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The Fight for Water: Overview
In this edition of the People’s Tribune In Depth series, we’ll look at the fight going on around water. Since none of us can live without water, this is one of the key questions confronting humanity today: Will clean water be considered something that every person has a right to have, regardless of ability to pay, or will it be a commodity to be sold for profit and denied to those who can’t pay?
With the global economic system under increasing pressure as technology eliminates jobs, investors keep looking for new sources of profit. In 2011, Willem Buiter, then chief economist at Citigroup, said that water is a private, not a public good, and should not be distributed according to need, but should be a commodity for sale. He said that, “Water as an asset class will, in my view, become eventually the single most important physical-commodity based asset class, dwarfing oil, copper, agricultural commodities and precious metals.”
By one estimate, the global market for water is potentially worth $1 trillion. And only a fraction of today’s supply is safe for consumption.
About 70% of the world’s fresh water use is for agriculture. The rest goes for energy production, manufacturing and basic personal hygiene (including drinking). About 97% of the world’s water is non-potable seawater. Most of the fresh water is in the polar ice caps. The remainder is in rivers, lakes and aquifers. Overall, only 0.007% of all the water in the world is safe for consumption, according to the World Health Organization. At the same time demand is increasing, and climate change is causing rainfall levels to decrease in some areas. Pollution of water with chemicals and other contaminants is a serious issue. Also, the water infrastructure in the US and other places is old and is approaching the end of its useful life, meaning significant investment in infrastructure will be required. Worldwide, 32 billion cubic meters of treated water is leaked from water supply systems every day.
The UN estimates that by 2025, two thirds of the world’s population will live in “water-stressed” areas, that is areas where the sustainable use of water has reached its limits. More than 1.6 billion people already live in such areas. More than 1.2 billion people lack access to clean water.
Expanding the water supply, improving water supply efficiency and improving water quality are seen by private investors as investment opportunities. The public sector currently runs the water industry in most of the world. Water and sanitation infrastructure is expected to require $11.7 trillion in global investment through 2030. Given the pressure on government budgets, private investors assume that much of this money will have to come from private sources, and they see this as an opportunity to make money. In the next three to five years (i.e., through 2021), the private sector is expected to account for 30% of water investments. Europe has already begun to make the transition to private management of water, and the majority of water services in the UK and France are now handled by private operators.
While nearly nine out of 10 people in the U.S. get their water from a publicly owned utility, the corporations still have their eye on privatizing our access to water. A number of big corporations, such as General Electric, Siemens, and ITT, have bought up companies that build and service water supply and treatment systems. Treatment and distribution of water is seen as more profitable than owning the water itself.
According to Food and Water Watch, “A 2010 survey of utilities in the Great Lakes region found that private water utilities charged more than twice as much as public water utilities. Selling off water rights is NOT a bargain. It is a terrible investment! . . . Private, for-profit utilities have no incentives of any kind other than making a profit and are not intrinsically involved in the well-being of the community as a whole.”
The bottom line is, who will decide if the people have access to clean water—the corporations or the people? How can we guarantee our access to water if the people don’t own and control the water and the means to distribute it?
Below is a selection of additional readings and videos, along with some suggested discussion points.
Suggested points to discuss and debate:
- Water is valuable to the corporations and billionaires as a new market because labor-replacing technology is causing markets to shrink, and for other reasons.
- The control of the economy by corporations and billionaires is standing in the way of us having clean, affordable water.
- We need the government to be our government, not the corporations’ government. Government must guarantee our basic needs are met.
- How do we get power away from these corporations?
- We are ultimately engaged in a fight for a new society where no one is denied water, food, housing, health care or any other necessity of life.
Keep Water Public
From the Editors March 2018 (People’s Tribune editorial)
World Water Day, March 22
“The last world war will be fought over water. . . . You can’t eat or drink your money.” — Kylo Prince, spiritual leader, Dakota and Ojibwe
Water. There is no life without it. Despite covering about 70% of the Earth’s surface, only 3% of it is fresh and suitable for drinking. Over one billion people lack access to water and another 2.7 billion find it scarce for at least one month of the year. According to UN projections, global demand for fresh water will exceed supply by 40% in 2030, thanks to a combination of climate change, human action and population growth.
In this light, Goldman Sachs declared water a “critical commodity” in 2008, referring to it as “the petroleum of the 21st century.” In the U.S., water is a $425 billion industry. Investment banks such as Goldman Sachs, J.P. Morgan Chase, Citigroup, UBS, and other elite banks are gobbling up the rights to groundwater, aquifers, and rivers, land with water on it or under, desalination projects, irrigation and well-drilling technologies, utilities, water infrastructure maintenance and construction, and more. They have amassed billions of dollars to buy up infrastructure around the world.
Furthermore, investment bank Citigroup urges water-rights owners to sell water to fracking companies. Fresh clean water is necessary for fracking which makes it a premium investment. Water for fracking can be sold by water companies for $3,000 per acre-foot instead of only $50 per acre-foot to farmers. Each fracked well requires 3 to 5 million gallons of water. Eighty percent of this water cannot be reused. Selling water to “frackers” has left communities high and dry in Texas and California, also profiting bottled water corporations such as Nestle as entire communities purchase bottled water for everyday use.
The privatization of public water systems is moving rapidly. In Kern County, CA, the Kern Water Bank (a large underground aquifer) was turned over to two giant agribusinesses while taps ran dry in nearby communities, forcing workers to buy bottled water. Adam Keats, attorney with the Center for Biological Diversity, predicts the private ownership of that much water will lead to speculation, and profitmaking.
Water and infrastructure-privatization is accelerating as many local and state governments, suffering from revenue shortfalls and under financial and budgetary strains can no longer maintain and upgrade their own utilities. They are vulnerable to corporate pitch-men who promise privatization increases efficiency and saves money. As Mary Grant from Food and Water Watch points out, often when they refer to efficiency, it’s cutting corners and cutting back water system jobs. It’s not actually making systems work more effectively. Water quality declines and price increases. Private companies, on average, charge 59% more than local governments do for water service. What privatization means for communities is rate hikes. It means loss of local control over a service essential for public health and wellbeing.
In communities across the nation, from Bakersfield, CA, to Atlantic City, NJ (where the people recently stopped privatization efforts there), from Flint and Detroit to New Orleans, the people are standing up to the corporate takeover of water. They are demanding government guarantee water as a human right and protect water as a common good. As corporations turn to speculation as a means to stay profitable, we, the people must demand government nationalize these corporations and run them in our interests.
Water is a Human Right
From the Editors May 2015 (People’s Tribune editorial)
Mark Twain once said “whisky is for drinking; water is for fighting over.” He was only half-joking. Nations have gone to war over water. Today, there is some kind of fight over water under way in almost every country, including the US. Who will control the world’s water, and for what purpose? Will water be a source of life, or a source of profit for the wealthy few?
Less than one percent of the Earth’s drinkable water is readily accessible for direct human uses. Drought, pollution, aging infrastructure, over-use by industry and agribusiness, and population growth are straining the water supply. By 2030, 47 percent of the world’s population will be living in areas of high “water stress.”
The wealthy investors who dominate the world see an opportunity. Ninety percent of the world’s fresh water is under public (government) control. The investors want to privatize the water and make it available only to those who can pay. They see a global market with an estimated value of $800 billion by 2035.
But millions of us can no longer afford to pay for it. In the US and across the globe, the economic system based on private ownership of the factories and other means to produce what we need is breaking down. The computer and the robot are replacing labor, wiping out the jobs, and the corporations and wealthy investors won’t pay to support labor they don’t need. The corporations and government in the US have merged to create a fascism designed to suppress any dissent and manage the economy for the benefit of the few. The drive to cut government costs and boost profits is part of this process.
You can see this corporate fascism at work in Detroit and elsewhere in Michigan, where the emergency manager system has been used to overrule elected local governments and open the door to privatization of water and other assets. In Detroit, thousands of households have had their water cut off because they can’t afford to pay. In Flint, the emergency manager switched the city from lake water to dangerously polluted river water to cut costs. And in Baltimore, MD, 25,000 households are facing water shutoffs.
Some 146 million people in the US, or 48 percent of the population, are living in some form of poverty. Labor-replacing technology has created a new section of the working class, people of every color and nationality, whose labor is no longer needed in the capitalist economy. The ruling class has no intention of providing them with food, water, housing or anything else. These workers are forced to fight for a new, cooperative society, where the means of producing what we need to live are publicly owned. For them, this is the only way to survive.
In a cooperative society, we could solve the problems and guarantee the water supply while protecting the Earth. We could guarantee water and all the necessities of life to everyone. Water is a battlefront where we can make the need for a new society clear. Water must be publicly owned and managed in the interests of the people. As Bolivian water activist Oscar Olivera has said, “Water is the patrimony of the Earth and the patrimony of humanity. No one should own water.”
Why Are They Poisoning Our Children?
From the Editors March 2016 (People’s Tribune editorial)
Tammy Loren, a mother of four who lives in Flint, recently told the New York Times, “My trust in everybody is completely gone, out the door. We’ve been lied to so much, and these aren’t little white lies. These lies are affecting our kids for the rest of their lives, and it breaks my heart.”
The poisoning of Flint, Michigan’s water with lead and other chemicals has become an international story. Millions of people are shocked and outraged by the callous disregard for human life shown by public officials in Michigan and at the federal level.
Yet there is more to this than heartless officials. These officials are acting on behalf of a corporate ruling class and an economic system that is eliminating democracy as it coldly discards anything that won’t make a profit, including people.
In Michigan the corporations have been moving to restructure cities like Flint. The rulers need to cut social services and privatize public services to funnel more money into the pockets of their corporations. They have used the financial crisis in cities like Flint as an excuse to appoint “emergency managers” with dictatorial powers to replace local elected officials and impose austerity programs. It was Flint’s governor-appointed emergency manager who switched the city’s water supply to polluted river water to pave the way to privatize the water for the corporations. This is a form of fascism. Democracy is going by the wayside to protect the continued rule and profits of the wealthy.
More and more, human labor is no longer needed, because the computer and the robot are replacing workers. Flint had some 80,000 residents working in the auto industry in 1978, and today less than 4,000 are employed in the one auto plant remaining there.
This pattern has been repeated across the country, and despite what politicians say, the jobs are not coming back. Millions are permanently unemployed or working for wages too low to live on. Poverty, hunger and homelessness continue to rise.
The wealthy ruling class that owns the increasingly laborless factories and other workplaces has a problem—the workers they no longer need are a liability. The corporations control the government, and they don’t want money spent on workers they don’t need. What’s more, these unneeded workers are a threat to the continued rule of the corporations, because they are demanding things that a system based on private profit can’t provide. The rulers are eliminating democracy to silence them.
The people of Flint and other Michigan cities are leading the way by building their own independent organizations and waging a determined struggle. We must build a powerful movement that demands that the government guarantee food, clothing, housing, healthcare and safe water for all in our country who need it. This is a stepping-stone to building a whole new society.
Private Water Firms Tap Profit From Struggling Public Utilities
https://www.bna.com/private-water-firms-n73014470228/
Water for Profit
http://ww2.cfo.com/strategy/2007/02/water-for-profit/
Reading scores plummet since Flint water crisis began
http://peoplestribune.org/pt-news/2018/03/reading-scores-plummet-flint-water-crisis/
‘The start of an important shift’: Water rights and human rights at Standing Rock
http://peoplestribune.org/pt-news/2016/11/start-important-shift-water-rights-human-rights-standing-rock/
California water: a human right or private property?
http://peoplestribune.org/pt-news/2016/11/california-water-human-right-private-property/
The fight to end poverty and sickness from water pollution in Appalachia
http://peoplestribune.org/pt-news/2017/03/fight-end-poverty-sickness-water-pollution-appalachia/
We Win! Atlantic City’s water stays public; Victory for grassroots organizing against water privatization
http://peoplestribune.org/pt-news/2018/02/win-atlantic-citys-water-stays-public-victory-grassroots-organizing-water-privatization/
Fighting to stop water shutoffs (Detroit)
http://peoplestribune.org/pt-news/2015/02/fighting-stop-water-shutoffs/
Water Privatization: Facts and Figures
(from Food and Water Watch)
Privatizing local water and sewer systems usually does far more harm than good for our communities.
Water privatization – when private corporations buy or operate public water utilities – is often suggested as a solution to municipal budget problems and aging water systems. Unfortunately, this more often backfires, leaving communities with higher rates, worse service, job losses, and more.
Problems with Water and Sewer Privatization
Loss of Control
- Privatization is irresponsible. By privatizing water and sewer systems, local government officials abdicate control over a vital public resource.
- Privatization limits public accountability. Multinational water corporations are primarily accountable to their stockholders, not to the people they serve.
Loss of public input. Because water service is a natural monopoly that lacks a true market, consumers can exercise choice only at the ballot box through the election of the public officials who oversee their utility. They don’t have a vote in the corporate boardroom. With public ownership, residents can visit their elected officials and directly express their opinions about the operation of their water systems. If the officials fail to respond, the community can vote them out of office. The public lacks similar mechanisms to address their concerns with private utilities and appointed state regulators, and long-term complex contracts can tie the hands of local governments.
Loss of transparency. Private operators usually restrict public access to information and do not have the same level of openness as the public sector.
- The objectives of a profit-extracting water company can conflict with the public interest. Because a water corporation has different goals than a city does, it will make its decisions using a different set of criteria, often one that emphasizes profitability. This can create conflict.
Cherry picking service areas. Private water companies are unlikely to adopt the same criteria as municipalities when deciding where to extend services. They are prone to cherry-picking service areas to avoid serving low-income communities where low water use and frequent bill collection problems could hurt corporate profits.
Contributing to sprawl. Local governments can use the provision of water and sewer services to promote smart growth, while water companies often partner with private developers to supply service to sprawling suburbs.
Undermining the human right to water. As a result of price hikes, service disconnections, inadequate investment and other detrimental economic consequences, water privatization often interferes with the human right to water. Read the issue brief: Water Equals Life: How Privatization Undermines the Human Right to Water
Rate Increases
Privately owned water utility service costs 58% more than public water service.
Investor owned utilities typically charge 59 percent more for water service than local government utilities. Food & Water Watch compiled the water rates of the 500 largest community water systems in the country and found that private, for-profit companies charged households an average of $501 a year for 60,000 gallons of water — $185 more than what local governments charged for the same amount of water.
Investor owned utilities typically charge 63 percent more for sewer service than local government utilities. Food & Water Watch compiled sewer rates survey data from dozens of states and found that private ownership increased sewer bills by 7 percent in West Virginia to 154 percent in Texas.
After privatization, water rates increase at about three times the rate of inflation, with an average increase of 18 percent every other year. Food & Water Watch examined how water prices changed under private ownership following the 10 largest known sales of municipal water or sewer system to for-profit companies between 1990 and 2010. As of 2011, after an average of 11 years of private control, residential water rates had nearly tripled on average, increasing a typical household’s annual bill by more than $300.
Higher Operating Costs
Private operation is not more efficient. Empirical evidence indicates that there is no significant difference in efficiency between public and private water provision.
Lack of competition. In theory, competition would lead to cheaper contracts, but in practice, researchers have found that the water market is “rarely competitive.” The only competition that can exist is the competition for the contract, and there are only a few private water companies that bid to take over municipal water systems. Once a contract is awarded, the winning company enjoys a monopoly. A lack of competition can lead to excess profits and corruption in private operations.
Privatization often increases costs. Corporate profits, dividends and income taxes can add 20 to 30 percent to operation and maintenance costs, and a lack of competition and poor negotiation skills can leave local governments with expensive contracts. Read the fact sheet: Public-Private Partnerships: Issues and Difficulties with Private Water Service
Public operation often saves money. A review of 18 municipalities that ended their contracts with private companies found that public operation averaged 21 percent cheaper than private operation of water and sewer services. Read the fact sheet: The Public Works: How the Remunicipalization of Water Services Saves Money
Other Costs
Privatization contracts can be expensive to implement. The privatization process is complicated, expensive and time-consuming. In total, contract monitoring and administration, conversion of the workforce, unplanned work, and use of public equipment and facilities can increase the price of a contract by as much as 25 percent. Other hidden expenses, including change orders and cost overruns, can further inflate the price of private service.
Privatization can increase the cost of financing a water project by 50 percent to 150 percent. Local governments usually use municipal bonds to finance water projects; these bonds have an average interest rate of about 4 percent. Private water companies use a mix of equity and corporate debt with a weighted average cost that ranges from 7.5 percent to 14 percent or higher. So, in total, over 30 years, private financing is nearly 1.5 to 2.5 times as expensive as public financing, adding $0.8 million to $2.5 million onto the total cost of every $1 million investment.
Service Problems
Privatization can worsen service. There is ample evidence that maintenance backlogs, wasted water, sewage spills and worse service often follow privatization. In fact, poor performance is the primary reason that local governments reverse the decision to privatize and resume public operation of previously contracted services.
Private operators may cut corners. When private operators attempt to cut costs, practices they employ could result in worse service quality. They may use shoddy construction materials, delay needed maintenance or downsize the workforce, which impairs customer service and slows responses to emergencies.
Privatization typically leads to a loss of one in three water jobs. A survey of 10 privatization contracts found that after taking over a system, water companies reduce the workforce by 34 percent on average. Other surveys have found similar results. With fewer employees to make repairs and respond to customer service requests, it is not surprising that service quality often suffers.
Privatization can allow systems to deteriorate. Such neglect can hasten equipment breakdowns and allow water system assets to deteriorate. Because 70 to 80 percent of water and sewer assets are underground, a municipality cannot easily monitor a contractor’s performance.
Source: Food and Water Watch
https://www.foodandwaterwatch.org/insight/water-privatization-facts-and-figures
Pamphlet: The Politics of Water and the Drought in California (at the website, click on the link in the text below the pamphlet cover image to get to the introduction to the pamphlet)
http://peoplestribune.org/pt-news/2016/06/booklet-politics-water-drought-california/
Video: Nestle CEO says water is not a human right
https://www.youtube.com/watch?v=u6BSY-Ybnn4
Video: ‘Here’s to Flint’ – [please watch at least the first 10 minutes, but the whole thing if you can] –
https://www.youtube.com/watch?v=x7ULFSaMooA
Video: Comedian Lee Camp on corporate plans to steal remaining fresh water
https://trofire.com/2018/03/02/secret-plan-steal-earths-remaining-fresh-water/
