Water: What the European Commission Doesnt Want You to Know
11 April, 2003
and an exchange of e-mails reveal that the European Union has asked
72 countries to open up their markets to private water companies.
came after a period of intense cooperation and consultation between
water companies and trade representatives of the European Commission,
which is the executive body of the European Union, leading up to the
most recent round of World Trade Organization negotiations in 2001.
were scheduled to discuss one of the WTOs flagship accords: The
General Agreement on Trade in Servicesa set of rules covering
international trade in such areas as energy, telecommunications, education,
tourism, transportation and water.
The new meeting
would extend the scope of the original agreement and explore ways of
liberalizing trade in services around the world. The idea was straightforward:
Members of the WTO would negotiate with each other to make it easier
for services and the companies that provide them to move from one country
to another. Members of the WTO could list services for which they guaranteed
access to foreign suppliers and then request that a member open up markets
for which it had not made commitments; foreign companies could then
offer to supply the services. The terms of the treaty were negotiated
by the governments of WTO member states.
negotiations, the European Commission sent out requests for liberalizing
services to 109 countries; 72 of those countries were asked to open
up their water markets. The requests, which are supposed to be secret,
were leaked to the Polaris Institute, a Canadian non-profit advocacy
group, which promptly posted the documents online. Until then, no one
from the general public had seen them.
A close analysis
of the documents and e-mails obtained by the Center of Public Integritys
International Consortium of Investigative Journalists from a watchdog
group based in Amsterdamthe Corporate Europe Observatory reveals
that officials of the European Commission met and communicated regularly
with representatives from various large water companies and that the
requests put forth by the EU reflect the interests of the water companies,
with little input from the community at large.
documents reveal is that the [EC] clearly identifies with the interests
of the corporations when it designs its GATS negotiating goals,
Olivier Hoedeman of Corporate Europe Observatory said. [The Commission]
is using GATS to pursue the market expansion interests of large EU-based
water corporations and nothing else.
The e-mail communications
also illustrate the value attached to the opinion of the water companies.
like to re-iterate the importance we attach to receiving input from
your company on the issues we discussed, an e-mail sent in June
2002 by Ulrike Hauer from the trade division of the European Commission
to officials in Thames Water and RWE, stated. In order to be able
to integrate any input into our negotiations, it would be most helpful
if we could receive any information you would be able to provide us
with by the end of this month.
Suez, Vivendi, Aqua Mundo and Thames Water, which is a subsidiary of
RWE, attended a meeting on May 17, 2002, in Brussels with the European
Commission and several representatives from other European companies
to discuss water-related services in GATS.
meeting a questionnaire was sent to each of the water companies asking
them about current foreign regulations and market access to water companies.
One of the main objectives of the EU in the new round of negotiations
is to achieve real and meaningful market access for European services
providers for their exports of environmental services, Hauer wrote
in the questionnaire. The document also asked the companies about obstacles
they faced when trying to enter new markets.
were not the only ones consulted during the process. The European Services
Forum, a large industry association that protects the interests of service
industries, was also an integral part in preparing the European Commissions
2001, João Aguiar Machado, head of the services and e-commerce
unit of the European Commissions trade division, sent a letter
to Pascal Kerneis, the managing director of ESF, asking for his help
in preparing GATS requests.
very much welcome industrys input, Machado wrote, both
in terms of finding out where the problems currently lie and in making
specific requests. Without ESF input, the exercise risks becoming a
purely intellectual one that may miss out on important issues.
exclusively related to water, the ESF connection is often cited as another
example of the close ties between the European Commission and industry.
ESF has worked
closely with the European Commission to come up with guidelines for
GATS and they have been a key player, Clare Joy, of the World Development
Movement in London, said.
European Commission officials, this relationship with the business sector
is not out of the ordinary.
negotiation the European Commission conducts, its normal practice
to consult with all stakeholders, Arancha Gonzalez, trade spokeswoman
for the European Commission, said. We do that not only with business
but also with civil society.
or Water Distribution
civil society was asked for input into the negotiations
early on is unclear. But a large number of civic groups, from watchdog
organizations to trade unions, have expressed concern with the GATS
process, fearing that it will help to dismantle public services in poor
countries around the world in exchange for profits from developed nations.
To allay criticism, the European Community released a document in February
2003 stating that the EC have thus modulated its requests so as
to take account of the level of development of individual countries.
EU requests do not touch on the issue of access to [water] resources.
The EU was telling
critics of the agreement the same thing: What they have told us
is that to least developed countries they make no requests for water,
Erik Wesselius from Corporate Europe Observatory said in October 2002,
a few months before the leaks.
The leaked documents,
however, seem to tell a different story. The list of countries who received
a request for access to water runs the spectrum in size and development,
from the United States and Australia to Bangladesh and Tanzania.
When asked about
the discrepancy, EU officials say there is no real contradiction. The
EC is not requesting access to water resources, Gonzalez said.
because the EU makes a clear distinction between water resources
and distribution. Although it is true that the EC is not
asking for access to a countrys water resources, it does ask for
liberalization in the water distribution sector, as well as wastewater,
a sector that is often carried out by the same water companies.
sector is where Europe has something to offer that could be of
benefit to different countries, Gonzalez said.
Not only does
the European Union benefit from this trade in services, supporters say,
but it will also help countries develop economically. The liberalization
of services in developing countries could bring these countries an additional
$6,000 billion in revenue by 2015, according to the European Commission.
What it could mean
The World Trade
Organization has often defended GATS by stating that none of the countries
have to accept any of the requests. This therefore means that all 72
countries could reject the requests to open up water markets.
however, that the privatization of water from these GATS requests are
related to the way in which many developing countries are often forced
to bring in the private sector by international financial institutions.
(See Promoting Privatization)
is functioning under a certain context and that is the context of IMF,
World Bank policies where countries are forced to privatize their public
services, Wesselius said. GATS is fixing those measures
for long periods
making it very difficult for countries to retrace
WTO is quick to emphasize that restrictions can be made on how much
a service is liberalized, activists against the GATS agreements say
that this kind of foresight is nearly impossible in developing nations,
where lack of resources make it difficult to analyze current markets.
Whats more, the EU has received only 25 requests from other nations,
showing that developing countries do not have a lot to ask for in service
critics say, European Union requests do not take into account how local
communities may feel about water privatization and the depth of local
the EU asks for opening up water markets in Bolivia, where in early
2000 citizens in the city of Cochabamba staged massive protests upon
the arrival of International Waters Aguas del Tunari, which increased
the price of water. The protests turned violent and resulted in at least
one related death from the confrontation with the police. After several
months of confrontation, the company left Cochabamba.
The World Development
Movement also argues that several of the countries being targeted for
water liberalization, such as Honduras and Tunisia, already have successful
water delivery operations.
the liberalization could cost the country severely because there is
a provision in the GATS agreements that locks a country in for three
years and allows companies to seek compensation if it is deemed that
they were treated unfairly by a local government, said Ruth Caplan,
of the non-profit organization, Alliance for Democracy.
for the secrecy surrounding these negotiations, many observers speculate,
is that these trade talks in services could be used as bargaining chips
in further trade talks. The EU could, for example, offer to ease market
access to agriculture in developing countries if they agree to open
up their service sector, Wesselius suggested.
The same kind
of bargaining could go on in developed nations. In the United States,
health insurance companies want to expand abroad, particularly in Europe.
Therefore, Caplan speculated, an exchange could occur between the liberalization
of the health sector in Europe in exchange for opening up water markets
in the United States.
There has been
no official reaction from the European Commission on these leaks and,
according to officials, one will not be issued.
had already been posted in our internet site, Arancha Gonzalez,
trade spokeswoman for the European Commission, said. Not the complete
documents, but they were in a very extensive summary form.
has so far only made available a very brief summary of its requests
to 109 countries, Joy said in an E-mail message. It is roughly
10 pages long. The documents that have been leaked run into 1000s of
At the top of
each leaked request the following is written: Member states are
requested to ensure that this text is not made publicly available and
is treated as a restricted document.
for responding to the GATS requests was March 31, 2003. Several nations
have missed the deadline, although this is not uncommon in trade negotiations.
Two countries who have responded and made their offers public are Australia
and the United States. For now, both have agreed to offer access to
their wastewater sector, but not to their potable water.