Suicide By Profit

Now that We’ve sketched out the situation a little, we can move on to possible solutions. Remember this: we have the power because we have the money. Without us products aren’t purchased, there is no economic growth, there is no profit. Each time you buy something you cast a vote for the type of world you wish to see.

Cochabamba, Bolivia.

In 1982 Bolivia ended decades of military rule in favor of a civilian government, but this welcomed change did not bring financial security with it. Deep in debt with rabid inflation, it could  not attract foreign investment and was forced to turn to the World Bank and the IMF for help.

The IMF approved a $138 million loan, but the required “structural reforms” stated that the country must sell off, or privatize, all of its remaining public utilities and infrastructure. So, Bolivia’s railway system, telephone system, airlines, hydrocarbon industries and eventually even its water services were sold to private companies.

It must be noted that these conditions are pretty much standard for World Bank and IMF loans.

Cochabamba is Bolivia’s third largest city and it’s water was provided up until that time by the state agency: SEMAPA. (at that time, many of the cities residents had no water at all in their homes or had water service only for a few hours per day). Under the terms of the loans, SEMAPA was put up for auction. Only one consortium of companies bid; Aguas del Tunari, which was controlled by Britain’s International Water, Italy’s Edison and the US’ Bechtel Enterprise Holdings.

At the time this deal was being made, certain Bolivian officials felt that a new dam would be needed. The World Bank, which was reaching the end of its involvement in Cochabamba felt that the damn was too costly and recommended water be diverted from an existing dam. The new dam, however was a pet project and it was pushed through.

On Oct 11, 1999 Aguas del Tunari was officially awarded forty year concession rights to provide water and sanitation services to Cochabamba. It is also announced that Aguas del Tunari will generate electrical energy and irrigation water for the regions agricultural sector. Bechtel’s International Water also claims that water delivery coverage and sewage connections will increase by about 93% by the fifth year of the program.

Also in October of 1999, the Bolivian government passed law 2029 in order to legalize the privatization of water and sanitation services. However, the law is so broadly worded that it could allow Aguas del Tunari complete control over all water resources including irrigation water, water from communal wells and, believe it or not, rainwater.

And, it made the residents pay the full cost of water services in Cochabamba.

Being western foreigners, the consortium was clueless about the potential impact of this. They didn’t think that raising the water rates 35% to about $20 per month would be a big deal. But, when your entire income is less than $100 per month and you spend less than $20 on food, it turned into a big deal in a big hurry.  Especially when a manager for the consortium indicated that water would be cut off to anyone not paying their bills.

And it wasn’t just the poor who were being thrown under the bus. Local businesses large and small along with middle-class homeowners saw their subsidies vanish as well.

So, in January of 2000 the protests began. There were large marches and speeches and a demonstration in the city’s main plaza that started peacefully enough . . .

Riot police met the demonstrators with tear gas and rubber bullets and live ammunition. The demonstrators responded with rocks and Molotov cocktails. Hundreds were arrested, injured and a half dozen killed. Most notably a 17 year old kid shot dead by a Bolivian Army captain which was captured on live TV.

In April of 2000, the government finally backed down and began to set things right. Aguas del Tunari was legislated to withdraw from the country and the control of Cochabamba’s water was turned over to a grassroots coalition. Detained protestors are released and it was promised that law 2029 would be repealed. Legislation that would have allowed for peasants to be charged for water drawn from communal wells is also removed.

So, it’s all over . . . except for the reprisals.

In November of 2001, Aguas del Tunari seeks restitution from the Bolivian government through the International Center for Settlement of Investment Disputes (ICSID) in the Netherlands, alleging that Bolivia violated a bilateral trade agreement when it revoked the consortium’s Cochabamba contract.

Then, in February 2002, it is announced that Bechtel seeks $25 Million in damages for breach of Aguas del Tunari’s contract with Bolivia via the ICSID. Disgusting when you consider that Bechtel’s revenues in 2000 exceeded $14 Billion while Bolivia’s entire national budget was $2.7 billion.

Where is it now?

After immense pressure from activist groups Bechtel was forced to relent and accept a token sum of about $.39 in change and everyone agreed that the contract “was terminated only because of civil unrest and the state of emergency in Cochabamba . . . ”

Today, Cochabamba is much the same as it was before this whole mess. Many are still without water and many have water only for a few hours a day and the old water system that Aguas del Tunari was going to replace is still being used. But, the people can afford their water.

My personal take on this episode and it seems to be the take of quite a few, is that while the people of Cochabamba were very ready and able to fight the battle, they weren’t prepared to administer the peace that they won.

To say that a lot has been written about these events is a vast understatement. There was far more than I could digest and write here in a cogent and coherent manner. But, that’s not the point. The point is that this is only one of the first and most publicized attempts in modern times. It won’t be the last. When water gets scarce and there’s a lot of money to be made, the concept of responsibility and humane treatment of those who can’t fend for themselves will go right out the window.

What should we take away from this? I once said to my son that a wise man learns from his mistakes but, that a wiser man still learns from someone elses.

Take away from that what you will. But take away something. Do something. Right now organizations like 350.org are mobilizing against the forces that are profiting from the destruction of our environment. The very environment without which all life on this planet will perish. Get involved. Find a group or start your own. As Carl Sagan said:

“Anything else you’re interested in is not going to happen if you can’t breath the air or drink the water. Don’t sit this one out. Do something. You are by accident of fate alive at an absolutely critical moment in the history of our planet.”

The Mississippi River is less than five feet deep near Vicksburg, Mississippi due to drought. Normally, this time of year it’s lowest level is about twenty feet.

56% of the continental US is in drought. Crops and livestock are getting hammered.

So, as the planet warms, the water will evaporate and be moved around by the atmosphere, leaving less and less on the ground for us to use and drink. In other words; water scarcity.

For those of us who don’t have regular access to clean water, this is a really bad thing and it’s only going to get worse.

For some others, this state of lack will be a good thing. This group will be made up of extremely wealthy companies and individuals who can buy the water rights of large areas. They will then turn and sell the water to whoever can pay the most for it, probably in the form of auctions.

This is already happening.

Out west in Texas, Colorado, Kansas and a few other places farmers are being forced to compete with oil and gas extraction and fracking companies for the rights to groundwater resources. Now, some might argue that this is only right in free market capitalism and theoretically, they would be right. However, farmers are easily out-spent. They don’t have anywhere near the financial resources that an oil company has. So, the oil company just deliberately bids more than the farmer could ever hope to pay.

Umm . . . what are they going to water our food with?

The ugly twin to this is that while the oil and gas company wins, everyone else loses. They use the water for fracking or some other refining or industrial process which poisons the water forever. They then inject that water into deep underground waste, injection and disposal wells because it’s cheaper than disposing it in an environmentally clean way. Now, while this is legal and considered safe in most states, scientists are discovering that this highly polluted and toxic mess is leaching into drinking water supplies all over the US. Some 30 trillion gallons of the stuff has been stored underground in 680,000 wells and they are finding increasing amounts of it leaking into aquifers.

Once it reaches a certain level in this aquifers, they have to be declared unsafe to drink, taking more of the Earth’s finite water supply off the table. Water just became more scarce.

Do you see where I’m going? We’ve seen somethig like this many times with another valuable commodity: oil.

When the supply of oil is disrupted because of diplomatic problems, as seen in our current spat with Iran or local revolt (as seen in the Niger Delta) the price of oil is bid upward by traders at the stock/commodities exchange. This is quickly reflected in the price we pay at the pump. When a new, huge oil field is discovered and its contents put online, the price tends to dip because there is a little more oil than the demand. Or, more cynically, speculators will buy tankers full of crude oil and park them somewhere where they are safe from governments and pirates. This drives the price of oil up, but only a little in the grand scheme of things. Then, they wait for the prices to really rise due to Mideast turmoil of some other similar stock perturbing event and then they sell the oil, making millions from the huge quantity they pulled off the market. Yes, their sudden sale floods the market with oil, but it only drops the price a little because it’s a small amount in the larger picture.

Water will work the same way. When corporations are successful in gaining control of large swaths of the world’s water market–make no mistake that it’s already underway–the price will fluctuate as market forces respond to demand and supply. And, with water supplies depleting as aquifers are over pumped and polluted, that demand will rise because clean water will become a relatively scarce thing.

And it’ll be expensive.

What are you paying now for a bottle of water? A buck or a buck, fifty a pint in some machine in your company’s break room? That bottle holds a pint? Eight pints to the gallon? Well . . . twice the price of gasoline already and it’s not even a crisis yet.

Of course, any company looking to satisfy its shareholders and make a modest profit will tack on a little to keep its wheels greased, so say it goes to three or four dollars for a pint. Now we’re leaning against thirty two dollars a gallon. Ugh.

And, when one is at rest or engaged in an activity which does not require much exertion, a person needs at least  liter/quart per day just to drink. That doesn’t take washing yourself or your clothes or cooking into consideration.

So how much would those activities add?

The average washing machine uses about fifteen gallons of water during a complete wash cycle. 15×32= $480 to fill your washer. Ouch.

To be sure, the people who are/will be selling water will keep the price just low enough that we can buy their product and not look elsewhere for a cheaper alternative (that’s what the oil companies do, so why not?), but I think you get my point: it adds up real fast.

And no matter what we do, we can’t get along without it.