The other day I had the opportunity to watch the controversial video of Peter Brabeck-Letmathe, Nestle's current CEO who claimed that water should be privatised and that the stand that some NGOs take to 'claim water as a human right' to be 'extreme'.
No doubt this statement provoked much anger from individuals and NGOs from all around the world and thus Nestle's corporate communication went into recovery mode, clarifying that Mr. Brabeck-Letmathe does indeed believe water is a human right.
No doubt, water is an important resource to all human beings, if it is not the most important resource of all. That being said, while every human being has a right to clean, potable (drinkable) water, clean water is but a scarce resource and like all resources is subject to market fluctuations.
Now, let us put aside our political sentiments and our fervent beliefs about what is right and wrong. Lets try and look at this issue from a market perspective. While more than 70% of the world is water, only 10% of it is drinkable. And of that 10%, only some of it is available in easily accessible water catchment areas, the rest residing in underground wells and streams. Consider that for a brief moment. This means that water is a scarce resource. Yes, it may be renewable, but it is still relatively scarce. So, in a situation where there is a scarce resource but demand is high, market forces will drive the price of said resource up. So, in a perfect market situation, water prices should, theoretically shoot up, unless new sources of water are found.
Lets assume a situation where water is strictly defined as a human right and that no form of private interference should attempt to regulate the water supply. While this sounds nice on paper, the reality is that, if water is unregulated, only individuals residing around water catchment areas would be the ones who benefit as they have the easiest access to water supply. Individuals residing in areas with no access to drinkable water would have to incur a higher individual cost just to gain access to the water supply. Without the capital brought in by private organisations to build the infrastructure necessary to distribute the water to all markets, this is a possible situation. Of course, the effective counter to that argument is to argue that the government should create the necessary infrastructure to manage the water supply, but that is already a form of regulation and control and the funds for such an exercise would inevitably come from the taxes paid by the people.
Water is a natural resource, like all natural resources, there is a ready market for it. Energy, Crops, Livestock, these are all natural resources and they are all regulated and managed by private or semi-private organisations and are subject to the market forces. To claim that water is not subject to these same forces is to be turning a blind eye to the situation. To make water free to everyone would be to ignore the fact that water is a limited resource. If water was free then authorities would have to come up with a way to ensure that every individual uses just enough water to meet their daily needs, an exercise which while possible, may be extremely challenging. And if individuals exceed said quota, they would have to be cut off. Can you imagine washing your car one day and suddenly having the water cut of because you used more than you should? And to make matters worse, you can't pay more money to reconnect your water supply, you simply have to wait until your quota gets re-instated.
As mentioned earlier 90% of the world's water is undrinkable. But with new technology, such as de-salination, such water can become drinkable. Water scarce countries like Saudi Arabia rely on such technology to supply drinkable water to their people. Such technological breakthroughs are possible due to the capital brought in by private companies working together with governmental authorities to develop means of creating a larger pool of drinkable water that more people can benefit from. Now, I am not saying that private companies are angels who have the best interests of the people in mind, but I am saying that private companies understand the value of unlocking new resource pools because of their potential to bring in long-term profit for the growth of the company. With backing from authorities, many of these multinational companies have the ability to inject capital into technological developments which have the potential of giving water access to many more individuals. And if market forces are anything to go by, when there is a larger supply of water in the world to meet its demands, its price will go down and water due to the increase in supply.
Of course there are many other factors to consider, such as the trickle-down price of said technological investment, the environmental impact of developing water extraction infrastructure and the social cost of displacing individuals from water catchment areas. However, the fact does remain that water is a natural resource and like all natural resources, is subject to market forces. Hence, the privatisation of water is something which is here to stay.
Now the other argument to consider is is the privatisation of water a violation of human rights? Well, to answer that question, let us consider the following: Would you rather drive up to the water catchment area yourself to fill up several gallons of water and bring it down to your area twice a month or would you prefer to pay someone to pipe water directly to your home for you? You see, water authorities and companies have made it easy for many people all around the world to gain access to clean, drinkable water. Furthermore, individuals who currently have no access to water can even gain access to water through efforts by water companies further developing said infrastructure.
Without a doubt, there is always the worry that corporations may get greedy and try to extort money from the users and hike up water prices. Well, users can always patronise a different water company or, in the case where water companies are semi-privatised, vote in a new government. How about water companies refusing to supply poorer areas due to fears of making losses? Well, that's where NGOs and pressure groups come in to highlight such problems and work together with/pressure water companies to bring water to such areas.
To end it off, let me reiterate my belief that Water is a basic human right. But to call privatisation a violation of that right is short-sighted. NGOs need to engage water companies instead of villifying them. If there are greedy/recalcitrant water companies out there, then lets name and shame them as individual companies instead of placing the blame at the feet of the privatisation process. By being vigilant and ensuring that these water companies live up to their promises, we ensure that every human being has the right to access to clean water.
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