Thirst: Fighting the Corporate Theft of Our Water

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Thirst

John Wiley & Sons

Chapter One

A new kind of citizens' revolt has broken out in t owns and cities across the United States. It's not made up of "the usual suspects," it has no focused ideology, and it's not the stuff of major headlines. The revolt often starts as a "not-in-my-backyard" movement to defend the character of a community or to assert a desire for local control. But quickly, almost spontaneously, the revolt expands its horizon to encompass issues of global economic justice, and its constituency grows to include people across party, class, and racial lines.

A number of issues have sparked local activism-the arrival of big-box stores like Wal-Mart, factory shutdowns, unwanted real estate development-but the new movement against the corporate takeover of water is shaped uniquely by its subject. Water is a necessity of life that touches everyone in their own homes. Because each community has only one supplier, the transformation of water from public asset to private commodity raises unavoidable questions about affordability, environmental impact, and local control. When a multinational water company comesto town, citizens are forced to recognize the arrival of globalization on their doorsteps.

This emerging citizens' movement coincides with the recognition that society faces the ticking clock of global warming. Scientists expect climate change to reduce available water supplies, especially in areas dependent on winter snowpacks. The clean, reliable, and cheap water we have taken for granted for decades is now threatened. Water scarcity, already a crisis in much of the world, is a coming reality in the United States.

An environmental crisis cannot be dealt with ad hoc. It demands concerted action from citizens through government. But, over the years, national, state, and local governments have been weakened by those ideologically opposed to a strong public sector. They are against government intervention in economic affairs and against populist movements that aim to reassert values of environmental stewardship and public service.

This book describes how citizens and communities across the United States are fighting to defend their water and take back their government at the same time. These activists often have no idea what they are getting into when they start. But, ready or not, they are thrust into a battle that takes them far from their initial concerns about their personal water supply or their local government. They must confront an elaborate array of ideas that seductively meld the traditional utopian impulse of Manifest Destiny with a corporate project of global economic integration. They must grapple, first, with an almost religious belief in the marketplace as the route to a more perfect society and, second, with the unmatched financial and political power of multinational corporations.

Nevertheless, these people and communities have shown that when it comes to water, the ideologues and practitioners of globalization may have overreached. Water is what makes life possible on this planet. It is "of the body" and essential. Our reaction to it is visceral, and when we suddenly find we can no longer take it for granted, we react very rapidly. The unanswered question is whether the struggles for control of water described in this book are simply a last stand against a corporatized future-or the beginnings of a revolt that will redefine how people interact with the environment and how citizens define democracy.

A Limited and Defining Resource

More than food, guns, or energy, the control of water has defined the structure of civilizations. Ruling classes have always been water rulers, and cities and farms can exist only to the extent that they control their water resources. For thousands of years, the conflicts between towns and countries have been defined by the battle over who gets to use the stream. The words rival and river have the same root.

Water is not merely a medium of conflict, it is also a purifying, regenerative, and hallowed element. The essential nature of water is sanctified in Christian baptism, the Jewish mikvah, and Hindu submersion in the holy waters of the Ganges River. Muslims and Hopis have their sacred water rituals, as does virtually every spiritual group.

Water itself isn't just a substance, it's a flow-the hydrologic cycle-from cloud to rain to river to sea and back to cloud. Until recently, this marvelous circulation has blinded us to the very real limits of water. Whether we believe in a Creator or not, no one is making more water. We have only the amount that we've always had. We drink the tears of Leonardo da Vinci and wash in the saliva of dinosaurs. Fresh water is a finite resource that is quickly dwindling compared with the world's growing human population and the rate at which we are polluting the water we have.

Although the majority of the earth is covered by water, most of it is in the oceans-salty, undrinkable, and unusable for growing food. Much of the remainder is in polar ice caps and glaciers, leaving less than 1 percent for human use in rivers, lakes, streams, and aquifers. The plenty we imagine as we look at satellite photos of a blue planet dwindles quickly to those thin blue capillaries on the map.

Scarcity is the soul of profit-if profit can be said to have a soul. The water crisis is already here, and that means clean, fresh water can command ever higher prices. Eager investors are bidding up water-industry stocks and lining up at industry-sponsored forums to get into the "water business." But because governments own most water services, investors have few choices. "How do we take some of the market share away from the government?" asked the vice chair of Southwest Water at an investors' conference. The water industry's answer is to ally with the financial industry, which also wants to open up the market. "It sounds like an exciting opportunity," an investment adviser told Bloomberg News, "but you have to have viable vehicles with which people can buy into the asset."

Corporations hope to fill that void primarily by privatizing urban water systems, either by outright purchase or by operating them under long-term contracts euphemistically called "public-private partnerships." The aim in both cases is to siphon profits from the flow.

Water is fast becoming a commodity to be bought and sold, rather than the medium through which a community maintains its identity and asserts its values. But for most people in the United States water is still just water-not the stuff of profit or politics. We don't give it a second thought until the tap runs dry or brown or we flush and it doesn't go away.

Public Water in the United States

In the past, most conflicts over control of water have been local, typically confined to a single watershed, the area drained by a stream or river. It's difficult to see great national political trends or global corporate strategies at work when local politicians, technical consultants, and engineers personify the arcane power relations of our plumbing. Although hidden out of sight and scent, even sewers have a history. In the United States in the nineteenth century, water ownership and management were largely in private hands. River or well water was tapped for local needs by individuals and, as the country grew, by small private companies.

Historian Norris Hundley, author of The Great Thirst, has written about a chaotic period in the late nineteenth century when "entrepreneurs promised clean, bountiful, reasonably priced water supplies" in return for a chance to make a profit. "These dream deals soon became nightmares of diversion facilities ripped out by floods, wooden pipes leaking more water than they carried, mud holes pitting the streets, pollution exceeding anything witnessed in the past, and an escalating fire threat." Across the country the pattern was repeated: private water management often meant leaky pipes, pollution, and disease.

In New York City, Aaron Burr's early-nineteenth-century Manhattan Company (later to become Chase Manhattan Bank) was one of the most corrupt, incompetent, and disastrous experiments in water privatization on record. As the city grew, access to clean drinking water was uncertain at best. People drank beer rather than risk disease and death from fetid waters. Some customers received no water at all, and many fire hydrants failed to work. It took the devastating cholera epidemic in 1832 and the Great Fire of 1835-so huge it was seen as far away as Philadelphia-to push the devastated commercial center of the United States into taking its water future into its own hands.

The story was similar in cities across the United States and Canada. As populations grew, private water companies did not have the resources to meet the need. Citizens demanded and eventually won modern public water systems, financed through bonds, operated by reliable engineers and experts, and accountable to local governments. The nation built a dazzling system of community waterworks, which provide clean, reasonably priced water and sewer systems that still rank among the best in the world. Approximately 85 percent of Americans are presently served by the thousands of publicly owned and locally operated water systems. For several generations, water has been a public trust.

But the country's once dependable public water systems now face a worsening crisis. In a survey of water professionals released in 2006 by the American Water Works Association, many utility managers chose the adjective failing to describe their water infrastructure rather than choosing the word aging as they had in previous years.

The growing crisis arises not just from scarcity but also from the failure of politicians at all levels of government to invest in water and sewage works. Federal cutbacks, in particular, have devastated city budgets, forcing elected officials to choose which programs to cut. Water services have been high on their lists. Wenonah Hauter of the national consumer-rights organization Food & Water Watch warned of this danger in a 2005 letter to the U.S. Conference of Mayors: "The more financially troubled a city's water system, the more receptive city leaders will be to ceding control over that system to a private operator in a long-term monopoly contract or through an outright sale." A 2005 survey indicated that the mayors of two hundred cities, large and small, would "consider" a privatization contract "if they could save money." In addition, local politicians have often raided profitable public water systems to pay for other programs, stripping local water departments of resources needed for maintenance or new equipment. And many rural water companies, public and private, are too small to afford the large investments necessary to upgrade their systems to meet environmental regulations.

In spite of these problems, public utilities in the United States are considered a model in many parts of the world. Public operation ensures transparency and documentation. It provides the opportunity for communities to work for positive outcomes through public hearings, citizen action, and elections.

Nevertheless, there's lots of work to do. Industry and government studies calculate that water utilities need to invest enormous sums over the coming years to fix the aging network of pipes under every street and the outdated plants that clean drinking water or treat sewage. A report issued by the Congressional Budget Office estimates the cost at $500 to $800 billion through the early-2020s. Much of that investment is necessary to meet new federal clean-water mandates handed down without the funding needed to fulfill them.

In the past, meeting such challenges was a sign of national pride and purpose, but those days now seem like distant history. U.S. government spending for water infrastructure is being reduced, even slashed, year after year. Everywhere, we hear instead the language of private markets. "In recent years, what we have seen is a kind of theft of the commons," says Maude Barlow, chair of the Council of Canadians, an independent, nonpartisan citizens' group. "The notion [is] that absolutely everything should be commodified and put on the open market, and it is happening very, very fast. Basically, we see this as an issue of human rights versus corporate rights."

The conservative agenda of small government, deregulation, and privatization has given big business an opening to create a private water market to replace a public service. Repeating promises made by nineteenth-century entrepreneurs, the private water lobby praises the efficiency of corporate enterprise and demands that water become like other industries that are run for profit. The potential market is huge and extends beyond municipal drinking water and sewage systems to include the bulk transport of water, bottled water, and new technologies like desalination.

The Players

If you've seen Roman Polanski's Chinatown, the classic film about obsession and corruption in a mythical, drought-stricken Los Angeles, or if you've read Marc Reisner's brilliant Cadillac Desert, a study of the savage billion-dollar battles over western water rights, you know there have always been ruthless and colorful players in the water business. However, today's corporate water executives are hardly the Horatio Algers, risk-taking moguls, and colorful scoundrels of the past. There's an entitled seediness rather than unbridled optimism to their efforts. Their wealth typically comes from buying and selling businesses rather than building them.

The railroad moguls' crude collusion with corrupt government bosses in the nineteenth century has become Halliburton and Bechtel's polished "public-private partnership" of the twenty-first. Close ties to the George W. Bush administration won both companies big contracts in occupied Iraq in 2003. Bechtel was awarded what the New York Times called an "unacceptable" deal to fix and run Iraq's ruined water systems: "The award of a contract worth up to $680 million to the Bechtel Group of San Francisco in a competition limited to a handful of American companies can only add to the impression that the United States seeks to profit from the war it waged."

Old notions of public service seem to evaporate when water becomes a business and profit becomes the motive. Seeking to consolidate market share, private water companies are merging or buying other companies, creating a volatile and unpredictable market-hardly the kind of stability required for a life-and-death resource like water. The turmoil continues as control of this most basic resource has become as volatile as ownership in a game of Monopoly.

Three corporate players have controlled the water game-Suez and Veolia, based in France, and the German utility corporation RWE, which in 2006 announced plans to sell its major water assets. Few Americans have heard of them, but the Big Three have dominated the global water business and are among the world's largest corporations. Together they control subsidiaries in more than one hundred countries. When the Center for Public Integrity issued a report on these powerful companies in 2003, their rapid growth had already triggered "concerns that a handful of private companies could soon control a large chunk of the world's most vital resource." The title of the report was The Water Barons.

Each of the Big Three bought subsidiaries in the United States after a 1997 Bill Clinton administration decision to change an Internal Revenue Service regulation that limited the potential market. Previously, municipal utility contracts with private companies were limited to five years. Now, such public-private partnerships could extend for twenty years. The rule change unleashed a wave of industry euphoria with predictions that private companies would soon be running much of what is now a public service. With 85 percent of water services still in public hands, "there's a tremendous market out there," said Peter Cook, head of the National Association of Water Companies, an industry trade group. Eager to get in on the predicted boom, Veolia purchased U.S. Filter in 1999, and Suez acquired United Water. Two years later, RWE subsidiary Thames Water purchased American Water Works, the largest U.S.-based private company, taking on $3 billion in debt in the process.

(Continues...)

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Excerpted from Thirst by Alan Snitow Copyright © 2007 by Alan Snitow. Excerpted by permission.
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