DEVELOPMENT: Campaigners Counter Privatisation Source

By IPS Correspondents Reprint | | Print |

David Cronin

BRUSSELS, Mar 30 2007 (IPS) - Anti-poverty campaigners are calling on the European Union’s developing aid chief not to renew the contract of an industrialist advising him on the role of the private sector in Africa.

Louis Michel, the European commissioner for development, has hired as an adviser his fellow Belgian Etienne Davignon, a major shareholder in the world’s largest private water company Suez. Davignon’s one-year contract with the European Commission expires this weekend (Mar. 31) and a variety of organisations believe it should not be extended on conflict of interest grounds.

“Private sector management of water supplies, particularly in developing countries, is a highly controversial area of policy,” said Vicky Cann from the London-based World Development Movement (WDM). “Based on this background, we consider it highly problematic that a Suez lobbyist holds the function of special adviser to the European commissioner for development.”

Cann has written to Michel recommending that instead of reappointing Davignon for another 12 months, he should find an adviser with specialist knowledge of how public utilities can be used to bring water to the poor. Her letter has also been signed by representatives of the European Federation of Public Service Unions (EPSU), ActionAid and Friends of the Earth.

The campaigners claim that Suez could benefit from a new multi-billion euro project being prepared by the EU’s executive arm, the European Commission. The EU-Africa Partnership on Infrastructure is set to award grants to private firms involved in water, energy and other projects at the end of 2007.

Davignon, who is also a former member of the Commission, is a board member with Suez, as well as holding more than 11,000 shares worth 350,000 euros (467,000 dollars) in the Belgo-French company. His brief as an adviser to Michel covers relations with Africa and the role of the private sector in development.

Michel has robustly defended his decision to hire Davignon, a long-time personal friend.

“Like every other commissioner, I wish to consult prominent individuals who are relevant to my portfolio,” said Michel. “Maybe NGOs (non-governmental organizations) think they have a monopoly on truth, but I have always thought that it is useful not to deprive myself of the experience of others.”

He has also claimed that he has never discussed water issues with Davignon.

“This is unconvincing,” Olivier Hoedeman from Corporate Europe Observatory, which monitors the activities of business lobbyists in Brussels told IPS. “When you look at the various EU aid programmes focused on African development, there is a very strong focus on infrastructure, including water and electricity. Suez is very active in a number of African countries. So you would expect Davignon to advise on water; it would be very logical for him to do so.”

Campaigners say that Suez has failed to honour promises of improving access to clean water for the poorest. As a result, it has had to abandon projects it was undertaking in Argentina and Bolivia, while other contracts in the Philippines, South Africa and Uganda have either terminated ahead of schedule or run into serious difficulties.

“These experiences show clearly that the commercial expansion agenda of Suez is at odds with the interests of the poorest in Africa and elsewhere in developing countries,” said Cann.

Davignon is one of four advisers from outside the Commission hired by Michel. The others are the Nobel Peace Prize winner and Grameen Bank founder Muhammad Yunus, Malian politician Sy Ousmane and former EU official Dieter Frisch, who now works for the anti- corruption group Transparency International.

The Commission’s enthusiasm for promoting a private sector role in development has been slammed by some campaigners. They say that it should learn from admissions made by other major donors of development aid. During an international water conference in Mexico City last year, the World Bank confessed that its expectations that water privatisation would benefit the poor had not materialised.

The Corporate Europe Observatory has also accused Michel of reversing his position on water. Shortly before he assumed responsibility as commissioner in 2004, Michel told the European Parliament that he believed water privatisation should not be foisted on poor countries as part of international trade liberalisation efforts.

Commission spokesman Amadeu Altafaj described Michel’s critics as “fundamentalists”.

“Amazingly, these allegations are coming from a few NGOs and not from the public in countries benefiting from EU aid,” Altafaj told IPS. “What we do is encourage the private sector to become involved in development in general, not only in water. If you want to manage water facilities with only a few stakeholders, who sometime don’t have sufficient expertise, then you are condemned to fail.”

“We should be able to carry out discussions with an open mind, as any other donor in the world does,” he added.

But a 2003 study by the United Nations Human Settlements Programme (UN Habitat) found that in some poor countries more than half the urban population have to depend on private companies for their water and this usually was more expensive than water from public utilities.

Access to clean water has increasingly been perceived as a basic human right in recent years. Britain, for example, last year issued a public statement recognising it as such.

Nonetheless, the United Nations Children’s Fund (UNICEF) estimates that over one billion people throughout the world are still using water that is unsafe to drink and 2.6 billion – 40 percent of the world’s population – lack basic sanitation. Every day about 4,000 children die from diseases such as diarrhoea which are linked to poor hygiene and scarcity of good-quality water.

In a new study, the World Development Movement says that one of the key challenges in tackling poverty is to use the public sector to boost access to water, given that 90 percent of piped water in the world is in public hands.

Although the WDM acknowledges that public utilties can be inefficient, it says that the private sector has “not demonstrated itself to be more adept at tackling the problems.”