The privatization of water began in the nineteenth century
as public issues began to arise in Europe in North America. Water privatization
is when private corporations buy or operate public water utilities. This
includes the maintenance of water systems and water resources. A transfer of responsibility to operate a
water delivery or treatment system, a more complete transfer of system
ownership and operation responsibilities, or even the sale of publicly owned
water rights to private companies are some of the ways in which water may be
privatized.
While “privatization” is a broad term, there are more
specific classifications involving water contracts. There are two main
classifications: asset sale and management contract. In an asset sale, a
private company could buy the entire water system from a government entity or
establish that system. In a management contract, a private company is
responsible only for the operation of the system. This means that a private
company would manage the operation and maintenance of the system but the public
would control the access to the water as well as the infrastructure. Privatization
is a controversial topic because it is an essential human need but is also an
economic good.
Privatization leads to rate increases, undermines water
quality, and means that companies are accountable for shareholders and not
consumers. Water is seen as a marketable commodity rather than a basic human
need and a natural resource. As corporate agendas are driven by profits rather
than by the public good, water privatizations usually results in compromising
of environmental standards. Private corporations may ignore environmental
sustainability. Development of watershed reserve lands increases contaminated
runoff, results in loss of habitat and ecosystem services, affects hydrology
patterns, and diminishes open space. Most companies seek cheap sources of water
with little thought on implications to the natural environment. Bulk water
sales have disastrous ecological consequences. Mass extraction of water from
its natural source can result in ecological imbalances such as aquifer
depletion and groundwater contamination. Aquifers, once depleted or
contaminated, are almost impossible to restore.
According to
citizen.org, federal regulations for water are based off a cost-benefit
analysis. This could mean that public health is compromised for profits to
companies. Privatization of water reduces local control and public rights. It
is hard to determine if the company will work in the best interest of the
community and, if dissatisfied with the company, the water rights are extremely
difficult to buy back from the company.
Job losses are a major factor in water privatization.
Private companies aim to minimize costs and increase the profits and this means
that sometimes service and water quality are put at risk because of
understaffing. Layoffs are not only tragic to the employees and their families,
but to the consumers that are utilizing this water. The privatization of water
may also lead to limited access for lower income families.
There are alternatives to corporate water privatization.
Around the world, cities have focused on democratic participation, local
accountability, and community activism. Measures for improvement of public
water supply have already been implemented in many places.
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