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Is Water a Commodity or a Right?

Global experiments in saving and selling the resource.

By Chris Wood 22 Mar 2006 | TheTyee.ca

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[Editor's note: Of 800 international journalists covering the Fourth World Water Forum underway in Mexico City, Chris Wood is the only Canadian. This is the second of several dispatches he is filing for The Tyee. Read the first one here.]

At one of the displays in the trade expo accompanying the Fourth World Water Forum in Mexico City this week, visitors take turns climbing aboard a primitive looking, but cheap and functional, treadle water pump. At another, a Scandinavian firm is showing off sleek water-saving and soil-composting toilets. At a third, American Cast Iron Pipe has samples of its namesake product available for examination. In still another part of the Centro Banamex in the west of the city, scale models visualize the aspirations of several Mexican states to build new dams to store water during rainy months against seasons of drought.

The emphasis on 'tubes and taps' is not entirely misplaced. Much of the world still lacks the basic infrastructure to deliver available water to the one-sixth of humanity that lacks secure access to it. Even rich Canada has shortcomings in that regard. By one estimate, as much as 45 percent of Montreal's water seeps through cracks in its antiquated mains before reaching consumers. But a striking feature of this summit, where 11,000 delegates from 123 countries have gathered to tackle the problems of a thirsty world, is the focus on what might be called software, rather than hardware; questions not of engineering, but of management, governance and choices.

Consensus is often elusive, as might be expected when rich and poor, providers and consumers, are wrestling with a topic as central to life, let alone prosperity, as water. In one press conference, pinstriped spokesmen for the World Bank spoke with the dry dispassion of technocrats of the need to tap "new sources of investment"-code for private funds-to expand water services in developing nations. A few steps away, half a dozen young people formed a line for photographers, each one holding up a sign in a different language bearing the same blunt message: "No Privatization of Water".

Water's true cost?

The same philosophical opposition was evident between those asserting that water must be viewed, first and foremost, as a "human right," and those who argue that much water presently wasted might be saved if people had to pay what it costs.

This particular debate is one Canadians have stuck their toe into-only to recoil. The city of Hamilton, Ont. experimented in 1995 with turning its water supply and sanitation services over to private operators. Instead of the savings and improved services it expected, Hamilton got scores of basements flooded with sewage, raw feces in the city's harbour and steep rate increases. The pungent debacle gave weight to-but obscured the self-interest of-Canadian Union of Public Employees President Judy Darcy's assertion that "Privatizing our water is absolutely the wrong choice."

Another issue getting attention in Mexico City that Canadians have stepped up to, only to step back again as fast as possible, is the place of water in international trade agreements. In the footsteps of the Canada-United States Free Trade Agreement and its subsequent extension to Mexico under NAFTA, numerous Latin American countries have signed similar deals, some including the U.S., some not. What, exactly, they mean for water and for countries' ability to protect their citizen's access to it, has been much debated here.

The original FTA was silent on the subject of water. Not by accident, according to former Alberta Premier Peter Lougheed, who was present when the negotiations turned to the subject. "We [Canadians] all kind of tied our shoelaces, dropped our pencils, looked out the window and the moment passed," he told me in an interview last year. That hasn't stopped knee-jerk aquanationalists from reading into the agreement a sort of silent 'call' option that could be triggered if Canada ever permits commerce in bulk water, even among its own corporate citizens. "Floodgates will be opened," the Council of Canadians' Sara Ehrhardt has warned "and neither the provinces nor Ottawa can stop US diversions."

I don't know if she has met Juan Carlos Alurralde. A man of charismatic presence with an engaging smile, dark curls pulled back into a pony tail and trim beard lightly frosted with grey, 'Oso' (the bear), as his friends call him, is a hydraulic engineer in La Paz, the capital of Bolivia, South America's poorest nation, and an advisor to that country's new president, Evo Morales. Bolivia is party to several trade agreements with its neighbours. The United States has sought to include it in a broader regional trade deal. An activist on behalf of the water rights of Bolivia's poor, Alurralde is not opposed to trade agreements per se. Instead, he's working with other South Americans to equip his country with the legal expertise to hold its own in any negotiations to come (a project funded, in part, by Canada).

The Bechtel revolt

Oso might surprise Judy Darcy, too. Bolivia's third-largest city, Cochabamba, was the scene of another disastrous attempt to turn water services over to a private company-US giant Bechtel Corp. Bechtel, promising better services to come, promptly raised water rates charged to Cochabamba's citizens by 300 percent, provoking an armed uprising. Bechtel broke the contract and demanded $45 million in compensation, a claim it has since been dropped to two Bolivianos-about twenty-five cents.

Strikingly, however, Alurralde doesn't blame Bechtel for the fiasco. He blames his own country's corrupt and incompetent officials who signed a deal giving the American corporation such sweeping entitlement that it could, in theory, have claimed the right even to rainfall being collected by peasants.

'The Bear' believes his country is taking steps to even the balance-without rejecting either trade deals or private investment in water services outright. A new law enshrines indigenous citizens' water rights. Bolivia has its first water ministry (something Canada does not). And President Morelos has written the World Trade Organization that Bolivia is withdrawing water from its commitments under that organization. Trade and commerce aren't the only areas where pragmatic thinking is likely to prove more valuable than new pipes or reservoirs-or head-in-the-sand denial. Some of the other 'software' needs being identified in the Mexico summit's multi-faceted discussions include:

* The need for a better understanding of the value of natural wetlands and water resources to the economy. Riverside marshes not only house ducks and herons, they cleanse impurities from water and limit the impact of floods. These and other environmental 'services' of natural watercourses need to be taken into account in weighing the costs and benefits of any proposed development. (Memo to the Fraser Institute: guys, why not apply your unofficial motto of 'If it matters, measure it' to this pressing question.)

* The need to develop institutions capable of managing river basins in their entirety, taking into account all of the competing influences and needs at play, including ecosystems and the recharge of groundwater as well human populations, and empowered to transcend the arbitrary political frontiers that mean nothing to nature. (Such holistic agencies exist for the Indus and the Mekong but not for the Columbia or the St. Lawrence.)

* Ways to put a price on water for agriculture, industry and domestic use that better reflects the cost to provide it and discourages waste, as well as market mechanisms that encourage scarce water to 'find' its most valuable use, while, in both cases, protecting nature and ensuring that no one is left without. (In Canada, only Alberta has pioneered the second; no province has properly grappled with the first.)

Casey Brown, an American water resource engineer with the air of an accountant more than a hardhat, sat with me for a moment to discuss his research as a member of Columbia University's Earth Institute. He illustrated the importance of these kinds of 'soft' questions with a story about his hometown of Boston.

A few years ago, Boston faced the need for a new water source to supply its 600,000 people. But objections were raised to diverting a portion of the Connecticut River for this purpose (remarkably, a small salmon population still calls the river home). Instead Boston raised water rates. The need for the diversion vanished as people began turning off the tap rather than let it run.

"Without doing anything, we doubled or tripled the 'capacity' of Boston Reservoir," Brown told me.

As with so much to do with water, we Canadians may be deluding ourselves that these are questions we do not face. As I reported in my first dispatch from the World Water Forum, the country with more fresh water than any other is conspicuous by its absence in Mexico.

But I repeat: our complacency is unjustified.

Stopping the squandering

Vancouver may be the city of umbrellas in January; it is often the city of water restrictions by August. On Vancouver Island, where I live, several communities are straining the limits of existing water supplies and unsure where to look for more. In British Columbia as a whole, despite the country's highest precipitation, we continue to permit unlimited pumping from aquifers which, scientists admit, we have barely begun to map, let alone understand well enough to know their limits.

By refusing to contemplate a role of any kind for commerce in water services, cowed by an alarmist and highly debatable reading of trade agreements, we deprive ourselves of ways to make the best use of water we do have. We may also deprive our cities-which face an estimated $90 billion bill for renewing aging infrastructure-of useful investment.

Every choice incurs a tradeoff. Even good ideas may be badly executed, while arbitrary rejection in advance of consideration is a sure recipe for impoverished options. The evidence here in Mexico City is that many of the world's other nations, including the poorest and driest, understand this. They also understand that the 'software' of water use-practices, policies and institutions-are easier to change than pipes and concrete. Like Bolivia's charismatic 'Oso', they are trying to equip themselves with the knowledge to make the best choices. The developing nations represented here look with as much envy on Canada's infrastructure of reservoirs and water mains as on our rainfall. It will be ironic in the extreme if we find ourselves looking with envy on their advances in managing the resource we so complacently squander.

Read Chris Wood's previous dispatch here.

Wood is a former national editor of Maclean's and an award-winning author of fiction and non-fiction. His latest book, on climate change and water, will appear next year from Raincoast Books.  [Tyee]

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