It started with Napoleon in the mid-19th century, was continued and refined by Margaret Thatcher in 1989 and was quickly adopted by the World Trade Organization: The “commodification” of water.
That means it now has a price, a value and can be sold. It also means that those too poor to buy it are in danger of not getting supplied. That’s about 1.1 billion people.
The assumption that water is something that humans have by right is fast changing. A shift in the concept of water has been subtly introduced. Water may be free, but the purification and transport costs someone money — so the end user has to pay. After all, food cost money and people pay for that? So what is different?
The difference is that food can be grown independently; water cannot. Water and its sources can be owned so that food cannot be grown; that is a death sentence to the poor who constitute the majority of the people on this planet.
There has always been an assumption that running water cannot be owned. It has taken on, honored by time and practice, the status of a human right. That water is necessary for the continuance of human life is axiomatic. However, as with many “human rights” established by precedence rather than treaty there will be opponents prepared to counter them out of vested financial interests.
Dr. D. Roy Laifungbam in a paper in 2003 contended that “even Northern countries that claim tremendous democracy, transparency, and equity in water resource management experience times when internal economic logic has overwhelmed ethical behavior.”
Equity in the distribution of safe drinking water is not just a matter of making the country wealthier and overcoming poverty and assuming that this will ensure access to water for all. “It is,” says Laifungbam, “more about building an ethic and changing frames in a way that respects concepts such as conservation, indigenous rights, and the importance of sustaining and sharing our ‘common’ intergenerational water resources. At the heart of the case for a ‘human right to water’ is the demand for not just action alone, but discourse in which equity is the core value.”
This idea seems to run counter to the actual policies of the “Long Term Vision for Water, Life and Environment in the 21st Century” — or “World Water Vision” — adopted by the World Water Council. The vision, according to Ismail Serageldin, World Bank vice president and chairman of the World Water Council, will “contribute to changing our world water future.”
The title of the vision document “World Water Vision: Making Water Everybody’s Business” reveals clearly what the vision is; business.
To help realize the vision, another body — the World Water Commission — was set up and staffed by Jerome Monod of Suez Lyonnaise des Eaux — a huge French water company, former World Bank President Robert S. McNamara; Inter-American Development Bank President Enrique Iglesias; World Bank/UN Global Environment Facility CEO Mohamed T. El-Ashry; and Ismail Serageldin as chairman.
Over 18 months, this body ran conferences and gathered information from academics, experts, large development agencies and NGOs worldwide.
“People most directly affected by water crises around the world were often marginalized in such events: Urban slum-dwellers, rural villagers, people afflicted by waterborne diseases, victims of World Bank-funded hydroelectric dam projects or those suffering from floods and droughts,” says Corporate Europe Observatory (CEO), an Amsterdam-based research and campaign group, “have had almost no input into the ‘vision exercise.”
Despite this, Serageldin refers to the vision as being reflective of “all stakeholders.”
The Global Water Partnership — a parallel body to the World Water Commission — developed and guided the process of realizing it and suggested actions that governments should take to implement the vision.
The CEO lists them: “Full liberalization and deregulation of the water sector; ‘national treatment’ whereby transnational corporations should be given the same treatment as local enterprises and/or public authorities; transparency in government procurement of water contracts; trade facilitation — where governments should be more service-oriented to the private sector; and privatization as much as feasible with mixed public-private partnership agreements being the next best thing.”
Further recommendations include “the removal of all price and trade distorting subsidies; dispute settlement over water issues; promotion of agricultural biotechnologies; protection of property rights over water resources; and alarmingly reminiscent of the infamous multilateral agreement on investment (MAI), a demand for a “stable and predictable investment climate” which would reinforce “investor rights.”
If this is the guidance and trend globally, what are the consumers in Saudi Arabia to expect when the Kingdom accedes to the WTO very soon where water is required to be treated as a tradable commodity? Will the concerns of the investor prevail, rights securely protected and rights to water traded on the Saudi stock exchange?
In 2001, Saudi Arabia announced it was to set up a separate ministry to manage its water resources and to facilitate private investment in the sector. The new Ministry of Water Affairs would be split from the Ministry of Agriculture and Water. The ministry was to prepare a comprehensive plan to establish water and sewage networks all over the Kingdom and develop the country’s water policies and propose new regulations to conserve water.
It was also to work out a suitable framework for private investment in the sector, covering financing, implementation, operation and maintenance of water projects.
Recently, Chris Grieve of Seureca Overseas, a subsidiary of Veolia, one of the world’s biggest water management companies, told the Jeddah Water and Power Forum that the “the concerns of the end customer, the user, must be the criteria.” “Water,” he said “was not a commodity, but a resource.” He made the point that water management companies provided the service of cleaning and distributing water on behalf of municipalities and pointed to Berlin as one example where default on bill payment was just 0.01 percent.
Saudi Arabia’s per capita income fell from over $20,900 per person in 1980 to about $12,200 per person in 2004. With the increasing population and an increasing shift to a young population profile (60 percent currently below 20 years old), the ability to pay service bill — especially if they are set even close to the manufacturing and distribution cost — will become increasingly difficult. Currently, desalinated water, which accounts for most domestic consumption, is subsidized by up to 97 percent.
Pressed as to what happens if a customer cannot pay for the “resource” which he separated from the idea of water as a “commodity,” he determined that the local government would have to decide at what stage it would intervene. However, if the collection of revenue is privatized as well as the manufacture and distribution of the “resource,” the distinct possibility remains that the “service,” as Grieve called it, will be withdrawn from a customer. In other words, the supply of water — the commodity — will be cut. The choice left is to drink untreated water with all the problems that come from it.
In May 2003, the formation of the Ministry of Water and Electricity was announced, bringing together these two vital aspects of the Kingdom’s economy under one ministerial roof. A statement from the Saudi Cabinet at the time added that the new ministry would also aim to increase water sales and review tariffs. Water rates in the Kingdom are heavily subsidized by the state and range from SR0.1/m3 ($0.026/m3) to SR6/m3 ($1.60/m3) where consumption exceeds 300m3/month.
Dr. Adil Bushnak, chairman of the Bushnak Group and a member of the Advisory Board of the Supreme Economic Council, said at the time that a tariff of SR6/m3 for water supply and a combined tariff of SR10-12/m3 would be enough to allow cost recovery and encourage investment.
He added that municipal water supply in the Kingdom would have to be increased by 300,000m3/d annually over the next 20 years just to maintain the current level of service.
At the recent Water and Power Forum in Jeddah, Loay Muasallem confirmed that the combination of population growth, low rainfall and low tariffs threatened the Kingdom’s ability to meet demand by 2025. He detailed that historically there had been a lack of information available on both leakages and water resources, a history of under-investment and a lack of skills — which were now in need of upgrading. All of these factors were now being addressed, he said.
In all the discussions about privatization, there is a significant omission; the individual’s right to water. Withdrawing water, even for a few days, is life threatening. The right to water is generally assumed in assorted human rights treaties to be included under the heading of the “right to life.” So far, no one has privatized that; the right to water has.
Given the track record of privatization and the tendency — for example in France — of municipalities to rely on the private water companies to oversee the process of water supply and distribution and reduce their vigilance over exactly what they are up to, any move toward privatization is filled with risk for the end user.
Perhaps in the drive to privatization and what is effectively the establishment of ownership of water by commercial organizations for profit, the Kingdom might seize the opportunity to lead by example and enshrine that right into law.