Project Censored 2001 - Story #1: World Bank and Multinational Corporations Seek to Privatize Water

1. World Bank and Multinational Corporations Seek to Privatize Water

International Forum on Globalization: Special Report
June 1999/ from PRIME 7/10/00
Title: The Global Water Crisis and the Commodification of the World's Water Supply
Author: Maude Barlow
www.ifg.org/bgsummary.html

THIS
July/August 2000
Title: Just Add Water
Author: Jim Shultz

In These Times
Water Fallout: Bolivians Battle Globalization
MAY 15, 2000
Author: Jim Shultz
www.inthesetimes.com

Canadian Dimension
February 2000
Title: Monsanto's Billion-Dollar Water Monopoly Plans
Author: Vandana Shiva
www.purefood.org/Monsanto/waterfish.cfm

Canadian Dimension
February 2,000
Title: Water Fallout
Author: Jim Shultz

San Francisco Bay Guardian
May 31, 2000
Title: Trouble on Tap
Author: Daniel Zoll
www.sfbg.com/News/34/35/bech2.html

San Francisco Bay Guardian
May 31, 2000
Title: The Earth Wrecker
Author: Pratap Chatterjee
www.sfbg.com/News/34/35/bech1.html

Corporate News Coverage: Toronto Globe & Mail 5/11/00

Faculty Evaluators: Tom Jacobson Ph.D., Tom Lough Ph.D., Leilani Nishime Ph.D.
Student Researchers: Christina Van Straalen, Mike Graves, and Kim Roberts

Global consumption of water is doubling every 20 years, more than twice the rate of human population growth. According to the United Nations, more than one billion people already lack access to fresh drinking water. If current trends persist, by 2025 the demand for fresh water is expected to rise by 56 percent more than the amount of water that is currently available.

Multinational corporations recognize these trends and are trying to monopolize water supplies around the world. Monsanto, Bechtel, and other global multinationals are seeking control of world water systems and supplies.

The World Bank recently adopted a policy of water privatization and full-cost water pricing. This policy is causing great distress in many Third World countries, which fear that their citizens will not be able to afford for-profit water. Grassroots resistance to the privatization of water emerges as companies expand profit taking. San Francisco's Bechtel Enterprises was contracted to manage the water system in Cochabamba, Bolivia, after the World Bank required Bolivia to privatize. When Bechtel pushed up the price of water, the entire city went on a general strike. The military killed a seventeen-year-old boy and arrested the water rights leaders. But after four months of unrest the Bolivian government forced Bechtel out of Cochambamba.

Bechtel Group Inc., a corporation with a long history of environmental abuses, now contracts with the city of San Francisco to upgrade the city's water system. Bechtel employees are working side by side with government workers in a privatization move that activists fear will lead to an eventual take-over of San Francisco's water system.

Maude Barlow, chair of the Council of Canadians, Canada's largest public advocacy group, states, "Governments around the world must act now to declare water a fundamental human right and prevent efforts to privatize, export, and sell for profit a substance essential to all life." Research has shown that selling water on the open market only delivers it to wealthy cities and individuals.

Governments are signing away their control over domestic water supplies by participating in trade treaties such as the North American Free Trade Agreement (NAFTA) and in institutions such as the World Trade Organization (WTO). These agreements give transnational corporations the unprecedented right to the water of signatory companies.

Water-related conflicts are springing up around the globe. Malaysia, for example, owns half of Singapore's water and, in 1997, threatened to cut off its water supply after Singapore criticized Malaysia's government policies.

Monsanto plans to earn revenues of $420 million and a net income of $63 million by 2008 from its water business in India and Mexico. Monsanto estimates that water will become a multibillion-dollar market in the coming decades.

UPDATE BY MAUDE BARLOW: This story is of vital importance to the earth and all humanity. The finite sources of freshwater (less than one half of one per cent of the world's total water stock) are being diverted, depleted, and polluted so fast that, by the year 2025, two-thirds of the world's population will be living in a state of serious water deprivation. Yet governments are handing responsibility of this precious resource over to giant transnational corporations who, in collusion with the World Bank and the World Trade Organization, seek to commodify and privatize the world's water and put it on the open market for sale to the highest bidder. Millions of the world's citizens are being deprived of this fundamental human right, and vast ecological damage is being wrought as massive industry claims water once used to sustain communities and replenish nature.

Recently, a civil society movement has been created to wrest control of water back from profit-making forces and claim it for people and nature. Called the Blue Planet Project, this movement is an alliance of farmers, environmentalists, Indigenous Peoples, public sector workers, and urban activists who forced the issue of water as a human right at the March 2000 World Water Forum in the Hague. The Project is holding the first global citizens' summit on water in Vancouver in July 2001. One major project has been support of the water activists in Cochabamba, Bolivia, who, led by union leader Oscar Olivera, forced the giant engineering company Bechtel to leave the country and stopped a World Bank-imposed privatization scheme that more than doubled the price of water to the local people.

The mainstream press has been reluctant to tell this story. Our fight in Canada started with concern over the potential of bulk water exports sought by some politicians and corporations. Water is included in both NAFTA and the WTO as a tradable good; once the tap is turned on, corporate rights to water are immediately established. But our mainstream press generally supports economic globalization and these trade agreements and will permit only selective reporting on opposition positions. Blue Gold, my paper on the commodification of water published by the IFG in 1999, has been printed in several languages and sold all over the world but has been ignored by the North American media.

The story of the destruction of the world's remaining freshwater sources is one of the most pressing of our time; there is simply no way to overstate the nature of this crisis. And yet when the mainstream media report on it-which is not nearly often enough or in sufficient depth-they seldom ask the most crucial question of all. Who owns water? We say the earth, all species and all future generations. Many in power have another answer. It is time for this debate.

For more information on this story and the Blue Planet Project, please contact The Council of Canadians: phone, 613-233-2773; fax, 613-233-6776; address, 502-151 Slater Street, Ottawa, ON. Canada, K1P 5H3; web-site, <www.canadians.org>.

Maude Barlow is the National Chairperson of the Council of Canadians and a director with the International Forum on Globalization.

UPDATE BY JIM SHULTZ: Eight months have passed since the people of Cochabamba forced the departure of a subsidiary of the Bechtel Corporation and restored control of the region's water supply into public hands. The story has brought unprecedented attention to the issue of water privatization and important events continue to unfold, both locally and internationally.

Locally, Cochabamba's residents are working closely with the newly reconstituted water company, SEMAPA, to extend water service to more families. In Alto Cochabamba, one of the city's poorest neighborhoods, a community water tank had remained uncompleted for years and became a local trash dump. Today the tank is in full operation, bringing public water into the neighborhood for the first time. Civic leaders say they are building a utility that is run by the people rather than by corrupt politicians or an overcharging corporation beyond local democratic reach.

As a direct result of the Democracy Center's reporting, Cochabamba's water rebellion is also drawing substantial world attention and solidarity. In December, a delegation of leading citizen action and labor groups from the U.S. and Canada came to Cochabamba for an international conference on water privatization. These groups and others have also pledged their support against Bechtel's latest attack, a lawsuit for as much as $20 million-compensation for losing their lucrative Cochabamba contract. It is an action that pits one of the world's wealthiest corporations against the people of South America's poorest nation.

Bechtel has been actively shopping for the friendliest international forum possible and apparently has decided its best chances lie in a suit under a Bilateral Investment Treaty (BIT) signed previously between Bolivia and Holland. Late last year Bechtel quietly reshuffled corporate papers to place its subsidiary under Dutch registration, in preparation for such action. International groups are gearing up to help Cochabamba leaders fight Bechtel's lawsuit. "This is going to be the first major international civil society fight against a corporate legal action under such a treaty," says Antonia Juhasz of San Francisco-based International Forum on Globalization.

The Democracy Center's articles, which ran primarily in the progressive press and were distributed widely via the Internet, also attracted publication in some dedicated city dailies, such as the San Jose Mercury, San Francisco Examiner, and Toronto Star (thanks to distribution by the Pacific News Service). Most mainstream coverage of the story, however, was limited to the dispatches of the Associated Press Bolivian correspondent. AP correspondent Peter McFarren came under fire for stories that eagerly repeated the Bolivian government's and Bechtel's public line, falsely blaming the water uprising on "narcotraffickers." One reader of the Democracy Center's articles noted the difference in the reporting and uncovered that McFarren was, at the same time, actively lobbying the Bolivian Congress to approve a controversial project to ship Bolivian water to Chile. When that conflict of interest was reported to AP, McFarren suddenly submitted his resignation.

More information on the story, including subscription to the free e-mail newsletter in which the stories originated, is available at "www.democracyctr.org".

Jim Shultz: JShultz@democracyctr.org

UPDATE BY PRATAP CHATTERJEE: Engineering News-Record magazine ranks Bechtel as the biggest construction company in the United States; it is also the biggest private company in northern California. It has built mega-projects from the Alaska pipeline and the Hoover dam to the San Francisco Bay Bridge, from natural gas pipelines in Algeria to refineries in Zambia. Hardly a day passes without the company signing a new contract somewhere in the world; all told it has worked on 19,000 contracts in 140 countries in the past century, many of them with taxpayer money. Yet an extensive review of Bechtel contracts over the last 100 years shows that time and again the company has been found guilty of sleazy political connections. In fact, if there's a pattern to Bechtel's public works projects, it's this: The company works under cover of the utmost secrecy and routinely jacks up the cost of projects far beyond the original bid, sticking taxpayers with huge, often unexpected bills.

If these cost overruns do generate some headlines, the environmental and social impacts of the company's construction activities rarely get a mention: managing bombsites for nuclear testing in Nevada, helping hack off the top of a sacred mountain on the Pacific island of New Guinea to build the world's largest gold mine, planning pipelines for Saddam Hussein in Iraq, drawing up development plans for a man accused of killing half a million Hutu refugees in the Democratic Republic of the Congo (former Zaire), building toxic refineries for Chevron in Richmond that destroy the San Francisco Bay.

Bechtel's management and spin doctors went into overdrive when staff at headquarters read the San Francisco Bay Guardian story and started to ask hard questions. We obtained an internal memo that explained why they had decided not to respond to the story:

"We're not currently considering legal recourse (for) a number of reasons:

* To win a libel or defamation lawsuit, Bechtel would have to show that the journalists, activists, or politicians in question either knew that such statements were false or entertained serious doubts about their accuracy. This could be very difficult to prove.

* A lawsuit would give Bechtel's most vocal critics another public forum in which to reprise their claims. Defense attorneys would be permitted to engage in wide-ranging discovery into Bechtel's nonpublic business affairs-including making substantial document requests and taking depositions from Bechtel employees-to probe whether or not the critical claims were true.

* Bechtel would have to prove the amount of damages suffered as a result of the alleged defamation. Bechtel would have to demonstrate some monetary loss, which might be difficult (and would, again, open us up to discovery of data)."

The mainstream press regularly writes about the contracts that Bechtel wins and completes but they rarely ever dig deeper to find out about the impact of these projects. No mainstream press has ever looked at a broad overview of the company's history or been able to probe into the company's inner workings: this is partly because the company refuses to give the media access to the company staff and management.

Pratap Chatterjee: pchatterjee@igc.org