On Tap at the WTO: Private Water

By Joshua Holland, AlterNet. Posted December 15, 2005.

Hong Kong -- Activists gathered here say that no issue highlights the tension between the human values they advocate and the economic logic of the legion of corporate globalizers that have descended on this city more clearly than water.

Water is viewed as one of the last "profit centers" by the international financial institutions and trade can impact whether it becomes a commodity or stays in public hands -- 90 percent of the world's water supplies remain in the public trust. Most notably water's on the table with the privatization of municipal water systems being aggressively pushed under the General Agreement on Trade in Services (GATS), a wide-ranging treaty that covers a host of services, both public and private.

Vandana Shiva, the scientist and global justice activist, argued this week that "we need to recognize that 90 percent of humanity lives on water as commons today." She lambasted a recent World Bank report urging poor countries to privatize their water systems, saying, "It actually talks about one major threat to water markets being community rights to water, and says these must be dismantled. As if there's something wrong with the commons, as if it's a primitive stage of human existence."

According to the United Nations, 1.3 billion people in the world lack access to clean water and worldwide demand is doubling every 20 years -- twice the rate of population growth. By the year 2025, demand for fresh water is expected to outstrip global supply by 56 percent. The issue gets scant attention, but analysts say that while the advanced nations are likely to wean themselves of their addiction to oil, water is the finite resource that will drive this century's wars just as fossil fuels did the last century's.

Maude Barlowe is the Director of the Council of Canadians, an NGO deep in the fight. She told me the water privatizers are driven not only by profit, but also by a deeper ideology. "There are those of us who believe that water is a public good and should be protected in legislation at all levels as something that must be kept out of the market system. And there are those who've gone to the other side, and that would include the World Bank, the regional development banks, the International Monetary Fund, the WTO and most of the big first world countries. And they say that the only way to avoid the global shortage of water that's already here for some places but coming for the whole world is to privatize water, commodify it, put it on the open market for sale to the highest bidder and have it guided by the same rules that govern the trade in running shoes."

Pushing the agenda here in Hong Kong are a small number of multinationals that dominate the growing water market. Two French titans, Vivendi Universal and Suez, dominate the group. According to a report by the Canadian NGO Polaris Institute in conjunction with Barlowe's Council of Canadians, the two -- often called the General Motors and Ford of the global water industry -- control over 70 percent of the existing world market in water services.

RWE, a German electricity and waste management company, may soon challenge their market share. After purchasing two key water companies, RWE has positioned itself to expand. The U.S. construction giant Bechtel, now notorious for its no-bid reconstruction contracts in Iraq, is also a growing player.

Under the GATS treaty being pushed in Hong Kong, any government in the WTO would be required to give foreign investors like these mammoth water corporations equal treatment with domestic investors like local government-owned utilities. Governments would have to prove that any legislation or regulation related to public water service is "necessary" and "the least trade restrictive of all possible measures."

According to the NGOs, "in effect, government regulations requiring high water quality standards for safety, accessible rates for poor communities, or specific improvements in pipe infrastructure could be declared "unnecessary" by a WTO tribunal."

Through the WTO's "coherence agreement" with the World Bank and International Monetary Fund, the water behemoths get an additional wedge: they're able to secure loans and grants to finance much of their operations in the developing world. These institutions use water privatization as a "conditionality" for development aid. A 2000 review of IMF loans in 40 countries found that 12 had loan conditions requiring some form of water privatization. The NGOs point out that "in general, it is African countries -- the smallest, poorest, and most debt ridden countries -- that experience these conditions. Tragically, more than five million people die each year in Africa from poor water access."

The big water corporations are active supporters of networks of water policy think tanks and "lobby groups that prime the pump for privatization." The network includes the Global Water Partnership, the World Water Council and the World Commission on Water. All three have working relationships with international finance institutions, the major corporate players in the water industry and the governments of the big service economies.

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Joshua Holland is an AlterNet staff writer.

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