The Guardian August 22, 2001


Trading in water

by Amit Sen Gupta

Virtually since the dawn of human civilisation, the total amount of fresh 
water available for human consumption and use has practically remained 
constant. Fresh water makes up just half a per cent of the total water on 
the planet  the rest being seawater, locked up in ice caps or deep below 
the earth's surface.

In the last 200 years the earth's population has risen over 33 times. On 
the other hand, the only renewable source of freshwater on earth is 
rainfall  which generates a more or less constant global supply of 40,000 
to 45,000 cubic km per year.

Moreover, overuse, pollution, diversion and depletion of this finite source 
of freshwater are taking place rapidly across the globe. It is being 
predicted that by 2025 the demand for fresh water will rise by over 56 per 
cent. Clearly fresh water is becoming a scarce commodity.

The United Nations estimates that one billion people already lack access to 
fresh drinking water, and within the next 25 years, the number of countries 
facing chronic water shortages will rise to 50, affecting about 35 per cent 
of the world's population.

Crisis in fresh water availability

It is not as if the increasing population has access to, or equal use of, 
this finite resource.

The United Nations reports that Europeans spend US$11 billion a year on ice 
cream (made mostly of water), US$2 billion more than the estimated total 
money needed to provide clean water and sanitation for the world's 
population.

More than five million people, most of them children, die every year from 
illnesses caused by drinking water that is unfit for human consumption. And 
while billions of people in developing nations go without clean water, 
North Americans use about 5000 litres of water per person per day!

Unequal access to water exists within nations too.

The ongoing unprecedented drought in India is affecting millions of humans 
and cattle, and is leading to famine-like conditions and large-scale 
migration.

The drought of the year 2001 affected the entire central belt, from East to 
West. Rivers and wells ran dry and over-pumping has either emptied ground 
water or pushed the source deeper down. At the same time, water-sport 
amusement parks are seen to sprout in every big city of the country.

Of the total quantum of water used by humans, 65 per cent is utilised for 
agricultural activities, 25 per cent by industry, and 10 per cent by 
households and municipalities.

The world's expanding cities and industries are taking more and more water 
from agriculture every year. Export oriented agribusiness is claiming more 
and more of the water once used by small farmers for food self-sufficiency.

While advances in modern engineering have allowed governments to supply 
farms and cities with water and hydroelectric power, it has also 
accentuated the disparities in access to water.

Water as a commodity

True to its character, global capital utilises this looming crisis for its 
own gain. Trade in water has, in recent years, become an extremely 
profitable business. As demand for fresh water continues to grow, more and 
more corporations and governments are joining the race to commodify water.

In industries ranging from wastewater services to bottled water to bulk 
water exporting, corporations are gearing up to exploit water shortages all 
over the world.

Two French multinational corporations dominate the world of privatised 
water  Vivendi SA, (whose water division is Generale des Eaux) and Suez 
Lyonnaise des Eaux (which built the Suez Canal and has holdings of over 
US$56 billion).

They are often referred to as the "Holden and Ford" companies of the water 
world. Between them, they own or have controlling interests in water 
companies spanning 120 countries on five continents. 

They distribute water to almost 100 million people in the world. In March 
1999, Vivendi purchased US Filter Corporation for more than US$6 billion, 
making it the world's largest water company in North America, with 
projected annual revenues of US$12 billion. 

With close to US$90 billion in annual revenues, the US is the world's 
largest water market.

Until now, small-scale public-sector operators have almost exclusively 
controlled this sector. Vivendi is poised to promote the massive 
privatisation of the American water market.

Corporations have suddenly discovered the potential of the water market. 
The World Bank places the value of the global water market at close to 
US$800 billion.

The power giant Enron (very familiar to people in India), has acquired 
Wessex Water PLC of Britain and is bidding for huge contracts for newly 
privatised water services in Bulgaria, Rio de Janeiro, Berlin and Panama.

Bottled water

A form of privatised water, familiar even in developing countries like 
India, is bottled drinking water. The inability of municipal bodies, 
throttled with financial cuts, to supply quality drinking water has opened 
up a huge private market for drinking water. In India, for example, bottled 
water sells at rates higher than that of milk!

So, enter private packaged suppliers. Bisleri, Triputi, Ganga, etc, have 
become familiar brands that are not only common in the big cities, but also 
deep in the countryside.

Recently, the two multinational soft drink giants  Coke and Pepsi  have 
entered the bottled water market. Parl, which owns Bisleri, is negotiating 
a deal to sell its brand to a French multinational.

World-wide, trade in bottled water is one of the fastest growing and least 
regulated. 

In the 1970s, the annual volume was around 9000 million litres. 

By 1980 this figure had reached around 19,000 million litres, and by the 
end of the decade the world was drinking around 6 billion litres of bottled 
water each year.

In 1998 over 18 billion litres of water were bottled and traded globally  
over 90 per cent of it in non-renewable plastic containers.

As the world's freshwater supply becomes increasingly degraded, those who 
can afford it are turning to bottled water, even though bottled water is 
subject to less rigorous testing and purity standards than tap water.

A March 1999 study by the US-based Natural Resources Defence Council (NRDC) 
found that much of bottled water is less safe than tap water. One third of 
103 brands of bottled water studied contained levels of contamination, 
including traces of arsenic and disease causing bacteria.

The study also found that at least one fourth of bottled water sold in the 
market is actually bottled tap water. Similar studies in India have come up 
with very similar findings. Yet the market for this water continues to make 
rapid strides.

As mentioned earlier the soft drink giants are now entering the bottled 
water market to challenge the supremacy of established global brands like 
Perrier and Evian.

Pepsi has its Aquafina line, and Coca-Cola has recently launched the North 
American version of its international label Bon Aqua, called Dasani. Coca 
Cola predicts that its Water line will surpass its soft-drink line within a 
decade!

These companies are engaged in a constant search for new supplies. They 
ship water in containers from distant sources, often purchasing water 
rights from farmers in rural communities all over the world. Corporate 
interests are buying up farmland to access wells, and then moving on when 
supplies are depleted.

Expanding trade

Bottled water is however a very small component of the global trade in 
water which involves the mass export of bulk water by diversion (of water 
bodies) and in sealed bags and super tankers.

Barges already deliver water to the islands in Bahamas, and tankers deliver 
water to Japan, Taiwan and Korea. 

A water company owned by the Turkish Government had begun work to divert 
water from the Manavgat River, to be shipped across the Mediterranean to 
Cyprus, Malta, Libya, Israel, Greece and Egypt, until political tensions 
halted the project.

The European Commission is looking into the possibility of establishing a 
European Water Network so that alpine water from Austria can flow into 
Spain or Greece, rather than into Vienna's reservoirs. A high-tech pipeline 
already transports spring water from the Austrian Alps to Vienna, and there 
are proposals to extend it to other countries.

In Canada, a permit granted in 1999 to the Nova Company to ship tankers of 
Lake Superior water to Asia was abandoned after a major public outcry.

Several companies around the world are developing technologies to make it 
possible to load large quantities of fresh water into huge sealed bags, to 
be towed across oceans for sale.

The Nordic Water Supply Company in Oslo has signed a contract to deliver 
seven million cubic metres of water per year to Northern Cyprus.

Aquaris Water Trading and Transportation Ltd of England has begun the first 
commercial deliveries of fresh water by bag to the Greek Islands.

But it is in North America that companies are lining up in large numbers to 
trade in water. Several are directly involved with plans to divert massive 
amounts of Canadian water to water-scarce areas of the United States, Asia 
and the Middle East by tankers, pipeline, or rerouting of natural river 
systems.

Evidently, the day is not far off when the fresh water resources of 
developing countries like India will be predated upon. While the developing 
countries offer a large market for fresh water, they also contain some of 
the largest reservoirs of this same water.

Regions like the Himalayas and its river and lake system  stretching 
through Pakistan, India, Nepal, China and Bangladesh  provide a vital 
source for fresh water mining.

The consequent ecological damage could threaten the most populated region 
of the world.

* * *
(Much of the material in this article has been prepared by Dr Vinod Raina for the All India People's Science Network.) People's Democracy paper of the Communist Party of India (Marxist)

Back to index page