GLOBAL CIVIL SOCIETY DEMANDS WATER FOR PEOPLE,
NOT PROFIT FOR TRANSNATIONAL CORPORATIONS

The World Bank in collaboration with WaterAid plans to hold a World
Bank - Civil Society Dialogue on Urban Water Supply and Sanitation,
"Forging Global and Local Coalitions for Reform," to be held on November
18-19, 2004 in London.

Some of the organizations signed below were invited to attend, but we
have decided to join with the global social movements protesting 60
years of World Bank policies and projects promoting privatization of
essential services, trade liberalization and resource extraction that
have further impoverished small farmers, local businesses, workers, and
low-income citizens while destroying the environment. We join with
global civil society and social movements calling for the World Bank to
halt these harmful policies and projects.

We make this decision to boycott the World Bank - Civil Society
Dialogue on Urban Water Supply and Sanitation because it is clear that
the World Bank does not have any serious intention of addressing our
issues of concern. Nor could the organizers guarantee that the dialogue
would take place in U.N languages in order to include
non-English-speaking participants.

For more than two decades civil society has been protesting World Bank
privatization policies that pass national wealth to the private sector
and leave the majority of the population forgotten and underserved. We
join with many other civil society organizations and social movements to
express our collective condemnation of the failure of the World Bank to
implement the recommendations of previous consultations and review
processes that it has been officially involved in such as the Structural
Adjustment Participatory Review Initiative (SAPRI) and the Extractive
Industries Review (EIR).

If the World Bank is interested in democracy and democratic processes
it should listen, for example, to the voices of the people as expressed
in Uruguay where on October 31, 2004 62.75% of the people voted "no" to
water privatization in a binding popular referendum. Last year 63.5% in
Uruguay voted "no" to World Bank policies on energy sector reform in a
binding popular referendum. These votes in Uruguay will inspire citizens
in countries around the world to follow in their footsteps.

As we make this decision to boycott the World Bank - Civil Society
Dialogue on Urban Water Supply and Sanitation, we wish to bring
attention to current World Bank policies and practices that daily create
obstacles to universal access to clean and affordable, undercut the
principle of water as a human right, and subject billions of people to
preventable water-borne diseases. Below are key facts about the World
Bank's current track record in urban water and sanitation. If the World
Bank wishes to have a dialogue with civil society, these are the issues
that must be placed front and center.

1. Stop World Bank loans that promote increased cost recovery for
the poor. 91.5% of World Bank water and sanitation loans included
measures promoting increased cost recovery during 2000-2004*. Increased
cost recovery means higher consumer water fees. Increased consumer
costs for water, especially in the global south where the majority of
the population earns less than $2 a day, makes water less accessible and
often drives people to resort to water from polluted streams, rivers or
wells. This increases the risk of water-borne diseases such as cholera,
diarrheal, and parasitic diseases. Those outside of the piped water
system, usually the poorest of the poor and often those who pay the
highest price for water, are especially hard-hit by increased cost
recovery as the higher price of water trickles down to small vendors and
tanker truck distributors from who the poorest sectors purchase their
water.

2. Stop World Bank loans that promote the privatization of water.
88.5% of World Bank water and sanitation loans included measures
promoting privatization during 2000-2004*. The loans promoted
privatization in a variety of forms from leases to management contracts
to asset sales. The water industry is highly concentrated with more
than 50% of the private water market controlled by just three large
transnationals -Suez, Vivendi and RWE. A very large proportion of World
Bank water and sanitation projects facilitate private sector contracts
to these three large transnationals (and all of their subsidiaries and
joint ventures). The promotion of water privatization is a fairly
recent social experiment by the World Bank and its results to date have
been highly controversial. The model has been a failure in many cities
including Manila, Buenos Aires, Cochabamba, Dakar, Dar-Es-Salaam and
many others. Key problems include unaffordable consumer water rates,
cut-offs in water service, water pollution, job losses, violations of
labor rights, major issues of contract incompliance, and when the
company is unable to recover sufficient profits, international lawsuits
that attempt to pass the debt to national governments.

3. Stop World Bank loans that promote water sector reforms that
benefit international markets rather than improving access to clean and
affordable water. Many World Bank water and sanitation loans include
measures that require new legal and institutional frameworks in order to
facilitate the entry, protect the operations, and ensure the
profitability of transnational water companies. World Bank proposals to
privatize water should be subjected to broad and representative debate
and subjected to the will of the people in democratic and participatory
decision-making, such as the binding public referendum that recently
took place in Uruguay.

4. Stop IFC aid to transnational water companies. The World Bank's
International Finance Corporation (IFC) provides financing to private
corporations in the form of loans, equity, and guarantees and also
provides advice, training and technical assistance to the private sector
and governments to implement privatization of services including public
utilities such as water and electricity services. The IFC was
responsible for designing the water privatization failure in Manila for
which the Philippine government paid $6.2 million and currently has
investments in this project. Meanwhile the public continues to bear the
painful cost of the IFC-supported project: high water costs, low water
quality, pipe leakages and water losses, unreliable water quality and
the consequent epidemic of gastro-intestinal diseases in parts of
Manila.

5. Stop ICSID support for transnational water companies. The World
Bank's International Centre for the Settlement of Investment Disputes
(ICSID) was created to protect transnational corporations from domestic
court systems where it is unlikely they would get as favorable
treatment. There are currently 9 pending cases in ICSID where major
transnational water companies are suing national governments for
millions of dollars. In Argentina, the global giant Suez is bringing
cases regarding its water concessions in Buenos Aires, Santa Fe, and
Cordoba and demanding more than $180 million in lost profits. The
Argentine government, struggling against bankruptcy, has encouraged the
city and provincial governments to submit to the demands of Suez and re
negotiate the contracts rather than face the costly battle in the ICSID
courtroom. For the people of Argentina this will mean many more years
of unreliable service, low water quality, high water bills, and service
cut-offs. The U.S. company Bechtel, has a pending case in ICSID
demanding $25 million in lost profits for its failed water privatization
project in Cochabamba, Bolivia. Indebted and bankrupt governments in
countries like Bolivia and Argentina are being forced by the World
Bank's ICSID to pay millions of dollars to transnational corporations
rather than deal with the desperate needs of their own citizens.

6. Support local and community-based public sector solutions
including public/public partnerships, public/community partnerships and
local cooperatives. World Bank policies should not be promoting new
business opportunities for transnational corporations, but rather should
support the exploration of a full variety of public sector options.
Project proposals should be transparent, publicly available, subjected
to the oversight of local citizens and should be developed in close
consultation with all stakeholders including trade unions, women's
groups, religious organizations, indigenous groups, the public health
sector, students, community and human rights organizations, among
others.

We wish to encourage those who decide to attend the World Bank - Civil
Society Dialogue on Urban Water Supply and Sanitation to bring these key
issues to the attention of World Bank officials. Civil society
organizations around the world must stand in solidarity to ensure a more
just and equitable world where clean and affordable water will be
defended as a fundamental human right rather than a privilege only
afforded to those who are able to pay.

Sara Grusky
Water for All Campaign
Public Citizen

(To sign on please send your name, organization and country to
[email protected] )