The world’s water supply is one step closer to becoming the most expensive liquid traded as a commodity — and corporations are setting the price.
In the last 10 years, bottled water consumption has doubled, and the typical American is estimated to consume 200 bottles of water every year. Aside from the growing demand among consumers, as a scarce resource, water is becoming a more valuable commodity.
While Earth’s surface is 70 percent water, 97 percent of that is salt water. Of the remaining 3 percent, 1 percent is available for humans to drink, according to Green Investing.
The scarcity of the product, combined with worldwide demand and water shortages, creates the perfect storm for corporations buying up a resource necessary for human survival.
Water: A human right?
According to the chairman of Nestle Corporation, access to water is not a human right.
The statement made by Peter Brabeck-Letmathe sent shockwaves through the activist community, yet his statements were in line with his corporation’s monopolization of water supplies throughout the world, including in the United States.
“It’s a question of whether we should privatize the normal water supply for the population. And there are two different opinions on the matter,” he said.
“The one opinion, which I think is extreme, is represented by the NGOs who bang on about declaring water a public right. That means that as a human being you should have a right to water. That’s an extreme solution. The other view says that water is a foodstuff like any other, and like any other foodstuff it should have a market value.”
In 2009, Nestle’s plans to drain U.S. aquifers to supply its bottled water came under attack by residents of Salida, Ark., who claimed the draining of the community’s aquifer would leave locals without a vital resource.
In January, Waterfund LLC announced it was partnering with IBM to create a Water Cost Index, in line with statements made by Nestle’s Brabeck-Letmathe.
“The principal reason behind our decision to work with IBM was their unique combination of expertise in the water sector combined with the best data analytics available. Our initiative with IBM will finally bring financial transparency to the water sector,” Scott Rickards, CEO of Waterfund, said in a press release. “Our initiative with IBM will finally bring real financial transparency to the water sector.”
Financial transparency, or economic boons to those who control the resource?
“By calculating the unsubsidized cost of freshwater production using IBM’s Big Data expertise, Waterfund can offer the first flexibility-tailored financial tools to investors in water infrastructure,” Rickards said. “The Rickards Real Cost Water Index highlights the energy costs, interest rate risk and capital expenditures required to build and maintain large-scale water treatment and delivery networks.”
Selling corporatization of water as ‘benefit’ for poor
More than 700 million people around the world do not have access to clean water. In the eyes of IBM and Waterfund, the answer is the privatization of this “commodity.”
“By creating a benchmark cost for water we intend to harness the capital market to this supremely important cause. If we can make it easier to price investments in the water sector, we can improve the flow of capital into an area where it is desperately needed. We look forward to working with Waterfund to bring this about,” IBM Engineer Peter Williams said in the release.
Food and Water Watch, an organization dedicated to keeping water “safe, accessible and sustainable,” disagrees.
“Around the world, multinational corporations are seizing control of public water resources and prioritizing profits for their stockholders and executives over the needs of the communities they serve,” it states on its website.
While a concern for those who already experience a lack of access to clean water, the problem is also growing in the United States. In the last three years, Food and Water Watch campaigned successfully on behalf of 17 U.S. cities to keep water sources from being purchased by corporations.
According to a report published by Food and Water Watch, corporations are pushing cities to sell, claiming it’s a way for financially struggling local governments to fill in the gap of budget shortfalls.
Despite claims by corporations controlling the game that this will result in greater access to water for all, Food and Water Watch says this simply cannot be so, as the main motivator behind any corporation is the dollar sign.
“Private equity takeovers of water are an alarming development,” it states in the report. “These financial players focus on short-term profits and may seek to flip assets after driving down service quality and driving up prices. Households and local businesses could end up paying much more while services deteriorate.”