Newsletter on the Right to Water Around the World Feb 08

[Guest guest]

February's Defend the Global Commons: News from Food &

Water Watch

 

In this issue

 

Arbitration Panel

Rules against Biwater in Tanzania Privatization The Thorny Side of Valentine's Flowers Facing Protest, Bechtel Plans to Leave Ecuador New Bolivian Constitution Would Support the Right

to Water

 

 

Arbitration

Panel Rules against Biwater in Tanzania Privatization

In a major victory for the

effort against water privatization, an international arbitration panel

unanimously ruled on January 10th that Biwater's subsidiary City Water

Services (CWS) breached a privatization contract in Dar es Salaam, owing

Tanzania $8 million in damages. Both the Tanzanian government and City

Water Services have been in legal disputes since 2005, after problems

with water and sewage services led the government to seize back control

of the water system from CWS. The settlement is a major success for the

Tanzanian government and civil society groups who have documented how

Biwater failed to fulfill any of the performance measures set out in the

contract, and sets an important precedence for failed water

privatizations across the world.

 

However, Biwater is not giving up so easily. Anticipating the outcome

from the panel, Biwater launched a parallel case at the International

Centre for Settlement of Investment Disputes (ICSID), claiming Tanzania

owes the company $20-25 million. The ICSID case gives an unfair advantage

to Biwater, because unlike the international arbitration panel, the ICSID

case will only consider claims from Biwater, leaving out any counter

claims Tanzania may have.

 

In addition, Biwater unloaded its subsidiary Cascal on Wall Street in the

United States just days after the Tanzania ruling. Biwater had initially

planned to raise as much as $365 million with an average share price of

$18, but instead, Cascal raised only $144 million with a share price of

$12. This disappointing result in the rushed sale is a reflection of the

American public becoming wary of water privatization and the companies

that dump bad investments on Wall Street investors and American

ratepayers.

 

For more

 

background on the Tanzanian case,

 

For more information on ICSID, see Food & Water Watch's report,

 

Challenging Corporate Investor Rule, which calls for reform of

the undemocratic and flawed ICSID process.

 

 

The

Thorny Side of Valentine's Flowers

As St. Valentine prepares to

launch himself on another February flight of romance filled with flowers,

you may want to know that many of the roses and other flowers that

symbolize Valentine's Day come from Lake Naivasha in Africa. Its waters

shimmering amidst Kenya's rift valley, the lake is renowned

for its beauty and the hippos, birds, and other wildlife basking along

its banks.

But the story of Naivasha is not all roses, for a dark and thorny side

lurks. A cadre of transnational flower farms has spent decades assaulting

the lake, its environs, and its people. These industrial operations have

depleted the waters and poisoned them with pesticides to grow flowers for

shipment to Europe and other wealthy destinations. Meanwhile, people

laboring in the farms have little choice but to accept corporate abuse

and low pay.

Despite these concerns, the flower industry is as dominant as ever, and

will continue to impact the local community and environment until

international action is taken. On January 31st, Food & Water Watch

released a report entitled, " Lake Naivasha: Withering Under the

Assault of International Flower Vendors, " that aims to look closely

at how the flower industry is contributing to the area's environmental

decline, and highlights current efforts to save the region and the lake.

 

The report was originally scheduled for release on Valentine's Day but

moved up due to the situation in Kenya and outrageous news coverage

sympathetic to the flower industry. Headlines such as, " Kenya

violence upsets flower production ahead of Valentine's Day " in the

International Herald Tribune and " Kenya's blooming industry is

facing hard times " in the UK Telegraph, are just a few

examples. Hundreds of people have been killed and thousands

displaced due to increasing violence.

" The situation in Naivasha is a human tragedy, not an investment

loss. Our sympathy and aid should go to the people in the region, not the

international corporate owners of these flower farms that exploit the

workers, the lake, and the environment, " Hauter said in a press

release.

The

 

report on Lake Naivasha was prepared by Food & Water Watch and

the Council of Canadians to launch a campaign to protect the lake and the

local communities that surround it. The campaign will urge the Kenyan

government to promote small-scale agriculture and eco-tourism and

encourage consumers in Canada, Europe, and the United States to purchase

local, ecologically sustainable flowers.

 

 

Facing Protest,

Bechtel Plans to Leave

EcuadorAfter years of poor

service, water cut-offs, flooding, and unsafe drinking water, the

residents of Guayaquil, Ecuador are organizing to demand their human

right to clean and affordable water, and putting more pressure on the

company that caused their water difficulties, Bechtel.

In October 2000, just months after massive citizen protests threw Bechtel

out of Bolivia, a local Bechtel subsidiary, Interagua, signed a 30-year

concession contract to run the water and sanitation services in

Guayaquil, Ecuador's largest city. Bechtel promised to invest $1 billion,

connect 55,000 new users and increase coverage to 90% for water and 60%

for sewerage treatment.

Instead, Guayaquil residents have suffered seven years of periodic water

cut-offs, flooding, a tripling of water rates, and contaminated water

(including a Hepatitis A outbreak in 2005). In 2007, the Ecuadorian

regulatory agency ECAPAG fined Interagua $1.5 million for contractual

violations, and in January 2008, a local judge ordered a prison sentence

for the manager of Interagua for contempt and failure to fulfill the

obligation to provide water services.

As a result of these decisions and mounting citizen complaints, Bechtel

is now trying to sell the company. But before Bechtel leaves the country,

local residents are demanding compensation. They are seeking damages for

the water contamination, an end to the water cut-offs, and the return of

all water services to local, public control. A local advocacy

organization, the Observatorio Cuidadano de Servicios Publicos, which

originally exposed the constitutional, legal and contractual violations

of Interagua, is working to ensure that Interagua takes responsibility

for its failure and is seeking to stop the water cut-offs through legal

action.

Don't Let Bechtel off the Hook in Ecuador!

 

Tell Bechtel to live up to its responsibility before it leaves

Ecuador.

 

For more

 

background on Bechtel in Ecuador,

 

 

 

New Bolivian

Constitution Would Support the Right to Water

In 2006, Bolivia elected

President Evo Morales, an Aymara Indian with a progressive agenda and a

campaign for change. One of his most significant initiatives was the

establishment of a Constituent Assembly that would draft a new Bolivian

constitution. But instead of establishing a popular- based assembly, it

became, as commentator Jim Schultz put it; " just one more party for

the political parties. " The Constituent Assembly faced intense

criticism throughout 2007, and violence erupted across the country.

 

Despite the criticism, the new draft constitution has several promising

articles on water, including Article 16 which states that every person

has the right to water and food, and Article 20 which adds that every

person has the universal right of access to basic services like water,

sewage, electricity, gas, telecommunications and transport. The draft

constitution further states that indigenous people will be able to

manage, build and maintain the water systems in their own territories.

Finally, the constitution guarantees " the state will protect the use

of water for life. "

While this draft constitution considers many of the demands made by

social movements over the years, there is widespread concern that current

policies and economic priorities will prevent the full implementation of

the constitution.

Bolivians now prepare for a popular vote that would approve or reject the

new constitution.