Privatization and Socioeconomic Rights

Human Rights Dialogue 2.9 (Spring 2003): "Making Human Rights Work in a Globalizing World"

Privatization and Socioeconomic Rights

Despite open resistance from some local NGOs, since 1994 South Africa has been implementing a policy of privatization in a range of areas, including basic services such as trash collection, electricity, housing, food, and water supply. Access to these services is directly linked to the enjoyment of such economic, social, and cultural rights as the right to water, health, and housing.

Early indications suggest that privatization has been unsuccessful in securing these basic services for all South Africans. The Rural Development Services Network estimated, for example, that service charges in the black townships of Fort Beaufort with respect to water provision and trash removal increased by almost 600 percent between 1994 and 1996. These townships also witnessed a significant increase in sanitation charges between 1995 and 1998 despite having only a “19th century bucket sanitation service.” These trends were accompanied by a 100 percent increase in water connection costs. It has also been estimated that since 1994 about ten million people have had their water supply disconnected and roughly two million people have been evicted for failure to pay water bills.

In South Africa, the critical question in analyzing the privatization of essential services is whether the policy is consistent with constitutional imperatives—especially those relating to socioeconomic rights. The 1996 Constitution of South Africa departs radically from traditional constitutions by giving explicit recognition to a range of socioeconomic rights in addition to civil and political rights. This recognition was informed by, among other things, the realization that redressing the deep systemic inequalities left behind by the apartheid regime and securing the meaningful enjoyment of citizenship rights by everyone in the newly-founded democratic era requires the protection of both sets of rights.

The socioeconomic rights guaranteed in the constitution include the right of access to health-care services, sufficient food and water, adequate housing, and education. The state is obliged to take legislative and other measures within available resources to ensure the progressive realization of these rights. Significantly, the constitution makes it possible for these rights to apply in the private sphere. Section 8(2) stipulates that a provision in the bill of rights binds “natural or juristic person” alike “to the extent that it is applicable,” depending on “the nature of the right” and “the nature of any duty imposed by the right.” Privatization should not limit existing enjoyment of socioeconomic rights. The constitutionality of privatization will also depend on whether it contributes to the progressive realization of relevant socioeconomic rights. Failure to satisfy either of these demands would mean that the policy is unconstitutional and that the state is in violation of its constitutional obligations.

Privatization has become a dominant economic policy prescribed by financial institutions and other donors. It has been incorporated in various multilateral trade agreements that promise improved efficiency in the delivery of and, ultimately, enhanced access to, basic services. Likewise, private actors involved in providing services relating to socioeconomic rights are obliged to ensure that they do not interfere arbitrarily with the enjoyment of the relevant rights. They are also under an obligation, to a certain extent, to promote these rights. The possibility of holding such actors directly responsible by a court of law exists under the constitution.

Several studies on privatization in South Africa have been conducted, but few have been approached from a human rights perspective. Most human rights activists lack the necessary background in economics to investigate the issue thoroughly, and most economic policy experts lack a comprehensive understanding of human rights. Therefore, a definitive answer to the question of whether privatization promotes or limits access to socioeconomic rights in South Africa has not yet been formulated. Recognizing this problem, the Community Law Centre of the University of the Western Cape designed a project to evaluate how the privatization of essential services has affected vulnerable groups’ access to socioeconomic rights. Central objectives of the project are an exploration of the obligations of the state and nonstate actors arising from these rights, how such rights are affected by privatization, and what these rights entail for privatization.

The other focus of the project will be on whether privatization is implemented in accordance with democratic norms and practices such as those relating to access to information and public participation. This component was informed by evidence of a number of bad privatization deals entered into by municipalities. These deals were conducted in violation of key procedural rules set out by the relevant Act of Parliament and in disregard of fundamental democratic norms relating to public participation in the privatization process and provision of adequate information to the public on privatization initiatives. They resulted in unnecessary litigation involving huge legal costs and the loss of enormous sums of money by the municipalities.

The research will result in a comprehensive background paper for a conference on privatization to be held in September 2003. Drawing participants from within and outside South Africa, the conference will provide a platform for building a vibrant local and international network aimed at ensuring that socioeconomic rights are not compromised by privatization. The conference will aim to bring various stakeholders together to provide a holistic evaluation of this policy. It is anticipated that the outcome of the background research and workshop will inform submissions for policy and legislative reform within South Africa may lead to possible litigation around these issues.

A major challenge of the project will be locating and cultivating common ground in the various positions on privatization. Views on privatization are diverse and often conflicting, ranging from total opposition to it through a partial acceptance limited to privatization of certain goods and services, to total acceptance.

Another challenge will be reaching a consensus on the extent to which private actors could be held accountable to human rights obligations engendered by socioeconomic rights. The horizontal application of human rights is still novel in contemporary constitutional law. Although the constitution does recognize horizontality of its bill of rights, little comparative jurisprudence exists that establishes the precise obligations of private actors. Furthermore, academic opinion is still divided in South Africa on the important question of whether the bill of rights applies directly to private actors or indirectly through common law. It is unclear whether one can bring an action against a nonstate actor based directly on a constitutional human rights provision. This problem is exacerbated by the fact that the obligations of states engendered by socioeconomic rights are also still underdeveloped. These factors restrict the ability of many human rights groups in South Africa to hold private actors responsible for violations of these rights.

It is hoped that this project will stimulate in-depth research, open discussion, and bring more clarity to the complex obligations of states and nonstate actors to provide access to socioeconomic rights in the context of privatization.

Read More: Globalization, Human Rights, Globalization, Human Rights, South Africa

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