The
EU Finances Privatization Of Water
By Abel Esteban Cabellos
20 April, 2007
Axix
Of Logic
Since
2005, the European Union has provided funding to the Public-Private
Infrastructure Advisory Facility (PPIAF), a public-private consortium
in charge of providing technical assistance in processes of privatization
of infrastructure for vital public needs such as water or sanitation.
Since 1999, PPIAF has spent more than 22 million euros in 37 poor countries
to promote a private water model that marginalizes broad sectors of
the population and has sparked popular upheavals.
Although the United Nations
and some governments of poor countries officially recognize access to
drinking water as a human right, and despite the alleged obligation
of states to safeguard, protect and respect all human rights, in practice,
access to drinking water is a pipe dream to approximately 1.1 billion
people, and is now considered in many states to be a marketable service.
Far from safeguarding this basic right, according to Thomas Fritz, researcher
of the Berlin-based non-profit association Center for Research and Documentation
Chile-Latin America, “multilateral and bilateral development agencies
are playing a key role in the privatization of water services and sanitation
in countries of the southern hemisphere,” preparing the way, sponsoring
and initiating privatizations.
By mid 2005, the European
Commission (EC) became a donor to the Public-Private Infrastructure
Advisory Facility (PPIAF), granting a total amount of one million euros
from the 9th European Development Fund (EDF) for a period of two years.
Since then, EuropeAid, the EC's Cooperation for Development Agency,
participated in several meetings held by the executive body of the consortium,
and has deepened its participation through the ACP Business Climate
Facility (known as BizClim, providing assistance to boost the development
of the private sector in Africa, the Caribbean and Pacific regions),
an institution that receives the entirety of its funding from the 9th
European Development Fund and which plans to reproduce some of PPIAF's
functions.
PPIAF's mission is aimed
at “helping to eliminate poverty and to achieve sustainable development
in developing countries by facilitating private sector involvement in
the development of infrastructures.” To achieve this goal, PPIAF
funds technical assistance on both the process of introducing the private
sector and the model of privatization to be implemented in water, energy,
transport and telecommunications. It also supports activities that seek
to persuade public opinion on the benefits of these reforms.
According to the consortium,
since its founding in 1999, approximately 22 million US dollars have
been spent on activities in the water and sanitation sector, an amount
that, according to recent research by the NGO World Development Movement
(WDM), was found to be involved in one or more processes of privatization
in this sector in 37 countries. The WDM’s criticism centers on
the use of public development funds to pay consultants who, on the one
hand, are promoting models that have systematically failed to provide
these services to the poorest sectors of the population, provoking in
some cases major social conflicts (e.g. the “water war”
in Bolivia); and on the other, are manipulating public opinion by means
of activities they call “propaganda.” Thus, the NGO alleges
that the PPIAF is interfering in the countries’ internal debate
on the model for provision of public services.
Alarmed by the results of
this research, dozens of NGOs from all over the world have written to
the European Commission, demanding an end to its support for PPIAF,
though no response has yet been received. The organizations suggest
that the EU instead create a mechanism to provide support only to reforms
within the public sector, or cooperation between public bodies in the
water sector. After research revealed that in at least 17 of 37 countries,
privatization is a condition being imposed by international financial
institutions for access to grants, loans or debt relief, the NGOs say
that “PPIAF is an institution that is playing a central role in
the pressure being exerted by some donors on developing countries in
order to privatize their water and sanitation sectors.”
An activist with Mumbai Paani
in India had this to say:
“Based on an analysis
of previous cases, it would seem that the World Bank is in command,
while PPIAF only funds the studies.”
Mumbai Paani is a coalition
of groups in civil society platform that opposes the process of privatization
of water and sanitation services of K-East in Mumbai, India, an initiative
promoted by PPIAF with the World Bank as the agency for implementation.
According to researcher Absar
Jafri, the municipal corporation of Mumbai, with no consultation or
debate between representatives of the city council, charged PPIAF and
the World Bank with the task of reforming the water services in one
of the cities' most profitable sectors, in exchange for a “pitiable”
donation of $600,000 by PPIAF.
The latter firm contracted
the French company Castalia (involved in another failed privatization
in Manila, Philippines) to conduct studies that would eventually lead
to contracting of services to foreign companies, a procedure in accordance
with internal proceedings of the World Bank. According to Jafri:
“... the World Bank,
humiliated in Delhi (where popular mobilizations paralyzed their plans)
is searching desperately for a successful example of its failed privatization
model, and has chosen the profitable services of K-East to achieve this
end”.
Although Spain does not directly
participate in PPIAF, several citizen organizations, coordinated by
Ecologistas en Acción (Environmentalists in Action) have initiated
contacts with political representatives in search of support for the
above demands.
Private sector development and business negotiations “In the light
of the importance of corporate activity for strategies of growth, development,
employment, generation of income and poverty reduction”, the European
Commission announced in a communiqué to the Council of the European
Parliament in 2003 its support for private sector development as a crucial
elements of its development policy.
This belief has taken the
form of the nearly 3 billion euros granted by the 9th European Development
Fund (EDF) to facilities for a series of African, Caribbean and Pacific
countries (ACP) earmarked for promotion of private sector business,
development of the financial sector, reform of public enterprises and
the development of structural sectors such as energy and water through
the development of public-private partnerships (known as PPP, this concept
has been a target for heavy criticism defenders of public services for
being an euphemistic form of referring to privatization).
At the same time, in 2002
the EU launched a Water Initiative (EUWI) designed to “contribute
to the achievement of the Millennium Development Goals (MDGs) and WSSD
targets for drinking water and sanitation”. Strongly criticized
by multiple NGOs from the very start, three years after EUWI's launch,
“not a single additional person has received access to water and
sanitation” says a report published by WaterAid and Tearfund,
as consequence of, amongst other factors, its “focus on attracting
private financing despite the proven disinterest of international investors
in financing water and sanitation projects in developing countries”.
On the other hand, the EC's
official policy considers UN Development Goals to be a priority for
its commercial negotiations with third countries. Nevertheless, according
to the Corporate Europe Observatory's investigator Christina Deckwirth,
the liberalization of the water services was one of the European Commission's
key objectives in negotiations for the liberalization of the trading
of the services, both on a multilateral level (WTO's Millennium Development
Round), and in bilateral and regional negotiations (EU-Mercosur, EU-ACP).
Abel Esteban Cabellos, member
of the Corporate Europe Observatory (CEO), Amsterdam. Translated into
English by Iris Buehler and revised by James Hollander, Tlaxcala*
Original Source in Spanish:
DIAGONAL
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