Roiling the Waters
A debate on water privatization, part five
15 Jul 2004
Everyone knows that water is the stuff of life. But is it best viewed as a commodity or as part of the commons? Should providing safe, affordable water be the role of governments, corporations, or partnerships between the two? On Tuesday, July 13 (dates may vary for local stations), the PBS show P.O.V. is airing "Thirst," a documentary by Alan Snitow and Deborah Kaufman that addresses these and other issues about water privatization. In partnership with P.O.V., Grist is hosting a week-long debate on the merits of water privatization between Peter Cook, executive director of the National Association of Water Companies, and Maude Barlow and Sara Ehrhardt, anti-privatization activists with the Council of Canadians.
Dear Maude and Sara:
According to our agreement this is my last offering in this dialogue. I have provided my comments together with the facts and figures upon which they are based. While I have welcomed your opinions and considered your views, I found little if any support for your arguments. Your opinions, while long on rhetoric, fall short on facts.
For example, in your last posting you say, "It has been widely acknowledged that bringing in large multinational corporations with a thirst for profits has not solved the problems of access, affordability, or accountability in these communities."
"Widely acknowledged" by whom?
Statistics we provided contradict your accusation. Examples include: 97 percent contract renewal for public-private partnerships (which include more than just the chemical delivery and short-term contract work that you mentioned); water-service business growth of 19 percent per year; and support for public-private partnerships from the U.S. Conference of Mayors. All of these facts strongly affirm that private water companies are, indeed, playing an important role in the provision of water service.
Another example of your rhetorical opinion unsupported by fact is the accusation that water companies working in more than one country "may leave our governments open to trade disputes in the future." I would be very interested if you have any legal documentation and examples supporting this theory, because the facts I have state otherwise.
International agreements and laws do not take precedence over U.S. law in the provision of water. The World Trade Organization itself is on record stating that international trade agreements are irrelevant to water issues, regardless of ownership. In a WTO document entitled "GATS Fact and Fiction, Misunderstandings, and Scare Stories: The WTO Is Not After Your Water," the WTO clearly states, "it is of course inconceivable that any Government would agree to surrender the right to regulate water supplies, and WTO Members have not done so."
Another flaw in your arguments against the private sector is that virtually all the private projects you have criticized are foreign. Unfortunately, they don't relate to what is happening in the United States. The business, regulatory, and political environment in the U.S. is substantially different, so these projects shouldn't be used to draw conclusions about private water's activities and successes in the U.S. market.
In addition, I cannot agree with your conclusion that where public-private partnerships were prematurely ended, the private partner was to blame and thus the entire concept of partnerships or private ownership cannot work. As I have explained in my previous emails, the reasons for ending those projects were very complicated and cannot simply be blamed on the private partners or flaws in the partnership model. The few projects you have cited in your criticism do not constitute a compelling case that private-sector solutions do not work, either domestically or internationally, especially in the face of substantial facts and statistics to the contrary.
Another fact is that water customers in the U.S. enjoy many government protections. Private water-service systems, whether domestic- or foreign-owned, must comply with the same health and economic regulations in the U.S. The U.S. Environmental Protection Agency and state agencies regulate drinking-water quality and standards, regardless of who owns or operates the system. Furthermore, and this is another important fact, it is not uncommon for public-private partnership contractual agreements to require environmental performance levels that exceed state and federal requirements.
Economically, a foreign owner's rates, profits, and capital investments are regulated by the same mechanisms that regulate a domestic-owned system -- the state Public Utility Commissions in the case of privately owned utilities, and the municipalities in the case of public-private partnerships.
Foreign companies, like domestic companies, have a business reputation to maintain, which is a strong incentive to provide excellent service. Though corporate headquarters may be abroad, the water-utility management and operations are always locally controlled because of the nature of the service provided. The consumer in Ohio is drinking Ohio water, managed and delivered by Ohioans.
I am also struck that some of your positions seem inconsistent. On the one hand, you admirably state concern for the poor and that access to water is essential. You also concede that the municipally run systems in Bolivia were in "disarray," to use your word, prior to the private companies' participation. However, in spite of acknowledging the failures of the municipally run systems, you still prefer the municipal model, which brought about the disarray, the high rates, and lack of access for the poor in the first place.
As you may or may not know, several NAWC members have internal programs to assist the disadvantaged in paying their water bills. The programs take different forms depending on the company and state, but they are all designed to assure that water is available to all. The NAWC and our members have also been at the forefront of advocating a federal low-income customer water bill assistance program based on the existing Low Income Home Energy Assistance Program.
Private water companies are working in the real world to address and solve the problems and challenges involving the efficient and reliable delivery of safe water. Those who truly care about these issues should not let themselves be clouded by misinformation. Those who review the facts, carefully and dispassionately, will conclude that private water companies, either through public-private partnerships or utility ownership, have a strong record of bringing efficiency, savings, and environmental responsibility to communities and municipalities. And, in virtually all of these arrangements, the control and ownership of water remains in the hands of local or regional government entities.
Since our agreement provides you, Maude and Sara, the final comment in this dialogue, I urge you to set aside mere opinion and focus on the facts, so we can work together to embrace solutions that will truly meet the needs of water customers both domestically and internationally. Water is too precious a resource and the needs of those we serve too important for us to seek confrontation instead of viable solutions.
Sincerely,
Peter Cook
Dear Maude and Sara:
According to our agreement this is my last offering in this dialogue. I have provided my comments together with the facts and figures upon which they are based. While I have welcomed your opinions and considered your views, I found little if any support for your arguments. Your opinions, while long on rhetoric, fall short on facts.
For example, in your last posting you say, "It has been widely acknowledged that bringing in large multinational corporations with a thirst for profits has not solved the problems of access, affordability, or accountability in these communities."
"Widely acknowledged" by whom?
Statistics we provided contradict your accusation. Examples include: 97 percent contract renewal for public-private partnerships (which include more than just the chemical delivery and short-term contract work that you mentioned); water-service business growth of 19 percent per year; and support for public-private partnerships from the U.S. Conference of Mayors. All of these facts strongly affirm that private water companies are, indeed, playing an important role in the provision of water service.
Peter Cook, executive director of the National Association of Water Companies.
International agreements and laws do not take precedence over U.S. law in the provision of water. The World Trade Organization itself is on record stating that international trade agreements are irrelevant to water issues, regardless of ownership. In a WTO document entitled "GATS Fact and Fiction, Misunderstandings, and Scare Stories: The WTO Is Not After Your Water," the WTO clearly states, "it is of course inconceivable that any Government would agree to surrender the right to regulate water supplies, and WTO Members have not done so."
Another flaw in your arguments against the private sector is that virtually all the private projects you have criticized are foreign. Unfortunately, they don't relate to what is happening in the United States. The business, regulatory, and political environment in the U.S. is substantially different, so these projects shouldn't be used to draw conclusions about private water's activities and successes in the U.S. market.
Another fact is that water customers in the U.S. enjoy many government protections. Private water-service systems, whether domestic- or foreign-owned, must comply with the same health and economic regulations in the U.S. The U.S. Environmental Protection Agency and state agencies regulate drinking-water quality and standards, regardless of who owns or operates the system. Furthermore, and this is another important fact, it is not uncommon for public-private partnership contractual agreements to require environmental performance levels that exceed state and federal requirements.
Economically, a foreign owner's rates, profits, and capital investments are regulated by the same mechanisms that regulate a domestic-owned system -- the state Public Utility Commissions in the case of privately owned utilities, and the municipalities in the case of public-private partnerships.
Foreign companies, like domestic companies, have a business reputation to maintain, which is a strong incentive to provide excellent service. Though corporate headquarters may be abroad, the water-utility management and operations are always locally controlled because of the nature of the service provided. The consumer in Ohio is drinking Ohio water, managed and delivered by Ohioans.
I am also struck that some of your positions seem inconsistent. On the one hand, you admirably state concern for the poor and that access to water is essential. You also concede that the municipally run systems in Bolivia were in "disarray," to use your word, prior to the private companies' participation. However, in spite of acknowledging the failures of the municipally run systems, you still prefer the municipal model, which brought about the disarray, the high rates, and lack of access for the poor in the first place.
As you may or may not know, several NAWC members have internal programs to assist the disadvantaged in paying their water bills. The programs take different forms depending on the company and state, but they are all designed to assure that water is available to all. The NAWC and our members have also been at the forefront of advocating a federal low-income customer water bill assistance program based on the existing Low Income Home Energy Assistance Program.
Private water companies are working in the real world to address and solve the problems and challenges involving the efficient and reliable delivery of safe water. Those who truly care about these issues should not let themselves be clouded by misinformation. Those who review the facts, carefully and dispassionately, will conclude that private water companies, either through public-private partnerships or utility ownership, have a strong record of bringing efficiency, savings, and environmental responsibility to communities and municipalities. And, in virtually all of these arrangements, the control and ownership of water remains in the hands of local or regional government entities.
Since our agreement provides you, Maude and Sara, the final comment in this dialogue, I urge you to set aside mere opinion and focus on the facts, so we can work together to embrace solutions that will truly meet the needs of water customers both domestically and internationally. Water is too precious a resource and the needs of those we serve too important for us to seek confrontation instead of viable solutions.
Sincerely,
Peter Cook
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From the Archives
Drink Different, by Maude Barlow, Sara Ehrhardt. A debate on water privatization, part four.
The Right to Privacy, by Peter Cook. A debate on water privatization, part three.
Wrung Dry, by Maude Barlow, Sara Ehrhardt. A debate on water privatization, part two.
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