The Secret EU Drive to Privatize Water

Up to the Last Drop: Secret Water War in Europe

Al Jazeera (2018)

Film Review

Up to the Last Drop is about the role of the EU Commission in pressuring member countries to privatize their municipal water supplies. Although the UN declared access to water a human right in 2001, the EU continues to exert pressure on indebted nations (ie Greece, Portugal, Italy and Ireland) to sell their water utilities to repay the debt they incurred by bailing out their banks in 2008.

Water privatization almost always leads to massive price hikes for consumers, who are fighting back. Between 2000-2017, popular unrest against privatization and price increases led municipalities in 37 countries to oust private water companies* and resume municipal control.

In 2005, mass protests over skyrocketing water prices led Bolivians to overthrow their government.

In 2011, 98% of Berlin residents voted “yes” on a referendum for local authorities to resume control of the city’s water supply. Italy also blocked water privatization (with 95% voting no) via referendum.

Ireland blocked a wholesale water privatization scheme via mass protest, and Portugal ended it by electing a new left-leaning government.

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*Two French companies Suez and Veolia monopolize nearly all private water schemes worldwide.

The film can’t be embedded for copyright reasons but can be viewed free at the Al Jazeera website: Secret Water Wars

Suez: Britain’s Illegal 1956 War Against Egypt

A Very British Crisis

BBC (2006)

Film Review

In 1956 Britain, France and Israel launched an illegal war of aggression against Egypt after President Gamal Nasser nationalized the Suez Canal. As in the more recent US invasions of Iraq, Afghanistan, Libya and Syria, UK Prime Minister Anthony Eden’s real goal was regime change – the removal of Nasser as president. Eden, like Bush and Obama believed the local population would welcome the foreign invasion – that they would use it to rise up and topple their leader.

The humiliation Britain faced over the Suez Crisis would spell the end of their role as the world’s foremost super power.

Part 1 covers Egypt’s war of independence, which began as a mass popular uprising against British military occupation. In 1952, a secret group of Egyptian military officers, led by Nasser, took advantage of the civil unrest to topple King Farouk, establish a revolutionary council and demand the withdrawal of British troops. When Britain and the US tried to isolate Nassar by blocking a World Bank loan for Egypt’s Aswan Dam, Nasser responded by nationalizing the Suez Canal Company (jointly owned by Britain and France). His intention was to use canal profits to pay for the dam.

Part 2 concerns the secret conspiracy hatched by Britain, France and and Israel to invade Egypt, reclaim the Suez Canal and remove Nasser from power.

Part 3 covers the brutal invasion and the armed civilian resistance that fought back against the invaders. It also reveals the humiliating circumstances that forced Britain to withdraw their troops before they ever reached the canal. Because both France and Britain hold vetoes on the UN Security Council, Eisenhower used economic warfare to force Britain to agree to a ceasefire. A coordinated attack on the British pound by Wall Street banks* forced Eden to request Eisenhower’s support for an IMF loan. The latter demanded an immediate ceasefire as a condition of the loan.

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*The filmmakers are a bit fuzzy about the coordinated sell-off of the British pound that caused its value to plummet. Based on what Willim Engdahl has written about US economic warfare (see How the US Uses War to Protect the Dollar), I suspect it was instigated by the Economy Warfare division of US Treasury.

Privatization and the Theft of the Commons

Catastroika

by Aris Chatzistefanou and Katerina Kitidi

Film Review

Catastroika is a Greek documentary on neoliberalism, with a specific focus on the privatization of publicly owned resources. Although it makes no mention of historian Richard Linebaugh, its depiction of the neoliberal privatization movement provides an elegant illustration of the ongoing theft of the Commons (see Stop Thief: the Theft of the Commons).

After a brief overview of the University of Chicago economists (championed by Milton Friedman) who first put neoliberal theory into practice during the Pinochet dictatorship, the documentary tracks the wholesale privatization of Russia’s state owned industries after the 1993 coup by Boris Yeltsin, in which he illegally ordered dissolution of the Russian parliament (see The Rise of Putin and the Fall of the Oligarchs).

The fire sale of state assets to oligarchs and western bankers would virtually destroy the Russian economy, throwing millions of people into extreme poverty and reducing average life expectancy by ten years.

The Privatization of East Germany

With German reunification in 1990, East Germany would be the third major target for massive privatization. According to German economists interviewed in the film, the process amounted to an “acquisition” of East Germany by West German bankers. The West German government set up an agency called Treuhand to buy up state owned East German businesses at the rate of ten to fifteen a day – a total of 8,500 businesses in four years. The process, undertaken with virtually no oversight, predictably resulted in massive chaos and fraud. Many well-performing East Germany companies were dissolved for the simple reason they competed with West German businesses. Three million (out of 4.5 million) East German workers lost their jobs, which East Germany’s GDP shrank by 30%.

Using Debt to Compel Compliance

With the gradual demise of the world’s dictatorships during the 1990s, debt, rather than brute force, became the main mechanism to compel people to give up their publicly funded assets. At present, most of the focus is on Greece.

Current EU Commission Jean-Claude Juncker holds up Treuhand (which incurred a 250 million euro debt German taxpayers are still paying off) as a model for the Greek Asset Development Fund. The latter has been steadily selling off (at bargain basement prices) Greek railroads and municipal power and water systems.

The Dismal Track Record of Privatized Utilities

The filmmakers end the film by highlighting the disastrous outcome of Britain’s decision to privatize its railroads in 1993, the city of Paris decision to privatize its water service in the 1980s (it’s recently been re-municipalized due to massive public unrest – like privatized water systems in Bolivia, Ecuador and Argentina) and California’s experiment with electricity deregulation in the 1990s (leading to the Enron scandal).*

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*The Enron scandal involved massive securities fraud and a deliberate conspiracy by power companies to withhold power to drive up electricity prices.

The Water Emergency

Blue Covenant: The Global Water Crisis and the Coming Battle for the Right to Water

by Maude Barlow

The New Press (2007)

Book Review

Although it receives less public attention, fresh water scarcity is far more urgent and deadly than climate change. With no choice but to drink contaminated water, millions of children under five are dying from infectious diarrhea. Growing water scarcity is also the major driver of illegal immigration. In Mexico alone, nearly 600 farmers a day abandon their land when their wells dry up.

According to the World Health Organization (WHO), 80% of global sickness and disease is caused by contaminated water. In the global south, where only the rich can afford clean water, the poor die of hepatitis, cholera, polio, botulism, salmonella, e coli, campylobacter, viral gastroenteritis and other infectious illnesses transmitted by human feces. In the global north we die at unprecedented rates of cancer and autoimmune disease from drinking water contaminated with endocrine disrupting herbicides and pesticides, industrial toxins, heavy metals, drugs and nanoparticles.

The Cause of Freshwater Scarcity

Barlow identifies seven major factors contributing to the rapid depletion of clean drinking water:

1. Total failure to regulate the massive increase in toxic runoff (animal waste, herbicides, pesticides, antibiotics) from factory farms and industrial sites.

2. Unregulated corporate mining of fossil water from aquifers that are too deep to be replenished by rainwater. Corporations siphon off millions of gallons a day at zero or minimal charge to mass irrigate deserts, manufacture cars and computers, mass produce bottled water* and extract oil from tar sands and oil and gas from shale (aka fracking).

3. Reduced rainfall due to destruction of water retaining landscapes from rapid and haphazard urbanization. Rain that falls on pavement runs off (and ends up in the sea), rather than being absorbed and evaporated.

4. Rapid glacial melting (due to climate change) of glaciers in the Himalayas, Alps and Andes. The Himalayan glaciers are the primary source of water for nearly half of humanity (India, Pakistan, China, Vietnam, Laos, Nepal, Bhutan, Burma, Thailand, Bangladesh and Cambodia).

5. Loss of water from the “virtual water” trade, thanks to International Monetary Fund (IMF) and World Bank policies that force poor countries to sacrifice their scarce freshwater by growing and exporting water intensive crops (eg avocados, citrus, wheat, coffee, cut flowers and biofuel).

6. Ill-conceived technological fixes, such as mega-dams, water diversion and desalinization that reduce, rather than increase, access to clean water. Desalinization is the most destructive, owing to the massive of toxic waste (from chemicals used to clean reverse osmosis filters) discharged to the ocean.

7. Water privatization by powerful multinational corporations. Most of the world’s freshwater is controlled by the French Companies Suez and Veola and the British/German company RWE/Thames.

The Global Water Cartel

During the late 19th and early 20th century, Europe (with the exception of France, where municipal water service has been privately run since the late 1800s), North America, Australia, New Zealand and Japan adopted universal public water and sanitation services in all major metropolitan areas. This never happened in the global south, where cities only provided water service to the wealthy elite. This made it easy for neoliberal institutions like the IMF to force water privatization schemes on countries in the global south with debt problems.

Barlow slams the IMF and World Banking for forcing water privatization schmes on South America, Africa and Asia as a condition of development loans. She’s especially critical of former UN Secretary General Kofi Anan for supporting these policies, in return for major donations Suez and Veola made to UNESCO.

Over the last few decades, Suez, Veola, RWE/Thames and a few smaller corporate players have been targeting cash-strapped US cities with their water privatization schemes. Bankrupt cities like Detroit are being forced to sell their public water systems as a source of revenue.

Water Warriors

Barlow devotes the last third of her book to the “water warriors” around the world who are fighting for clean drinking water to be recognized as a basic human right. Among other reforms, there must be pressure on government to end the virtual water trade by promoting local sustainable farming, to ban private water companies from developing countries, to strictly enforce laws against surface and ground water contamination, to charge corporations full value for the water they take for bottling plants, fracking, manufacturing and flood irrigation and to promote urban planning that accommodates the need for rainwater to be captured and returned to the earth.

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* The big three global bottling companies are Nestle, Pepsico and Coca Cola, though Starbucks’s water bottling company Ethos Water is sneaking up on them with their phony campaign to “help children get clean water.”