Only five percent of the world’s population buys water from transnational
corporations, but annual revenues already reach forty percent of the oil
sector. With this enormous potential for profit, water TNCs are pushing to
legitimize the trade of water as a commodity through the WTO’s General
Agreement on Trade and Services (GATS).
*/Jakarta Post <http://www.thejakartapost.com>/
November 13, 2002
The global trend in the water industry, predicted Fortune magazine
in May 2000, was that “Water promises to be to the 21st century what
oil was to the 20th: the precious commodity that determines the
wealth of nations.”
Water, the
report said, has become one of the biggest businesses at a global level. The
annual revenue of the water industry was estimated at that time by Fortune at some
$400 billion, 40 percent of the oil sector and one-third larger than the
pharmaceutical sector. The revenue is from only 5 percent of the world’s
population that receives their water supplies from corporations. Thus the
potential for water market growth is very high, estimated in 1998 by the World
Bank to grow to $800 billion; last year the bank revised the projection to $1 trillion.
Four
transnational corporations (TNC) in the water industry - RWE, Vivendi,
Suez-Lyonnaise and Enron - are in the Global Fortune 500, with Vivendi and
Suez-Lyonnaise as the market leaders. Vivendi has 110 million customers
worldwide, with annual revenues of more than 13 billion euros. Meanwhile,
Suez-Lyonnaise, another French-based TNC, generates 10 billion euros in annual
revenues from its worldwide customers.
Monsanto, a
giant chemical TNC, also sees this emerging market, and intends to expand its
business to the water sector starting from India and Mexico, since both face
water shortages.
Although
these giant water TNCs are competing with one another to create their share in
the lucrative market, they are also pursuing the same goal: to establish a
global water market where water can be treated as a commodity - sold and traded
freely.
“Put water
on sale, and let the market determine its future,” they seem to say. This goal
could be achieved by legitimizing the trade of water through free-trade
instruments like GATS/WTO.
In terms of
the free market, water supply is put into the same category as education,
healthcare, banking, tourism, transportation and waste management, and trade in
it is governed in the 1994 General Agreement on Trade in Services (GATS), which
is part of the World Trade Organization (WTO).
GATS
intends to liberalize the trade in services by lifting all trade barriers, of
which public ownership is one, and restraining national regulations. The
agreement prohibits discrimination against a foreign supplier in all covered
areas, notwithstanding the conditions under which services are provided and
regardless of the human rights or environmental record of the provider. Parties
have also agreed that some rules apply “horizontally,” whether or not the area
has already been listed under GATS.
One horizontal rule, one writer notes, is “most-favored nation,” which says that once corporations from one country are operating in your market, you must allow the corporations from all countries in as well. This rule applies to all services, even those still protected.
In the water sector, GATS thus implies that all countries should open
their market for water supply services without reserve and transfer water
management to the private sector. As liberalization requires the confinement of
the role of the state to mere facilitator, the transfer of public ownership of
water services to the private sector is a practical consequence.
Proponents of GATS are very much convinced that water privatization and
the institution of the global water market will benefit rich and poor alike.
But also, more and more civil society organizations have become aware and
voiced criticism and objections to water services being put under legally
binding trade agreements like GATS. These criticisms and objections concern two
main issues.
First, as stated above, GATS is helping the private sector, especially
giant water TNCs, to expand their operations all over the world. But from
experience, water privatization creates many new problems. When corporations
sell water for profit, the quality, access and safety of water supplies are
endangered and the future of water resources is threatened.
The second issue concerns a very fundamental principle. Water is undeniably
an essential resource for every living being. Thus, decisions on this resource
should be made democratically at the local, national and global level, based on
people’s fundamental right to safe and affordable water.
We believe
the institutions of WTO/GATS are undemocratic, unfair and unaccountable. GATS
supporters say that the agreement has been negotiated by governments. But the
GATS terms were negotiated between a few powerful governments behind closed
doors. And most governments were told to sign up to the done deal or be left
out of the trading system.
Any policy
on water should be discussed and debated democratically so that ordinary
people, indigenous communities, community-based organizations and all global
citizens can participate and voice their opinions and ideas.
We should
encourage our government not to make any commitments regarding GATS before
carrying out a comprehensive assessment of its impact on our shared life. The
assessment should then be followed by an extensive public discussion and debate
involving all citizens, in order to reach participatory and responsive
decisions. Therefore, indirectly, we would make our government accountable for
its trade policies, and hopefully in the end it could stand up to powerful governments
imposing water privatization in the GATS negotiating process.
The
writer is coordinator for the Indonesian Forum on Globalization Research,
Business Watch Indonesia in Jakarta. - Ed.