How Privatisation Undermines the Human Right to Water and Sanitation

by | Jan 15, 2019 | Blogs

Photo: Resilience

Access to safe water and sanitation has long been internationally recognised as a basic human right, essential for life. But when water becomes a marketable commodity rather than a public good, it is inevitable that human rights are undermined.

End Water Poverty has consistently highlighted the importance of accountability to achieving the human right and the Sustainable Development Goal (SDG) on water and sanitation. This raises a fundamental question: What happens to the human right to water and sanitation when a government hands accountability to a private corporation?

In September 2018, the United Nations released a groundbreaking report highlighting the detrimental effects of privatisation on human rights and the poorest in society. Philip Alston, the UN Special Rapporteur on extreme poverty and human rights criticised the World Bank, the International Monetary Fund, and the UN for aggressively promoting the widespread privatisation of basic services, and governments for undermining human rights.

“States can’t dispense with their human rights obligations by delegating core services and functions to private companies on terms that they know will effectively undermine those rights for some people.” – Philip Alston, the UN Special Rapporteur on extreme poverty and human rights

For the past four decades, evidence has shown that privatisation of water and sanitation often increases costs for governments and low income households. It has not been efficient or cost effective. It has reduced quality and undermined access, particularly for the poorest and most vulnerable in society.

Philip Alston argues that privatisation ‘is premised on assumptions fundamentally different from those that underpin respect for human rights, such as dignity and equality. Profit is the overriding objective, and considerations such as equality and non-discrimination are inevitably sidelined. Regulatory and other constraints are viewed as obstacles to efficiency, and accountability for other than economic outcomes sits uneasily at best. Rights holders are transformed into clients, and those who are poor, needy or troubled are marginalised…There is no substitute for the public sector to coordinate policies and programmes to ensure respect for human rights. Yet privatisation directly undermines the viability of the public sector and redirects government funds to subsidies and tax breaks for corporate actors.’

Despite the evidence, proponents of privatisation continue to argue that only corporations can fill the funding gap required to achieve the Sustainable Development Goals, including for water and sanitation. Public Private Partnerships (PPPs), including blended finance, are falsely promoted as a way for governments to access new capital and mitigate risk. In almost all cases the capital is not new; it’s borrowed from banks at a higher rate of interest than governments would pay. Inflexible contracts often lasting 25-30 years, force governments to prioritise ever increasing repayments over other spending priorities. This can lead to spending cuts in other areas, further weakening the rights of most vulnerable and marginalised. Moreover, as the catastrophic failure of a number of PPPs in the UK has taught us, the risk always remains with the public purse.

Systems of Exchange
Credit: Systems of Exchange

In October 2018, the UK’s Conservative Government announced that it would abolish new PFI and PF2 schemes, following the collapse of the major outsourcing company Carillion, the failure of numerous contracts in health, education and transport, and overwhelming public opposition to PPPs. This is significant as the UK was one of the first countries to develop PPPs and is currently paying over £10 billion a year for over 700 deals. Nevertheless, despite their failure in the UK, the Conservative Government continues to promote PPPs to some of the poorest countries in the world.

In England, water and sanitation have been fully privatised since 1989. Regional water companies, many of which are owned by banks, private equity firms or foreign investment funds, have been criticised for using profits to pay dividends, rather than invest in infrastructure, increasing household bills by over 40 percent above inflation and paying minimal taxes and excessive executive salaries. Research has shown that privatisation in England costs consumers an additional £2.3bn a year, or £100 per household. In Scotland, where water and sanitation is provided by a publically owned corporation, household charges remain lower than in England.

There is an alternative to privatisation. Evidence from 235 cases of water remunicipalisation in 37 countries between 2000 and 2015, shows that quality and publicly provided water and sanitation services are far more accountable, better quality, financially transparent, efficient and cost effective. They are better at meeting the needs of the poorest and most vulnerable in society and respecting the human rights to these services.

Three years into the Sustainable Development Goals, we are already way behind target on providing universal access to safe water and sanitation. Decades of evidence has shown us that rather than providing a solution, privatisation is exacerbating the water and sanitation crisis. Sadly, this is only set to get worse, as climate change continues to limit access to clean water, and the SDGs are promoted as a business opportunity.

To get the SDG progress back on track, we need to reclaim the agenda and make the case for the alternative: only quality, publicly provided water and sanitation services can deliver SDG 6 and the human right to WASH to genuinely leave no one behind. It’s time to join the fight.

Mark Beacon is a member of End Water Poverty’s steering committee and an International Officer for UNISON, the UK’s largest trade union.