Privatization and Commodification

Water is basic to the survival of all life. In 2010, the United Nations adopted Resolution 64/292 that “recognizes the right to safe and clean drinking water and sanitation as a human right that is essential for the full enjoyment of life and all human rights.”

Water privatization is when private corporations buy or operate public water utilities.  A parallel threat is commodification – the attempt to turn water into a product from which “owners” can reap maximum profits at public expense.

At FLOW, we believe water privatization and commodification represent the antithesis to this basic human right. Trends toward privatization -- and to define water as a commodity -- are occurring globally; this trend is occurring at both the international and the community level.

The World Bank and International Monetary Fund often require privatization of that country’s or community’s water system as a condition of the Structural Adjustment Programmes (SAPs) that countries must implement to obtain loans or favorable trade agreements. This continues to promote private profit over the human right to water. International players benefitting from these policies include major corporations such as Bechtel, Suez, Veolia, and Nestle.

The threat of water privatization in the United States and Canada has been focused on taking advantage of debt-ridden communities. Many water and sanitation systems in the United States are old and in need of repairs. The Water Infrastructure Network estimates that U.S. communities will need to invest $23 billion dollars each year over the next 20 years to modernize our water and sanitation infrastructure. A commission appointed by Michigan Governor Rick Snyder estimated an additional $900 million per year over the next 20 years to meet basic water infrastructure needs in the state.

Many communities are unable or unwilling to make the necessary investment. As a result, some communities are selling or leasing their systems to private corporations.

Commodification

Not only is water infrastructure moving towards private ownership, but trends on Wall Street also exist to commodify water resources. According to Food and Water Watch, investment funds have over $100 billion ready to invest in the private ownership of water rights. T. Boone Pickens -- a Texas oil and gas magnate who was once the largest private owner of water in the U.S. -- has been quoted as saying: “there will be those who sell water, and those who want to buy it. It’s the guts and feathers of the thing. You just wait and see.” Read investor recommendations from Wall Street advisors and you can see that water is already viewed as a commodity.

The concern about treating water as a commodity is that it will become subject to market prices. In conjunction with private companies at the helm of water infrastructure, only those who can afford it will have access. The commodification of water directly threatens the fundamental notion that water is a human right, to be available to all people regardless of their income or economic ability.

A Threat to the Public Trust

Privatization of our cities’ water and sanitation systems has not worked. Here are a few reasons they have cited; privatization:

1. Has led to rate increases;
2. Has resulted in lower water quality;
3. Has led to corruption;
4. Has resulted in loss of jobs.
5. May lead to wholesale water exports;
6. May reduce public rights and local control;
7. May leave the poor with no access to clean water.

According to Corporate Accountability International: “democratically controlled public-water systems work. They have long been the backbone of public health, economic development and environmental sustainability in communities around the world.”

At FLOW, we believe that if water is privatized and commodified, then citizen and community water rights will no longer exist and the legal protections for the Great Lakes, such as the Great Lakes Compact, will no longer be enforceable. Under public trust principles, the waters of the Great Lakes and protected uses cannot be alienated by government, and in any event may never be transferred or controlled for private purposes. In addition, a duty is imposed on government to account for its actions or approvals of a diversion or a proposed use to assure that there is no unlawful alienation or transfer for private purpose and no material impairment of public trust waters or uses.

Can you imagine the power of a water cartel?
Some things must remain in the hands of the people, and water is one of them.

Read more:

Food and Water Watch Water Privatization Facts and Figures

Why Water Privatization is Bad for People and the Planet