Water, a precious tradable commodity<\/p>\n
Henry Heyneardhi, Coordinator, Indonesian Forum on Globalization
\nResearcher, Business Watch Indonesia, Jakarta,
\nheyneardhi@watchbusiness.org<\/p>\n
The global trend in the water industry, predicted Fortune
\nmagazine in May 2000, was that \"Water promises to be to the 21st
\ncentury what oil was to the 20th: The precious commodity that
\ndetermines the wealth of nations\".<\/p>\n
Water, the report said, has became one of the biggest
\nbusinesses at a global level. The annual revenues of the water
\nindustry was estimated at that time by Fortune at some US$400
\nbillion, 40 percent of the oil sector and one-third larger than
\nthe pharmaceutical sector.<\/p>\n
The revenues are from only 5 percent of world's population
\nthat receive their water supplies from corporations. Thus the
\npotential for water market growth is very high, estimated in 1998
\nby the World Bank to grow to $800 billion; last year the Bank
\nrevised the projection to $1 trillion.<\/p>\n
Four transnational corporations (TNC) in the water industry --
\nRWE, Vivendi, Suez-Lyonnaise and Enron -- are in the Global
\nFortune 500, with Vivendi and Suez Lyonnaise as the market
\nleaders. Vivendi has 110 million customers worldwide, with annual
\nrevenue of more than 13 billion euros. Meanwhile, Suez Lyonnaise,
\nanother French-based TNC, generates 10 billion euros in annual
\nrevenues from its worldwide customers.<\/p>\n
Monsanto, a giant chemical TNC, also sees this emerging
\nmarket, and intends to expand its business to the water sector
\nstarting from India and Mexico, since both face water shortages.
\nMonsanto planned to earn revenues of $420 million and net income
\nof $63 million by 2008 from its water business in India and
\nMexico, wrote the environmentalist Vandana Shiva in 1999.<\/p>\n
Although these giant water TNCs are competing with one another
\nto create their share in the lucrative market, they are also
\npursuing the same goal: To establish a global water market where
\nwater can be treated as a commodity, sold and traded freely.<\/p>\n
\"Put water on sale, and let the market determine its future,\"
\nthey seem to say. This goal could be achieved by legitimizing the
\ntrade of water through free-trade instruments like GATS\/WTO.<\/p>\n
In terms of the free market, water supply is put into the same
\ncategory as education, healthcare, banking, tourism,
\ntransportation and waste management, and trade in it is governed
\nin the General Agreement on Trade in Services (GATS) 1994, which
\nis part of the World Trade Organization (WTO).<\/p>\n
GATS intends to liberalize the trade in services by lifting
\nall trade barriers, of which public ownership is one, and
\nrestraining national regulations.<\/p>\n
The agreement prohibits discrimination against a foreign
\nsupplier in all covered areas, notwithstanding the conditions
\nunder which services are provided and regardless of the human
\nrights or environmental record of the provider. Parties have also
\nagreed that some rules apply \"horizontally\", whether or not the
\narea has already been listed under GATS.<\/p>\n
One horizontal rule, one writer notes, is \"most-favored
\nnation,\" which says that once corporations from one country are
\noperating in your market, you must allow the corporations from
\nall countries in as well. This rule applies to all services, even
\nones still protected.<\/p>\n
In the water sector, GATS thus implies that all countries
\nshould open their market for water supply services without
\nreserve and transfer water management to the private sector. As
\nliberalization requires the confinement of the role of the state
\nto mere facilitator, the transfer of public ownership of water
\nservices to the private sector is a practical consequence.<\/p>\n
Proponents of GATS are very much convinced that water
\nprivatization and the institution of the global water market will
\nbenefit rich and the poor alike. But also, more and more civil
\nsociety organizations have become aware and voiced criticism and
\nobjections to water services being put under legally binding
\ntrade agreements like GATS. These criticisms and objections
\nconcern two main issues.<\/p>\n
First, as stated above, GATS is helping the private sector,
\nespecially giant water TNCs, to expand their operations all over
\nthe world. But from experience, water privatization creates many
\nnew problems. When corporations sell water for profit, the
\nquality, access and safety of water supplies are endangered and
\nthe future of water resources is threatened.<\/p>\n
These situations have arisen in Canada, Rio de Janeiro,
\nPanama, Jakarta, Trinidad and Tobago, Budapest. South Africa,
\nManila and Buenos Aires to mention a few.<\/p>\n
In 2000 the Bolivian government sold off the city's public
\nwater system to a U.S. water corporation. Soon, people of the
\nCochabamba area found out that price of water had increased
\ndramatically, a situation that had never occurred previously.<\/p>\n
Therefore, the Cochabambans joined in demonstrations against
\nwater privatization. The government was forced to return the
\ncity's water system to public control and kick out the private
\ncorporations, but not before one 17-year-old boy who had
\nparticipated in a demonstration was killed, and hundreds injured.<\/p>\n
The second issue concerns a very fundamental principle. Water
\nis undeniably an essential resource for every living being. Thus,
\ndecisions on this resource should be made democratically at the
\nlocal, national and global level, based on people's fundamental
\nright to safe and affordable water.<\/p>\n
We believe the institutions of WTO\/GATS are undemocratic,
\nunfair and unaccountable. GATS supporters say that the agreement
\nhas been negotiated by the governments. But the GATS terms were
\nnegotiated between a few powerful governments behind closed
\ndoors. And most governments were told to sign up to the done deal
\nor be left out of the trading system.<\/p>\n
Any policy on water should be discussed and debated
\ndemocratically so that ordinary people, indigenous communities,
\ncommunity-based organizations and all global citizens can
\nparticipate and voice their opinions and ideas.<\/p>\n
We should encourage our government not to make any commitments
\nregarding GATS before carrying out a comprehensive assessment of
\nits impact on our shared life.<\/p>\n
The assessment should then be followed by an extensive public
\ndiscussion and debate involving all citizens, in order to reach
\nparticipatory and responsive decisions. Therefore, indirectly, we
\nwould make our government accountable for its trade policies, and
\nhopefully in the end it could stand up to powerful governments
\nimposing water privatization in the GATS negotiating process.<\/p>",
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