Global Policy Forum

By Jonathan Leavitt

Introduction to the issue

Twenty years from now, there will be a war somewhere in this world that is propelled forward by our countries economic interests. Call it a hunch. As a result of this war, many of us who have somehow remained out of jail under the Bush/Cheney/Ashcroft administrations and their successors, will take to the streets to march in protest. But the signs this time won't say "No Blood for Oil", instead they will say "No Blood for Water". Instead of "Whose Streets, Our Streets!" it will be "Whose Water, Our Water!" This is how important this issue is on the world stage and this is why we must begin putting the issue of globalization and control of water on the front burner for social justice activists all over the country.

Many of us believe that "water is a basic human need, and therefore a right, and should not be treated as a commodity'. Corporations and those who believe in the corporate model deny this and will do whatever it takes to move the issue of control over water into the market forces that have given us war upon war, the corporate model that gave us Enron and WorldCom, the corporate model that gave us the disaster in Bophal, India, and the Exxon Valdez, the corporate model that has given us 42 million African citizens with an HIV death sentence hanging over them, the corporate model that has given us CIA sponsored coups of democratically elected leaders, and the corporate model that has given us the worship of one basic principle, that those who have money will always be making decisions for those without.

What oil is in today's geopolitical framework, water will soon become. The World Bank has predicted that by 2025, 2/3 of the world's population will run short of fresh drinking water. The bottom line is that corporations want a piece of the $82 billion dollar U.S. market (9.3 billion is the bottled water industry) ($400 billion dollar market worldwide, including the $35 billion dollar bottled water industry)

If there is any doubt the issue of who controls the worlds water should be a priority issue for social justice activists, we need only look at two points: The first point is that a mere 12% of the world's population uses 85% of the world's water. And of course this 12% does not live in the under industrialized ("3rd world"). This mirrors the relationship between the current "power" commodity of oil and its usage on a global scale. The second important and telling point is the recent War In Iraq.

First our government spends hundreds of billions of dollars of taxpayer money on the destruction of a country over a twelve-year period. Now they are handing our rebuilding contracts of hundreds of millions of dollars to multinationals like Bechtel. A significant part of this rebuilding will be geared towards the repair of the Iraqi infrastructure including the water delivery system in Iraq. Much of this was destroyed at the end of the first Gulf War (for no military reason) and resulted in over 5,000 Iraqi children dying every month from water related illnesses. This means that nearly ¾ million children died as a result. This is a war crime in no uncertain terms.

So will this new Iraqi water system be operated for profit and at the expense of Iraq's poor? Of course it will. Just look at how advancing U.S. troops tried to make the people of Basra pay for water from Kuwait before the British took over the city. And given the ideological bents of both Bechtel and the Bush administration we can expect a push to fully privatize Iraq's rebuilt infrastructure and most certainly their water delivery system.

In other words what these brilliant minds have devised is the "perfect closed circle" for corporate economics. Taxpayer's money, which comes disproportionately from working family's is used to create opportunities through the military industrial construct and then US corporations reap the benefits through enormously lucrative contracts. They will receive all the financial benefits with none of the risk. Massive corporate welfare backed by the most powerful armed forces in the history of the world. (See "CALLING THE SHOTS: Bechtel and U.S. Policy in the Middle East" available at www.stopcorporatecontrol.org)

Background on the privatization of water and related trade treaties

Over the last decade we have seen a significant rise in attempts by corporations both national and international to get control over one of the last great sources of available public funds. These of course are local municipal budgets and the public spending that goes in support of everything from public education to trash pickup to water delivery systems. Almost every community has begun the slow devolution from the public sector model to the corporate model. The process of globalization has accelerated this push for privatization.

With promises of greater efficiency and cost savings for strapped communities, these corporations have begun making in-roads into what has always been a relative safe haven for local control and autonomy from the growing influence of the corporate model. Not content with simply calling all the shots in the world of International politics and economics through the IMF and World Bank and the spider web of international finance, not content to call all the shots via their powerful federal government lobbyists working out of Washington, not content to call the shots at Statehouses across the country, they now want to finish their assault on government by the people by bringing their failed model in to our backyards. As is so often the case, the first wave of this new corporate assault was aimed at disenfranchised communities whose economic distress was seen as the perfect weakness to exploit.

It's important to understand that there is a history of privatization of water delivery systems that date back hundreds of years. In fact, many of the first contracted water delivery systems were done by private companies. But the circumstances of the country were much different then. There was very little public infrastructure or municipal revenue sources that could support municipal building projects of this scale.

The nature of corporations was different as well. Multi-national trade treaties did not exist in the format we are familiar with today. And corporate charters were reviewed every year to see if the corporation had served the public good. Thankfully by the time corporations received their "personhood" (with all the rights of a US citizen, but none of the responsibilities) through a number of bad Supreme Court rulings, most of these private water efforts had moved into public hands. So as we speak today in the United States, we have roughly 85% (about 60,000 cities or towns) of our water delivery systems in the hands and control of public municipalities.

Now however it is a new age, and corporate America has spent the last thirty years trying to figure out how it could escape the basic concepts of democracy through the creation of international trade treaties where local decision making (still accessible to regular citizens and responsive to citizen outcry) could be overruled.

Here's how these trade treaties and globalization of our local economy work using three distinct examples. The first is taking place in Nottingham, NH where USA Springs, plans to build a water bottling plant. It has applied for a permit to pump hundreds of thousands of gallons of water a day from an aquifer that underlies Nottingham, Barrington, and other towns in 3 watersheds. This could mean pumping 310,000 gallons per day, enough to fill one million 20 oz. bottles every 24 hours. USA Springs has said it plans to sell the bottled water in Europe.

In a letter to US Representative (now Senator) John E. Sununu, US Trade Representative Robert Zoellick said that "nothing in the WTO agreement requires local authorities to permit bulk extractions of water that would be contrary to sound resource management and conservation or that would create hazards to human health. Of course, once local authorities decide to permit bulk water to be extracted from an aquifer, bottled, and sold as an article of commerce, WTO rules would likely apply to the sale of that article of commerce."

The State of New Hampshire claims the right to determine whether a large groundwater withdrawal such as the USA Springs proposal would harm other groundwater users. If the State grants a permit to withdraw a certain amount, it believes it reserves the right to change the amount at a later date. And under the GATT, General Agreement on Tariffs and Trade, quantitative restrictions affecting exports are prohibited, but exceptions can be made for natural resource conservation. Unfortunately the GATT trade agreement that dealt primarily with goods is no longer the main agreement of trade issues and has now been both updated and overtaken by the WTO and more severe trade agreements such as GATS which sets up privatization of services and TRIPS which governs and pushes forward Intellectual Property Rights which corporations use to make profits out of GMO seeds, or to prevent developing countries like Brazil from providing cheap HIV medicine for its poor.

Under the soon to be enacted GATS, General Agreement on Trade in Services, there are no exemptions for natural resource conservation. Under the GATS section on domestic regulations, any regulations considered "more burdensome than necessary to assure quality of service" are considered unfair barriers to trade. A trade tribunal would resolve the determination of whether or not regulations are considered fair or unfair. In other words, if the state of New Hampshire opens this door up even a crack, then the tentacles of these trade treaties will have enough maneuvering room to work their poison.

As another important example of how trade issues relate to the issue of water is the example of when Sun Belt Water of California sought to suck up tankers of bulk water from lakes in British Columbia. In response to public pressure the Canadian government denied the request and passed a law prohibiting bulk water exports in the future. However as a foreign investor under which NAFTA grants new rights and privileges, Sun Belt Water took its case to NAFTA for arbitration. Under NAFTA, foreign investors can directly sue if they believe government action has taken place which is "tantamount to expropriation" of their property, i.e. if government regulation or law harms its ability to profit from its investment. If it wins, the government must compensate it for its losses. Similar provisions are likely to be in FTAA.

If Canada loses they will either have to change the law or pay billions to compensate the corporation for "future expected profits". The same principle might eventually apply to the state of New Hampshire under soon to be enacted trade treaties and its battle with USA Springs.

The other scenario is taking place in many more cities and towns across the country and the world, including my hometown of Lawrence, MA currently faced with the possibility of their water works being turned over to United Water / French Suez.

This is how the corporations work in this particular scenario. First, they identify communities whose finances are shaky (Tax base weak resulting in a small budget, no room for capital improvements, bonding capacity already reached) and whose water delivery system needs significant replacement work or a complete overhaul. Then they connect with local "players" to serve as ambassadors of the privatization concept. (i.e. former councilors)

Keep the process as "closed" as possible. For example, make no effort for citizen input on the process. Meet in private. Avoid any and all publicity about the process. (This allows all the "players" in this kind of process (law firms, engineering firms, firms that handle municipal finance questions) to benefit richly off the process alone. For instance Lawrence has paid out nearly $4,000,000 for Wall St. Consultants already. These are names you will hear over and over again…. Hawkins, Delafield and Woods, Malcolm Pirnie, Advest, Inc when you look into water privatization all over the country.

Then they begin to circulate carefully designed public relations materials to both elected officials and the residents of the community. In these public relations pieces they list the glowing recommendations that come from citizens in communities that have relationships with the multi-national, clients of the company, and of course both employees and representatives of organized labor.

This multi-national will also begun making promises about what it will bring to the city. It lists its "Community Initiatives" like a "Buy Lawrence First" policy, scholarships to the Boys and Girls Club, Adopt a School Program, Urban Outreach Program, and support for Minority and Women Owned Small Businesses.

Let's start with a "Buy Lawrence First" policy. Exactly what kinds of materials and services will a water treatment plant need from the small businesses of Lawrence? Probably none. But it sure sounds good and looks great in print. Next, there is the promise of scholarships to local youth. Well this will be useful since by going with United Water / French Suez, many local fathers and mothers will lose their water Department jobs. Jobs that would have helped pay for college for local residents.

Then there is the "Adopt a School" program that will probably entail sending corporate speakers into 5th and 6th grade classes to tell them how great corporate economics are and that many of them should look into the exciting career opportunities in the world of water delivery systems. "Urban Outreach" for these multi-nationals means learning how to say, "Your water rates have gone up again" in both English and Spanish.

And as for the last promise of support for "Minority and Women Owned Small Businesses"…These corporations know that it is these groups that are most likely to oppose this corporate takeover. These are the groups that best understand who corporate economics works for (and who it doesn't work for). So they want to appease them with false promises and token pledges of support.

Ramifications for the Community

The ramifications for the community begin on the economic level. Most communities are overextended in terms of revenue for public services. In Lawrence our community's water revenue goes directly into an "enterprise fund" that is used solely for water related issues. It's criminal that during difficult fiscal times, communities are being misled into handing over one of the few sources of revenue they have under their full control and a public service that pays its own way.

There is also the fact that money normally circulated back into the community via a public workforce (and almost guaranteed to be spent locally) is now shipped out to distant foreign shareholders. And lastly is the reality that privatization and globalization of our local economy leads to rate increases. Corporations must seek to maximize their profits. Once the workforce has been slashed at the beginning of the privatization, the only remaining way to maximize profit is to increase water rates.