Selling our water: Unethical, yet unstoppable?

Selling our water: Unethical, yet unstoppable?

Budi Widianarko, Head, Graduate School of Environment and Urban Studies,
Soegijapranata Catholic University, Semarang

Privatization has become a magical buzzword in the water
arena. Globally, in just a decade the number of consumers has
risen eightfold, from 51 million in 1990 to 460 million at
present. Many analysts have predicted that the trend of water
privatization will continue to accelerate. It is estimated in
2015 that more than 1 billion people will use "privatized water".

This is among the core issues at the ongoing third world water
forum from March 16 to March 23 in Kyoto, Japan.

This privatization option -- dubbed "public-private
partnership" -- has been promoted by water corporations as an
effective means for improving people's access to water.
Privatization is believed to be a capable weapon to combat the
weaknesses of existing public sector water undertakings (PWUs).
Generically, these are reckoned to be their lack of financial
capacity to expand systems as well as inefficiencies from
technical, financial and managerial aspects. Privatization is
thus believed to promise better and wider access to water.

Very sadly, in Indonesia these drawbacks are profoundly
believed, not only by municipal governments but also by PWU
administrators. Even if options for improving the performance of
a PWU are available or can still be explored, usually
privatization is chosen as the best and most immediate therapy.
One possible explanation for this attitude is the widespread
preference for instant solutions. This kind of attitude is
perfectly matched by the strong drive of transnational water
companies to expand their market.

This "perfect match" takes place in metropolitan areas where a
variety of problems related to water service provision are
prevalent. Shockingly enough, the same tendency is spreading to
smaller towns (thanks to decentralization?), many of which have
no significant problem with their water service provision.

The underlying principle of privatization is the market-based
mechanism, which basically consists of supply and demand, price
and profit. Viten, a Dutch water company sums it up perfectly in
its slogan "people-planet-profit". Once water is turned into a
commodity, the notion of ownership will prevail.

Claims over water ownership generate an ethical challenge.
However, there is already a generic counterargument to it. In
his article in Development Outreach (Fall 2002) the chief
executive officer of giant French water corporation Suez, Gerard
Mestrallet, wrote "water is a common good, one of the basic
public goods. At Suez, we are opposed to the private ownership of
water resources precisely because ... water is not a commodity.
We do not trade in water. We do not sell a product. We provide a
service. The service of making clean water continuously available
to all, and returning water to the natural habitat once it has
been treated. It is the price of that service that is billed, not
the price of water as raw material".

By pricing "only" the cleanup and distribution service, not
the water itself, the company seems to be paying ample respect to
water. However people have to pay for water: Water has a price.

The higher the profit margin incorporated into the price, the
greater the attractiveness of water pricing.

This is not to say that provision of water by PWUs is free
from pricing. As a subsystem of municipal and local governments,
PWUs should not include a maximized profit margin in the bill,
for it is a political responsibility of the (local) government to
secure its citizens' access to water.

The bill can duly be considered as the people's contribution
to government efforts to provide and distribute clean and safe
water. So, the notion of water pricing is less pronounced.

With privatization, water tariff hikes have taken place in
many countries. In terms of environmental ethics, giving a price
to water as a tradable good is clearly paradoxical, while access
to clean water is declared by the UN to be a human right.

Water is vital for the life of the biosphere. It can be found
across the levels of living beings, from simple cells to complex
ecosystems. Copious exchanges of water within the biosphere are
crucial to its maintenance, especially temperature control.
And, according to what is called the Gaia hypothesis (after the
Greek goddess of Earth) the Earth is a single, living organism
comprising, among other things, the atmosphere, oceans, the
climate, land and living creatures. Since water is the most
essential factor for the earth's survival it should be assigned
an intrinsic value.

By having an intrinsic value, environmental ethic experts say,
water would be valued beyond its utility. This is somehow
compatible to some traditional beliefs and religions in
Indonesia: Water is seen as the origin and posterity of all life,
spiritual blessing, and also as a healing substance (Tony Whitten
et al., Ecology of Java and Bali, 1996). Traditional communities
are well-equipped with local wisdom related to water rituals,
use, distribution and conservation.

Having been practiced for thousands of years this wisdom has
become a social norm largely obeyed by community members. In the
face of such a norm the pricing of water is incompatible.

In addition to the ethical problem, privatization of water
here also tends to trigger a social justice problem. With very
weak enforcement of environmental laws and regulations, various
acts of pollution -- particularly by industry -- can still occur
without any strict penalty be imposed.

There is thus an obvious risk of overcharging the ordinary
human user for the cost of purifying polluted water. It is
clearly unjust to charge an ordinary user solely based on the
volume of water, without subtracting the cost component for
cleaning up the contamination caused by others.

Without incorporating the "polluter pays" principle in the
formula, the calculation of cost recovery would be unjust. Costs
of purifying polluted water are thus borne by all users,
regardless of their responsibility for contaminating it.

Despite problems of ethics and justice, water privatization in
Indonesia seems unstoppable. Worse, the currently available draft
of the water resources law stresses commercialization. Now is the
time to seek the attention of the public, in order to prevent
unnecessary privatization of PWUs in their cities and towns.