Kamis, 27 Oktober 2011 09:37
Navigating Critical Waters; Issues, Challenges and Alternatives to The Privatization and Commerzialization of Water in Asia -ASEAN People Forum Workshop

WORKSHOP THEME:  “Navigating Critical Waters: Issues, Challenges and Alternatives to the Privatization and Commercialization of Water in Asia”
Organizers: Focus on the Global South; Municipal Services Project-Asia; Reclaiming Public Water; Jubilee South-Asia Pacific Movement on Debt and Development
Speakers: Dr. Buenaventura Dargantes, Visayas State University (Philippines); Hamong Santono, Kruha (Indonesia); Milo Tanchuling, JS-APMDD (Philippines); Irfan Zamzami, AMRTA Institute (Indonesia); Nestor Villasin, Philippine Association of Water Districts (Philippines)
Facilitator: Jenina Joy Chavez (Philippines)
ASEAN countries face serious challenges in water, namely fast diminishing access to water by more members of the population, especially the poor and marginalized; threatened supply as a result of unsustainable living ways that have harmed water resources; treatment of water by governments as well as private sector as a commodity and not as human right or part of the commons.  With this perspective being the dominant now, most ASEAN governments look at privatization as the solution.  But is it? This was the main question that the workshop addressed. Privatization is what’s being pushed also by international financial institutions (IFIs) such as the Asian Development Bank (ADB) and World Bank (WB) by financing projects, such as mega-dams, that harm the environment and communities.
In the introduction to the workshop, there was also a specific reference to the ASEAN’s Strategic Plan of Action on the Environment (1994-1998) which obligates the region’s governments to deliver based on the recommendations of the United Nations’ Agenda 21, which required that “adequate supplies of water of good quality are maintained for the entire population while preserving the hydrological, biological and chemical functions of ecosystems, adapting human activities within the capacity limits of nature and combating vectors of water-related diseases.”

Regional Perspectives
Using a study from the Municipal Services Project conducted together with partner organizations and institutions, Dr. Buenaventura Dargantes discussed the various models for managing water resources and delivery for the benefit of the greater public that are currently being practiced in communities and local settings in Southeast Asia, including in the Philippines. These practices can be considered alternatives to the current trend of commercializing water management and delivery.  He emphasized public and community  non-profit partnerships as viable alternatives to private sector-led water sector/industry.

The most significant lessons gained from experiences in water management partnerships are:

•    A vote for public – means that there can be partnerships involving people and communities on one hand and water agencies on the other and that such partnerships are based on the goal of promoting the greater good of the public through the delivery of safe, equitable and adequate water and sustainable water resource management underpinned by principles of 1) water justice, 2) water as part of the commons and a human right, and 3) this rights can be allocated, framed, protected and realized in an equitable and sustainable way;

•    Decentralization trends in water service delivery – may be viewed as geographically dispersed and therefore not operating optimally and are not financially efficient, but they do serve the needs of populations not served by central water utilities;

•    Finance in infrastructure – is very important but  borrowers could search for alternative sources of finance, or redesign projects or project components to make them amenable to combinations of funding modalities (e.g. counterpart funding as a way to finance the construction of water systems for irrigation and domestic uses), instead of just acceding to the imposed loan conditionalities of IFIs;

•    Private sector through its corporate social responsibility (CSR) programs can help address social transformative goals, by subsidizing costs of connections of low-income communities and informal settlements; and also by allowing communities to manage water systems provided by private businesses under their CSR programs;

•    More accountability from bureaucrats – can be achieved through the establishment of a system of communication between policy makers, regulators, utility managers and water users with the view of arriving at a common understanding of the goals, policies, programmes and activities of water utilities;

•    Research on alternatives – should be sustained as this will be the source of knowledge that may help spell the success of failure of alternative partnerships and infrastructure;

•    Advancing the practice of alternatives – means it is doing research is not enough, but that the experiences should be replicated or sustained in practice as modes of governance that respond to changing physical conditions, socio-economic realities and policy environments;

•    Advocacy for alternatives – there is a need for institutional and policy reforms (including legislative reform) to strengthen alternatives to commercialization of water resources and services; to promote the inclusion of case studies as course content for university degree programmes on water resources and services management; to sustain discussion of alternatives during development planning for the water and sanitation sectors undertaken by local governments, civil society organizations and community-based water service providers.

Mr. Hamong Santono from Kruha in Indonesia discussed the impact on people’s access to water of the ASEAN framework that water is a commodity and that privatization is the answer to the problems faced by the water sector. Water privatization, as seen in the case of Indonesia and Malaysia where the governments have even legislated the privatization of water management, has led to many problems, including diminishing access to water especially of marginalized communities and the further weakening of ASEAN states’ ability to push for reforms in the water sector.  The World Bank financed through loans US$30 million worth of water projects in Indonesia in the 1990s; private sector-led projects continue until today in West Kalimantan, Central Java and West Java. Similarly, privatization of water management begun in Malaysia in the 1990s; most operators of national water service/delivery are now private corporations. Due to privatization, water tariffs in Malaysia have increased by as high as 15 percent while the public has experienced more disconnections and the private operators sustained their profits.

Santono proposed instead for the adoption of the view that “access to water is a human right and that water is part of the commons.” He also stressed that there should be a paradigm shift in viewing the link between climate change and water resources.  The current view is that climate change is contributing to water crisis, but Santono argued that it is the destructive ways of harnessing and managing water resources that are contributing to climate change.

Country Cases
The reports on country experiences, specifically in the Philippines and Indonesia, showed that privatization has in fact resulted in prohibitive water prices and development projects, such as dams, that are detrimental to communities and environment. The Philippine case presented by Mr. Milo Tanchuling showed that increased government indebtedness could be linked to privatization of the water service sector.  According to Tanchuling, the World Bank's IFC designed the first water privatization policy in the Philippines, the Water Crisis Act of 1995.

More than a decade after privatization has resulted in unmitigated rate increases—with per cubic meter of water in Metro Manila now costing P30 (or .70 USD).  The high cost of water has not been translated into better access by the public and to lower non-revenue water (NRW), which would have been an indication of efficiency in water management.  As of 2010, two distribution areas are being serviced by private companies: Metro Manila with two concessions (East and West Zone) and the Subic Bay Economic Zone.

Other threats faced by Metro Manila’s population brought about by privatization are: insecurity of water supply such that continuity and sufficiency are never ensured and assured; rise in demand as consequence of the tendency of consumers to either conserve or over-consume water, and; distribution wastage.

The government’s Manila Water Works and Sewerage System has not ceased in pursuing the privatization track as it continues to look at dam construction as means to supposedly increase water supply; government meanwhile is also privatizing the management of a key water source, the Angat Hydropower Plant.

Indonesia, as reported by Mr. Irfan Zamzami of AMRTA Institute, has experienced exorbitant increases in the price of piped water and yet there have been more cases of inefficiency as a result of privatization. Private operators, according to Zamzami’s report, have in fact failed to reach targets for both population coverage and water volume sales.  There have been cases too when people paid for subscriptions for piped water for as high as $US20 but water “failed to flow”; in other cases, water connection fees are steep so that the residents couldn’t afford piped water.

Privatization has also affected security of labor of the employees of these previously public companies. Zamzami reported that there had been only one salary increase in the privately-owned water companies since the early 1990s even as the status of seconded employees has remained uncertain. The contracts with private companies should either be amended or terminated, he proposed.

Based on a specific experience in the Philippines reported by Mr. Nestor Villasin of the Philippine Association of Water Districts (PAWD), local water districts have proved their capability to operate professionally and partner with other institutions, with such engagements or partnerships resulting in improved overall management of water systems “in the area of non-revenue water, water quality, business planning and finance.”  Villasin however acknowledged that there are also other water providers that are expanding communities’ access to water, such as “cooperatives, barangay-based user association, community-based as well as private enterprises, and local govermnet initiated and operated water supply system.”

For its part, the PAWD are composed of 600 water districts “across the archipelago” from northern Luzon to southern Mindanao.  Being the biggest water service provider in the country, PAWD has increasingly taken the role of policy reform advocate. Their campaigns for policy reform include socialized water rates to benefit the greater majority, development of innovative approaches to reach waterless communities, and protection and security for workers in the water industry, and on a more environmental perspective, they now see the need to become more serious in their campaign for watershed protection.


The following recommendations emerged from workshop discussions/exchanges:

1)    Push for ASEAN’s recognition that access to water  is a human right and for ASEAN governments to acknowledge that it is a common good that should be provided their people;
2)    Rescind and halt water privatization projects, and instead explore other typologies of partnerships in the local levels that will result in the delivery of clean, affordable water to communities, and at the same time ensure the sustainability of water resources;
3)    Recognize that injustices have been committed as a result of water-related development projects, such as dams, and development policies supporting such projects must therefore be reformed.

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