ALLIANCE FOR DEMOCRACY

WATER, WATER EVERYWHERE
TO BE SOLD TO THE HIGHEST BIDDER

This is the future we can anticipate if advocates of water privatization get their way. There will be plenty of water for the rich provided to them by transnational corporations and the poor, well, let them catch rainwater. Too bad if they live in a dry climate.

THE BIG LEAK Transnational corporations which stand to profit from the sale of water are pressing their agenda in negotiations by 140 countries to expand the World Trade Organization's General Agreement on Trade in Services (GATS). In a leaked document, the European Commission is requesting that the U.S. and 27 other countries open up their water systems to foreign competition.

What the corporations don't get in GATS, they will try for in the Free Trade Area of the Americas (FTAA) currently being negotiated by 34 countries in the Western Hemisphere.

WHY IS THIS SUCH A BIG ISSUE NOW? Clean water is becoming scarce thanks to the waste and pollution by manufacturers and agribusiness. In some areas, there is a shortage of water period, for instance where aquifers are being depleted by over-irrigation. Today, over a billion people lack adequate access to clean drinking water. With global warming and population growth, the situation will only get worse. By the year 2025, over 3 billion people may live in regions that lack water.

With water in short supply it has a market value and corporations are licking their chops over the big profits they can make. According to John Bastin of the European Bank of Reconstruction and Development, "Water is the last infrastructure frontier for private investors." The World Bank places the value of the world water market at close to $800 billion.

TWO-PRONGED ATTACK Corporations seeking to make big profits from water are mounting a two-pronged attack. One is to open up the sale of bulk water across national boundaries and the other is to privatize the local supply of drinking water. These goals will be met much more readily by getting the right language into international trade agreements.

When water is sold in bulk it is a commodity. The transport and municipal provision of drinking water are services. Both could be impacted by the WTO and FTAA agreements.

WATER AS A COMMODITY. Already NAFTA and the WTO agreements have provisions on market access which ban any limit on the quantity of a good or service which is traded across national boundaries. Nor can there be any limit on the total value of foreign investment. Maude Barlow in Blue Gold points out "if the export of water were to commence between NAFTA countries, the tap couldn't be turned off, even if new evidence found that massive movements of water were harmful to the environment." Massive movements? Yes, corporations, smelling the gold of large profits, are talking about using supertankers or super-large bladders to export water.

WATER AS A SERVICE. While GATS covers all services and regulations by national, state and local governments, it supposedly does not apply to services provided in the "exercise of government authority." Sounds like our municipal water systems are safe, right? Wrong. Two conditions are attached which make the provision virtually useless. First, the service can't be supplied on a commercial basis. If a town charges consumers for the water they use, are they supplying the water on a commercial basis? Second, there cannot be "competition with one or more service suppliers." If a private company sells water from the back of a truck, isn't there competition? With government services not really protected, powerful corporations can pressure towns and cities into privatizing their systems.

BLUE GOLD RUSH The Blue Gold Rush is already beginning. While the two big French transnational corporations, Vivendi and Suez, have a real head start in water privatization, U.S.-based transnationals like Bechtel are getting into the act as well. Rebecca Mark, speaking when she was CEO of ENRON's water division, Azurix, said "'We're going to be in their face,'" referring to the competition and said she would not rest until "she has fully privatized the global water market."

ENRON's Azurix is now history, but a new player has entered the picture. Alaska Water Exports wants to tap two rivers in northern California, pipe their flows into giant polyfiber bags and tug them through the ocean to San Diego. Ric Davidge who heads the company is an ex-Alaska water official and aide to former Interior Secretary James Watt so you know this is not about environmental protection! Davidge organized Alaska Water Exports as part of World Water SA, an international consortium that includes Nordic Water and venture firms from Japan and Saudi Arabia. So this is not just a domestic venture and could get protected under WTO and GATS rules. The Alliance and other organizations are mobilizing to stop this water grab.

Further South in California, the Cadiz Corporation planned to use an aquifer under the Mojave Desert to store and mine water for use by Los Angeles. Fortunately, in October 2002, this environmentally destructive proposal was voted down by the Los Angeles Water District. The CA state constitution guarantees the people the right of ownership of the water, but tragically the people are losing control of this right to agribusiness, private land companies, and water speculators. Since 1992, some companies operating as federal contractors have been given the right to sell some of California's water on the open market. In 1995, the state also gave its contractors the right to sell water. For more information about California's water and how you can get involved, contact Nancy Price in Davis at 530-758-0726.

In other parts of the country, Perrier is buying up large areas of land over springs and aquifers to expand its bottling business in the U.S. It is already operating in Michigan. Meanwhile, using U.S. subsidiaries, Vivendi and Suez are running water and sewer utilities in cities like Atlanta, Georgia.

In Texas, T. Boone Pickens, the corporate raider, has a sprawling ranch in the Texas panhandle where the Ogallala Aquifer underlies the bleak, isolated terrain. The New York Times reports "At a time when nearly every major city in Texas is desperate for more water to meet runaway population growth, Mr. Pickens is proposing to pump tens of billions of gallons -- to the highest bidder." He plans to make a cool $1 billion selling to Texas cities by pumping from the Ogallala Aquifer which supplies farmers with water all the way north to South Dakota and is already being rapidly depleted.

This competition will not necessarily be played by gentlemen's rules.

"Water has moved from being an endless commodity that may be taken for granted to a rationed necessity that may be taken by force."

--Global Water Corporation's Publication Global Gazette

STOP THE GATS ATTACK on WATER Now the cat is out of the bag. We know that the European Union, acting on behalf of its big transnational corporations like Vivendi and Suez, wants the U.S. to open up its water systems to privatization. We must make sure our public officials know about this and get local resolutions passed protesting this incursion on municipal authority.

In addition, every municipality should declare water to be a public good, not a commodity to be bought and sold for profit whether this be by domestic or foreign corporations.

For more information and model resolutions go to www.thealliancefordemocracy/globalization and look under GATS or contact Ruth Caplan in the Alliance for Democracy Washington DC office.
Call 202-244-0561 or e-mail rcaplan@igc.org