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"The Campaign of Manila's Water Vigilance Network against Suez and What You
Can Do" - Carla Montemayor (Bantay Tubig, Philippines). Presentation at the
European Social Forum-Seminar "Commercialisation vs Public Services", Paris,
14 November 2003.
Good afternoon to all of you. I am here to first of all make a connection between what is happening in the Philippines as a consequence of water privatisation and what people in Europe and especially in France can contribute to campaign, to one: ameliorate the consequences of privatisation and secondly to stop a repetition of this project elsewhere in the Philippines.
Let me just briefly recap what has happened since the Metro Manila water system was privatised six years ago. At that time the Manila water utility was considered the biggest water privatisation project in the world. This was in 1997. At that time the argument for privatising it was the same argument they used elsewhere, one was to bring in much needed financing that our government did not have at the time and also using the ecological argument that a privately managed utility would be an improvement over publicly managed ones.
So Metro Manila was divided two sections and bidded out. The west zone, which is the more relevant for now, went to a local firm whose partner is Suez. After six years, what has happened? The Philippine government and other promoters of privatisation continue to argue for the benefits of the privatisation project. They say that it has improved access and increased capital into poor governments like the Philippines, but our experience just disproves this, not only in Manila but in other cites as well, like Jakarta. In the case of Suez, which is operating in the Philippine as a subsidiary called Ondeo, the failure of water privatisation will be evident. The latest, ultimate proof that Suez has failed and water privatization has failed in Manila is the cholera outbreak last October. This outbreak due to water contamination killed 6 people and hospitalized 600 people more in the Suez-managed area. The contamination of the water supply is from low water pressure, leakages and lack of disinfection of the water in the deteriorating water network. These are of course responsibilities of the water concessionaries that took over that area. To just give you a second perspective about how grave the situation and how far the water network has deteriorated since the privatisation. The last outbreak of this sort in the Philippines was in the 19th century. A that time of course there was no water sanitation and sewage to speak of, but now we are in the year 2003 and supposedly an efficient water firm has taken over the system and yet this sort of tragedy has happened and may happen again due to the neglect and the greed of a water corporation like Suez.
There are other indications of the failure apart from this outbreak. The water prices in the Suez area has increased by 400 % since privatization. They have not expanded to the areas which they promised to expand to, such as urban poor areas in Metro Manila which has not had water access since the beginning. At this point poor people are forced to buy vended water from private vendors at five or even at the maximum ten times of the price of piped water. In sum there are about a million residents in Manila who are still without water. Sanitation cover is at 7% at this point. As I said the pipe network is old to begin with, it has been there for 100 years. And that is an argument Suez has been using: 'the pipe network is old, we have no funds to repair it'. Of course that is a lie. First of all, they have overcharged. Secondly, they knew that the pipe network was old when they got in. The promise of privatisation was to up-grade the water system by infusing investment into such a project.
Last December 2002, Suez decided to opt out of the contract, they decided to terminate the contract. It claimed that the Philippine government had not fulfilled its commitments and therefore that is a reason why they had failed to deliver on the targets that are stipulated in the contract. Suez then asked for an international arbitration panel to be convened in order to hear the case and establish whether and who was the fault in the failure of the system. Was it Suez - to us that is very obvious - or was it the Philippines government? Until now we have had nine months of arbitration which has been closed to the public. We are questioning the process to begin because the arbitration panel is composed of only three people which are nominated by the company and government and one independent. It has been out of reach of affected citizens and it has cost the Philippino tax payers about 3 million dollars. My organisation had to file a case in the Philippine court in order to open it to the public. It was not open, it finished in November. The result of the arbitration was a shock. It came just last November 7. The decision was that Maynilad, the water consortium formed by Suez and the local partner, had to pay the Philippine government 120 million dollars in unpaid concession fees. [applause from the audience] Let me just clarify, we are also happy, although this 120 million dollars is not for indemnification, it is not to pay for the damage they have caused to water system. It doesn't mean they are at fault. It only means they are compelled to pay the unpaid concession fees that have refused to pay since 2001, the reason being that there was an Asian financial crisis, 'they had no money', etc. So now they are compelled to pay. We are happy about this decision but then is this something that is worth 3 million dollars to decide on? For 3 people to work for 9 months to say 'OK, now they have to pay'? That was already in the contract. We do not understand why it has to be subjected to that kind of tedious process, only for the arbitration panel to say that they have to pay what they own.
Apart from that, they have not established the guilt of Suez and Maynilad nor has it held the Philippine government in breach of the contract. In other words, no one is at fault. This is a confusing decision so what is the arbitration for, we ask? For 9 months debate and examining papers to assess the situation and then say no one is at fault? For us the situation is very clear. Suez and its local partner are accountable, not just for the deterioration in the water system, but also for the death of 6 people and the 600 people who got ill because of contaminated water.
That is one of the main reasons why I am here today: to inform the French public and other people who are present here about what you can do in order to help governments like the Philippines, not just governments, but people who have been very profoundly affected by water privatisation. Let me just briefly mention three pressure points that an international solidarity campaign can focus on. One is obviously Suez. This company has to get out and the cholera outbreak gives an added urgency to this campaign. That campaign to get Suez out of Manila has to be linked up with campaigns in Jakarta and Buenos Aires and other cities like in United States which also have the same experience. That pressure against Suez can not be coming from these countries alone. I would very much encourage those who are here today to contribute to effort to hold this company accountable and to get it out of Manila. The second pressure point is going to be on the French government and the European Union. The French government because it has a very strong lobby for Suez to stay on in Manila and in fact has gone directly to the president of the national government of the Philippines, promoting water privatisation policies and presenting a package of so-called requests, impositions mostly, for Ondeo/Suez to stay on as the operator of the West zone in Metro Manila. What can be expected if they stay on? More of the same: cholera outbreaks and other disasters. Third would be the multilateral institutions, international financial institutions, which have considerable exposure, both in the Philippine government and in Maynilad, institutions like the Asian Development Bank and the International Finance Corporation of the World bank.
These are just three pressure points that international campaigners can focus on. And to conclude, a fourth important point for solidarity campaigning is the development of alternatives, because without that we cannot move forward. What do we have to offer when Suez leaves? Their best argument has been that they have marginally improved water access and if we can not prove that we offer better alternatives it will be very hard to convince people, specially poor people, that they need to resist to water privatisation.
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