Blue Gold: The Fight to Stop the Corporate Theft of the World's Water

December 12, 2002

Blue Gold: The Fight to Stop the Corporate Theft of the World’s Water by Maude Barlow


JOANNE MYERS: On behalf of the Carnegie Council I would like to welcome members and guests to our Books for Breakfast program. Today we are very pleased to have with us Maude Barlow to discuss her book, Blue Gold: The Fight to Stop the Corporate Theft of the World’s Water.

Water is a resource that is essential to our life, so when we hear that the demand for fresh water is rising so much faster than the available supply, we find this to be a disturbing phenomenon. All over the world the lack of fresh water has forced relatively affluent societies to finance costly water projects in order to irrigate their land to grow crops and run many industrial activities, while yet some of the world’s most impoverished nations still lack the minimum funds to deliver any water at all to their cities and towns.

By 2025 the United Nations predicts that the number of people suffering from an inadequate supply of clean water will grow from the current level of 2 billion people to the staggering number of 5 billion. As a result, it is easy to understand why several large multinationals have targeted the future management of the world’s water systems as a potentially lucrative market.

The question for this morning is this: should water, a compound essential to life itself, be turned into a profit-making business?

Although the debate over the use of water is still in its infancy, given what we now know, it is easy to understand how highly charged the economics of water can become. Already, corporations own or operate water systems across the globe that bring in about $200 billion a year. However, they serve only 7 percent of the world's population, leaving a potentially vast market untapped.

Some contend that unless water is treated as an increasingly precious commodity and priced to reflect its value, particularly for heavy users, such as farmers and factories, much of it will be wasted. But will allowing private enterprise to manage or own many of the world’s water systems help overcome this problem; or will it expose the poor to impossibly high water bills?

In the recently published book, Blue Gold, which also has just been or is about to be published in fifteen additional countries, Maude Barlow, a Canadian political activist, policy critic, and author, writes with her co-author Tony Clarke about "the corporate theft of the world’s water supply." She explores the ongoing struggle between seeing water as a marketable commodity whose use and distribution is determined by profit—here the major bottled water producers come immediately to mind—or viewing access to clean water as a fundamental human right belonging to no one and not to be sold to the highest bidder.

Our speaker is the National Volunteer Chairperson of the Council of Canadians, a nonpartisan public interest organization supported by over 100,000 members. She is the author or co-author of thirteen books, including the best-selling Class Warfare: The Assault on Canada's Schools, as well as Global Showdown: How the New Activists Are Fighting Global Corporate Rule.

Please join me in giving a very warm welcome to our guest as she tells us the story of the fresh water crisis and how we can save our vital supplies of this resource.


MAUDE BARLOW: Thank you very much. I'll start by telling you about how I got involved in this, because I am not a scientist; I’m a political and social activist. I’m the elected Chairperson of Canada’s largest public advocacy organization. The equivalent here in the United States would be Ralph Nader's Public Citizen, and in fact we work very closely with them. I make serious trouble in our country for our government, and have been called the "real leader of the opposition in Canada."

Our organization has four major campaigns: safe food, clean water, fair trade, and health care. We have campaigners and activist groups around the country. We are entirely member-funded, with no government or corporate funding, so we are very independent as an organization.

We were concerned when the very first free trade agreement in the world was signed, January 1, 1989, pre-NAFTA. It was the Canada-U.S. Free Trade Agreement, which was uncontroversial here, but was the central issue of the 1988 Federal election in Canada.

Water was included as a tradeable good and then as an investment. When NAFTA came along, the terms were enlarged. We also signed a proportional sharing agreement on our energy with the United States in that trade agreement, and the percentage, for instance, of our natural gas since that first free trade agreement has increased from 25 percent to 60 percent of our production; and we're not allowed to cut back, even after signing the Kyoto Accord, unless our American customers say that we're allowed to. So we're locked into a proportional sharing agreement on the continent.

Our concern has been that if we start selling commercial exports of water, we will be locked into the same kind of agreement with the United States. My original concern was around the sovereignty of water—who owns Canada's water.

I started to do research on the world's water, and found that only in the last ten years has there been what I call a "red alert" around the world on the issue of fresh water.

One of the things I hadn't known is that that amount of fresh water in our world is finite and very small. It's less than one-half of 1 percent of all the total world’s water stock. And not only is it the same amount of water that was here at the creation of the planet, it's the same water. So the next time you walk in a rain, just remember some of that rain was in the blood of dinosaurs.

It's a very precious resource, and if we take care of it, it recycles through the hydrologic cycle; but if we do not take care of it, we destroy it.

What we know from reports by the United Nations, the World Bank, and the World Watch Institute over the last ten years is that we are running out of fresh water in the world because we are diverting, polluting, and depleting the existing sources so quickly that we're now using up groundwater. Groundwater are the sources of water in aquifers or running rivers underneath the ground. Up until about 50 years ago, very little of that groundwater was used. People had wells, but that took very little water. But now we're able to put huge bores into these great big aquifers and take huge amounts of water up at a time.

And so what we have is cities, like Mexico City, Bangkok, Beijing, which are literally sinking in on themselves. The weight of the city, giving in on the ground where the water is being removed, causes the whole city to sink. This is called subsidence.

About a quarter of all our water use now around the world is coming from groundwater sources, and that’s only in the last 30-50 years. So, suddenly, we went from having lots of fresh water on the surface to polluting, depleting, diverting that fresh water, to using the water under the ground at a rate far faster than it can be replenished.

One example is the Ogalala Water Aquifer that goes from the Dakotas down under California. There are 200,000 wells taking water up in that aquifer. The water is being used to grow water-intensive crops like alfalfa and cotton in the desert, which we shouldn't be doing ecologically. The Ogalala Aquifer is being depleted at 14 times faster every year than it can be replenished.

Mining or careless use also allow sea water to invade an aquifer and destroy it very quickly. Or if it's bombed, as in Serbia, a huge water table was infected and destroyed by bombs containing dangerous chemicals. Or it can be a mining tailing that allows poisons and toxic waste to come in, from mining into an aquifer, and it doesn't take much to destroy a whole table.

The institutions looking at this all agree that the earth's fresh water is depleting so fast that by the year 2025, fully two-thirds of the world’s population will be living with some amount of stress around water. One-third of the world's population will have absolutely no access at all.

We already know that 22 African countries are running out of water. In South Africa alone, women have to go so much farther now to get water, which is becoming polluted and depleted, that they walk an average of to the moon and back 16 times every day just to find water for their families. They're using up the water supply at four times faster than it can be replenished.

We're now talking about the earth’s "hot stains," areas where water reserves are absolutely disappearing. It includes the Middle East and northern China. They have diverted water from communities and farms and subsistence farming to their industries because they have been able to actually quantify how much more money they can make on a drop of water if they make a shower curtain liner or running shoe than if they allow it to continue to grow food for the local people. And so there has been massive diversion and fully two-thirds of all of the cities in northern China are now in a water crisis. They're talking about moving the capital of China from Beijing because Beijing is absolutely running out of water.

In Mexico, they're talking about moving Mexico City—and I don’t know where you’d move 28 million people—in the next decade. The Mexican valley is out of water.

California will be out of water in 20 years. Florida is in terrible trouble. The Great Lakes are quite shallow, and we are depleting them so quickly that there is concern by many environmental groups that it may be that one day the St. Lawrence River will no longer reach the ocean. And we’re not talking hundreds of years, but ten to 15. It has already happened to the Colorado River, the Yellow River in China, and the Ganges in India. Many of the great rivers of the world no longer reach the ocean, and that has huge environmental impacts.

Every eight seconds a child dies in our world from lack of fresh water. But we're talking about this increasing to the point where it will be as potentially catastrophic as global warming, and perhaps hit us much faster.

I've traveled a lot in countries where there isn't water now, and the catastrophe is not in the future, it's in the present. It’s probably the most pressing environmental, and therefore political, issue of our day.

Now I would like to address the issue of who owns this water—what do we start to do about it; and how we start to move around this.

We know how to save the world's fresh water resources. We know we need massive changes in industry. We need laws. Martin Luther King used to say that legislation may not change the heart but it can restrain the heartless, meaning laws around the abuse and pollution of water. We need to stop toxic dumping into our lakes and river systems. We need to stop the destruction of our wetlands and our forests. We need to replace flood irrigation with drip irrigation. We need massive infrastructure repair in our cities, particularly in the developing world, where sometimes as much as 90 percent of all the water is wasted through leaking pipes. We need to use every drop twice as well as we use it now.

We need a new water ethic. We have to start seeing ourselves as animals, like other species, who must respect the laws of Nature and not remain somehow above the laws of Nature, which we currently do.

Unfortunately for all of us, this has come at a time when most governments around the world have bought into the so-called Washington Consensus, which is that there’s only one model of government around the world, and it's that competitive nation states have to abandon regulatory regimes and allow the market to make decisions around natural resources, health care and education. We are living in a time when absolutely everything is for sale; there’s nothing really sacred anymore from the marketplace. So the fish before they’re caught, the rain before it falls, the seed deep in the forest, our very life itself—everything is up for sale now.

We know that the United Nations and the World Bank had a very important conference two years ago that deemed that water is a human need and not a human right, although an arm of the UN just two weeks ago said no, it's a human right. This is a very important dispute because you can’t trade or sell a human right, but you can make money on a human need.

Now we have a handful of transnational corporations, backed by the World Bank and the International Monetary Fund, going into developing countries and saying, "as part of your structural adjustment, we want you to convert your public water systems to a private system and we’ll tell you which corporation will come in."

Some of these companies are startlingly open. They say that the decline of fresh water around the world is a unique and wonderful venture opportunity and will make a huge amount of money. Fortune 500 last year had a special issue on water, saying it is the hottest property out there, invest in water, because people will sell anything for fresh water. You can live for a little while without food, and you can live certainly on basic food, but you cannot live without fresh water.

The annual profits of the water industry now amount to about 40 percent of the oil sector and already substantially higher than the pharmaceutical sector. But we figure that only between 5 and 10 percent of the world’s fresh water has been privatized. So you can imagine the amount of money we’re talking about if it could all be cartelized the way oil has been.

There are about ten huge transnational water companies that we call the "water lords." The three biggest are from Europe: Vivendi, Suez-Lyonnaise des Eaux from France, and the German company RWE.

In Germany, Deutsche Bank has a huge pool of money, but they locate it offshore so they don’t have to pay taxes. They come back and lease the water system—they buy the water system, or set up or build the water from local municipalities and then they lease it back to them. It’s called cross-border leasing. They hire a local company, and if they don’t like the local company, they can always fire it. They have done this to about 30 water systems in thirty municipalities in Germany alone. When the local people went to the municipality of Stuttgart, and asked, "Who owns our water system now?" they said, "It's a private consortium," and they don’t want you to know. So who owns it if this company collapses?

In the United States Vivendi operates through its subsidiary, U.S. Filter, and Suez by its subsidiary, United Water, and RWE through American Water Company. They sound very American, but are in fact owned by these big transnationals from Europe.

These companies are aided by the World Bank and the IMF. We document the performance of private water companies and show that these companies in Europe have made huge profits, charged very high prices for water, and cut off customers who can't pay. There’s no transparency in their dealings, there’s reduced water quality, bribery and corruption.

Water-for-profit takes a couple of other forms. One is the bottled water industry. It's one of the fastest-growing and least-regulated sectors of our economy, growing at an annual rate of about 20 percent. Last year, close to 90 billion liters of fresh water were put in bottles, mostly plastic, which end up in our river systems and our wetlands, adding to pollution.

There is a big feeding frenzy with Nestle buying up many water companies. They now own Perrier. There’s a big fight going on in Michigan because Perrier has a grant to take a huge amount of water from an aquifer that feeds the Great Lakes. We’re not supposed to export water out of the Great Lakes, so they're doing it through Perrier bottled water. Nestle has also bought San Pellegrino.

And, of course, Coca-Cola. Where do you go in the world that you don’t see Coca-Cola as the exclusive vendor? They take water right out of the tap, put it through a reverse-osmosis process, add their secret mineral packet, and sell it back to us at 2,000 times what it would have cost us to take it out of the tap.

In fact, a recent study by the National Defense Research Council here found that bottled water is no better than most tap water around the United States.

One company says: "Water is now a rationed necessity that may be taken by force," because fierce disputes are happening all over the world. For instance, Coca-Cola has gone into India and has bought up and been given the right to a huge water system—a lake and river system that feeds it. They are now saying that the local people have to pay them royalties to access water that they have used for centuries.

And corporations are now also involved in the construction of massive pipelines to carry fresh water long distances for commercial sale, while others are constructing supertankers and giant sealed water bags. The World Bank says, "One way or another, water will soon be moved around the world as oil is now."

The environmental impacts of reversing water is the concern that if we start feeding America’s water appetite, we will need to have massive reversal of direction for our water, because most of our water flows north. So we're talking about projects that would make the Three Gorges Dam look small, and we have no idea what the environmental impact would be.

International trade agreements are now protecting these corporate rights. NAFTA protects water as both a good and an investment. There is already a company in California that is suing the Canadian Government for US$10 billion because the Government of British Columbia banned water exports for commercial purposes and this company was trying to get contracts at the time. So they are now saying their livelihood was cut off. This is under Chapter 11 of NAFTA that allows corporations to bypass their own government and directly sue the government of another country.

And NAFTA contains that same proportional sharing provision that we now have on energy. As soon as we start exporting water for commercial purposes, NAFTA kicks in.

But the WTO now is also exploring water as a service under the General Agreement on Trade and Services.

When I was in Doha, Qatar, for the last World Trade Organization meeting, I noted with alarm that on the last day, at the last minute, Europe added a clause taking down tariff and non-tariff barriers to environment services, which includes water.

Here is the case against privatization. First of all, I don't want to excuse the poor way in which some governments have treated their water. In many cases, they're desperately poor. But the alternative to bad government is not transnational pools of money for which nobody is accountable and which has to take 20-to-25 percent of all public funds and instead of putting it into water delivery or conservation, is putting it into a faceless investor. The alternative is good government. We should say to the World Bank and the IMF and the United Nations, "As a condition of your money in countries where you're concerned about this, you should be talking about good public governance."

The commodification of water is ethically, environmentally, and socially wrong. It would ensure that decisions regarding the allocation of water are based on commercial, not environmental or social-justice considerations.

Privatization of water means that the management of water resources is based on the principles of scarcity and profit maximization rather than long-term sustainability.

Corporations are, just self-evidently, dependent on increased consumption to make money. And so they want to invest in technology. They want the notion that somehow, if it's broken in your country, you can import it, you can fix it, desalination will somehow work. It doesn't.

We say that water belongs to the earth, to all species, to future generations, it's a public trust and a human right, and it must not be commodified for anyone’s personal profit. We hope to come up with a "new water ethic." My book outlines ten principles for a water-secure future and ten fundamental steps as to how we get there.

The fight took place a bit at the World Summit on Sustainable Development in Johannesburg, South Africa in September 2002. The water corporations were there. When you got off the plane, there was De Beers with their ad "diamonds are forever.' It was water in the shape of a diamond, like a water drop, and it said, "Water is forever." The corporate takeover of the World Summit on Sustainable Development was astounding.

The water companies sat as delegates on their government boards in their government negotiations, so that Mr. Thierry Chambolle of Suez was sitting as a full member of the government delegation from France. The water corporations came up with a privatized future and what they call public-private partnerships. That is all that came out of the World Summit on Sustainable Development.

Interestingly, in South Africa when apartheid ended, they brought in their wonderful new Constitution. They became the first country in the world to guarantee water as a basic part of their Constitution. Then they privatized water and gave it over to Suez-Lyonnaise des Eaux. The townships now have a handle, a tap, but between the water pipe and the tap is a state-of-the-art water meter. You can see it calculating every drop that comes out, and you pay by the drop—in an area with 80–90 percent unemployment. They look at it, sigh, and go back to the river that has cholera warning signs on it, because that’s where they get their water, which is why cholera has just shot up.

The bigger showdown is coming this March in Kyoto, Japan. There is a new self-styled international body called the World Water Council. It’s the United Nations, the World Bank, and these water corporations. They held their first meeting in Marrakech in March 1997. They had their first World Water Forum in The Hague in March 2000.

Coming up to the Third World Water Forum in Kyoto, I have been asked to play a key role in the theme of public-private partnership. We're negotiating now as we go. But they are setting the terms of the world because there is ministerial presence there.

We believe that we have created a treaty initiative to share and protect the global water commons that we want our governments to sign. We want a guaranteed water lifeline for every person on earth. We want national water protection acts, and we know what those have to look like. We want an end to the IMF/World Bank-enforced water privatizations. And we are calling for a Global Water Convention, which would create an international body of law to protect the world’s water heritage based on the twin cornerstones of conservation on one hand and equity on the other.

We need this debate and we need it now, because water will be the most important issue of our time. We need to start talking about it.

Thank you.

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