TAPPED OUT - Water Wars

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TAPPED OUT - Water Wars


Looming Crisis/Liquid Harvest: Corporate theft, privatization and commodification of water




A worldwide crisis over water is brewing. Already water has played a part in causing wars, altering policies and changing alliances. Corporations acquire the world's water by three major methods: a) by "water mining" the underground aquifers, or deep sources of many of the world's streams or rivers; b) by leasing state and government water systems and collecting revenues; and c) by "managing" city water systems.

According to the United Nations, 31 countries are now facing water scarcity and 1 billion people lack access clean drinking water. Water consumption is doubling every 20 years and yet at the same time, water sources are rapidly being polluted, depleted, diverted and exploited by corporate interests ranging from industrial agriculture and manufacturing to electricity production and mining. The World Bank predicts that by 2025, two-thirds of the world's population will suffer from lack of clean and safe drinking water.

Rather than taking the dramatic action necessary to protect precious water resources, governments around the world are retreating from their responsibilities. Instead of acting decisively, they are bending to the will of giant transnational corporations that are poised to profit from the shortage of water. Fortune magazine has predicted that "water is the oil of the 21 century" and corporations are rushing to invest in the water business.

Giant water, energy, food, and shipping companies have plans to buy water rights, privatize publicly owned water systems, promote bottled water, and sell "bulk" water by transporting it from water rich areas to markets desperate for more water. At the same time, to ensure maximum profits, these companies are lobbying to weaken water quality standards, and pushing for tradeagreements that hand over the U.S. water resources to foreign corporations.

Right here in the United States, where some regions are already suffering from serious water shortages, corporations from Vivendi to Nestle are poised to make a profit on water. Some corporate interests even want to sell bulk water from the Great Lakes, the world's largest freshwater system. The Great Lakes have suffered from pollution, lost two-thirds of their extensive wetlands and experienced a catastrophic loss of biological diversity. Only 3% of the shorelines are suitable for swimming.

Water resources in Wisconsin and Michigan have been targeted by giant bottled water companies like Perrier. Selling bottled water is one of the most successful revenue generating schemes for private corporations. As drinking water has been degraded, the bottled water industry is promoting its expensive product as the solution.

Unfortunately, bottled water is not adequately regulated, and tap water is actually subject to more rigorous testing and safety standards. A 1999 study of bottled water found that bottled water is no safer than tap wader, and sometimes is less safe. Meanwhile, companies like Coca-Cola are selling purified tap water as a healthy option, and they believe that in the long run selling water will be more profitable than selling Coke.

  • Why oppose privatization of water? Water privatization can foster corruption and result in rate hikes, inadequate customer service and a loss of local control and accountability.
  • Who are the major water companies? A handful of global corporations, ranking among Fortune's Global 500 List and backed by the World Bank, are pushing governments to privatize water services and market water from the global commons.
  • The U.S. Water Declaration: The declaration reaffirms that water is a common good that should not be privatized, commodified, or exported for profit. Add your organization!
  • Turning Up the Tap: How the Private Water Industry Wants to Boost Profits - At the Expense of Taxpayers (pdf)
  • Water Privatization Fiascos: Broken Promises and Social Turmoil (pdf)

Types of conflict, now include:

  • Control of Water Resources (state and non-state actors): where water supplies or access to water is at the root of tensions.
  • Military Tool (state actors): where water resources, or water systems themselves, are used by a nation or state as a weapon during a military action.
  • Political Tool (state and non-state actors): where water resources, or water systems themselves, are used by a nation, state, or non-state actor for a political goal.
  • Terrorism (non-state actors): where water resources, or water systems, are either targets or tools of violence or coercion by non-state actors.
  • Military Target (state actors): where water resource systems are targets of military actions by nations or states.
  • Development Disputes (state and non-state actors): where water resources or water systems are a major source of contention and dispute in the context of economic and social development.

We can't live without water. You may have thought it was a human right. But certain corporations have been plotting to control the water supply on this planet for a while now, and have been moving into place around the globe. Now the World Bank has required certain governments to privatize their precious water supply -- make it a corporate commodity answerable only to stockholders -- as a condition to getting a loan.

In some places it is now illegal to catch rainwater, because rain is being considered private property, including the United States. The evil of this worldwide corporate grab for control of your most precious resource is practically inconceivable, but it is happening. Blue Gold: World Water Wars is a landmark documentary that every school, library and church should own and show. Do you want the cost of your water to be controlled by private corporations and stockholders only interested in their bottom line? Do you want to give up your right to the water around you, including rain?

Simon, a former Democratic senator from Illinois, delivers a call-to-arms to citizens and political leaders to act to save the world's water supply. "Within a few years," he writes, "a water crisis of catastrophic proportions will explode on us." Simon, who was a newspaperman before he was a politician, is a clear and forceful writer who makes use of compelling statistics to outline the looming crisis: 9500 children die every day due to thirst or polluted water and a projected three billion people will be living in regions afflicted by severe water shortages in just 25 years.

Among the most immediate problems Simon covers are vanishing groundwater reserves in California, polluted drinking water in India and the potential for geopolitical violence in the arid Middle East. Simon urges governments to step up their support for desalination, conservation and pollution control. He also calls for policy changes such as charging consumers for the actual cost of conveying their water. Although suffering from a drought of firsthand vignettes and individual case studies, Simon's book is well reasoned and well researched and deserves serious attention?not least because he offers the bracing example of a former public servant still committed to the intelligent and informed discussion of a pressing issue.


There's a battle going on for the source of life, water. Our corporate media isn't saying much about it, but across the globe citizens are struggling against transnational corporations like Nestle and Vivendi which are seizing the dwindling fresh water supplies. It's an absolutely critical topic that this film explains in an informative and inspiring fashion. "Flow" takes us to Bolivia Cochabamba!: Water War in Bolivia, South Africa, India Water Wars: Privatization, Pollution, and Profit, Michigan and beyond; and introduces us to the people who are being harmed by corporate tyrannies that are claiming the water of their land. Big businesses are making a fortune as they pollute or divert water supplies, or bottle it for sale at prices that the world's poor cannot afford.

People in the wealthy nations may feel they are immune from this crisis, but they too are being ripped off by the bottled water racket and poisoned by the continuing toxification of water with synthetic chemicals Toxic Legacy: Synthetic Toxins in the Food, Water and Air of American Cities.

"Flow" features many heroes we don't yet know the names of, like Vandana Shiva and Maude Barlow; but we are fortunate they have been slowing the march of the corporate fundamentalists The Corporation. People concerned about health and justice will want to contribute to the cause of water rights for humans, not for CEOs. Buying and sharing this film is a great first step. Subscribing to magazines like Onearth also helps, as the Natural Resources Defense Council is featured in this film due to the research and litigation they've been advancing on this and so many other pressing environmental issues.

Parts of this film will anger the viewer, but that mood is a natural and necessary part of the process toward social change. The film ends on an optimistic note about the power of the people, something that elites have feared for centuries The Chomsky Sessions: Noam Chomsky On The World

There are different types of private sector participation (loosely all labelled "privatization") in water supply and sanitation

The four most common models in the order of increasing transfer of responsibilities to the private operator are:

  • management contract, under which the private operator is responsible only for running the system, in exchange for a fee (usually performance-related). Investment is typically financed and carried out by the public sector, but implementation may be delegated. Assets remain publicly owned.
  • lease contract, under which assets are leased to the private operator, who recoups the cost from end users. Investment is typically financed and carried out by the public sector, but implementation may be delegated. Assets remain publicly owned.
  • concession, under which the private operator is responsible for running the entire system, including planning and financing investment. Concession contracts usually run for 20–30 years. Assets remain publicly owned.
  • Asset sale (full privatization), under which the operator owns the assets for an undetermined period. This model has been used in England and Chile.


What's New with My Subject?

In her book Water Wars, the Indian author Vandana Shiva lists nine principles underpinning water democracy. At least two of these principles are directly compromised by the privatization of water. Point number four states that “Water must be free for sustenance needs. Since nature gives water to us free of cost, buying and selling it for profit violates our inherent right to nature's gift and denies the poor of their human rights.” When private companies try to make large profits through high water prices, it denies the poor the inalienable right to the most necessary substance for life. Inaccordance with this fact, point number seven states, “Water is a commons. . . It cannot be owned as private property and sold as a commodity.” How can one justify claiming water as their own through contractual agreement while letting another human being go thirsty? Water is a commons because it is the basis of all life. Water rights are natural rights and thus are usufructuary rights, meaning that water can be used, but not owned. As far fetched as water ownership may seem, it is happening at an increasing rate around the globe.



Currently there is a rush to privatize water services around the world. The World Bank and International Monetary Fund (IMF) are pushing for the privatization of water services by European and U.S.-based companies. They are pushing privatization through stipulations in trade agreements and loan conditions to developing countries. These privatization programs started in the early 1990’s and have since emerged in India, Bolivia, Chile, Argentina, Nigeria, Mexico, Malaysia, Australia, and the Philippines, to name a few. In Chile, the World Bank imposed a loan condition to guarantee a 33 percent profit margin to the French company Suez Lyonnaise des Eaux while the company insisted on a margin of 35 percent.

This privatization of services is only the first step toward the privatization of all aspects of water. Through this new globalization and privatization of water resources, there is an effort to replace collective ownership of water sources with corporate control. This effort is being met with increasing opposition. Supporters of privatization say that it has a great track record of success, increasing the efficiency, quality, reliability and affordability of services to the population.

www.rppi.org/ privatizingwatersaves.html

Yet the industry has a track record of hazards and failures. For example, private companies most often violate standards of operation, and engage in price fixing without many consequences. This leads to water stress among the poor populations of these areas, causing people to drink water that is often very contaminated and hazardous to their health (even though case studies have shown that privatized water can be very contaminated as well).

Rising Prices and Deteriorating Water Quality

Australia - In 1998, the water in Sydney, was contaminated with high levels of giardia and cryptosporidium shortly after its water was overtaken by Suez Lyonnaise des Eaux.
Canada - At least seven people died as a result of E. coli bacteria in Walkerton, Ontario, after water testing had been privatized by A&L Labs. The company treated the test results as "confidential intellectual property" and did not make them public.
Morocco - Consumers saw the price of water increase threefold after the water service was privatized in Casablanca.
Argentina - When a Suez Lyonnaise des Eaux subsidiary purchased the state-run water company Obras Sanitarias de la Nacion, water rates doubled but water quality deteriorated. The company was forced to leave the country when residents refused to pay their bills.
Britain - Water and sewage bills increased 67 percent between 1989 and 1995. The rate at which people's services were disconnected rose by 177 percent.
New Zealand - Citizens took to the streets to protest the commercialization of water.
South Africa - Water became inaccessible, unaffordable, and unsafe after the water supply was privatized by Suez Lyonnaise des Eaux in Johannesburg. Cholera infections became widespread and thousands of people were disconnected from their supply of water.



"Privatizing can be useful. Excessive privatization is dangerous. With more than 100,000 private contractors currently operating in Iraq alone, the implications of Outsourcing Sovereignty, as Paul Verkuil's timely and perceptive new book warns, should be the concern of every American."
Ted Koppel, Managing Editor, Discovery Channel

"For the last generation, American government at all levels has vastly expanded privatization of public programs. In this path-breaking analysis, Verkuil reminds us a rush toward privatization for efficiency's sake can ironically threaten the conduct of a responsible democracy. Anyone who cares about the future of American government will have to confront the powerful argument that Verkuil raises in this important book."
Donald F. Kettl Director, Fels Institute of Government University of Pennsylvania

"Paul Verkuil's thoughtful and thorough account assembles key facts behind privatization of military, incarceration, policing, and domestic security, and provides the lenses of political and legal analyses to make sense of the private-contract state--the emerging 'fourth branch' of government. Anyone who cares about democracy needs to know the information and questions raised in this astute book."
Martha Minow, Jeremiah Smith Jr. Professor of Law, Harvard Law School; Author of Partners, Not Rivals: Privatization and the Public Good

"A path-breaking discussion, with implications for countless debates about the uses and limits of privatization. Verkuil is one of the most illuminating public law scholars in the country, and this book sheds a bright new light on the line between the private and public spheres."
Cass R. Sunstein, University of Chicago Law School

"Outsourcing Sovereignty is a penetrating and timely analysis exploring a set of issues vital to our nation's security and prosperity."
Max Stier, President and CEO, Partnership for Public Service

"Paul Verkuil's book is an important book at an important time. When the forces of the market are hailed as the best guide for efficiency and effectiveness and globalization reinforces this, it is imperative to ask what the limits of 'the market' can be and to re-asses the value of public goods and services within states....Although the book focuses on the situation in the United States, the value of the insights it provides go much further."
Sam Muller, Director of The Hague Institute for the Internationalization of Law

"Certainly anyone interested in remedying the dangers of 'outsourcing sovereignty' would do well to study closely Verkuil's extremely valuable contribution"
Philip a. Dynia, Loyola University New Orleans, Law and Politics Book Review

In this fascinating book, Paul Verkuil, Professor of Law at Cardozo Law School, Yeshiva University, examines the USA's shift from public government to private governance. Outsourcing rose by 86% between 2000 and 2005 and the value of non-competitive contracts rose by 115%, mainly due to the war on Iraq.

He examines the public/private distinction, constitutional governance, the limits of delegation, contract theory, and structural reforms. He uses constitutional, statutory, administrative and contractual sources and work in delegation theory and transactions cost analysis.

Under the US Constitution, the people is the sovereign power, delegating its powers to the three branches of the state, executive, legislature and judiciary, which are supposed to be agents of the people. But delegating sovereign powers to private hands undermines the state's capacity to govern. Outsourcing political decisions threatens the democratic principle of accountability.

Verkuil looks at the private military, private disaster relief, private border control, private prisons and private police. He argues that the planning and execution of responses to disasters are core government duties. He notes that after 9/11, Congress voted to `deprivatise' airport security, over Bush's opposition. Private security firms had treated security as a cost-control item, forcing down the quality of services. He notes, "In Europe, the preference for public sector solutions has been trumped by a higher principle congenial both to community integration and the world of privatization." Why higher?

Privatisation does not improve performance: research shows that professional civil servants manage better than political appointees, but then better performance is only the politicians' claim, not privatisation's real aim. Its real aim is to maximise profit - which Verkuil manages not to see, writing, "Outsourcing in the face of both accountability and efficiency objections is inexplicable."

He concludes that the use of contractors to displace functions normally performed by government officials is a danger to democracy, and so should be curtailed. We need to secure and preserve public values and oppose the current unprecedented delegation of powers to private firms.