On May 10, the government sold its sovereign rights to water. This was effectively carried out under the new water laws which will govern the ownership, use, distribution and profitability of water. What was once a fundamental responsibility of the government, i e to ensure clean, clear, safe and reliable water services provision will now be supplied by private companies on a commercial basis. The nation's precious natural asset has been transferred to private hands.

Before the laws were passed, proposals for amendments were invited from civic society groups concerning the draft bills. But the draft bills had nothing to do with the protection, conservation and sustainable management of the nation's precious water resources for the people and the future generations. It was a piece of legislation to facilitate the privatisation of water and to enable the corporate sector to make money from it.

The water bills were passed without amendments. Under the circumstances, participation of civic society was merely a PR exercise. Laws that will result in the control and management of the nation's water resources by private companies were drafted without serious public debate, participation and involvement. It was a fait accompli .

This only goes to show how powerful and influential the corporate water lobbies are, who are quietly working to resist pressures from consumers, civic society, enlightened bureaucrats and politicians. They are present at Water Forums where they speak, lobby governments and have advocacy organisations to represent them.

Lack of evidence

The World Bank says that Malaysia is among the top five countries in the developing world in terms of investments in privatised water and sewerage projects valued at more than US$5 billion and in the number of projects. Some of the global water companies operating in Malaysia include Ondeo the world's leading provider of water-related services and part of the French Suez Lyonnaise des Eaux group, Vivendi (now called Veolia), and Thames Water (now owned by RWE the German energy giant). Suez Lyonnaise and Vivendi are the two largest water corporations in the world.

Worldwide, there is hardly any evidence to show that the privatisation of water services has benefitted the people. In fact the World Bank in a recent study stated that there is no statistically significant difference between the efficiency performance of public and private operators in this sector. On the other hand, the water privatisation failures that plague the cities of Manila, Buenos Aires, Jakarta and Johannesburg for instance are well documented.

Back home in 1998, the Klang Valley was hit by a severe water crisis that dragged on for months. Despite heavy rains, the dam levels were critical. The water department could not cope with the crisis; water supply was irregular; tankers when they did arrive supplied water which was unfit for consumption. Public frustration and suffering was extreme. On top of this, there was an outbreak of cholera.

In March 1998, the Kidney Centre in Cheras did not have a drop of water for nine days. The residents of Section 5, PJ had dry taps for 17 straight days. This water cut was repeated in May when they had no water for eight days. Despite meetings with the MP, the Water Works Department, the MPPJ, the District Officer and the JKR, these authorities could not remedy the situation.

The latter to their amazement realised that the water company cannot be forced to resume water supply, they can only make polite requests. No one took responsibility for this disaster in Selangor in 1998, no one was held responsible.

And to add further insult when citizens in Selangor decided to hold a public forum on the water crisis, they received phone threats and the police revoked the permit for the forum for security reasons. These water companies have such enormous power and control over our daily lives. Indeed Malaysians have a short memory.

Water services privatisation has recorded more problems than benefits, all of which are detrimental to the public interest. These include: phenomenal price increases in water tariffs and super profits to the shareholders; public subsidies for private profits; the prevalence of corruption; the fragmentation of responsibility that threatens health and environmental accountability and quality of service; the threat to water conservation and sustainable resource exploitation; monopoly control by foreign water corporations which puts the government at the mercy of these corporate giants; and poor regulation and lack of transparency by the water companies. These are fundamental issues crucial to the nation s sovereignty and well being. It concerns the protection of water resources, environmental security, the nation s patrimony, and the future generations.

Privatised water management contracts are long term concessions usually 20-30 years. The terms of the contract and the financing systems operated by these powerful companies, make it difficult for the government to reclaim control of water management, even when the performance of the private monopoly is unsatisfactory. This allows the corporations to impose their will and interests on governments.

Foreign water companies are foreign investors, and what would otherwise be a local matter under domestic or national laws can be subject to international laws, and in a conflict, the latter prevails. For e.g. when the water company Aquas del Tunari (owned by Bechtel) was forced to leave Bolivia in 2000 (following a citywide revolt in Cochabamba when it raised water rates by an average of more than 50%), it sued the Bolivian government US$50 million for compensation in the International Centre for Settlement of Investment Disputes (ICSID), a closed door trade court operated by the World Bank which had forced Bolivia to privatise its water system as a condition for a loan in 1997.

The company was able to do this by using a loophole in Bolivia s Bilateral Investment Treaty with Holland, which made ICSID the mechanism for dispute resolution between member states and investors. In 1999, Aquas del Tunari changed its residence to Amsterdam in order to take advantage of this. (However, there is a happy ending to this story. In January this year, Betchel dropped the case as a result of an international citizens campaign).

Growing awareness

Globally, there is now a growing awareness among peoples and governments of the dangers of water privatisation. Peoples movements the world over have made reclaiming public water and the right to water the forefront of public campaigns. In March this year, at the World Water Forum in Mexico, 10,000 people marched to show their opposition to the privatisation of water. Nearer home in Chiang Mai, Thailand over 10,000 people representing a wide coalition of consumers, health activist, human rights groups and other civic organisations called the Thai Peoples Alliances against Free Trade Area and Privatisation held a peaceful demonstration in January to bring to wider public attention these issues.

In January in Bolivia, the new Water Minister Abel Mamami, declared among others that: water is a public good and its management needs to be in a sphere that is public, social, community based, participative and not based on profit; water should not be privatised and should be withdrawn from all free trade and investment agreement and there should be profound change in the organisation of the World Water Forum to allow majority and decisive participation in the negotiations by the poorest and those who most need water.

Elsewhere increasing number of countries now include laws providing for referenda and plebiscites against the privatisation of water and electricity. In Louisiana, USA, a new law was passed in 2003 requiring future privatisation of water or sewerage to subject to a popular referendum. In 2004, Uruguay and Holland created history when new laws were enacted in their respective countries to make water privatisation illegal. In both countries, the new laws outlaw both the sale of water systems and the delegation of water supply operations to private companies.

In sharp contrast, Malaysia appears to have unquestioningly embraced water privatisation with open arms, and in the process denied civic society the right to be heard. The Coalition Against Water Privatisation (CAWP), the largest alliance of registered consumer groups, trade unions, human rights bodies, women s organisations, health and environmental activists, and social researchers was summarily told by the Energy, Water and Communications Minister that their views cannot be accepted , neither will it be allowed to participate in the Water Forum.

Water is essential to life, good health and well being. Thus who gets it, what quantity and quality, when, and how, involve the rights and needs of many interests at stake in our society. Hence citizens have a right to take part in shaping policies that fundamentally affect their lives. Just as they have a responsibility to pay taxes and to vote, government has a responsibility to ensure the basic well being of all citizens and the future generations. Given the public importance of this resource, public disclosure and accountability and public participation is essential and absolutely necessary.

When government sells away the right to water, it is selling its sovereign right to determine its own domestic policies regarding water. Commercialisation of water has far reaching implications on the life and well being of Malaysians. There are critical issues at stake which include democratic participation, public health and safety, environmental sustainability, social equity and national sovereignty. Sadly the government does not see water as a public trust that must be protected by government and the community. In paving the way for corporate control, growth and profit, it has abdicated its responsibility to the citizens and the future generations.

SM MOHD IDRIS is president of the Consumers Association of Penang.