result, dysentery increased sixfold, leading the British Medical Association to condemn privatisation because of the related health risks. While the companies are hugely profitable and executive incomes soar, no effort has been spared in maximising revenues. In one instance, a water company began billing a rural resident who was serviced by a well. The company argued that the rain falling on the resident’s property was making its way into the storm drainage system and therefore the resident should pay a fee.
Water is becoming a commodity to be traded and sold. Pressures within Canada to privatise control of municipal water services and treat water resources as an export commodity are increasing. French and British companies are vying with American firms to control Canada’s water services. Many municipalities have entered into “partnerships” with private organisations. Moncton, for example, has entered into a 20-year agreement that will see the city’s water filtration plant maintained and operated privately.
The company, US Filter, will build the plant and sell it to the city upon completion, in exchange for a guarantee that it will have exclusive rights to sell Moncton its drinking water. The company has sought status as a municipality for tax purposes, arguing that it should be exempt from GST.
In France, private companies have been prosecuted for providing water that’s polluted and unfit to drink. A French Government report revealed more than 5.2 million citizens received “bacterially unacceptable” water.
Corruption is also rampant, with water-related bribery schemes resulting in convictions of municipal officials and water company board members under investigation.
French cities with private water charge 30 per cent more than cities with public water. In France as well as Germany and the Czech Republic, municipalities guarantee payments to companies if consumption or prices are not sufficient to ensure a profit.
In the past five years, privatisation of water utilities in the US has expanded. The major utilities, Consumers Water Co., Dominguez Services, Southwest Water, Connecticut Water and E’Town Corp have seen returns of more than 20 per cent for investors.
World water nightmare
The very future of humanity on Earth has been gravely imperilled by greedy, dishonest, power-hungry politicians and corporations.
They have succeeded in reducing every component of Nature to an economic commodity. They have abrogated the ethics and spirit of life preservation and replaced them with the values of corporate consumerism.
The commodification of water… genetic engineering and patenting of traditional seed stock… control water, control food, control people…
A truly dark age is upon us.