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CORPORATE RAIDERS!Matthew Fox

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The global water crisis like many environmental concerns was not an issue to the masses until the 1980s except for one sector.

PRIVATE SECTOR (Global Corporations

Private Sector = Private, for profit!

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40 years ago: Only the elite drank bottled water Technologies were in their infancy Pipelines for water diversion did not exist Water services were delivered by state

owned public utilities Those living in the rural South relied on local

rivers, lakes and wells for their water

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The development of the water systems during the late nineteenth and early twentieth centuries in industrialized countries were public water , farming, and sanitation services.

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WHY? Public systems were allowed to take out long-term

loans at better rates than were available to the private sector.

The obvious benefit was that the savings from the loans were passed on to the public as lower rates.

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However, in many countries of the Global South, consumed by a growing poverty class and increasing public debt, the story was quite different and the public sector was ready to move into the water market for profit.

The costs of all aspects of water management are enormous

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By the 1990s, the "public model" for financing water projects CHANGED and the "private model" for financing water projects was favored.

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The frontrunners of this change at that time were the European private water companies.

Britain, under Margaret Thatcher, adopted water privatization in England (1989).

Soon, the United States, under Ronald Reagan, joined those favoring water privatization

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The "Washington Consensus" was soon adopted by:

the World Bank,

the International Monetary Fund, and shortly thereafter,

the United Nations.

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Disregarded at the time that after privatization was actually implemented:

Thousands of workers were laid off

Millions had their water cut off when they could not pay their water bills.

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During this period of time, the global South became ripe for the pickings by the Global North Carpetbaggers!

Poor countries owed money to the World Bank and were unable to pay. But, the World Bank agreed that it would renegotiate the loans IF: the countries undergo Structural Adjustment Programs that

required them to sell off public enterprises and utilities and privatize essential public services.

Water and sanitation services were immediately target

WHY?

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The structure of the World Bank is control of its decision making was done by a vote of its country members.

Voting power was proportional to the amount invested.

Control was vested in the United States, Japan, Germany, England, and France.

Which countries had corporations that wanted to wrestle control of the water system?

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A World Bank Article of Agreement actually states that a principal goal is the promotion of private investments

In 1993, the World Bank adopted the Water resources Management policy paper which noted: the unwillingness of the poor to pay for water services and

stated that water should be treated as an economic commodity, with an emphasis on efficient, financial discipline and full-cost recovery.

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Precedent was set for the proposition that: Corporations can set water prices high enough

to not only recover the cost of their investment, but to make profits for their investors.

The result: Loans for public projects were rejected in favor

of a private model. Between 1990 and 2006, the World Bank funded more than 300 private water projects in developing countries.

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There was a problem though in getting local acceptance of the privatization model:

It was necessary to involve the elite of the targeted country . . . And as a consequence there became local business involvement in the projects for their own financial gain.

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As Barlow points out:

"A great deal of work, money and planning has gone into acquiring the 'manufactured consent' of the global ruling class to water privatization." Barlow, Blue Covenant, p. 42

[The rich get richer!]

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The consensus of those reflecting on the past:

"Debt and poverty are not the problem. The main problem which degraded water services in the Third World is inefficient and corrupt governments whose failure to protect water, so as to reflect its true cost, has led to a culture of wastefulness among the masses." Barlow, Blue Covenant, p. 43

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THE CONSEQUENCE:

ACCEPT ONE OF THE MAJOR WATER CORPORATIONS OR GO WITHOUT FUNDING.

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The United Nations, in 1992, at its Dublin Conference, declared that water:

Has an "economic value" In all its "competing uses" and Should be recognized as an

"economic goal."

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Then came the World Trade Organization in 1995. The General Agreement on Tariffs and Trade (GATT)

found water was a "good" and as such, is subject to the rule that prohibits the use of export controls for any purposes. WATER COULD BE MOVED FREELY FROM ONE COUNTRY TO ANOTHER.

The General Agreement on Trade in Services (GATS) intended to allow for private competition in sectors once controlled exclusively by governments. GOVERNMENTS HAD NO EXCLUSIVITY TO WATER. (THIS INCLUDES ENVIRONMENTAL SERVICES, WASTEWATER TREATMENT, PURIFICATION SYSTEMS, CONSTRUCTION OF WATER PIPES, GROUNDWATER ASSESSMENT, IRRIGATION, AND WATER TRANSPORT SERVICES)

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A number of groups have popped up purporting to be the protectors of global water like:

World Water Council (but it is sponsored by the World Bank and the United Nations). Its policies may be biased.

AquaFed (a lobbying group for the Private Water Operations). Its policies may be biased.

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Conference after conference for years purportedly neutral in their ideologies but funded by global corporate conglomerates have been held.

The consensus always supported privatization.

NO SURPISE HERE!

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Big water companies provide water to over six hundred million people (10% of the world's population)

Of the four billion people who have water services (15% of those) have their water services provided by private big water operators.

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The World Water Forum refused to recognize water as a "human right", instead calling it a "human need."

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Even at the Third World Forum in Kyoto in March, 2003, the consensus was that the private sector should run the water systems of the global south and again the participants refused to recognize water as a "human right".

The Candessus Committee Report supported full-cost recovery for water projects and advocated the use of public funds to pay for the preparation of private contracts and tenders.

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PRIVATIZATION'S LEGACY: Corruption Sky high water rates Cutoffs of water to millions Reduced water quality Nepotism Pollution Worker layoffs Broken promises Led to foreign control of water Created monopolies

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While corporations argue that a favorable legacy would be assured is if for them to have access to public subsidies. This is the very thing (the dollar cost of water services) that they were supposed to have assumed.

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"The net contribution of 15 years of privatization has thus been to significantly reduce the funds available to poor countries for investment in water.”- David Hall and Emanuele Lobina, Pipe Dreams, The Failure of the Private Sector to Invest in Water Services in Developing Countiries (2006), citing in Maude Barlow, Blue Covenant (2007), p 59.

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Be careful, if it walks like a duck, and quacks like a duck . . . It is probably a duck.

The World Bank has tried to repackage and re-launch privatization under the softer guise of a public-private partnership.