[mobglob-discuss] 10 reasons to oppose water privatization

[Yashi & Liz]

----- Original Message -----
From: "Bella" <bella_donna_36 at yahoo.com>
To: "magicalactivism" <magicalactivism at yahoogroups.com>
Sent: Thursday, July 11, 2002 9:36 AM
Subject: [magicalactivism] 10 reasons to oppose water privatization


> Top 10 Reasons to Oppose Water Privatization (short version)
>
> The World Bank has predicted that by 2025, two-thirds of the world s
> population will run short of fresh drinking water. Given such a grim
> outlook, it comes as little surprise that Fortune magazine recently
> defined water as "the oil of the 21st century." Poised to capitalize on
> this crisis are private companies, many of which are multinationals
> whose tentacles are probing the planet for opportunities to turn the
> misery of water-starved regions into profits for their executives and
> stockholders.
>
> Instead of protecting existing supplies, enhancing conservation
> efforts, helping vulnerable populations, curbing pollution and raising
> public awareness, more and more government officials throughout the
> world are turning to privatization transferring the control of this
> precious resource from the public sector to the private sector.
>
> It is no underestimation to say that the very survival of untold
> millions of people could rest on decisions being made today largely
> behind closed doors in corporate boardrooms and government offices
> throughout the world. With each drop of water that falls into the hands
> of private interests, any sustainable solution to the global water
> crisis moves further and further from the public s grasp.
>
> Privatization Leads to Rate Increases
>
> Corporations have utilized rate hikes to maximize profits, which, by
> definition, is their the bottom line. This bottom line often comes at
> the expense of water quality and customer service, but not at the
> expense of maintaining inflated executive salaries. Among the more
> unseemly aspects of handling water as a marketable commodity, rather
> than a basic human need and a natural resource, is that the poor are
> often denied access. Because living without water is not an option,
> people are often forced to consume unsafe water, lest be faced with
> going without food, medicine or education.
>
> Privatization Undermines Water Quality
>
> Because corporate agendas are driven by profits rather than the public
> good, privatization usually results in the compromising of
> environmental standards. The National Association of Water Companies
> (NAWC), which represents the U.S. private water industry, intensively
> and perennially lobbies Congress and the Environmental Protection
> Agency to refrain from adopting higher water quality standards. The
> NAWC also persistently requests that all federal regulations be based
> on sound cost-benefit analysis, which means that public health is
> compromised for the sake of higher profits.
>
> Companies Are Accountable to Shareholders, Not Consumers
>
> In many cases, deals that government agencies make with water companies
> include exclusive distribution rights for 25 to 30 years, effectively
> sanctioning a monopoly. Companies are under little pressure to respond
> to customer concerns, especially when the product in question is not a
> luxury item that families can do without if they are dissatisfied with
> the performance of the only provider.
>
> Privatization Fosters Corruption
>
> The very structures of privatization encourage corruption. Checks and
> balances that could prevent corruption, such as accountability and
> transparency, are missing at every step of the process, from bidding on
> a contract to delivering water. Contracts are usually worked out behind
> closed doors with the details often still kept secret after the
> contract is signed, even though it is the public that will be directly
> affected by the conditions of the contract. This situation opens itself
> up to bribery, which, if recent scandals throughout the world are any
> indication, is not an uncommon occurrence.
>
> Privatization Reduces Local Control and Public Rights
>
> When water services are privatized, very little can be done to ensure
> that the company be it domestic, foreign or transnational will work in
> the best interest of the community. Furthermore, if a community is
> dissatisfied with the performance of the company, buying back the water
> rights is a very difficult and costly proposition. Again, the prime
> directive of the water companies is to maximize profits, not protect
> consumers.
>
> Private Financing Costs More than Government Financing
>
> There is a false perception that when water services are privatized,
> the financial burden will shift from the public to the private sector,
> which will save taxpayer money by assuming the costs of repairing,
> upgrading and maintaining infrastructure. In reality, taxpayers simply
> wind up paying for these projects through their monthly bills. Tax-free
> public financing translates into lower-cost projects, while taxable
> private financing results in higher interest rates. As a result,
> consumers are also forced to make these higher payments on company
> loans.
>
> Privatization Leads to Job Losses
>
> Massive layoffs often follow in the wake of privatization, as companies
> try to minimize costs and increase profits. At times, service and water
> quality are put at risk due to understaffing. As a result, layoffs can
> be devastating not only to the workers and their families, but to
> consumers as well.
>
> Privatization is Difficult to Reverse
>
> Once a government agency hands over its water system to a private
> company, withdrawing from the agreement borders on the impossible.
> Proving breach of contract is a difficult and costly ordeal. And
> multinational trade agreements provide corporations with powerful legal
> recourse. A private company, for example, can use the North American
> Free Trade Agreement s secretive tribunals to contest challenges to
> privatization. And in World Bank loan deals, which often makes water
> privatization a condition, companies are usually guaranteed cash
> payments if a government agency returns its water system to public
> control.
>
> Privatization Can Leave the Poor with No Access to Clean Water
>
> Contrary to public assertions, World Bank and International Monetary
> Fund privatization schemes in the developing world usually result in
> reduced access to water for the poor. "Structural adjustment" programs
> foisted upon governments seeking loans often include water
> privatization as a condition. Impoverished, politically enfeebled
> countries are hardly in a position to refuse these conditions, as doing
> so would cause them to default on their debts. As a result, the World
> Bank and IMF are able to provide lucrative and virtually risk-free
> contracts for multinationals, due to guaranteed rates of return and
> investment protection clauses.
>
> Privatization Would Open the Door for Bulk Water Exports
>
> Fully aware of bleak water supply prognostications, corporations are in
> a mad dash to obtain access to fresh water that they can sell at huge
> profits, as high as 35 percent. It goes without saying that those who
> control water supplies will exercise economic and political power at
> almost unimaginable degrees. Bulk water exports transporting water from
> water-rich countries to water-poor countries could have disastrous
> consequences. Massive extraction of water from its natural sources can
> result in ecological imbalance and destruction. Disrupting aquifers by
> over-extraction often damages the environment and socioeconomic
> standards. Groundwater is being over-extracted as it is, and once
> aquifers are emptied or polluted, they are almost impossible to
> restore.
>
>
>
>
> =====
> talk-action=nothing
>
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