The Water Thieves


April 2, 2008 8:59 | by Steve McGiffen

looking at the way the EU's mania for privatisation is standing in the way of a solution to the growing crisis of water supply in Europe and beyond.

The Morning Star recently reported the outrage caused in Britain by the official regulator Ofwat's approval of increased sewage and water bills. Averaging 5.8%, or over £300, they will hit pensioners and others on low incomes hard. Some areas, including North Wales - a region hardly famed for its arid climate - will see bills rise even more.

What people rightly angered by this profiteering may not have known was that this was far from being a purely British phenomenon. It is, in fact, part of a world-wide water-grab being conducted by major corporations, aided by the usual suspects, the International Monetary Fund and the European Union.

The IMF imposes privatisation of essential services on any country desperate enough to go to it for a loan, or seeking debt relief. The EU is attempting to force developing countries to open their services markets to European corporate investment as it negotiates trade deals.

Known as 'Economic Partnership Agreements' (EPAs) these seek to impose 'free trade' on poorer countries, making it impossible for them to develop manufacturing and processing industries in the face of foreign competition. In addition, the EU is determined to push countries into removing restrictions on foreign (for which read corporate) investment, including in service sectors. As is the case within Europe, publicly-owned service providers will simply be classed as monopolies, and any attempt to defend or improve them as supporting a restrictive monopoly practice.

Since the late 1980s, the European Commission has turned a jaundiced eye on publicly-owned companies of all kinds. In its ultra-liberalising view a public service which is owned by the people is no different to any other monopoly. The fact that Belgium, for example, has a legal bar on privatising water is, in this way of seeing things, merely a 'restraint of trade', as it prevents private companies from competing for contracts within the sector. Belgium can no longer claim that this is Belgium's business and if any other country doesn't like it they can lump it.

This is an exclusion whose days are numbered.

As a result of EU rules implicit in the 1957 Treaty of Rome, first made explicit thirty years later in the Single European Act and intensified with every new European treaty since, a foreign water privateer such as the French Vivendi has the right to muscle in on the Belgian 'market' for water, and it is only a matter of time before someone insists on exercising that right. The facts that privatisation of water does not deliver what it claims to, and that the Belgian people might like the current arrangements or want to decide for themselves how they might be improved, are, in the EU's view, irrelevant.

Fortunately, reality is having its say. In France - the lair of the water privateers - around forty local authorities, including Paris, have taken water back into public ownership in the last decade. A rash of privatisations had followed the introduction of a new law in 1992. A few years of experience of rising prices and deteriorating levels of service were enough for most French people, however, and while French corporations scour the world looking for water to grab, France itself is turning away from this bogus "solution".

As well as trade negotiations, the EU organises the theft of the people's property outside Europe through the European Union Water Initiative (EUWI). This makes it clear that the EU sees its prime responsibility as being to EU-based corporations, rather than to people in developing countries lacking access to clean, usable water. The fact that water is a necessity makes it, in the Commission's worldview, a great business opportunity, rather than a human right. The 1.4 billion people in the world who are without clean water and the 2.5 billion without even basic sanitation are potential sources of profit. The Millennium Development Goal of halving these numbers by 2015 becomes simply a commitment to line the pockets of corporate shareholders.

The fact is, in rich countries or poor, there is no way to make a service provider committed to delivering wholesome water and effective sanitation to every home into a profitable business. This is why, in common with other vital services such as public transport and postal delivery, it was in public ownership in the first place.

Privatisation is simply another way of transferring public wealth into private pockets. This is as true in Africa as it is in Accrington. Where a population is relatively wealthy, as in Britain, the money will come direct from the people's pockets, in the form not only of raised prices but also in the taxes needed to cover the subsidies which are in reality the only source of 'profit' for the privateers.

Where the people are too poor to pay up, one of two things will happen. Services will improve, if at all, only for the rich. Or exceptions may be found in urban areas, but only if development monies which originate with those same taxpayers in Europe and other wealthier parts of the world cover the costs, and then some. The market can deliver only to those who can pay. The poor will not get water, being too poor to pay for it, unless someone else pays for them.

25 million people a year die as a result of water-related diseases. Most readers would, I hope, be only too happy to see some of their taxes go to addressing the stark inequalities which lie behind these wasted lives. Lining the pockets of Vivendi's shareholders, however, is likely to be less popular.

The real solution is, of course, to use our development monies, our power as a trading bloc and our long experience and accumulated expertise to work with those communities and public utilities in developing countries which are really trying to solve this most fundamental of problems.

Partnerships between public utilities in Europe and developing countries - known as PUPs - to share expertise and improve service; innovative thinking such as the small solidarity levy paid by customers of Milan's publicly-owned water company; and a concerted effort to achieve and go beyond the UN's Millennium Development Goal are what will help to end the thirst, hunger and disease which are the results of inadequate water supply and sanitation.

Steve McGiffen is editor of Spectre and writes monthly column for the Morning Star, where this article first appeared.

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