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Sunday, September 28, 2008

SELLING WATER

Water Commodification: A Challenge of Environmental Ethics ?1

Budi Widianarko2

Privatization have become a magical buzzword in the water arena. Globally, just in a decade the number of consumer has swollen eight times, from 51 million in 1990 to 460 million at present time. Many analysts predict that trend of water privatization will continue to accelerate. It is estimated in 2015 more than 1 billion people will use private water.

This privatization option has been promoted by water corporations to be an effective means for improving the people’s access to water. Preferable use of the term “public-private partnership” over “privatization” clearly implies what is going to be tackled by this option. To its promoters, privatization is believed to be a capable weapon to combat weaknesses of currently existing public sector water undertakings (PWUs). Generically, the immediate blames to PWUs are lack of financial capacity to expand systems as well as inefficiencies in technical, financial and managerial aspects. Privatization is thus believed to promising a better and wider access to water.

Very sadly, in Indonesia these drawbacks are profoundly believed, not only by municipal governments but even also by PWUs administrators. Even if options for improving the performance of a PWU are available or can still be explored, usually privatization is chosen as the best and most immediate therapy. One possible explanation for this attitude is the preference toward instant solution, namely “solving” problem without much struggle, which nowadays seems to be rampant within public institutions in Indonesia. Naturally, this kind of attitude is perfectly matched with the strong drive of transnational water companies in expanding their market. It will not be too surprising, however, if this “perfect” match take place in metropolitan and bigger cities where various problems related to water service provision are prevalent. Shockingly enough, the same tendency is now also spreading all over the country (thanks to decentralization?), stretching to smaller towns which, so far, have no significant problem with their water service provision.

Water as A Commodity
Undoubtedly the underlying principle of privatization is the market-based mechanism which has a skeleton consists of supply, demand, price and of course profit (Viten, a Dutch water company perfectly put it in their triple-p slogan “people-planet-profit”). As a consequence of the above mentioned market based principle, water is therefore treated as a commodity. As soon as this commodification takes place, the notion of ownership will prevail.

Claim over water ownership definitely generates an ethical challenge. However, there is indeed a generic counter argument to it. In his article in Development Outreach (Fall-2002) Gerard Mestrallet (2002), Chairman and CEO of Suez – the giant French water corporation, wrote
“water is a common good, one of the basic public goods. At Suez, we are opposed to the private ownership of water resources precisely because, in our eyes, water is not a commodity. We do not trade in water. We do not sell a product. We provide a service. The service of making clean water continuously available to all, and returning water to the natural habitat once it has been treated. It is the price of that service that is billed, not the price of water as raw material”.

On paper, the above argument is perfect and yet sophisticated. By pricing “only” the cleanup and distribution service, and not the water itself, the company seems to pay ample respect to the water. In reality, however, people have to pay for obtaining water. They have to pay based on the volume of water they use. For ordinary people, who can not afford to digest the above sophisticated argument, the reality is simple: water has a price. In this case, the higher the profit margin incorporated into the price the stronger the notion of water pricing will be.

This is not to say that provision of water by PWUs is free from pricing. As a subsystem of the municipal/local governments, PWUs should not include a maximized profit margin in the bill, since it is a political responsibility of the (local) government to secure its citizens’ access to water. Under this framework the bill can duly be considered as people’s contribution to the government efforts in providing and distributing clean and safe water. So, the notion of water pricing is less pronounced.

Environmental Ethics
As mentioned earlier, privatization raises a strong notion of water pricing. This notion will be more obvious if after privatization take place the bill constantly increases. Water tariff hikes after privatization takes place is evident in many countries. In terms of environmental ethics, giving a price to water is not an acceptable conduct. It is clearly a paradox, if clean water declared by the United Nations as a human right is, at the same time, also regarded a tradeable good. We all are aware that water is a vital substance for life of the biosphere. It can be found across the levels of living beings, from simple cells to complex ecosystems. For us, human beings, water is the most intimate and vital substance. About 60% of our body is water.

Copious exchanges of water taking place within the biosphere is crucial to the maintenance of the biosphere, especially temperature control. Furthermore, according to the Gaian ethics assignment of intrinsic value can be extended beyond individual living being. With its distinctive atmospheric gas composition, the biosphere (Gaia – the name after the Greek Earth goddess) can be regarded as a living being analogous to a living individual with vital organs (wetlands, tropical forests, continental shelves etc) (see e.g. Whitten et al., 1996). Since water is the most essential factor for survival of the Gaia, naturally it is very tempting to assign water with an intrinsic value.

By having an intrinsic value, something - in this case water - is valued beyond its utility (Light & Rolston III, Environmental Ethics, 2003). This is somehow compatible to how most Indonesian regard water. Some traditional beliefs and religions in Indonesia view water as the origin and posterity of all life, spiritual blessing, and also as a healing substance (Whitten et al., Ecology of Java and Bali, 1996). Accordingly, traditional communities are well-equipped with local wisdoms related to water ritual, use, distribution, and conservation. Being practiced for thousands of year these wisdoms has become social norms obeyed by members of the community. Taking into account these local wisdoms and social norms, the concept of price for water is certainly incompatible with traditional communities.

In addition to the ethical problem, privatization of water sector in Indonesia also tends to trigger a social justice problem. With a very weak enforcement of environmental laws and regulations various pollution - particularly by industries - can still take place without any strict penalty. In this situation there is an obvious risk of overcharging the ordinary human user with the cost of purifying the polluted water. It is clearly injustice to charge an ordinary user solely based on the volume of water, without leaving behind the cost’s component for cleaning up the contamination which are done by others. Without incorporating the polluter pays principle in the formula, calculation of cost recovery will certainly be socially injustice. Costs of purifying polluted water have to be born by all the users, regardless their shares in contaminating the water.

In terms of environmental ethics and social justice, it can therefore be foreseen that the commodification of water will ultimately create problems rather than solutions. Unfortunately, the drive for water privatization in Indonesia seems can not be stopped. And even worse, the currently available draft of Water Resources Law put too much emphasis on commercialization. Now is the time to call public attention for not allowing unnecessary privatization of PWUs in their cities and towns.
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1 Earlier version of this article was discussed at People’s Forum on Water, Session: “Water Problem in Indonesia”, March 17-2003, Hartopia-Kyoto, JAPAN
2 Professor of Environmental Management and Director of the Graduate School of Environment and Urban
Studies at the Soegijapranata Catholic University (UNIKA), Semarang – INDONESIA
(e-mail: widianarko@unika.ac.id)

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