Capitalism Fouls Things Up
The Ontario Tory government is moving quickly, now late in its electoral mandate, to sell our water resources, both municipal water treatment plants and distribution systems, to private, profit-motivated corporations. In this column we want to draw your attention to what may not seem, at first glance, to be a major issue.
Why is it important issue that workers mobilize in opposition to water privatization? The answer is a combination of environmental, labour and economic reasons. Water is a natural resource that Canadians take for granted, until our taps run dry or we find that the drinking water we have always relied upon has become unfit for consumption due to some kind of pollution.
There are many aspects to water questions, including human and ecosystem heath, economics and international trade. What approach should socialists promote to preserve the world's water resources and ensure a sustainable water supply for future generations, while at the same time guaranteeing an equitable distribution of water today? In this issue we explore some of the important issues that are associated with this vital natural resource for Canadian workers.
Water is the life-blood of our planet, essential for human life. We live on a planet with enough water to support all life yet human living patterns mean that many people live without adequate supplies of clean water for their daily living needs. In many areas of the world today, water has become a scarce resource leading many to predict that wars of the future will be fought over access to water.
In recent years evidence has mounted to highlight the deteriorating quality of Canadian water. There are several reasons to explain our present predicament: increasing use of agricultural chemicals on soils across the country, industrial pollution spewing across both land and water masses, untreated sewage still being dumped into our lakes, rivers and coastlines, and climate change which is responsible for our lakes being at their lowest levels in 34 years. It goes on and on.
As well as the deteriorating quality of Canadian water and the environmental threats outlined above, our water resources are also under attack from two other directions: privatization of our water supply and services, and pressures to export our water to foreign customers. Historically, in Canada, as in many other countries, water has been treated as a public resource. However one of the consequences of the rise of neo-liberalism in the 1980s and early 1990s has been mounting pressure to privatize our water resources. This has coincided with new attempts to export Canadian water to foreign markets.
The first moves to privatize water occurred in Great Britain during the regime of Tory leader, Margaret Thatcher. Under her vicious, right-wing government, deregulation and privatization of both water services and the electric utility industry advanced rapidly in the late '80s. Privatization of water supply resulted in escalating prices and poorer quality service to the consumer, fat company profits and windfall executive salaries and bonuses.
As a result of the negative publicity generated by the British example, the major water multinationals adapted their strategy to deflect attention and minimize public criticism. Rather than the typical 100 percent investor-owned water and wastewater utility in Great Britain, the practice in North America has been to subtly establish their initial breech in the public system through short term (3-5 yr) operations and maintenance contracts. What this amounts to in reality is nothing less than privatization through the back-door.
Under this system, ownership remains in municipal hands, but management and operation of the plants is privately-controlled. In order to win the contract, private companies promise to cut costs. However, the only way that they can deliver on this promise is by downsizing the work force and trimming maintenance and subcontracting services, which decreases wages. In other words, jobs are cut and service deteriorates.
In the U.S., private companies have succeeded in gaining a foothold in the water industry by these very means. Now that they have established a model of private control over public water, they are seeking to export (to impose!) their model on Canadian municipalities operating under increasingly stringent financial constraints.
In a move designed to kick-start privatization in the water industry the Ontario Conservative government passed Bill 107, transferring all responsibility for water services, except regulation, to the municipalities. Bill 107 gives municipalities the right to sell their water and wastewater facilities to private corporations. The government also intends to sell the publicly-owned Ontario Clean Water Agency (OCWA). OCWA operates many small and medium size water and wastewater facilities in the province. Once OCWA is sold, many small communities will be left at the mercy of private corporations for the provision of water services.
To this point the international, privately-owned water industry has been dominated by British and French corporations (See Table 1). In North America most of the water and wastewater companies vying for a share of the public market are either affiliated to or subsidiaries of large European multinational corporations. The strength and geographical breadth of these companies is illustrated by the large number of countries in which they are already active (Table 1).
| Table 1: The Major Players in the International Water Industry | |||
| Company | Country of Origin | Nations active in | Pop. served |
| Generale des Eaux | France | 38 | 65M |
| Lyonnaise des Eaux | France | 39 | 65M |
| Severn Trent | Great Britain | 9 | 15.1M |
| United Utilities | Great Britain | 10 | 7.5M |
| Source: Public Services Privatisation Research, World Wide Web, May 17, 1998 | |||
Water workers in Canada are primarily represented by the Canadian Union of Public Employees (CUPE), the major union amongst municipal workers across the country. CUPE, in conjunction with a number of other organizations (see below), has launched a fight-back campaign to protect public ownership of our water resources. According to Judy Darcy, CUPE national president, "Public ownership and control of Canadian water resources and water services is at stake. As corporations look to privatize water services in hundreds of Canadian municipalities and turn our water resources into an export commodity, the public needs to be alerted and encouraged to tell the water corporations, keep your hands off our water."1 CUPE is organizing water watch committees in local communities and calling on Canadians to join them in the struggle to defend public ownership of water.
The struggle to prevent the privatization of water is occurring around the world. Aside from the ongoing struggles in Great Britain, workers in South Africa represented by the South African Municipal Workers Union (SAMWU), have been fighting similar moves to sell their water to the private sector. SAMWU argues that "international experience showed workers lose jobs, water prices rise and quality drops when private companies take over concessions to manage municipal supplies. SAMWU is demanding a moratorium on all negotiations between local authorities and the private sector over privatisation of municipal services."2
In the past two years private companies have tried to obtain the right to sell Canadian water to markets in the U.S. and Japan. The idea of selling Canadian water to the U.S. has been broached before, particularly a scheme hatched in the early 1960s. The proposal, at that time, was to construct an artificial waterway, known as the Rocky Mountain Trench, running south along the eastern edge of the Rocky Mountains, diverting water primarily from river systems in northern Canada to the rapidly developing American south-west. At that time the idea was abandoned due to political opposition and rising Canadian nationalist sentiment.
The problem now surfacing, and which is certain to increase in coming decades, is that the U.S. can no longer avoid the fact that it has been mining its underground water resources at a rate far beyond nature's ability to replenish its natural aquifers. This is most apparent in the American south-west, a region that is naturally grassland or semi-arid desert. Since the post-war period, minor outposts in this region have grown into major metropolises, e.g., Phoenix and Tucson, Arizona.
The American south-west is the most prominent example of unsustainable water usage in the U.S.. The U.S. consumes more water per capita than any other country in the world. Rather than examine its own wasteful water consumption practices American corporate interests would rather find ways to access or appropriate water from Canadian sources.
The issue of exporting Canadian water can be looked at from a number of angles, including consequences arising out of NAFTA, threats to Canadian water quality and aquatic ecosystem health, and concerns about whether Canadians should be responsible for bailing out an unsustainable American system that wastes vast amounts of water on green lawns and an ever-growing network of pesticide-dependent golf courses for the well-to-do.
Under the restrictive terms of the NAFTA agreement, if we permit water to be traded as a commodity, American companies become eligible to participate in any water market that develops. Any attempt by Canadian governments to limit access to Canadian water by American companies would be subject to sanctions and law suits under NAFTA. Furthermore, American companies would be guaranteed a proportional share of any water exports. These concerns are multiplied by the increasing trade liberalization envisioned in the proposals for the Multilateral Agreement on Investment (MAI), which virtually removes all legal obstacles to any corporation from any country that may wish to export water from Canada to the United States or elsewhere.
Our water resources are a vital part of our heritage. We cannot permit them to be wasted and abused, or sold to the highest bidder for short term profit!
Last month in Ottawa, a Common Front to protect water was launched. Initial participants include the Canadian Union of Public Employees (CUPE), the Canadian Environmental Law Association and the Council of Canadians. The Front called "on the Chretien government to deliver the goods on legislation designed to prohibit the export of Canadian water and to safeguard public control of this resource."3
The corporations that dominate the international economy want to treat water as just another commodity to buy and sell, and coincidentally to reap windfall profits. They would like to see the British example (i.e., privatization of water) spread around the world. Multinational corporations, such as Exxon and Royal Dutch Shell, have controlled our primary sources of energy, i.e., fossil fuels, for the past century. Now they want to own our water resources.
Privatized water, sold as a commodity, will only benefit the small percentage of the population composed of corporate executives. If their goal of privatizing water is achieved, the major losers in this battle will be, first of all, workers in the industry who will see their numbers and wages drastically cut. Next will be all consumers who will witness dramatic price rises and deteriorating service. Finally, our environment will suffer the consequences that result from tampering with delicate ecosystems that have developed over the course of millions of years. Transferring water between different river drainage basins will lead to incalculable environmental disasters. These reasons justify our firm stand against water privatization and water exports.
No to privatization of water!
No to water exports!
No socialism without environmental sustainability!
No environmental sustainability without socialism!
1. Common Front To Protect Water. "Our Water Is Not For Sale", Press Release, Ottawa, Ontario, December 7, 1998.
2. Weekly Mail and Guardian, November 4, 1997.
3. Common Front To Protect Water. Op cit., December 7, 1998.