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'It is almost inevitable that the Forum will end in the ritual excoriation of the private water companies.'[1]
Industry news service Global Water Intelligence advising water corporations on what to expect from the World Water Forum.
Activists from around the world made privatization the most controversial single issue at the one-week Forum, taking another important step towards turning the tide and promoting people-centred alternatives. But there is still a long way to go.
Accounts of disastrous privatization experiences in the South torpedoed the PR strategy of the pro-industry World Water Council (WWC), which co-organized the event. The WWC tried to promote increasingly ubiquitous 'public-private partnerships', while transnational corporations (TNCs) focused on damage-limitation. Financial institutions such as the Asian Development Bank and power blocs like the European Union (EU) stubbornly hung on to privatization as the panacea for the global water crisis.
The Kyoto conference took place when the debate over water privatization was already in great turmoil after a series of failures in major cities like Manila, Buenos Aires, Jakarta and Atlanta.[2] European water corporations failed to live up to promised improvements in delivery and access for the poor. In many other cities major price hikes have actually reduced access to clean water for the poorest, with disastrous health impacts.
After years of claiming they could solve the world's water needs, the French water giant Suez and other major corporations announced a partial departure from developing-country markets,[3] They are still eager to take over water systems but are demanding public subsidies, government guarantees and insurance to secure their profits.
Privatization PR
Compared
with the previous World Water Forum (March 2000 in The Hague), the Kyoto
conference was far more open, the pro-privatization bias less explicit.[4]
The World Water Council this time had a more subtle strategy - to build
support among the thousands of water professionals, academics, lobbyists
and decision-makers from around the world who attended the conference. Eager
to de-politicize the debate, the Council hoped that the nebulous 'public-private
partnerships' (PPPs) would blur the issues.
In a joint session with anti-privatization group Council of Canadians, WWC vice-president Bill Cosgrove called for a dialogue in which all parties would 'put their differences aside'. He went on to state that access to water is a human right.[5] This position had once been fiercely resisted by the WWC and the industry in general, but was now embraced, presumably on the assumption that - as with other human rights - it would not be enforceable any time soon.
Others speaking on behalf of the WWC made similar attempts to muddy the debate. Paul Reiter of the International Water Association claimed there was a consensus about public ownership of water resources. Local governments should, rather, choose the right model of management, from 'a continuum between fully public and fully private'. According to him, 'there is no such thing as privatization'.
Many in the audience disagreed. Activists from El Salvador, the Philippines, Ghana, Mexico and elsewhere testified to the negative social impact of privatized water management, in recent years frequently presented as PPPs. Maude Barlow of the Council of Canadians spoke out against them in principle - governments, she said, are left with all the risk while profits are secured for corporations. The key difference is that public utilities can choose socially responsible tariffs and re-invest any surplus. Governments can deliver clean water for all, Barlow stressed, but crippling foreign debts must be cancelled first, Northern aid budgets increased and an international speculation tax introduced to raise funds.
Throughout the Forum the WWC continued to present PPPs as the way forward - not least because public water utilities still supply 95 per cent of drinking water worldwide. 'The World Water Council tried to present themselves as caring for the poor and the environment,' concluded Maude Barlow. 'But the real agenda (of privatization) didn't change a bit.'[6]
Conciliatory CEOs
While
most of the PR during the Kyoto conference was left to the WWC, the corporations
also had their own three-hour session. The CEO Panel, a lobby group launched
three years ago at the Second World Water Forum, presented no less than
12 corporate executives on stage (including Suez, Vivendi, Thames Water,
Unilever, Heineken and Nuon), flanked by a representatives of the UN, the
World Bank and industry-friendly NGOs like WWF. Video clips on efforts to
'raise awareness' among school children - and a TV-talkshow-style facilitator
- were designed to create a relaxed mood.
Bill Alexander of Thames Water set the tone by arguing for 'a holistic view' and 'equitable distribution'.[8] Speakers presented the results of CEO Panel projects, such as the 'White Paper on Valuing Water'. The report wants to 'clarify through dialogues our values, value differences and common ground. When this is done, people and businesses are willing to pay more for water systems and their governance...'[7]
Activists soon restored a sense of reality. Maria Silva Ortiz from Uruguay explained how Suez cuts off the water supply to schools that cannot pay. The problem here is not lack of awareness but the steep price increases following privatization. An activist from Ghana asked what the corporations really mean with slogans like 'improving water governance', when Suez and Vivendi are ignoring the overwhelming opposition to privatization among the population. Activists from Tanzania, South Africa, US, Denmark, Bolivia, Canada and elsewhere denounced the presentations by industry as 'greenwash' and 'poor-wash'.
Despite their constant pledge to seek 'dialogue', the CEOs offered no substantial response to the criticisms. They refused to admit any malpractice in Manila, Jakarta, Atlanta, Buenos Aires or elsewhere. Instead they blamed the messenger. At the press conference after the session, Anthony Burgmans of Unilever complained about the lack of trust. 'Dialogue is the only way to overcome distrust, but one needs to choose the partners well,' Burgmans concluded. He must have been thinking of Jamie Pittock from WWF UK who, on stage with the CEOs, congratulated the industry on its efforts and stated that public or private control 'makes no difference for the environment'.
The CEOs did occasionally make conciliatory statements. Gerard Payen of Suez admitted that his company might have taken advantage of poor countries in the past: 'If a government came to us and said, "we want to sell our assets", then who were we to say "no"? We are in business, after all.'[9]
Thames Water CEO Bill Alexander went further. In an implicit critique of the policies of the World Bank and Northern governments, he said that 'in our view it is wrong in principle and counter-productive in practice for public bodies at any level of government to be forced to outsource public services to private companies'.[10] This, and similar statements recently made by Thames Water, shows that as the tide turns against privatization the company fears for its 'license to operate'.
Camdessus' painful comeback
The
predictable climax of the debate was the session organized by the 'World
Panel on Financing Water Infrastructure', chaired by former IMF director
Michel Camdessus.
During this event, on the final day, Camdessus defended the panel's report on 'Financing Water for All'. The report, launched in advance of the Forum, was welcomed by many Northern governments, financial institutions and corporate lobby groups. Civil society and trade-union groups, on the other hand, strongly denounced the report's bias towards the private sector. Public Services International criticized key panel proposals, such as the 'devaluation liquidity backstopping facility' and the 'revolving fund' (which is intended to subsidize the preparation of corporate contracts), as 'a boon to the water industry that won't do much to provide water to the poor.'[11]
The panel's session began with a two-hour presentation of the main proposals in the report. Activists in the audience responded by activating noisy homemade 'lie-meters', until Bolivian activist Pablo Solon finally got the chance to speak. When the facilitator refused to open up the session for further debate, 50 to100 activists mounted the stage. They chanted 'No water for profit!' and 'Water, not war!', before walking out of the hall to hold an improvized press conference. They then meet with several hundred Japanese anti-privatization demonstrators.[12]
A battle won?
The
declaration agreed by the Ministerial Conference was couched in the language
of compromise.[13] The Camdessus report, as the Financial
Times observed, was 'merely noted in the final document after vocal
protests from campaigning organizations, who said it put profit before meeting
human needs.'[14]
There was also no consensus on defining access to water as a human right. In the absence of new funding commitments from the industrialized countries, almost everybody was frustrated. One European government official saw 'no reason to come all the way to Japan for eight days simply to make speeches and vague promises about dealing with the problems.'[15] Agnes van Ardenne, Dutch Minister for Development Co-operation, was one of several government representatives arguing that 'there should be no more forums'. [16] The World Water Council did its best to seem up-beat but could hardly conceal the PR disaster. Not only did the attempt to co-opt civil society fail; activists used the Forum very effectively to showcase the disturbing realities of privatization.
There is still a long way to go. Will the World Bank shift away from one-size-fits-all policies which, more than anything else, have accelerated privatization in the South? Some World Bank representatives stated that 'there has been a change in opinion and that the bank is trying to explain its position and looking for solutions', but others were far less apologetic.[17] The Asian Development Bank, which had a major presence in Kyoto, appeared to be in little doubt about continuing to impose privatization as a loan conditionality.
The European Union was a particularly aggressive proponent of corporate water management - for instance in the presentation of its 'Water for Life' initiative (which uses development aid to promote private-sector involvement in Africa and Latin America).[18]
Numerous critical questions were raised about the EU's attempts to bring water into the services-liberalization negotiations (GATS) at the World Trade Organization (WTO). So the EU decided to take the offensive. Koos Richelle of the European Commission presented the EU's demands for increased market access for European water corporations as a way to 'facilitate greater investments' in drinking water in poorest countries. Richelle ignored the fact that GATS commitments are irreversible, closing off future de-privatization options. The EU's approach, covered by pro-poor rhetoric, boiled down to promoting the expansion of the European corporations that control the global private water business.[19]
From Kyoto to Evian
If
privatization is not the answer to the global water crisis, what is?
Inspiring lessons can be learned from people-centred models that are in place or under development in cities in Latin America, Africa and Asia.
Active community participation has been key to the success of DMAE, the water utility of the Brazilian city of Porto Alegre.[20] In Tamale, northern Ghana, residents have taken control of the water supply themselves in order to reduce leakages and bring down water bills. In Dhaka, the capital of Bangladesh, a trade-union co-operative runs the water supply in several neighbourhoods. The co-operative has reduced leakages by half, eliminated corruption and improved services dramatically. During the Kyoto conference Public Services International promoted the concept of 'public-public partnerships' (PUPs) to promote solidarity and mutual support between public water utilities from different parts of the world.[21]
No less important are alternative approaches to financing improved public services. An obvious solution would be to raise the necessary funds through taxes, so that the water needs of the poorest are subsidized by the rich, both locally and internationally (North-South). Investment in public water systems in the South should also be a worthwhile cause for ethical investors.[22]
The key problem is the lack of political will. The failure to commit significant new funding happened in the same week the US and British Governments launched a war on Iraq. The direct military costs of the war are over $80 billion for the US alone - far more than it would take to provide clean water to the billions of people who need it. The wider negative economic impacts and the costs of rebuilding Iraq are at least tent times this amount.
Both war and water will be high on the agenda of the G8 summit in Evian (France) from 1 to 3 June. Key decisions which the Kyoto conference failed to deal with - such as whether to subsidize the expansion of water TNCs in developing countries - will resurface.
There is every reason to worry about the outcome. The host government, France, is a strong defender of Suez, Vivendi, Saur and other corporations headquartered in Paris. Civil society will assemble in large numbers. They will demonstrate against the US-led militarization of international relations and gather at counter-summits to strengthen campaigns for people-centred policies.
