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.