IBON FEATURES | Recent government data shows that 3,000 more families lost access to safe and clean water since MWSS was privatized in 1997
IBON Features— In the recently concluded Asia Water Week 2013, the Asian Development Bank (ADB) announced that even though there has been improved access to water and sanitation in Asia, wealthier nations and citizens still enjoyed better water infrastructure and services than the poorer majority. The event brought to fore the role of private entities in managing water resources, in underscoring that public utilities “lack the capacity in all aspects of sustainability, including effective functioning, financing and demanding responsiveness.”
Still, Philippine experience under a privatized Metropolitan Manila Waterworks and Sewerage System (MWSS) has shown a worse case of access to water-related services. On the occasion of World Water Day, the reiteration of water as a human right is an imperative.
Right to water
On the favorable vote of 122 countries, the July 2010 United Nations General Assembly declared that safe, clean drinking water and sanitation are key to the realization of all human rights. The declaration was made amid deep concern over reports that 884 million people worldwide were without access to safe drinking water and more than 2.6 billion or 40% of the global population lacked access to basic sanitation; and 1.5 million children under 5 years old died each year as a result of water – and sanitation-related diseases.
It is a hallmark in decades-long efforts of water advocates asserting water as a basic human right. Many years before this UN declaration, the right to water has been referred to in various international instruments such as the Convention on the Rights of Persons with Disabilities (2006), Convention on the Rights of the Child (1989), Convention on the Elimination of All Forms of Discrimination Against Women (1979) and the International Covenant on Economic, Social and Cultural Rights (ICESCR, 1966).
Significantly, in September 2010, the United Nations Human Rights Council Resolution on human rights and access to safe drinking water and sanitation affirmed that the right to water and sanitation are part of existing international law. The resolution confirmed that States that are parties to the ICESCR are the primary duty-bearers in ensuring the provision of safe water and sanitation for all individuals.
In the Philippines, the privatization of public water utilities has worsened the people’s access to water with 16 out of 100 families in all income classes not having access to safe water. In Metro Manila, water rates have also continued to increase since the privatization of the Metropolitan Waterworks and Sewerage System (MWSS) with the two private firms increasing their basic charges by 585% for Maynilad and 1,119% for Manila Water. Consumers are also opposing the looming huge rate hike after the two water firms petitioned for Php10.30/cu.m and Php5.83/cu.m hikes as part of their rate-rebasing scheme. All eyes are now on the MWSS as it deliberates the justness of the petitioned rates.
The government privatized water supply in Metro Manila in 1997 through separate Concession Agreements between MWSS and Manila Water Company and Maynilad. A policy pushed by the World Bank, one of MWSS’s main creditors, the privatization of Metro Manila’s water system was supposed to help the agency address its debt problems. The move also promised to ensure the efficient delivery and affordability of water services. However, recent government data shows that 3,000 more families lost access to safe and clean water since MWSS was privatized in 1997, bringing the number to 204,000 families in Metro Manila. Less than 60% of the area covered by Maynilad has continuous water supply, and it remains unclear whether the 90% coverage reported by Manila Water pertains to water services directly rendered to individual households or those that pass through “middlemen”. Moreover, 1.54 billion liters of water is wasted daily in Maynilad and Manila Water areas because of leaking pipes.
For many years, water companies have been allowed to charge unreasonably, with consumers’ bills including, for example, double charges based on foreign currency movement through the currency exchange rate adjustment (CERA) and on top of that, the foreign currency discount adjustment (FCDA). The Concession Agreement also allows the water firms to collect the extraordinary price adjustment (EPA) which could be used to offset anything that could affect the profits of Maynilad and Manila Water. Furthermore, they are allowed to rebase their basic charge every five years throughout the duration of the Concession Agreement to raise revenues for future projects and ensure commercial viability. The imposition of these onerous charges and anti-consumer rate setting scheme explain why rates have soared so high under privatization and why the Philippines have one of the most expensive water rates in the Asia. Also for many years, the classification scheme on which the water firms based charges on consumers’ groups has turned out to be unsuitable in certain cases, for example the classification of churches as ‘commercial’ and home-based bakeries as ‘industrial’.
Despite these privatization woes, the previous administration still extended the two water companies’ concessions for 15 more years. Moreover, under the present Aquino administration’s public-private partnerships (PPPs) program, private entities will initially invest in, construct and operate a project for the first years while earning back the cost, all before government takeover of the project. PPPs have the regulatory risk guarantee element that pertains to government’s monetary allocation for the private company in anticipation of any risk or problem that the latter may face upon entry into the project. One example is the ongoing privatization of the LRT 1 wherein the draft Concession Agreement states that government will shoulder the cost in case the winning bidder could not implement a fare hike due to regulatory or other issues.
There are up to 15 PPP projects for roll-out in the water sector under the Aquino administration. Ten of these have the combined worth of about Php116.45 billion covering multipurpose projects such as the construction or rehabilitation of dams for hydropower as in the case of Angat Dam Turbines 4 and 5, and projects for potable water, as in the Bulacan Bulk Water project, and the New Centennial Water Source Project which may involve the revival of the Laiban dam project which stands to affect indigenous communities and agricultural lands. The PPP Center has already announced that the controversial Laiban Dam, shelved in the past due to serious environmental and social costs, might be pursued under the administration’s PPP scheme.
Meanwhile, although it has not prospered in the House, Sen. Edgardo Angara’s proposed Senate Bill 2997 and its counterpart in the lower house seeks to further privatize the delivery of water services by covering water districts across the country. The bill has been strongly opposed by water district employees and other sectors for threatening to close down public water utilities, retrench employees, and jack up water rates.
For the public, another round of rate hikes will strengthen the case against privatization. The dismal state of people’s access to water all the more warrants the employment of alternative means to realize the right to water.
On World Water Day, the Water for the People Network (WPN) reiterates principles enshrined in the Filipino People’s Water Code: that water is an extension of the basic human right to life and to the sufficiency of which every Filipino and every human being has a fundamental and inalienable right. The People’s Water Code was crafted by people’s organizations and water advocates around the country during the WPN’s founding assembly in 2003.
The Code stresses that “water should be treated as a people’s resource and a public good that should remain in the public domain.” It gives precedence to ancestral domains of indigenous communities and encourages community management over water resources and provision of water services. It recognizes water to be part of national patrimony, and thus that it should not be subject to exploitation for foreign and private interests.
These principles point to the reclamation of water resources and the management and development of such by the people, which can be achieved by a strong-willed and genuinely pro-people government. IBON Features