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LATIN AMERICA / THE CARIBBEAN
Water as private property
Alejo Álvez
11/3/2007
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Transnational companies tighten their grip on region’s water resources.

Transnational companies tighten their grip on region’s water resources.
The global water crisis will leave 2.7 billion people in 2025 facing difficulties obtaining water or even without this vital substance.

This alarming truth has prompted the creation of a powerful social movement to defend this resource, and at the same time it has driven multinational companies to seek control of the region’s existing reserves.

Social organizations define water as a public good that should be managed by national governments, but international finance organizations such as the International Monetary Fund (IMF), the World Bank and the Inter-American Development Bank (IADB) say that only private sector investment — to the tune of US$50 billion a year — can guarantee universal water access in Latin America.

“Just like in the colonial era, the IMF, World Bank and the IADB give credits to the submissive governments and always in the payment plans the handing over of natural riches is included, so that the multinationals are left with the control of our resources and turn water into merchandise,” said the Water Defense Commission of Uruguay. In 2004, the commission led the successful campaign to stop the privatization of water there by plebiscite.

Disastrous private management
“International bodies succeeded in privatizing water in all its forms — family consumption, sewage systems, cleaning and export — by imposing such privatization as a condition in 30 percent of their agreements with each country in 2000 and 40 percent in 2001,” states a study by the Spaniard nongovernmental organization Solidarity for Development and Peace, known by its Spanish initials SODEPAZ.

In the 1990s, at the height of neoliberal policies in the region, many Latin American and Caribbean countries passed their water sources, drinking water services and bottled water supply over to private multinational water companies, such as French companies Vivendi and Suez and their many subsidiaries, as well as large food and beverage corporations such as Nestlé, Danone, Coca-Cola and PepsiCo.

In all cases, a common scheme was followed. It began with the self-destruction of the state-run water companies in order to justify low-cost privatizations.

Later came an increase in water service fees, the breach of concession contract because of a lack of investment, ending with the reselling of the companies, indebted and obsolete, back to the governments that granted the concessions.

After the Compañía de Aguas, a subsidiary of Vivendi, ran the Aqueducts and Sewer System Authority of Puerto Rico from 1995 to 2001, it left a legacy of operational and maintenance failures in the drinking water and sewage treatment plants.

The company’s successor, another French company, Ondeo, a Suez subsidiary, did no better, and in 2004 the government cancelled the contract and transferred the company to public hands.

After the companies’ destruction that follows to their easy earnings from generous concessions, abusive rates and received credits — and eventually absorbed by the state — there is environmental destruction to content with.

In Argentina, Obras Sanitarias de la Nación, a sewage company, was handed back to the state last year after being run by Suez for 13 years.
“Because of the bad quality of water it offered, the French Suez Lyonnaise des Aux left us with a grave health problem,” said Ginés González García, Argentina’s health minister.

A report by the National Water Works Agency states that between December 1992, when privatization of the sector began and December 2005, shortly before it was returned to state hands, cases of child diarrhea increased by 75 percent and “cases of water-transmitted diseases increased at a worrying rate,” González García said.

In 2001, the US-based company Azurix, an affiliate of the US giant Bechtel, was forced to abandon its concessions in the cities of Bahia Blanca and Santa Fe, after strong protests from the local population when water for consumption was found to contain fecal bacteria.

On last Sept. 2, 80 percent of the population of Cordoba voted in a referendum against the contract with Aguas Cordobesas Suez-Roggio, a Suez subsidiary, that has planned a 300 percent-increase in rates for next January. But the vote was non-binding, and did not obligate the provincial government s to break the contract.

“Water wars”
In Cochabamba, Bolivia, massive street protests during the “water war” ended in 2000 with a contract cancellation for Aguas del Tunari, a Vivendi affiliate. In 2005, it was residents in El Alto, a satellite city above the capital, La Paz, who kicked out Aguas del Illimani, a Suez affiliate.

In Uruguay, while a privatization scheme was in its pilot stage, 65 percent of voters in an October 2004 plebiscite voted to kick Aguas de Barcelona, another Suez subsidiary, out of the country. As in Bolivia, the decision was based on complaints of high rates, poor quality water and shortcomings in the services.

Suez, under Aguas de Barcelona, was forced to leave Colombia in 2005 for “repeatedly” violating its contract after it charged abusive rates during its 10 years of operations there, where it had increased its rates between 55 percent and 126 percent.

Bottled water
Nestlé and French company Danone already dominate the bottled water business in Mexico, Argentina, Brazil and Uruguay. Coca-Cola and PepsiCo. are also trying to get more access to the region’s water in order to dilute their beverage syrups — which would lower production costs — and later get better footing on this industry that is led by European companies.

Close to 50 million liters of bottled water are sold in Mexico each day — the second highest rate in the world after the United States, according to the Beverage Marketing Corporation. Mexico has a little over 100 million people.

More than 18 billion liters of bottled water is consumed annually in Mexico, where 12 in each 100 inhabitants lack drinking water, and 15 of every 100 Mexicans lack plumbing. Nestlé Waters sells Santa María and Nestlé Pure Life bottled water here.

During the government of Vicente Fox (2000-2006) Mexico became an emblematic country for the water crisis.

During his six-year term, Fox —the former president of Coca-Cola in Mexico — approved 44 concessions for exploitation of Mexico’s rivers and underground water resources, including in the Chiapas state, where Coca-Cola was given a spot where half of the country’s water recharges (in Huiztan and the base of the Hultepec hill), according to the Mexican Consumer Defense Association.

In Brazil, Nestlé is accused of extracting waters without authorization from the National Water Park in the southeastern Minas Gerais state. It is also accused of demineralizing the water — prohibited by Brazilian law — and constructing a water plant without conducting an environmental impact study.

The company sells Nestlé Pure Life, Eco de los Andes, Fresh Water and Glaciar in Argentina.

The increase in bottled water consumption is a result of the supposed safety for the users, according to private market studies. But the United Nations Food and Agriculture Organization says that water from the faucet, when it has been adequately treated, is “ideal for human consumption.”

Canadian researchers Maude Barlow and Tony Clarke presented a report at the IV World Water Forum in Mexico last year that analyzed 103 bottled water brands, and found that a third were contaminated with arsenic residues and fecal coliforms.

One quarter of them were taken directly from the tap, they said, which is what Coca-Cola water was found to be in the United Kingdom in 2004


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