Water, that most common of elements, the thing of life itself, is rapidly being drawn into the madness and ruin that is corporate globalization. Water - its very definition, who controls it, who will die because they can't afford it - will be the most divisive issue of this century.
It will be a fight over definitions: is water a right or a commodity? Though Canadians have rarely spoken of water as a "right," it is clear that they have always treated it as such.
The Canadian government - faced with its own water crisis over a NAFTA challenge regarding bulk exports - has nonetheless apparently come down on the side of commodification. Canadian officials have been quoted as seeing water as nothing more than a need that can be met by the market.
Mike Harris is already preparing the ground for a massive redefinition of the relationship between water and human beings. Canada's pre-eminent anti-government leader has stated unequivocally that the private sector will play a key role in future water services in Ontario.
But messing with the means of life may just attract the kind of massive public opposition that the corporate globalizers want to avoid. Two cases involving third world communities demonstrate what is coming down the road.
The most famous example to date involves the people of the town of Cochabamba, Bolivia. Its citizens launched a successful popular uprising explicitly against that trio of institutions - the World Bank, a huge transnational corporation (in this instance, Bechtel Corporation) and the state - that virtually define corporate globalization.
In February, 1999, the World Bank told the mayor of Cochabamba that if the city did not privatize its water system it would not receive another cent of financial assistance for local water development. Then, after judging the resulting Misicuni privatization project financially unviable, the Bank proceeded to back it anyway, insisting on water pricing that would cover the excessive costs, and guarantee that Bechtel would earn a 16% profit.
Water prices for many locals tripled, meaning some people were paying 20% of their income for water. In a scenario impossible to parody, people not even hooked up to the system were told that they would have to put metres on their private wells and pay Bechtel for the water they drew.
The resulting citizens' revolt shook the Bolivian government. It led to a week of protests, general strikes, and highway blockages which brought major areas of the country to a virtual standstill. The government caved and told Bechtel to leave. The privatization was reversed and the water system handed over to the town.
But Bechtel had not given up. Apparently anticipating trouble, Bechtel made moves before its expulsion that guaranteed it access to one of the world's 1,500 powerful Bilateral Investment Treaties (BIT). These treaties - mini-MAIs with all of the intrusive power of the failed Multilateral Agreement on Investment - allow corporations to sue governments directly. And Bechtel, knowing that Bolivia had such an agreement with Holland, transferred its holding company from the Cayment Islands to Holland. It is now using the BIT to sue Bolivia for US $40-million.
The second case involves the Mexican town of Guadalcazar. Faced with plans by an American corporation, Metalclad, to take over a toxic waste site and build a toxic waste treatment facility, the people of the town refused. They had once driven the previous owners out of town with machetes for polluting their water supply. This time they simply refused to grant a construction permit to Metalclad. planned facility was never built.
But the decision of the townspeople has now been turned into a major NAFTA challenge. Metalclad sued Mexico under the notorious Chapter 11 of NAFTA and was awarded US$16.7-million based on the town's actions. The ruling by the tribunal is a cautionary tale for Canadian municipalities.
The tribunal ruled that NAFTA applies without qualification to sub-national governments, and that environmental impact considerations, public opinion and the past performance record of the proponent were matters outside the jurisdiction of local government. It also found Mexico liable for the uncertainty Metalclad claimed to have about the approvals it needed from other levels of government. And its award included costs incurred before Metalclad had even applied for local approvals.
What makes the case especially interesting is that Mexico is appealing the decision - using a Canadian judge as arbiter.
Will the judge take his direction from the extremely narrow rules of NAFTA's Chapter 11? Or will he take into account the public interest that would be considered if such a case was before a Canadian court?
The case will be heard in Vancouver beginning Feb. 19. The federal government has been given intervenor status. On whose behalf will they intervene? Will they defend Canadian municipalities from a NAFTA chapter Canada now wants to renegotiate, or will they defend the right of Metalclad to run roughshod over democratic government?
Murray Dobbin is a freelance writer and author based in Vancouver.
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