The Tide Turns - But Pro-Privatisation Currents Remain Strong

Observations on the World Water Forum in Mexico City

By Olivier Hoedeman and Nami Yamamoto, CEO/TNI Water Justice Project[1] , May 2006

The Fourth World Water Forum in Mexico City (March 16-22 2006) showed that the international debate about water and sanitation is at crossroads. After the unashamed promotion of privatisation at the previous editions of the World Water Forum (The Hague in 2000 and Kyoto in 2003), the Mexico City conference indicated a growing recognition of the widespread failures of private sector water management and the need to prioritise improved public water supply. Civil society movements are gearing up to make the most of the window of opportunity that was very visible during the Mexico City events.

Forum Organisers Aim for Damage Control

The failure of privatisation in numerous cities over the last years and the gradual departure of Suez and other water multinationals from developing countries, forced the World Water Council (the think tank co-hosting the Forum) to adopt a very careful discourse during the Fourth World Water Forum. Public and private water operators are both needed and the choice should be left to local authorities, argued Loïc Fauchon, president of the World Water Council and executive director of the Marseille Water Supply Company, a Suez subsidiary.

A closer look at recent developments in the private water industry explain why damage control was the main objective for the promoters of privatisation during the Mexico City conference. Suez, the world's largest water multinational, is on the way out of Latin America, a region that was until recently seen as one of the company's main growth markets. When Suez was thrown out of the Bolivian city of El Alto in early 2005, this was particularly significant because the company had consistently highlighted this city as proof that privatisation can be “pro-poor”. It was the federation of neighbourhood associations FEJUVE, representing the poorest in El Alto, that led the uprising against Suez, protesting against the company's failure to deliver promised expansion of access to clean water and sanitation. FEJUVE activist Abel Mamani has since become minister of water in the new progressive government led by Evo Morales. One of the government's first decisions was to announce the end of 15 years of failed privatisation experiment in Bolivia. Also the Argentinean government has recently announced that it closes the book on water privatisation and instead starts work on developing a new public service model with a strong role for the water trade unions.

These dramatic developments reflect the general experience with water privatisation over the last decade. A new report by the World Development Movement ("Pipe Dreams") documents that private water corporations have consistently failed to deliver the promised investments in improved access to water and sanitation for the poorest in developing countries and have instead prioritised profits.[2] This debunking of the 'myth' that the private sector would bring in the needed capital for investments fundamentally undermines the rationale for privatisation.

Beyond Opposition: Improving Public Water

The global water justice movement was more visible than ever before during the week of the World Water Forum in Mexico City. A demonstration of 30,000 - 40,000 people took place on the opening day of the Forum. The demonstrators, including many indigenous people, blasted the Mexican government's plans to privatise water management, called for the human right to water (as a constitutional right) and for water to be publicly managed. It was the first time that such a large manifestation took place during a World Water Forum, with a message fundamentally challenging the pro-privatisation agenda of the Forum organisers.

In the following days, the International Forum in the Defense of Water, the counter-event supported by a coalition of over one hundred Mexican and international civil society groups, showed that the water justice movements are moving far beyond opposition to privatisation.[3] Discussions during this very successful and well-attended alternative forum focused strongly on the challenge 'how to make public water work for all?' Speakers from all parts of the world showed great confidence that it can be done, based on real-world experiences that failing state-run utilities can be fundamentally transformed if the political will is there. Silvano da Costa, the president of the Brazilian federation of municipal water companies (ASSEMAE) presented a new book which documents 20 cases of successful public water reforms in Brazil.[4] Key to the achievements of many of these Brazilian utilities is the introduction of extensive democratic control and participation mechanisms to engage users and civil society groups in planning and other key aspects of water management. Similar approaches have proven successful in other parts of the world. Dr. Suresh from Tamil Nadu (India) introduced the participants of the alternative forum to the ongoing democratisation reforms that have led to impressive improvements in the efficiency and accountability of the public water company in his state.[5]

New Bolivian Water Vision

Among the speakers at the alternative forum was also Abel Mamani, the new Bolivian minister of water, who presented his government's vision for a new model of public water delivery. The ministry's document "A human vision of water in Bolivia" defines clearly that water should be regarded as a public good and that access to water is a right for humans and other living beings. In order to fulfill its responsibility to provide sufficient high-quality water to the whole of the population, the government must make public water work, Mamani explained during a workshop at the alternative forum. This means forming genuinely public water companies in Bolivia: utilities that are effective, responsive and transparent, with socially responsible prices and all surpluses being reinvested. Mamani emphasised that it is not going to be easy, but can be done by working closely with social movements. The structure of the new ministry of water reflects this vision. A new body (called the Technical Social Committee) has been created within the ministry to enable civil society to participate in making strategic decisions.

Mamani emphasised that international solidarity is much needed. The World Bank already has indicated its hostility to the plans of the new Bolivian government and insisted on 'private sector participation'. He called upon civil society groups and municipalities around the world to provide support instead. A similar appeal for international solidarity came from Alberto Munoz, community activist from Santa Fe (Argentina) where Suez was forced to leave earlier this year after almost a decade of privatised water mismanagement. Munoz stressed that water movements are entering a new phase: "victory over privatisation was only the beginning and we now need to develop a public model that works, with citizen's participation. We must proof that it is possible."

The next months and years will show whether the global water movements can rise to the occasion, but there many positive signs. Workshops at the alternative forum addressed concrete issues such as how to facilitate public-public partnerships (PuPs) to speed up improvements in public water delivery.[6] A clear priority is to help remunicipalisation succeed in El Alto (Bolivia) and elsewhere where citizens' movements have forced Suez and other water multinationals to pull out.

Latin American Governments Defend Right to Water

Abel Mamani also played a very important role inside the Fourth World Water Forum, where the new Bolivian government caused intense political debate about the Ministerial Declaration. The draft declaration that had been prepared in advance of the World Water Forum was very weak, with all controversial issues simply avoided and no direction provided. The Bolivian government had come to Mexico with a ten-point proposal for overhauling the draft Ministerial Declaration.[7] In order to gather broad support this was adapted into a shorter list of key demands, which included "water as a fundamental human right", "public and participative management of water", "excluding water from trade agreements", and a "critical view towards the process that led to the World Water Forums" (reflecting that the Forum is not part of the UN system and co-hosted by the World Water Council, a think tank with pro-privatisation leannings).

Particularly the proposal to recognise the human right to water resulted in fierce controversy during the two-day negotiations of government representatives from around the world. At one point during these talks, ten governments appeared to support the right to water in the Ministerial Declaration. This included Argentina, Brazil, Cuba, Paraguay, Venezuela, Uruguay and some European countries such as Spain and Sweden. Due to strong opposition from the governments of countries like Mexico, the UK, The Netherlands, France and the US, the "right to water" was eventually excluded from the final declaration, causing Bolivia, Cuba, Venezuela and Uruguay to table a "Complementary Declaration" with the rejected demands.[8] The role of the European Union was remarkable, especially since the European Parliament in a resolution adopted just before the Forum had called the European Commission and EU governments to secure the recognition of access to water as a human right. The EU's position in Mexico City, however, was that water “a primary human need”, but not a right. The day after the end of the talks, newspapers around the world had headlines stating that the World Water Forum had failed to endorse water as a human right. Despite of the disappointing outcome, the confident intervention by Bolivia and other progressive Latin American governments during the World Water Forum signals the beginning of a new and exciting phase in the international water debate.

Right to Water Co-opted by Privatisers?

A worrying development during the Mexico City conference was the attempts by proponents of private water management to co-opt "the Right to Water", one of the key demands of the civil society movements that oppose commercialisation and privatisation. Both the World Water Council and the International Federation of Private Water Operators (AquaFed) went on the offensive and expressed their support for "the Right to Water". AquaFed (a lobby group controlled by French water multinationals Suez and Veolia) claimed that private water operators "contribute to making the Right to Water a reality every day".[9] This embrace of "the right to water" rhetoric is a clever tactical move with little risks involved for the proponents of privatisation. Civil society groups promote an international treaty that obliges governments to implement access to clean water and sanitation through publicly owned and managed utilities. AquaFed trusts that powerful governments will prevent any such outcomes. Despite their abominable record, private water multinationals like Suez even seem to consider “the right to water” a potential tool for expanding into new markets.

For a detailed critique of AquaFed and its spin during the World Water Forum, see http://www.corporateeurope.org/water/aquafed.html

UN Advisory Board Calls for Water Operators Partnerships

The rebellion by Bolivia and other Latin American governments was not the only good news from inside the World Water Forum. After years where governments and international institutions were obsessed with promoting the role of the private sector, experience has now shown this to be a dangerous distraction from the real solutions. This has resulted in the fragile beginnings of a more positive approach towards public sector water operators. An example of this emerging recognition was the report of Kofi Annan's Advisory Board on Water and Sanitation. The Board's chair, former Japanese prime minister Ryutaro Hashimoto, stated in his speech that "Public water services currently provide more than 90% of water supply in the world. Modest improvement in public water operators will have immense impact on global provision of services."[10] Among the boards proposals was the launch of a mechanism to facilitate public-public partnerships, described as Water Operators Partnerships (WOPs) on a not-for-profit basis.[11] This mechanism for facilitating cross-border partnerships could give a massive boost to the emergence of public-public partnerships and thus accelerate efforts to improve public utility performance around the world.

Challenging European privatisers

Despite the many positive developments, the Fourth World Water Forum also showed clearly that there are very significant obstacles ahead. The World Bank grudgingly had to accept that their privatisation recipes have failed to deliver the promised results, but has far from abandoned it neoliberal instincts.[12] The World Bank's pro-privatisation policies in India, where state governments are under strong pressure to embrace 'public-private partnerships', is just one example of this. Moreover, whenever privatisation seems infeasible the World Bank is now pushing public water companies to commercialise there operations, which often has similarly problematic impacts. A very disturbing development is also the World bank's promotion of privatisation and commercialisation of irrigation water for agriculture. The IMF (which recently imposed a sweeping privatisation programme on Honduras) and other international financial institutions (IFI's) remain deeply committed to expansion of the private sector as the way forward for water delivery in developing countries. The same goes for many European governments. This might not be so surprising in the case of the French government (France is home to the world's largest water corporations), but what to think of the Dutch government's enthusiasm for promoting the role of the private sector through public-private partnerships (PPPs)? The new Dutch water law rules out any role for private water operators in domestic water supply, but the government's international water policies are based on the exact opposite principles.[13] Clearly far stronger pressure must be mobilised to make European governments, as well as the European Commission, abandon the pro-privatisation approach and instead support progressive public water reforms.

Further reading:

WaterJustice online resource centre on alternatives to privatisation: http://www.waterjustice.org/


  1. For more information about the TNI/CEO Water Justice Project, see http://www.tni.org/altreg-docs/water.htm
  2. "Pipe Dreams: The failure of the private sector to invest in water. services in developing countries", World Development Movement, March 2006: http://www.wdm.org.uk/resources/briefings/aid/pipedreamsfullreport.pdf
  3. For more information on the International Forum in the Defense of Water, go to: http://www.comda.org.mx/ As part of the International Forum, an international "Symposium on Improving Public Water Delivery" was held on March 15th. Background papers and presentation documents from speakers at the symposium are online at the TNI website. The symposium was organised by groups from the 'Reclaiming Public Water' network, which was launched in November 2005. The RPW network promotes progressive public water models and other alternatives to water privatisation.
  4. See also the summary article "Successful Municipal Experiences in Brazil: Public Utility Service in Water and Sanitation", Silvano Silvério da Costa March, 2006.
  5. See for instance: "Maladies of the Water Situation: Democratising and Demystifying The Conundrum", V. Suresh, Vibhu Nayar and Pradip Prabhu, March 2006.
  6. See also "Public Water for All: The Role of Public-Public Partnerships", a ‘Reclaiming Public Water’ discussion paper, TNI/Corporate Europe Observatory, March 2006.
  7. Draft proposal presented by the Minister of Water of Bolivia March 10 2006.
  8. More information about the Bolivian government's position is available on www.waternotforsale.org - including the text of the "Complementary Declaration".
  9. AquaFed press release, March 19 2006: "Private Water Operators call to turn the Right to Water into a reality for all People". See also “Gérard Payen's statements on the "Right to Water and the Role of Local Governments".
  10. Speech by Mr. Ryutaro Hashimoto at the Ministerial Conference of the 4th World Water Forum, 21 March 2006.
  11. See the Compendium of Actions
  12. presented by the Advisory Board during the 4th World Water Forum.
  13. See for instance "After Privatisation: What Next?", Global Issue Paper 28 (March 2006), Heinrich-Boell-Foundation. See also Food & Water Watch's World Bank Watch.
  14. See page 10-11 in "Public Water for All: The Role of Public-Public Partnerships", a 'Reclaiming Public Water' discussion paper, TNI/Corporate Europe Observatory, March 2006.