President Duterte continues to berate the two giant water companies—Manila Water and Maynilad. He fumes as to why these companies are able to treat water, a natural resource, as a commodity and as an object of endless profit-making exercises, made possible by onerous or one-sided water concession contracts forged by the water twins under the Ramos and Macapagal-Arroyo administrations.
We agree with him that water, a natural resource, should not be treated as another commodity. It is part of the national “commons” that should be equitably shared and enjoyed by all. The commons include land, forests, seas, culture and other resources, including the digital commons that form part of our national patrimony. They should be developed and managed in a sustainable way to meet the needs of both the present and future generations.
The commons also cover the essential public services, such as education, social protection, health, electricity and other basic amenities that the Constitution says should be developed by the State for the benefit of all citizens.
In the development of the foregoing natural resources and public services, the government naturally plays a central visioning, organizing and managing role. A strong public sector is needed. Go to China, go to Singapore, go to Scandinavia and so on, and see the pivotal role of the government in ensuring that all citizens are able to enjoy efficient, affordable and accessible public services.
The problem is that, in the case of the Philippines, these natural resources and public services have become a special target of the narrow privatization program promoted (imposed is a more accurate word) by the IMF-World Bank tandem. This privatization program was an integral part of the so-called structural adjustment program that the twins devised for the country in the 1980s to 1990s. The Philippines was one of the original guinea pigs for the SAP program that is now widely denounced in Latin America and other heavily indebted developing countries, as well as by a number of World Bank researchers, past and present (e.g., former WB Chief Economist Joseph Stiglitz).
The country’s problem has been compounded by the neoliberal attitude of the Filipino economic technocrats who embraced the privatization program in full because they, apparently, believe that everything, such as the water distribution business, can be reduced to a market issue. In addition, they can avoid doing the difficult task of attending to all the details of planning, budgeting and implementing the delivery of a public service, such as water or power distribution. Let the big corporations do the job. And let the different household consumers, big and small, pay the “right-water tariffs” if they want water to continue flowing in their faucets. In short, let the public service become another tradable commodity, subject to the supply-demand dynamics in a market economy.
Clearly missing in the foregoing commodification/privatization framework is the central role of the government, both at the national and regional/local levels, as a visionary development leader and as a “balancer” of competing development goals. In the case of the water public service, these goals include the following: affordable and accessible water for all; equitable social and economic development in all areas served and to be covered; sustainable water generation and environmental management; well-being of communities along the water generation-distribution value chain; and consultation/participation of the consumers and concerned communities in the waterbusiness.
The last means the citizens from
the developed and underserved communities should have a say in the formulation
and implementation of a holistic and people-focused water development program,
from generation to infra development and distribution. There is none in the
present system. There are no consumer and civil society representatives (not
even Rotarians) in the boardrooms of the water companies. The Local Water
Utilities Administration are also silent on why the big water companies (Prime
Water, FilCapital Water, Manila Water and so on) are competing with one another
in “privatizing” the more developed water districts. The LWUA has also not
issued any statement on the numerous complaints by
consumers of “privatized” water districts over rising water tariffs and
declining water service.
It appears that under the water privatization program, the government’s role is reduced to that of a passive onlooker, unable even to tame or regulate the insatiable desire of the water companies for more and more profits. The regulators have been captured by the industry players.
So can the Duterte administration reverse the commodification/privatization program in the water and other public services? What is the government’s game plan? As it is, the water consuming public in Metro Manila is mesmerized by the capacity of the government to threaten the water giants with the possible filing of plunder cases and possible imprisonment of the multibillionaire owners of Manila Water and Maynilad? But are there programs then to reverse privatization? To stop the ongoing privatization of the most developed water districts by the big corporations?
If the government economic planners are thinking along this line, they can educate themselves on the studies conducted by the Public Sector International and Transnational Institute. In Reclaiming Public Services (2017), the PSI and TNI reported that there have been at least 835 examples of “re-municipalization,” or de-privatization, involving more than 1,600 cities and 45 countries worldwide.
One notable case documented by the book is the success of the city government of Grenoble, France, and its citizens in putting “an end to a corrupt contract with water multinational Suez” in the early 2000s. Grenoble, a pioneer in Europe on water privatization, has become a pioneer in de-privatization. The city created a new public water operator that provides better quality water at lesser cost, and includes citizen participation in the running of the public service.
Another notable case that should excite the lawyers of the Duterte administration is the re-municipalization of the centralized heating system of Vilnius, Lithuania. The city government decided against the renewal of a 15-year contract with the French energy multinational Veolia, which was charged by the city government for price gouging and generating “unlawful excess profit of €24.3 million between 2012 and 2014.” Veolia brought the case for international arbitration under the France-Lithuania Bilateral Investment Treaty, demanding a retention of the contract and payment of €100 million in damages. The city government stood firm, and took over the management of the heating system even if the arbitration case was still pending (as of 2017).
Clearly, political will is central in any program to bring back sanity in a privatization program that has become highly commercialized and inimical to the consumers and the nation. Will the Duterte administration be able to summon the same political will in altering the four-decade-old SAP and privatization program in support of the people’s interests?