We’ve all heard the virtues of privatization, how private companies are far more efficient than their bureaucratic, red tape counterparts. To many, privatization sounds like a fantastic idea. People are disillusioned with the inefficiency of their government and want an alternative. One of the areas targeted for privatization is essential to all people: water.†
The people of Cochabamba, Bolivia, know what happens when privatization gets out of control.†According to Dustin VanOverbeke’s article "Water Privatization Conflicts," the Bolivian government was forced by The World Bank to contract the water supply to a private corporation. The price of water skyrocketed. Although the company argued the price only increased by 10 percent, water bills showed prices increased by as much as 90 percent. The basic argument behind the price hikes was that service was far better than when the water was distributed by the government. According to Food ‘ Water Watch, after massive protests Bolivia canceled a contract with a subsidiary of U.S.-based corporation Bechtel and was sued for $25 million. In the end, Bechtel settled and Bolivia had to pay the equivalent of $1.
Water does not necessarily become safer when privatized, as the people in an Ontario town found out. Water testing was privatized in Walkerton, Ontario in 1995, rather than being tested by the Ministry of the Environment, according to the World Socialist Web site. Regular, non-privatized water-testing labs were shut down even though Eva Ligeti, former environmental commissioner, warned against it. In 2000, the water supply was found to be contaminated with e-coli bacteria that led to seven deaths. A’L Labs tested the water and was aware of the water being contaminated, but treated the results as "confidential intellectual property" and did not divulge the results to the general public. The government also had a hand in the crisis by deregulating water protection and laying off water-testing employees.
Aguas Argentinas is another example of privatization gone wrong. Aguas Argentinas was created with the help of the International Monetary Fund and, again, The World Bank, creating another classic case of price hikes and minimal improvement in service. Rates went up nearly 90 percent, but this did not mean improved service as stated in its contract.
According to Sebastian Hacher’s article "Argentina Water Privatization Scheme Runs Dry," although the company handled the transport of sewage waste, over 80 percent of untreated waste was dumped into Rio de la Plata, a river in the Berazetegui zone. This created a backlash from local governments, but Aguas Argentinas argued drinking water was safe. A study revealed this was not the case in many Buenos Aires districts, where water and fish were found to be contaminated with polychlorinated biphenyls, known to be carcinogenic.
Companies need a measure of accountability other than fines that amount to nothing more than a slap on the wrist.
Companies must be held responsible by their customers, not just their stockholders. It is important to remember that government has its place and private companies have theirs. However, neither should gamble with the most precious resources needed for living.
Corgey, a political science junior, can be reached via [email protected].
