OPEN LETTER FROM CONCERNED CITIZENS AROUND THE WORLD IN SUPPORT OF THE
GHANA NATIONAL COALITION AGAINST THE PRIVATISATION OF WATER
Dear Mr. James Wolfensohn, President of the World Bank
Dear Mr. Henri Proglio, CEO of Vivendi Environnement (Veolia)
Dear Mr. Mestrallet, CEO of Suez
Dear Mr. Larry Magor, CEO of Biwater,
Dear Mr. J.F. Talbot, CEO of SAUR
We, the undersigned, are writing as individuals and members of organizations, many of whom know firsthand the tragic impacts of corporate failures in the water sector from Bolivia to the Philippines and from Argentina to South Africa. Given this history of failed water privatization projects, many perpetrated by the very same corporations that are now seeking contracts in Ghana, we ask that you listen to the concerns of the Ghana National Coalition Against the Privatisation (CAP) of Water. The Ghana National CAP of Water, made up of women's organizations, student and youth groups, tenants, residents and community associations, religious groups, trade unions, environmental groups, and human rights groups has united around the goal of ensuring access to water for all Ghanaians by 2008. The National CAP of Water has concluded that the achievement of this goal is being undercut by World Bank and government programs that promote (1) an international market price for water, and (2) private sector contracts to foreign multinational corporations for the management of the Ghanaian water system. We ask that these programs cease and the Ghanaian people be given a chance to develop alternative proposals.
The National CAP of Water calls for:
* A thorough examination of public sector options. Reform and restructuring of the public sector water utility is a viable option, requiring investments in capacity-building, infrastructure, greater local management autonomy and local community accountability.
* Full participation of all sectors of civil society in decision-making about reforms in the water sector.
* Full public disclosure of all documents, bids, proposals and negotiations involving private sector contracting to foreign multinational corporations for the management of the Ghana water system.
The undersigned organizations and individuals are particularly concerned about the proposed private sector water contract in Ghana because many of us have experienced serious problems with private sector water delivery in our own countries. A few examples are highlighted below.
BOLIVIA: In 1999, the Bolivian government granted a 40-year contract for the water services of Cochabamba to a subsidiary of the corporate giant, Bechtel. The terms of the contract were so draconian that citizens, unable to survive under the burden of the new water prices, began to organize to drive the company out. Water rates increased immediately - by 100 to 200 percent in some cases. Small farmers and the unemployed were especially hard hit. In a country were the minimum wage is less than $100 per month, many families were struggling to pay water bills of $20 or more. In April 2000 after months of civil disobediance and angry protest in the streets, the president of Bolivia was forced to terminate the water privatization contract. Bechtel, in retaliation, sued the government of Bolivia for $25 million. Bechtel claimed it had lost investment and “potential profits” as the company was expected to earn an annual income of $58 million.
PHILIPPINES: In 1997, the Filipino government granted a 25-year contract to Maynilad Water (co-owned by Suez and the Lopez family) to provide water services to part of Manila. Civil society groups criticized the undemocratic and non-transparent nature of the privatization process, rate hikes (which include an adjustment tied to exchange rate fluctuations), unmet promises of rehabilitation and expansion of water services (especially to the urban poor) and weak regulatory and oversight practices. In a Christmas 2001 press release the Asian Labor Network said, “In effect Maynilad Water has deprived the Filipino family of three full meals or three kilos of rice. The ordinary vendor will now have to surrender one full day of income to pay for the cost of water.” Following bad management and the Asian financial crisis, Suez is now using various legal manuevers to try to rid itself of responsibility for the debt. And, Maynilad Water is negotiating with the Filipino government, attempting to pass its debt to the public sector in a debt-equity swap. As is too often the case, the people of the Philippines will pay the burden of this debt.
ARGENTINA: In 1993, the Argentine government granted a 30-year contract to Aguas Argentinas (majority owner Suez) to provide water and sewerage services to the city of Buenos Aires. During the first eight years the company earned a 19% profit rate on its average net worth, but after 2002 the peso crisis left the company in debt. The contractual clause that permitted Aguas Argentinas to link water prices to the U.S. dollar, and ensure hefty profits, was overruled by an emergency decree of the government. Linking consumer water prices to the peso exchange rate had meant on-going price increases which were borne disproportionately by the urban poor. Non-payment for water and sanitation services were as high as 30%, service cut-offs were common, and women and children bore the brunt of the health and safety consequences. Aguas Argentinas reneged on its contractual obligation to build a sewerage treatment plant and over 95% of the city's sewerage flows directly into the Rio del Plata. Now Suez threatens legal action in the World Bank court, claiming $180 million in damages, to force contract re-negotiations.
SOUTH AFRICA: In 1999, the British water multinational Biwater developed a joint venture with a South African group and was awarded a 30-year contract to provide water in Nelspruit, South Africa. The company has nearly tripled the consumer price of water and been quick to cut-off service for those who cannot afford to pay. The price hikes and persistent complaints that the company fails to provide service to poor areas, have caused some consumers to boycott paying their bills. Contractual commitments to expand access are being hampered, according to Biwater officials, by the lack of revenue and lack of access to credit. Conflict and social tension continue as citizens insist that access to clean and affordable water is a human right.
These are just a few of the water privatization failures suffered by people around the world. We call on you to listen to the concerns of the Ghana National CAP of Water. There is significant opposition to private transnational corporate involvement in the water sector. There must be an end to the external pressure, including that of the World Bank, that promotes private sector contracting to foreign transnational corporations of vital natural resources such as water.
Sincerely,
Sara Grusky
Water for All Campaign
Public Citizen
Phone: (202) 454-5133
Website: httpwww.wateractivist.org
For more information on the Water For All Campaign please visit: http://www.citizen.org/cmep/
Please also see:
GHANA NATIONAL COALITION AGAINST THE PRIVATISATION OF WATER
(CAP OF WATER) (Photo Source) http://www.isodec.org.gh/isodec/water_NCAP.htm
GHANA NATIONAL COALITION AGAINST THE PRIVATISATION OF WATER
Dear Mr. James Wolfensohn, President of the World Bank
Dear Mr. Henri Proglio, CEO of Vivendi Environnement (Veolia)
Dear Mr. Mestrallet, CEO of Suez
Dear Mr. Larry Magor, CEO of Biwater,
Dear Mr. J.F. Talbot, CEO of SAUR
We, the undersigned, are writing as individuals and members of organizations, many of whom know firsthand the tragic impacts of corporate failures in the water sector from Bolivia to the Philippines and from Argentina to South Africa. Given this history of failed water privatization projects, many perpetrated by the very same corporations that are now seeking contracts in Ghana, we ask that you listen to the concerns of the Ghana National Coalition Against the Privatisation (CAP) of Water. The Ghana National CAP of Water, made up of women's organizations, student and youth groups, tenants, residents and community associations, religious groups, trade unions, environmental groups, and human rights groups has united around the goal of ensuring access to water for all Ghanaians by 2008. The National CAP of Water has concluded that the achievement of this goal is being undercut by World Bank and government programs that promote (1) an international market price for water, and (2) private sector contracts to foreign multinational corporations for the management of the Ghanaian water system. We ask that these programs cease and the Ghanaian people be given a chance to develop alternative proposals.
The National CAP of Water calls for:
* A thorough examination of public sector options. Reform and restructuring of the public sector water utility is a viable option, requiring investments in capacity-building, infrastructure, greater local management autonomy and local community accountability.
* Full participation of all sectors of civil society in decision-making about reforms in the water sector.
* Full public disclosure of all documents, bids, proposals and negotiations involving private sector contracting to foreign multinational corporations for the management of the Ghana water system.
The undersigned organizations and individuals are particularly concerned about the proposed private sector water contract in Ghana because many of us have experienced serious problems with private sector water delivery in our own countries. A few examples are highlighted below.
BOLIVIA: In 1999, the Bolivian government granted a 40-year contract for the water services of Cochabamba to a subsidiary of the corporate giant, Bechtel. The terms of the contract were so draconian that citizens, unable to survive under the burden of the new water prices, began to organize to drive the company out. Water rates increased immediately - by 100 to 200 percent in some cases. Small farmers and the unemployed were especially hard hit. In a country were the minimum wage is less than $100 per month, many families were struggling to pay water bills of $20 or more. In April 2000 after months of civil disobediance and angry protest in the streets, the president of Bolivia was forced to terminate the water privatization contract. Bechtel, in retaliation, sued the government of Bolivia for $25 million. Bechtel claimed it had lost investment and “potential profits” as the company was expected to earn an annual income of $58 million.
PHILIPPINES: In 1997, the Filipino government granted a 25-year contract to Maynilad Water (co-owned by Suez and the Lopez family) to provide water services to part of Manila. Civil society groups criticized the undemocratic and non-transparent nature of the privatization process, rate hikes (which include an adjustment tied to exchange rate fluctuations), unmet promises of rehabilitation and expansion of water services (especially to the urban poor) and weak regulatory and oversight practices. In a Christmas 2001 press release the Asian Labor Network said, “In effect Maynilad Water has deprived the Filipino family of three full meals or three kilos of rice. The ordinary vendor will now have to surrender one full day of income to pay for the cost of water.” Following bad management and the Asian financial crisis, Suez is now using various legal manuevers to try to rid itself of responsibility for the debt. And, Maynilad Water is negotiating with the Filipino government, attempting to pass its debt to the public sector in a debt-equity swap. As is too often the case, the people of the Philippines will pay the burden of this debt.
ARGENTINA: In 1993, the Argentine government granted a 30-year contract to Aguas Argentinas (majority owner Suez) to provide water and sewerage services to the city of Buenos Aires. During the first eight years the company earned a 19% profit rate on its average net worth, but after 2002 the peso crisis left the company in debt. The contractual clause that permitted Aguas Argentinas to link water prices to the U.S. dollar, and ensure hefty profits, was overruled by an emergency decree of the government. Linking consumer water prices to the peso exchange rate had meant on-going price increases which were borne disproportionately by the urban poor. Non-payment for water and sanitation services were as high as 30%, service cut-offs were common, and women and children bore the brunt of the health and safety consequences. Aguas Argentinas reneged on its contractual obligation to build a sewerage treatment plant and over 95% of the city's sewerage flows directly into the Rio del Plata. Now Suez threatens legal action in the World Bank court, claiming $180 million in damages, to force contract re-negotiations.
SOUTH AFRICA: In 1999, the British water multinational Biwater developed a joint venture with a South African group and was awarded a 30-year contract to provide water in Nelspruit, South Africa. The company has nearly tripled the consumer price of water and been quick to cut-off service for those who cannot afford to pay. The price hikes and persistent complaints that the company fails to provide service to poor areas, have caused some consumers to boycott paying their bills. Contractual commitments to expand access are being hampered, according to Biwater officials, by the lack of revenue and lack of access to credit. Conflict and social tension continue as citizens insist that access to clean and affordable water is a human right.
These are just a few of the water privatization failures suffered by people around the world. We call on you to listen to the concerns of the Ghana National CAP of Water. There is significant opposition to private transnational corporate involvement in the water sector. There must be an end to the external pressure, including that of the World Bank, that promotes private sector contracting to foreign transnational corporations of vital natural resources such as water.
Sincerely,
Sara Grusky
Water for All Campaign
Public Citizen
Phone: (202) 454-5133
Website: httpwww.wateractivist.org
For more information on the Water For All Campaign please visit: http://www.citizen.org/cmep/
Please also see:
GHANA NATIONAL COALITION AGAINST THE PRIVATISATION OF WATER
(CAP OF WATER) (Photo Source) http://www.isodec.org.gh/isodec/water_NCAP.htm