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Drying Up
The Global Water Privatization Pandemic

by Kari Lydersen
11.14.04

THE WOODS AND WETLANDS IN MECOSTA COUNTY, MICHIGAN, are pristine, idyllic. Chickadees and sparrows flit from tree to tree as snow slowly melts, and hawks swoop overhead. Deer rest in the marshlands under the watchful eyes of herons. The seasons change leisurely, seemingly untouched by humankind, with spectacular fall colors giving way to heavy snows and finally shoots and buds pushing forth in late March before hot, leafy summers.

Most residents in this rural area live in tune with the rhythms and breaths of the woods and wetlands. They know the names and seasonal habits of the local birds, amphibians and fish and can identify the different types of trees and shrubs.

But the lifeblood is being sucked out of this area, literally, and packaged in plastic bottles to be shipped around the world and sold, adorned with a photo of snow-covered peaks that exist only in some advertising executive’s imagination. This is Ice Mountain bottled water, a brand of Nestle Waters North America, one of the world’s largest bottled water companies. In Mecosta County, Nestle is pumping up to 400 gallons a minute from an aquifer on a hunting preserve, diverting water that otherwise would have ended up in tributaries with names like Deadstream and Thompson Lake and, eventually, in Lake Michigan.

The water is pumped from the aquifer, then bottled 12 miles from the aquifer at a massive, brightly lit factory flying an Ice Mountain flag alongside those of the US and Michigan. Local opposition did nothing to deter Nestle when it built the plant in 2001; the company is currently trying to step up the site’s water extraction by twofold or more, and is also exploring dozens of other sites in the state for pumping.

And for this water Nestle pays exactly nothing. Aside from the minimal rent on a 99-year lease the company holds with the individual owner of the hunting preserve, and a reported $85 annual well fee, Nestle is pumping the water for free—and making up to $2 million a day, according to hydrologist and Michigan State University environmental law professor Chris Grobbel.
“It’s the public’s water, and [Nestle’s] getting it for nothing,” says Grobbel. “The idea of water rights, of water as a common good, goes back to ancient Rome. Water is supposed to be owned by the people, and the government protects it for them. But here they’re doing the opposite.”

Citizens here opposed Nestle’s pumping increase with a lawsuit and various direct actions including a “canoe-in” in the nearby streams. In the fall of 2003, activists won a victory when Michigan circuit court judge Lawrence Root issued a sweeping 64-page opinion that accused Nestle lawyers of lying and catalogued the significant potential environmental effects of pumping. Root ordered Nestle to reduce its pumping immediately and to stop all pumping by December 2003. But Nestle obtained a stay against the decision pending the outcome of its appeal, and since then they have continued to pump upwards of 300 gallons a minute from the aquifer. Citizens around the state, including members of a group called Water Is Sweet, continue to battle to halt the pumping.

Meanwhile, a four-hour drive from Mecosta County in Detroit, one of the country’s most impoverished and segregated cities, tens of thousands of residents are surviving without running water because they can’t pay water bills, which have amounted to hundreds or even thousands of dollars. In some cases, they inherited the bills from previous tenants or owners of their buildings; in others, dire economic circumstances have made it impossible for them to keep up with rate increases. Between June 2001 and June 2002, the last year for which numbers are available, 40,752 addresses in the city had their water turned off. The Michigan Welfare Rights Organization says that water shut-offs have continued at a comparable rate. In April the group helped file a class action lawsuit on behalf of six plaintiffs whose water had been turned off; one is a 72-year-old World War II veteran who was told that, due to a miscalculation, he had 30 days to pay more than $3,000 in back water bills.

“He was retired from his job, he didn’t have health insurance, he had recently had some deaths in his family, and then he had his water turned off,” said Maureen Taylor, state chairperson of the Michigan Welfare Rights Organization. “This is a crisis that’s not being talked about.”

There are similar situations all over the world. Nestle has a nasty international record of sucking water out of communities. In Brazil, the company is held responsible for ruining rare mineral springs in the town of São Lourenco that were considered to have special healing properties. The Brazilian government is investigating Nestle for drastically reducing the mineral content in the medicinal “water circuit” springs by overpumping for its ironically named Pure Life brand.

In 2003, Water Is Sweet member Holly Wren Spaulding visited South Africa, where millions of families are without water because of exorbitant water rates. Despite a clause in the Constitution of the African National Congress maintaining water to be “a human right…indispensable for leading a life of human dignity,” in 2001 alone, 10 million South African families had their water cut off, resulting in a three-year cholera epidemic as people resorted to drinking from polluted streams.

“It’s actually worse than under apartheid,” noted Wren Spaulding, who is a member of a national working group on water that met during Miami’s 2003 anti-FTAA protests. “They’re charging people for water in neighborhoods where there is 70 percent unemployment and people don’t even operate on a cash economy.”

The privatization of municipal water systems is a prime policy pushed by the International Monetary Fund (IMF) and the World Bank in exchange for loans and bailouts. Water, after all, is a profitable resource, worth an estimated $45 billion worldwide. The World Bank estimates that 2 billion people, a third of the world’s population, live in water-scarce areas; that number could double in less than 30 years.

In the last decade, a handful of multinational corporations have, to a large extent, gained control of the global water market. Armed with the dubious promise to bring water to the poor, and hefty loans from the World Bank and the IMF, competing water giants have pursued aggressive campaigns of municipal water and wastewater system takeover that generally include promises to upgrade aging infrastructure, expand service networks and improve water quality. But in Buenos Aires, Argentina; Cochabamba, Bolivia; Johannesburg, South Africa; and other cities around the world—even Atlanta, Georgia—privatization has delivered water contaminated with raw sewage, taps that flow only part of the day and rates so high that many poor customers receive no water at all.

A report from an August 2003 international anti-water-privatization conference in San Salvador, El Salvador, notes that Latin America is home to 26 percent of the world’s water resources, yet there are no laws guaranteeing access to water. In Chile, 90 percent of urban water resources are privatized; in Argentina, water is largely privatized; and in Uruguay and Brazil, movements toward privatization are ongoing.

Water Privatization: Born in the USA

In the US, water systems were developed in the 1800s by private companies that built dams and pipelines to supply groundwater and river water to growing cities. Early water barons usually owned land or development companies, and diverted rivers to dry areas, creating lush oases that lured new residents. Their waterworks turned what had been a free, common resource into a commodity—one that greatly increased the value of the lands they subdivided and sold.

Early water customers paid a flat fee for their unmetered water, and it was a common practice in the early days of municipal water service to leave sprinklers running all night long. Those too poor to tap into private waterworks drew water from public taps, bought it from peddlers at high per-gallon rates or carried it from river and creeks that were polluted with raw sewage. Private water companies’ monopolistic practices often resulted in sporadic service and outbreaks of typhoid and cholera. Eventually, municipalities took over private water companies and the task of distributing water to citizens.

In the arid West, water is liquid wealth, and dams are the engine of commerce. In the early 20th century, during Western urban expansion, “worthless” desert land was turned into something that could be speculated on, subdivided and sold as small slices of paradise. First private developers, then municipalities, then the Bureau of Land Reclamation and the Army Corps of Engineers built larger and larger dams across ever-deepening canyons. Throughout the West, enormous dams impounded and continue to impound millions of acre-feet of water and generate enormous amounts of cheap hydroelectricity. This water and electricity allowed cities to grow explosively (so explosively, in fact, that demand has spurred a search for yet more rivers to dam in a cycle that continues to this day).

Dam-building corporations made enormous profits. Large farms bought water at incredibly low rates to grow subsidized, price-protected crops. Members of Congress counted on dams to appease constituents and special interests by bringing cheap water to cities, farms and industries. Industry and agriculture grew to support urban populations, whose higher water rates subsidized industrial and agricultural water users.

For small farmers, fishers, indigenous nations and anyone living outside the new cities, dams were a disaster. Most small farmers could not afford to construct the networks of pipes and ditches to bring the water onto their fields. Dams brought pure drinking water to city-dwellers, while rural communities with less political influence were left with drinking groundwater contaminated with agricultural and industrial chemicals. Tribes who relied on free-flowing rivers for subsistence and fishermen who made a living from undammed rivers. saw the water commons diverted and sold.

New Mexico: Acequia vs. Intel

Even in the over-dammed American West, a few community-run water systems survive. In New Mexico, small dams are part of a sustainable model of water distribution developed in the Islamic world, brought to Spain by the Moors and to New Mexico by Spanish conquistadors. The acequia system, as it is called, consists of a network of diversion dams, canals and ditches as well as an intricate social system of rights and responsibilities that determines how a river’s water is allocated to those who use it. The state’s water laws are modeled on this system: Water rights are attached to pieces of land, and continue only so long as a farmer uses the water and helps maintain the ditch system. Rather than an arbitrary amount of water, a ditch user receives a portion of the river’s flow that varies according to rainfall. Those who have used the water the longest have priority over more recent users. In New Mexico, indigenous pueblos and the heirs to Spanish land grants have “senior” rights, and the City of Albuquerque is considered a “junior” water user. But as in South Africa, Brazil, Bolivia and Argentina, this sustainable traditional system is at risk due to pressure from huge companies.

At a chile-roasting stand with a hand-lettered sign in Albuquerque’s South Valley, which feeds off of the Rio Grande River, a longtime farmer and ditch user describes the current clash between the traditional acequia system and industrial and urban water use in water-scarce New Mexico. A brand-new black Ford F350 extended cab pickup pulls into the dirt lot, and a large man wearing new jeans, a button-down shirt and a five-gallon cowboy hat steps out, followed by a skinny young man he introduces as his son. Frank and Joe Pacheco (not their real names) grow chile, squash and corn at Quatro Estrellas farm in the Rio Grande Valley, as their family has for generations. They water it all with the ditch, but like many small farmers they feel the pressure of drought, industrialization and urban sprawl on the desert river’s limited flow.

Small farmers like Frank and Joe are still the biggest users of water in New Mexico, and are often accused of wasting water by the cities of Albuquerque and Santa Fe, as well as by computer-chip maker Intel, which has a factory nearby. Intel moved to New Mexico in the mid-’90s after buying up thousands of acres of farmland in order to use the land’s water rights, and the company now diverts 2.5 billion gallons of water per year to its factories. It returns most of the water to the Rio Grande—laced with volatile organic compounds, acids and other toxic waste.

The long-running battle for the Rio Grande’s water in and around Albuquerque is a struggle between opposing worldviews. On one side is the free market shibboleth of “efficiency,” which sees water merely as a resource and ultimately urges the use of all the water in a river before it runs, “wasted,” into the ocean. By this logic, water used at the Intel plant is more “productive” than water flowing on to an alfalfa field, because it generates much higher profits per acre-foot. It also has an alchemical power to attract industry and workers, and as a result, Albuquerque continues its sprawl across the arid mesas while its aquifer continues to shrink.

In the farmers’ worldview, however, the river means having a livelihood connected to the land; they have a right to it because they have always used it to sustain their families and communities. Rather than providing cash crops for export, traditional water management systems yield building materials, game, fish, mushrooms, herbs, berries and field crops. It is their very “inefficiency,” in market terms, that allows them to do this.

Conventional market logic says that if you build a dam and deprive someone of the water, then by all rights it’s yours to sell back to them. In a recent PBS interview, physicist and “water warrior” Vandana Shiva, who has traveled the world speaking out against the theft of the common, said: “Water is created in nature and not in markets. Markets can only allocate water and take it uphill to where the money is. Usually this means that those who have destroyed water resources by abuse and pollution get a new license to destroy it.”

Bolivia’s Water War

In Bolivia, before the passage of an infamous 1999 water law called Law 2029, traditional autonomous water distribution networks provided water to campesinos outside the city of Cochabamba. Within the city, only half the population was connected to the central water system; the rest got water from barrio-wide cooperatives, wells or rainwater cisterns.

Law 2029 handed all of these autonomous water systems over to private corporations without any compensation to the people who had built them, and prohibited people from drawing water from their wells without paying a utility fee. It even prevented people from collecting rainwater in cisterns. The law was passed largely to facilitate a government plan to sell off the city’s entire water rights and service. In September 1999, after years of pressure and negotiations by the World Bank and IMF, the Bolivian government signed a 40-year contract with the conglomerate Aguas del Tunari (AdT), making it the sole provider of water for personal and agricultural use—and sanitation services—to a city of about a million. AdT’s largest interest-holder is the US-based multinational corporation Bechtel.

Within weeks of taking over Cochabamba’s water system, AdT/Bechtel raised water prices roughly 200 percent, with the justification that it had improved service. In a way this was true; before the takeover most of the city relied on the local, sometimes haphazard, community water networks that in many areas only provided water during certain parts of the day or week. But the rates AdT/Bechtel charged for its “improved” service amounted to 25% or more of poor households’ incomes, and as a result many were left with no water at all. The company refused to reduce water rates or subsidize poorer families. In January 2000, tens of thousands of people took to the streets in Cochabamba demanding affordable water and the termination of Bechtel’s contract; the city was shut down for four days with road blocks and a general strike. February marked the start of three months of protest and blockades that shut down the city for weeks at a time.

This resistance was largely coordinated by a group called the Coalition in Defense of Water and Life (the Coordinadora). In March 2000, the Coordinadora held a referendum on the water contract: More than 48,000 people voted, and over 90 percent favored an end to increased water rates, Bechtel’s contract and Law 2029.

The government and AdT and Bechtel executives refused to listen, however, and the water war raged on. A 17-year-old boy, Victor Hugo Daza, was killed by a military sniper firing into a crowd. (The sniper was later acquitted of any charges.) All over the city people tore down AdT billboards and signs. Protests spread to La Paz and other cities; citizens demanded the ouster of then-president Hugo Banzer and an end to the influence of Bechtel. On April 8, 2000, Banzer declared a state of emergency, allowing the suspension of constitutional rights. Two days later, the government signed a contract with Coordinadora leader Oscar Olivera terminating the contract of AdT/Bechtel, promising to repeal the privatization law, releasing detained protesters, and, remarkably, turning the control of water over to the Coordinadora. The pueblo was victorious, but the clashes left at least four dead, up to 100 injured, and caused $110 million in damage to the city, measured in US dollars.

“Schools, businesses, everything was closed,” said Coordinadora member Raul Salvatierra during a recent interview in the organization’s headquarters just off the palm-lined main square of Cochabamba. “There weren’t even bikes in the streets. There were protests and blockades in every province. Bechtel was frustrated in their ambitions to make all this money off our water.”

Now, the Coordinadora and other organizations are working to develop a functioning form of water distribution that guarantees water to all, relies on democratic and inclusive decision-making procedures, and incorporates existing wells and cisterns. Under the new system, households are charged for the cost of transporting their water, the necessary upgrading of infrastructure, and the administration of the system. A study is currently under way to determine exactly what those costs are. Salvatierra, who is director of water distribution to the Zona Sur neighborhood under this new system, notes that the majority of households in the area still rely on their own independent water systems, wells and cisterns.

Though the community system may not be able to offer water 24 hours a day to everyone, and it will take a while to revamp the decrepit infrastructure, the vast majority of Cochabambinos still prefer it to AdT/Bechtel. They hope this serves as a model for other communities around the world fighting water privatization, and for the larger battle to protect water as a human right rather than an exploited for-profit resource.

The Future and Present

Because of resistance like that encountered in Bolivia, and because so many people in developing countries are unable to pay “market rates” for badly needed services, companies like Bechtel are starting to conclude that privatizing water systems in desperately poor countries may not be the best idea.

Despite IMF pressure, water giant Suez recently abandoned service contracts in Buenos Aires and Manila, Phillipines, and pulled out of a deal to build a water treatment plant in Puerto Rico, citing “poor economic conditions.” Instead, Suez and other companies are turning to the water networks of the European Union, North America, and China, where they expect to find less popular resistance and more stable economies. This could be seen as a victory, but it also simply moves the battlegrounds on which water wars will be fought.

In the US, the struggle against privatization of municipal water services has begun in Atlanta, Georgia; Lexington, Kentucky; and Stockton, California; among other places. While the campaigns against water privatization often begin with the goal of keeping water systems in the hands of government agencies, some activists have moved on to demand the return of water supplies to the communities’ direct control. Some are using the struggle against privatization as an opportunity to challenge the high social and ecological cost of the water grid and advocate for alternatives.

The commons philosophy rests on the idea that access to water is a human right and that protecting and conserving rivers and watersheds is a responsibility of human society. As Water Is Sweet’s Holly Wren Spaulding puts it, “How can you tell people that water is not a right, but a privilege?” [ L i P ]