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SOUTH AMERICA: Who Controls the Water?

Marcela Valente

CÓRDOBA, Argentina, Jul 21 2006 (IPS) - Social movements that have been working hard in Argentina, Bolivia, Brazil, Chile and Uruguay to put water services that were privatised in the 1990s back in state hands met in this Argentine city to share their experiences and decide what the next steps are, now that several corporations are pulling out of South America.

“The big challenge, maybe even bigger than the one we faced in the fight to restore state control over privatised water companies, is the construction of an alternative form of administering this resource, that would be both public and participative,” Oscar Olivera, spokesman for the Bolivian Coalition in Defence of Water and Life, told IPS.

A strong movement against the privatisation of water and sewage services emerged years ago in Bolivia, and five people have been killed in street protests in La Paz and the neighbouring working class suburb of El Alto, in which as many as 500,000 people participated.

In 2000, Bolivians held massive demonstrations to protest rate hikes of up to 300 percent, which had expanded water bills to the point that they accounted for 20 percent of household budgets.

Today, the French corporation Suez-Lyonnaise des Eaux, which held a concession granting it control over water and sewage services for 40 years, as of 1999, is withdrawing from Bolivia, which now has a brand-new Water Ministry, as well as a social movement that will take part in administering the country’s water.

“The (leftist) government of Evo Morales had to live up to its mandate, and established the ministry,” said Olivera.

Civil society groups from across the region attended the Peoples’ Summit for Sovereignty and Integration, which ended Thursday with a street march, parallel to the Mercosur (Southern Common Market) summit in the capital of the Argentine province of Córdoba, 800 km northwest of Buenos Aires.

The Mercosur trade bloc is comprised of Argentina, Brazil, Paraguay and Uruguay, and Venezuela is in the process of becoming the fifth full member. Bolivia and Chile are associate members.

The People’s Commission for the Recovery of Water in Córdoba, made up of social organisations, trade unions and political parties, called on South American groups that have fought to restore public control over water in several countries to debate the failure of attempts to privatise the sector and to discuss possible models of public management of the resource.

In the past year, Suez pulled out, or is in the process of doing so, from the administration of water in Argentina, Bolivia and Uruguay, where water services had been privatised in the 1990s.

Describing the experience of government management of water was Dieter Warshof with the Association of Municipal Water and Sewage Companies of Brazil, which represents some 1,500 firms run by city governments in Brazil, many of them with the participation of social groups.

But a key concern of the participants at the peoples’ summit was to build a “new” model of management of water and sewage services. “We have been effective in our efforts against privatised companies, but not in proposing an alternative model,” said activist Alberto Muñoz from the northeastern Argentine province of Santa Fe.

That view was shared by many of the participants.

Muñoz is a member of Users and Consumers of Rosario, a consumer rights organisation that forms part of the Provincial Assembly for the Right to Water in Santa Fe.

“We need to replace the idea of the state company with that of the public company, because the state does not always represent the public interest,” he said.

“We have to get involved,” urged the activist, who led the struggle in his province against the privatisation of the state-owned water company, which was in the hands of Suez.

Anil Naidoo, coordinator of the Blue Planet Project, an international campaign of the Council of Canadians – a citizens’ interest group – was the only speaker from outside of South America. “In this process it is important not to replace one empire with another, and to have a very clear idea of what we want to do,” he said.

In an interview with IPS, Naidoo said South America at this time is “the heart of the movement for the human right to water,” and added that “it is in this region that new ideas on how to manage the resource are taking shape.”

“The movement is strong, and we want to support it,” he said enthusiastically.

Trade unionist Luis Bazán, who coordinates the peoples’ commission in Córdoba for the restoration of public control over water, told IPS that “We want to design a single policy on the management of water in Mercosur, in which it is considered a public good and an essential right.”

“We are going to ask the presidents to incorporate this institutionally, because in some countries, private companies are pulling out due to the persistence of social movements, but there are still contradictory cases like that of Argentina,” he said.

Argentine President Néstor Kirchner decided this year to rescind Suez’s contract for water and sewage services in Greater Buenos Aires and establish a new public company, similar to what was done in the province of Santa Fe.

Muñoz pointed out that Suez was forced out early this year after just 10 years, instead of the 30 years stipulated in the contracts, due to breach of contract, unjustified rate hikes, and poor quality of service.

Under pressure from the Provincial Assembly for the Right to Water that emerged in Santa Fe, the government moved to cancel Suez’s contract. Today, 50 percent of the Aguas de Santa Fe water company is owned by the provincial government, 40 percent by municipal governments, and 10 percent by trade unions.

“It’s a transition; it’s not exactly what we want. But we were at least able to defeat the privatised company, which was totally inefficient,” said Muñoz. “For us, this is like the final stage of the era of privatisation, but we want greater participation by universities and social organisations in decision-making in the company.”

In Córdoba, on the other hand, although the movement against privatisation successfully pressed Suez to announce that it would withdraw, it failed to get the provincial government to assume control over water and sewage services. The administration instead offered to transfer the shares to a private firm from Argentina, to which the peoples’ commission responded with a legal challenge.

The lawsuit is based on the fact that “The contract states that the shares cannot be transferred to another company,” said Bazán. While waiting for the court’s decision, the movement is debating what steps to take next. For now, it is studying other experiences in the region.

Participation by trade unions in the management of water is opposed by nearly all of the organisations that have fought privatisation. “They defend corporative interests, and sometimes even the interests of the private companies themselves,” Bolivian activist Olivera complained.

But the movements all agree that a new public company must be based on the concept that water is a social good, not merchandise, and that access to water is a fundamental human right. They also want rates to be based on consumers’ ability to pay, with the wealthy charged higher tariffs, and they are pushing for a prohibition of shutting off service for non-payment.

“President Kirchner renationalised the Aguas Argentinas company and created the Agua y Saneamiento S.A. firm. But we have found that the new state-owned company also cuts off service for lack of payment, and that isn’t what we want,” an activist who came to Córdoba from Buenos Aires said during the plenary session.

Another participant, from the southwestern Argentine province of Río Negro, noted that in his district, water services were never privatised, but the administration of the company was partially placed in the hands of private firms. “They stripped the company of its assets, and didn’t do anything positive,” he protested.

In a 2004 referendum, voters in Uruguay voted for a constitutional amendment declaring water a public good and prohibiting the privatisation of water and sewage services.

The concessions that had been granted to Aguas de la Costa (belonging to the Spanish Aguas de Barcelona, which is partially owned by Suez) and Uragua (a subsidiary of another Spanish company, Aguas de Bilbao), which controlled water services in the southeastern province of Maldonado, were cancelled shortly after the referendum.

However, Sebastián Valdomir of the Redes Amigos de la Tierra environmental organisation – a member of the National Commission in Defence of Water and Life in Uruguay – told IPS that the companies have brought a suit against Argentina before the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), demanding compensation.

“We should launch a regionwide campaign to denounce this strategy taken by the companies,” he said. “Water cannot be subject to what the ICSID decides.”

Olivera said that even though new left-leaning governments in South America are willing to move towards restoring public control over water, there is still much to be done. In Bolivia, he said, proposals are being drawn up to be submitted to the constituent assembly that will rewrite the constitution, in order to generate room for broader public participation in decision-making.

“Politics must now be deprivatised, and an end must be put to the political élite’s monopoly over words, so that the people can begin to be heard,” he maintained.