On the heels of the World Bank's 2014 spring meetings, an international coalition of water rights groups from India and the United States issued a stern call for the institution to end its destructive promotion of water privatization under the guise of development. After a week of meetings, including high level events on water, no action has been taken to address the coalition's concerns.
The World Bank, via the International Finance Corporation (IFC), has been increasing its support of private water projects in the Global South. And while many of these projects are struggling, have failed or are facing cancellation, the World Bank continues to herald them as successes. Not only do many of these projects threaten water access and exacerbate poverty, the World Bank's involvement as an investor in the projects and advisor to many of the governments commissioning them presents an irreconcilable conflict of interest. This is especially true in cases where the IFC holds an equity stake, as it does in India.
“The IFC's ideological promotion of private water is doing more harm than good in many places around the globe.” said Shayda Naficy, a water expert at Corporate Accountability International. “The World Bank must put decisions and funding for water in the hands of governments and the people they are accountable to, and stop directly supporting corporations like Veolia that are designed only to produce profits for their shareholders.”
In Nagpur, India, the IFC holds a 13.9 percent stake in the Veolia subsidiary whose joint venture, Orange City Water, won the water supply contract. Already, the project has been marked by inequitable water distribution, service shutdowns, and allegations of corruption and illegal activity that have resulted in ongoing protests, official investigations and legal action. Most surprisingly, the World Bank has declared the project a success and a model to be emulated elsewhere.
In light of the massive disparity between the IFC's propaganda about the Nagpur project and its failure on the ground, French transnational Veolia was “awarded” the Pinocchio Award by three French NGOs for prioritizing profits over access and violating the human right to water.
“It is highly objectionable that the World Bank continues to call the Nagpur project a model of success,”says Jammu Anand of the Nagpur Municipal Corporation Employees Union – a group that has been fighting the IFC-backed water privatization in Nagpur. “The truth is it's a failure on all fronts. In the last three years, the cost of operation and maintenance of the system has increased drastically and the price of water has increased many fold. Citizens are being looted by this project's high tariffs and workers are being exploited by low wages.”
The IFC is also supporting other water privatization projects across the country. In Khandwa, the IFC gave a loan to Vishwa Infra for a water supply project. Madhya Pradesh-based Manthan Adhyayan Kendra's assessment of the project found that it resulted in rising water tariffs, prohibition of local water sources and private control of the water supply. In response, a local campaign organized to successfully compel the state government to investigate. Based on findings of irregular behavior, the committee determined that the project should be cancelled. In spite of this damning recommendation, the Bank continues to promote the project as success.
“Across the country, local resistance groups have emerged to keep water in the public domain,” said Afsar Jafri of Focus on the Global South to Citizen News Service (CNS), “We will continue to expose and defeat the World Bank-corporate-politician-criminal nexus that is attempting to privatise our water through corrupt and non-transparent means.”
At the October Annual Meetings, Corporate Accountability International released an open letter to the World Bank from over 70 influential public health and water experts, advocates, economists and others from across the globe, including the National Alliance of People's Movements, Manthan Adhyayan Kendra, and Focus on the Global South, calling for an end of all support for private water, beginning with IFC divestment from all equity positions in water corporations.
One year later, as government delegates and Bank decision-makers head home from another round of meetings, no action has been taken to remedy this harmful practice. Yet, over the past year, momentum has been building to challenge the IFC's often covert role in promoting water privatization around the world, especially in places like India where many projects are in the works. As Wilfred D'Costa, Indian Social Action Forum, says “We will continue our struggle against privatization with a renewed demand for public water systems that serve people, not profits.”