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June 17th, 2013

Ecuador, Jakarta move to protect water for people, not for profit

By Jaime Hamre, Food & Water Watch Intern

Both Ecuador and Jakarta, Indonesia have taken big steps recently to ensure access to water for their citizens. As part of the Water Law under negotiation in the National Assembly, Ecuadorian President Rafael Correa announced the establishment of a minimum water consumption per person from which water prices and subsidies can be determined. Across the globe, Jakarta has initiated moves to remunicipalize its water system, aiming to repurchase shares from a foreign private firm.

President Correa’s declaration is especially important in light of Interagua’s privatization of the water supply in Guayaquil, Ecuador’s largest city, in 2001. Interagua is a subsidiary of the American company Bechtel, the same company that fueled the infamous water war in Cochabamba, Bolivia. After Interagua procured a 30-year contract in Guayaquil, water prices increased by 180 percent. Even though key water systems, such as Guayaquil, remain privatized, in 2008, Ecuador rewrote its constitution to include rights for nature and also established the human right to water.

President Correa stated last week that when the minimum water consumption per person is determined, it will constitute a base for water pricing. President Correa is working with the National Secretariat of Water (Senagua) to analyze the cost to government of subsidizing water prices.

When water systems were privatized in Jakarta 16 years ago, water quality decreased, while tariffs rose by 258 percent. Led by governor Joko Widodo, the city is now moving to remunicipalize the system with help from groups such as the Coalition of Jakarta Residents Opposing Water Privatization (KMMSAJ), which has filed a lawsuit with the goal of annulling the 1997 contracts between the city and the private firm.

KMMSAJ is also helping with fundraising efforts in case the lawsuit is unsuccessful and the city must pay penalties for dropping the contract to take over operation. While re-municipalizing a water or wastewater treatment system can be quite costly in the short term, the long-term benefits in terms of cost savings, quality, transparency, and democracy are well worth it. Approximately 90 percent of global water systems are publically owned and operated.

In both Guayaquil and Jakarta, privatization has meant higher prices and poor water quality. The high price of water in Guayaquil, Ecuador since privatization has been linked to poor water quality and hepatitis outbreaks. In Jakarta, less than 35 percent of residents were able to receive service from the private company.

The privatization of systems often leads to price increase, as well as a decrease in quality and accessibility, whereas models such as public-public partnerships provide greater affordability and quality. For more on this issue, see our report: Water = Life: How Privatization Undermines the Human Right to Water.

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