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Water: preservation, responsible management, equitable distribution

Dr Rogate R. Mshana, WCC programme executive for JPC/Economic Justice, presents an ecumenical perspective

01 January 2005

The ecumenical perspective

Dr Rogate R. Mshana
WCC programme executive for JPC/Economic Justice

Introduction

This presentation will outline the current global water situation and discuss the current contentious views on preservation, responsible management and equitable distribution.

A major question raised for further reflection and action by churches, communities and governments concerns how best water could be managed, protected and distributed equitably. The ecumenical perspective is drawn from the Ecumenical Water Network and also from the encounters of the World Council of Churches (WCC) with the World Bank and the IMF. In the first of these encounters, the WCC raised the whole question of water under the theme: "Commodification of public goods: water, the source of life". Responses can be found in the papers presented and compiled in a report entitled, "Wealth creation and justice". Some of the ecumenical critiques of privatization of water can also be found in the report of the second encounter, "In search of a just economy: common goals, separate journey".

The ecumenical movement maintains that water is a gift of God and a fundamental human right. It should remain under public responsibility and should not be traded. Other social movements share this view. However the World Bank, the IMF and corporations along with some governments favour the process of privatization through trading water following three methods of privatization as explained by Wangusa:

  • Complete sale by governments of public water delivery and treatment systems to private corporations.
  • Long-term leases or concessions allowing corporations to take over the delivery of water services and collection of revenues.
  • Corporations contracted by governments to manage water services for an administrative fee.

In the name of promoting efficiency in water delivery, the World Bank and the IMF are forcing all these methods on the developing world. In all cases, there have been successes and failures leading to increased protests particularly in poor countries (Bolivia, South Africa, Philippines, etc.).

Corporations see investment in water as a fast-growing business. It is estimated to be an annual billion-dollar industry, 40% of the size of the oil sector and one-third larger than pharmaceuticals. Most of these companies are the beneficiaries of the USD 20 billion lending of the World Bank to water supply projects over the last 12 years. A study by the International Center for Public Integrity (ICPI) revealed that of the 276 World Bank water supply loans from 1990 to 2002, 30 percent required privatization - the majority in the last five years. Some companies like Aguas Argentines, controlled by Suez and its shareholders, were making huge profits of as much as 25 percent. ICPI reported that an Argentine businessman earned a profit of USD 100 million on privatization. Bottled water is also a USD 33 billion annual business. So we have a scenario in the world of those who push the attractive marketization of water (water marketers) for profit, and others who are against it for moral and ethical reasons (public service defenders).

Let us approach this issue objectively with a critique, some clarifications, and offering possible alternatives.

The global water situation:
Do we have enough water on earth?

The following are facts on the quantity of available fresh water on earth. 97 percent of total water on earth is seawater, unfit for human use. Of the 3 percent that is fresh, two-thirds is locked up in glaciers or ice around the poles. Only 1 percent of all the water is available for human consumption. This amount, which is vital for life, should be enough for all. It falls from the clouds on to the land, nourishes life, returns through rivers to the salty sea and evaporates as fresh water back into the clouds. Fossilized ground water is also available but it is not like oil or coal.

According to The Economist's water survey, unlike oil, water is infinitely renewable. It seems the marketers do not see any danger of complete depletion of the 1 percent fresh water on earth. For them, this amount will remain on earth forever, replenishing itself naturally as it has done for the past 4 billion years.

The ecumenical movement does not concur with this view. A UN study indicates that by the year 2025, two-thirds of the world will be water-poor. It is this concern that was also implied implicitly when the Canadian Environmental Law Association stated, " Water is an essential need, a public trust, not a commodity."

So what is the problem?

Water is not available for all people on earth. 1.1 billion people do not have access to potable water and 2.2 million people in the developing countries are dying every year, most of them children, from diseases linked to the lack of access to clean drinking water, inadequate health and poor hygiene; 6000 boys and girls die every day from diseases linked to the lack of access to clean drinking water, inadequate health and poor hygiene; 1.5 billion people in the world are suffering from parasite infections due to solid waste in the environment, which could be controlled with hygiene, water and sanitation. Because of distance, women carry heavy burdens of water of about 20 kilograms on their heads, walking an average 6 km.

There is also inequality in water use in the world. The population of Nairobi, Kenya pays five times more for water than does the North American citizen. When a toilet is flushed in the North, a person is using the same amount of water that one person in the Third World uses all day to wash, clean, cook and drink. Water accessibility and inequality are major problems. In Sub-Saharan Africa, only 58 percent of the population have access to improved water sources.

Huge water consumption by industry and agriculture

The huge consumption of water by industry and agriculture, and leakage are further problems. The UN figures indicate that 69 percent of all water available for human use on an annual basis is soaked up by agriculture (mostly in the form of irrigation). Industry accounts for 23 percent, and domestic use (household, drinking water, and sanitation) for approximately 8 percent. Agriculture is responsible for most of the depletion of ground water along with 70 percent of pollution. The annual water volume used by industry will rise from 752 cubic kilometres per year in 1995 to an estimated 1,170 cubic kilometres in 2025. In developing countries 70 percent of industrial wastes are dumped untreated into waters where they pollute the usable water supply. Water is also wasted through leakage. So we are faced with these problems which can be summarized as inaccessibility, inequality, excessive consumption, pollution and leakage. The big question is, can the public sector, communities or the private sector solve these problems?

There are two major obstacles when it comes to delivery of water to people.

1. Water is in the wrong location: Some places have more water than they can possibly use (Canada, Austria, and Ireland). Others have too little (Northern China, the Middle East). There are also variations at national levels, as the water- poverty index shows for two villages about 32 kilometers apart in Tanzania. Water is also heavy, and this makes it costly to transport over long distances.

2. Use, misuse and abuse of water: 50 percent of global fresh water is wasted through leakage and, according to marketers, this wastage is prevalent where water is regarded as free or is under-priced to the extent that the costs of collecting, cleaning and distributing water are not covered. Gerard Mestrallet of Suez, the world's biggest water company, has said, "God provided the water, not the pipes". Wherever that capital investment comes from, somebody has to pay for water, contend the marketers, "if not the users, then taxpayers or aid donors".

According to the marketers, water is poorly governed by the public sector. This also leads to overuse of water for the wrong things, such as for highly water-intensive crops. Industrial toxins and wastes are also dumped and pollute water.

The marketers propose pricing it properly to discourage misuse, and to reflect as far as possible the costs of providing it (including environmental costs) as well as its marginal utility. "For people who have no access to clean water, what matters is whether water comes out of the tap, not who delivers it," say marketers.

The public service defenders call for more community and government responsibility, but have not been explicit on how to cover collection, cleaning and distribution costs of water. For them, the most important thing is to view water as sacred and not for sale. They are committed to 12 proposals to "prevent water from being privatized and degraded to a tradable good, and to ensure that the people have a democratic right in determining national and local water strategies". It is assumed that the people will deal with all issues raised by marketers when they sit down to plan.

Water marketers and public service defenders

The water war today is between the water marketers and the public service defenders. This was evident in water protests in Cochabamba, Bolivia, South Africa and the Philippines. The marketers are out for profit and the public service defenders are concerned about the ethics of water, the source of life for all and for the environment. Neo-liberal corporate globalization is behind the marketers and it is responsible for global inequality, poverty and disregard of the environment.

Should the public and communities who advocate for water for all and non-commodification of this resource be over-ridden by the marketers in the name of efficiency and profit? Or should the public and the communities be strengthened in order to be able to resolve the current problems without privatization?

Let us review the privatization trend. Is it truly powerful?

Up to now, 90 percent of fresh-water delivery in the world is done by the public sector. The situation varies from one context to another however. In the US, water delivery is more public than in France which, for the last 150 years, has used private companies to deliver water. There is, therefore, a small degree of a private/public water delivery mix in industrized countries and to some extent in developing countries.

There are four major global companies in the private sector. These are Suez, with 125 m. customers, Veolia, with 110 m., Thames (now RWE) with 70 m., and Sur (France) with 25 m. The first three have business in Europe, Asia, Latin America and North America, but very few in Africa. As can be seen, they are dealing with only 10 percent of global fresh water. There is a tendency, however, for the water business to expand by 10 percent annually.

Privatization is encouraged today, and some companies want water supply to be part of the WTO rules on liberalization. The Center for Public Integrity reported on the tendency towards privatization that "While private companies run only 5 percent of the world's waterworks, their growth over last 12 years has been enormous. In 1990, about 51 million people got their water from private companies, according to water analysts. That figure is now more than 300 million."

The ICPI investigation over 12 years of the six most globally active water companies showed that they ran drinking water distribution networks in at least 56 countries. In 1990, they had been active only in about a dozen countries. In Africa, they have expanded to ten countries from three in 1990. In terms of revenue increase over years, Vivendi Universal, the parent of Vivendi Environnement (now Veoliea) reported earning over $5 billion in water-related revenue in 1990; by 2002 that had increased to 12 billion. RWE, which moved to the water market with its acquisition of Britain's Thames Water, increased its water revenue by 9,786 percent-from $25 million in 1990 to $2.5 billion in 2002. ICPI reports that water companies are chasing a business with potential annual revenue estimated at anywhere from $400 billion to $3 trillion. It is predicted by Switzerland's Pictet bank that by 2015, 75 percent of European and 65 percent of US water utilities will be privatized.

Water privatization has not yet reached alarming levels, but the most dangerous scenario is the tendency to push privatization to the extent that it replaces public water control, as witnessed in Europe. Scarcity of water is used as a threat. It should be noted that even in the US, public utilities still serve 81 percent of the American population. In some states, provision bounced between public and private owners. Some of the companies were accused of supplying water only to the rich and some for neglecting maintenance and repair work. In the US, much of the current involvement in water is in management rather than outright ownership of water works.

The ecumenical movement recommends that even the urban water supply should be under the control of the public instead of the private sector. A participant from the Philippines who presented an excellent case study on Manila's water privatization at an ecumenical meeting held in New York in April 2005 made the point that the public water supply was more efficient than that supplied by the private sector.

Indigenous People and a number of African and Asian rural communities have another system that is community-based, where water, like air, is sacred and must be respected and protected. According to these community norms, the life system including water is seen in a holistic way. For these communities, water is the essence of life and should be left intact. In most cases, water comes from streams and springs and is harvested by communities without charge. They pay by protecting the water sources.

Many lessons could be drawn from how Indigenous people avoid the misuse of water. Tradability comes with industrialization and commercialization. As soon as pipes are laid in villages, or ground water is brought from beneath the earth to the surface by either shallow wells or bore holes, then the issue of delivery costs arises. Marketers propose only the establishment of water rights, pricing and water trading as a solution. The call for good governance is reduced to pricing and trading.

However, there are various ways to resolve the problems raised earlier regarding water. Let us approach them one by one.

Inaccessibility of clean water

Many people lack access water if the price for its provision is prohibitive, or if the public utilities do not provide it to a community located far away from water sources. This problem could be solved by both the government and communities at various levels working out a procedure for community participation in planning meetings on water. In many villages in Africa, for example, communities form water committees that include women to discuss availability, protection, distribution and consumption. In urban areas, municipal councils should call for people's participatory budgeting processes that would allow allocation of government funds derived from taxes to finance water utilities. For governments that are poor, greater external debt cancellation, increased aid and just trade are all imperative in order to free enough government revenue to make safe water available to all the people.

Inequality

The Gini coefficient that measures inequality in the world shows a 0.61 point coefficient, indicating gross inequality, as to water. This inequality is dramatic in many countries in Africa. People living in slums or remote villages are deprived of water because they are marginalized. Without addressing inequality, only the rich will benefit from public water subsidies. The main beneficiaries of low water prices are not the poor, as claimed by marketers, but the middle classes who have access to piped water. The poorest often pay more than ten times these prices to private vendors.

To ensure that the poor are served with water, a formula of taxing the rich in order for the poor to be provided with water must be developed. Some alternatives are being tried in South Africa, where higher charges are imposed for greater consumption. In Chile, water stamps are given to poor people to meet their bills. Whatever framework is developed to help the poor, it is necessary to take into account their needs first before talking of profit. Where water is drawn from water sources to urban centres, piped water should also be available to communities and be managed by those communities themselves, some of whom were custodians of water sources for decades.

Excessive consumption, pollution and leakage

Industry and agriculture consume more water than the domestic sector. Only the public sector can enforce regulations on the use of water in these sectors. Governments must ensure that industry pays sufficient taxes, and also follows anti-pollution measures. Drip irrigation (crop by drop) methods that utilize very little water should be promoted. Prevention of leakage and abuse of water resources could be done by decentralizing water governance to municipalities and communities.

In the rural areas, where over 80 percent of the people in Africa live, for example, communities are often better at finding solutions than national governments; the same is true as regards municipal authorities in cities. If private contractors for water supply are used by governments, they must be always be controlled with regard to such matters as price, quality and service delivery. Communities, and particularly women, should monitor both the government water supply and the private sector.

Conclusion

Water should remain a public trust and not a commodity. The government and communities should manage its protection, consumption and distribution. Precautions should be taken when governments make contracts with private companies. Here increasing transparency through involving communities should solve issues of corruption.

Structural Adjustment Programmes and the current conditionalities implicit in Poverty Reduction Strategies (PRSs) of the World Bank and the IMF, implicitly forcing poor countries to privatize water through blanket liberalization, should be resisted.

Where public-private partnership programmes exist in water delivery, governments should ensure that people and environment come before profit. People living in poverty and the safeguarding of the environment should be the main criteria in devising water management strategies, protection and consumption.

In observing March 22 every year, water activists should continue to fight so that water remains a public domain. Let criticisms leveled against public water delivery be corrected with specific proposals. Churches and the ecumenical family should continue to demonstrate how public water management could be made efficient, leaving no space for criticism by water marketers. Struggles against water privatization are part of the struggles against neo-liberal globalization, which promotes private property and contracts.