War over Water
Posted on December 12 2003 |
Vinod Riana
‘Water flows Uphill to Money’
Since the beginning of the world, gravity has been nature’s engine to distribute water over the earth. But as mankind (marginally womankind) has progressed, we have reached a state of economic ‘progress’ that will finally defy nature and its gravity – no, water has not acquired wings, but with the privatization of water on the anvil, it will ‘flow uphill to money’, as a resident of the high desert in New Mexico observed after his community’s water had been diverted for use by the high-tech industry.
There is, sickeningly, a consistent universal solution to all the problems of the world today – globalization. So why should water remain confined to local regions or within national boundaries? The corporate solution is simple, let national governments hand over the right to water to them and they will transfer water in bulk across nations and continents. If in the process, the poor and the needy are further deprived from their scarce water sources at the expense of industry and the rich, and corporations make profits, well what could be wrong!
In 1998, the Nova Company of Canada awoke the region to the fact that diverting or exporting Great Lakes water to regions of the globe that would buy it was a real possibility. Nova was granted a permit to ship tankers of Lake Superior water to Asia but this was withdrawn after Canadian and US citizens protested and held elections. Then in October 1999, Sunbelt Corporation of California filed a $10.5 billion claim under NAFTA because of British Columbia’s withdrawal of a water export permit. Using trade agreements like North American Free Trade Agreement (NAFTA), the General Agreement on Tariffs and Trade /World Trade Organization (GATT / WTO), corporations smell blood in water trade, and the war over water is truly on. However, like vultures, the corporations must first sight the carcass before swooping down, which is what the present water crisis gripping the globe provides them.
The Crisis
We live under a false illusion that there is an infinite supply of water on earth. Available fresh water has continued to be the same for over 2000 years, and it amounts to less than half percent of all water on earth. The rest is seawater or inaccessible in ice caps, groundwater and soil. The population has risen over 33 times during these 2000 years. Consequently, United Nations estimates that one billion people already lack access to fresh drinking water, and within the next 25 years, the number of countries facing chronic water shortages will swell to 50 with three billion people, about 35 percent of the world’s population. World Bank and United Nations estimates predict that by 2025, the demand for fresh water will rise by over 56 percent more than is currently available. While the only renewable source of freshwater is continental rainfall (which generates a more or less constant global supply of 40,000 to 45,000 cubic km per year), the world population keeps increasing by roughly 85 million yearly. Therefore, the availability of fresh water per head is decreasing rapidly.
Most stupidly, overuse, pollution, diversion and depletion of this finite source of freshwater is taking place at overwhelming rates. Averages hide lies. It is not as if the increasing population has access, or is using equally, this finite resource.
• The United Nations reports that Europeans spend $11 billion a year on ice cream (made mostly of water), $2 billion more than the estimated total money needed to provide clean water and safe sewers for the world’s population.
• More than five million people, most of them children die every year from illnesses caused by drinking poor quality water. While billions go without clean water, North Americans use about 5,000 liters of water per person per day!
Water inequality exists not only between nations but within nations too:
•The ongoing unprecedented drought in India is affecting millions of humans and cattle, and is leading to famine like conditions and large-scale migration, even though the government takes pride in proclaiming that food godowns are bursting with huge stocks!
•Millions of people are scrounging for cupfuls of water and morsels of food on a daily basis. However, water sport amusement parks are sprouting all over the big cities and highways of the country and are being advertised prominently in color, on the same pages of national dailies that allow no more than a centimeter-deep news of the drought.
•Likewise, in 1994, when Indonesia was hit with a major drought, residents’ wells ran dry, but Jakarta’s golf courses continued to receive 1,000 cubic meters per course per day.
•In 1998, in the midst of a three-year drought that dried up river systems, the Cyprus government cut the water supply to farmers by 50 percent while guaranteeing the country’s two million tourists a year all the water they needed.
• In Lima, Peru, poor people may pay a private vendor as much as $3 for a cubic meter of water, which is often contaminated and has to be collected in buckets. The more affluent on the other hand pay 30 cents per cubic meter for treated water provided through taps in the houses.
•In Dhaka, Bangladesh, squatters pay water rates that are twelve times higher than what the local utility charges. Indigenous people have been affected in a particularly brutal fashion by the theft of their water. It is the immediate relationship that these people have to water that make them especially vulnerable to any large-scale project that alters aquatic ecosystems.
Water inequalities have profound impacts on the food security of the majority of people on earth. Irrigation and crops claim 65 percent of all water used by the humans, compared to 25 percent for industry and 10 percent for households and municipalities. The annual rise in population and over consumption demands higher food production, requiring larger amounts of water. But the world’s expanding cities and industries are successfully competing and taking increasingly more water from agriculture every year. Throughout rural Latin America and Asia, massive industrialization is disrupting the relationship between humans and nature. Export-oriented agribusiness is claiming more and more of the water once used by small farmers for food self-sufficiency.
The other major drain on local water supplies is the more than 800 free trade zones in the developing world where assembly lines produce goods for the global market. In such zones in Mexico, for example, clean water is so scarce that babies and children drink Coca-Cola and Pepsi instead! During a drought in northern Mexico in 1995, the government cut water supplies to local farmers while ensuring emergency supplies to the mostly foreign controlled industries of the region.
The Worldwatch Institute warns that an unexpectedly abrupt decline in the supply of water for China’s farmers could threaten world food security. China faces severe grain shortages in the near future because of water depletion due to the current shift of limited water resources from agriculture to industry and cities. The resulting demand for grain in China could exceed the world’s available exportable supplies. As the western half of China is made up mostly of deserts and mountains, the bulk of the country’s 1.2 billion people live on several great rivers whose systems cannot sustain such demands. For instance, in 1972, the Yellow River failed to reach the sea for the first time in history. That year it failed for 15 days, and every year since, it has been running dry for a greater number of days. In 1997, it failed to reach the sea for 226 days.
The story is the same with all of China’s rivers and with its depleting water tables beneath the North China Plain. As big industrial wells probe the ground ever deeper to tap the remaining water, millions of Chinese farmers have found their wells pumped dry. Three hundred Chinese cities are already facing severe shortages. These shortages come at a time when China will see a population increase in the next 30 years greater than the entire population of the United States. Conservative estimates suggest that the annual industrial water use in China could grow from 52 billion to 269 billion tons in the same period, and when rising incomes are allowing millions of Chinese to install indoor plumbing with showers and flush toilets. Worldwatch predicts China will be the first country in the world that will have to literally restructure its economy to respond to water scarcity.
The situation is not much different in the other billion-plus population country, India. Most agree that the ongoing drought of the year 2001 is the worst ever, affecting the entire central belt, from East to West. Rivers and wells have run dry and over pumping has either emptied aquifers or plunged them deep down. In the beach area of Madras, aquifers filled with saline water, ensuring that numerous high-rise apartments and condominiums that have sprung up along the beach remain unoccupied, or have tankers ferrying water to them. With depleted rivers, a lot of hydropower generation is badly affected, reducing power supply to farms and cities to alarming levels. All this happened during the winter months, when water bodies are normally full after the monsoons. The coming summer, when temperatures soar to above 45 degrees Celsius in the drought belt, could be calamitous.
The official response around the world to such conditions and water demands is to build more dams and divert more rivers. We are now tampering with water systems on a scale that is totally unsustainable.
The number of large dams worldwide climbed from just over 5000 in 1950 to almost 500,000. In the northern hemisphere, three-quarters of the flow from the world’s major rivers was harnessed and tamed for power generation. In the U.S., only two percent of the country’s rivers and streams remain free flowing and undeveloped. All but one of England’s 33 major rivers is suffering; some are now less than a third of their average depth. The Thames is threatening to run dry and already larger ships have to restrict their movements to high tides. Development cut the Rhine River in Europe off from 90 percent of its original flood plains. Over the last 25 years, the Danube’s phosphate and nitrate concentrations have increased six-fold and four-fold, respectively. According to the Food and Agriculture Organization (FAO), 80 percent of China’s major rivers are so degraded they no longer support fish. After the Pak Mun Dam was built in Thailand, all 150 fish species that had inhabited the Mun River virtually disappeared. The world’s waterways are struggling with the full range of modern toxic pollution problems. Ninety percent of the developing world’s wastewater is still discharged untreated into local rivers and streams.
The Aral Sea basin, shared by Afghanistan, Iran, and five countries of the former Soviet Union, was once the world’s fourth largest lake. Excessive river diversions have caused it to lose half its area and three-fourths of its volume, while its surrounding wetlands shrank by 85 percent. Almost all fish and waterfowl species have been destroyed in what is perhaps the planet’s greatest environmental tragedy. Each year, winds pick up 40-150 million tons of a toxic salt mixture from the dry seabed and dump it on the surrounding farmlands. Millions of ‘ecological refugees’ have fled the area.
As advances in modern engineering allow governments to supply farms and cities with water and hydropower, the human, social and environmental costs have been enormous. There is simply no way to overstate the water crisis of the planet today. Till now, deprived and affected populations have been agitating for their share of land, water and forests with their governments.
Instead of radical reforms to address the grave water and ecological problems, governments are likely to wash their hands off the water problem by giving control to corporations.
Commodification and Privatization
We are now in the era of Everything is for sale. Even those areas of life once considered sacred, such as health and education, culture and heritage, genetic codes and seeds, and natural resources such as air and water are being put up for sale. In 1997, $157 billion worth of global public government resources were transferred to private companies, an increase of 70 percent in one year.
A new global royalty now centrally plans the market, destroying lives and nature in its wake. As David Korten, former senior advisor to USAID says, ‘The world is now ruled by a global financial casino staffed by faceless bankers and hedge-fund speculators who operate with a herd mentality in the shadowy world of global finance. Each day, they move more than two trillion dollars around the world in search of quick profits and safe havens, sending exchange rates and stock markets into wild gyrations wholly unrelated to any underlying economic reality. With abandon they make and break national economies, buy and sell corporations and hold politicians hostage to their interests.’
As demand for fresh water continues to grow, governments and corporations are considering the commodification of water – buying, selling, shipping and bottling. International trade agreements are increasing the means by which environmental resources are valued and disputes settled. In industries ranging from wastewater services to bottled water to bulk water exporting, corporations are jumping in to exploit water shortages.
Two French transnationals dominate the world of privatized water: Vivendi SA, whose water division is Generale des Eaux, and Suez Lyonnaise des Eaux (which built the Suez Canal and has holdings of $56 billion). They are referred to as the General Motors and Ford Company of the water world. Between them, they own, or have controlling interests in, water companies in approximately 120 countries on five continents and distribute water to almost 100 million people in the world. In March 1999, Vivendi purchased U.S. Filter Corp. for more than $6 billion in cash, making this merger the world’s largest water company in North America with projected revenue of $12 billion in annual sales. With close to $90 billion in annual revenues, the US is the world’s largest water market. Until now small scale public-sector operators have almost exclusively controlled this sector. Vivendi is poised to promote the massive privatization of the American water market.
Having acquired Wessex Water PLC of Britain, none other the Dabhol power plant constructor – the power giant Enron -- which has virtually blackmailed the governments of Maharashta and the central government in India, is bidding for huge contracts against established players for newly privatized water services in Bulgaria, Rio de Janeiro, Berlin and Panama. The very familiar Rebecca Mark is the CEO of Enron’s recently formed water division, Azurix. Ms. Mark, whom the Fortune Magazine named as one of the 50 most powerful women in the US in 1998, says she wants to change her lifestyle so she can ski every day and ride her horses, but not before she has fully privatized the global water market. She estimates its worth at approximately $300 billion (the World Bank places the value at closer to $800 billion).
One form of privatized water familiar even in developing countries is bottled drinking water. The ability of municipal bodies, throttled with financial cuts, to supply quality drinking water is increasingly diminishing. So, enter private packaged suppliers. In the thirst rich country like India, brand names like Triputi, Ganga, Bisleri, wrongly claim to provide mineral water; Ganga of course passes off its water as sourced from the holy Ganges.
Worldwide, trade in bottled water is one of the fastest growing, and among the least regulated. In the 1970s, the annual volume was around 9,000 million liters. By 1980, this figure had reached around 19,000 million liters and, by the end of the decade, the world was drinking around 6 billion liters of bottled water each year. In 1998 over 18 billion liters of water was bottled and traded globally, with over 90 percent of it in non-renewable plastic containers. As the world’s freshwater supply becomes more degraded, those who can afford it are favoring the packaged item, even though bottled water is subject to less rigorous testing and purity standards than tap water (Indians can feel reassured that the problem is worldwide!). A March 1999 study by the US based Natural Resources Defense Council (NRDC) found that much bottled water is less safe than tap water. One third of 103 brands of bottled water studied contained levels of contamination, including traces of arsenic and E. coli, and at least one fourth of bottled water is actually bottled tap water, a fact that is all too familiar in India.
Alongside the giants of the industry, such as Perrier, Evian, Naya, Poland Spring, Clearly Canadian, La Croix and Purely Alaskan, and thousands of smaller outfits, the big soft drink companies are entering the market in force. Pepsi has its Aquafina line and Coca-Cola has recently launched the North American version of its international label, Bon Aqua, called Dasani. Coca Cola predicts that its water line will surpass its soft-drink line within a decade. These companies are engaged in a constant search for new water supplies to feed the insatiable appetite of the business and are engaging in the trade of water by tanker shipments and by purchasing water rights from farmers. In rural communities all over the world, corporate interests are buying up farmland to access wells and then moving on when supplies are depleted.
The global income gap is clearly reflected in inequitable access to bottled water. The NRDC reports that some people spend up to 3,000 times more per liter for bottled water than they do for tap water. For the same price as one bottle of this consumer item, 3000 liters of tap water could be delivered to homes, according to the American Water Works Association. Ironically, the same industry that contributes to the destruction of public water sources, in order to provide ‘pure’ water to the world’s elite in non-renewable plastic, peddles its product as being environmentally friendly and part of a healthy lifestyle!
Bottled water is however, a very small component of the projected global trade in water, the mass export of bulk water, by diversion, sealed bags and supertankers. Barges already deliver water to the islands in Bahamas, and tankers deliver water to Japan, Taiwan and Korea. A Turkey government water company had begun work to divert water from the Manavgat River, to be shipped across the Mediterranean to Cyprus, Malta, Libya, Israel, Greece and Egypt, until political tensions halted the project. The European Commission is looking into the possibility of establishing a European Water Network such that alpine water from Austria can flow into Spain or Greece, rather than into Vienna’s reservoirs. A high-tech pipeline already transports quality spring water from the Austrian Alps to Vienna, and there are proposals to extend it to other countries. Similarly, a number of companies are exploring to meet the water shortages of England by large-scale export of water from Scotland, by tanker and by pipeline.
Several companies around the world are developing technology to make it possible to load large quantities of fresh water into huge sealed bags, to be towed across oceans for sale. The Nordic Water Supply Company in Oslo has signed a contract to deliver 7 million cubic meters of water per year to Northern Cyprus. Aquaris Water Trading and Transportation Ltd. of England has begun the first commercial deliveries of fresh water by bag to the Greek Islands.
However, it is in North America that companies are lining up in numbers to trade in water. Some of them are directly involved with plans to divert massive amounts of Canadian water to water-scarce areas of the United States, Asia and the Middle East by tanker, pipeline, or rerouting of natural river systems.
By all indication, it would not take long before many of these companies, helped by weak and willing national governments get a stranglehold in Asia. Apart from the lucrative market in water-starved areas of Asia, regions like the Himalayas and its river and lake system stretching through Pakistan, India, Nepal, China and Bangladesh provides a vital source for fresh water mining. The consequent ecological damage could threaten the most populated region of the world.
NAFTA and WTO
As mentioned previously, the permit granted to the Nova Company to ship tankers of Lake Superior water to Asia, and the case filed by the Sunbelt Corporation of California has awakened the world to the imminence of large scale water trading. Though in both the cases, the governments acted to withdraw permission under public pressure, the legal validity of such withdrawals will set the course for future action. Sunbelt has already filed a claim for $10.5 billion under NAFTA. Public outcry against the environmental hazards due to bulk transfer of water and the ethics of treating a universal public resource like water as a tradable good will have to pressure not only the respective national governments, but fight multilateral trade agreements that apart from restricting fresh environmental legislations are systematically used to dismantle existing environmental protection measures, in favor of trade.
NAFTA clearly provides the blueprint for the future of water trading. Its Chapter 3 establishes obligations regarding the trade in goods. It also uses the GATT definition of a ‘good’, which clearly lists ‘waters, including natural or artificial waters and aerated waters’ and adds in an explanatory note that ‘ordinary natural water of all kinds (other than sea water)’ is included’. It would therefore appear that we must confront the reality that under NAFTA and WTO rules, water export controls are prohibited. Moreover, under NAFTA, Canada is also precluded from denying US investors and service providers the same access to Canadian water that it allows Canadian companies, communities and residents.
Common sense and environmental ethics demand that water in its ‘natural state’ should not to be considered a tradable ‘good’ and therefore should be outside the purview of trade rules; however, under both the US and international law, water in its natural state is considered a commercial good. Moreover, a very large portion of water resources of all nations would already have to be considered as having entered into commerce, because it is being used to generate power, irrigate crops, support industry and service individual consumers.
The most likely source that places water at risk is Article XI of WTO that imposes a blanket prohibition against the use of quantitative export controls on any product destined for the territory of any contracting party. This means quotas or restrictions on the export of water imposed for environmental purposes could be challenged as a form of protectionism.
Two recent WTO rulings suggest that precedents have been set up against environmental protection – an American law to protect Asian sea turtles from shrimp nets and dolphins from drift nets has been successfully challenged; and, Indonesia was forced to lift its ban on the export of raw logs. Both bode badly for a nation’s right to protect its natural resources. The West Coast Environmental Law Association thinks that these rulings will reverberate in all natural resource sectors. WTO of course has both the legislative and judicial authority to challenge laws, policies, and programs of member countries if they do not conform to WTO rules, and it has the power to strike down these rules if they can be shown to be ‘trade restrictive’.
Believing that Article XX of WTO can protect the environment and natural resources of a member country could be illusory. According to this Article, member countries can still adopt laws ‘necessary to protect human, animal or plant life or health … relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption.’ However, the Article can only be applied in ‘non-discriminatory’ fashion and cannot be a disguised barrier to trade. Up until now, in each case the WTO has upheld the rights of commerce over the rights of environmental protection. To complicate matters, WTO does not recognize the authority of Multilateral Environmental Agreements (MEAs), making it inimical to environmental laws.
As for legal measures to restrict water trading, ensuring that water in its ‘natural state’ should be treated as a non-tradable good, in the opinion of the West Coast Environmental Law Association, is no longer feasible because of NAFTA and WTO, unless pressure is put to change the NAFTA/WTO provisions. The Association suggests that the best approach for preventing bulk water removals is the enactment of national legislations designed specifically for the purpose. This may not prevent corporations from attempting to buy water rights, but could insulate nations against investor claims.
Toward a Water Conservation Ethic
Countries in Asia, particularly China and India need to wake up to provide a lead such that their water resources do not become the next target of profit hungry corporations, destroying in the process the already endangered Himalayan ecological system, the source of most of the fresh water in the world. Apart from studying the various legal strategies that can confront trade-related assaults, what seems to be desperately required, even to overcome internal water requirements, is citizen action based on a Water Conservation Ethic. Such an Ethic would recognize that:
• Water belongs to the earth and all species.
• Water is a finite resource.
• Water is a part of an ecosystem, interconnected to land and biomass. It must be left where it is and best protected in natural watersheds.
• Polluted water must be recycled.
• An adequate supply of clean water is a basic human right.
• Citizens and local communities have rights to decisions concerning water use and must be legally empowered.
• Economic globalization policies are not water-sustainable.
Georg Wurmitzer, mayor of a small town of Simitz in the Austrian Alps states, ‘It is a sacred duty to help someone who is suffering from thirst. However, it is a sin to transfer water just so that people can flush their toilets and wash cars in dry areas … It makes no sense and is ecological and economic madness’. We must recognize that the world is in the midst of a severe water crisis today. Entire societies and ecosystems are under threat. Governments are losing their right to protect their water heritage, or are willingly bartering them away. Most have not even begun to address the issues of privatization, commercialization and trade in water. Yet, while they leave their water resources unprotected by legislation, they are actively negotiating and signing international trade and investment agreements that supersede national laws. But, there must be hope, a radical rethinking of our values, priorities and political systems is urgent and still possible. •
Sources:
Barlow, Maude; Blue Gold, The Global Water Crisis and the Commodification of the World’s Water Supply, International Forum on Globalization, June 1999. Liberally used here.
What’s Trade Got to do With It? Water: A Case Study; National Wildlife Federation, Canada, November 1999
A Legal Opinion Concerning Water Export Controls and Canadian Obligations Under NAFTA and the WTO; West Coast Environmental Law Association, September 1999
Stikker, Allerd; Water Today and Tomorrow, Prospects for Overcoming Scarcity, Futures, Vol. 30, No1, Elsevier Science, 1998
Nelson, Joyce; There Goes our Water, Internal paper for the Canadian Union of Public Employees, January 1997
Menotti, Victor, The Environmental Impacts of Economic Globalisation, International Forum on Globalisation, August 1998
Brown, Lester, and Halweil, Brian; China’s Water Shortage Could Shake World Food Security, Worldwatch, July’August 1998
Postel, Sandra; Forging a Sustainable Water Strategy, State of the World, 1996, Worldwatch Institute
Global Water Corporation Web site: www.globalwatercorporation.com
Global Initiators Committee for the Water Contract, The Water Manifesto, The Right to Life, Lisbon, 1998
Gleick, Peter; The World’s Water: The Biennial Report on Freshwater Resources, 1998/1999, Island Press, California, 1998
National Geographic, Water, Special edition, 1993
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