The Freshwater Cartel


The world is moving toward a corporate controlled freshwater cartel. Private companies, backed by governments and global institutions, are making fundamental decisions about who has access to water and under what conditions.

Simply put, the answer to the world’s water crisis rests on the principles of conservation, water justice and democracy. No global corporation can operate on these three principles and remain competitive in the marketplace. Three major problems thus arise with the growing corporate control of water.

The first is that there is no incentive to stop pollution and hence no profit in conservation. In fact, it is to the distinct advantage of the private water industry that the world’s freshwater supplies are being polluted and destroyed.

Individual corporate leaders might not take pleasure in the global water crisis but it is exactly this crisis that is driving profits in their industry. The “dead hand” of the market will favour those companies that maximise profit. In the water business, that means taking advantage of a dwindling supply that cannot meet a growing demand.

With governments, industries and universities now investing so heavily in the burgeoning water cleanup technology industry, incentives to emphasise source protection and conservation are removed at every level. Once a massive and expensive cleanup industry is in place, economic and political pressure will come to bear on governments and global institutions to protect it. Global trade rules to promote the water technology industry are already in place. The World Trade Organization promotes and protects the trade in environmental services, encouraging cross-border trade and investment in private water cleanup companies.

As with all tradable goods and services, governments are encouraged to relinquish public control of water treatment to the private sector and have to ensure that any rules they have in place are the least trade-restrictive possible. This means that rules and regulations meant to protect the public and the environment must not hamper private business: the pressure is constantly on governments to “cut red tape” and lower their standards. As well, under the National Treatment provision of the WTO, governments cannot favour domestic water companies and will have to open up their bidding process to the increasingly powerful water technology transnationals.

The second problem with corporate control of water is that water and water infrastructure — from drinking water and sanitation utilities services to bottled water, cleanup technologies and nuclear-powered desalination plants — will flow to where the money is. No corporation is in business to deliver water to the poor.

Already, wealthy countries such as Saudi Arabia and Israel are dependent on expensive water purification technologies for their day-to-day living. On the other hand, equally water-starved countries such as Namibia and Pakistan cannot afford such technology, and so their citizens suffer from severe water shortages.

Bottled water is the exclusive prerogative of those who can pay for it, as is clean water from the tap in many parts of the world. World Water and Flow Inc, two companies on the verge of a bulk water transfer business, are looking to send their first shipments not to the parts of the world where people are dying for water but to Las Vegas and Los Angeles, in the case of World Water, and Saudi Arabia and the United Arab Emirates in the case of Flow.

The water industry is becoming more adept at lobbying and advising governments and global institutions on water policy. The big service companies have enormous clout with the World Bank and the United Nations as well as with their own governments.

Pipe Dreams, a study undertaken by the Public Services International Research Unit reports that big companies such as Suez and Veolia actually influence World Bank decisions about where funding for water services should go: “Putting private companies in the driving seat in recent years has allowed them to set the agenda in terms of prioritising the contents, regions and cities where investment in the water sector should go.”

Because of the corporate need to make a profit, donor-funded investments are not concentrated on the areas of greatest need. Rural communities have suffered from a similar lack of attention because of their inability to create a profit for the water companies. As a consequence, sub-Saharan Africa and South Asia have been the focus of only 1 per cent of total promised private sector water investment.

The third major concern around corporate control of water is that, with no regulatory oversight or government control, there will be no protections for the natural world and the need to safeguard integrated ecosystems from water plundering. As it is now, in most parts of the world governments have little knowledge of where their groundwater sources are located or how much water they contain. Consequently, they have no idea how much pumping they can maintain or if current water mining operations are sustainable.

An added strain is put on rural and wilderness water sources by the water needs of urban centres, especially the burgeoning megacities of the developing world. These needs are increasingly being met by draining rural and wilderness lakes, rivers and aquifers.

Although governments must manage competing pressures, if they maintain control of water systems, they can try to protect rural ecosystems. But if, as is increasingly the case, water transfers are in the hands of private brokers who are competing with one another for dwindling resources and the process is unregulated by governments, there will be few protections in place to stop the destruction of watersheds and ecosystems and the species and plant life they sustain.

It is unlikely that a time will come when there is no private involvement in water. Nor are most critics saying there is no place for private companies in finding solutions to the coming global water crisis. However, there is a desperate need for public oversight and control of the world’s declining water supply and for elected governments — not corporations — to make the decisions about this shared heritage before it is too late.

This is an edited extract from Blue Covenant — The Global Water Crisis and the Coming Battle for the Right to Water (Black Inc).

Maude Barlow will be touring Australia in late August/early September, beginning as a guest of the Melbourne Writers’ Festival.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.