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Anti-privatisation Wave
Sinks Corporate Lobby Group
he involvement of TNCs in water delivery worldwide has increased dramatically over the last decade. In contrast to other industry sectors such as oil or biotechnology, this expansion is not reflected in the emergence of a powerful international lobby group representing major water corporations. The most ambitious attempt to create such an international grouping to channel and boost industry’s influence is the International Private Water Association (IPWA). Established in 1999 with enormous ambitions, IPWA’s current crisis to a large extent reflects the backlash against water privatisation.
The International Private Water Association (IPWA) was established in 1999 by Philip Dyk,[1] with the help of the association management company Marketshare Inc.[2] At that time the sweeping current of water privatisation was fairly undisturbed and it seemed like happy days for the water industry would never end. The new grouping was therefore launched with much fanfare and with a bold water privatisation message. Although based in the US, IPWA envisaged a global structure with regional working groups covering all continents.[3] The group’s mission was “to promote opportunities for private sector participation in water utilities worldwide.”[4]
IPWA devoted itself to the privatisation drive with its regional working groups pushing for new expansion opportunities for private water corporations by “promoting privatisation concepts with local, regional and federal authorities.”[5] The working group for Asia, announced that “it will help to determine the scope of regulatory reforms generally required in target markets to allow water projects to proceed with private investment.”[6] IPWA not only lobbied to pass laws which facilitate or forced water privatisation, but it also worked to consolidate the pro-privatisation bias of international financial institutions (IFI’s), making use of its close ties to IFI officials.[7] These institutions have played a crucial role in boosting the private involvement in water services over the last decade. Despite mounting evidence that privatisation is far from a panacea, the World Bank and other IFIs continue to force poor countries to privatise their water services as a condition to get loans.[8]
While at first it seemed like smooth sailing, there were rougher waters ahead for IPWA. The group’s troubles coincided with a rapidly growing opposition to water privatisation in many countries around the world, sparked by the disappointing (if not disastrous) results experienced in many cities that had undergone privatisation. It was an unmistakable sign of IPWA’s retreat when the group closed down its website in 2002.[9] Earlier that year the IPWA went into merger talks with the Water Industry Council (WIC), a major lobby group for the US water industry, though talks quickly broke down. The memorandum of the proposed merger reveals that the backlash against water privatisation had hit both groups.[10] The memo proposed that the new group would, “develop a media campaign to dispel incorrect public perceptions of our industry and to reinforce positive attitudes… educating the public and its decision-makers about our industry, its practices and its benefits to the public.”[11] In an interview, Executive Director Kathy Shandling tried to downplay the failed merger talks, claiming that, “we never took it seriously.”[12]
IPWA’s global ambitions were undoubtedly hindered by the fact that the ‘Big Three’ (Suez, RWE and Vivendi, only the latter a member of IPWA [13]) as well as other major water corporations, already have their own channels of influence on the national and international level.[14] These water giants, (almost exclusively EU-based) moreover seem to prefer lobby groups with a more sophisticated discourse and strategy, which are less of a public relations liability. Examples include greenwash pioneers World Business Council for Sustainable Development (WBCSD), or hybrid bodies like the World Water Council, an influential think-tank very favourable to the corporate agenda.[15]
IPWA-boss Shandling admits that the turning tide in the global water debate is partly caused by “NGOs and protest groups protesting against privatisation.” In response to these developments, IPWA has decided to modify their blunt pro-privatisation rhetoric and embrace the new buzzword engineered by more sophisticated corporate players such as the WBCSD— namely ‘public-private partnerships’. Kathy Shandling explains: “We don’t use the word ‘privatisation’. Not anymore. We use ‘public-private partnerships’. Privatisation is a bad word”.
The new IPWA avoids “the p-word,”[16] for instance when talking about “the potential expanding role of the private sector as a viable partner to governments and ‘parastatals’ within the global water/wastewater project and service arena.”[17] However, this strategy to wait out the storm does not go deeper than a more careful choice of words. IPWA’s mission remains unchanged. “We’d like to see the expansion of private involvement, but what you see now is standstill,” Shandling complains.[18]
Despite the IPWA’s new low public profile, most likely to avoid becoming the target of anti-privatisation activists, all four regional working groups remain active. According to Shandling, IPWA organises numerous conferences, seminars and dialogues with governments and various agencies. Their priority for this year is a newly created financial task force, seeking to provide corporations with access to cheaper capital and minimise investment risks.
IPWA fails to admit that there are fundamental problems with the private sector’s record in deliver water, particularly in the South. The disastrous mismanagement by US-based Bechtel Corporation in the Bolivian city Cochabamba was merely a “misscomunication problem.” It was “a project not as structured as it should have been,” Shandling claims.[19] The many broken promises by Suez (including Manila and Atlanta) are also dismissed as insignificant. On the large price hikes imposed by water TNCs following privatisation with often dramatic social impacts, Shandling cynically comments: “People who are suddenly getting water bills who didn’t get them before are saying, ‘Water is an act of God. I shouldn’t have to pay for it.”[20] Despite this arrogance, it remains to be seen whether the IPWA will manage to revive itself.
Notes
1. Philip Dyk is founder and former President of IPWA. He has been involved for over 15 years in financing and developing utility infrastructure projects and companies. Apart from being Managing Director of Pacific Capital Resources, he has also chaired Ahlstrom Capital Corporation.
2. Marketshare Inc explains: “Our unique specialization is in forming and bringing to market new associations, coalitions and executive roundtables. We also build and revive struggling associations…”. Marketshare Inc has created among others the Russian-American Chamber of Commerce, the Environmental Business Association and the Association for Internet Marketing. The company does not limit to provide their clients with administrative services, they also lobby and organise PR campaigns for them. Source: http://www.marketshareinc.net/
3. The four regional working groups, each headed by one IPWA vice-president are Europe, Middle East and Africa; Latin America; Asia; and North America.
4. Source: IPWA’s website. The group has closed down their website, but the information contained can be tracked using wayback.com, an internet site with an archive of more than 10 billion websites that have been posted in internet. To check IPWA’s site go to: http://www.web.archive.org/web/*/http://www.ipwa.org
5. A common objective listed for all 4 regional working groups.
6. http://www.web.archive.org/web/*/http://www.ipwa.org
7. The Asia working group presented “ideas to various multilateral agencies on how their resources might be most effectively deployed to facilitate private involvement in Asian water infrastructure projects”. Advisory members of IPWA include the member of the World Bank group - the International Finance Corporation – , the US Credit Export Agency the Overseas Private Investment Corporation and the European Bank for Reconstruction and Development. According to the membership list listed in http://www.web.archive.org/web/*/http://www.ipwa.org, dated in 2001.
8. A report released by the Center’s International Consortium of Investigative Journalists in February 2003 stated that in the 12 year period covered by the report the World Bank loaned some $20 billion to water-supply projects, imposing privatisation as a condition in one third of them. In that same period Vivendi Universal reported that its water-related revenue rose from $5 to $12 billion. “Multinationals Ride Wave of Water Privatisation”, 4 February 2003, Marty Logan, OneWorld US.
9. Although the group’s Executive Director Kathy Shandling fourth months later still claimed that this is only a technical matter. Phone interview with Kathy Shandling, IPWA’s Executive Director, 6 February 2003. According to wayback.com (see footnote 4), the first posting of IPWA website dates 27 November 1999, and the last one is May 31st 2002.
10. At the time of IPWA’s establishment the US seemed like a promising market for private involvement in water services. But a string of negatives experiences is helping to turn the tide. Municipalities that in the late 90’s decided to privatise their water services, such as Milwaukee or Atlanta (which handed the water supply over to United Water, a Suez subsidiary), found that the quality of the service has greatly deteriorated. In parallel, US campaigns for water justice have gained strength and raised awareness on the dangers of water privatisation.
11. Memorandum. Members of the International Private Water Association and the Water Industry Council. Phil Dyk and Larry Chertoff. Trade Association Alliance. Monday, 14 February 2002.
12. Ibid.
13. Vivendi is sponsoring member of IPWA, the most expensive category of membership. Paying $10.000 per year gives Vivendi and other sponsoring members such as PriceWaterhouseCoopers or Anglian Water voting right and other benefits in the organisation. The compromise of spending 10 hours per month in IPWA initiatives reduces the fee by half, and for $5.000 per year Azurix, BiWater Capital, Societe General or the Fuji Bank enjoy the same rights. Membership list listed in http://www.web.archive.org/web/*/http://www.ipwa.org (dated 2001).
14. The EU-based water corporations have strong allies in the European Commission, which advances the interests of European water corporations to gain access to world water markets, for instance through trade negotiations within the World Trade Organisation (WTO), particularly in the current round of negotiations in trade in services (GATS). French TNCs, such as Vivendi, Suez and SAUR, also have the invaluable help of the French government, which takes a very protectionist stand at home guarding the French water market against foreign competitors while aggressively promoting the expansion of French water companies abroad.
15. See CEO’s fact sheet on the World Water Forum.
16. The old IPWA’s website contained a section on ‘Conference and Privatization Calendars’, which appears for the last time the 24 of September of 2001. From this and other evidences it appears that IPWA does not have technical problems with their site, but decided that keeping it open would have a similar effect as a red scarf for a bull.
17. IPWA’s new mission statement.
18. Phone interview with Kathy Shandling, IPWA’s Executive Director, 6 February 2003
19. Ibid.
20. Kathy Shandling quoted in “Private Industries Compete for Water Rights Wordlwide”, by Joan Lowy, Abilene Reporter, 7 January 2002.
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