Water
privatization is looming in India too: A PPP project
in Nagpur, India, also promoted as a success by the World Bank, has been
widely characterized as a failure. Public
unions and civil society groups recently concluded a series of mobilizations aimed at
preventing similar projects from spreading across India as part of Prime
Minister Narendra Modi’s urban
development initiatives, which incorporate the World
Bank-backed water privatization models from Manila and Nagpur. Nagpur’s
privatized water
utility is a joint venture of French water giant Veolia, in which the IFC held
equity until 2014.
The letter, addressed
to World Bank President Dr. Jim Yong Kim,
with copies to U.S. Secretary of Treasury Jacob Lew and newly
appointed IFC Executive Vice President and CEO Philippe Le
Houérou, comes in the wake of
the water crisis in Flint, Michigan, where an anti-democratic model of governing
led to a public health catastrophe. The inquiry focuses on the WBG’s conflict
of interest resulting from its multiple roles as advisor to governments,
worldwide marketer of privatization models—such as public-private
partnerships (PPPs)—and investor in private water corporations
that benefit from the very projects it facilitates.
Moore—the
Ranking Member of the Monetary Policy and Trade
Subcommittee—has a key role overseeing the U.S.’s relationship with
the WBG and other development institutions and has long been a champion of water
access issues. Last year, the Congresswoman joined 22 other members of
the Congressional Black Caucus in a letter of support
to groups in Nigeria organizing to block a planned
water privatization scheme and has
recently expressed
deep concern about Congress’s anemic response to the crisis in Flint.
“Water
access is a fundamental human right no matter where you live,” said Rep. Moore.
“Dr. Kim and his team have the responsibility to put the World Bank’s
mission—alleviating global poverty—above the pursuit of profits. The
institution must take that responsibility much more seriously, especially when
it comes to water, or it will fail the very people it is supposed to be
serving.”
Recent
crises in Detroit and Flint, Michigan have raised the prominence of issues of
water management and delivery across the U.S. A giant water transnational with
a history of IFC investment, Veolia, attempted to capitalize
on the water emergency in Detroit to generate business for itself
and has been implicated
in the Flint crisis.
“The
World Bank is stacking the deck, dealing the cards and placing all the bets,
putting profits above human need,” said Shayda Naficy,
a water privatization expert at Corporate Accountability
International. “For years it has ignored the concerns of those most affected
by this blind pursuit, but with Congress asking questions, it can no longer pursue
this path with impunity.”
Moore’s
letter highlights the privatization of the water system in Manila, Philippines,
which is the “success
story” touted by the IFC in its public and behind-closed-door marketing
around the world. The IFC
advised the Philippines government to contract two private corporations to
manage the city’s water system, which it did in 1997, hiring Maynilad and
Manila Water Corporation (MWC).
The
IFC then invested in MWC, the
corporation that, following the IFC-brokered
arrangement, assumed only 10 percent of the pre-existing utility’s debt and inherited
better existing infrastructure compared to Maynilad. Since then, MWC has raised rates
nearly 850 percent, and has brought the regulator and
Philippines government into costly arbitration at two
supranational dispute
resolution venues.
As
part owner of Manila Water, the IFC is in direct opposition to the government’s
efforts to keep water affordable for its people. According to Corporate
Accountability International’s calculations, the IFC has made $43 million from
its initial investment.
Widespread
opposition to the public private partnerships (PPPs) is making this form of
privatization politically difficult, despite IFC’s active promotion of
Manila as an exemplary PPP model for replication around the world. Recently,
the World Bank
abandoned its multimillion dollar effort to secure a
water treatment PPP in Lagos, Nigeria. This reversal came after a year of
protests from civil society and labor
groups, including a summit in Lagos last August to chart the
course for the city’s public water management.
###
For
more information please refer to “Shutting
the Spigot on Private Water” and “Behind the
World Bank’s Spin,” 2012 and 2014 reports issued by Corporate
Accountability International.
The
human right
to water was recognized by the United Nations (UN)
Committee on Economic, Social and Cultural Rights in 2002, and by the UN
General Assembly in 2010. The World Bank Group, an independent “specialized
agency” associated with the UN, recognized the right in 2004.
