2. Water Rights and Water Wrongs
The Issue/Event:
Following a general strike which paralysed the town of El Alto, the poor and mostly indigenous neighbour of the administrative Capital La Paz, the Bolivian Government announced on 13th of January 2005 that it would cancel the water contract held by the private consortium, Aguas de Illimani.
Since 1997, Aguas de Illimani had been providing water services to the region, but its prices had become impossibly high. New water and sewerage connections were costing the equivalent of $445, in a region where the minimum wage is $60 per month (but only for the 30% of the population employed in the formal economy). The cancellation has not yet come into effect, since the Bolivian Government faces compensation claims by Suez Lyonnaise des Eaux, which invested $63m in the venture. The water privatisation was originally promoted by the World Bank as a ‘pro-poor’ scheme, and the bank invested $17m in the Aguas de Illimani project (1) (2).
Similar situations have occurred in the Philippines, Ghana, Paraguay, Panama, Brazil, Peru, Colombia, India, Pakistan, Hungary, South Africa and the US (see 3).
In the UK a massive water privatisation programme was pushed through by the Conservative Party at the end of the 1980s. The 10 regional water authorities of England and Wales were turned over to private companies in 1989 on the assumption that private markets would lead to greater efficiency. But privatisation advocates can hardly point to the UK as an example of smooth transition to for-profit water delivery. Prices rose by nearly 50 per cent in inflation-adjusted terms in less than a decade, and disconnection rates also soared.
The new industry's response to the public outcry over the health perils of disconnecting people's water was to install special pre-payment meters at the homes of those at risk of non-payment. When a household was unable to pre-pay, the meters automatically shut off its water supply. Meanwhile, water quality steadily deteriorated. Arguably, the situation in the UK has improved since the Labour government pushed through changes to water legislation in 1999. A new Office of Water Services now regulates the industry, and it has insisted upon new investments in infrastructure along with rate reductions of about 12 per cent (3).
Positions that have been taken:
According to the World Bank, ‘Improving service efficiency is an overarching goal for the reform of water and sanitation services. Reforming the public service provider may be insufficient in achieving this goal. The private sector, under contract with the public sector, has often yielded better results’ (4). The World Bank and the Swiss and German development agencies have told the Bolivian President, Carlos Mesa, that, should a public water company replace Aguas de Illimani, they would refuse to extend their loans.
Countries which endorse the Universal Declaration of Human Rights, the International Covenant on Economic, Social and Cultural Rights, the International Covenant on Civil and Political Rights, and the Convention on the Rights of the Child, agreed that basic human dignities include not only civil and political rights but also economic, social and cultural rights. Among the latter are included the right to food, shelter, health, education and water (5).
Questions for consideration:
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Is the efficiency attributed to privatised utilities a viable option where there is no market to support it?
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Should countries have the right to administer their own resources?
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Natural resources are limited. Should they be managed globally? Should international bodies intervene in individual countries’ natural resources provision?
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What are the effects of investment treaties, like the North American Free Trade Agreement, on government efforts to promote health, environmental protection and other social goals?
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Is there such thing as a right to natural resources?
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Much of the world's drinking water supply systems are inadequate but will going private make things better?
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Should private conglomerates be in charge of public services?
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How are frontiers drawn for natural resources? (This is also relevant to the question of pollution, particularly air pollution and radioactive pollution – particularly in the case of countries that do not produce nuclear energy but whose neighbours do).
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International disputes: India and Bangladesh over the waters of the Ganga (6).
References:
(2) Chávez, Franz 2005 ‘Bolivian Water Rates Hard to Swallow’ http://www.tierramerica.net/2005/0312/iarticulo.shtml
(3) http://www.theecologist.org.article.html?article=449
(4) http://rru.worldbank.org/PapersLinks/Privatizing-Water-Sanitation-Services
(5) http://www.communitylawcentre.org.za/ser/esr2003/2003nov_bolivia.php
(6) Samaddar, Ranabir 2001 ‘Language of dialogue’. A biography of the Indian nation 1947-1997. New Delhi and London: Sage
(7) Photos of the Cochabamba ‘water wars’: http://www.xs4all.nl/%7Earenaria/water/Cochabamba%20pictures.htm
