Archived press release

H2orrible to contemplate: wto plans mass water sell-off

2 November 2001

Water companies with appalling environmental track records could be handed control of water resources across the world if the European Union gets its way at the World Trade Organisation talks in Doha later this month. The European Union, including the UK, is pushing for further liberalisation of trade in services including water services through the General Agreement on Trade in Services (GATS) [1].

A Friends of the Earth report published today [2] shows how expansion of negotiations to liberalise trade in water services means opening up this sector - collection and delivery of water - to private service providers. This could have a damaging impact on the global environment and poor people's access to a clean, safe water supply. The plan is being promoted by developed nations, especially the EU negotiating bloc, despite the fact that water privatisation so far has often been bad news for vulnerable communities and the environment.

In developing countries, water prices have often increased and level of service decreased when multinational companies have been given concessions. For example, since the French company Suez-Lyonnaise became the major partner in Buenos Aires' privatised water utility in 1993, prices have risen by 20%. In Manilla, MWSI (partially owned by Suez-Lyonnaise)have been given permission to increase charges by a half, despite failing to meet the key target of providing 24 hour water supply to all connections. Poorer families, if connected to the water supply at all, can no longer afford water.

In the UK, seven out of the ten most prosecuted polluters in 2000 were water companies.Wessex Water Ltd (owned by the US utilities giant Enron) which was the sixth worst; AWG(Anglian Water Group) Plc (which has subsidiaries world-wide from Argentina to the Czech republic and Thailand) which was the fourth worst; and Thames Water Plc (owned by Germany's RWE and with interests as far afield as China, Nigeria, Egypt, Australia and Brazil)was the third worst, with five court appearances and six prosecutions. [3] By opening up the water services to the private sector, GATS is enabling companies like these to expand their operations to the rest of the world.

GATS was established in 1994, with extended negotiations beginning in 2000 (“GATS 2000"). Corporate lobbying was instrumental in establishing this agreement and corporate lobby groups [4] often have direct links to the relevant government ministers and well established forums where intensive lobbying takes place behind closed doors. GATS and the WTO are untransparent, undemocratic and biassed towards the interests of multinational companies and developed nations.

This is not the forum for decisions to be made on water. Water is a resource essential to life. Decisions about allocation and distribution should be democratic and based on everyone's fundamental right to a clean, healthy supply. Management of water resources needs to be based on long-term sustainability rather than on profit maximisation.

Hannah Griffiths, Corporates Campaigner for FOE said:

“GATS has been created with the interests of multinational companies in mind. The economic benefits lie with the companies. The damage - environmental degradation and loss of local control, and often cuts in services and hikes in prices - is done to communities around the world..

The private water companies are among the worst polluters. Water privatisation has not delivered high environmental standards, but has brought an increase in the price to the consumer, as well as allegations of bribery, corruption and unfair labour practices. Despite this mountain of evidence, the WTO and governments who support GATS plan to reward these failed multinationals with even greater control of the world's water.”

Notes for Editors

1. The General Agreement on Trade in Services (GATS) was made in 1994. In 2000, WTO negotiations on extended liberalisation of trade in services (“GATS 2000") began.
2. Stealing our Water. Implications of GATS for Global Water Resources. For a copy telephone 020 7490 1555
3. UK Environment Agency, 2001 'Spotlight on Business Environmental Performance 2000', 'Multiple Prosecution Table', London
4. In particular the following lobby groups are pushing GATS: European Roundtable of Industrialists (ERT); European Services Forum (ESF); Global Business Dialogue on Electronic Commerce (GBDe); International Chamber of Commerce (ICC); Transatlantic Business Dialogue (TABD); UNICE; US Coalition of Service Industries (USCSI)
   

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Published by Friends of the Earth Trust