1resourceprivatization

The Institute for Domestic and International Affairs

Social, Humanitarian and Cultural

Resource Privatization

Rutgers Model United Nations

16-19 November 2006

Director: Matt Korostoff

© 2006 Institute for Domestic & International Affairs, Inc. (IDIA)

This document is solely for use in preparation for Rutgers Model

United Nations 2006. Use for other purposes is not permitted without the express written consent of IDIA. For more

information, please write us at [email protected]

Introduction _________________________________________________________________ 1

Background _________________________________________________________________ 3 Tragedy of the Commons___________________________________________________________ 4 Privatization Efforts in the 21st Century ______________________________________________ 6

Water__________________________________________________________________________________6 Recent Developments in Water Privatization ___________________________________________________8 Species Privatization _____________________________________________________________________12 Crop Privatization and the Problem of Sustainability ____________________________________________15 Emissions Credits _______________________________________________________________________19

Current Status ______________________________________________________________ 22 Water __________________________________________________________________________ 22 Genes __________________________________________________________________________ 23 Air ____________________________________________________________________________ 24

Key Positions _______________________________________________________________ 25 World Governments______________________________________________________________ 25 Civil Society and International Organizations_________________________________________ 26 Industry ________________________________________________________________________ 27

Works Cited ________________________________________________________________ 30

Works Referenced ___________________________________________________________ 33

Rutgers Model United Nations 2006 1

Introduction In the market economy, one of the most fundamental units of trade is what is

known as a “commodity.” A commodity can be any naturally occurring or manufactured

product with monetary value, but commodities are

especially “foodstuffs and industrial raw materials

in their unprocessed form.” 1 Examples of

commodities are oil, gold, and grains, are

differentiated from other manufactured goods in

that any quantity of a commodity is considered

equivalent in value to any identical quantity of the

same commodity. A bushel of wheat from the

United States is considered to be equal in value to a bushel of wheat from the fields of

France or China. Thus the process of commodification, argues Susan Strasser in

Commodifying Everything “requires understanding [things] more for their monetary value

than for some intrinsic worth, usefulness, or nonmaterial qualit[y].”2

Commodities, in their most simplified form, are naturally occurring resources

traded for private profit. Most take for granted the notion that resources such as land, oil

wells, gold claims, and diamond mines can or should be privately owned. This basic

assumption about the proprieties of privately owned resources becomes slightly more

complicated when one attempts to apply this theory to other natural resources such as

water, air, or species of plant and animal. In the past thirty years, these resources have

undergone massive privatization efforts around the globe. Increasingly, conservationists

argue that certain resources cannot, by nature, be privatized.

Since the latter half of the 20th Century, private ownership has extended itself to

resources that would have been unthinkable or technologically impossible in any

1 Chamber’s Encyclopedia, III, s.v. “commodity agreement.” 1959. 2 Susan Strasser, “Boundaries of the Market,” in Commodifying Everything, ed. Susan Strasser (New York: Routledge, 2003), 3.

Commodity: A product or resource that is traded primarily on the basis of price, and not on differences in quality or features. Examples include precious metals, many agricultural products, fuels, and minerals. Manufactured goods are said to be commodity goods if purchasing decisions are made almost solely on the price of the product.� Source: www.mastercardbusiness.com/ mcbizdocs/smallbiz/finguide/glossary.html


previous era. This trend began with the privatization of water collection and purification

systems in Western Europe, an experiment which has spread rapidly around the world.

This trend continued in the mid 1970s with the introduction of privately traded emission

credits, in which on state could buy surplus “blocks” of emissions from other states as

part of a collective effort to minimize pollution. The trend continued into the 1990s with

the introduction of genetic patents and intellectual property rights related to genetically

modified organisms (GMOs).

The modern market economy has brought with it a strange paradox. While

mechanized and privatized means of production have meant an overall worldwide

increase in productivity, they have also meant private ownership of resources previously

held in public trust relegating resources inaccessible to some. Attaching a price to natural

resources has meant in some circumstances that those resources are too costly for the

poorest members of society. In one famous case, a water privatization scheme brought

running water to thousands of Bolivians for the first time but at an unaffordable price. It

is easy to see that resource privatization increases efficiency but concerted effort must be

taken to ensure that this privatization does not hinder equity. This contrast between

market efficiency and wealth distribution has generally been at the center of the

commodification debate.

Current trends toward commodification have been largely “created through lack of

decision.”3 Privatization schemes are often instituted on an ad hoc basis for expedience

sake or due to a lack of political will to explore other options. Just where property rights

end and where human rights begin is, in many ways, the central question of economic

development in the 21st Century.

3 Matthew Albright, “Life Patents and Democratic Values,” in Rights and Liberties in the Biotech Age, ed. Sheldon Krimsky and Peter Shorett (New York: Rowman & Littlefield Publishers, 2005): 34.


Background Private ownership of natural resources is by no means the only system of resource

distribution; indeed, it is a relatively new element of the human experience. Resource

privatization in the modern sense was not truly attempted until the 12th Century, and did

not take hold as the dominant system until the early 19th Century, when land was

privatized on an almost universal scale in states that were not practicing serfdom.4 The

privatization of land shall serve as the reference point to the remainder of this discussion.

To people of ancien régime Europe, rights to pastoral grazing areas were held in

common. To simplify the situation greatly, a single grazing area served a single

community,

which shared

access to that

grazing area

among its many

members,

bringing with it

the advantage

that each

individual herder

had access to a

grazing area that

vastly exceeded his needs. In some circumstances, however, “open access” to a common

resource had dire consequences. The dark side of common resource management is what

ecologist Garrett Hardin, in his famous 1968 paper, would term “the tragedy of the

commons.”5

4 John R. McNeill, “Tragedies of Privatization: Land, Liberty, and Environmental Change in Spain and Italy, 1800-1910,” in Land Property and the Environment, ed. John F. Richards (Oakland, CA: ICS Press, 2002), 222-234. 5 Garrett Hardin, "The Tragedy of the Commons," Science 162 (1968): 1243-1248.

Types of Resource Ownership

Open Access

In an open access system, no one truly “owns” the resource and it is open to use by all. Regulations on this sort of resource are typically accomplished only by agreement of all concerned parties. An example of an open access resource is the air and all international waters.

Common Ownership

In a common ownership scenario, access to a resource is restricted to a specific and defined group of people. Within that group, there may or may not be rules restricting resource usage. An example of a common ownership scenario is the medieval pastoral grazing areas discussed above.

Government Ownership

In a government ownership scenario, a resource is open to no one unless designated by the government. In theory, the government administers the resource for the public good. An example of a government owned resource is national parks.

Private Ownership

In a system of private ownership, a single individual or corporation has the sole right to develop or exploit a given resource. An example of a privately owned resource is a plot of land, such as a farm, owned by an individual. Often, a government owned resource is sold to an individual or corporation creating a privately owned resource.


Tragedy of the Commons This economic phenomenon occurs when open-access or commonly owned

resources are not properly regulated. In order to prevent ecological destruction of the

common grazing area, it is necessary that all users of the resource practice moderation. If

only a portion of commons users practice moderation, then a few greedy individuals will

consume more than their fair share leaving some with insufficient grazing area. As a

result, none of the villagers practice moderation for fear that doing so will result in all the

common grazing area being consumed up before they have had a chance to use it. So,

despite a desire for moderation on the part of an overwhelming majority of villagers,

none practice it and the commons becomes unusable to all members of the community.6

Partially due to an effort to prevent this phenomenon, European land usage laws of this

period were an indecipherable tangle of contradictions, were barely sustainable, and were

in dire need of reformation.7

The solution European thinkers arrived at was privatization, or “the enclosure

movement” as it has become known. Common land would be enclosed for grazing and

closed off to users other than the manorial lord, allowing that only the interests of one

individual needed to be addressed. It would be in against the interest of that individual to

exploit his land to the point of ecological destruction. That individual would not have to

account for the potential greed of his neighbors and would therefore be free to treat the

land responsibly, and productivity would increase. Moreover, lords with surplus land

could sell access to others for a fee. The movement was wildly successful in this regard:

productivity flourished, and landowners equipped with newly found freedom and revenue

began experimentation with new farming technologies. In turn, innovation flourished

and the agricultural revolution was born. The increase in productivity that resulted from

these new innovations, many historians argue, set the stage for the industrial revolution

6 Incidentally, this is the most basic example of a mathematical method of economic analysis known as “game theory.” 7 Ibid


and the market economy was born. The enclosure movement stood as the single greatest

advance in agriculture since the invention of irrigation.

Enclosing land did not come without controversy, however, as the process

required the eviction of tenant subsistence farmers. Evicted tenants resisted fiercely all

across Europe. The 16th Century saw several large-scale enclosure riots throughout

England. Huge numbers of peasants were reduced from subsistence farming to abject

poverty as fences were built to keep them off of what was once open land. Peasants were

forced to move to cities and the urban working poor grew at astounding rates. Moreover,

despite the effort to more effectively steward land use, ecological collapse was actually

encouraged in some areas, as the lushly forested regions of Lucania, Italy and Alpujarra,

Spain were laid to waste. Their trees were harvested and their soil washed away from

flood. While this process sought to correct the improper usage of land, the strategy that

was used was not democratic in nature. Rather, the noble classes in Europe saw this as

an opportunity to amass tremendous estates. They lacked the agricultural experience

necessary to properly care for the land, and in some cases, treated the resource worse than

their common predecessors.8

The economic principles that this trend illustrates are applicable to modern

privatization efforts. It demonstrates that, while resource privatization tends to increase

productivity within an industry, it also tends to favor the captains of those industries. Or,

to speak in economic terms: while increasing efficiency, it tends to be less distributive

than other means of resource management.9 While privatization may mean there is more

wealth to go around, all too often, very little of that wealth is actually shared with those

seeking it. This example also serves to demonstrate that, while privatization can often

mean a single individual dedicated to the administration of a finite resource, it does not

8 Ibid 9 Paul Cook and Colin Kirkpatrick, “Summary of The Distributional Impact of Privatization in Developing Countries,” in The Political Economy of Inequality, ed. Frank Ackerman (Washington, D.C.: Island Press, 2000), 320-323.


mandate this result. When it is not in the interest of the owner of a resource to administer

it responsibly, the ecological consequences can be disastrous.

Privatization Efforts in the 21st Century Globalization has brought about never before seen opportunities for privatization.

Increasing demand in the developing world,

innovation in science, and new ways of

thinking about economics have brought the

prospect of privatization to resources never

useful to transnational trade, including such commodities as water, air, and living

organisms. To be sure, there are commodification debates occurring regarding every

industry and useful substance on earth. Most of these debates, however, regard scope and

manner of commodification, and have therefore been overlooked for this study. Rather,

this discussion will focus on resources which a) remain largely in the public sector or b)

whose role as a commodity has not become deeply engrained by tradition in the world

economy. While little controversy exists over whether oil is to remain privatized, much

controversy exists over whether genomic structures are to be brought into the commercial

marketplace

Water Growing world population, expanding industry, and rising standards of living have

increased demand for water around the world. In industrialized parts of Africa and Asia

the demand for water is growing at twice the population growth rate.10 By UN estimate,

1.1 billion people do not have access to clean water and 1 in 3 people throughout the

world, some 2.6 billion, do not have any access to “any kind of toilet or latrine.”11 The

need to improve water service around the world is undeniable. Water is, however, an

exceptional resource.

10 Mitch Potter, “Water Edict ‘Toothless,’ Critics Say,” The Toronto Star, March 23, 2000, News Section 11 Elizabeth Malkin, “At World Forum, Support Erodes for Private Management of Water,” The New York Times, March 20, 2006, Section A; Column 1; Foreign Desk; Pg. 11.

Globalization: Development of extensive worldwide patterns of economic relationships between nations. Source: www.investorwiz.com/glossary.htm


Degrees of Government Control on Water Delivery, Descending from Most Control to Least Control

Conventional government agency

Administrative unit of government, established by the executive branch of government.

Performance-based organization

Government agencies, in which agency officials are rewarded on the basis of performance.

Government corporation

Owned by the government, but intended to be entrepreneurial. It acts much like private corporations and is freed from many restrictions imposed on government agencies.

Service contract A contract for the maintenance of a specific service by a private entity

Management contract The government pays a private operator to manage facilities, yet retains much of the operating risks.

Lease contract A private operator pays a fee to the government for the right to manage the facility and takes some of the operating risks.

Build-operate-transfer (BOT) arrangement

A private entity builds, owns and operates a facility, then transfers ownership to the government at the end of a specified period.

Concession

A private entity takes over the management of a facility or a state-owned enterprise for a given period during which it also assumes significant investment and operational risks.

Partial privatization/divestiture

The government transfers part of the equity in the state owned company to private entities (operators, institutional investors). The private stake may or may not imply private management of the facility.

Full privatization/divestiture

The government structures a public service as a state-owned company and transfers 100% of the equity in the state-owned company to private owners.

Reproduced verbatim from: Limits to Privatization, ed. Ernst Ulrich von Weizsäcker and others (Earthscan: Sterling, VA)

Accepting the premise that privatization schemes tend to be more efficient but less

distributive of wealth, the case of water presents challenges, as water must be delivered

both efficiently and

cheaply in order to be

valuable. To emphasize

either of these qualities

over the other is to

disregard important

realities the water crisis.

Thus it is irrational to

approach this discussion

from an ideological

standpoint. The

complexity of the world

water crisis must be

solved dispassionately

through practical means,

calling upon the resources

of both the public and

private sector.

With few

exceptions water has not

been commodified in the classic sense. Rather, it is water delivery and sanitation systems

have undergone privatization, as the mechanism by which individuals gain access to this

resource has been altered from “public good” to “commercial good.” The introduction of

the profit motive to water delivery is the primary factor which distinguishes a privatized

system from a non-privatized system.

Water privatization occurs in varying degrees. The most extreme form of


privatization schemes is the British model, in which the water supply system was sold in

its entirety to private water companies.12 Few nations have followed this model since.

Generally, modern water privatization schemes rely on a mix of government and private

ownership, known as Public-Private Partnerships (PPP). Most PPP schemes employ

private management and human resources, while retaining government ownership of

assets. The success of PPPs often depends on the degree to which they are able to adapt

and change in order to suit local realities. It is frequently the case that what works in one

location is an utter failure in another, thus, no one mix of private and public can be said to

have a distinct advantage over any other. These arrangements need to be implemented in

a form that specifically addresses the needs of the given situation.

Recent Developments in Water Privatization The year 2000 was a

critical year for water

privatization, as two events that

year absolutely changed the tone

of the water privatization debate.

First, was arguably the worst

failure of a water privatization

scheme in history. In 1999,

under pressure from the

International Monetary Fund

(IMF) and World Bank, Bolivia

privatized the water supply of

its third largest city,

Cochabamba, in a closed door,

12 David A. McDonald and Greg Ruiters, “Theorizing Water Privatization in Southern Africa,” The Age of Commodity: Water Privatization in Southern Africa, ed. David A. McDonald and Greg Ruiters (Sterling, VA: Earthscan, 1987), 13-42.

Bolivia


no-bid contract negotiation. The buyer was a subsidiary of the San Francisco, USA based

Bechtel corporation. By January of the next year water prices had begun to rise by more

than 200 per cent, consuming as much as a quarter of the annual income of

Cochabambans. 13 By provision of the legislation accompanying the privatization

contract, Cochabambans could also be charged for water drawn from their own wells or

rain water gathered in rooftop cisterns. In every possible sense, water had been

privatized and commodified. Protests filled the streets and soon turned to riots. Police

intervened and six demonstrators were killed, and hundreds were injured. Bechtel was

driven from the nation.

As protests raged and tear gas flowed in the streets of Cochabamba, an event of a

strikingly different nature was occurring in The Hague: the Second World Water Forum.

There, representatives of industry, government, and civil society met to discuss the future

of world water supply. At this forum, the World Commission on Water in the 21st

Century, a group formed jointly by the United Nations and the World Bank under the

authority of the World Water Council, issued its groundbreaking report, calling for

rethinking of a number of water-related issues:14 • A holistic, systemic approach relying on Integrated Water Resource Management (IWRM)

must replace the fragmentation that currently exists in managing water; • Participatory institutional mechanisms must be put in place to involve all sectors of society in

decision making; • Fresh water must be recognized as a scarce commodity and managed accordingly; • Fresh water must be recognized as a basic need and adequate access to it must be ensured for

the poor; • Incentives for resource mobilization and technology change are needed.15

It is difficult to overstress the importance of the final point: “Incentives for resource

mobilization” necessarily means a degree of privatization. The report goes on to note:

13 Maude Barlow and Tony Clarke, “The Struggle for Latin America’s Water,” NACLA Report on the Americas 40, no. 1 (July/Aug 2004): 17. 14 Asit K, Biswas, “Introduction,” in Water Pricing and the Public-Private Partnership, ed. Asit K, Biswas and Cecilia Tortajada (New York, Routledge, 2005). 15 “Report of the World Commission on Water,” International Journal of Water Resources Development 16, no. 3 (Sept 2000): 289-320.


Free water leads to wasted water.... The situation is clear: without full-cost pricing the present vicious cycle of waste, inefficiency and lack of service for the poor will continue. There will be little investment from the private sector, services will be of poor quality and rationed, there will be little left for investing in water quality and other environmental improvement.16

As the World Water Forum deliberated, unrest was continuing in Cochabamba. On 22

March 2000, as the conference reached its final day and the delegates prepared to leave,

La Coordinadora, the main protest organizing group in Cochabamba, held an informal

referendum of 50,000 local residents. Ninety-six per cent voted that Bechtel leave

Bolivia and that water be returned to the public trust.

Cochabamba has come to serve as a potent example for the anti-privatization

movement and has been a major factor in the framing of the privatization debate in the

past six years. In many ways, however, Cochabamba remains an exceptional case.

Indeed, one needs look no further than the Bolivian capital, La Paz, just 150 miles away

to find one of the mot successful water privatization schemes in recent history.

In 1990, the World Bank agreed to finance a water delivery infrastructure building

project for the city of La Paz. By 1997, the plan was two years behind schedule and the

Bank demanded that the water infrastructure be privatized in return for an extension on

repayment.17 The Bolivian government, after an open bidding process, sold its water

treatment and delivery rights to Aguas del Illimani S.A. (AISA), a multinational

corporation 59 per cent owned by the French Suez Company—the largest water delivery

and treatment corporation in the world. In their first three years of operation AISA

delivered 71,000 new water connections, 63 per cent of which were supplied to the

poorest districts of El Alto, an impoverished suburb of La Paz. In the area of sewage

service, AISA consistently and vastly exceeded its contractual obligations, as ninety per

cent of La Paz residents now have access to a toilet. These gains are three times what the

public Bolivian water company accomplished in a comparable period.18

16 Ibid 17 Ralf Südhoff, “Solving Water-Supply Problems in Bolivia: Beyond Cochabamba,” in Limits to Privatization, ed. Ernst Ulrich von Weizsäcker and others (Earthscan: Sterling, VA, 2005), 21. 18 Ibid.


What is truly important about the La Paz case is not the number of connections

they managed to produce, but instead the fact that these connections were delivered in an

equitable fashion, achieved through a three-tiered approach. First, was a contractual

obligation to deliver water to the poorest districts and an independent regulatory board to

enforce it. Second was the choice to cap the price of water for the first five years of

operation. Rather than following the standard model for contract bidding wherein the

contract is given to whichever corporation promises the lowest price, who, incidentally,

may or may not be able to deliver, the Bolivian government set its own price for water

and gave the contract to the corporation that was willing to make the largest financial

investment in development and, as such, stood the greatest chance of delivering water at

the set price. The third method employed in La Paz to ensure equitability was a

restructuring of the pricing system. The state owned water delivery firm had arbitrarily

assumed at least ten cubic meters per month of water usage per connection, and charged

accordingly. AISA ended this practice, charging only for water actually consumed,

notably averaging just eight cubic meters in the poorer districts. 19 As argued in the 2000

report of the World Water Commission, impoverished people were thriftier and

consumed less water. As a result of these equity measures, the average price of water in

La Paz rose 38 per cent in the first three years of AISA operation, but about a third of

residents saw the cost of water decrease.20 By careful management, Bolivia was able to

overcome the classic problem conflict of efficiency and equity.

These examples offer evidence that efforts to privatize resources are not a

guaranteed success. Private sector participation may be a very useful tool for bringing

water to thirsty people of the world, but it can also result in exorbitant and inequitable

pricing. It is essential that the private sector engage the public with sensitivity because,

as we have seen, the failure to do so can be disastrous. Water cannot be treated as a

19 Ibid. 20 Ibid.


commodity like any other, as it an essential of life. When water is taken out of the

commons, it presents unique issues unparalleled by any other resource.

Species Privatization In 1980, the United States Supreme Court made a ruling that altered the nature of

biological research throughout the world. In the case of Diamond v. Chakabarty, 447

U.S. 303 (1980), the court ruled that a bacteria produced by a General Electric scientist

through genetic engineering was patentable. Seven years later, the United States Patent

Office decreed that higher forms of life were patentable, so long as they were original

creations. The following year, they issued their first such patent on creature called

OncoMouse—a mouse genetically engineered to be more susceptible to cancer in order to

test potentially carcinogenic materials.21 With that, the door was open to a new era of

genetic patenting.

At present, patent law extends far beyond genetically modified creations, as an

individual gene may be claimed as the intellectual property of the first individual that

isolates it.22 This has led to a new form of business known as “genetic prospecting,” or,

to be more critical, “biopiracy.” This practice is controversial to say the least.

More than 10,000 human genes and gene fragments have been patented by Incyte

Genomics and Celera.23 Around a fifth of all human genes are now patented.24 Like gold

prospectors of old, gene prospectors travel to remote areas seeking out potentially

valuable genes. In 1995, American scientists discovered that the Panamanian Guaymi

Indian tribe possessed a natural immunity to the virus HTLV-II, a virus similar to HIV.

21 Andrew Christie, “Earning the right to own a species; Environmental and industrial interests make an unlikely alliance against Europe's first patent for a genetically engineered plant.” The Independent (London), April 16, 1990, p. 15. 22 The Sunday Times “Human DNA has become a commodity,” The Australian, June 6, 1995. 23 Jonathan King and Doreen Stabinsky, “Life Patents Undermine the Exchange of Technology and Scientific Ideas,” in Rights and Liberties in the Biotech Age: 49. 24 Kate Ravilious, “Science: Private companies own human gene patents,” The Guardian (London), October, 14, 2005, pg. 11.


The blood cell line of the Guaymi Indians has now been patented in the United States.25

The same fate has been met by the Hagahai people of Papua New Guinea.26

In a high profile case in 1994, biotech corporation Myriad Genetics patented two

genes linked to breast cancer (BRCA1 and BRCA2), despite having had only a minimal

role in the isolation of those genes.27 After Myriad established its patent in Canada in

2001, Canadian public agencies which had been providing screening for the BRCA2 gene

free of charge, were ordered to end that practice. Myriad claimed that it alone had the

legal right to perform the screening and was demanding $3,850 per test to do so. After

two years of halted tests, the health services of British Colombia and Ontario instructed

doctors to resume testing, preferring to settle the matter in court. To date, the matter has

not been resolved.28

Under the European Patent Convention (EPC) a patent granted by the European

Patent Office (EPO) is binding to all 25 members of the European Union. Such a patent

must be for an original, useful, and “non-obvious” idea. Article 53 of the EPC holds that

“European patents shall not be granted in respect of ... plant or animal varieties or

essentially biological processes for the production of plants or animals; this provision

does not apply to microbiological processes or the products thereof.” 29 Through

extensive interpretation and legal wrangling, the EPO almost entirely rewrote this

language. By its plain meaning, the language allows for patenting of sub-cellular

structures such as genes, as well as any single-celled organism, and, significantly, a

single cell of any higher organism. By jurisprudential extension, the word “variety” was

extended to something its authors never could have anticipated. A species, the EPO ruled,

is more specific than a variety. For that reason, between 1983 and 1995 individual plant

25 “Human DNA has become a commodity.” 26 Teresa Riordan, “Recent patent on a Papua New Guinea tribe's cell line prompts outrage and charges of 'biopiracy.'” New York Times, November 27, 1995, sec D-2. 27 Albright, 33. 28 Karen van Kampen, “Owning the Code,” Financial Post Business Magazine, September 1, 2005, p. 56. 29 Qtd in Geertrui Van Overwalle, “Biotechnology patents in Europe: from law to ethics,” in Biotechnology, Patents, and Morality, ed. Sigrid Sterckx (Ashgate, Burlington USA, 2000): 197-206.


species were subject to patenting in the EU.30 In 1995, the patentability of whole plants

was repudiated by the EPO. At present, a plant patent may be valid only if a) the plant is

an original creation under the 1961 Convention for the Protection of New Varieties of

Plants; b) the patent refers only to a single cell of the plant; or c) the patent refers only to

the genetic line of the plant. Also, the technical process by which new species of plant

may be synthesized is unquestionably subject to patenting.

One factor has turned genetic patenting from a western legal curiosity to an

international issue with serious implications for development. On 1 January 1995, the

members of the World Trade Organization (WTO) signed the Agreement on Trade-

Related Aspects of Intellectual Property Rights (TRIPS), a multilateral agreement that

requires its participants to enact strict intellectual property laws.31 Ratification of the

TRIPS agreement is required for membership in the WTO. TRIPS made two important

changes to the nature of genetic patents. First, Article 27.3 (b) required that all

participating nations make microorganisms, microbiological processes, and “plant

varieties” patentable. Second, Articles 1.3 and 3.1 mandate that each participating state

extend intellectual property protection to foreign nationals. 32 Strictly speaking, TRIPS

does not amount to an international patent, but it does allow individuals and corporations

to enforce their intellectual property rights through legal means.

Genetic patents are a double-edged sword. Some argue biotechnology companies

are less likely to do important genetic research if they cannot be assured a profit for their

work, and that this opportunity for profit actually serves to encourage the development of

medical technology. Others, such as leading anti-privatization activist Jeremy Rifkin of

the Foundation for Economic Trends, argue that no entity should be permitted to own

something that is the product of millions of years of evolution—not an invention by any

stretch of the imagination. Rifkin and his allies argue that genetic patents slow science 30 Ibid. 31 Vandana Shiva and Ruth Brand, “The Fight Against Patents on the Neem Tree,” in Limits to Privatization, ed. Ernst Ulrich von Weizsäcker and others (Earthscan: Sterling, VA, 2005): 51-54. 32 World Trade Organization , “URUGUAY ROUND AGREEMENT: TRIPS,” http://www.wto.org/english/docs_e/legal_e/27-trips_03_e.htm (accessed April 26, 2006).


by making resources overly costly or unavailable. Reportedly, in 2002, US labs ceased

test for the disease haemochromatosis due to the cost of paying genetic royalties.33 In a

2003 survey, 25 per cent of U.S. genetic testing laboratories reported having to conclude

one or more tests due to genetic patents. Fifty-three per cent reported that they had

chosen to avoid developing tests due to genetic patents. Rifkin argues that while patents

encourage new discovery in the pharmaceutical field, that they are actually restrictive in

the provision of medical care.

This is, at its heart, the classic conflict between market efficiency and equity. It is

possible that the granting of genetic patents will cause the biotech industry to be more

efficient and productive, but it is also possible that such patents will result in a less

distributive market. In terms of genes, a less distributive market means limiting access to

research data and the results of that research. It is also true that, like the above case of

Lucania, Italy and Alpujarra, Spain during the enclosure movement, it may not be in the

interest of patent holders to administer genetic resources responsibly.

Crop Privatization and the Problem of Sustainability Assuredly, gene privatization has been most impactful in the area of crops.

Biotech companies such as American giant Monsanto have created genetic modification

(GM) and enhanced plants that, under the TRIPS agreement, only they have the right to

dispense. As of 2001, Monsanto controlled more than 90 per cent of GM seeds planted

around the world. The genetic makeup of these plants is the intellectual property of

Monsanto, and farmers may only use through a lease contract. “Increasingly,” writes

Hope Shand in Rights and Liberties in the Biotech Age “the seed industry provides

proprietary seed to farmers under contractual agreements that prohibit the farmer from

saving, reusing, or selling any of the harvested crop seed.”34 Monsanto sees itself as

leasing genes, rather than selling seeds. As a result, farmers are forced to return to 33 Fred Pierce, “It isn’t yours,” New Scientist, 173, no. 2329 (2002): 15. 34 “Hope Shand, “New Enclosures: Why Civil Society and Government Should Look Beyond Life Patents,” in Rights and Liberties in the Biotech Age, ed. Sheldon Krimsky and Peter Shorett (New York: Rowman & Littlefield Publishers, 2005): 44.


Monsanto every year for new seeds, rather than planting save-seed from the previous

season.

In a high profile case in 1998, Percy Schmeiser, a private farmer in Saskatchewan,

Canada was sued by Monsanto for illegally planting a RoundUp Ready canola.35 The

GM crops of his neighbors had pollinated his crop, and produced RoundUp Ready seeds,

which were replanted the next season. The cross-pollinated crops were reported to

Monsanto by Schmeiser’s neighbors, who came to collect samples. The supreme court of

Canada sided with Schmeiser but upheld the patent. Schmeiser is one of at least 475

farmers known to have been sued by Monsanto.36

To be sure, the GM food industry is still in its infancy, and it has managed to

sustain itself largely through investment rather than profit.37 In order for the industry to

truly develop and innovate, it must carefully guard profits in the short-term. Regardless,

the tactics employed by the biotech industry have repeatedly exceeded accepted norms of

business.

Undoubtedly, the most controversial of the tactics contemplated by the biotech

industry is the use of Genetic Use Restriction Technologies (GURTs) or “Terminator”

technology as it is more commonly known. Terminator technology, despite having never

been commercially released, has caused a firestorm of controversy and international

protest, as it seeks to circumvent the costly process of intellectual property enforcement

by making it biologically impossible to replant patented crops. Terminator technology

relies on a genetic switch for fertility, which is turned on and off through the external

application of chemicals.38 Any plant bearing the terminator gene will not produce seeds

unless chemically treated to do so. A plant equipped with the terminator gene could not

possibly have brought about the Schmeiser case discussed above. Strategies such as this

have cause discomfort for those seeking worldwide agricultural development. 35 Mark Thornton, “Seeds of Destruction,” Courier Mail (Queensland, Australia), June 23, 2001, p. 31. 36 Anuradha Mittal and Peter Rosset, “Genetic Engineering and the Privatization of Seeds,” Dollars and Sense 234 (March/April 2001): 24-27. 37 Albright, 32. 38 Shand, 42


On 3 June 1992, the tone of the gene privatization debate was permanently altered,

when the historic United Nations Conference on Environment and Development

(UNCED) or “Earth Summit” convened in Rio de Janeiro, Brazil. This conference saw

the adoption of two agreements with serious implication for life patents. The Convention

on Biological Diversity (CBD) was signed by 168 nations including all major centers of

genetic research, and is aimed at preventing developed states from pirating the genetic

resource of developing states. “Recognizing the sovereign rights of States over their

natural resources, the authority to determine access to genetic resources rests with the

national governments and is subject to national legislation.”39 This provision instantly

turned genes from an open access resource to a government-owned resource.

Unfortunately, this has had some unintended consequences as cash-strapped nations often

sell bioprospecting rights to corporations willing to pay for them, excluding all other

scientists.40

Arguably the greatest success of the CBD is a 1994 agreement brokered by its

Intergovernmental Committee.41 Under this agreement, more than 600,000 unique seed

samples stored in 12 genebanks around the world have been inventoried and entered into

public trust under the administration of the UN Food and Agriculture Organization

(FAO), and are immune from intellectual property rights claims.42 This agreement has

increasingly become the model for defending against biopiracy.

The second achievement of the Rio Earth Summit with special relevance to this

discussion was the adoption of Agenda 21 on sustainable development.43 Agenda 21 has

come to be seen as one of the principle documents addressing development of the past 50

39 Convention on Biological Diversity, Article 15.1, http://www.biodiv.org/convention/articles.asp?lg=0&a=cbd-15 (accessed April 26, 2006). 40 Pierce, 15. 41 Geoff Tansey, “Free access to plant genetic resources assured,” Financial Times (London), July 5, 1994, Commodities and Agriculture, p. 34. 42 UN Food and Agriculture Organization, “SD Dimensions,” February 1998, http://www.fao.org/sd/epdirect/EPre0041.htm (accessed April 26, 2006). 43 United Nations, “Earth Summit,” May 23, 1997, http://www.un.org/geninfo/bp/envirp2.html (accessed April 26, 2006)


years, as it lays out the basic principle agriculture should be sustainable. In a framework

of sustainability, agricultural processes should neither cause dependence nor deplete the

ecosystem within which they operate. Save-seed farming, in many ways, is the

quintessential example of sustainable agriculture. The role which genetic patents have

played in jeopardizing this system raises enormous concerns for the United Nations.

The drive for sustainable development in many ways defines the economic vision

of the United Nations for the 21st Century, and is a philosophy that encompasses both

economics and ecology. “Sustainable development,” declared the oft-quoted Brundtland

Report, “is development that

meets the needs of the

present without

compromising the ability of

future generations to meet

their own needs.” 44 The

economic side of sustainability focuses on reducing dependence and developing

communities capable of providing for themselves. A sustainable community should not

be reliant upon continuous charitable donations and should produce enough to support

consumption. The better known ecological side of sustainable development seeks to

preserve environmental resources for future use.

Crop species privatization is seen by many as directly counteracting sustainability

goals on both the economic and ecological fronts. By putting an end to save-seed

farming, the hallmark of a sustainable agriculture, biotechnology corporations cause

farmers to become dependent upon the continued sale of GM seeds. The communities

which rely upon these seeds are vulnerable to market fluctuations. Additionally,

reinvesting in new seed every year depletes the financial resources of farmers. As a

consequence, farmers are forced to maximize the profitability of every harvest, often

44 “Our Common Future,” Report of the World Commission on Environment and Development, GA A/42/427: 1987.

Sustainable Development: Development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It contains within it two key concepts: the concept of "needs", in particular the essential needs of the world's poor, to which overriding priority should be given; and the idea of limitations imposed by the state of technology and social organization on the environment's ability to meet present and the future needs. (Brundtland Commission, 1987). Source: www.unisdr.org/eng/library/lib-terminology-eng%20home.htm


resulting in single crop farming, which depletes soil. It is evident that crop privatization

has ecological as well as economic consequences.

Emissions Credits In 1977 the United States attempted a radical experiment in climate regulation. It

is what is known as “emissions credits” or “emissions trading,” and it represented a

complete overhaul of pollution control.45 Emissions trading is an example of a market

based incentive (MBI) for environmental improvement, and begins by capping the total

amount of any given pollutant that can be released into the atmosphere. Individual

polluters are then given credits, which allow them to dispose of a set amount of the given

pollutant, and those polluters who are able to operate a lower emission levels may sell

their remaining credits for a profit, sometimes described as a “negative commodity.”

While classical commodities refer to the right to exploit a resource by gathering raw

materials, pollution credits give the private right to exploit a resource by disposing of

processed materials.

Emission crediting is a cost saving technique more than it is a technique for

achieving ecological harmony. Prior to the introduction of the “cap and trade” system,

functionally all regulations on emissions fell into the category of “command and control,”

(CAC) or a standards system as it is often known, meaning the imposition of direct

limitations and regulations on emission levels, regardless of the costs. The cap-and-trade

system seeks to reduce the overall level of pollution, while allowing for market flexibility.

Polluters with lower abatement costs are able to bring emissions bellow their cap, and

excess credits can be sold to polluters with higher abatement costs, thereby rewarding

those who reduce pollution and punishing those who do not. In theory, while the total

reduction in pollution is the same or greater overall as in a standards system, costs are

reduced all around. This would seem to suggest that emissions trading is a universally

advantageous arrangement. Elegant as this model may be, real world practicality may be

45 Bernd Hansjürgens, “Introduction,” in Emissions Trading for Climate Policy: US and European Perspectives, ed. Bernd Hansjürgens (New York, Cambridge University Press, 2005): 7.


something of a different story. Much like the water privatization debate above, the devil

it would seem is in the details.

There is no dispute that emissions trading, when executed competently, is more

cost effective than a CAC. The cost of CAC systems may be as much as 24 times that of

a MBI system for the same pollutant.46 It is estimated that the famed US Acid Rain

Program to regulate sulfur dioxide saves between $225 million and $375 million per

year.47 This should come as no surprise because, as noted above, emissions trading is

primarily a cost cutting measure, not a measure for environmental improvement.

Although, it is important to note, emissions trading owes its popularity to the belief that it

abates cost while delivering ecological improvement equal to or better than that delivered

by CAC systems. Whether or not emissions trading achieves its environmental goal

seems to be a matter of some dispute, highly dependent upon the pollutant in question.

The critical flaw in many emissions trading systems is that they fail to account for

discrepancies in location. If one factory shifts a large portion of its emissions to a factory

next door, the net environmental impact is zero when compared to a CAC system and the

net financial impact, as has been shown, is positive. However, if emissions are shifted to

a distant location—particularly one with a pre-existing environmental damage or one

more densely populated—the environmental impact may be severe. Thus, for pollutants

such as Mercury or sulfur dioxide, emissions trading creates “hot spots” where

environmental conditions are actually worsened when compared to a standards system.48

There may even be a correlation between abatement costs and the ecological vulnerability.

Large cities, for instance, suffer from higher abatement costs but are also most vulnerable

to certain pollutants due to poor air quality and high population density. Although both

costs and emissions may be reduced overall, a few communities may be forced to bear a

disproportionately large amount of the ecological burden.

46 Peter Berck and Gloria E. Helfand, “The Case of Markets versus Standards for Pollution Policy,” Natural Resources Journal 45 no. 2 (2005): 352. 47 Ibid. 48 Ibid, 354.


Significantly, it is only certain pollutants that are capable of creating pollution hot

spots. Green house gasses (GHGs), for instance, have the same ecological impact

regardless of where they are released, and as a result, GHGs such as carbon dioxide make

ideal candidates for emissions trading systems. As we shall see, carbon trading markets

have grown to be the centerpiece for environmental regulation in the 21st Century.

Some argue that regardless of the efficacy it is morally inexcusable to remove air

from the public trust. Economist Tom Tietenberg, for instance, notes that the following

criteria must be met before property rights can be ethically applied to any good or service: 1. Exclusivity-All benefits and costs accrued as a result of owning and using the resources should accrue to the owner, and only to the owner, either directly or indirectly by sale to others. 2. Transferability -All property rights should be transferable from one owner to another in a voluntary exchange. 3. Enforceability -Property rights should be secure from involuntary encroachment by others.49

Needless to say, air does not meet these criteria; the costs and benefits of using the

atmosphere apply to all people, not emission credit holders exclusively. As such,

Tietenberg argues decisions about atmospheric usage must be made collectively. This

argument is easily sidestepped, however, by defining emissions credits as licensure for

conduct, rather than a deed of ownership over a parcel of air. Still, others take moral

exception to the notion of emissions trading. Steven Kelman, a professor at Harvard

University’s Kennedy School of Government, argues that, “one may oppose the effort to

place a price on a non-market thing and, in effect, incorporate it into the market system

out of fear that the very act of doing so will reduce the things perceived value. To place a

price of pollution, and hence environmental quality, may reduce the perceived value of

environmental quality.”50 Kelman goes on to compare the potential devaluation of the

environment subjected to market mechanisms to prostitution. Earlier, Kelman frames the

debate by quoting from interviews with several skeptical environmentalists51:

49 Ibid, 363-364. 50 Steven Kelman, “Economists and the Environmental Muddle,” Public Interest 64 (Summer 1981): 118. 51 It should be noted that even Kelman’s report makes no pretension to the idea that MBIs are opposed by a majority of environmentalists. By his own polling, 32 per cent of environmentalists favored MBIs while 37 per cent opposed them (p. 109). It should also be noted that these figures are now woefully out of date and should have little bearing when attempting to assess the efficacy of emissions trading.


When you have a manipulative approach like this, it isn’t a societally-stated goal to clean up rivers.... The demand for MBIs reflects the deep resentment people had at being called criminals. They wanted to put this on a businesslike basis. But I’m not ready to abandon that approach ... That’s a problem with the economic approach, that it doesn’t distinguish between willful and nonwillful ... These words are important in environmental policy.52

This may all seem too philosophical or linguistic to be the condensation point for a

world-wide environmental policy. Indeed, it is possible to become so greatly engrossed

in the ideological side of privatization that one forgets the exigencies of the global

economy.

Current Status

Water At the Fourth World Water Forum in March 2006, there was a noticeable change

in the tone of the discussion, as all the major participants had seemingly abandoned any

idea that the private sector could be a major player in water delivery.53 Even the World

Water Council, the business minded brainchild of the World Bank and UN whose

groundbreaking 2000 report transformed the water privatization debate, seemed to have

soured on privatization. “Let's finance infrastructure for the 50 countries most in need

and the twenty poorest megacities through a more intense donation policy,” said Council

president Loïc Fauchon in a dramatic policy shift.54

The great decade-long promise of the panacea of privatization has simply not

materialized. Private water companies have managed just a one per cent improvement in

water supply in the past ten years and public utilities continue to supply more than 90 per

cent of water in the developing world.55 Even the once shining example of privatization

done right—La Paz—had fallen from grace by the time the World Water Forum

convened. Gains in water supply have not kept pace and residents of the impoverished

suburb El Alto had begun to resist the presence of the Suez Corporation. The 52 Ibid, 113. 53 Elizabeth Malkin, “At World Forum, Support Erodes for Private Management of Water,” The New York Times, March 20, 2006, Section A; Column 1; Foreign Desk; Pg. 11. 54 Ibid. 55 Ibid.


government of Bolivia is currently in the process of negotiating a withdrawal of the water

conglomerate from the nation.

Although likely motivated by the political considerations, water supply

corporations seem to be in the process of cutting their losses. Beginning in 2003, the

Suez Corporation announced that it would decrease its exposure in the developing world

by a third, and decrease its investments by half.56 “Under all foreseeable conditions,”

writes Asit K. Biswas in 2005 “the vast majority of domestic urban consumers will

continue to receive their water ... from the publicly-run water companies for at least

another 15 years.” 57

This may be a sign that the great experiment in water privatization has ended.

However, this may be a simple case of a lack of political will. If water privatization is to

be made to work, it is the task of the U.N. to play a leadership role in revitalizing private

sector participation. Conversely, if the world community is finally ready to cast aside

water privatization as a development option, there is a major void to fill. In the absence

of private sector participation, there is no coherent plan for water-delivery infrastructure

development. Diminishing the role of either public or private sector participation

necessarily entails enhancing the role of the other.

Genes In 2002, a new trend of resistance to gene privatization began to emerge. The

vanguard of this movement has been India, a victim of some of the most obvious acts of

biopiracy in history. Indian grassroots movements as well as the Indian government have

recently successfully challenged patents on the neem tree and basmati rice, crops grown

traditionally for generations. The key to dismissing ownership rights on crops has been

demonstrating that a patent was granted for a non-novel creation. To this end, India has

established a database cataloguing traditional crops and their uses.

56 Biswas, 5. 57 .Ibid.


The late 1990s saw a flurry of international rulings and regulations striking against

life patents. In 2000, the United Nations approved a global moratorium on terminator

technology until the effects of it could be sufficiently understood, a regulation that

remains in effect. In 2004 the EPO revoked the patents of Myriad genetics on BRCA1

and BRCA2 breast cancer genes and significantly reduced the scope of two other similar

patents. Myriad commented that the loss of the European market was of little concern to

them, as most of their revenues came from the United States and Canada.58 Between

1998 and 2004, the EU maintained a moratorium on genetically modified foods, although

the motivation is disputable. In 2006, the WTO ruled that the moratorium had been a

violation of free trade agreements. GMO exporters are now free to seek financial

damages, but more importantly, have now been granted access to a large new market.59

Support for life patents has drastically decreased in the years following the Rio

Earth Summit. Most support for life patents now comes from within the biotech industry

and from the WTO. Undoubtedly, the political will to drastically alter the law regarding

genetic patents exists. All that remains to be seen is the leadership to make that will into

action.

Air Support for emissions trading has never been stronger. One of the most

momentous occasions in the history of intergovernmental cooperation took place on 16

February 2005 when the Kyoto Protocol entered into force, binding 164 participating

states to meet new emissions standards through a cap-and-trade carbon emissions market.

Under the Kyoto plan, regional groups form carbon markets, a radical and long-overdue

modification to national carbon trading markets. The most significant of these regional

groups is the European Union Emission Trading Scheme (EU ETS). Including all 25

members of the EU, the EU ETS is the largest emissions trading group in history. It has

brought with it the novel, if not dangerous new element of publicly traded credits 58 Karen van Kampen, supra. 59 The Toronto Star, “AgricultureGene-modified ban on foods,” May 12, 2006, p. E02


between buyers other than polluters. EU emission credits are now traded by brokers in

commodity exchanges throughout Europe, just like commodities such as oil or gold,

causing the European emissions market to be subject to market instabilities and

fluctuations, including a major crash in the price of credits in early 2006.

Canada’s experience with pollution illustrates the nature of emissions trading in

the 21st Century. Canada, although fully industrialized, has failed to implement an

emissions trading system, and a viable system is not expected to emerge until 2008.

Canadian businesses have proved impatient about the prospect of having to wait for

domestic investment opportunities when foreign opportunities are plentiful. Money has

begun to hemorrhage from Canada and into foreign carbon markets. Canada is estimated

to have lost up to $1 billion in revenue to the investment exodus.60

Whereas emissions trading was once a novel approach to a modern problem, it has

now become the standard for managing efficiency of climate control systems. For better

or worse, states that do not participate in the commodification of the atmosphere are

being left behind.

Key Positions

World Governments The issue of privatization is one that tends to split “first world” nations from

developing states. The United States and Western Europe are home to the largest biotech

companies as well as the largest water delivery companies in the world while less-

developed parts of the world are prone to exploitation.

Water privatization was conceived in Western Europe and, at present, the world’s

largest private water delivery company is headquartered in France. Water privatization

schemes are increasingly met with hostility in the developing world, as the more

60 Mike De Souza, “Ottawa blasted for Kyoto cash exodus: Millions lost as emission firms head overseas,” The Calgary Herald (Alberta), May 15, 2006, p. E1.


impoverished societies may find it difficult to meet whatever criteria a private company

may place on the access to water.

Inarguably, the strongest opponent of privatization has been the United States.

The United States is prone exercising its economic philosophy on the world through the

WTO, and the defense of intellectual property rights on genes more often than not

protects US citizens from oversees competition. The United States is also one of very

few nations to have failed to ratify the CBD.

Undoubtedly, the key opposition to the privatization of genes has been India and

Brazil. These powerful but largely agrarian nations possess the political capital to

challenge the United States as well as the economic motivation to do so.

Civil Society and International Organizations The two organizations famous for their tireless advocacy of privatization are the

IMF and the World Bank. The core function of both these organizations is to lend money

to developing nations, and both organizations often make the privatization of resources

and industries conditions of their loans. The World Bank and IMF see privatization as a

tool by which market efficiency can be improved thereby allowing them to recoup their

loans.

The WTO is the primary enforcer of intellectual property rights on genes. It is

through the authority of the WTO that genetic patents have become an international issue.

To be sure, there are a far greater number of civil society organizations working in

opposition to life patents than there are organizations working to support life patents.

The World Health Organization, for instance, said in their 2002 report Genomics and

World Health, “The current position regarding DNA patenting is retarding rather than

stimulating both scientific and economic progress. The monopolies awarded by patents

of genes as novel chemicals, therefore, are not in the public interest.”61

61 Shand, 42.


The movement for sustainable development in civil society is overwhelming.

Extremely well-known groups, such as OxFam International and the World Wildlife

Fund work to further the goal of a sustainable planet.

Industry Unsurprisingly, world industry has been highly favorable to the idea of

commodification. Giants such as Monsanto, Incyte, and Suez stand to profit enormously

from commodification of natural resources. Significantly though, there are major

differences between different businesses. The French water company Suez, for instance,

has made a stated commitment to sustainable development. Suez has remained flexible

and adaptive to local conditions, allowing them to thrive in a variety of situations. The

opposite end of this spectrum contains biotechnology firms such as Myriad, which

seldom gives any thought to elements of business other than profitability. As a result, the

world community has responded with hostility, revoking patents and disregarding those

in place. Myriad is likely to suffer financially as a result.

The world community has already chosen sustainable development as the way of

the future, as expressed through Kyoto, the CBD, and Agenda 21 of the Rio Earth

Summit. Those corporations willing and able to help knit a framework of sustainability

present an important asset to that goal. Those that insist on resisting this goal present a

serious challenge the UN and the world community.


Summary In modern era, there is seemingly nothing that cannot be bought and sold. This,

however, is a result of the fact that the world community has yet to stand together to form

a coherent policy on the scope of property rights. Oftentimes, while vesting control of a

resource in private hands has the effect of increasing market efficiency, it has the counter

effect of decreasing market equity. When the interests of only one individual need be

addressed resource privatization can have a beneficial ecological impact. All too often,

however, it is not in the interest of the owner of a resource to treat his or her property

responsibly. When this is the case, the result is a system of unsustainability and

ecological ruin. It is the goal of this committee that the later condition should be avoided.

While this brief discusses ownership of resources such as air and genetic

formations in some detail, the true debate is much larger. The discussion also includes

such public goods as fish stocks, coal, and even oil. The earth contains a tremendous

wealth of resources for which the only cost of exploitation is the means through which

the goods are extracted from the land. Whereas once these goods used to be owned by

the public, new economic paradigms are granting ownership rights of these commodities

and the land in which they are found to private companies, seeking profit and not

necessarily the broader good of community. History has shown that states are not

wealthy merely because they are home to tremendous oil or gold deposits, but instead,

achieve this richness through its ability to extract and market these goods. But as these

commodities are extracted and sold, the real challenge is where those monies are directed,

either to the private or public sectors.


Discussion Questions

• Where do property rights end and human rights begin? Do the two necessarily conflict?

• Why was Cochabamba such an unmitigated disaster? What could have been done

to prevent the failure of Bechtel?

• What makes genes different from any other chemical? Is it possible for biotechnology to flourish without the availability of biotech patents?

• What are the implications of increasing market efficiency in water supply? What

are the implications of increasing market equity in water supply? How might the two be reconciled?

• How are life patents related to the concept of sustainable development?

• Should biotech companies be permitted to use Terminator technology to defend

intellectual property rights? Could it be the case that opposition to Terminator technology is truly an expression of opposition to life patents?

• Is water privatization an effective means of resource management? If not, what

might take its place to allow for more efficient water delivery infrastructures?

• Under what circumstances does taking a resource out of the commons result in ecological destruction?

• Is there a relevant and substantive difference between emissions trading and

private ownership of the atmosphere?

• Assuming that there is an intrinsic human right to water, does it necessarily follow that there is an intrinsic right to free water? Water purification and delivery is a costly process, shouldn’t it be on a paid basis?

• How might Hardin’s tragedy of the commons be prevented if not through

privatization?


Works Cited Andrew Christie, “Earning the right to own a species; Environmental and industrial

interests make an unlikely alliance against Europe's first patent for a genetically engineered plant.” The Independent (London), April 16, 1990, p. 15.

Anuradha Mittal and Peter Rosset, “Genetic Engineering and the Privatization of Seeds,”

Dollars and Sense 234 (March/April 2001): 24-27. Chamber’s Encyclopedia, III, s.v. “commodity agreement.” 1959. Convention on Biological Diversity, Article 15.1,

http://www.biodiv.org/convention/articles.asp?lg=0&a=cbd-15 (accessed April 26, 2006).

David A. McDonald and Greg Ruiters, “Theorizing Water Privatization in Southern

Africa,” The Age of Commodity: Water Privatization in Southern Africa, ed. David A. McDonald and Greg Ruiters (Sterling, VA: Earthscan, 1987), 13-42.

Emissions Trading for Climate Policy: US and European Perspectives, ed. Bernd

Hansjürgens (New York, Cambridge University Press, 2005): 7. Elizabeth Malkin, “At World Forum, Support Erodes for Private Management of Water,”

The New York Times, March 20, 2006, Section A; Column 1; Foreign Desk; Pg. 11. Fred Pierce, “It isn’t yours,” New Scientist, 173, no. 2329 (2002): 15. Geertrui Van Overwalle, “Biotechnology patents in Europe: from law to ethics,” in

Biotechnology, Patents, and Morality, ed. Sigrid Sterckx (Ashgate, Burlington, USA, 2000): 197-206.

Geoff Tansey, “Free access to plant genetic resources assured,” Financial Times

(London), July 5, 1994, Commodities and Agriculture, p. 34. Karen van Kampen, “Owning the Code,” Financial Post Business Magazine, September

1, 2005, p. 56. Kate Ravilious, “Science: Private companies own human gene patents,” The Guardian

(London), October, 14, 2005, pg. 11.


Land Property and the Environment, ed. John F. Richards (Oakland, CA: ICS Press, 2002).

Limits to Privatization, ed. Ernst Ulrich von Weizsäcker and others (Earthscan: Sterling,

VA, 2005). Mark Thornton, “Seeds of Destruction,” Courier Mail (Queensland, Australia), June 23,

2001, p. 31. Matthew Albright, “Life Patents and Democratic Values,” in Rights and Liberties in the

Biotech Age, ed. Sheldon Krimsky and Peter Shorett (New York: Rowman & Littlefield Publishers, 2005).

Maude Barlow and Tony Clarke, “The Struggle for Latin America’s Water,” NACLA

Report on the Americas 40, no. 1 (July/Aug 2004): 17. Mike De Souza, “Ottawa blasted for Kyoto cash exodus: Millions lost as emission firms

head overseas,” The Calgary Herald (Alberta), May 15, 2006, p. E1. Mitch Potter, “Water Edict ‘Toothless,’ Critics Say,” The Toronto Star, March 23, 2000,

News Section. Paul Cook and Colin Kirkpatrick, “Summary of The Distributional Impact of

Privatization in Developing Countries,” in The Political Economy of Inequality, ed. Frank Ackerman (Washington, D.C.: Island Press, 2000), 320-323.

Peter Berck and Gloria E. Helfand, “The Case of Markets versus Standards for Pollution

Policy,” Natural Resources Journal 45 no. 2 (2005): 345-368. “Report of the World Commission on Water,” International Journal of Water Resources

Development 16, no. 3 (Sept 2000): 289-320. The Sunday Times “Human DNA has become a commodity,” The Australian, June 6,

1995. Steven Kelman, “Economists and the Environmental Muddle,” Public Interest 64

(Summer 1981): 106. Susan Strasser, “Boundaries of the Market,” in Commodifying Everything, ed. Susan

Strasser (New York: Routledge, 2003), 3.


Teresa Riordan, “Recent patent on a Papua New Guinea tribe's cell line prompts outrage and charges of 'biopiracy.'” New York Times, November 27, 1995, sec D-2.

The Toronto Star, “AgricultureGene-modified ban on foods,” May 12, 2006, p. E02 United Nations, “Earth Summit,” May 23, 1997,

http://www.un.org/geninfo/bp/envirp2.html (accessed April 26, 2006) UN Food and Agriculture Organization, “SD Dimensions,” February 1998,

http://www.fao.org/sd/epdirect/EPre0041.htm (accessed April 26, 2006).


Works Referenced The Corporation, dir. Jennifer Abbott and Mark Achbar, 2003. PBS, “Frontline World,” June, 2002,

http://www.pbs.org/frontlineworld/stories/bolivia/timeline.html (accessed April 5, 2006)

Garrett Hardin, "The Tragedy of the Commons," Science 162 (1968): 1243-1248.

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