bluegold

the global water crisis and the commodification of

the world ’s water supply

A Special Report issued by

the International Forum on Globalization (IFG)

au t h o r : m au d e b a r l o w

National Chairperson, Council of Canadians

Chair, IFG Committee on the Globalization of Water

Revised Edition, Spring 2001

introduction 2

the crisis A Finite Resource 5Scarce Water, Scarce Food 7Endangering Species 8

the impact of globalizationEverything for Sale 11Unequal Access 12Prohibiting Preservation 13

the water privateersWater for Sale 15A Poor Track Record 16World Bank in the Lead 17Water War 19High-Tech Water Guzzlers 20

the global trade in water Pipe Schemes 22Canada and Alaska: OPEC of Water? 24Bottled Water Becomes Big Business 27

the failure of governmentsToo Little Too Late 29Trading and Buying Water Rights 32Closed Door Deals 33

the threat of international trade and investment agreements

Water, NAFTA and the FTAA 35Water and the WTO 37Water and the International Investment Treaties 39

the need for common principlesThe Ethics of Water Sharing 41The Ethics of Water Pricing 42Protecting Water: 10 Principles 43

conclusion 48

sources 50

contents

“The wars of the next century will be about water.”— Ismail Serageldin, vice president of the World Bank

W E ’D L I K E T O B E L I E V E there’s an infinite supply ofwater on the planet. But the assumption is tragicallyfalse. Available freshwater amounts to less than one-half of 1 percent of all the water on earth. The rest issea water, or is frozen in the polar ice. Fresh water isrenewable only by rainfall, at the rate of 40,000 to50,000 cubic kilometers per year. Due to intensiveurbanization, deforestation, water diversion and indus-trial farming, the earth’s surface is drying. If presenttrends persist, the water in all river basins on everycontinent could steadily be depleted.

Global consumption of water is doubling every 20years, more than twice the rate of human population

growth. According to the United Nations, more thanone billion people on earth already lack access tofresh drinking water. If current trends persist, by 2025the demand for freshwater is expected to rise to 56percent above the amount that is currently available.

As the water crisis intensifies, governmentsaround the world—under pressure from transnationalcorporations—are advocating a radical solution: theprivatization, commodification and mass diversion ofwater. Proponents say that such a system is the onlyway to distribute water to the world’s thirsty. However,experience shows that selling water on the open mar-ket does not address the needs of poor, thirsty peo-ple. On the contrary, privatized water is delivered tothose who can pay for it, such as wealthy cities andindividuals and water-intensive industries, such as

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introduction

Overuse and diversions of fresh water have devastated wetlands, wildlife and biodiversity. The continental United States haslost 50 percent of its wetlands. In California, 95 percent of wetlands are gone, and populations of migratory birds and water-fowl have dropped from 60 million in 1950 to three million today.

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agriculture and high-tech. Asone resident of the highdesert in New Mexicoobserved after his communi-ty’s water had been divertedfor use by the high-techindustry: “Water flows uphillto money.”

The push to commodifywater comes at a time whenthe social, political and eco-nomic impacts of water scarci-ty are rapidly becoming a destabilizing force, withwater-related conflicts springing up around the globe.For example, Malaysia, which supplies about half ofSingapore’s water, threatened to cut off that supply in1997 after Singapore criticized its government poli-cies. In Africa, relations between Botswana andNamibia have been severely strained by Namibianplans to construct a pipeline to divert water from theshared Okavango River to eastern Namibia.

The former mayor of Mexico City has predicteda war in the Mexican Valley in the foreseeable futureif a solution to the city’s water crisis is not foundsoon. Much has been written about the potential forwater wars in the Middle East, where water resourcesare severely limited. The late King Hussein of Jordanonce said the only thing he would go to war withIsrael over was water, because Israel controls Jordan’swater supply.

Meanwhile, the future of one of the earth’s mostvital resources is being determined by those who profitfrom its overuse and abuse. A handful of transnationalcorporations, backed by the World Bank, are aggres-sively taking over the management of public waterservices in developing countries, dramatically raisingthe price of water to the local residents and profitingfrom the Third World’s desperate search for solutionsto the water crisis. The corporate agenda is clear:water should be treated like any other tradable good,with its use determined by market principles.

At the same time, governments are signing awaytheir control over domestic water supplies by partici-pating in trade agreements such as the NAFTA; itsproposed successor, the Free Trade Area of the

Americas (FTAA); and theWorld Trade Organization(WTO). These global tradeinstitutions effectively givetransnational corporationsunprecedented access to thewater of signatory countries.

Already, corporationshave started to sue govern-ments in order to gain accessto domestic water sources. Forexample, Sun Belt, a

California company, is suing the government ofCanada under NAFTA because British Columbia(B.C.) banned water exports several years ago. Thecompany claims that B.C.’s law violates severalNAFTA-based investor rights and therefore is claim-ing $10 billion in compensation for lost profits.

With the protection of these international tradeagreements, companies are setting their sights on themass transport of bulk water by diversion and bysupertanker. Several companies are developing tech-nology whereby large quantities of freshwater wouldbe loaded into huge sealed bags and towed across theocean for sale. Selling water to the highest bidder willonly exacerbate the worst impacts of the world watercrisis.

A number of key research and environmentalorganizations such as Worldwatch Institute, WorldResources Institute and the United Nations EnvironmentProgram have been sounding the alarm for well over adecade: If water usage continues to increase at currentrates, the results will be devastating for the earth andits inhabitants. Groups such as the International RiversNetwork, Greenpeace, Clean Waters Network, SierraClub and Friends of the Earth International, alongwith thousands of community groups around theworld, are fighting the construction of new dams,reclaiming damaged rivers and wetlands, confrontingindustry over contamination of water systems, andprotecting whales and other aquatic species fromhunting and overfishing. In a number of countries,experts have come up with some exciting and creativesolutions to these problems. This work is crucial, yetsuch efforts need to be coordinated and understood

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According to the United Nations, more

than one billion people on earth

already lack access to fresh drinking

water. If current trends persist, by 2025

the demand for fresh water is expected

to rise to 56 percent above the amount

that is currently available.

in the broader context of eco-nomic globalization and itsrole in promoting privatizationand commodification.

Who owns water? Shouldanyone? Should it be priva-tized? What rights do transna-tional corporations have tobuy water systems? Should itbe traded as a commodity inthe open market? What lawsdo we need to protect water? What is the role of gov-ernment? How do those in water-rich countries sharewith those in water-poor countries? Who is the custo-dian for nature’s lifeblood? How do ordinary citizensbecome involved in this process?

The analysis and the recommendations in thisreport are based on the principle that water is part ofthe earth’s heritage and must be preserved in the pub-lic domain for all time and protected by strong local,national and international law. At stake is the wholenotion of “the commons,” the idea that through ourpublic institutions we recognize a shared human andnatural heritage to be preserved for future genera-tions. Local communities must be the watchdogs of

our waterways and must estab-lish principles that oversee theuse of this precious resource.

Instead of allowing thisvital resource to become acommodity sold to the high-est bidder, we believe thataccess to clean water for basicneeds is a fundamental humanright. Each generation mustensure that the abundance and

quality of water is not diminished as a result of itsactivities. Great efforts must be made to restore thehealth of aquatic ecosystems that have already beendegraded as well as to protect others from harm.

Above all, we need to radically restructure oursocieties and lifestyles in order to reverse the deple-tion of our freshwater and to learn to live within thewatershed ecosystems that were created to sustainlife. We must abandon the specious notion that wecan carelessly abuse the world’s precious watersources because, somehow, technology will come tothe rescue. There is no technological “fix” for a planetdepleted of water.

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We must abandon the specious notion

that we can carelessly abuse the

world’s precious water sources because,

somehow, technology will come to the

rescue. There is no technological “fix”

for a planet depleted of water.

a finite resource I T I S C O M M O N LY A S S U M E D that the world’s watersupply is huge and infinite. This assumption is false.In fact, of all the water on Earth, only 2.5 percent isfreshwater, and available freshwater represents lessthan half of 1 percent of the world’s total water stock.The rest is seawater, or inaccessible in ice caps,ground water and soil. This supply is finite.

As Allerd Stikker of the Amsterdam-basedEcological Management Foundation explains: “Theissue today, put simply, is that while the only renew-able source of freshwater is continental rainfall (whichgenerates a more or less constant global supply of40,000 to 50,000 cubic km per year), the world popu-lation keeps increasing by roughly 85 million peryear. Therefore the availability of freshwater per headis decreasing rapidly.”

Most disturbingly, we are diverting, polluting anddepleting that finite source of freshwater at an aston-ishing rate. Today, says the United Nations, 31 coun-tries are facing water stress and scarcity and over onebillion people lack adequate access to clean drinkingwater. By the year 2025, as much as two-thirds of theworld’s population—predicted to have expanded byan additional 2.6 billion people—will be living inconditions of serious water shortage and one-thirdwill be living in conditions of absolute water scarcity.

World Resources, a publication of the UnitedNations Environment Program, the World Bank andthe World Resources Institute, has a dire warning:“The world’s thirst for water is likely to become oneof the most pressing resource issues of the 21st centu-ry...In some cases, water withdrawals are so high, rela-tive to supply, that surface water supplies are literally

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the crisis

Aquifers are being depleted on every continent far faster than they can replenish themselves. This dry stock pond inBracketville, Texas, is at the southern end of the High Plains Ogallala aquifer, which is being depleted at eight times thereplenishment rate.

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shrinking and groundwaterreserves are being depletedfaster than they can be replen-ished by precipitation.”

Groundwater over-pump-ing and aquifer depletion arenow serious problems in theworld’s most intensive agricul-tural areas. In the U.S., the High Plains Ogallalaaquifer, stretching some 800 miles (1,300 km) fromthe Texas panhandle to South Dakota, is beingdepleted eight times faster than nature can replenishit. The water table under California’s San JoaquinValley has dropped nearly ten meters in some spotswithin the last 50 years. Twenty-one percent of irriga-tion in the U.S. is achieved by pumping ground waterat rates that exceed the water’s ability to recharge (andmost water used for irrigation cannot be recycled).

In the Arabian peninsula, groundwater use is nearlythree times greater than recharge and, at the currentrate of extraction, Saudi Arabia is running towardtotal depletion in the next 50 years; Israel’s extractionhas exceeded replacement by 2.5 billion meters in 25years and 13 percent of its coastal aquifer is contami-nated by seawater and fertilizer run-off; currentdepletion of Africa’s non-recharging aquifers is esti-mated at 10 billion cubic meters a year; water tablesare falling everywhere throughout India; land beneathBangkok has actually sunk due to massive over-pump-ing; and northern China now has eight regions ofaquifer overdraft while the water table beneathBeijing has dropped 37 meters over the last fourdecades. In fact, so severe is the projected water crisisin Beijing, experts are now wondering whether theseat of power in China will have to be moved.

In Mexico City, pumping exceeds naturalrecharge by 50-80 percent every year and experts aresaying the city could run out of water entirely in thenext decade. In the maquiladora free trade zones allalong the Mexican-U.S border, water is a preciouscommodity, delivered weekly in many communitiesby truck or cart. In early 2001, the National WaterCommission reported that the border area, thick withindustrial and human waste and strapped for funds,only treats about one-third of its waste water and

sewage. Ciudad Juarez, grow-ing at a rate of 50,000 peoplea year, is running out of water;the underground aquifer thecity relies on has declined atabout five feet a year. At thisrate, there will be no usablewater left in 20 years.

As Stikker explains, this means that instead of liv-ing on water income, we are irreversibly diminishingwater capital. At some time in the near future, waterbankruptcy will result. Sandra Postel of the GlobalWater Policy Project adds that, in addition to deplet-ing supplies, groundwater mining causes salt water toinvade freshwater aquifers, destroying them. In othercases, groundwater mining actually permanentlyreduces the earth’s capacity to store water. In California,for example, overuse of the underground water sup-plies in the Central Valley has resulted in a loss ofover 40 percent of the combined storage capacity ofall human-made surface reservoirs in the state. In1998, California’s Department of Water Resourcesannounced that by 2020, if more supplies are notfound, the state will face a shortfall of water nearly asgreat as the amount that all of its towns and citiestogether are consuming today.

Further, the global expansion in mining and man-ufacturing is increasing the threat of pollution tothese underground water supplies. (In most Asiancountries, for example, these aquifers provide morethan 50 percent of domestic water supplies.) WorldResources reports that as developing countries undergorapid industrialization, heavy metals, acids and per-sistent organic pollutants (POPs) are contaminatingaquifers.

At the same time, over-exploitation of the planet’smajor river systems is threatening another finitesource of water. “The Nile in Egypt, the Ganges inSouth Asia, the Yellow River in China, and theColorado River in America are among the majorrivers that are so dammed, diverted, or overtappedthat little or no freshwater reaches its final destinationfor significant stretches of time,” writes Sandra Postel.In fact, the Colorado is so over-subscribed on its jour-ney through seven U.S. states that there is virtually

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Today, says the United Nations, 31

countries are facing water stress and

scarcity and over one billion people lack

adequate access to clean drinking water.

nothing left to go out to sea. The flows of the RioGrande and upper Colorado rivers are in danger ofbeing reduced by as much as 75 percent and 40 per-cent respectively over the next century.

Perhaps the most devastating analysis of theglobal water crisis comes from hydrological engineerMichal Kravèík and his team of scientists at theSlovakia non-governmental organization (NGO)People and Water. Kravèík, who has a distinguishedcareer with the Slovak Academy of Sciences, hasstudied the effect of urbanization, industrial agricul-ture, deforestation, dam construction, and infrastruc-ture and paving on water systems in Slovakia and sur-rounding countries and has come up with an alarmingfinding. Destroying water’s natural habitat not onlycreates a supply crisis for people and animals, it alsodramatically diminishes the amount of available fresh-water on the planet.

Kravèík describes the hydrologic cycle of a dropof water. It must first evaporate from a plant, earthsurface, swamp, river, lake or the sea, then fall backdown to earth as precipitation. If the drop of waterfalls back onto a forest, lake, blade of grass, meadowor field, it cooperates with nature to return to thehydrologic cycle. “Right of domicile of a drop is oneof the basic rights, a more serious right than humanrights,” says Kravèík.

However, if the earth’s surface is paved over,denuded of forests and meadows, and drained of nat-ural springs and creeks, the drop will not form part ofriver basins and continental watersheds, where it isneeded by people and animals, but head out to sea,where it will be stored. It is like rain falling onto ahuge roof, or umbrella; everything underneath staysdry and the water runs off to the perimeter. The con-sequent reduction in continental water basins resultsin reduced water evaporation from the earth’s surface,and becomes a net loss, while the seas begin to rise.In Slovakia, the scientists found, for every 1 percentof roofing, paving, car parks and highways construct-ed, water supplies decrease in volume by more than100 billion meters per year.

Kravèík issues a dire warning about the growingnumber of what he calls the earth’s “hot stains”—places already drained of water. The “drying out” of

the earth will cause massive global warming, with theattendant extremes in weather: drought, decreasedprotection from the atmosphere, increased solar radi-ation, decreased biodiversity, melting of the polar ice-caps, submersion of vast territories, massive continen-tal desertification and, eventually, “global collapse.”

scarce water, scarce foodA S W E L L A S C R E AT I N G major environmental prob-lems, overtapping of ground water and rivers is exac-erbating another potential crisis—world food security.

Irrigation for crop production claims 65 percentof all water used by humans, compared to 25 percentfor industry and 10 percent for households andmunicipalities. The annual rise in population meansthat more water is needed every year for grain pro-duction (for humans and animals), a highly water-intensive activity. But, every year the world’s burgeon-ing cities and industries are demanding more andmore of the water earmarked for agriculture. California,for example, now projects a serious decline in irrigat-ed lands just as its population is exploding.

Eventually, some dry areas will not be able toserve both the needs of farming and those of the bal-looning cities. If these regions are to meet everydaywater requirements, they might have to permanentlyimport all or most of their food. This raises the prospectthat lack of water will make some countries chronical-

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[ t h e c r i s i s ]

Available freshwater represents less than half of one percentof the world’s total water stock. The rest is seawater, or inac-cessible in ice caps, some ground water and soil.

99%

<1%

ly dependent on others, or on the international com-munity at large.

Throughout rural Latin America and Asia, massiveindustrialization is throwing off the balance betweenhumans and nature. Export-oriented agribusiness isclaiming more and more of the water once used bysmall farmers for food self-sufficiency. Another majordrain on local water supplies are the more than 800Third World free trade zones, such as those in LatinAmerica, where assembly lines produce goods for theglobal consumer elite. In the maquiladora zones ofMexico, for example, clean water is so scarce thatbabies and children drink Coca-Cola and Pepsiinstead. During a drought crisis in northern Mexicoin 1995, the government cut water supplies to localfarmers while ensuring emergency supplies to themostly foreign controlled industries of the region.

The story is perhaps most stark in China. TheWorldwatch Institute warns that an unexpectedlyabrupt decline in the supply of water for China’sfarmers could threaten world food security. Chinafaces severe grain shortages in the near future becauseof water depletion due to the current shift of limitedwater resources from agriculture to industry andcities. The resulting demand for grain in China could

exceed the world’s available exportable supplies.While China might be able to survive this for a timebecause of its booming economy and huge trade sur-pluses, the resulting higher grain prices will createsocial and political upheaval in most major ThirdWorld cities and shake global food security.

The western half of China is made up mostly ofdeserts and mountains; the vast bulk of the country’s1.2 billion citizens live on several great rivers whosesystems cannot sustain the demands currently placedupon them. For instance, in 1972, the Yellow Riverfailed to reach the sea for the first time in history.That year it failed on 15 days; every year since, it hasrun dry for more days. In 1997, it failed to reach thesea for 226 days. The story is the same with all ofChina’s rivers and with its depleting water tablesbeneath the North China Plain. As big industrialwells probe the ground ever deeper to tap the remain-ing water, millions of Chinese farmers have foundtheir wells pumped dry. Four hundred of China’s 600northern cities are already facing severe water short-ages, which affects over half of China’s population.

These shortages come at a time when China willsee a population increase in the next 30 years greaterthan the entire population of the United States, whenconservative estimates predict that annual industrialwater use in China could grow from 52 billion tons to269 billion tons in the same period, and when risingincomes are enabling millions of Chinese to installindoor plumbing with showers and flush toilets. TheWorldwatch Institute predicts China will be the firstcountry in the world that will have to literally restruc-ture its economy to respond to water scarcity.

endangering speciesA R O U N D T H E W O R L D, the answer to the increase inwater demand is to build more dams and divert morerivers. Water has long been manipulated. Even theearliest civilizations, from the Roman to the Mayan,built aqueducts and irrigation schemes. But we arenow tampering with water systems on a scale that istotally unsustainable.

The number of large dams worldwide hasclimbed from just over 5,000 in 1950 to 38,000 todayand the number of waterways altered for navigation

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Hundreds of thousands of fish and other forms of aquatic lifeare killed by agricultural chemicals that find their way intoground and surface waters. In the U.S., 37 percent of fresh-water fish, including coho salmon and many species of trout,are now at risk of extinction.

[ t h e c r i s i s ]

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has grown from fewer than9,000 in 1900 to almost500,000. In the northernhemisphere, we have har-nessed and tamed three-quar-ters of the flow from theworld’s major rivers to powerour cities. While advances inmodern engineering haveallowed governments to sup-ply farms and cities withwater, these practices havedone great damage to the nat-ural world.

The world’s waterways arealso struggling with the fullrange of modern industrialtoxic pollution problems.Ninety percent of the devel-oping world’s waste water is still discharged untreatedinto local rivers and streams.

In the U.S., only 2 percent of the country’s riversand streams remain free-flowing and undeveloped.The continental U.S. has lost more than half of itswetlands and California has lost 95 percent.Populations of migratory birds and waterfowl havedropped from 60 million in 1950 to just 3 milliontoday. Watersheds that are the most biologicallydiverse are the most degraded, putting species andwilderness at great risk.

“The U.S. is the epicenter of freshwater biodiver-sity in the world,” says Larry Masters of the NatureConservancy. However, 37 percent of its freshwaterfish are at risk of extinction, 51 percent of crayfishand 40 percent of amphibians are imperilled, and 67percent of freshwater mussels are extinct or vulnera-ble to extinction.

One billion pounds of weed and bug killers areused throughout the United States every year, reportsNational Geographic, most of which runs off into thecountry’s water systems. The Natural ResourcesDefense Council says that 53 million Americans drinktap water contaminated with lead, fecal bacteria orother harmful pollutants. Nearly 40 percent of U.S.rivers and streams are too dangerous for fishing,

swimming or drinking. “Wehave crashing ecosystems inevery river basin in the West,”says Steve Glazer of the SierraClub’s Colorado River TaskForce.

In Canada, Jamie Lintonhas documented a disturbingstory of water system abusefor the Canadian WildlifeFederation. Wetland lossincludes 65 percent of Atlanticcoastal marshes, 70 percent ofsouthern Ontario wetlands, 71percent of prairie wetlands,and 80 percent of the FraserRiver Delta in Canada’sprovince of British Columbia.Acid rain has caused a 40 per-

cent decline in fish species in some Canadian lakes.Most major river systems have been dammed, andmore stream flows are diverted out of their basins oforigin than in any other country in the world by aconsiderable margin. Over a century of mining,forestry and large-scale industry has affected virtuallyevery water body in Canada, and toxic chemicals arefound even in the most remote parts of the Far North.

In the Great Lakes of North America, the world’slargest freshwater system, the result has been a “cata-strophic loss of biological diversity,” according toLinton. Janet Abramovitz of the Worldwatch Instituteadds that the Great Lakes have lost two-thirds oftheir once extensive wetlands and that less than 3percent of the lakes’ shorelines are suitable for swim-ming, drinking or supporting any aquatic life.

The Nature Conservancy has identified 100species and 31 ecological communities at risk withinthe Great Lakes system and notes that half don’t existanywhere else. Two hundred years ago, each of thefive Great Lakes had its own thriving aquatic commu-nity. In 1900, 82 percent of the commercial catch wasnative. By 1966, native species were only two-tenthsof 1 percent of the catch; the remaining 99.8 percentwere exotic species, most of them devastating to thelocal species.

According to the UN Food and Agri-

culture Organization (FAO), 80 percent

of China’s major rivers are so degraded

they no longer support fish. The building

of Egypt’s Aswan Dam in 1970 caused

the number of commercially harvested

fish to drop by almost two-thirds.

The World Resources Institute reports

that, after the Pak Mun Dam was

built in Thailand, all 150 fish species

that had inhabited the Mun River vir-

tually disappeared.

The story is the same allover the world. All but one ofEngland’s 33 major rivers aresuffering; some are now lessthan a third of their averagedepth. The Thames is threat-ening to run dry and alreadylarger ships are having torestrict their movements tohigh tides. Development hascut off the Rhine River inEurope from 90 percent of itsoriginal flood plains, and thenative salmon run has nearly disappeared. Over thelast 25 years, the Danube’s phosphate and nitrate con-centrations have increased six-fold and four-fold,respectively, causing great harm to the region’stourism and fisheries. According to the UN Food andAgriculture Organization (FAO), 80 percent ofChina’s major rivers are so degraded they no longersupport fish. The building of Egypt’s Aswan Dam in1970 caused the number of commercially harvestedfish to drop by almost two-thirds.

The World Resources Institute reports that, afterthe Pak Mun Dam was built in Thailand, all 150 fishspecies that had inhabited the Mun River virtuallydisappeared. Introduction of non-native species toVictoria Lake in Africa has all but destroyed thenative species population, already imperilled by mil-lions of liters of untreated sewage and industrial wastedumped by the cities of surrounding Kenya, Tanzaniaand Uganda. Three-fourths of Poland’s rivers are socontaminated by chemicals, sewage and agricultural

run-off that their water is unfiteven for industrial use. Nearlyhalf of the water and sewagetreatment systems in Moscoware ineffective or malfunction-ing and, according to theRussian Security Council, 75percent of the Republic’s lakeand river water is unsafe todrink.

The Aral Sea basin sharedby Afghanistan, Iran and fivecountries of the former Soviet

Union was once the world’s fourth largest lake.Excessive river diversions have caused it to lose halfits area and three-fourths of its volume, while its sur-rounding wetlands have shrunk by 85 percent.Calling it one of the planet’s greatest environmentaltragedies, Postel reports that almost all fish and water-fowl species have been decimated and the fisherieshave collapsed entirely. Each year, winds pick up 40-150 million tons of a toxic salt mixture from the drysea bed and dump it on the surrounding farmlands.Millions of “ecological refugees” have fled the area.

There is simply no way to overstate the water cri-sis of the planet today. No piecemeal solution isgoing to prevent the collapse of whole societies andecosystems. A radical rethinking of our values, priori-ties and political systems is urgent and still possible.Yet, as we will explore in the next section, there areforces at work in the world today that, unless chal-lenged, would move the world almost inexorably intoa water-scarce future.

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There is simply no way to overstate the

water crisis of the planet today. No

piecemeal solution is going to prevent

the collapse of whole societies and

ecosystems. A radical rethinking of our

values, priorities and political systems

is urgent and still possible.

everything for sale T H E D O M I N A N T D E V E L O P M E N T M O D E L of our timeis economic globalization, a system fuelled by thebelief that a single global economy with universalrules set by corporations and financial markets isinevitable. Economic freedom, not democracy or eco-logical stewardship, is the defining metaphor of thepost-Cold War period for those in power. As a result,the world is going through a revolutionary transfor-mation as great as any in history. The most directresult of economic globalization to date is a massivetransfer of economic and political power away fromnational governments into the hands of the bureau-cracies they helped to create. At the heart of thistransformation is an all-out assault on virtually everysphere of life.

Everything is for sale, even those areas of lifeonce considered sacred, such as health and education,culture and heritage, genetic codes and seeds, andnatural resources such as air and water. Increasingly,these services and resources are controlled by a hand-ful of transnational corporations who shape nationaland international law to suit their interests. TheWashington-based Institute for Policy Studies reportsthat the top two hundred corporations are now so bigthat their total sales surpass the combined economiesof 182 countries and they have almost twice the eco-nomic clout of the poorest four-fifths of humanity. Ofthe 100 largest economies in the world, 53 are nowtransnational corporations.

A new global royalty now centrally plans themarket, destroying lives and nature in its wake. Says

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the impact of globalization

Women from a village near Ncamaseri, Botswana, must dig for receding ground water in the Kalabahi desert. Water isincreasingly scarce in arid parts of Africa as aquifers are seriously depleted. The situation is becoming so dire that disputesamong governments over available water supplies are increasing. For example: the growing tensions between Namibia andBotswana over rights to the Okavango River.

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writer and former senior advi-sor to the U.S. Agency forInternational Development(USAID) David Korten, “Theworld is now ruled by a globalfinancial casino staffed byfaceless bankers and hedge-fund speculators who operatewith a herd mentality in theshadowy world of globalfinance. Each day, they movemore than two trillion dollarsaround the world in search of quick profits and safehavens, sending exchange rates and stock marketsinto wild gyrations wholly unrelated to any underly-ing economic reality. With abandon they make andbreak national economies, buy and sell corporationsand hold politicians hostage to their interests.”

unequal accessA S T R I K I N G F E AT U R E of economic globalization is thewidening gap between rich and poor; an entrenchedunderclass is being created between regions and with-in every society in the world. The 2000 UnitedNations Human Development Report says that thedisparity in the level of income between the top 20percent and the bottom 20 percent of the world’spopulation is 150:1 and has doubled in the last 30years. The world’s 225 richest individuals have a com-bined wealth equal to the annual income of half ofhumanity. The three richest people in the world haveassets that exceed the combined gross domestic prod-uct of 48 countries.

The richest fifth of the world’s people consumes86 percent of all goods and services, while the poor-est fifth consumes just over 1 percent. Americans andEuropeans spend substantially more every year on petfood, reports the United Nations, than the totalmoney needed to provide basic health and nutritionfor everyone in the world. Americans spend moremoney on cosmetics every year than the total amountneeded to provide basic universal education.

It is no surprise, then, that the deep inequalitysustained by economic globalization, whether intention-al or not, is dramatically affecting the poor’s access towater, the most basic of life’s rights. The United

Nations Economic and SocialCommission on SustainableDevelopment says that fullythree-quarters of the popula-tion living under conditions ofwater stress—amounting to 26percent of the total world pop-ulation—are located in devel-oping countries. By 2025, theCommission projects, thoselow-income countries experi-encing water stress will

amount to 47 percent of the total world population.

In highly populated Asian, African and LatinAmerican countries, massive increases in animal andhuman waste, intensified with the arrival of factoryfarms, are exposing more and more people to choleraand the deadly E. coli bacteria through contaminatedwater supplies. Most local governments cannot evenafford basic chlorine to treat the water. Many localcommunities previously turned to aquifers and hand-pumps to get around the problem of polluted surfacewater, now chemical and human waste seeping intothese sources has rendered the water table dangerousas well. In Third World cities, it is now common toration water to neighbourhoods for a few hours a dayor a few days a week.

The United Nations reports that Europeans spend$11 billion a year on ice cream, $2 billion more thanthe estimated total money needed to provide cleanwater and safe sewers for the world’s population.More than five million people, most of them children,die every year from illnesses caused by drinking poor-quality water. While billions go without clean water,North Americans use 1,300 gallons of water per per-son every day.

But water inequality exists within societies aswell. In 1994, when Indonesia was hit with a majordrought, residents’ wells ran dry, but Jakarta’s golfcourses, which cater to wealthy tourists, continued toreceive 1,000 cubic meters per course per day. In1998, in the midst of a three-year drought that driedup river systems and further depleted aquifers, theCyprus government cut the water supply to farmersby 50 percent while guaranteeing the country’s two

12

When water is privatized, prices are set

on the open market; as a result, millions

of poor people have been cut off. Because

the companies are motivated by profit

and not public service, they have no

incentive to supply the poor with water.

million tourists a year all the water they needed. InSouth Korea, farmers south of Seoul recently armedthemselves with hoes and blocked municipal watertrucks from pumping water for city dwellers in fear itwould leave their crops wanting.

Anne Platt of Worldwatch Institute reports that afamily in the top fifth income groups in Peru, theDominican Republic, or Ghana is respectively, three,six, or twelve times more likely to have water con-nected by pipe to the home than a family in the bot-tom fifth in those countries. Because they lack accessto publicly subsidized utilities, says Platt, the pooroften end up paying more for their water than do therich because they must obtain it from illegal sourcesor private vendors.

In Lima, Peru, for instance, poor people may paya private vendor as much as $3 for a cubic meter ofwater, which they must then collect by bucket andwhich is often contaminated. The more affluent, onthe other hand, pay 30 cents per cubic meter fortreated water provided through the taps in their hous-es. Hillside slum dwellers in Tegucigalpa, the capitalof Honduras, pay substantially more for water sup-plied by private tankers than they would even if theypaid for the government to install a water pipe. InDhaka, Bangladesh, squatters pay water rates that aretwelve times higher than what the local utilitycharges. In Lusaka, Zambia, low-income families pay,on average, half their household income on water.

Indigenous people have been impacted in a par-ticularly brutal fashion by economic globalization andthe theft of their water. It is the immediate relation-ship that indigenous people have to water that makesthem especially vulnerable to any large-scale projectthat alters aquatic ecosystems. The massive hydro-electric projects of northern Quebec were devastatingto the local Cree First Nations as well as to the cari-bou and fish upon which they depend.

Environmental writer Josh Karliner explains:“Indeed the process of globalization is steamrollingsocial and financial support for the basic rights of thepoor, increasingly shunting the disenfranchised off tothe side, where they must fend for themselves in thebrutally competitive ‘market.’ Growing numbers ofpeople are becoming victims of globalization, as the

forces of corporate expansion move into farmlands,deserts, oceans and river systems they previouslyignored. Already poor but largely self-sufficient, com-munities across the earth are being cast into deepersocial and ecological poverty, as well as cultural dislo-cation, as their resources are appropriated for theseemingly insatiable demands of the world’s evergrowing consumer societies.”

Once recognized as a basic human right, water isnow denied to huge numbers of the human family.Wise conservation of water cannot take place untilthe reality of inequality is confronted—and the reali-ty of inequality cannot be confronted until the tenetsof economic globalization are rejected.

prohibiting preservationG L O B A L I Z AT I O N C R E AT E S E C O N O M I C and politicalstructures that make an ecologically sound economyentirely impossible. Economic globalization refers tothe integration of national economies into a singleunified market. Transnational corporations pressurenational governments to privatize, deregulate, elimi-nate trade and investment “barriers,” boost exports,and generally relinquish state controls over the econ-omy in order to create one global economy.

Such economic integration unleashes new levelsof industrial production, intensifying natural resourceexploitation and exacerbating all existing environ-mental problems. Heightened competition forcesgovernments to roll back environmental protectionsin order to increase the competitiveness of theirdomestic producers and attract foreign investment.Economic activities that are ecologically sustainableare punished by deregulated market forces, makingresponsible management a liability that decreasescompetitiveness.

“Globalization creates political and economic struc-tures whose patterns of production and consumptionare both ecologically and socially destructive,” saysVictor Menotti, director of the International Forumon Globalization’s Committee on the Environment.“All activity orients around exports, which, to beglobally competitive, require centralized control overvast natural resources, the ability to access largeamounts of finance capital, and the need to operate

13

[ t h e i m pa c t s o f g l o b a l i z at i o n ]

complex mega-technologies.Fewer workers are needed, sogreat numbers of people areleft watching as local resourcesthey once tended are nowshipped away to others.”

The result is a regime thatcontradicts the very principlesof ecologically sustainableeconomics: removing controlover the land from people who live on it, discourag-ing strong regulatory protections, penalizing respon-sible management, and making impossible the task ofgetting the price right.

As nature is increasingly commodified, governmentsall over the world are dismantling environmental leg-islation or allowing industry to police itself. Countriesare lowering corporate taxes and environmental regu-lations in order to remain competitive, the primarymandate of the new economy. As a result, govern-ments are left with reduced fiscal capacity to reclaimpolluted waterways and build infrastructure to protectwater; at the same time they are also left with reducedregulatory capacity to prevent further pollution.

Globalization’s imperative of unlimited growthmakes it impossible for participating countries to makewater preservation a priority. Non-industrial countrieshave restructured their economic systems to pay theirdebt and export their way to prosperity, destroyingboth natural ecosystems and environmental regulationsin the bargain. The massive abuse and pollution ofthe internal waterways of most developing countrieshas been one price of belonging to the global econo-my. The depletion of underground aquifers and riversto supply the water demand of transnational industryis another.

Intrusive technologies, including the massivetransportation systems needed to carry out globaltrade, damage water systems as well. Roads carvedout of wilderness destroy river and lake habitats aswell as forests; increased global shipping multipliesthe amount of waste dumped directly into oceans andlakes; and dredging for port and waterway construc-tion destroys coastal habitat.

China has started workon a gargantuan $1 billionproject to divert water fromthe Yangtze River to Beijing.Ten thousand workers havealmost finished drilling a 420-kilometer series of tunnels todrain water from the middlestretch of the Yangtze, whereit will either be sent through ahigh-mountain range, or

through a new 1,230-kilometer channel to water-starved cities like Taiyuan on its way to the capital—a prospect the Worldwatch Institute compares toturning the Mississippi River to service Washington,D.C.

The governments of several South Americancountries have temporarily put a hold on the creationof a mammoth new water system that would channel3,400 kilometers of the Paraguay and Paraná rivers forindustrial use and open up the interior of the conti-nent to global trade. But environmentalists aren’t cele-brating yet; they know there are huge corporateinterests at stake and they will not easily give up onthis project.

“Given current corporate practices,” says business-man and environmentalist Paul Hawken, “not onewildlife reserve, wilderness, or indigenous culture willsurvive the global economy. We know that every nat-ural system on the planet is disintegrating. The land,water, air, and sea have been functionally transformedfrom life-supporting systems into repositories forwaste. There is no polite way to say that business isdestroying the world.”

Not everyone is so gloomy about the world watercrisis. After all, what some see as an ecological night-mare of unprecedented proportions, a growing num-ber of private investors are seeing as a golden marketopportunity.

14

Wise conservation of water cannot

take place until the reality of inequali-

ty is confronted—and the reality of

inequality cannot be confronted until

the tenets of economic globalization are

rejected.

15

water for saleJ U S T AT T H E T I M E G O V E R N M E N T S are backing awayfrom their regulatory responsibilities, giant transna-tional water, food, energy and shipping corporationsare lining up to take advantage of the world’s watershortage, acquiring control of water through the own-ership of dams and waterways; the development ofnew technologies such as water desalination andpurification; control over the burgeoning bottledwater industry; the privatization of municipal andregional water services, including sewage and waterdelivery; the construction of water infrastructure; andwater exportation.

“Water is the last infrastructure frontier for privateinvestors,” says Johan Bastin of the European Bank forReconstruction and Development. Tragically, water isalso the last frontier of nature and the commons.

The Globe and Mail of Canada states that privatizingwater looms as the national mega-industry of the nextdecade, with potential investment in the tens of bil-lions of dollars. “Water is fast becoming a globalizedcorporate industry.” In May 2000, Fortune magazinestated that, in a world fleeing the vagaries of technol-ogy stocks, water is the best investment sector for thecentury. The World Bank places the value of the cur-rent water market at close to $1 trillion; however,with only 5 percent of the world’s population current-ly getting its water from corporations, the profitpotential is unlimited.

The world of privatized water is overwhelminglydominated by two French transnationals. SuezLyonnaise des Eaux (which built the Suez Canal andhad 1999 profits of $1.5 billion on sales of $32 bil-lion) and Vivendi SA are referred to as the General

the water privateers

This hand-drawn map by the Silicon Valley Toxics Coalition depicts the high concentration of EPA Superfund clean-upsites, and 150 ground water contamination sites caused by an industry once thought to be “clean.” Chip manufacturers usemassive amounts of clean, freshwater and contaminate it in the process. Silicon Valley has more Superfund sites than anyother area in the U.S.

ro

bert

daw

so

n

Motors and Ford Motor Company of the water world.Both are ranked among the 100 largest corporationsin the world by the Global Fortune 500. Between themthey own, or have controlling interests in, water com-panies in over 120 countries on five continents, anddistribute water to almost 100 million people in theworld.

Suez’s CEO, Gerard Mestrallet, says that he wantsto take a page from his country’s past and develop inhis company the philosophy of “conquest” as Suezmoves into new markets around the world. Suez ismore than just a water company. According to Fortune,“its a fresh invention ...a diversified utility that offerscities a full range of infrastructure services, from waterand sewer to trash collection, cable TV, and electricpower.” The company, which projects an annual 10percent expansion of its water business, has justsigned its first major business contracts in China,which Mestrallet says “will be a prime market at theonset of [this]century.”

Both Suez and Vivendi are vying for the lucrativeU.S. market, estimated to be the world’s largest withannual revenues at $90 billion. New U.S. laws haveopened the way to greater private sector involvementin the U.S. water supply and treatment business.Until now, this sector has been almost exclusivelycontrolled by small public-sector operators. Nowthese companies are poised to promote the massiveprivatization of the American water market. In 1999,Suez paid $1 billion for United Water Resources andbought two major water treatment chemical produc-ers, Nalco and Calgon, for $4.5 billion. In the sameyear, Vivendi purchased U.S. Filter Corp. for morethan $6 billion in cash, giving the new company aprojected revenue of $12 billion in annual sales.Vivendi also owns 42 percent of Air and WaterTechnologies (AWT).

Another French company, SAUR, owned by theconstruction company, Bouygues, is also emerging ina number of countries. The Spanish transnationalAguas de Barcelona is active in Latin America, andGreat Britain’s Thames Water and Biwater are acquir-ing water concessions in Asia and South Africa.United Utilities of Britain has joined up with theAmerican construction and engineering giant,

Bechtel, to promote privatization schemes in Northand South America.

Recently, a number of large pipeline and energyand electricity companies have entered the waterfield, promising great stock profits from what they arecalling “convergence”—the prospect of a single com-pany carrying natural gas, water and electricity tomillions of customers on a for-profit basis. GeneralElectric has joined forces with the World Bank andinvestment speculator George Soros to invest billionsof dollars in a “Global Power Fund” to privatize ener-gy and water around the world, according to theGuardian Weekly.

U.S. energy giant Enron, having acquired WessexWater PLC of Britain, is bidding for huge contractsagainst the established players for newly privatizedwater services in Bulgaria, Rio de Janeiro, Berlin andPanama under its new water division, Azurix. TheRWE Group, Germany’s largest electricity producer, isalso emerging as a major player in water and waste-water services.

a poor track recordTH E P R I VAT I Z AT I O N O F M U N I C I PA L WAT E R servicesaround the world has a terrible track record. Sincewater services were privatized in France, customer feeshave increased by 150 percent. The government ofFrance also reports that the post-privatization drinkingwater of over five million people was contaminated.For most of the past decade, French magistrates havebeen investigating allegations of corruption againstexecutives of the two major French water companieswho have been convicted on three occasions of pay-ing bribes to obtain water contracts in France.

Public Services International (PSI) reports that inEngland, between 1989 (the year water was priva-tized) and 1995, there was a 106 percent increase inthe rate charged to customers, while the profits of thecompanies increased by 692 percent. The salary ofthe highest paid director of North West Water, forexample, increased by 708 percent. As a result ofthese price hikes, the number of customers who havehad their water disconnected has risen by 50 percentsince privatization. British water corporations havebeen among the worst environmental offenders in the

16

[ t h e wat e r p r i vat e e r s ]

U.K. Between 1989 and 1997,Anglian, Severn Trent,Northumbrian, Wessex (a sub-sidiary of Enron) andYorkshire were successfullyprosecuted 128 times.

Furthermore, privatizationis almost always accompaniedby lay-offs. In Great Britain,the private companies firedalmost 25 percent of the workforce, approximately 100,000workers, when they acquiredrights to the water system. In December 1999, whencompanies were ordered by the government to makeprice cuts, they announced thousands of further lay-offs, even though they were enjoying wide profit mar-gins. In central Europe, private water companiesreduced the work force of seven cities (whose rightsthey acquired) by 30 percent in just a few years. InSydney, Australia, after the Water Board was priva-tized, thousands of workers lost their jobs and pricesfor consumers almost doubled in four years.

When water is privatized, the public often losesits right to access information about water quality andstandards. A furor erupted when it was discovered inthe summer of 1998 that the water supply of Sydney,Australia, now controlled by Suez Lyonnaise des Eaux,contained high levels of the parasites giardia andcryptosporidium and that the public had not beeninformed of the problem when it was first discovered.

In Ontario, Canada, the government introducedwhat it called a “Common Sense Revolution.” Key tothis “revolution” were massive cuts to the environ-ment budget, the privatization of water testing labs,the deregulation of water protection infrastructure,and massive lay-offs of trained water testing experts.In fact, in 1999, just after a Canadian federal govern-ment study revealed that a third of Ontario’s ruralwells were contaminated with E. coli, the Ontario gov-ernment dropped testing for E. coli from its DrinkingWater Surveillance Program and, a year later, closedthe program down entirely.

The results were catastrophic. E. coli outbreaks ina number of communities sent waves of panic through

rural Ontario. In June 2000 atleast seven people, one ofthem a baby, died from drink-ing the water in the smalltown of Walkerton. The townhad subcontracted to a branch-plant of a private testing com-pany from Tennessee. Thelab, A&L Laboratories, discov-ered E. coli in the water, butfailed to report the contami-nation to provincial authori-ties, an option it has under

the new “common sense” rules. A lab spokesman saidthat the test results were “confidential intellectualproperty” and, as such, belonged only to the “client”—the public officials of Walkerton who were nottrained to deal with the tests.

world bank in the leadT H E S T O RY I N T H E N O N-I N D U S T R I A L W O R L D is farworse because international financial institutions suchas the World Bank and the International MonetaryFund are aggressively promoting the privatization ofwater. As Public Services International explains, thepolicies of these institutions distort nations’ choicesby imposing water privatization as a condition ofloans and debt relief, financing water transnationals inpreference to efficient public enterprises, and sellingwater utilities to reduce national debt.

World Bank-sponsored water privatization projectspromote monopolies and protect rampant corruptionand bribery and are often negotiated entirely in secret.The agreements are considered “intellectual property”and the public has no access to their terms. Collusionwith dictators such as Indonesia’s Suharto are too fre-quent. The Bank often puts up the lion’s share of theinvestment while the company takes home the profits.Suez promised to invest $1 billion to privatize thewater system of Buenos Aires, but only put up $30million; the rest came from a World Bank agency.

When water is privatized, prices are set on theopen market. Says Suez Director During, “We arehere to make money. Sooner or later the companythat invests recoups its investment, which means thecustomer has to pay for it.” The result in the Third

17

Vivendi SA and Suez Lyonnaise des

Eaux are the General Motors and Ford

Company of the water world. Between

them, they own, or have controlling

interests in, water companies in 120

countries on five continents and dis-

tribute water to almost 100 million

people in the world.

World is that millions of poorpeople are paying exorbitantprices for water, while othershave been cut off. Because thecompanies are motivated byprofit and not public service,they have no incentive to sup-ply the poor with affordablewater.

For example, in India,some households pay a stag-gering 25 percent of theirincome on water. The watersystem of Manila, in the Philippines, was divided bythe World Bank into two zones in 1997, each run bya separate consortium. One consortium includedBechtel, the other, Suez Lyonnaise des Eaux. Onlymonths into the new arrangement, these consortiumssharply raised customer rates, contrary to their pro-claimed intention to keep rates low, to compensatefor revenues lost due to the regional currency crisis. Ayear later, Biwater Plc. corporation increased waterrates in Subic Bay in the Philippines by 400 percent.

Labor activists in South Africa have been threat-ened with legal action by British transnational Biwaterfor criticizing the company on the Internet. Theactivists charge the company with poor water man-agement practices and with being involved in theBritish arms-for-aid scandal in the 1980s, a fact docu-mented by the British House of Commons’ ForeignAffairs Committee. The South African MunicipalWorkers’ Union says that Biwater is trying to stave offpublic criticism in the hopes of gaining the first pri-vate water contract in South Africa’s history.

The union’s position is firm: “Water privatizationis a crucial issue for public debate. Human livesdepend on the equitable distribution of waterresources; the public should be given a voice indeciding whether an overseas-based transnational cor-poration whose primary interest is profit maximiza-tion, should control those critical resources...Water isa life-giving scarce resource which therefore mustremain in the hands of the community through publicsector delivery. Water must not be provided forprofit, but to meet needs.”

The privatization of wateris wrong on many counts. Itensures that decisions regard-ing the allocation of watercenter almost exclusively oncommercial considerations.Corporate shareholders areseeking maximum profit, notsustainability or equal access.Privatization means that themanagement of water resourcesis based on the principles ofscarcity and profit maximiza-tion rather than long-term sus-

tainability. Corporations are dependent on increasedconsumption to generate profits and are thereforemuch more likely to invest in desalination, diversionor export of water than in conservation.

Further, the global trend to commodify what hasbeen a public service reduces the involvement of citi-zens in water management decisions. Private waterprojects brokered by the World Bank, for example,have minimal disclosure requirements. A water corpo-ration executive at the March 2000 World WaterForum in The Hague, said publicly that as long aswater was coming out of the tap, the public had noright to any information as to how it got there. Theconcentration of power in the hands of a single cor-poration and the inability of governments to reclaimmanagement of water services allows corporations toimpose their interests on government, reducing thedemocratic power of citizens.

Pro-privatization advocates argue that they areseeking private-public partnerships, and give assur-ances that governments will still be able to establishregulations. However, because the provision of waterservices itself does not provide sufficient return, watercorporations are increasingly seeking exclusive con-trol over water service provision through acquisitionsof infrastructure and water licences and closing theloop around public involvement. In early 1999, whenthe government of Ontario announced the break upof the public utility, Ontario Hydro, into three newprivate companies, it also made public its intention toeliminate access to information laws.

18

Computer manufacturers use massive

quantities of de-ionized freshwater to

produce their goods and are constantly

searching for new sources. Increasingly,

this search is pitting giant high-tech

corporations against economically and

socially marginalized peoples in a battle

for local water sources.

In their support for large-scale project financing,the World Bank and others give preference to largemulti-utility infrastructure projects that favor thebiggest corporations, leading to monopolies againstwhich local suppliers cannot compete. To add insultto injury, the World Bank is underwriting these giantcorporations with public money, and often incurs therisk, yet the private company reaps the profit. Andoften governments, supposedly representing theirpeople, have to assure a return to the shareholder. Forexample, Chile had to guarantee a profit margin of 33percent to Suez Lyonnaise des Eaux as a World Bankloan condition—regardless of performance.

Most disturbing, the close alliance between gov-ernments, the World Bank and the water companiesgives these corporations undue influence over govern-ment policies, such as deregulation and free trade,and preferred access to upcoming water contracts thatfavor their interests. The stated goal of the WorldBank water loan to Budapest was to “ease politicalresistance to private sector involvement.” In thePhilippines, the water corporations can appeal gov-ernment decisions and actions against them to aninternational arbitration panel appointed by theInternational Chamber of Commerce.

These World Bank-backed contracts gone so farthat they now actually contain a form of “democracyinsurance.” A recent contract between this Azurix cor-poration and the Argentine government guaranteescash payment for “expropriation” if a future governmentchanges its mind and wants to bring water servicesback under public control.

water warI N 1998, T H E W O R L D B A N K refused to guarantee a$25 million loan to refinance water services inCochabamba, Bolivia, unless the government sold thepublic water system to the private sector and passedthe costs on to consumers. Bolivia, one of the poorestcountries in the world, finally acquiesced. Only onebid was considered, and the company was turned overto Aguas del Tunari, a subsidiary of a conglomerateled by Bechtel, the giant San Francisco engineeringand construction company.

In December 1999, before making any infrastruc-

ture investments, the private water company, Aguas delTunari, announced the doubling of water prices. Formost Bolivians, this meant that water would now costmore than food; for those on minimum wage orunemployed, water bills suddenly accounted for closeto half their monthly budgets, and for many, waterwas shut off completely. To add to the problem, theBolivian government, prompted by the WorldBank, granted absolute monopolies to private waterconcessionaires, announced its support for full-costwater pricing, pegged the cost of water to theAmerican dollar and declared that none of the WorldBank loan could be used to subsidize water servicesfor the poor. All water, even from community wells,required permits to access, and even peasants andsmall farmers had to buy permits to gather rainwateron their property.

The selling-off of public enterprises such as trans-portation, electrical utilities and education to foreigncorporations has been a heated economic debate inBolivia. But this was different; polls showed that 90percent of the public wanted Bechtel out. Debateturned to protest and one of the world’s first “waterwars” was launched.

Led by Oscar Olivera, a former machinist turnedunion activist, a broad-based movement of workers,peasants, farmers and others created La Coordinadorade Defensa del Agua y de la Vida (the Coalition inDefense of Water and Life) to “de-privatize” the localwater system. Between January and early February,2000, hundreds of thousands of Bolivians marched toCochabamba in a showdown with the government,and a general strike and transportation stoppagebrought the city to a standstill. Police reacted withviolence and arrests and in early April 2000, the gov-ernment declared martial law. Activists were arrestedduring the night; radio and television programs wereshut down in mid-program. A 17-year-old boy, VictorHugo Danza, was shot through the face and killed.

Finally, on April 10, 2000, the directors of Aguasdel Tunari and Bechtel abandoned Bolivia, taking withthem key personnel files, documents and computersand leaving behind a broken company with substan-tial debts. Under popular pressure, the governmentrevoked its hated water privatization legislation. With

19

[ t h e wat e r p r i vat e e r s ]

no one to run the local water company, ServicoMunicipal del Agua Potable y Alcantarillado (SEMAPO),the government handed water services over to the workforce of SEMAPO and the people, complete with debts.

The people accepted the challenge, and set outto elect a new board of directors for the water com-pany and to develop a new mandate based on a firmset of principles. The principles stated that the com-pany must be efficient, free of corruption, fair to theworkers, guided by a commitment to social justice(providing first for those without water), and it mustact as a catalyst to further engage and organize thegrassroots.

The first act of the new company was to opera-tionalize a huge water tank in the poorest neighbor-hoods, establishing connections to 400 communitiesthat had been abandoned by the old company. Thenthe company established an active presence in theneighborhoods, listening to the people and workingwith them to solve problems. In Summer 2000, LaCoordinadora organized its first public hearings onSEMAPA to begin a public process on building abroad, consensus-based definition of what the compa-ny must become, and received many proposals fromcivil society.

The company has also taken a strong stand againstany compensation to Bechtel for its “losses.” Bechtel issuing the government of Bolivia for close to $40 mil-lion at the World Bank’s International Court for theSettlement of Investment Disputes. It is claiming“expropriation” rights under a 1992 Bilateral InvestmentTreaty (BIT) that Bolivia signed with Holland. Bechtel,an American company, must have sensed the conflictsin Bolivia brewing. In late 1999, it moved its holdingcompany for Tunari from the Cayman Islands toHolland, thereby gaining the right to sue SouthAmerica’s poorest country.

While the Bolivian government has officially saidit will fight this challenge, there are those in the gov-ernment who feel it best to pay Bechtel its compensa-tion to prove that Bolivia is ready for economic glob-alization and will be a “good” global player in theWTO. There is a real concern that the governmentof Bolivia is now in secret negotiations with Bechtelto settle that dispute out of court.

In the early months of 2001, a very disturbingpattern of surveillance, infiltration, harassment andphysical attacks against members of La Coordinadoraemerged. It is widely understood that both LaCoordinadora and SEMAPA have powerful enemies inthe echelons of power in the Bolivian and state gov-ernments. A failure on the part of the citizens to runtheir own water company could be used as a warningto others around the world who stand up to water pri-vatization and the power of the World Bank.

high-tech water guzzlersS I M I L A R WAT E R C O N F L I C T S are growing in the com-puter industry, where big corporations are claimingunfair shares of local water supplies. Computer manu-facturers use massive quantities of de-ionized freshwa-ter to produce their goods and are constantly searchingfor new sources. Increasingly, this search is pittinggiant high-tech corporations against economicallyand socially marginalized peoples in a battle for localwater sources.

Electronics is the world’s fastest-growing manu-facturing industry, according to the Silicon ValleyToxics Coalition. Giants such as IBM, AT&T, Intel,NEC, Fujitsu, Siemans, Phillips, Sumitomo, Honey-well, and Samsung have annual net sales exceedingthe gross domestic product of many countries.Originally thought to be a “clean” industry, high-techhas left a staggering pollution legacy in its short his-tory. In 1980, the U.S. Congress set up the Superfundprogram through the EPA to locate, investigate andclean up the worst sites in the nation. Presently, theSilicon Valley has more EPA toxic Superfund sitesthan any other area in the U.S. plus more than 150groundwater contamination sites, many related tohigh-tech manufacturing. Close to 30 percent of theground water beneath and around Phoenix, Arizona,has been contaminated, well over half by the high-tech sector.

There are currently about 900 semi-conductormanufacturing plants, or fabrication facilities (fabs)making computer wafers (used for computer chips)around the world. Another 140 plants are now underconstruction. These plants consume a staggering amountof water. For example, Intel Fab, a software companylocated on the high desert near Albuquerque, New

20

[ t h e wat e r p r i vat e e r s ]

Mexico, is permitted to usenearly 6 million gallons (18million liters) of water per day,or enough to supply a smalltown. At this rate (includingthe new plants under con-struction) the industry will beusing over 500 billion gallons(1,500 billion liters) of waterand producing over 100 bil-lion gallons (300 billion liters)of waste water each year.Much of the new constructionfor high-tech manufacturing isin water-poor countries or in the desert, but as localactivists say, “Water flows uphill to money.”

The question is: where will the water come from?The Southwest Network for Economic Justice and theCampaign for Responsible Technology explains: “Inan arena of such limited resources, a struggle ensuesbetween those who have traditionally enjoyed theseresources and those newcomers who look at theseresources with covetous eyes.”

High-tech companies are engaging in mechanismsto capture traditional water rights: water pricing, where-by industry pressures governments for subsidies andcircumvents city utility equipment to directly pumpwater, thus paying much less than residential waterusers pay for water; water mining, whereby companiesgain rights to deplete the aquifers while driving upthe access costs to smaller users such as family farm-ers; water ranching, whereby industry buys up waterrights of ranches and farmers; and waste dumping,whereby industry contaminates the local water sourcesand then passes the costs on to the community.

Despite increasing industrial demand, conserva-tion programs aimed at ordinary people are notapplied to industry. “While some residents tore outtheir lawns last year [1996] to save water,” theAlbuquerque Tribune wrote of a city conservation proj-ect, “it poured with increasing volume through thespigots of industry.” While residents had to decreasetheir use by 30 percent, Intel Fab was allowed toincrease its use by the same amount. In addition, Intelpays four times less than the city’s residents for its

water. Perhaps the most dis-turbing trend, however, is thedeliberate destruction of alocal pueblo traditionalacequia—a collective system ofagricultural water distribu-tion—to feed the voraciousappetite of the high-techgiants.

Under the new commer-cial system, water is separatedfrom the land it belongs toand transported great dis-

tances; this is anathema to the local indigenous ways.Says John Carangelo, a mayordomo of the La JoyaAcequia Association, “In New Mexico, where thetotal finite supply of water is allegedly fully appropri-ated, the location of a high-tech industry is depend-ent on the purchase of existing water rights. Thishigh demand for water and their vast financialresources makes water a valuable commercial prod-uct.” He warns that water trading could hollow outrural America.

Local sources, however, will clearly not be sufficientto meet industrial needs, given the aquifer depletiontaking place in many high-tech-intensive areas. Thecompanies are starting to look farther afield withintheir own countries or abroad for new sources ofwater; the global trade in water provides a possiblenew source. Given the rapid growth of high-techcompanies in the non-industrial world, particularlyChina, it is entirely possible that current bulk waterexports are being negotiated to feed the voraciouswater appetite of the global technology industry.

21

Computer manufacturers use massive

quantities of de-ionized freshwater to

produce their goods and are constantly

searching for new sources. Increasingly,

this search is pitting giant high-tech

corporations against economically and

socially marginalized peoples in a bat-

tle for local water sources.

pipe schemesTHE WATER PRIVATEERS are now also setting their sightson the mass export of bulk water by diversion, bypipelines and by supertanker. Modified tanker deliver-ies already take place in certain regions that are willingto pay top dollar for water on an emergency basis.Barges carry loads of freshwater to islands in theBahamas and tankers deliver water to Japan, Taiwan, andKorea. Turkey is preparing to sell its water by ship-ping it on converted oil tankers and through pipelinefrom the Manavgat River to Cyprus, Malta, Libya,Israel, Greece and Egypt.

In the summer of 2000, Israel began negotiationsto buy over 13 billion gallons of water a year fromTurkey; the tankers are already moored to huge yel-low floating stations two miles offshore, awaiting

delivery orders. Turkey’s water company says it hasthe pumps and pipes to export four to eight timesthat amount.

To deal with droughts in southern Europeancountries, the European Commission is looking intothe possibility of tapping into the sources of water-rich countries such as Austria. If its plans to establisha European Water Network are realized, Alpine watercould be flowing into Spain or Greece, rather thanVienna’s reservoirs, within a decade. “This means thatin theory we could supply everyone in the EuropeanUnion, all 370 million of them,” declares HerbertSchroefelbauer, deputy chairman of Verbund, thecountry’s largest electrical utility. A high-tech pipelinealready transports quality spring water from theAustrian Alps to Vienna, and the proposal to extend

22

the global trade in water

This map shows current shipment of freshwater and proposed plans for future mass transport of water. Global corporations arepressuring governments around the world to privatize water as the solution to the water crisis.

this system to other countriesis creating great unease amongAustria’s environmentalists,who warn of the damage bulkexports could have on the sen-sitive alpine ecosystem.

Gerard Mestrallet of SuezLyonnaise is planning anotherSuez Canal—this time inEurope. He has announced his intention to build agiant 160-mile aqueduct to transport water from theRhone River through France to the Catalonian capi-tal, Barcelona.

To address England’s growing water crisis, somepolitical and corporate leaders are calling for large-scale exports of water from Scotland, by tanker andpipeline. Already, several British companies are explor-ing the possibility of water exports and one Scottishentrepreneur told The Scotsman that Scottish companiesare also interested. Complicating the political sensitivi-ties is the fact that Scotland still has a publicly ownedwater system, while British water is run by privatizedcompanies. Ironically, some of these companies havebeen lukewarm to exports because the scarcity ofwater in England has kept prices and profits high.

Professor George Flemming of StrathclydeUniversity claims that it would be relatively simple toextend pipelines and natural waterways that alreadyexist between the north of Scotland and Edinburgh toLondon and other parts of England. However, supportfor water sovereignty in Scotland is strong. WhenScotland’s water authority, West of Scotland Water,publicly sounded out a plan to sell surplus water toSpain, Morocco and the Middle East, public reactionforced it to back off. Still, many see this reluctance astemporary. Flemming believes that England and Walesare running out of water because of global warmingand that imports of bulk water are inevitable.

In Australia, United Water International hassecured the contract of the water system of Adelaide(located in southern Australia) and has developed a15-year plan to export its water to other countries forcomputer software manufacturing and irrigation.Domestic companies were not allowed to bid for thiscontract because it was assumed that a large transna-

tional would increase thevalue of the water exports,now expected to be in therange of $628 million.

Several companies aroundthe world are developingtechnology whereby largequantities of freshwater wouldbe loaded into huge sealed

bags and towed across the ocean for sale. The NordicWater Supply Company in Oslo, Norway, has signeda contract to deliver 7 million cubic meters of waterper year in bags to northern Cyprus. During the GulfWar, Operation Desert Storm used water bags to sup-ply water to their troops.

Aquarius Water Trading and Transportation Ltd.of England and Greece has begun the first commercialdeliveries of freshwater by polyurethane bags, towedlike barges through waterways. The company, whosecorporate investors include Suez Lyonnaise des Eaux,delivers water to the Greek Islands where a pipingsystem links the bag to the main water supply on theisland. Aquarius predicts that the market will soonexceed 200 million metric tons per year. The compa-ny’s bag fleet consists of eight 720-ton bags and two2,000-ton versions. The larger bags hold two millionliters of water each. Aquarius has completed researchand development on bags ten times larger and issearching for the capital investment to produce them.The company has its sights set on Israel, and claimsto have the interest of several major water companies.

Nowhere are dreams for the trade in water as bigas they are in North America. Every few years, plansto divert massive amounts of Canadian water towater-scarce areas of the United States, Asia and theMiddle East by tanker, pipeline, or rerouting of thenatural river systems, are raised only to be shut downby public protest. One of the largest proposed diver-sion projects was called the GRAND Canal—theGreat Recycling and Northern Development Canal. Itoriginally called for the building of a dike acrossJames Bay at the mouth of Hudson Bay (both ofwhich now flow north) to create a giant freshwaterreservoir out of James Bay and the twenty rivers flow-ing into it. A massive series of dikes, canals, dams,

23

Several companies around the world are

developing technology whereby large

quantities of freshwater would be loaded

into huge sealed bags and towed across

the ocean for sale.

power plants and locks would divert this water at arate of 62,000 gallons a second down a 167-mile canalto Georgian Bay, where it would be flushed throughthe Great Lakes and taken to the U.S. Sun Belt.

The NAWAPA—the North American Water andPower Alliance—was a similar scheme. The originalplan envisaged building a large number of major damsto trap the Yukon, Peace and Liard rivers into a giantreservoir that would flood one-tenth of British Columbiato create a canal from Alaska to Washington state andsupply water through existing canals and pipelines tothirty-five American states. The volume divertedwould be roughly equivalent to the average totalannual discharge of the St. Lawrence River.

In the early 1990s, a consortium named Multi-national Water and Power Inc. spent $500,000 promot-ing the diversion of water from the North ThompsonRiver (a tributary of the Fraser River) into the ColumbiaRiver system for delivery by pipeline to California.

In the last decade, these projects have quietly beendrawing support again from the business community inCanada. In 1991 Canadian Banker magazine said that waterexport would become a multi-million dollar business:“The concept of NAWAPA... remains a potentially awe-some catalyst of economic and environmental change.”

In the same year, Report on Business magazine stated:“Pollution, population growth and environmental cru-sading are expected to put enormous pressure on theworld’s supply of freshwater over the next ten years.Some of Canada’s largest engineering companies aregearing up for the day when water is moved aroundthe world like oil or wheat or wood…What will beimportant is who has the right to sell it to the highestbidder.”

Meanwhile residents of water-scarce regions con-tinue to live in denial. In a July 1998 article for TheAtlantic Monthly titled “Desert Politics,” writer RobertKaplan notes the blind faith of people living in theArizona desert believing that some magical solutionto their water shortage will manifest itself while theycontinue to build in an area never meant for humanhabitat in these numbers. He notes that more than800,000 people live in greater Tucson alone and fourmillion in Arizona, a tenfold increase in seventy years.According to Wade Graham of Harper’s Magazine,municipal development in Phoenix is occurring at arate of an acre every hour. Kaplan writes,

“Maybe, as some visionary engineers think, theSouthwest’s salvation will come ultimately from thatshivery vastness of wet, green sponge to the north:Canada. In this scenario a network of new dams,reservoirs, and tunnels would supply water from theYukon and British Columbia to the Mexican border,while a giant canal would bring desalinized HudsonBay water from Quebec to the American Midwest,and supertankers would carry glacial water from theBritish Columbian coast to Southern California—allto support an enlarged network of post-urban, multi-ethnic pods pulsing with economic activity.”

canada and alaska: opec of water?T H E C A L L T O E X P O RT WAT E R by supertanker is heat-ing up again in Canada after a lull of a few years. InBritish Columbia, a number of export companies suchas Western Canada Water, Snow Cap Water, WhiteBear Water and Multinational Resources were alreadylined up for business when the government bannedthe export of bulk water in 1993. One project was toinvolve a Texas company prepared to pay for a fleetof 12 to 16 of the world’s largest supertankers(500,000 deadweight tons) to operate around the

24

[ t h e g l o b a l t r a d e i n wat e r ]

Few of the 150 fish species that inhabited the Mun Riverhave survived the Pak Mun Dam project in Thailand. Thisdam typifies huge mega-dam projects funded by the WorldBank and private industry that cause havoc to the environ-ment and displace millions of people.

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clock. Under one contract,the annual volume of water tobe shipped to California wasequivalent to the total annualwater consumption of the cityof Vancouver.

The British Columbiangovernment that made thedecision to ban bulk waterexports is politically committedto this position; howeverfuture governments in B.C.might easily reverse this poli-cy, opening a floodgate ofexport proposals. Canadianwater expert Richard Bockingexplains that the same compa-nies would transport oil andwater, in some cases, emptying oil on one leg of thetrip, and carrying water home on the return voyage:

“Water export from the B.C. coast would involvehuge supertankers, operating year round on tightschedules. They would wind their way through tortu-ous coastal waterways, maneuvering around islandsand reefs in an area where no well-developed marinetraffic management system exists. There are strongand often turbulent tidal currents in coastal inletswhere winter winds often reach ferocious velocities.

“These huge tankers would travel through watersthat are amongst the world’s finest for recreationalboating and fishing. Pods of killer whales move regu-larly through these waters. Along with commercialand sports fisheries, spawning for almost the entirecommercial oyster industry of coastal B.C. is locatedhere. The enormous fuel tanks of supertankers are fullof bunker C fuel, the worst possible grade of oil inenvironmental terms. With currents, winds, rocks,and reefs intersecting with tight ship schedules, thestage is set for tragedy on a grand scale.”

In recent years, two other Canadian provincesreceived corporate applications to allow the export ofbulk water for commercial profit. In the spring of 1998,the Ontario Ministry of the Environment approved aplan by Nova Group to export millions of liters ofLake Superior water by tanker to Asia. However, the

province later rescinded thegrant after an outcry from theInternational Joint Commission;(then) U.S. Secretary of StateMadeleine Albright, whoclaimed that the United Stateshad shared jurisdiction overLake Superior; and the public,most notably those living inthe Great Lakes area ofCanada and the United States.The other application, arequest to export 52 billionliters of water a year frompristine Gisborne Lake in theNewfoundland wilderness,seemed poised to receive thego-ahead, given recent state-ments made by Newfoundland’s

new premier, Roger Grimes. The company, McCurdyGroup of Newfoundland, plans to ship the water tothe Middle East by supertanker.

Newspaper and business publications are intensi-fying the debate. In February 1999 the National Postcalled Canada’s water “blue gold” and demanded thatthe government “turn on the tap.” Its business colum-nist, Terence Corcoran, added fuel to the fire: “Canadais a future OPEC of water. Here’s a worthwhile long-term bet: By 2010, Canada will be exporting largequantities of freshwater to the U.S., and more bytanker to parched nations all over the globe.

“The issue will not be whether to export, but howmuch money the federal government and the provinceswill be able to extract from massive water shipments.Rather than resisting the idea of water exports,Canada will end up scrambling to head the WWET,the World Water Export Treaty, signed in 2006 by 25countries with vast water reserves. Using the OPECmodel, they will attempt to cartelize the world supplyof water and drive the price up.” The Calgary Herald’seditorial board agreed, “Canada has plenty of fresh-water, so let the commercial exports begin.”

However, Canada isn’t the only water-rich regionbeing eyed by transnational business. A Canadiancompany, Global Water Corporation, has signed an

25

“Pollution, population growth and

environmental crusading are expected

to put enormous pressure on the world’s

supply of freshwater over the next ten

years. Some of Canada’s largest engi-

neering companies are gearing up for

the day when water is moved around

the world like oil or wheat or wood...

What will be important is who has the

right to sell it to the highest bidder.”

—report on business

agreement with Sitka, Alaska,to export 18 billion gallons(58 billion liters) per year ofglacier water to China whereit is to be bottled in one ofthat country’s “free tradezones” to save on labor costs.Although the companybrochure acknowledges thatthere is a severe water crisis inChina, it entices investors “toharvest the acceleratingopportunity...as traditionalsources of water around theworld become progressivelydepleted and degraded” andlaments the fact that the gov-ernment of British Columbiain Canada has placed a ban onbulk water exports.

The company is nowengaged in a “strategic allianceto plan an international strategy to move water glob-ally in bulk tankers” with the Signet Companies, aninternational maritime shipping company based inHouston, Texas. Signet has been engaged in the bulkmovement of water since 1986 when both WesternCanada Water and its predecessor contracted theshipping company for the “design, development,analysis and implementation of an international watertransport system.” As Global explains, “Water hasmoved from being an endless commodity that may betaken for granted to a rationed necessity that may betaken by force.”

But Global is only one of the many companieswith interests in Alaskan water. Alaska has becomethe first jurisdiction in the world to permit the com-mercial export of bulk water. The Alaska BusinessMonthly bluntly states, “Everyone agrees water has21st century potential as an export from Alaska, andcommunities from Annette Island to the Aleutians arethinking about turning on the tap.” The journalreports that a Washington-based company has begunshipping city tap water from Alaska on barges to bebottled in Kent, Washington, and that several otherprojects are in the works.

Alaska’s water resourcesare staggering, reports thepro-export Alaska BusinessMonthly. For example, it sug-gests that if Sitka filled a mil-lion-gallon tanker per day,this would still be less than 10percent of its current waterusage. In Eklutna, Alaska, BrianCrewdson, assistant to the gen-eral manager of the AnchorageWater and Wastewater Utility,estimates the export potentialto be as high as 30 million gal-lons (90 million liters) per day.

He reports that in 1995 aMitsubishi-leased tanker tak-ing on petroleum by-productsfor processing overseas alsoloaded a couple of millions ofgallons of Eklutna water forshipment to Japan. He

believes this may have been the first tanker shipmentof water out of the United States and when word gotout, he received calls from companies interested indoing business in New York City, Washington D.C.,and Charleston, S.C. Crewdson adds that there ismore money in bulk water exports than bottled waterexports.

One entrepreneur who is poised to profit fromAlaskan water exports spent much of his career shapingwater policy in the public sector. Ric Davidge, presidentof Arctic Ice and Water Exports, served in the U.S.Department of the Interior as chairman of the FederalLand Policy Group and was a key advisor to both thefederal and state governments in the clean-up opera-tions for the Exxon Valdez oil spill. As Alaska’s direc-tor of water, Davidge was responsible for initiating themarketing of the state’s water and established the pol-icy framework that allowed for the export of water. Soonafter he set the export wheels in motion, he movedinto the private sector and began a water export busi-ness. He is now known as “Alaska’s Water Czar.”

Davidge’s curriculum vitae states that he providesa “wide range of consulting services to foreign and

26

“Water has moved from being an end-

less commodity that may be taken for

granted to a rationed necessity that may

be taken by force.

It is Global Water’s intention to exploit

this gap in foreign markets through its

ability to supply bulk Glacier Water

by shipping to foreign distributors who

will then bottle and market the finished

Glacier Water product at prices that

substantially undercut all other imported

products as well as being able to rival

local bottled product prices.”

global water corporation’s publication global gazette

domestic companies developing bulk and bottled waterexports from Alaska.” Clients include companies fromSaudi Arabia, Taiwan, Alaska, Washington, Canada,South Korea, Tanzania, Japan, Mexico, California andNevada.

There are some who say that bulk export of wateris too expensive to be economically viable and sug-gest that the future lies with desalination. However,the World Bank points out that the world has alreadytapped all its low-cost, easily accessible water reserves;the financial and environmental costs of tapping newsupplies, however they are developed, will be two tothree times more than those of existing investmentsand the demand will be there even if the sources areexpensive.

While desalination will be used by some countries,it is a very expensive process and is fossil fuel inten-sive. Massive desalination projects would be possibleonly to those countries with abundant energy supplies,and would seriously add to global warming—a crisisalready exacerbated by freshwater diversion.

Davidge points out that the price of water on adollar-per-unit basis is already higher than refinedgasoline. “Everything from soft drinks to French wineto microchips will get many times more expensive asarea reserves of clean water are drawn down.” Heargues that desalinated water is more expensive toproduce and more environmentally destructive thanbulk water shipments in tankers and water bags.

Quebec businessman Paul Barbeau of Aquaroute,Inc., a company “dedicated to water transportation inbulk,” agrees. He says that water can be easily export-ed by tanker vessel on very short notice. He claimsthat at his former company, Enercem Tankers, he con-verted and operated a petrol carrier into a water carri-er which was used to transport Canadian water to theBahamas. “Capturing water is easy. A floating ship cansimply pump what may be declared as a water ballast.This is done daily on any coastal or ocean-going ves-sel or even more simply with any barge as there arealready some on the Great Lakes. The tools to exportwater afloat are already there. What is missing is theprecise development in law to prevent an uncon-trolled practice.”

Even some environmentalists believe that watercommodification and trade is inevitable. Says AllerdStikker, “It could very well be that in the beginning ofthe 21st century clean water will start to become amajor regional and inter-regional commodity, beingproduced and traded in volumes undreamt of today.”

Especially in light of economic globalization, it isa myth that large cross-border transfers of water arenot economically feasible. The only difference betweenthese and other mega-projects is that water becomesa product transferred across borders. These mega-projects are identical in purpose to domestic waterprojects and governed by the same economic analy-sis. There is no reason to believe that current massivegovernment subsidies to industry and agribusiness aregoing to end anytime soon. Transnational corpora-tions operating in water-intensive industries are goingto expect local governments to find and fund thewater supplies they need before making investmentand production decisions.

bottled water becomes big businessW H E R E T H E R E I S A D E M A N D for the trade of wateracross borders, it is already well underway. The tradein bottled water is one of the fastest-growing (andleast regulated) industries in the world. In the 1970s,the annual volume was 300 million gallons. By 1980,

27

[ t h e g l o b a l t r a d e i n wat e r ]

Walker Glacier and the Tatshenshini-Alsek River—Majestic rivers and lakes in Alaska, Canada and the lowerU.S. are threatened by proposals to ship freshwater acrossthe ocean by supertankers for industrial use.

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this figure had climbed to 630 million gallons, and bythe end of the decade, the world was drinking twobillion gallons of bottled water every year. But thesenumbers pale in comparison to the explosion in bot-tled water sales in the last five years—over 20 percentannually. In 2000 over 8 billion gallons (24 billionliters) of water was bottled and traded globally, over90 percent of it in non-reusable plastic containers.

In Canada, the amount of water extracted by bot-tlers has grown by more than 50 percent in less thana decade; bottlers, who pay no fee for the water theycapture, have the legal right to extract about 30 bil-lion liters a year—1,000 liters for every person in thecountry. Almost half of it is exported to the U.S.

As the world’s freshwater supply becomes moredegraded, those who can afford it are favoring thepackaged item, even though bottled water is subject-ed to less rigorous testing and purity standards thantap water. A March 1999 study by U.S.-based NaturalResources Defense Council (NRDC) found that muchbottled water is no safer than tap water and some isdecidedly less so. One-third of 103 brands of bottledwater studied contained levels of contamination,including traces of arsenic and E. coli and at least one-

fourth of bottled water is actually bottled tap water,the study found.

Alongside the giants of the industry, such asPerrier, Evian, Naya, Poland Spring, Clearly Canadian,La Croix and Purely Alaskan, there are literally thou-sands of smaller companies now in the business. Aswell, the big soft-drink players are entering the mar-ket en masse. PepsiCo has its Aquafina line and Coca-Cola has just launched the North American version ofits international label, Bon Aqua, called Dasani. Coca-Cola predicts that its water line, which is just processedtap water and sells for more than gasoline, will sur-pass its soft-drink line within a decade.

These companies are engaged in a constant searchfor new water supplies to feed the insatiable appetiteof the business and are engaging in the trade of waterby tanker shipments and by purchasing water rightsfrom farmers. In rural communities all over the world,corporate interests are buying up farmland to accesswells and then moving on when supplies are depleted.In South America, foreign water corporations are buy-ing vast wilderness tracts and even whole water sys-tems to hold for future development.

Sometimes these companies leave dried-up sys-tems in a whole area, not just their own land. A fero-cious debate has been taking place in Tillicum Valley,a picturesque fruit and wine district in British Columbia.Clearly Canadian Beverage Corp. has been miningthe ground water of the region so relentlessly thatlocal residents and orchard growers say the companyis “draining their water supply dry.”

Of course, the global income gap is mirrored ininequitable access to bottled water. The NRDCreports that some people spend up to 10,000 timesmore per gallon for bottled water than they do fortap water. For the same price as one bottle of this“boutique” consumer item, 1,000 gallons (3,000 liters)of tap water could be delivered to homes, accordingto the American Water Works Association. Ironically,the same industry that contributes to the destructionof public water sources—in order to provide “pure”water to the world’s elite in non-reusable plastic—peddles its product as being environmentally friendlyand part of a healthy lifestyle.

28

[ t h e g l o b a l t r a d e i n wat e r ]

Once a part of the “commons,” available freely to all, wateris becoming a commodity nearly as valued and scarce as oil.The bottled water industry promotes its expensive product asbeing environmentally friendly and part of a healthy lifestyle;however, freshwater sources are being depleted and degradedand even more pollution is generated by creating non-reusableplastic water containers.

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too little too lateG O V E R N M E N T S A L L O V E R T H E W O R L D have beenremiss in not recognizing the crisis surrounding theworld’s water resources and for not taking steps tooffset the coming emergency.

In the industrial world, there are some real successstories in the reclamation of rivers, lakes and estuarieschoked with sewage and industrial pollution. TheHudson River in the U.S. was once given up for dead;now it abounds with life. Citizens and governmentshave worked to ban some of the most egregious tox-ins entering our water, such as DDT, and in December2000 concluded a historic treaty banning the majorpersistent organic pollutants (POPs). As well theyhave forced the partial clean-up of industrial effluentsuch as waste from pulp and paper mills.

The partial recovery of the Great Lakes throughjoint action of the bordering provinces and states, forexample, is being studied by scientists all over theworld. After discovering that phosphorus was causingmuch of the deterioration, the governments of Canadaand the United States signed the Great Lakes WaterQuality Agreement in 1972, which strongly curbedthe dumping of phosphorus and municipal sewageinto the lakes.

As well, conservation efforts in Europe and NorthAmerica have resulted in some reduction in house-hold and industrial water use, helping to slow the rateof aquifer withdrawal. Water use has actually droppedin some regions and industrial sectors in the U.S. by10 to 20 percent since 1980, according to the UnitedStates Geological Survey. In the last decade, govern-

29

the failure of governments

As governments abandon their duty to protect existing water supplies, warning signs such as these have become commonplacein many regions around the globe.

usd

a

ments have begun to meet ona regular basis to begin toaddress the multiple crises ofdepletion, pollution, sanitationand equity of access.

The United Nationsdeclared the 1980s to be theInternational Drinking WaterSupply and Sanitation Decadeand made some significantinroads toward providinginfrastructure and clean waterto some particularly desperatecommunities. But the United Nations admits that lackof money is seriously jeopardizing this campaign, andat its present rate, the world cannot expect to see full-service coverage before the year 2100.

A statement of principles—The Dublin Statementon Water and Sustainable Development—emergedfrom a 1992 conference in Ireland. That documentserved as the foundation for the water chapter ofAgenda 21, the global action plan developed at the1992 Earth Summit in Rio. These principles recognizethe need to protect watershed ecosystems and call formore long-range planning by governments to protectfreshwater resources. The United Nations Commissionon Sustainable Development undertook a comprehen-sive assessment of the world’s freshwater resources,presented to the General Assembly in 1997. The reportoutlines areas for “urgent action,” and calls for theorganization to “facilitate inter-governmental dialogue”on taking action toward “sustainable development.”

Important as these steps are, they are not yetgreat enough nor coordinated enough to offset theother actions, or inactions, of governments. As KlauseTopfer of the United Nations Environment Programsaid at a March 1998 water conference in Paris, “Thefragmentation of authority for water across many sec-tors and departments at the national and internationallevels has resulted in the absence of a common visionon the sustainable use of this vital resource.” And,perhaps more significantly, international environmentalagreements or documents such as The Dublin Statementare voluntary, and their goals contradict the currentglobal trade system as promoted by trade agreements

and institutions such as theWTO, which have powerfulenforement mechanisms toensure that market principlesrule over environmental orhuman needs.

The United Nationspoints out that governmentsin industrial and non-industri-al countries alike give low pri-ority to water issues and insti-tutions; funding for researchand solutions is abysmally

inadequate. Freshwater management is in its infancy—and political commitment, public education andconservation awareness are sadly lacking all over theworld. While environmental concernes and hugefinancial costs have slowed the enthusiasm for mega-projects such as dams and hydroelectric projects insome countries, others are embracing such technolo-gy with zeal.

Meanwhile, governments and industry continue toengage in destructive practices. While many northerngovernments have banned the sale and use of toxinssuch as DDT within their borders, northern-basedmultinationals continue to manufacture and peddlesuch harmful chemicals elsewhere. As a result, theyare widely used in the non-industrial world. Massiveuse of pesticides, herbicides, fungicides and hormonesare used in agriculture around the world. Traces ofthese toxins can be found in ecosystems in virtuallyevery country on earth, including uninhabited wilder-ness and watersheds.

Governments are failing to address another lead-ing cause of water loss: leakage from municipal infra-structure and irrigation systems. In the Third World,these problems are being exacerbated as governmentssink deeper into poverty in the wake of the globalfinancial meltdown. The World Bank reports that atleast 50 percent of municipal water is wasted throughleakage in the developing world. For example, in thePhilippines’ Manila, 57 percent of its municipal wateris lost through leaks and theft. In non-industrial coun-tries, reports World Resources, 60 to 75 percent of irri-gation water never reaches the crop.

30

With current technologies and methods

available today, a conservative estimate

is that agriculture could cut its water

demands by close to 50 percent, indus-

tries by 50 to 90 percent, and cities by

one-third without sacrificing economic

output or quality of life. What is miss-

ing is political will and vision.

In industrial countries, where the technology andresources are available for improvements, governmentshave instead cut spending on public works and evis-cerated environmental laws in the name of globalcompetitiveness. Already crumbling inner-city systemsare deteriorating in most industrialized cities. InBritain, for example, Worldwatch Institute estimatesthat one-quarter of the water that enters the distribu-tion network is lost because of broken pipes andother problems. Until it started to address the prob-lem, Boston, Massachusetts, lost almost 40 percent ofits municipal water supplies annually from similarneglect. The average Canadian household uses about500,000 liters a year, but almost half is wasted inwashing cars or dripping taps. The Canadian govern-ment estimates that it will cost $53 billion (Can $80billion) to upgrade deteriorating water infrastructures.

A coordinated effort by the world’s governmentscould change this pattern of waste within a decade.With current technologies and methods available today,a conservative estimate suggests that the agriculturesector could cut its water usage by close to 50 percent,industries by 50 to 90 percent, and cities by one-thirdwithout sacrificing economic output or quality of life.What is missing is political will and vision.

As well, millions of people die every year fromcontaminated water because many governments don’tallow local communities to manage their ownresources. A March 1999 study by the World Bankand the United Nations Development Programreports that international aid programs channel toomuch money through government agencies and utili-ties and don’t trust local communities to manage theirown systems. The report also accuses internationalagencies and governments of forcing new technolo-gies on communities that cannot afford to maintainthem. As an example of what can work, the reporthighlights a pilot project in Uttar Pradesh, India’smost populous and least developed state, in which vil-lagers elect their own water-management committeesand oversee public budgets. The local test projectscost two-thirds less than those delivered by the gov-ernment water board.

Governments are also culpable by their massivesubsidization of the global transportation system that

underpins economic globalization. If the full cost oftransporting consumer goods across the ocean for assem-bly and then back again was reflected in the final price,the volume of world trade would diminish significantly.

Governments subsidize the water-guzzling high-technology sector in many ways. The city of Austin,Texas, not only awards tax breaks to high-tech compa-nies (recently $125 million to Samsung and $56 mil-lion to Sematech), but also reduced water rates. Austin’sindustrial water rates are less than two-thirds of whatresidents pay. For its Rio Rancho facility in NewMexico, Intel recently received a tax subsidy of $8billion via an industrial revenue bond and an addition-al $250 million in tax credits and other subsidies. TheSouthwest Network and the Campaign for ResponsibleTechnology reports in Sacred Waters, “The greatestform of cost externalization related to water...comesin the form of water price subsidies, water deliveryand treatment infrastructure subsidies, and restrictedaccess to traditional and low-income water userscaused by the massive use by this industry.”

Further, in the absence of legislation or even debatein most countries, the privatization of water andwastewater services is steadily advancing. Through

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Santa Clara River, Santa Clara, California—Hundreds ofagro-industrial chemicals pour from pipes such as this intostreams, rivers, and lakes. In many countries, waters are socontaminated that the water is unfit even for industrial use.In the U.S. agriculture accounts for polluting 70 percent ofthe nation’s impaired rivers and streams and 49 percent ofaffected lakes.

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“public-private partnerships,”municipal governments inmany countries are blurringthe lines between private com-panies and democraticallyelected governments. Often,these “partnerships” are thefirst step to full privatization.Because many of the samecompanies providing theseservices are likely to moveinto the area of bulk export, dams and water diver-sion, governments are granting them access to waterresources through the back door.

trading and buying water rightsC O M M E R C I A L WAT E R T R A D I N G is growing in manyparts of the world, usually with governments’ blessing.In Chile, where privatization is a government goal,water companies are buying water rights from farmersand selling them to cities. Informal, small-scale watertrading among farmers is common throughout thenon-industrial world. As long as these arrangementsare made between local farmers and local communi-ties, the system can work equitably; but if the practiceis unregulated, it is often used to drive up the price ofwater for the poor. When large corporations enter thegame, they typically buy up block water rights,deplete water resources in an area, and move on.

A similar practice is already common in thefishing industry. Large corporations are buying upgovernment-granted fishing licences called IndividualTransferable Quotas (ITQs)—an entitlement that canbe leased or sold, permitting the holder to catch aspecified quantity of fish. Originally designed by gov-ernments to control overfishing, ITQs are now con-centrating the fishery industry in the hands of a smallnumber of giant fishing corporations who encouragedestructive fishing practices and strangle local com-munities. As one out-of-work Newfoundland fishersaid, “For the first time in history, the fish are ownedbefore they are caught.”

In California, water rights trading is becoming avery big business. In 1992, the U.S. Congress passeda bill allowing farmers, for the first time in U.S. histo-ry, to sell their water rights to cities. In 1997, (then)

Interior Secretary BruceBabbitt announced plans toopen a major water marketamong the users of theColorado River. The new sys-tem would allow interstatesales of Colorado River wateramong its southern users—Arizona, Nevada and California.

Wade Graham (Harper’sMagazine) calls this develop-

ment “the largest deregulation of a national resourcesince the Homestead Act of 1862” and adds that theonly thing that could have topped it would have beenthe privatization of all U.S. federal lands. Governmentleaders are counting on the free market to do whatpoliticians and the courts have not been able to do—referee between the many claims to the Colorado’swater.

The deals are expected to be small at first (Nevadahas already arranged to pay Arizona to store waterfor future use), but in the long run, the fast-growingareas where high-tech industry is concentrated willbe able to obtain vast quantities of reasonably pricedwater from a virtually limitless source. As a warning,Graham points to a failed experiment in water priva-tization in the Sacramento Valley in the early 1990s.

For the first time, Southern California cities andfarmers were no longer prevented from buying waterdirectly from Northern California farmers, hoarding itand selling it on the open market. Large-scale opera-tors helped themselves to huge amounts of water andstored it with the Drought Water Bank until the pricewas right to sell. A small handful of sellers walkedaway with huge profits, while other farmers foundtheir wells run dry for the first time in their lives. Theresults were disastrous; the water table dropped andthe land sank in some places.

Graham compares this incident with the OwensValley tragedy at the turn of the last century. Theonce lush, water-rich Owens Valley was bled drywhen water officials from Los Angeles devised ascheme to divert Owens Valley water to southernCalifornia. The Owens Valley scam demonstratedthat although only a few individuals or corporate

32

The United Nations points out that

governments in industrial and non-indus-

trial countries alike give low priority to

water issues and institutions; funding

for research and solutions is abysmally

inadequate.

entities hold registered waterrights, the entire communitydepends upon those rights...Water in California is prosper-ity, and if the legal right to useit can be privatized and trans-ferred away, then the prosperi-ty of the community may gowith it.

Water rights trading, how-ever, is growing in Californiadespite the storm warnings. In1993, the billionaire Bass brothers of Texas quietlybought up 40,000 acres of Imperial Valley farmland inorder to sell water to the city of San Diego,California. The project fell through when it was dis-covered that the district, not private farmers, ownedthe property. In January 1999, U.S. Filter Corp. boughta ranch and 14,000 acre-feet of water north of Reno,Nevada, which it intends to divert by pipeline toReno for commercial sale. The local community ofLassen County says it will be left without its lifeblood.Santa Monica–based Samda plans to pump well waterfrom its 2,000-acre ranch in Fremont Valley north ofMojave and deliver it by pipeline to Los Angeles. TheStockman Water Co. has received an endorsementfrom the city of Parker, California, to pump water outof the San Luis Valley to Denver, Colorado.

In early 2001, the Metropolitan Water District ofLos Angeles contracted to buy as much as 47 trilliongallons of water from the state’s largest farming com-pany, Cadiz Inc. In a move of great concern to envi-ronmentalists and farmers, who fear a repeat of OwensValley, the water will be pumped from an aquiferdeep under the Mojave Desert. Tony Coelho, former-ly a powerful Democratic congressman and a chair-man of Al Gore’s presidential campaign, says that thiswater source is so valuable, no dollar figure can be puton it. “Careers are made and lost in water politics, andthat will be true here.” Adds Keith Brackpool, theBritish entrepreneur who runs Cadiz, “If you do themath, the price of our water just soars.”

Little wonder California’s Governor Gray Davissays, “Water is more precious than gold.” In a privatemarket, the superior purchasing power of large cities

such as Los Angeles and ofcorporations such as Intelcould force the cost of waterup far enough to price farm-ers, small towns and indige-nous peoples out of the mar-ket.

closed door dealsC O M PA N I E S W I T H WAT E R

I N T E R E S T S stand to reap hugewindfalls as governmentsaround the world, having

allowed municipal infrastructures to crumble, nowhand the water market over to the private sector. Andthey are doing it with the full participation andapproval of international government agencies such asthe United Nations and the World Water Council.

In July 2000, the United Nations announced a“Global Compact” with a number of major transnation-al corporations, including Nike, Shell Oil and SuezLyonnaise des Eaux. Many NGOs were surprised anddeeply concerned about the UN giving its blessing tocorporations noted for their bad environmental andlabor practices in return for their agreement to a handfulof purely voluntary guidelines. But this development isvery much in keeping with the pro-privatization posi-tion the UN has been following for some years now.

At a March 1998 conference in Paris, the UNEconomic and Social Council Commission onSustainable Development proposed that governmentsturn to “large multinational companies” for capital andexpertise and called for an “open market” in waterrights and an enlarged role for the private sector. TheUN promised to mobilize private funds for the vastinvestments needed for networks and treatment plantsand for the technology needed to ensure future watersupplies.

The UN, with the World Bank and the Interna-tional Water Resources Association, is also a foundingmember of the World Water Council, “the world’swater-policy think tank” as the Council describes itself.The World Water Council’s 175 member groups includeleading professional associations, global water corpo-rations, government water ministries, and internation-

33

It is clear that transnational water cor-

porations are waging an offensive on

many fronts to take over the agenda of

international sustainable development

programs for their own profit and that

political leaders, the World Bank and

the United Nations are openly colluding.

al financial institutions. One of its two vice presidentsis Rene Coulomb of Suez Lyonnaise des Eaux.

The Council held the first World Water Forum inMarrakesh, Morocco, in 1997, and the second in TheHague in March 2000, attended by 5,700 participantsfrom all over the world and chaired by then WorldBank Vice-President Ismail Serageldin. While ostensi-bly called to bring together “stakeholders” in the waterissue from around the world to address the globalwater crisis, the Forum was instead used as a showcasefor the transnational water and energy companies andeven big food corporations such as Nestle andUnilever in order to promote privatization and fullcost recovery as the only solution to the world’s watershortages. Most panels and workshops were chairedby World Bank and corporate executives who alsomade up the lion’s share of panelists; only one publicsector union representative was invited to speak dur-ing the entire five-day conference.

NGOs were allowed to attend, but the prohibi-tive cost of the conference fee and accommodationensured that only a small number were present.Government officials from more than 160 countriesattended, but were relegated to observer status andapproving the final report of the Forum, which refusedto name water as a human right, calling it instead a“human need.” This is not semantic; if water is a humanneed it can be serviced by the private sector. A humanright cannot be sold. Throughout this process, corpo-rations emerged as the dominant players on the worldwater stage.

A second new international water agency wasalso created in 1996, composed of many of the sameplayers. The Global Water Partnership (GWP)describes itself as an “action-oriented network” oforganizations interested in water issues with a missionto find “practical tools” for solving water problems,particularly in developing countries. Its membershipincludes a number of NGOs, government agencies(such as Canada’s Canadian International DevelopmentAgency, whose former head, Margaret Catley-Carlson,is GWP’s new chair), multilateral banks and the pri-vate sector. Suez Lyonnaise des Eaux executive, ReneCoulomb, sits on the steering committee, as does arepresentative of the Switzerland-based World

Business Council for Sustainable Development andthe World Bank. Another representative of SuezLyonnaise des Eaux, Ivan Cheret, sits on the GWP’sTechnical Advisory Committee.

Its operating principle that water is an “economicgood” and has an “economic value in all its competinguses,” is the basis for GWP’s priority on the privatiza-tion of water services. For instance, in November1997, this advisory group held a meeting in Vitória,Brazil, in partnership with the Brazilian Association ofWater Resources and the Inter-American DevelopmentBank. Among the issues considered were “public-pri-vate partnerships for water management.” SuezLyonnaise des Eaux, through its membership on thiscommittee, is in a privileged position to bid for these“partnership” contracts with the “good housekeepingseal of approval” of the world’s governments and theUnited Nations.

It is clear that transnational water corporationsare waging an offensive on many fronts to take overthe agenda of international sustainable developmentprograms for their own profit and that political lead-ers, the World Bank and the United Nations areopenly colluding. Their way is paved by the utter fail-ure of governments everywhere to protect their waterheritage. The private sector argues that it is time togive the private sector the chance to manage this pre-cious resource and even some environmentalists, hav-ing given up on governments altogether, agree.

In fact, governments are losing their right to pro-tect their water heritage by default. Most governmentshave very few laws or regulations regarding their watersystems. Most haven’t even begun to address the issuesof privatization, commercialization and trade in water.Yet, while they leave their water resources unprotect-ed by legislation, they are actively negotiating andsigning international trade and investment agreementsthat supersede national law. These treaties includetrade in water, and some explicitly grant water rightsto the private sector. The most immediate example isNAFTA signed by Canada, the United States andMexico in 1993.

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[ t h e fa i l u r e o f g o v e r n m e n t s ]

water, nafta, and the ftaaC H A P T E R 3 O F N A F TA establishes obligations regard-ing the trade in goods. Using the General Agreementon Tariffs and Trade (GATT) definition of a “good”which clearly lists “waters, including natural or artificialwaters and aerated waters,” NAFTA adds in anexplanatory note that “ordinary natural water of allkinds (other than sea water)” is included. Chapter 12sets out a comprehensive regime to govern trade andinvestment in the service sector, including water serv-ices. Chapter 11 establishes an extensive array ofinvestor rights, including investors in water goods andwater services. Thus, under NAFTA, water is a com-mercial good, a service and an investment.

There are three key provisions of NAFTA that

place water at risk. The first is “National Treatment”whereby no country can “discriminate” in favor of itsown private sector in the commercial use of its waterresources. For example, if a municipality privatizes itswater delivery service, it would be obliged to permitcompetitive bids from water service corporations ofthe other NAFTA countries. Similarly, once a permitis granted to a domestic company to export water, thecorporations of the other NAFTA partner countrieswould have the same right of establishment to thecommercial use of that country’s waters as its domes-tic companies. If a Canadian company, for instance,gained the right to export Canadian water, Americantransnationals would have the right to help them-selves to as much Canadian water as they wished.

35

the threat of international trade and investment agreements

New River on the U.S.-Mexico border, Calexico, California—In industrial “free trade” zones nearly all water goes to manu-facturing for the U.S. market. Reportedly, water is so scarce that babies and children in these regions drink Coca-Cola insteadof water.

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The second key provisionis Article 315, the “proportion-ality” clause, under which agovernment of a NAFTAcountry cannot reduce orrestrict the export of aresource to another NAFTAcountry once the export flowhas been established. Article309 states that “no party mayadopt or maintain any prohibi-tion or restriction on theexportation or sell for exportof any good destined for theterritory of another party” andthis provision includes a banon export taxes. This means that if the export ofwater were to commence between NAFTA countries,the tap couldn’t be turned off. Exports of water wouldbe guaranteed to the level they had acquired over thepreceding 36 months; the more water exported, themore water required to be exported. Even if new evi-dence were found that massive movements of waterwere harmful to the environment, these requirementswould remain in place.

The third provision is “Investor State” (Chapter11) whereby a corporation of a NAFTA country cansue the government of another NAFTA country forcash compensation if the company is refused itsnational treatment rights or if that country imple-ments legislation that “expropriates” the company’sfuture profit. Only a “foreign-based” company can sueusing Chapter 11; domestic companies have to abideby national law and cannot sue their own governmentfor compensation under NAFTA. As a result of thisprovision, there has been a flurry of investor-statesuits in North America challenging environmental,health and safety legislation in the three countries.

Chapter 11 could specifically apply to water intwo ways. If any NAFTA country, state or provincetried to limit the delivery of water services or thecommercial export of its water to its domestic sector,corporations in the other countries would have theright to financial compensation for “discrimination.”In fact, the very act of a government attempt to banbulk water exports automatically makes water a com-

mercial tradable commodity,triggering NAFTA. The verysame law that excluded themwould trigger foreigninvestors’ NAFTA rights, andthey could demand financialcompensation for lost oppor-tunities. For now, as long aswater is lying in its naturalstate, it is safe from trade reg-ulations.

As well, under Chapter11, changes to governmentpolicy could trigger a challenge,as foreign companies have the

advantage under this ruling. For example, if the stateof Alaska were to reverse its policy and ban waterexports or change the law so that only Alaskan compa-nies could export water in order to keep jobs athome, the U.S. government would be vulnerable to ahuge investor-state challenge. Global Water Corp. ofBritish Columbia is poised to make a great deal ofmoney from its contract with Alaska. Because it is aCanadian and not an American company, Globalwould have rights to sue not accorded to U.S. domes-tic companies in the same situation.

The first NAFTA Chapter 11 case on water wasfiled in the fall of 1998. Sun Belt Water Inc. of SantaBarbara, California, sued the Canadian governmentbecause the company lost a contract to export waterto California when the Canadian province of BritishColumbia banned the export of bulk water in 1991.Sun Belt alleges that the ban contravenes NAFTA andis seeking $10 billion in damages. “Because of NAFTA,we are now stakeholders in the national water policyin Canada,” declared Sun Belt’s CEO Jack Lindsay.

All of these corporate-friendly provisions—andmore—are contained in the FTAA, currently beingnegotiated by 34 countries of the Americas and theCaribbean. Although it is based on the NAFTA model,the FTAA goes far beyond NAFTA in its scope andpower.

The FTAA, as it now stands, would introduce intothe Western Hemisphere comprehensive new provi-sions on services including NAFTA’s Chapter 11, that

36

Sun Belt Water Inc. of Santa Barbara,

California, is suing the Canadian gov-

ernment because the company lost a

contract to export water to California

when the Canadian province of British

Columbia (B.C.) banned the export of

bulk water in 1991. Sun Belt alleges

that the ban contravenes NAFTA and

is seeking $220 million in damages.

would create a trade powerhouse with sweeping newauthority over every aspect of life in Canada, theAmericas and the Caribbean (except Cuba). TheFTAA would give unequalled new rights to thetransnational corporations of the hemisphere to com-pete for and even challenge every publicly fundedservice of its governments, including water and envi-ronmental protection.

As well, the proposed FTAA contains new provi-sions on competition policy, government procurement,market access and dispute settlement that, togetherwith the inclusion of services and investment, couldremove the ability of all the governments of theAmericas to create or maintain laws, standards andregulations to protect the health, safety and well-beingof their citizens and the environment they share.Also, the FTAA negotiators appear to have chosen toemulate the WTO rather than NAFTA in key areas ofstandard setting and dispute settlement, where theWTO rules are tougher.

water and the wtoN A F TA I S N O T T H E O N LY existing trade agreementthat compromises water. The WTO was created in1995 at the conclusion of the Uruguay Round of theGATT in order to enforce GATT and other agree-ments. The WTO’s 134 member nations work towardeliminating all remaining tariff and non-tariff barriersin order to promote the movement of capital, goodsand services across nation-state borders. The WTOcontains no minimum standards to protect laborrights, social programs, the environment or naturalresources.

The essence of the WTO is deregulation; it isintended to render it more difficult for nations to placesafeguards or conditions on exportable products,including natural resources. The market is given pre-emptive rights to determine the course of resourcedevelopment, and nation-state rules are not to betrade- or profit-inhibiting. Tough environmental lawscan be disputed by member countries at the WTO asbeing non-tariff barriers to trade. Therefore, domesticstandards that are lower than the global average areprotected; those that are higher become clear targetsfor dispute. Once a WTO dispute panel issues a rul-ing, worldwide conformity is required. A country is

obliged to harmonize its laws, face the prospect oftrade sanctions or pay direct compensation.

The WTO’s authority includes water; it incorpo-rates the same GATT definition of a “good” as doesNAFTA. Although the WTO does not yet include aninvestor-state clause, in some ways it is more of adanger to the protection of water than NAFTA. Thisis because, unlike any other global institution, theWTO has both the legislative and judicial authorityto challenge laws, policies and programs of membercountries if they do not conform to WTO rules, andit has the power to strike down these rules if they canbe shown to be “trade restrictive.”

One provision of the WTO particularly placeswater at risk. Article XI specifically prohibits the useof export controls for any purpose and eliminatesquantitative restrictions on imports and exports. Thismeans that quotas or bans on the export of waterimposed for environmental purposes could be chal-lenged as a form of protectionism. A GATT ruling

37

This warning sign on a polluted lake in the Evergladeswarns that fish are too contaminated to eat. Everglades’waters have been diverted for chemical intensive sugar caneplantations, which drain into lakes throughout the region.

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[ t h e t h r e at o f i n t e r n at i o n a l t r a d e a n d i n v e s t m e n t a g r e e m e n t s ]

that forced Indonesia to lift itsban on the export of raw logsand a NAFTA ruling against asimilar practice in Canada donot bode well for a nation’sright to protect its naturalresources.

Further, the WTO forcesnations to forfeit their capacityto discriminate against importson the basis of their consump-tion or production practices.Article I, “Most FavoredNation,” and Article III,“National Treatment,” requireall WTO countries to treat“like” products exactly thesame for the purposes of tradewhether or not they were pro-duced under ecologically sound conditions. Even if itwere discovered that the commercial trade in waterwas destructive to watersheds, the WTO could preventcountries from restricting that trade because of envi-ronmental concerns.

WTO defenders argue that an “exception” includ-ed in the GATT will protect the environment andnatural resources. According to Article XX, membercountries can still adopt laws “necessary to protecthuman, animal or plant life or health...relating to theconservation of exhaustible natural resources if suchmeasures are made effective in conjunction withrestrictions on domestic production or consumption.”However, there is something known in trade jargonas a “chapeau” to Article XX, which means that theArticle can only be applied in “non-discriminatory”fashion and cannot be a disguised barrier to trade. Inthe individual dispute cases that have come before theWTO to test these “protections,” the WTO hasupheld the rights of commerce over the rights ofenvironmental protection.

Also, any protections must be interpreted in away that is “least trade restrictive.” Further, the WTOdoes not recognize the authority of MultilateralEnvironmental Agreements (MEAs) and threatens toundermine agreements such as the Convention on

International Trade inEndangered Species of WildFauna and Flora (CITES).Says U.S.-based PublicCitizen, “The emerging caselaw...indicates that the WTOkeeps raising the bar againstenvironmental laws.” If panelrulings to date are any indica-tion, water is at great riskunder the WTO, in spite ofthe so-called “exception” ofArticle XX.

A new agreement of theWTO, the General Agreementon Trade in Services (GATS),poses another serious tradethreat to water sovereigntyand conservation. The GATS

was established in 1994, at the conclusion of the“Uruguay Round” of the GATT and was one of thetrade agreements adopted for inclusion when theWTO was formed in 1995. Negotiations were tobegin five years later with the view of “progressivelyraising the level of liberalization.” These talks gotunderway as scheduled in February 2000, and arescheduled to reach a general agreement by December2002.

The GATS is called a “multilateral frameworkagreement,” which means that its broad commissionwas defined at its inception and then, through perma-nent negotiations, new sectors and rules are added.Essentially, the GATS is mandated to restrict govern-ment actions in regard to services, through a set oflegally binding constraints backed up by WTO-enforced trade sanctions. Its most fundamental pur-pose is to constrain all levels of government in theirdelivery of services and to facilitate access to govern-ment contracts by transnational corporations in amultitude of areas, including water and environmentalservices.

The GATS covers hundreds of types of waterservices—sewer services, freshwater services, treat-ment of waste water, nature and landscape protection,construction of water pipes, waterways, tankers,

38

The essence of the WTO is deregula-

tion; it is intended to render it more

difficult for nations to place safeguards

or conditions on exportable products,

including natural resources. Tough

environmental laws can be disputed by

member countries at the WTO as

being non-tariff barriers to trade.

Therefore, domestic standards that are

lower than the global average are pro-

tected; those that are higher become

clear targets for dispute.

groundwater assessment, irri-gation, dams, bottled water,and water transport services,just to name a few. Crucially,the object of GATS disciplinesare not services per se, butrather government actions,initiatives and regulations thatpertain to services and limit orprevent private-sector rightsto service industries. No otheragreement to date has attempted to reach so far intothe policy jurisdiction of governments (although theproposed FTAA services agreement is modelled onthe GATS).

Essentially, under proposed new wording, govern-ments would have to prove that any measure or regu-lation related to water (and other services, such ashealth care, utilities and education) were “necessary,”based on “transparent and objective criteria,” in accor-dance with “relevant international standards,” and theleast trade restrictive of all possible measures. Forexample, to defend standards on drinking waterbefore a WTO trade panel, a government would haveto prove that it had canvassed every conceivable wayin which it might improve water quality, that it wassubjected to an assessment of its impact on interna-tional trade in water services, and that it opted for theapproach that was least trade restrictive of the rightsof foreign private water providers.

Furthermore, the GATS has not even adopted theweak GATT Article XX exception relating to conser-vation, thus expressing an undeniable and deliberateintent to subordinate conservation goals to those oftrade liberalization. As Canadian trade expert StevenShrybman notes in his March 2001 legal opinion onthe GATS: “At risk is the public ownership of waterresources, public sector water services, and the author-ity of governments to regulate corporate activity forenvironmental, conservation or public health reasons.”

water and international investment treatiesI N A D D I T I O N T O T H E A B O V E A G R E E M E N T S ,countries all over the world are signing BilateralInvestment Treaties (BITs) which, by and large, leave

their natural resource sectorsopen to unconditional invest-ment by one another’s corpo-rations. There are now 1,720bilateral agreements and thenumber grows every year.Most BITs contain a form ofNAFTA’s Chapter 11 provi-sion, allowing corporations ofthe signatory countries to suegovernments for “expropria-

tion” compensation. This is the trade venue chosenby Bechtel in its suit against the government ofBolivia.

BITs are modelled on the Multilateral Agreementon Investment (MAI), a treaty proposed by membercountries of the Organization for EconomicCooperation and Development (OECD) which wasdefeated in the fall of 1998 due to international oppo-sition. Drafted by the International Chamber ofCommerce, the MAI contained the same investor-state rights as NAFTA, but applied them to a widerrange of sectors and corporations. Any “investor” ofany member country could have claimed access to thenatural resources of any other country without dis-crimination and would have had the right to sue forcompensation if denied. The MAI set out clear rulesfor privatization of public assets, including naturalresources.

These international trade and investment agree-ments are gaining in power and scope. Yet very fewof the world’s citizens are aware of their contents oreven their existence. No plan for water protection canafford to ignore them; they form a clear and presentdanger to water stewardship and must be deeplyreformed or abolished.

39

Within every community and in every

country, citizens are going to have to take

charge of this issue. We must formulate

the policies and laws needed at every level

of government, including the international

level, and set out to make them real.

Watersheds come in families; nested levels of intimacy. On thegrandest scale the hydrologic web is like all humanity — Serbs,Russians, Koyukon Indians, Amish, the billion lives in thePeople’s Republic of China — it’s broadly troubled, but it’s hardto know how to help. As you work upstream toward home, you’remore closely related. The big river is like your nation, a little outof hand. The lake is your cousin. The creek is your sister. Thepond is her child. And, for better or worse, in sickness and inhealth, you’re married to your sink.

—Michael Parfit, National Geographic

P R E S E N T LY, T H E W O R L D I S P O I S E D to make crucial,perhaps irrevocable decisions about water. Except forthose now deliberately seeking to profit from theworld’s water crisis and those who have continued topollute water systems even when confronted with evi-dence of the damage they have wrought, the harm

done to water to date has been largely unintentionaland reactive—a combination of benign neglect, igno-rance, greed, too many demands on a limited resource,careless pollution and reckless diversion. The humanrace has taken water for granted and massively mis-judged the capacity of the earth’s water systems torecover from our carelessness. Although we now mustanswer for the great harm we have caused, it is proba-bly fair to say that no one set out to create a globalwater shortage or to deliberately destroy the world’swater supply.

However, lack of malice is no longer a goodenough excuse. We know too much. Forces arealready established that would see water become aprivate commodity to be sold and traded on the openmarket, controlled by transnational corporations and

40

the need for common principles

The 3,900-mile Yangtze River in China is under threat by the Three Gorges dam project. The dam would submerge 40 histor-ical sites and over 140 towns, dislocating over one million people. Animals at risk include: the rare white dolphin, endangeredgiant sturgeon, the giant salamander, freshwater jellyfish, alligators, monkeys and birds.

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guaranteed to serve investors and private sectorsthrough global trade and investment agreements. Ifwe do nothing now, this is the future of water.

the ethics of water sharingI N O R D E R T O B E G I N to develop a comprehensive sus-tainable water ethic, it is first necessary to acknowl-edge that there is a profound human inequity in theaccess to freshwater sources around the world. Thosewho are water-poor live almost exclusively in thenon-industrial world; those who are water-rich live inindustrial countries, where governments and corpora-tions have become wealthy from the colonization anddomination of the very areas now living in water-stressconditions. We have in this situation a tragic dilem-ma. It could be argued that the industrialized worldhas a moral obligation to share with water-poor areas,even though this would put great stress on alreadydamaged ecosystems.

Those who view water as a commodity say thatwater flowing into the sea or situated in what one for-est company CEO calls “decadent wilderness” is notof service to people or the economy and is, therefore,a wasted commodity. However, environmentalistswarn that this is a simplistic analysis. For one thing,water situated in lakes is not available for export ordiversion unless we choose to dry up those lakes.Only water that runs off from rivers to the sea or ismined from aquifers is actually available freshwater.Although Canada holds almost one-quarter of theworld’s freshwater, for instance, most of it is in lakesor river systems flowing north. To move large vol-umes of this water would massively tamper with thecountry’s natural ecosystems.

Scientists warn that removing vast amounts ofwater from watersheds has the potential to destroyentire ecosystems. Lowering water tables can createsinkholes and dry up wells. Huge energy costs wouldbe associated with large-scale water movement; oneversion of the GRAND Canal scheme called for aseries of nuclear power stations along the route tosupply the energy needed for the movement of suchhuge volumes of water. Existing water diversions andhydroelectric projects are causing local climatechange, reduced biodiversity, mercury poisoning, lossof forest, and the destruction of fisheries habitat and

wetlands. Imagine what damage a mega-project suchas the GRAND Canal might cause.

Scientific studies show that large-scale waterremoval affects not just the immediate systems, butecosystems far beyond. “This work proves beyond alldoubt that water is not ‘wasted’ by running into thesea. It suggests that the cumulative effects of remov-ing water from lakes, rivers and streams for export bytanker could have large-scale impacts on the coastaland marine environment,” says Canadian water expertJamie Linton.

Richard Bocking says we strike a Faustian bargainwhen diverting rivers. “For power generation or irriga-tion today, we exchange much of the life of a river, itsvalley and biological systems, and the way of life ofpeople who are in the way. As the cost of the last 50years of dam building becomes evident, we can nolonger plead that we don’t know the consequences oftreating rivers and lakes as plumbing systems.”

However, what of the humanitarian argumentthat in a world of water inequality, water-rich areashave an obligation to share water supplies with oth-ers? Perhaps here it would be helpful to distinguishbetween short-term and long-term approaches.Importing water is not a desirable long-term solutionfor either the ecosystems or the peoples of water-scarce regions of the world. Water is such an essentialnecessity of life, no one should become dependent onforeign supplies that could be cut for political or envi-ronmental reasons.

It is also helpful to distinguish between water trad-ing and water sharing. In a commercially traded waterexchange, those who really need the water would bethe least likely to receive it. Water hauled long dis-tances by tankers would only be available to thewealthy, especially large corporations. Importingwater for only those who could afford it would reducethe urgency and political pressure to find real, sustain-able and equitable solutions to water problemsthroughout the world.

George Wurmitzer, the mayor of Simitz, a smalltown in the Austrian Alps, essentially captures the dif-ference between water sharing and water tradingwhen he expresses concerns about large-scale exports

41

of water from his community:“From my point of view, it is asacred duty to help someonewho is suffering from thirst.However, it is a sin to transferwater just so that people canflush their toilets and washtheir cars in dry areas...Itmakes no sense and is ecolog-ical and economic madness.”

As Linton says, “Perhapsthe strongest argumentagainst [commercial] waterexport is that it would onlyperpetuate the basic problemthat has caused the ‘water crisis’ in the first place—the presumption that peoples’ growing demands forwater can and should always be met by furnishingan increase in the supply. This thinking has led tothe draining of lakes, the depletion of aquifers anddestruction of aquatic ecosystems around theworld.”

If, however, we maintain public control of water,it might be possible to share water supplies on a short-term basis between countries in times of crisis. In thesecases, water sharing would need to be accompaniedby strict timetables and conditions aimed at makingthe receiving region water-independent as soon aspossible. This way, water could be used to encouragewater system restoration. This kind of resolution isnot conceivable, however, if the privatization of theworld’s water continues unchallenged; corporationswould not allow a non-profit system of water transferto be established.

the ethics of water pricingS I M I L A R LY, T H E C A L L T O P L A C E a true economicvalue on water—increasingly made by environmental-ists who rightly point out that in many water-richcountries, water is taken for granted and badly wast-ed—must be put in a political context. The argumentis, if an accurate economic value were to be put onwater, people would be more likely to conserve it. Butin the current climate, there are serious concerns thatneed to be raised about the issue of water pricing.

First, water pricing exacer-bates the existing globalinequality of access to water. Aswe know, the countries that aresuffering severe water shortagesare home to the poorest peopleon earth. To charge them foralready scarce supplies is toguarantee growing water dis-parities.

The issue of water pricingwill therefore exacerbate theNorth/South divide. There is asub-text to much of the hand-wringing over the world’s

water shortage. Almost every article on the subjectstarts with the reminder of the population explosionand where is it occurring. The sub-text is that “thesepeople” are responsible for the looming water crisis.But a mere 12 percent of the world’s population uses85 percent of its water, and the 12 percent don’t livein the Third World.

The privatization of this scarce resource will leadto a two-tiered world—those who can afford waterand those who cannot. It will force millions to choosebetween necessities such as water and health care. InEngland, high water rates forced people to choosewhether or not to wash their food, flush their toiletsor bathe.

Second, under the current trade agreements,priced water becomes a private commodity. Only ifwater is maintained as a public service, delivered andprotected by governments, can it be exempted fromthe onerous enforcement measurements of these freetrade deals. The results of the trade agreements arevery clear. If water is privatized and put on the openmarket for sale, it will go to those who can afford it,not to those who need it. Once the tap has beenturned on, by the terms of trade rules it cannot beturned off.

The World Bank says that it will subsidize waterfor the poor. Anyone familiar with the problems ofwelfare, particularly in the Third World, knows thatsuch charity is punitive at best, and more often non-existent. Water as a fundamental human right is guar-

42

Clearly, the focus must be on those who

use water most and who then remove the

benefits of using this common good, this

public trust, from the community for the

sake of profits, particularly in an age of

mergers and transnational corporations.

Business has no right to deprive anyone

of their inalienable human rights; if that

is the price of profit, the price is too high.

anteed in the UN International Covenant on HumanRights. Water welfare is not what the architects ofthat great declaration had in mind.

Third, as it is now envisaged, water pricing willnot have much of an impact. It is generally acceptedthat water consumption in urban centers breaks downat 70 percent industrial, 20 percent institutional and6-10 percent domestic. Yet most of the discussionsabout water pricing center on individual water use.Large corporate users notoriously evade paying thecost of their water altogether.

Finally, in an open bidding system for water, whowill buy it for the environment and the future? In allof this privatization/pricing debate, there is preciouslittle said about the natural world and other species.That is because the environment is not factored intothe commercial equation. If we lose public control ofour water systems, there will be no one left with theability to claim this life-giving source for the earth.

Yet the need to stop wasting water is urgent. Thedialogue about water pricing is a crucial one; howev-er, it must take place within a larger framework. To beboth effective and just, any serious consideration ofwater pricing must take into account three factors:the global poverty gap, water as a human right andwater in nature.

To deal with the first, the global poverty gap,there are several immediate actions governmentscould take. These include cancelling the Third Worlddebt, increasing foreign aid budgets to their previousstandards (.7 percent of GDP), and implementing a“Tobin tax” ( a small, worldwide tariff) on financialspeculation that would pay for water infrastructureand universal water services.

To deal with the issue of water as a human right,countries must adopt constitutions such as that ofSouth Africa, which guarantees water first for people,second for nature and third for the economy. EverySouth African is guaranteed enough free water forbasic needs; only then is there consideration of pricing.

To ensure that ecosystem survival is key to anynew system that might include pricing, revenuesraised must be used to protect the environment,

restore watersheds, enforce clean water standards andrepair faulty infrastructure, which is currently thecause of great water wastage.

Further, the focus must be on the greatest abusersof water—large industry and corporate farming.Governments must bring the rule of law to those cor-porations that pollute and waste precious water. Theymust also implement a more just taxation system thatcaptures some of the untold billions in taxation thatlarge corporations now evade. These revenues wouldgo a long way toward cleaning up the earth’s dyingwater systems. Clearly, the focus must be on thosewho use water most and who then remove the benefitsof using this common good, this public trust, fromthe community for the sake of profits, particularly inan age of mergers and transnational corporations.Business has no right to deprive anyone of theirinalienable human rights; if that is the price of profit,the price is too high.

None of these conditions, however, is possible ifwater is not controlled in the public interest. If wateris allowed to be commercialized and controlled bycorporations, the profit principle will dominate. Inthis case, water-pricing would become a tool of themarket, rather than be a tool that could be used as anincentive to conservation and to ensure that waterremains a fundamental human right for every personon earth.

protecting water: ten principlesI N O R D E R T O TA K E the kind of action needed by alllevels of government and communities around theworld, it is urgent that we come to agreement on a setof guiding principles and values. The following isoffered as an opening dialogue:

1) Water belongs to the earth and all species.Water, like air, is necessary for all life. Without water,humans and other beings would die and the earth’ssystems would shut down. Modern society has lost itsreverence for water’s sacred place in the cycle of lifeas well as its centrality to the realm of the spirit. Thisloss of reverence for water has allowed humans to abuseit. Only by redefining our relationship to water andrecognizing its essential and sacred place in naturecan we begin to right the wrongs we have done.

43

[ t h e n e e d f o r c o m m o n p r i n c i p l e s ]

44

Because water belongs tothe earth and all species, deci-sion-makers must representthe rights and needs of otherspecies in their policy choicesand actions. Future genera-tions also constitute “stake-holder” status requiring repre-sentation in decision-makingabout water. Nature, not man,is at the center of the uni-verse. For all our brilliance andaccomplishment, we are aspecies of animal who needswater for the same reasons asother species. Unlike other species, however, onlyhumans have the power to destroy ecosystems uponwhich all depend and so humans have an urgent needto redefine our relationship to the natural world. Nodecisions about water use should ever be made with-out a full consideration of impacts to the ecosystem.

2) Water should be left where it is whenever possible.Nature put water where it belongs. Tampering withnature by removing vast amounts of water from water-sheds has the potential to destroy ecosystems. Large-scale water removal and diversion affects not just theimmediate systems, but ecosystems far beyond. Wateris not “wasted” by running into the sea. The cumula-tive effects of removing water from lakes, rivers andstreams has disastrous large-scale impacts on thecoastal and marine environment as well as on theindigenous peoples of the region, and other peoplewhose livelihoods depend upon these areas.

While there may be an obligation to share waterin times of crisis, just as with food, it is not a desir-able long-term solution for either the ecosystems orthe peoples of any region of the world to becomedependent on foreign supplies for this life-givingsource. By importing this basic need, a relationship ofdependency would be established that is ultimatelyharmful. By accepting this principle, we learn thenature of water’s limits and to live within them, andwe start to look at our own regions, communities andhomes for ways to meet our needs while respectingwater’s place in nature.

3) Water must be conservedfor all time.Each generation must ensurethat the abundance and quali-ty of water is not diminishedas a result of its activities. Theonly way to solve the problemof global water scarcity is toradically change our habits,particularly when it comes towater conservation. Peopleliving in the wealthy countriesof the world must change theirpatterns of water consumption,especially those in water-rich

bioregions. If they don’t change these habits, any reluc-tance to share their water—even for sound environmentaland ethical reasons—will rightly be called into question.

The key to maintaining sustainable groundwatersupplies is to ensure that net extractions do notexceed recharge. Some water destined for cities andagribusiness will have to be restored to nature. Largetracts of aquatic systems must be set aside for preser-vation; governments must agree on a global target.Planned major dams must be put on hold and somecurrent river diversions must be re-oriented to reflecta more natural seasonal flow or else be de-commis-sioned altogether.

Infrastructure improvement must become a priorityof governments everywhere to stem the huge loss ofwater through aging and broken systems. Governmentsubsidies of wasteful corporate practices must end. Byrefusing to subsidize abusive water use, governmentswill send out the message that water is not abundantand cannot be wasted.

4) Polluted water must be reclaimed.The human race has collectively polluted the world’swater supply and must collectively take responsibilityfor reclaiming it. Water scarcity and pollution arecaused by economic values that encourage overcon-sumption and grossly inefficient use of water. Thesevalues are wrong. A resolution to reclaim pollutedwater is an act of self-preservation. Our survival, andthe survival of all species, depends on restoring natu-rally functioning ecosystems.

While it is true that governments have

failed badly in protecting their water

heritage, it is only through democrati-

cally controlled institutions that this

situation can be rectified. If water

becomes clearly established as a com-

modity to be controlled by the private

sector, decisions about water will be

made solely on a for-profit basis.

Governments at all levelsand communities in everycountry must reclaim pollutedwater systems and halt, to theextent possible, the destruc-tion of wetlands and watersystems habitat. Rigorous lawand enforcement must addressthe issue of water pollutionfrom agriculture, municipaldischarge and industrial con-taminants, the leading causesof water degradation.Government must re-establishcontrol over transnational mining and forestry com-panies whose unchecked practices continue to causeuntold damage to water systems.

The water crisis cannot be viewed in isolationfrom other major environmental issues such as clearcutting of forests and human-induced climate change.The destruction of waterways due to clear cuttingseverely harms fish habitat. Climate change will causeextreme conditions. Floods will be higher, storms willbe more severe, droughts will be more persistent. Thedemand on existing freshwater supplies will bemagnified. To reclaim damaged water will require aninternational commitment to dramatically reducehuman impacts on climate.

5) Water is best protected in natural watersheds.The future of a water-secure world is based on the needto live within naturally formed “bioregions,” or water-sheds. Bioregionalism is the practice of living withinthe constraints of a natural ecosystem. The surfaceand groundwater conditions peculiar to a watershedconstitute a set of essential parameters that governvirtually all life in a region; other characteristics, suchas flora and fauna, are related to the area’s hydrologi-cal conditions. Therefore, if living within the ecologi-cal constraints of a region is key to developing a sus-tainable society, watersheds are an excellent startingpoint for establishing bioregional practices.

An advantage of thinking in watershed terms isthat water flow does not respect nation-state borders.Watershed management offers a more interdiscipli-nary approach to protecting water. Watershed man-

agement is a way to break thegridlock among international,national, local and tribal gov-ernments that has plaguedwater policy around the worldfor so long. Watersheds, notpolitical or bureaucraticboundaries, will lead to morecollaborative protection anddecision-making.

6) Water is a public trust tobe guarded at all levels ofgovernment.

Because water, like air, belongs to the earth and allspecies, no one has the right to appropriate it orprofit from it at someone else’s expense. Water, then,is a public trust that must be protected at all levels ofgovernment and communities everywhere.

Therefore, water should not be privatized, com-modified, traded or exported in bulk for commercialpurpose. Governments all over the world must takeimmediate action to declare that the waters in theirterritories are a public good and enact strong regula-tory structures to protect them. Water should imme-diately be exempted from all existing and future inter-national and bilateral trade and investment agree-ments. Governments must ban the commercial tradein large-scale water projects.

While it is true that governments have failedbadly in protecting their water heritage, it is onlythrough democratically controlled institutions thatthis situation can be rectified. If water becomes clear-ly established as a commodity to be controlled by theprivate sector, decisions about water will be madesolely on a for-profit basis.

Each level of government must protect its watertrust: municipalities should stop raiding the water sys-tems of rural communities. Watershed cooperationwill protect larger river and lake systems. Nationaland international legislation will bring the rule of lawto transnational corporations and end abusive corpo-rate practices. Governments will tax the private sectoradequately to pay for infrastructure repair. All levelsof governments will work together to set targets for

45

Economic globalization undermines local

communities by allowing for easy mobil-

ity of capital and the theft of local

resources. Liberalized trade and invest-

ment enables some countries to live

beyond their ecological and water

resource means; others abuse their limited

water sources to grow crops for export.

global aquatic wilderness pre-serves.

7) An adequate supply ofclean water is a basic humanright.Every person in the world hasa right to clean water andhealthy sanitation systems nomatter where they live. Thisright is best ensured by keep-ing water and sewage servicesin the public sector, regulatingthe protection of water sup-plies and promoting theefficient use of water. Adequate supplies of cleanwater for people in water-scarce regions can only beensured by promoting conservation and protection oflocal water resources.

First Nations Peoples have special inherent rightsto their traditional territories, including water. Theserights stem from their use and possession of the landand water in their territories and their ancient socialand legal systems. The inalienable right of self-deter-mination of indigenous peoples must be recognizedand codified by all governments; water sovereignty iselemental in the protection of these rights.

Governments everywhere must implement a“local sources first” policy to protect the basic rightsof their citizens to freshwater. Legislation thatrequires all countries, communities and bioregions toprotect local sources of water and seek alternativelocal sources before looking to other areas will go along way to halt the environmentally destructivepractice of moving water from one watershed basin toanother. “Local sources first” must be accompanied bya principle of “local people and farmers first.” Localcitizens and communities have first rights to localwater. Agribusiness and industry, particularly largetransnational corporations, must fit into a “local-first”policy or be shut down.

This does not mean that water should be “free” orthat everyone can help themselves. However, a policyof water pricing that respects this principle wouldhelp conserve water and preserve the rights of all to

have access to it. Water pric-ing and “green taxes” (whichraise government revenueswhile discouraging pollutionand resource consumption)should place a heavier burdenon agribusiness and industrythan on citizens; funds col-lected from these sourcesshould be used to providebasic water for all.

8) The best advocates forwater are local communitiesand citizens.

Local stewardship, not private business, expensivetechnology or even government, is the best protectorof water security. Only local citizens can understandthe overall cumulative effect of privatization, pollu-tion and water removal and diversion on the localcommunity. Only local citizens know the effect ofjob loss or loss of local farms when water sources aretaken over by big business or diverted to farawayuses. It must be understood that local citizens andcommunities are the front-line “keepers” of the rivers,lakes and underground water systems upon whichtheir lives and livelihoods rest.

In order to be affordable, sustainable and equitable,the solutions to water stress and water scarcity mustbe locally inspired and community-based. Reclamationprojects that work are often inspired by environmen-tal organizations and involve all levels of governmentand sometimes private donations. But if they are notguided by the common sense and lived experience ofthe local community, they will not be sustained.

In water-scarce regions, traditional local indige-nous technologies, such as local water sharing andrain catchment systems that had been abandoned fornew technology, are being revisited with someurgency. In some areas, local people have assumedcomplete responsibility for water distribution facilitiesand established funds to which water users must con-tribute. The funds are used to provide water to all inthe community.

46

“From my point of view, it is a sacred

duty to help someone who is suffering

from thirst. However, it is a sin to

transfer water just so that people can

flush their toilets and wash their cars in

dry areas... It makes no sense and is

ecological and economic madness.”

george wurmitzer, mayor of simitz, austria

9) The public must participate as an equal partnerwith government to protect water.A fundamental principle for a water-secure future isthat the public must be consulted and engaged as anequal partner with governments in establishing waterpolicy. For too long, governments and internationaleconomic institutions such as the World Bank, theOECD and trade bureaucrats have been driven bycorporate interests. Even in the rare instances thatthey are given a seat at the table, non-governmentalorganizations (NGOs) and environmental groups aretypically ignored. Corporations who heavily fundpolitical campaigns are often given sweetheart con-tracts for water resources. Sometimes, corporatelobby groups actually draft the wording of agree-ments and treaties that governments then adopt. Thispractice has created a crisis of legitimacy for govern-ments everywhere.

Processes must be created whereby citizens,workers and environmental representatives are treatedas equal partners in the determination of water policyand recognized as the true inheritors and guardians ofthe above principles.

10) Economic globalization policies are not water-sustainable. Economic globalization’s values of unlimited growthand increased global trade are totally incompatiblewith the search for solutions to water scarcity.Designed to reward the strongest and most ruthless,economic globalization locks out the forces of localdemocracy so desperately needed for a water-securefuture. If we accept the principle that to protect waterwe must attempt to live within our watersheds, thepractice of viewing the world as one seamless con-sumer market must be abandoned.

Economic globalization undermines local commu-nities by allowing for easy mobility of capital and thetheft of local resources. Liberalized trade and invest-ment enables some countries to live beyond their eco-logical and water resource means; others abuse theirlimited water sources to grow crops for export. Inwealthy countries, cities and industries are mush-rooming on deserts. A water-sustainable societywould denounce these practices.

Global sustainability can only be reached if weseek greater regional self-sufficiency, not less. Buildingour economies on local watershed systems is the onlyway to integrate sound environmental policies withpeoples’ productive capacities and to protect ourwater at the same time.

47

[ t h e n e e d f o r c o m m o n p r i n c i p l e s ]

N O T L O N G A G O, T H E W O R L D C E L E B R AT E D the 50thanniversary of the 1948 United Nations UniversalDeclaration of Human Rights. This Declarationmarked a turning point in the long international questto assert the supremacy of human and citizen rightsover political or economic tyranny of any kind.Together with the International Covenant on Economic,Social and Cultural Rights and the InternationalCovenant on Civil and Political Rights, the Declarationstands as a twentieth century Magna Carta. Besidesgranting full human rights to every person on earthregardless of race, religion, sex, and many other crite-ria, the Declaration includes the rights of citizenship,services and social protections that every citizen has aright to demand of his or her government.

These rights include social security, health, andthe well-being of the family, including the right towork, decent housing and medical care. Thecovenants bind governments to accept a moral and

legal obligation to protect and promote the humanand democratic rights outlined in the Declarationand contain the measures of implementation requiredto do so. The individual rights and responsibilities ofcitizens as established by the Declaration, togetherwith the collective rights and responsibilities ofnation-states as established in the covenants, repre-sent the foundation stones of democracy in the mod-ern world.

Yet a half-century later, the lack of access to cleanwater means that more than one billion people arebeing denied a right guaranteed them in the UnitedNations Declaration. Over those fifty years, the rightsof private capital have grown exponentially, while therights of the world’s poor have fallen off the politicalmap. It is no coincidence that the deterioration anddepletion of the world’s water systems has taken placeconcurrent with the rise in the power of transnationalcorporations and a global financial system in which

48

conclusion

communities, indigenous peo-ples and farmers have beendisenfranchised.

The role of the state hasbeen profoundly altered inrecent decades. As writer andactivist Tony Clarke explains,“Stateless corporations areeffectively transforming nation-states to suit their interests inglobal transnational invest-ment and competitiveness.” Itappears that governments andgovernment institutions, even the United Nations,have become, at worst, captive to these corporateforces and, at best, unable to stand up to them.Citizens have been largely left to fend for themselves.

In recent years, an international movement ofworkers, social advocates, human rights groups andenvironmental organizations has come together toput human and ecological issues back on the politicalagenda. They are forming powerful alliances with oneanother to affect government policy in their owncountries and around the world and to dismantle orreform global institutions working against them. Publiceducators are meeting with one another to stem theassault on public education. Environmentalists areworking together to slow the progress of internationaltrade agreements. International anti-poverty activistsmeet regularly to forge a new international “SocialContract” for adoption by governments.

Similar groups are coming together to forge linksand take direct action to protect water. The BluePlanet Project is an international initiative begun byThe Council of Canadians to protect the world’sfreshwater from the growing threats of trade and pri-vatization. During the March 2000 World WaterForum in The Hague, activists from Canada and morethan a dozen other countries organized to opposethe Forum’s privatization agenda and kick-start aninternational network to protect water as a commonresource and a basic human right. A grassroots civilsociety movement, The Blue Planet Project, intendsto become an active force in every country and com-munity in the world.

Information on this projectcan be found at www.canadi-ans.org/blueplanet.

The time has come totake a clear and principledstand to stop the systematicdevastation of the world’swater systems. In the longterm, nation-states have to bere-tooled in order to establishthe regulations and protec-tions necessary to save theirwater systems. International

law must be developed that recognizes and enforcesthe social obligations of global capital in the interestsof the global “water commons.” Most important, thecitizens of planet earth must move, and quickly, if weare to save it.

49

Global sustainability can only be

reached if we seek greater regional self-

sufficiency, not less. Building our

economies on local watershed systems

is the only way to integrate sound

environmental policies with peoples’

productive capacities and to protect

our water at the same time.

50

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