FOR IMMEDIATE RELEASE
Dangers of Water Privatization Demand Greater
New Report Sets Forth Principles to Ensure Fairness, Protect
OAKLAND, CA - The Pacific Institute released a new report on
water privatization today that aims to ensure water privatization
deals are fair, protect the public health, and don't harm the
environment. "The New Economy of Water: The Risks and Benefits
of Globalization and Privatization of Fresh Water" is the
most comprehensive examination of the issue of water privatization
to date. The report looks at the dangers and benefits of water
privatization, offers case studies from around the world, and
sets forth principles designed to help guide privatization deals.
"Water privatization efforts have been growing rapidly both
in the United States and abroad, but public understanding and
oversight of these deals lags far behind. Water privatization
must be subject to much stronger public scrutiny," emphasized
Dr. Peter H. Gleick, lead author of "The New Economy of Water"
and Director of the Pacific Institute. "Part of the problem
is that there are few formal guidelines and, in most cases, inadequate
Though certain types of privatization can help water utilities
become more efficient or provide water to those in the developing
world who currently lack basic services, there are a host of dangers.
Privatization may bypass under-represented communities and worsen
inequities in the distribution of water, especially in the poorest
nations. Privatization agreements may discourage efficiency and
conservation efforts and they may fail to protect important natural
"There is little doubt that the headlong rush to private
markets has failed to address some of the most critical issues
and concerns about water," stated Dr. Gleick. "How can
we protect the world's poorest people, how can we ensure that
the environment gets a fair share, how can water quality be protected
for future generations? All of these questions must be answered
before we move forward with more privatization."
In some cases, governments lean heavily on industry-funded consultants
or even the companies doing the deals to seek guidance. The complexity
of water privatization deals often means that many governments
are not able to fully understand the consequences of turning over
control of public water systems until it is too late.
"As the Enron bankruptcy shows, using markets to manage
key public resources can sometimes have disastrous consequences,"
noted Dr. Gary Wolff, the Pacific Institute's Principal Economist
and Engineer. "Complex privatization deals are often poorly
understood by government officials - even in the United States
and Europe - yet water privatization has enormous implications
for the public health and for the health of our natural world."
There are solutions to the problems of privatization: Clear and
consistent standards, strong public oversight, and strict scrutiny
of any deals by independent organizations.
"Our assessment shows that rigorous, independent review
of water privatization efforts are necessary to protect the public,"
said Dr. Gleick. "Governments must establish clear guidelines
that ensure fair access to water regardless of income, protect
the environment, ensure transparency, and include affected parties
in decision-making efforts. Water is far too important to human
health and the health of our natural world to be placed entirely
in the private sector."
The full report is available in electronic form online.
Founded in 1987 and based in Oakland, California,
The Pacific Institute for Studies in Development, Environment
and Security is nonpartisan and independent. We provides
research and policy analysis on issues at the intersection
of sustainable development, environmental protection and
This report was funded by donations from the Rockefeller,
Hewlett, and MacArthur Foundations.