“The Right to Water: Fulfilling the Promise”
Water is a limited natural resource and a public good fundamental for life and health. The human right to water is indispensable for leading a life in human dignity. Water, and water facilities and services, must be affordable for all.
–UN Committee on Economic, Social and Cultural Rights
What does it take to translate these noble words into reality for the poor of Latin America and the world?
Each day across the planet more than one billion people, a sixth of the world’s population, lack access to something basic and essential to life – water. In Latin America more than 75 million people lack water. More than two and a half billion people in the world (116 million in Latin America) do not have adequate sewage and sanitation services. In impoverished countries across the planet mothers with their children in tow must travel with bundles of heavy clothing to rivers and streams to wash clothes. They must haul even heavier buckets of water back to their homes for cooking and bathing.
Those considerable inconveniences are among the least of the worries and hardship brought on by the lack of access to water. More than two million people per year, mostly children, die from water-related diseases such as diarrhea and cholera.  In the country where I live, Bolivia, nearly one of out every ten children born dies before he or she turns five and water-related diseases are a leading cause of these deaths.
How can we bridge the staggering gap between the declaration of water as a human right and the actual achievement of its fulfillment? That is the overarching question for economic, social and cultural rights (ESCR) in general at the start of the 21st century and it is especially so for the right to water. Through international treaties such as the International Covenant on Economic, Social and Cultural Rights (ICESCR), the governments of the world have bound themselves, legally and morally, to a set of promises. Through what kinds of public policies – global, national and local – will we make sure that those promises are kept?
On the question of whether clean water and sanitation need to be expanded to the world’s poor there is little debate or disagreement. There is, however, a rampant debate, and an urgent one, about the right strategies for doing that. At the center of that debate are some essential questions, which this article will seek to discuss, both by example and analysis. Does expanding water and sanitation to the world’s poor require that we place the world’s water resources into private hands, making water a commodity owned and managed by private corporations? What should the poor pay for water services – what it costs to actually provide those services, or something less than that? If the poor are to pay less than the full-cost of their water, who shall pay the rest and how?
Lastly, in an era when global human rights accords are increasingly overshadowed by global economic accords that often work at cross-purpose (especially so regarding the right to water), by what strategy might the human rights community seek to make rights the higher priority?
The Push to Privatize Water
Across the world, and Latin America has been no exception, there is a powerful push underway to convert water into a private commodity – to put it under the control of private corporations, to price it according to the dictates of the marketplace, and to make the users of water, including the poor, pay the full cost of what it takes to provide it. This push to privatization is led by the World Bank (the Bank) and multinational corporations, such as Bechtel, that see decades of economic opportunities ahead through the control and sale of water resources.
Advocates for water privatization lay out a simple logic for their position. The challenge of providing water to vast unserved populations, they note, is a daunting one for poor nations, a complex and extremely expensive task of infrastructure development and financing. In the words of World Bank water officials, “Few countries have the resources, or strong enough public-sector management, to do this alone. Consequently, they look to public-private partnerships to build, maintain, and operate water systems.”
Privatization advocates argue that putting water into private, profit-seeking hands gives poor countries three desperately needed ingredients for meeting their water needs. First, it gives poor countries access to private sector investment capital, which they argue is essential to financing water system expansion. Second, it brings in skilled private sector managers who will run water operations more honestly and more efficiently than public water systems, so often plagued in poor countries by local corruption. Third, privatization brings with it access to the skilled technical support vital to managing and expanding water services.
Through its global water policies, the Bank also actively promotes a policy of “full-cost” recovery, requiring that water consumers carry the full burden of financing their water systems, including expensive infrastructure development and profit on corporate investment. Bank officials warn that if water users don’t have to pay sufficiently high prices for their water that they will waste it. In the words of the World Bank’s President, James Wolfensohn, “And the biggest problem with water is the wastage of water through lack of charging.”
The World Bank believes so strongly in its water privatization theology that it coerces the governments of poor countries to adopt it, making privatization and market pricing of water a condition of essential World Bank assistance. In one country after another World Bank officials have pushed governments down the path toward water privatization, and in at least one country, with results that have been both tragic and even deadly.
Bolivia and the Revolt Against Water Privatization
No place in the world has become a more visible symbol of the battle over who should control water than the small Andean city of Cochabamba, Bolivia. Bolivia is South America’s poorest nation, with the highest percentage of indigenous people (61.8% of the total population) in all of the Americas. Its five hundred year history since the arrival of the Spaniards is a tale of a nation rich in natural resources, with those resources stolen by empires abroad. “Cerro Rico” the small hill just outside of the city of Potosi almost single-handedly bankrolled the Spanish empire for three centuries, full of silver that was mined by Indian and slave labor (killing millions of those who mined it).
Cochabamba, Bolivia’s third largest city (population 600,000), has been growing rapidly for more than a decade. With the collapse of the country’s once-dominant mining industry and the increasing hardships of life in the countryside, hundreds of thousands of Bolivians have moved to the city’s temperate climates, seeking economic opportunity and constructing a sprawl of new neighborhoods that lack basic water and sanitation.
The city’s public water system, SEMAPA (Servicio de Agua Potable y Alcantarillado de Cochabamba) was incapable of keeping up with the demand for expansion. It was also notoriously plagued with acts of corruption (for example, water company officials in charge of buying pumps might extract a 10% kickback in exchange for steering business to a particular supplier) and efforts by local political parties to use the water company to their political advantage (by giving jobs to political supporters or steering new water development toward supportive neighborhoods).
The World Bank, which had given various packages of financial aid to the local water company over more than a decade, decided that the solution to Cochabamba’s water problems was to make the public water system private and made it clear to Bolivian officials that privatization was the price that Bolivia needed to pay for Bank financial assistance in the future.
In February 1996, Bank officials told Cochabamba’s Mayor that it was making a $14 million loan to expand water service conditioned on the city privatizing its water. In June 1997, Bank officials told Bolivia’s President that $600 million in international debt relief was also dependent on Cochabamba putting its water into corporate hands.  The Bank also advised the Bolivian government that, “No public subsidies should be given to ameliorate the increase in water tariffs in Cochabamba…” In other words, Cochabamba residents, including the poor, should pay the full price that the market demanded in order to provide them with water. While Bank officials would later claim that they opposed the details of the way Bolivia negotiated the privatization deal, the Bank’s role as the catalyst behind it is indisputable.
In 1999 the Bolivian national government, having been given a clear ultimatum from the Bank, initiated a process to put Cochabamba’s public water system in private hands. In a closed-door process with just one bidder, Bolivian officials signed an agreement leasing off Cochabamba’s water for 40 years to a mysterious new company named Aguas del Tunari – which would later turn out to be a subsidiary of the California engineering giant, Bechtel.
The water contract was, for Bechtel, a very lucrative arrangement. The agreement guaranteed the company an average profit of 16% per year every year over the 40-year life of the contract. Financing that profit (in addition to the costs of water development), however, required big increases in local water bills. Within weeks of its takeover of the water Bechtel’s company hit local families with rate increases of up to 200% and sometimes higher. Workers living on the local minimum wage of $60 per month were told to pay as much as $15 just to keep the water running out of their tap. Tanya Paredes, a mother of four who supports her family knitting baby clothes, saw her water bill increased from $5 per month to nearly $20, a rise equal to what it costs her to feed her family for a week and a half. “What we pay for water comes out of what we have to pay for food, clothes and the other things we need to buy for our children,” said Paredes.
Local resistance to the water price hikes was fierce. Led by a coalition of factory workers, irrigators, farmers, students and average consumers, the citizens of Cochabamba staged a series of broad protests demanding that the water price hikes be rescinded. Bolivian officials leapt to Bechtel’s defense and in February 2000 sent more than 1,200 police into the streets in an effort to break the protests, leaving dozens seriously wounded. When its efforts to break the protests failed, the government offered up a temporary rollback in the rate hikes, over Bechtel’s objections.
Subsequently, as leaders of the anti-privatization movement were able to obtain and analyze the Bechtel contract, they decided to amplify their demands, calling not just for a permanent rescinding of the water hikes but for cancellation of Bechtel’s contract altogether and a return of the water company to public hands. That demand was endorsed by a “public consultation” in which more than 50,000 people participated.
During the first week of April 2000 the citizens of Cochabamba shut down their city for a week – no automobiles on the streets, no schools or offices open – in a broadly-supported general strike demanding Bechtel’s departure. Seeking to protect the contract, President Hugo Banzer (a former 70s-era dictator) declared a state of martial law, shutting down television stations and arresting protest leaders from their homes in the middle of the night. The citywide strike, however, continued at full force and on April 10th Bechtel officials finally fled the country. The water company was taken over by a newly constituted board and management formed by city officials and leaders of the civic uprising.
In November 2001 the Bechtel Corporation launched a $25 million legal action against the people of Bolivia, in a little-known, highly secret trade tribunal (the International Centre for the Settlement of Investment Disputes – ICSID) operated by the same institution that forced Cochabamba to privatize its water in the first place, the World Bank. “We’re not looking for a windfall from Bolivia. We’re looking to recover our costs,” explained Michael Curtin, the head of Bechtel’s Bolivian water company. Bechtel’s claim, however, also includes a demand for a portion of the profits they expected to make and were not allowed to reap.
The World Bank venue for Bechtel’s case is so secret that members of the press and public are forbidden from being present at its proceedings and are not allowed to know when or where those proceedings are held, who testifies or what they say. The head of the tribunal hearing Bechtel’s case was directly appointed by a designee of the World Bank President. The case is currently pending amidst international calls for it to be opened to public scrutiny.
A Story Repeated Around the Region and the World
Bolivia’s struggles with water privatization and its revolt against it may have become the best known, but it by no means the only such story around the world. In a review of World Bank water-related loans granted in 2001 (after the Bank’s Bolivian water privatization fiasco), Public Citizen found that market pricing and/or privatization requirements were built into loans to eleven different countries (Burkina Faso, Comoros, Ecuador, India, FYR Macedonia, Niger, Russian Federation, Senegal, Ukraine, and the Republic of Yemen).
Elsewhere in Latin America, Buenos Aires privatized its water system in 1993, ceding control of the water to a subsidiary of the global water company Suez (Aguas Argentinas S.A.). As part of the deal, the privatized company was allowed to peg local water rates to the dollar. That dolarization, plus weak regulation by the government, allowed water prices to rise dramatically and allowed the company to earn an average profit rate of 19%. Former Argentine President Fernando de la Rua, speaking in 1999 as Mayor of Buenos Aires, said of the privatization, “Water rates, which Aguas Argentinas said would be reduced by 27% have actually risen 20%. These price increases, and the cost of service extension, have been borne disproportionately by the urban poor.” The Buenos Aires privatization deal has also been plagued by backpedaling on the part of the company in its commitments to expand sewage and other related services. In its dispute with the Agentine government Suez, like Bechtel, has sought redress from the World Bank’s secretive International Centre for the Settlement of Investment Disputes (ICSID).
A Flawed Economic Theology
Far from being an effective strategy for advancing rights, privatization and subjecting water access to the inequities of the private market has too often turned out to be a blunt instrument for violating human rights.
Human rights doctrine does not demand or expect the impossible. A government may have a solemn obligation to assure clean and affordable water for all, but finding the source, laying the pipe, and filling the taps will never happen overnight. Governments are bound by the principle of “progressive realization”, that in the absence of fulfilling those rights there must at least be a clear plan of how that fulfillment will be achieved. And the first criteria of any such plan is that the government shall take no regressive measures – i.e., “no deliberate steps backwards.” In other words, at minimum the state cannot make the situation worse. To do so, in itself, is a direct violation of international human rights law.
By any measure imaginable, the water price hikes imposed by Bechtel and other private water companies, and the government decisions that allowed them, were a clear and deliberate step backwards in terms of making water affordable and accessible for the poor. In fact, those government and corporate actions directly made water less affordable and accessible and in some cases, such as in South Africa, have been enforced with actual cutoffs of water altogether. Water privatization has not only led to the violation of people’s economic rights, but their political and civil rights as well. In Bolivia the government took up martial law and the bullet in the name of protecting a contract it negotiated in secret with a foreign corporation.
The failure of the World Bank’s privatization theology lies not in faulty implementation, as Bank officials are quick to suggest, but in the shaky assumptions upon which the Bank’s theory is built, notions which are not compatible with the notion of a universal right to water.
In theory, privatizing water is supposed to bring in skilled and effective managers, yet in Cochabamba, the foreign managers sent in by Bechtel proved so incompetent that they sparked a full-scale public rebellion and were chased from the country (not exactly something one adds to an executive resume). They were also so immoral that they sat contentedly in a five star hotel watching the images on television as the Bolivian government literally shot people on their behalf. 
In theory, privatizing water is supposed to provide the skilled technical assistance needed to effectively respond to water needs. Cochabamba, however, did not need to lay out huge sums to Bechtel to attract such expertise. It has been offered it, in abundance and for free, by the unions and workers that run public water systems across the US and Canada who would like to see the city’s public water system succeed and flourish.
Lastly, in theory, privatizing water is supposed to be essential in order to attract the substantial investment capital required for water expansion and development. Yet in Cochabamba the profit that Bechtel demanded and won for that investment – 16% per year every year for 40 years, guaranteed by the taxing authority of the government – was excessive to the point of near theft.
The power of Cochabamba’s story is not just as a tale of popular resistance but in how clearly it demonstrates the schism between the theory of water privatization and how that theory actually plays out on the ground in the lives of real people.
At the core of water privatization’s failure is a cautionary tale about the economist and his friend who fall into a deep whole. While his friend commences to panic, the economist remains cool and calm. “Not a problem,” says the economist. “First we assume a ladder.” In its forcing poor countries to place their water into the hands of corporations like Bechtel the World Bank suffers a similar ailment, “No problem, first we assume that the government has both the honesty and competence to fairly regulate a large multinational corporation.” In Bolivia, as in many other countries, the government demonstrated neither competence nor integrity in its dealing with Bechtel, with the Bolivian people paying the price. Instead of protecting its own people against Bechtel’s excesses, it took up arms to defend the company.
Cochabamba’s willingness to resist, and its success in doing so, is a result of history, missteps by both the Bolivian government and Bechtel, luck, and bravery. Bolivia has a long history of non-violent civil resistance (especially in labor conflicts in the nation’s mines) and is one of just a few countries in Latin America that have waged successful revolutions (in 1952). For many, especially the young, Cochabamba’s struggle to protect its water echoed powerfully with those earlier struggles.
If Bechtel had not raised rates so dramatically so soon after taking over (within just a few weeks) it is unlikely that it would have sparked such a public uprising. If the Bolivian government had not sought to crush public protest against the rate hikes, those protests may not have gained such strength. If Bechtel’s takeover had not been linked to government efforts to also strip rural water users of control over their wells and irrigation systems, it is unlikely that there would have been such a powerful joining or urban and rural protest. If the water revolt had not taken place during the same week that tens of thousands were gathering in Washington, DC to protest the policies of the World Bank and International Monetary Fund (in April 2000) it is unlikely that Cochabamba would have captured such broad global attention. In the end water and affordable access too it was something so basic that average people, both poor and middle class, were willing to fight for it at great personal risk.
Solving the Practical Problems of Water Access
The challenge of securing clean and affordable water for the world’s poor remains a daunting one and criticism of market-oriented, privatization approaches (however valid) still leaves that larger problem unsolved. On the practical side the challenge remains – how can poor countries adequately finance their water needs and efficiently administer their water systems.
The task of financing water for the poor itself begins with a question. Can the poor afford to pay what it costs to provide clean, accessible water? In wealthy nations, including the U.S., it an accepted matter of public policy that the poor cannot afford to pay the full cost of basic services (water, electricity, and telephone) nor are the poor expected to. Through “lifeline” utility rates and other mechanisms the poor are charged a discounted amount based on what they can afford, with subsidies from other sources filling in the gap. The poor in poor countries should be entitled to no less.
From where should these subsidies come? There are three basic options. One is to build subsidies for the poor into water rate structures (a common practice) in which wealthy water users pay more than their actual costs and the poor pay less. However, in poor communities, such as Cochabamba, the number of wealthy may be so few in relation to the larger numbers of poor that cross-subsidies between water uses are not, by themselves, enough to pay the bill. Post-Bechtel, Cochabamba’s public water company found that it could cover all of its monthly operating costs from revenues generated by water users (at the pre-Bechtel rates) but were left with nothing additional to cover the costs of expansion.
A second option is to have local water systems receive a general subsidy through the national tax system. That broadens the base of responsibility for financing water development, but still may fall well short in poor countries already plagued by high public deficits and insufficient public resources to meet the basic needs of the people.
To fulfill the right to water in poor countries it may well be that financing must come, not only from those countries’ own resources, but from aid and subsidies from abroad as well. If we have a genuine global agreement that water is an essential right then we need an accompanying global agreement to pay the bill, and not through private investment that demands a king’s ransom in return. The push, by the World Bank and others, for water systems in poor countries to become economically self-sufficient will not work if the people using that water are so poor that they can’t afford the cost. Just as we deem it reasonable that more well-to-do water users would subsidize poor ones, in order to fulfill the right to water it may simply be an economic necessity for rich nations to subsidize access to water in poor ones, through foreign assistance and the like.
It is also in everyone’s interest – the poor being served and the governments and agencies contributing funds – that public water companies be honest and well run. The corruption and inefficiency that too often afflict public utilities in poor countries is of little surprise in situations where economic opportunity is scarce and where local elites are used to taking the opportunities (honest and otherwise) that they can grab onto. Two reforms are essential.
The first is transparency – decisions, documents, and the other tools of public accountability must be open for public view and civic groups need to be equipped to understand them. Institutions like the World Bank and regional development banks (such as the Interamerican Development Bank) could help by offering technical assistance and training to citizen groups interested in learning how to monitor their public water systems.
The second reform deals with instituting genuine public control. In Cochabamba, the reconstituted public water company now has a board that includes members directly elected by the public. Public boards are the mechanism for assuring public control and strengthening these boards with training, staffing and support ought also to be a key priority for the World Bank and other funders.
Whether water systems end up in public hands or private, there needs to be a clear and accountable system of public regulation (be it by a local board, some other public official, or a mix). That includes public accountability in terms of system-wide issues (such as rate structures, subsidies, monitoring investments and purchases, etc.) and at the level of individual consumers (addressing complaints over poor services, billing problems, etc.). None of these reforms are as romantic or as attention grabbing as a revolt over privatization, but they are the building blocks of local water systems that are genuinely committed to getting people clean and affordable water and doing so honesty and efficiently.
The Larger Picture – Putting Rights First
Alongside the attempt to solve the local and practical problems of water access is a larger challenge, one that is global and will set the course of water policy and human rights for a century to come. How do we put human rights, like that to water, above all the other commercial interests at stake? How do we put human rights first?
The establishment of the human right to water is part of a half century-long noble effort by the nations of the world to establish human rights as a matter of international law. In instruments and treaties such as the Universal Declaration of Human Rights, the International Covenant on Economic Social and Cultural Rights, the Convention on the Rights of the Child, and others, nations have agreed that our basic human dignities include not only civil and political protections but also economic, social and cultural rights as well.
However, for these same sixty years the governments of the world have also been methodically establishing a very different set of global rules, aimed at binding countries to a collection of economic rules that often violate human rights. These rules can be found in international trade accords such as the World Trade Organization (WTO), the North American Free Trade Area (NAFTA), the proposed Free Trade Area of the Americas (FTAA), and in the economic commands issued to poor countries by international financial institutions such as the World Bank and the International Monetary Fund (IMF).
For poor governments, faced with a choice between honoring human rights accords or complying with the commands of international economic institutions, the choice is sadly clear. If they violate human rights, governments may face complaints or at worst international investigation. In contrast, the World Bank and IMF can cutoff millions of dollars in aid. Decisions by international trade courts can extract hard cash. In Bolivia, under pressure from the World Bank and Bechtel, the government probably never gave the human right to affordable water a second thought. If human rights law had had some teeth, Bechtel’s contract and its water price hikes could never have stood.
The challenge of this century is to reconcile the clear and growing conflict between these two emerging systems of global governance – human rights vs. global economic rules – in a way that it makes it legally clear and enforceable that human rights come first. In this effort to establishment the supremacy of global human rights we will need to be united and strategic. A strategy that aims simply to bash or abolish institutions like the World Bank, or to scuttle proposed agreements like the Free Trade Area of the Americas (FTAA), may provide us ample opportunities for chest-thumping but it does not stand much chance of winning. Alternatively, if we take an approach based on tinkering with the internal details of these institutions and agreements the global human rights movement will only get lost in that detail.
A different approach, one that draws its power from its simplicity, would be this. All of the world’s various economic accords, from sweeping ones such as the WTO to smaller bilateral trade agreements, should be amended to contain a simple “human rights first” clause, along the lines of: “All provisions of this agreement are declared subservient to the following global human rights accords…” The United Nations, through it various human rights committees should then be given authority to investigate and adjudicate conflicts between economic accords and human rights accords. Similar provisions should be added as well to the charters of the World Bank, International Monetary Fund and other international financial institutions.
What would such a strategy gain us? First, it would raise the debate over economic globalization up above the static of detail to a level of global principle – which comes first, the rights of people or of corporations? Second, from an organizing perspective it would give human rights organizations and citizens around the world a clear and common objective around which to rally. Third, from a legal perspective, it would lay the foundation for the kinds of human rights vision that we need to have not just two or ten years from now, but for the long term construction of global economic justice.
To be sure, such a proposal will draw sharp criticism. Critics will charge that human rights disputes will get in the way of important steps toward global economic development; that as a result it will make the poor worse off; that such provisions would never be enforced, given the lack of enforcement mechanisms already existent in the UN system; and that such provisions will threaten national sovereignty. However, by putting human rights at the head of any global economic accord we would not stifle economic development, but assure that it is guided by people’s genuine needs.
As for national sovereignty, the governments of the world are already bound to international human rights law and economic agreements signed between nations should be no less attentive to those human rights agreements. Lastly, while it is true that a huge amount of work would need to be done to develop the mechanisms and institutions needed to enforce a “human rights first” approach, with that work we would be constructing an essential pillar for global justice, akin to the rights agreements themselves.
The rules of the new global system are under construction. If we fail to establish now, the principal that human rights come first, that opportunity may easily slip away. In engaging that task we will be protecting, for generations to come, not just the right to water, but all of the basic economic, social and cultural rights whose fulfillment is essential.
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Jim Shultz is the executive director of the Democracy Center.