How is privatization of water companies: Does it work?

Dear EarthTalk: Is it true that some countries have turned over public water supplies to private companies, effectively denying local communities much-needed access?

J. Johnson

Lancaster, Pa.

Water is such an important part of life that it has long been regarded as a public good worth entrusting only to public entities. But given the mixed track record of municipal, regional and national governments to properly manage water resources, outsourcing to private companies is becoming more common. But critics of such privatization point out that the end result for consumers is not always so positive.

Perhaps the best known example transpired in Bolivia in the 1990s, when water systems in poor regions were put up for sale to private investors at the urging of development agencies intent on steering poor countries away from state control of industries and toward free market systems.

Bolivia hired U.S.-based Bechtel Corporation to take over and manage water in the Cochabamba region there. Bechtel made good on its pledge to provide water to many previously underserved Cochabamba areas, but it also raised prices significantly.

“Many were unable to pay such high rates, and even though water was now available to them, they couldn’t access it because they couldn’t afford it,†reports the nonprofit World Savvy.

In 2000 riots erupted in Cochabamba as hundreds of residents filled the streets, angry that a private, foreign entity was preventing them from accessing water.

“The violence shook the confidence of the local government and international investors,†says World Savvy. “Bechtel was forced out, resulting in not only chaos in water delivery in the area, but also in a serious blow to foreign investment in the country.â€

Similar conflicts have played out in other parts of Bolivia as well as in Ghana, Uruguay and the United Kingdom.

In the United States, the federal government ensured the protection of waterways and drinking water in the 1970s through passage of the Clean Water Act and Safe Drinking Water Act, which among other benefits increased funding for community water systems to help cities and towns maintain high standards and inexpensive access to fresh water.

“However, since the 1980s, the federal government has been cutting back funding to communities for water infrastructure, with assistance falling to historic lows under the Bush administration,†reports the nonprofit Food & Water Watch. Without federal funding, communities that can’t afford to keep fresh water supplies clean and safe are increasingly turning to private companies.

But at what cost? Food & Water Watch cites dozens of examples from across the country where water privatization has gone woefully bad: “[H]igh rates and bad service plague communities who transfer control of their water service to the hands of corporations.†Common complaints include skyrocketing rates, sewage-flooded basements, broken pipes, bad water quality, and cost overruns. “The water barons prioritize stockholder returns over public well-being and leave municipalities to clean up the mess.â€

Not everyone thinks water privatization is all bad, especially when governments can’t efficiently manage the sourcing, sanitizing and distribution of life’s most vital resource. “There is evidence that privatization may work when the cost of water is subsidized for poorer populations,†reports World Savvy. Regardless, the debate will rage on as more and more governments turn to water privatization as stress over accessing water becomes more commonplace in a quickly warming and increasingly drought-stricken world.

CONTACTS: World Savvy, worldsavvy.org; Food & Water Watch, foodandwaterwatch.org.

Dear EarthTalk: As far as I know, genetically modified foods are not required to be labeled so. Why is this? Don’t we have a right to know what our food is made of?

Rebecca Webster

via e-mail

Unbeknownst to most Americans, a majority of the processed foods available in grocery stores today are derived from genetically modified (GM) sources — whereby genes have been taken from one species and inserted into another to obtain specific traits or characteristics.

Given how new GM technology is — scientists first began tinkering with it in the 1970s but only recently began utilizing it on a wide scale across the food sector — the jury is still out as to whether such products can cause health or environmental problems.

In light of such uncertainties, the European Union and dozens of other regions around the world, including Australia and Japan, now require food producers to label GM products clearly so consumers can decide for themselves whether or not to take the risk. Neither the United States nor Canada has any such requirements.

GM’s critics say that food companies have lobbied hard to ensure that U.S. regulators don’t require producers to distinguish GM from traditional foods: “If a GM crop looks like its non-GM equivalent and grows like it, then it is assumed to be the same, and no safety testing is needed before people eat it,†reports the blog, Food Democracy. Corn, for example, may contain antibiotic-resistant genes or a built-in insecticide — but to the U.S. government “it looks and grows like maize, so it is safe to eat.â€

The result, says Food Democracy, is widespread ignorance among consumers about what kinds of strange genes may have been inserted into the otherwise mundane foods they are purchasing and eating.

“Keeping consumers in the dark has prevented them from making real choices about the food they eat,†says Food Democracy. “Without labels, the principles of supply and demand are no longer in effect as consumers can’t send a message to farmers and manufacturers about what they do, and don’t, want to eat.â€

According to a survey by the Pew Research Center for the People and the Press, 53 percent of Americans would not eat GM foods if given the choice, while 87 percent believe GM foods should be labeled as such regardless.

But since the federal government has no plans to require any such labeling, consumers must take matters into their own hands. To wit, the nonprofit Institute for Responsible Technology recently released a free iPhone app called ShopNoGMO which provides consumers with a handy resource they can access right from the grocery aisle for identifying non-GM brand choices across 22 grocery categories.

In addition, leading natural food retailers launched the Non-GMO Project in 2005 to develop an independent certification system to help consumers identify non-GM foods where they shop. Whole Foods, Seeds of Change, Nature’s Way and 400 other U.S. and Canadian firms now support the campaign, and today several thousand grocery products sport the easy-to-recognize “Non-GMO†seal. The project also has an ingredient database to help food producers find non-GM ingredients to use in their processed foods. Project leaders hope their work can help prevent new GM crops from gaining a foothold and build a strong non-GM food sector across the country, despite lack of federal intervention.

CONTACTS: Pew Research Center for the People and the Press, people-press.org; Food Democracy Blog, fooddemocracy.wordpress.com; Institute for Responsible Technology, responsibletechnology.org; Non-GMO Project, nongmoproject.org.

Send environmental questions to EarthTalk, in care of E – The Environmental Magazine, PO Box 5098, Westport, CT 06881; earthtalk@emagazine.com. E is a nonprofit publication.