Ethics problems of privatizing water supply services. Paper submitted for Ethics class, with good reseach on Chinese market.
Privatization of public systems has been going on in both developed and developing countries for many years, maybe with more strength on developing countries in the last decade because of their higher reliance on public companies.
The inefficiency of many public companies and its burden to the countries bearing them has been probably the reason most commonly used to justify them. Other reasons have also been: expertise of the private companies, fewer capital funds needed to start the project (in case of new projects) and less resources needed from the government to control the day-to-day operations from the company.
Water supply systems have also been a target for privatization in many countries, especially in low-mid income countries (see figure 1).
Fig 1: Investment in privatization of water supply systems in millions of dollars from 1991-2005 for low-mid income countries
As we can see in Fig 1 the areas with higher concentration of water supply privatization have been Asia pacific & Latin America.
Nevertheless, why is privatization of water supply controversial? Many countries establish in their constitutions that water is a right to their citizens and according to the United Nations Committee on Economic, Social and Cultural Rights, the access to water is a human right (November 26, 2002, “The human right to water entitles everyone to sufficient, safe, acceptable, physically accessible and affordable water for personal and domestic uses”).
However, how can we ensure that this right is enforced when private companies are the responsible for providing the service? Let us see the t...
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...municipal concession should be between 8 and 12 percent, but the 2002 Opinion on accelerating the Marketisation of Urban Utilities indicates that Chinese authorities cannot issue guarantees to investors for privatizations. ) The fact is then that the central government is supportive of price rises but the provincial government, that has to deal with unpopular price rises, tends to protect the customers.
On the other side investors with bargaining power (mainly foreign investors) can manage in some cases to secure better deals, like provisions for compensation in the event of changes in regulations, a higher starting tariff, or a more beneficial tariff adjustment formula.
Definitely, the challenge for the Chinese authorities is to be able to develop a robust regulatory regime for privatization in water services that is suited to China’s specific characteristics.
...t education and the enlargement of knowledge base, but with something as serious as the privatization of water a little more finality is needed.
... upon solution to water access disagreements, social and political powers must be willing to compromise since the risks associated with disagreements regarding water allocation may be too great. As stated by Shiyyab (2004), “If sustained over a period of time, these problems will directly affect social harmony, domestic stability and eventually, regional peace.” (p. 30). Investments must be made by industry as well as local and national governments for purification of wastewater so that clean water, when needed, will be available. The necessity of obtaining water is a fundamental human right and,
In the documentary, Blue Gold: World Water Wars, it follows several people and countries world-wide in their fight for fresh water. The film exposes giant corporations as they bully poorer developing countries to privatize their own supply of fresh water. As a result of the privatization, corporations make a hefty profit while the developing countries remain poor. Blue Gold: World Water Wars also highlights the fact that Wall Street investors are going after the desalination process and mass water export schemes. This documentary also shows how people in more developed nations are treating the water with much disregard, and not taking care of our finite supply. We are polluting, damming, and simply wasting our restricted supply of fresh water at an alarming speed. The movie also recognizes that our quick overdevelopment of housing and agriculture puts a large strain on our water supply and it results in desertification throughout the entire earth. The film shows how people in more industrialized nations typically take water for granted, while others in less industrialized nations have to fight for every drop.
Water privatization is putting water rights into private corporations. In developing countries privatization is acceptable but in developed countries water should be left to the public. In the developed countries like the US, France and Europe water is controlled by the public and private companies or corporations. Water remains a function of municipal government in 90% of cities around the US and Suez Environment and Veolia Water are the top two water companies.2 The consensus throughout the US is that water should be the publics responsibility because water in privately owned water facilities is more expensive and in some cases below standards and less desirable.6 People in the US want to keep their water in their hands because they feel better knowing that people like them control and consume the same water as they do and not people who do not. Putting water in the control of private companies has some less desirable effects on the public. These organizations have a profit motive with incentives that cause them to avoid conservation and efficiency measures since profits depend upon volu...
The total area of Mexico’s surface is slightly less than 2 million km2 (UNESCO 2006). The population is about 103 million people (Castro and Heller 2009). In the last two decades, as the population of the country has been growing intensively, the demand of water also dramatically increased. According to Armentia and Cisneros, the number of people who don’t have an access to water supply is about 11 million, almost 11% of Mexico’s population (Castro and Heller 2009). But there are far more people who don’t have an access to safe water. Moreover this situation with lack of water is exacerbated by malfunction of sewer systems. But to understand the causes of scarcity of water in Mexico and to evaluate the policy of the government in this sector, it needs to be observed thoroughly.
This is because only a small part of the population, particularly in developing countries, have access to water of acceptable quality. It is estimated that in some countries only 20% of the rural population has water of satisfactory quality. Based on these statistics, it is clear the urgent need for awareness about caring for water use. Almost without realizing it, we are seriously jeopardizing this essential resource, not for us but for our children's children and their generations, aware that in other parts o...
There are 80 countries that have been suffering from a lack of clean water, and two billion people lack access to freshwater, especially South Africa (Alois). This area of countries is the driest in the world - Sudan, Ethiopia, Egypt and so on. Like in the book A Long Walk to Water by Linda Sue Park, Nya, who lives in Sudan, has been lacking clean water. She has to find water every day for her family. Luckily, Nya got help from Salva who used to live in Sudan and came back from America to build the water system for her village. However, there are still many people around the world that have been suffering to find clean water for basic use. There are many factors that cause a lack of clean water around the world: geography of countries, deforestation,
Nightingale, Demetra Smith and Pinus, Nancy. "Privatization of Public Social Services: A Background Paper". 1997. Internet http://www.urban.org/pubman/privatiz.html
... drinking water such as Bolivia and Ghana. In the documentary, Flow the experience of poor Bolivians was shown. The water corporations provided unclean drinking water that was full of pollutants. The water cost more than the poor could afford. As a result the citizens rioted and protested against the private water company.
For Nestlé Corporation during such crisis, water was still a commodity to be sold in the open market. Nestlé drained 80 million gallons of water a year from Sacramento aquifers during the time of crisis of record drought. The mayor of Sacramento city gave the rights to Nestlé for significantly less amount to bottle the water and sell it for outrageous profits while the people of California suffered tragic draught situation. Nestlé Water Company paid 65 cents per 750 gallons of water to the city of Sacramento. This means, for 215,000 gallons of water the company paid $186. This water is sold for $2.1 million USD, resulting in a difference of 10,000% of what it should cost and what people paid. People were upset because of the lack of regulation and control when a giant corporation is taking their water for minting money. There were rallies organized in Sacramento and other parts of California. The mayor of Sacramento should have been more concerned about managing the public water resources properly rather than giving corporations the opportunity to bottle it, in fact the corporations should understand the responsibility to manage water wisely. Nestlé was even given a tax break and wasn’t required to pay the commercial rate for the water which it sold back to people at humungous
Safe water and sanitation as a basic human right, household water treatment, rainwater harvesting ... and reports from Kyoto, Madagascar, Uzbekistan, Guinea and other countries around the world.
Clean and safe drinking water resources are becoming scarce as the population grows. The world is facing many problems, but the most important thing needed to survive, is water. Water is getting low in many countries, therefore residents are suffering the misfortune of not having the reliable source of clean water. Today many countries are having water shortages meaning rivers, lakes, streams and groundwater are not enough to rely on for supplying water demands. For example, California is facing a drastic water shortage, the natural water resources are not enough to fulfill their water demands.
One main causes of water scarcity is water mismanagement worldwide. Water mismanagement has become a crisis of governance that will impact heavily ...
"Water Crisis." World Water Council. 7th World Water Council, 2012. Web. 18 Nov. 2013. http://www.worldwatercouncil.org/library/archives/water-crisis/
Cherain, T., Unni, K., and Sophie, L. 2010. China – India water shortage. Bloomberg News. http://www.grailresearch.com/pdf/ContenPodsPdf/Water-The_India_Story.pdf (accessed November 1, 2010).