Press release of Corporate Accountability International on water privatisation

Dear friends, 

Earlier this month (December 6, 2014), Corporate Accountability International (a US based NGO) held a programme in Nagpur in consultation with Nagpur-based activist Jammu Anand. During the event, Jammu Anand released a report that 'exposes the myth vs reality' of World Bank marketing of water privatization projects and 'lays bare' its conflict of interest in many of these projects. The report 'debunks' the World Bank's marketing of the Nagpur model as a success. 

With a view to encourage different view-points, I am hereby uploading the press release issued at the programme. I welcome comments/opinions on the issue of water privatisation, so that this issue could be discussed further on this blogspot. Here is the text: 

Press Release

New report exposes World Bank’s misleading marketing and conflict of interest

 

Report release comes just days before international week of action to expose, oppose privatization

BOSTON— Today, Corporate Accountability International released a new exposé detailing how the World Bank throws good money after bad to promote water privatization projects around the world that could threaten water access for millions.

The expose highlights cases from cities around the world including Nagpur, India and Manila, Philippines—case studies the bank uses to market water privatization projects. In both cases, despite serious human rights, environmental and labor concerns, the World Bank continues to market them as success stories to governments.

In conjunction with the report release, activists from India, the Philippines and Lagos, Nigeria—the Bank’s most recent target—held an international week of action to expose the truth behind World Bank marketing of key water privatization successes and prevent water privatization projects from going forward in Lagos, Nigeria and other parts of the world.

“This week of action and report release mark the beginning of the end to the World Bank’s deceptive marketing and harmful water privatization projects,” said the report’s author, Shayda Naficy, an international water privatization expert, “Officials considering such projects deserve to know the truth—the World Bank isn’t an impartial advisor; it has a vested financial interest in these deals going through, despite the  rate hikes, service cutoffs, labor abuses and failure to invest in infrastructure that often result.”

In response to industry reports of an undisclosed contract between the World Bank and the city of Lagos to design and implement a plan to privatize water in Lagos, CAI and Environmental Rights Action of Nigeria called on the World Bank to publically disclose the advisory contract with its private sector arm, the International Finance Corporation (IFC).  After weeks of pressure from civil society, the World Bank announced the cancellation of the proposed advisory contract. Leading trade publication Global Water Intelligence also published a retraction of its earlier claim that the IFC’s contract with Lagos Water Corporation was in effect.

Central to the groups’ concerns and the focus of the report is the misleading PR the World Bank uses to market water privatization projects to governments around the world. As part owner of several water corporations including Veolia and Manila Water Company, the World Bank is positioned to directly profit from this marketing, and the resulting projects. Two of the Bank’s most often relied upon “success” stories are in Manila, Philippines and Nagpur, India—both cases that are considered deeply troubled by water privatization experts.

As the report details, in 1997, the IFC, the private sector arm of the World Bank, advised the Philippines government to contract with two private corporations—Maynilad and Manila Water Company—to manage the city’s water system, and took an equity stake in Manila Water Company. The results have been devastating. Rates have increased over 500%, the workforce has been cut, poor quality has led to disease outbreaks, and broken infrastructure promises have resulted in unreliable or nonexistent access in some communities.

And, in Nagpur, India, a water project – involving a Veolia subsidiary in which the IFC holds a 13.9 percent stake -- has been marked by failure at every turn. The project has failed to deliver the infrastructure improvements promised and is mired with project delays, inequitable water distribution, service shutdowns, and allegations of corruption and illegal activity that have resulted in ongoing protests, official investigations and legal action. Despite these problems, the bank has declared the project a success and promotes both cities as models to be emulated elsewhere.

“Seventeen years after Metro Manila’s water service was privatized, the water corporations still refuse to bring pipes into poor communities like ours,” said Mercedes Donor, a resident of Manila, “How can this be called a success story when poor families have to pay more than the rich just to get water?”

The week of action and report release are part of a growing global movement to reclaim privatized water systems and prevent new deals from going through. In the U.S., seen as an expansion market for the private water industry, people in Baltimore, Maryland and Detroit, Michigan are organizing to oppose potential privatization contracts with Veolia, alongside partners from across the globe.