Privatisation No Answer to Water Scarcity - UN
UNITED NATIONS - U.N. Secretary-General Kofi Annan is sceptical that
privatisation of the world's water supplies will help resolve the
problems facing more than 1.2 billion people globally who have little
or no access to safe drinking water.
But while Annan details some shortfalls of privatisation in a new
report, an initiative by his own office is partly to blame for those
problems, says one environmentalist, while another argues that the
public-private debate should end so the focus can be placed on those
people without water.
In the 29-page report released here, Annan points out that private
investors have become more cautious and slowed investments in the
water sector, having underestimated risks, overestimated profits,
and encountered contractual problems.
"Problems that have arisen with private water companies include collusive
bidding on water supply contracts, regulators who are too readily
influenced by regulated companies, inflexible contractual guarantees
of returns, monopolisation of essential infrastructure and lack of
transparency," Annan says.
The study, which is due to go before the 12th session of the U.N.
Commission on Sustainable Development Apr. 14-30, says that more than
80 percent of those without access to water live in rural areas.
But one observer blames the United Nations for mollycoddling a flawed
private sector that now controls about 10 percent of the world's water
"The secretary-general's statement of the problems of water privatisation
is too little, too late," says Michael Dorsey, a member of the Faculty
of Science in the Environmental Studies Programme at U.S.-based Dartmouth
Dorsey, a former U.N. representative of the Sierra Club, told IPS
that environmental groups worldwide believe that part of the problem
lies at Annan's own doorstep, because some of the world's private
water suppliers are members of his much-touted Global Compact.
A voluntary initiative launched by Annan's office in July 2000, the
Global Compact includes more than 1,000 companies worldwide that are
working with the United Nations to promote corporate responsibility,
including labour, environmental and human rights standards, in the
"We have repeatedly urged the secretary-general's office, U.N. agencies
and member states to take critical measures to halt the privatisation
of natural resources," Dorsey said. But Annan's office has rarely
listened -- "indeed they have often ignored these calls."
"Now they are seeing the effects as predicted," he added, pointing
out that some of the "prime culprits of the problematic privatisation
the secretary-general abhors are members of his own Global Compact."
These companies, Dorsey says, include Vivendi, Veolia Environment
"Though started with good intentions by the secretary-general, the
Global Compact is counter-productive," he added.
Georg Kell, executive head of the compact, calls the comparison incorrect
"It is like comparing apples and oranges,'' he said. ''We have never,
ever taken up either the issue of privatisation or water. And there
is no direct connection between the Global Compact and water privatisation,"
Kell told IPS.
But Dorsey said the Global Compact allows the name and reputation
of the United Nations to be abused by corporations whose practices
are in contradiction with the values of the world body.
"Minimally, if the secretary-general is truly concerned about the
privatisation of water and other natural resources, he needs to be
courageous and identify the problematic corporations in name -- and
ban them from the compact," he added.
In his report, Annan says that in view of the apprehension about granting
local water monopolies to private companies and, in particular, concerns
over the social impact of increases in water charges, governments
and consumers in many developing nations have not encouraged participation
by multinationals in the provision of water services.
"The debate in different forums has contributed to a better understanding
of the potential role of the private sector, although not to a consensus
on all the issues," he adds.
A consortium of European non-governmental organisations (NGOs) expressed
fears last week that the newly created Water Facility of the European
Union could promote the expansion of private-sector water management
in developing countries.
Gordon McGranahan, director of the human settlements programme at
the London-based International Institute for Environment and Development
(IIED), told IPS that Annan is right to be sceptical of international
efforts to promote the role of the private sector in water provision.
The experience, he said, is mixed, and indicates that the role of
the private sector should emerge from water sector reform, not drive
"It is time to stop fighting over whether the role of the private
sector in water provision should increase (or decrease), and to focus
instead on how to get all providers, whether public, private or civil
society organisations, to provide better services to the world's water-deprived,"
Otherwise, he added, the likelihood that global targets for providing
water will be met ''are slim indeed''.
According to the Millennium Development Goals, approved by heads of
state at the U.N. Millennium Summit in September 2000, an additional
1.6 billion people will seek access to safe drinking water by 2015.
If their needs are to be met, the U.N. study says, developing nations
will need about 26 billion dollars to extend water supplies over the
next 11 years.
But with cuts in official development assistance (ODA), resources
have been in short supply worldwide.
The coordinators of the Fourth World Water Forum, scheduled to take
place in Mexico on Mar. 22, say that about four billion people could
face water shortages by 2025, nearly three times the current figure,
even in water-abundant regions like the Americas.
"This situation illustrates that there is much more to the looming
water crisis than simply water availability," says Mexican President
Vincente Fox in a statement in advance of next week's forum.
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