By: Nnaemeka Nwangene
According to the advocacy organization food and water Europe; entrusting water utility operation to private enterprises is an inadequate method of realizing the human right to water. For advocacy organization food and water Europe; it’s about water=life: their report on how privatization undermines the human right to water shows that poor rural communities with weak governments can better deliver safe, clean and affordable water to their residents by partnering with one another.
On the 15th of October 2010 the United Nations General Assembly declared that access to clean water and sanitation is an essential human right- this is according to the food and water Europe executive director Wenonah Hauter-“yet the same communities that struggle to access this essential resource are also vulnerable to privatization schemes that hike up prices and leave the poor unable to afford basic water services”. Approximately 2.6 billion people worldwide lack access to basic sanitation services this is according to the UN General Assembly. While the World Bank has recommended that governments partner with private companies to better deliver drinking and wastewater services to communities in developing areas, such approaches have in many occasions actually undermined the ability of the poor to access these services.
In September 2018, the United Nations released a ground breaking report highlighting the detrimental effects of privatization on human rights and the poorest in society. Philip Alston, the UN special Rapporteur on extreme poverty and human rights criticized the World Bank, the International Monetary fund and the United Nations for aggressively promoting the wide spread privatization of basic services and governments for undermining human rights. In the words of Philip Alston “states can’t with their human rights obligations by delegating core services and functions to private companies on terms that they know will effectively undermine those rights for some”. So in essence it is clear that privatization of water and sanitation should be provided for by the government, is not being provided for by the government and by privatization the costs of government increases as well as that of low income households. This privatization exercise/policy hasn’t been efficient nor is it cost effective for the poorest and most vulnerable in the society.
The UN Rapporteur Philip Alston argues that “privatization is premised on assumptions fundamentally different from those that underpin respect for human rights, such as dignity and equality. Profit is the overriding objective and considerations such as equality and non- discrimination are inevitably sidelined. Regulatory and other constraints are viewed as obstacles to efficiency and accountability for other than economic outcomes sits uneasily at best. Rights holders are transformed into clients and those who are poor, needy or troubled are marginalized. There is no substitute for the public sector to coordinate policies and programs to ensure respect for human rights. Yet privatization directly undermines the viability of the public sector and redirects government funds to subsidies and tax breaks for corporate actors”. Despite the evidence, proponents of privatization continue to argue that only corporations can fill the funding gap required to achieve the Sustainable Development Goals (SDGs) including for water and sanitation. Public private partnerships (PPPs), including blended finance; are falsely promoted as a way for governments to access new capital and mitigate risk. In almost all cases the capital is not new, it’s borrowed from banks at a higher rate of interest than governments would pay, inflexible contracts often lasting 25-30 years, force governments to prioritize ever increasing repayments over other spending priorities. This can lead to spending cuts in other areas, further weakening the rights of most vulnerable and marginalized. Moreover as the catastrophic failure of a number of PPPs in the United Kingdom has taught us the risk always remains with the public purse. In October 2018, the United Kingdom’s conservative government announced that it would abolish new PF1 and PF2 schemes, following the collapse of the major outsourcing company Carillion, the failure of numerous contracts in health, education and transport, and overwhelming public opposition to PPPs. This is significant as the United Kingdom was one of the first countries to develop PPPs and is currently paying over £10 billion a year for over 700 deals. Nevertheless, despite their failure in the United Kingdom, the conservative government continues to promote PPPs to some of the poorest countries in the world. According to the analysis, private operation can create obstacles to the human right to affordable and accessible water and sanitation services. For instance in the following countries:
⮚ In Guayaquil, Ecuador water prices increased by 180 percent after the water system there was taken over by Interagua, a subsidiary of Betchel.
⮚ Customers of the private water provider in Jakarta, Indonesia experienced a 258 percent increase in tariffs and poor water quality, while only 54 percent of low income households were provided with new water connections.
⮚ In England, water and sanitation have been fully privatized since 1989, regional water companies many of which are owned by banks, private equity firms or foreign investment funds have been criticized for using profits to pay dividends rather than invest in infrastructure, increasing household bills by over 40 percent above inflation and paying minimal taxes and excessive executive salaries. Research has shown that privatization in England costs consumers an additional £2.3 billion a year, or £100 per household in Scotland where water and sanitation is provided by a publically owned corporation, household charges remain lower than in England.
⮚ In Nigeria, government provides water for the rich who live in Government reserved areas (GRAs) while the landlords sell water to their tenants living in their houses and who pay rent monthly or annually as the case may be. Also some landlords do not allow their tenants to fetch water from the well which was dug with the assistance of the tenants instead the tenants walk a certain distance to fetch water.
⮚ A similar pattern of exclusion was also evident in La Paz and El Alto, Bolivia where a private contractor was accused of denying water service to 80,000 families. Many couldn’t afford the cost of setting-up a connection, which for the poorest households cost the equivalent of more than two years of food expenses.
Lack of easy access to water carries severe public health consequences, resulting in 1.5 million deaths a year. High water prices brought on by privatized service deprived consumers of their right to water often with disastrous health and social consequences. High water prices in Guayaquil, Ecuador were linked to poor water quality and hepatitis outbreaks.
While privatized water service has been shown to obstruct the right to water, research shows that municipalities can deliver safe, affordable water to residents by pooling resources in public-public partnerships (PUPs). According to food and water Europe, Public-Public Partnerships can mitigate price increases and allow communities to avoid other problems associated with privatized water service because they eliminate the profit margin that is mandatory in privatized water delivery.
Public –public partnerships can help improve system capacity and promote fair and equitable water service at a lower cost while upholding the basic rights of consumers to water, yet their implementation could be greatly expedited with help from the development community.
Three years into the Sustainable Development Goals (SDGs), we are already behind target on providing universal access to safe water and sanitation. Decades of evidence has shown us that rather than providing a solution, privatization is exacerbating the water and sanitation crisis. Sadly, this is only set to get worse, as climate change continues to limit access to clean water, and the Sustainable Development Goals are promoted as a business opportunity. To get the Sustainable Development Goals progress back on track, we need to reclaim the agenda and make the case for the alternative which is that; only quality publicly provided water and sanitation services can deliver Sustainable Development Goals number 6 and the human right to WASH to genuinely leave no one behind.
There is an alternative to privatization; evidence from 235 cases of water re-municipalization in 37 countries between 2000 and 2015, shows that quality and publicly provided water and sanitation services are far more accountable, better quality, financially transparent, efficient and cost effective. They are better at meeting the needs of the poorest and most vulnerable in society and respecting the human rights to these services.
We call on the World Bank and the European commission to invest in water and sanitation aid; to help communities implement Public- Public Partnerships, rather than encouraging the proliferation of privatized water-said Wenonah Hauter”( the food and water Europe, Executive Director).