Development & Aid, Europe, Headlines

DEVELOPMENT-EU: NGOs Fear Water Privatisation

Stefania Bianchi

BRUSSELS, Mar 17 2004 (IPS) - Civil society groups are calling on the EU to ensure that a new initiative does not further water privatisation in developing countries.

The groups are concerned that the Water Facility of the European Union (EU) may support the expansion of private sector water management in some of the poorer countries.

The European Commission, the executive arm of the EU, adopted a proposal in January to allocate 1.2 billion dollars to improve access to water and sanitation for the Africa, Caribbean and the Pacific (ACP) bloc. The group comprises 77 countries.

Forty of these are considered to be among the least developed countries (LDCs). They are economically vulnerable and heavily dependent on EU aid.

The Commission’s proposal follows in part a commitment made at the World Summit on Sustainable Development in Johannesburg in 2002 to deliver on the millennium development goal of halving the number of people without access to safe drinking water and basic sanitation by 2015.

About 1.1 billion people lack access to safe drinking water, and 2.4 billion people to sanitation.

Despite progress towards these goals, the Commission says funds remain scarce. Officials say a further 52.2 billion dollars is needed to meet water and sanitation targets.

Half of the fund (some 612 billion dollars) will be allocated to the Water Facility now, while a decision on the second half of the money will be made by March 2005.

The European Commission said last month that it was “making use of all available funds to reach the target.” It said the funds would “attract more investors and will act as a catalyst to raise capital funding and reduce the risks involved.”

Poul Nielson, EU Commissioner for Development and Humanitarian Aid, says the EU needs to take a “bold and urgent decision” to address the water crisis in the ACP countries.

A consortium of non-governmental organisations (NGOs), led by AEFJN (Africa-Europe Faith and Justice Network), Both ENDS, POLLEN and the Corporate Europe Obervatory, say the EU’s Water Facility should “facilitate the expansion and upgrade of public-run drinking water and sanitation infrastructure.”

The NGOs say in a statement that they welcome the water initiative as a “contribution towards the improvement of water and sanitation in ACP countries” but that the EU proposal must “prioritise capacity building above infrastructure or promoting private investments.”

The group says the Commission’s proposal “simply assumes that the role of the private water industry needs to be expanded” but “provides no evidence of the merits of this assumption.”

The NGOs expressed concern that the record of the private water industry in developing countries in recent years has not “systematically been assessed, despite high-profile failures and malpractices.”

The group says that instead of subsidising privatisation of water management, the funds should strengthen the public sector to ensure “effective public management delivering affordable water to all.”

The group points to a European Parliament resolution last year which insisted “on the need for local public authorities to be given support in their efforts towards establishing an innovative, participatory, democratic system of public water management that is efficient, transparent and regulated and that respects the objectives of sustainable development in order to meet the population’s needs.”

The NGOs say that the Water Facility should also address the lack of management and infrastructure in developing countries. They are calling on the EU to “dedicate all, or at least a major part, of the Facility’s funds to strengthening public skills and management capacities.”

Stefan Verwer from the group Both ENDS which supports environmental organisations in the South fears that the Commission will use the fund to further water privatisation in poor countries.

“The EU is going to force private investors impose policies on developing countries instead of strengthening management. There won’t be the public capacity to monitor it,” he told IPS.

Marc Maes from the Belgian NGO 11.11.11. agrees. “Developing countries can’t support projects like this in their public sector,” Maes told IPS. “The EU is leading them into privatisation.”

Jean-Charles Ellermann-Kingombe, spokesperson for Nielson told IPS: “On capacity building and support to enabling environment – that is very much part of what the facility is intended to finance. But it will also contribute to infrastructure investments and these investments just have a different price tag.”

He added: “We are aware of some NGOs’ reluctance of involving private investments. But with an estimated annual financing gap of 42 billion euros (51.5 billion dollars)if we are to meet the Millennium Development Goals, we cannot afford not to deal with the private sector.”

A decision on the final “modalities” of the Water Facility is due next week.