Who Owns the Earth’s Water?

Paul Donahue

August 2005

Water promises to be to the 21st century what oil was to the 20th century: the precious commodity that determines the wealth of nations. Fortune magazine, May 2000

Imagine for a moment what life will be like in the corporate-controlled world of the future. A handful of huge, powerful corporations will be responsible for all the societal services now handled by local, state and national governments - schools, police, prisons, military, mail, elections, social security, and so on. Even more importantly, corporations will control those things essential to human survival, namely food and water. If they can figure out a way to commodify the air we breathe, they surely will attempt to exert their control over the planet’s oxygen, as well. Services once provided by government agencies, accountable to voters, will be provided by corporations, accountable only to stockholders. With our governments in the sway of the corporations, our minimal democracy having eroded even further, and ultimate authority ceded to corporate- run international trade organizations, we will have lost the power to control the things most important to our survival.

Is this some remote and unlikely futuristic scenario? I wish it was, but a corporate-owned and controlled planet is closer than you might think - much closer - and unless we wake up soon and start taking back the reins, it will become a reality. One of the most important struggles being waged around the world against corporate control is over who owns our water. Water is essential to all life on the planet, from microbes to humans. If ever there was a natural resource that should remain part of the commons, this is it.

On a world scale, freshwater is scarce and becoming scarcer, with demand growing greater each year as the human population of our planet continues to swell. The rate of global water consumption is currently doubling every 20 years. With more than one billion human inhabitants of the Earth already lacking access to safe drinking water, and that number growing daily, the scenario for the future is already very frightening. The World Health Organization predicts that 48 nations will face severe water shortages by 2025, and the World Bank has predicted that by the year 2025, two-thirds of the world’s population will run short of fresh drinking water.

As fresh drinking water becomes more and more scarce, the world can expect violent conflicts over water to become more commonplace, destabilizing entire regions of the world. Hotspots where water reserves are dwindling include the Middle East, northern China, Mexico, California and almost two dozen countries in Africa. The Israeli-Palestinian conflict is a ready example of a water war already in progress, but the situation in the Middle East and around the globe will undoubtedly grow worse in the years ahead. If you think the current oil wars are bad, wait until the water wars really kick in.

Making a bad situation even worse, much worse, we have entered the brave new world of water privatization, where huge, predatory, multinational corporations are gradually gaining control over our once publicly-owned water supplies. With growing scarcity, the market value of water will undoubtedly rise. It is with good reason that Fortune magazine has dubbed water the oil of the 21st century. According to Fortune, the annual profits of the water industry now amount to about 40 percent of those of the oil sector, and are close to $1 trillion.

The international water cartel.

Water privatization around the globe is occurring on several fronts. One front is the water services industry, with corporations aggressively working to privatize the world’s public water systems. European corporations dominate this global water services market, with the largest being the French companies Suez (and its U.S. subsidiary United Water), and Vivendi Universal (Veolia, and its U.S. subsidiary USFilter). These two corporations control over 70 percent of the existing world water market. Following Vivendi and Suez are the German company RWE-Thames (and U.S. subsidiary American Water Works), the French company Bouygues Saur, the British companies United Utilities, Severn Trent, AWG plc, and Kelda, and the US company Bechtel. Between them, they are now controlling once-public water systems in 150 countries.

The result of water privatization is predictable. With the bottom line being the only thing that really matters to these corporations, price hikes and water quality problems often follow on the heels of privatization. In developing countries, the poorer customers who cannot pay the inflated water bills see their water service cut off. This same pattern is being repeated over and over again as public water systems around the globe fall victim to the wave of privatization.

A second front of water privatization is the bottled water industry, one of the fastest-growing and least regulated industries in the world. It is led by corporations such as Nestlé, the world leader in bottled water, Coca-cola, PepsiCo. and Danone. This is already around a $25 billion a year industry and it is expanding at an annual rate of about 20 percent. These corporations are going around the world securing access to springs and groundwater supplies, aggressively fending off citizens’ groups and governments that attempt to regulate them, then bottling the once publicly-owned water and selling it back to us at exorbitant prices. Along the way they are causing serious harm to the environment, pumping springs dry, pulling toxins and other impurities into the groundwater, devastating wetland ecosystems, and draining aquifers.

A third front in water privatization is the bulk export of water from water-rich countries to water-starved regions. Corporations are currently investing in several schemes to transport freshwater in bulk, including the construction of pipelines, supertankers, and giant, sealed water bags. According to the World Bank, "One way or another, water will soon be moved around the world as oil is now."

All this water privatization is proceeding at a frightening pace. As an example, analysts now predict that within the next 15 years for-profit water corporations will control 65 percent to 75 percent of what are now public water systems. The reasons this privatization is moving so rapidly is because the water cartel has worked closely with the World Bank and other international financial institutions to gain a foothold on every continent. The corporations involved aggressively lobby for legislation and trade laws to force municipalities to privatize their water and they also set the agenda for debate on solutions to the world's increasing water scarcity.

International “free” trade agreements have given a tremendous boost to water privatization. The World Trade Organization (WTO) and the North American Free Trade Agreement (NAFTA), established by and for large multinational corporations, promote deregulation and privatization of goods and services, including water. As a result of these trade agreements, it is now difficult for a nation to control exports of its water beyond its borders, or to prevent foreign corporations from establishing water operations inside the country. As an example, under NAFTA’s rules, Canada may be forced to allow the bulk export of water to the United States. Already, a California company is suing the Canadian government for $10.5 billion because the province of British Columbia banned the commercial export of bulk water.

The international water cartel also receives a tremendous amount of help from international lending institutions, such as the World Bank and the International Monetary Fund (IMF). Working hand-in-hand with the water giants, these lending institutions are both actively pushing water privatization, forcing developing countries to abandon their public water systems and contract with the corporations to provide water to their citizens. The World Bank has recently changed its policy from pressuring countries to privatize their water systems, to making water sector loans contingent on privatization. With the water systems in many developing countries in desperate need of repair, the countries have little choice but to accept the terms dictated.

The challenge ahead of us is formidable. The corporations involved in water privatization are extremely powerful, with strong allies in government. In the words of Maude Barlow, author of Blue Gold, The Fight to Stop the Corporate Theft of the World’s Water, “It’s important to remember that it’s a very small, incestuous circle - these water companies, the World Water Council, the World Bank, the World Trade Organization, the IMF. There’s a lot of money to be made from the commodification of water, and these people know that whoever controls water is going to be both very rich and very powerful.” The momentum for privatization is considerable. If we are to protect our public water resources and prevent the nightmare scenario of for-profit corporations meting out costly water to a thirsty world, the time to act is now

Suggested Reading

This is a vital but complex issue and this article is only a brief overview. For further information, please refer to the suggested reading list below.

To Get Involved

Below are the website addresses for some of the organizations working to protect our water resources from privatization.