Global Policy Forum

Blocking the Wave of Privatisation of Water


By Raúl Pierri

Inter Press Service
September 23, 2005

The nations of South America must urgently take steps to guarantee that water is legally considered a social, not an economic resource, and to block the advance of transnational corporations, which are increasingly gaining control over public utilities in the developing South, warned the French foundation France Libertés.

Danielle Mitterrand, the founder of France Libertés and the widow of former French President Franí§ois Mitterrand (1981-1995), headed up a delegation of the foundation that ended a tour to South America Friday. The aim of the tour was to promote the concept of water as a public good, and to speak out against the privatisation of water and sanitation companies.

"The foundation was initially involved only in the defence of human rights, including legal, economic and social rights, but we gradually came to realise that the right to water is essential, and that water was going to become one of the most pressing problems in the world," said Catherine Legna, projects director in France Libertés. "In our view, the commodification of water is simply unacceptable," she told IPS. "Products can be bought and sold, but the buying and selling of resources that are indispensable to life itself, like water, is intolerable."

The delegation's first stop was Brazil, where the foundation's representatives signed agreements with the leftist government of Luiz Inácio Lula da Silva, in which Brazilian authorities committed themselves to blocking any attempt at privatising the management of that country's water.

France Libertés will also serve as a link between municipal governments in Brazil and the French public enterprises Eaux de Paris and Ville de Grenoble, to share experiences in the "social management" of water. The foundation also promised legal advice to municipal authorities in Brazil in cases in which multinational companies running water utilities have failed to live up to the terms of their contracts.

The activists later headed to Bolivia, on the invitation of social movements in the western city of El Alto, a sprawling working class suburb located next to La Paz. Through massive street protests, the civil society groups forced the government to cancel its contract last January with the French corporation Suez-Lyonnaise des Eaux, which was running the water company.

The social movements in El Alto, which has a largely indigenous population of 800,000, accused the French firm of infringing the contract and of charging unjustifiably high rates. The company was also accused of failing to keep its promise to invest 800 million dollars in the construction of a water treatment plant, of dumping waste into Lake Titicaca, and of leaving many people with no access to water.

"Bolivia is one of the countries in the most dire situations, but it is also the country that has the strongest social movement, because it is based on the deep indigenous roots of the Bolivian people," said Legna. "They have a strong sense of solidarity and awareness of the concept of using the water for the public good," she added.

France Libertés will play the role of intermediary in order for the public water company in the central city of Cochabamba to receive advice from the French cities of Paris and Grenoble. "We believe it makes the most sense for the city governments, which know what it means to administer these resources, to directly contact each other," said Legna.

Activists point out that in the past few years, a large part of the planet's clean water has fallen under the control of transnational corporations. They also warn that in just a few years time, a handful of corporations will control almost 75 percent of all water for human consumption in the world, as an increasing number of governments privatise water and sewage services.

The main concessionaires are the French Vivendi-Générale des Eaux and Suez-Lyonnaise des Eaux, which control 40 percent of the market and provide services to some 110 million people in more than 100 countries. Suez reported net earnings of 2.42 billion dollars in 2004, 2.8 percent up from the previous year. Governments argue that their main motivation in handing over drinking water distribution and treatment and sanitation services to the private sector is to improve public services.

But instead of alleviating the problem of limited public access to clean water, the private corporations have inflated rates, and corrupt corporate practices have led to severe crises in cities and entire countries in some cases, say the activists. One-fourth of the world's population has no access to clean water, which leads to the deaths of at least 34,000 people a year.

The U.N. has warned that unless drastic measures are taken, within the next 20 years, 1.8 billion people will live in countries or regions that suffer severe water shortages. Mitterrand visited Buenos Aires shortly after Suez decided to pull out of Aguas Argentinas, a company that was privatised in the 1990s and which serves 10 million people in Greater Buenos Aires.

The French company decided to leave Argentina due to resistance by the administration of Néstor Kirchner to allow an increase in rates, which were frozen during the South American country's economic meltdown in late 2001. Mitterrand said in Buenos Aires that in her view, Suez "failed to live up to its agreement" with the Argentine government. She also said public services should always be provided by the State, and not by mixed or private systems, "which do not work."

The delegation decided to end its South American tour in Uruguay "as a symbol, to tell the world that an example was set here," said Legna. "The case of Uruguay is unique in the world, and that's why we came. Not to give advice, but to exchange experiences," she stressed. In a referendum last year, 64.7 percent of Uruguayan voters came out in favour of introducing a constitutional amendment which states that "water is a natural resource essential to life" and that access to piped water and sanitation services are "fundamental human rights".

The constitutional reform also defined water as a public good and guaranteed civil society participation at every level of management of the country's water resources. In addition, the new clause established that piped water will be supplied "exclusively and directly by state-owned legal entities", and that concessions to private firms would be cancelled.

That raised questions regarding the contracts that had been granted to the Spanish companies Uragua and Aguas de la Costa, which were already operating in the southeastern province of Maldonado. However, the leftist government of Tabaré Vázquez, which took office last year, issued a decree allowing the companies to continue operating in Maldonado on the understanding that the constitutional reform was not retroactive. But in the end, the government cancelled Uragua's concession for breach of contract and for failing to invest in the promised sanitation works.

In Uruguay, Mitterrand met Vice President Rodolfo Nin Novoa and Montevideo Mayor Ricardo Ehrlich to express her concern about the government decree. "We said all of the private companies providing water services should leave," she said in a press conference held after the meeting.




FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.