Water privatization: Theft of the commons

by Jeff Conant

For much of the past two centuries, there has been a prevailing assumption in industrialized and industrializing societies that water and sanitation services should be delivered by public utilities, at  public or publicly subsidized cost, on the basis that these services met essential needs and promoted the public good. It was generally understood that their provision could not be left to profit-hungry  entrepreneurs, but was the responsibility of enlightened governments to prioritize taxpayer monies for water, sanitation, health care and education.

But, beginning in the 1990’s, following in the wake of a global wave of privatization and deregulation advanced by Ronald Reagan, Margaret Thatcher, and other Western leaders, this assumption no longer held true. As the 1990’s progressed, water utility privatization began to be imposed upon nations as a condition of structural adjustment and debt-relief packages. A handful of multi-national water utility companies, among them Suez, Veolia, Bechtel, and RWE-Thames, became aggressive players in the global market for water and sanitation service provision. The entrance of these corporations in the field of developing water infrastructure was accompanied by a set of ideological arguments dressed up as simple fact: Public services are inefficient, corrupt, and subject to political manipulation; therefore, the argument went, the private sector must take the helm.

Overnight, water was named Blue gold, the oil of the 21st century, and the likely cause of the next wars by Fortune Magazine and other  prophets of capital. Buy water, we were told, early and often. And the race to privatize our water reached a frenzied pace. Bolivia,  Argentina, Uruguay, Colombia, Tanzania, Ghana, South Africa, Indonesia, and other countries immediately felt the impact of  privatization; many fought back. In the U.S., Atlanta, New Orleans, Stockton, Indianapolis, Lexington, Buffalo, Milwaukee, and many other  cities have made deals with private water operators, most of which later went bad.

It became clear after many experiments with privatization that private companies, whose primary concern is to return profits to their shareholders, have little incentive to expand and improve access to potable water when large sectors of the population are  unable to pay market rates for piped water. The water privatization experiment imposed on the world during the last decade has resulted  in a massive commercial failure: private companies have been unable to bring new investment or expand access to water services to those in need. Contrary to the high hopes for privatization, overall there has been a drop in investment, a lack of service expansion, a failure of service, an erosion of public involvement and new government debt.

Private water companies have been unable to meet obligations to shareholders to provide a market rate of return AND to meet their obligation to expand water systems and provide acceptable quality water at affordable prices. In most developing countries, water and  sanitation systems are in desperate need of investment in the basic infrastructure of pipes, treatment plants and sewer systems. Investment has not kept pace with population growth and large sectors of the low-income population remain unserved.

The World Bank’s Public Private Infrastructure Advisory Fund (PPIAF) admits there have been “no clear investment gains” from private  sector participation in the water sector.[1] The World Bank’s Water & Sanitation department concludes that: Finding new sources of finance will be critical to expanding access to urban water supply and sanitation (WSS). Present investment  towards the water Millenium Development Goals is only half what is needed. Public finance will continue to be the main source of  funding WSS investments. Private financing has accounted for less than 10 percent of investment in WSS over the last decade.[2]

In the U.S. more than 85 percent of municipal water utilities are still publicly controlled; this is true also in the world-at-large.  But everyday we hear about new attempts by private water utilities, private equity funds, and other corporate investors to take over  local water markets; the financial crisis has put additional burdens on city governments, forcing them to consider selling off public  services to bring in much-needed revenue. But history shows that private control of such a basic resource as water is NEVER in the  best interests of most people.

Water justice

Access to clean water and healthy watersheds for drinking, fishing, and cultural uses is a human right. Globally, this access is an exception, not the norm. One billion people worldwide do not have safe drinking water within a 15 minute walk from their homes. In California, 1 million people drink from contaminated wells, mostly in poor communities in the Central Valley.

In response to this worldwide denial of the human right to water, the concept of water justice has emerged in recent years. Water justice is the right of all people to collectively control local water sources and the watersheds that sustain them.

We work in solidarity with collectives, NGOs, and community groups that harvest rainwater, remove dams, and build and maintain community drinking water systems, all with the aim of water justice.

How we support water justice:

  • We promote what South American water activists call “El Buen Vivir,” a “good enough” standard of living based on sustainable systems of water, food, energy, and transportation. We model this way of life as individuals and through our writing and community workshops.
  • We collaborate with organizations such as the Environmental Justice Coalition for Water to facilitate greywater, rainwater harvesting, and ecological sanitation workshops in low-income communities and communities of color.
  • We provide free consultations in our areas of expertise to groups working for water justice. We aim to create a model where workshops and installations in affluent regions supports work in low-income communities and countries.
  • We donate 10% of all workshop income to groups fighting for water justice internationally.