Water as Commodity: The Wrong Prescription

In celebration of our 40th anniversary year, Food First is revisiting past publications from our rich archive of analyses on the root causes of hunger and social movements fighting for the right to food around the world. We hope you enjoy (re-)reading these trail-blazing pieces, which remain highly relevant today.

In 2001, Maude Barlow, National Chairperson of the Council of Canadians and chair of the board of Food & Water Watch, wrote this Food First Backgrounder about the consequences of privatizing water. The threats of misuse, inequitable distribution, pollution, and scarcity have become more acute over the past fourteen years, with ongoing controversy around privatization and corporate loopholes exploited by companies like Nestlé. 

The world is poised to make crucial and irrevocable decisions about water. When world leaders and civil society representatives gathered at the tenth Stockholm Water Symposium in August 2000, there was little disagreement about the urgent nature of the water crisis facing the world.

The human race has taken water for granted and massively misjudged the capacity of the earth’s water systems to sustain the demands made upon it.

All the attendees agreed that the human race has taken water for granted and massively misjudged the capacity of the earth’s water systems to sustain the demands made upon it. Our supply of available fresh water is finite and represents less than half of one percent of the world’s total water stock. Thirty-one countries are facing water stress and scarcity, and over a billion people lack adequate access to clean drinking water. By consensus, the group recognized the terrible reality that by the year 2025, as much as two-thirds of the world’s population will be living with water shortages or absolute water scarcity.

The Stockholm Water Symposium also acknowledged that instead of taking great care with the limited water we have, we are diverting, polluting, and depleting it at an astonishing rate as if there were no reckoning to come.

But there is profound disagreement among those in the “water world” around the nature of the threat and the solution to it. A growing movement of people believes that the imperatives of economic globalization—unlimited growth, a seamless global consumer market, corporate rule, deregulation, privatization, and free trade—are the driving forces behind the destruction of our water systems. These must be challenged and rejected if the world’s water is to be saved.

The Water Transnationals

Just as governments are backing away from their regulatory responsibilities, giant transnational water, food, energy, and shipping corporations are acquiring control of water through the ownership of dams and waterways. These corporations are gaining control over the burgeoning bottled water industry, the development of new technologies such as water desalination and purification, the privatization of municipal and regional water services, including sewage and water delivery, the construction of water infrastructure, and water exportation.

The goal is to render water a private commodity, sold and traded on the open market, and guaranteed for use by private capital through global trade and investment agreements. These companies do not view water as a social resource necessary for all life, but an economic resource to be managed by market forces—like any other commodity.

These companies do not view water as a social resource necessary for all life, but an economic resource to be managed by market forces—like any other commodity.

At conferences like the Stockholm Water Symposium, transnational water companies assert that they are in this business for almost altruistic reasons. It is to their benefit to blur the lines between government and the private sector, and they certainly are doing a very good job of that. A closer and well-documented examination of their practices tells a very different story: higher consumer rates, dramatic corporate profits, corruption and bribery, lower water quality standards, and overuse of the resource for profit. While the companies argue that the privatization of water services is socially beneficial, the consequence of corporate control is that social and environmental concerns come second to the economic imperative of maximum profits for shareholders.

Pricing

Privatization leads inevitably to an area of profound disagreement about water, and that is water pricing. The argument, echoed even among some environmentalists, is that we have taken water for granted, and have overused it. Pricing water will cause us to understand its real value and force us to start conserving it from economic necessity. This argument is flawed in several ways.

There is a subtext inherent in much of the hand-wringing over the world’s water shortage. Almost every article on the subject starts with the reminder of the population explosion and where it is occurring. The subtext is that “these people” are responsible for the looming water crisis. But a mere 12 percent of the world’s population uses 85 percent of its water, and these 12 percent do not live in the Third World.

Water pricing, combined with privatization, will seal water’s fate as a commodity under the terms of international trade agreements supported by the World Trade Organization (WTO) and the North American Free Trade Agreement (NAFTA). Both the WTO and NAFTA consider water to be a tradable good, subject to the same rules as any other good. Only if water is maintained as a public service, delivered and protected by governments, can water be exempted from the onerous enforcement measurements of these trade deals. Claiming environmental exemptions for water will not suffice. Every single time the WTO has been used to challenge a domestic environmental rule, the corporations have won and the environmental protection has been ruled “trade illegal.”

Another Way

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. It’s not too strong to say that we are called now to rise to the greatest challenge of our time.

A radical rethinking of our values, priorities, and political systems is urgent and still possible. It’s not too strong to say that we are called now to rise to the greatest challenge of our time.

The answers lie within a rejection of economic globalization and the embrace of a whole new water ethic. First, we have to declare that water belongs to the earth and all species, and is sacred to all life on the planet. Second, water must be declared a basic human right. Above all, we as human beings must change our behaviors. The world must accept conservation as the only model for survival, and we must all teach ourselves to live within our environment’s capacity. Never has there been such an urgent need to come to terms with this seminal issue.

Maude Barlow is the recipient of numerous awards including the 2005 Right Livelihood Award (known as the “Alternative Nobel”). In 2008/2009, she served as Senior Advisor on Water to the 63rd President of the United Nations General Assembly and was a leader in the campaign to have water recognized as a human right by the UN. She is also the author of 17 books, including her latest, Blue Future: Protecting Water For People And The Planet Forever.

Click here to read the full Backgrounder.