http://www.informationclearinghouse.info/article33885.htm
The Global Water Grab
By Shiney Varghese
February 09, 2013 "IATP" -- Writing in National Geographic in
December 2012 about "small-scale irrigation techniques with simple
buckets, affordable pumps, drip lines, and other equipment" that "are
enabling farm families to weather dry seasons, raise yields,
diversify their crops, and lift themselves out of poverty", water
expert Sandra Postel of the Global Water Policy Project cautioned
against reckless land and water-related investments in Africa.
"[U]nless African governments and foreign interests lend support to
these farmer-driven initiatives, rather than undermine them through
land and water deals that benefit large-scale, commercial schemes,
the best opportunity in decades for societal advancement in the
region will be squandered."
That same month, the online publication Market Oracle reported that
"[t]he new 'water barons'-the Wall Street banks and elitist
multibillionaires-are buying up water all over the world at
unprecedented pace." The report reveals two phenomena that have been
gathering speed, and that could potentially lead to profit
accumulation at the cost of communities and commons -the expansion of
market instruments beyond the water supply and sanitation to other
areas of water governance, and the increasingly prominent role of
financial institutions.
In several instances this has meant that the government itself has
set up public corporations that run like a business, contracting out
water supply and sanitation operations to those with expertise, or
entering into public-private partnerships, often with water
multinationals. This happened recently in Nagpur and New Delhi,
India. In most rural areas, ensuring a clean drinking water supply
and sanitation continues to be a challenge. For-profit companies such
as Sarvajal have begun setting up pre-paid water kiosks (or water
ATMs) that would dispense units of water upon the insertion of a
pre-paid card. It is no surprise that these are popular among
people who otherwise have no access to clean drinking water.
With climate change, however, the water crisis is no longer perceived
as confined to developing countries or even primarily a concern
related to water supply and sanitation. Fresh water commons are
becoming degraded and depleted in both developed and developing
countries. In the United States, diversion of water for expanded
commodity crop production, biofuels and gas hydro-fracking is
compounding the crisis in rural areas. In areas ranging from
the Ogallala aquifer to the Great Lakes in North America, water has
been referred to as liquid gold. Billionaires such as T. Boone
Pickens have been buying up land overlying the Ogallala
aquifer, acquiring water rights; companies such as Dow Chemicals,
with a long history of water pollution, are investing in the business
of water purification, making pollution itself a cash-cow.
But chemical companies are not alone: GE and its competitor Siemens
have extensive portfolios that include an array of water technologies
to serve the needs of industrial customers, municipal water suppliers
or governments. (In the last year and a half two Minnesota based
companies have become large players in this business-Ecolab, by
acquiring Nalco and Pentair by merging with Tyco's Flow Control
unit-both now belonging to S&P's 500.)
The financial industry has also zeroed in on water. In the summer of
2011, Citigroup issued a report on water investments. The much quoted
statement by Willem Buiter (chief economist at Citigroup) gives an
inkling of Citigroup's conclusion: "Water as an asset class will, in
my view, become eventually the single most important
physical-commodity based asset class, dwarfing oil, copper,
agricultural commodities and precious metals." Once again, several
others had already seen water as an important investment opportunity,
including GE's Energy Financial Services, Goldman Sachs and several
asset management firms that are involved investing in farmland in
Asia, Africa, South America and Eastern Europe.
Given these recent trends, initiatives that track the water use of
companies or map information regarding water related risks could be
double edged. Some examples include the 'water disclosure project'
and the 'water-mapping project'. Both are initiated by non-profits/
think-tanks, the former by UK-based Carbon Disclosure Project and the
latter by the US-based World Resources Institute. While distinct,
they are linked by their shared constituency: global investors
concerned about water-related risks. These initiatives could help
companies identify and reduce their water footprint, or could lead to
company investments that follow water and grab it.
The Carbon Disclosure Project's water disclosure project seeks to
help businesses and institutional investors understand the risks and
opportunities associated with water scarcity and other water-related
issues. According to its most recent report, issued on behalf of 470
investors with assets of $50 trillion USD, over half the respondents
to their survey have experienced water-related challenges in the
preceding five years, translating into disruptions in operations,
increases in expenses and other detrimental impacts.
Aqueduct Alliance and its water mapping project, which aims to
provide companies with an unprecedented level of detail on global
water risks, seems at one level a direct response to the findings of
the global water disclosure reports by CDP. General Electric, Goldman
Sachs and the Washington-based think tank World Resources Institute
are the founding members of the Aqueduct Alliance. All of them
identify water-related risks as detrimental to profitability,
continued economic growth and environmental sustainability. The water
maps, with their unprecedented level of detail and resolution, seek
to combine advanced hydrological data with geographically specific
indicators that capture social, economic, and governance factors.
But this initiative has given rise to concerns that such information
gives companies and investors unprecedented details of water-related
information in some of the world's largest river basins.
Many of these investors, described as the "new water barons"
in Jo-Shing Yang's article "Profiting from Your Thirst as Global
Elite Rush to Control Water Worldwide," are the same ones who have
profited from speculating on agricultural contracts and contributing
to the food crisis of the past few years. The food crisis and recent
droughts have confirmed that controlling the source of food-the land
and the water that flows under or by it-are equally or even more
important.
A closer look at the land-related investments in Africa, for
example, show that land grabbing is not simply an investment, but
also an attempt to capture the water underneath. At the recent
annual Global AgInvesting Conference (with well over 370
participants), the asset management groups and global farm businesses
showcased their plans, including purchases of vast tracts of lands in
varying locations around the globe. With tools such as water maps,
such investors are further advantaged. The global rush for land
grabbing, as well as the resistance to it, shows that all
stake-holders-pension funds, Wall Street or nation-states on the one
hand or the people who currently use these lands and waters, and
their advocates on the other-are well aware of the life-and-death
nature of land (and water) grabbing, especially in the case of
developing countries.
National and international regulatory mechanisms must be put in place
to ensure that basic resources such as land, water and the means for
accessing fresh water do not become merely the means for profit
accumulation for the wealthy, but are governed in a way that ensures
the basic livelihood of those most dependent on it. The last session
of the Committee on World Food Security ? (a United Nations mechanism
set up to address the food crisis)? was a good starting point, and
has set in motion a series of consultations on principles for
agricultural investments. Civil Society Organizations
are tracking the various ways in which regulations may develop in
national contexts: simply facilitate land grabbing, mitigate negative
impacts and maximize opportunities or block (or roll-back) land
grabbing altogether. Ultimately, any policy approaches must
prioritize local communities' access to food and water: Any
water-related investments needs to be about allaying their livelihood
risks and enhancing their ability to realize their rights, whether it
is in developing countries or developed countries.
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