Is South Africa's Water at Risk of Being Privatized?

2015-12-05 13:36

South Africa's drought situation is now in full effect, as five of the nine provinces have been declared emergency areas. Farmers can only watch as their lands and produce waste away, leaving our country with no choice but to import produce. In addition to the lack of rain, this emergency situation is compounded by the evidential lack of maintenance and planning of the grid (mostly at the local level) now being cited by political opponents, academics, and other observers. The extent of which is yet to be fully revealed as the DA [supposedly] yet to receive the Blue and Green Reports from Water Affairs Minister Nomvula Makonyane. Aside from the usual political tactics of finger-pointing by political opposition, this could hold serious implications for our society and our economy. As much as this is abhorrent and reflective of "criminal stupidity" as some have called it, the question remains as to how the country's water grid and water reservoirs will be restored and maintained. Once again the country may be in the throes of more contentious violence and protest over a resource - the definition of which has long been in contention since the country's political transition in 1994.

With consistently decreased expenditure on water infrastructure in some of the country's biggest municipalities, dwindling fiscal reserves with congruent embezzlement don't only make the weekly media rounds, but now constitute criminality of the highest order. It's perhaps quite fitting, and just as well the government has pledged to removing itself from the Rome Statue and the ICC. Carte Blanche has already detailed the negligence of water management systems, resulting in exponential increases of green algae in our dams. This potentially puts hundreds of thousands of consumers at [lethal] risk. The ability to not only deliver water, but safe and clean drinking water has now overtaken most concerns in both govt. halls and the public social discourse.

With yet another sector of the public service clearly beset by political malaise and ineptitude, the private sector as both partner, and [perhaps] the eventual sole provider of water may come to form our reality sooner than we think. Even if opposition to corporate provision arises, community provision and NGO involvement, commonly neglected from definitions of privatization may also become a resort for the poor. This self reliance is often  tinted as community participation/involvement (McDonald & Ruiters: 2005). Rand Water's recent call for funding of water based NGO's is one example of the state's decentralization efforts amid increasing pressure and incapacity to deliver

Companies specializing in water grid and purification technology have already been delivering water [on and off] to municipalities for some years now. These include French companies Suez and Veolia, with plants and research facilities situated across the country. Suez of France, through its subsidiary Water and Sanitation Services South Africa (WSSA), and Sembcorp of Singapore, through its subsidiary Silulumanzi, are international firms with contracts in South Africa. The former of these two have been involved in protracted disputes over the provision of water in parts of Johannesburg and KwaZulu-Natal since the advent of the new millennium. Contestations between commodification and human rights based provisions have been played out between Civil Society, the state and companies providing water for the best part of 15 years. With no small implications or future outlook[s], Professor Patrick Bond has fastidiously documented these events and what they could mean for the future of the country. Earlier episodes with water companies include


August 2000, when a cholera crisis emerged in poverty-stricken KwaZulu-Natal province and social protest rose to new heights, water minister Ronnie Kasrils lobbied that free basic water should be included in the African National Congress ruling party’s 2000 municipal campaign promises. However, in July 2001, the free water policy became official, but faced noncompliance by municipal and national bureaucrats responsible for administering the policy. The Johannesburg Water Company, managed by Suez, revised water tariffs in July 2001 to provide the free lifeline, 6,000 liters per household per month (Bond: 2010: 445)

This resulted in higher tarrifs imposed on users for future use, leading to higher disconnection rates in parts of Soweto. Eventually;

Activists in the Anti-Privatization Forum advocate[d] a different strategy based upon decommodification, insisting upon a larger free lifeline tariff, ideally on a per-person, not per-household basis, with a price curve that then rises in a concave manner to penalize luxury consumption. They took this case, along with a challenge to pre-paid water meters, into the courts, and in April 2008 won a landmark judgment which doubled free basic water from 25 to 50 liters per person per day, and also banned pre-payment meters. (Bond: 2010: 446)

All of these protracted battles are related to the commodification lobby, on the part of big business, to get international conventions and governments to re-orient their perception of water from a human right to an economic commodity. Documents like that of the UN Dublin Statement on water and sustainable development purported controversial clauses such as Principle No. 4 - "Water has an economic value in all its competing uses and should be recognized as an economic good"

No other company has taken this principle to heart more than Nestle. Besides perpetuating child slavery in the Ivory Coasts Cocoa industry, Nestle is a company which has foreseen the increasingly lucrative value of water as an economic good. Former CEO Peter Brabeck-Letmathe has gone on record as saying he doesn't believe water is a human right. In light of this executive admission, Nestle South Africa in turn, has had to deny allegations of non-compliance and community marginalization regarding its operations and treatment of water extraction for its PureLife bottled water brand. This follows a controversial German documentary (Bottled Life) detailing its nefarious ambitions and operations around the world, including parts of South Africa. Just to give an idea of the company's interests in the country a look at the following excerpt gives some indication

Nestlé is the world's largest food company and Nestlé Waters is the world's largest bottled water company. Bottled water is one of the fastest growing sectors of the beverage industry, estimated to be doubling every 3 – 4 years. In South Africa, Nestlé Waters became one of the major players in the bottled water business through its Valvita and Schoonspruit brands. One of Nestlé Waters' most important assets is the Doornkloof plant near Olifantsfontein where the aquifer in the underlying dolomite produces one of the finest natural mineral waters in the world. When the plant burnt down in October 2002, management sought an urgent replacement for this strategic resource.


Inversely, in its efforts to "Create Shared Value" among multiple stakeholders (both at local and international level) the company still seems to operate with an air of malfeasance. Recently it played host of an international symposium on water management in conjunction with the World Economic Forum in Pakistan. Through creating international Alliance for Water Stewardship (AWS) standards, the company seeks to work with governments across the world in order to safeguard water reservoirs, storage, and supply. Recently Brabeck-Letmathe and the WEF were proud to announce the adoption of the Strategic Water Alliance Partnership which will see Nestle in collaboration with the Dept. of Water Affairs and other companies including

  • The Coca-Cola Company (the commitment of which to water based provisions of Corporate Social Responsibility - quite dismal if one considers it's annual turnover, let alone its net worth in South Africa)
  • International Finance Corporation
  • Pepsi-Co
  • Swiss Agency for Development and Cooperation
  • Veolia Environment
  • SAB Miller (soon to be no more after the recent AB-InBev acquisition)
  • Anglo American
  • and Sasol

[Eskom - omitted being that it's still a state-owned company]

These companies will be expected to pool their resources and expertise under the "Water Resource Group" to increase their efficiency of water use. Such refined techniques and technology could hypothetically be sold back to the state, or rolled out for public use should they deem it fit to do so. Strangely enough, however, the conservation part of Nestle's SA website is vaguely missing nor does it contain any reflection of this so-called Strategic Partnership. Perhaps this alludes to the company's true position regarding water use. This [potentially] renders its own slogan of " Creating Shared Value" as  nothing more than face-value Corporate Social Responsibility (but then again, which company hasn't been accused of such?). Many would say that Nestle has unfairly been branded as the face of corporate aggression regarding the commodification of water, but its recurrently questionable actions across various parts of the globe suggest otherwise.

South Africa's contentious history, however, makes it less certain that government or the people will be open to a complete service provision of water by the private sector. This is also coupled with the uncertain political climate now befalling the country following the deterioration of the ANC government. Subsequent social unrest as a result of economic stagnation presents another barrier to corporate involvement. This is coupled with ever-fluctuating exchange rates in developing countries including our own. Although most municipalities continue to provide water and sanitation services through public utilities or directly themselves, the Managing Director of Silulumanzi notes.

the South African water market is still in its infancy and municipalities are unsure of how to engage the private sector."

The rate at which corporate involvement is increasing in the water sector can't go on ignored. The neo-liberal stance of our government (revealed by analysts across the board) coupled with ever increasing environmental hardships create ideal positions for water companies. Documentaries like Blue Gold: World Water Wars have highlighted the plight faced by nations (developing and developed) when facing corporate aqua-ambitions. South Africa, through negligence and politically based appointments, runs the increasing risk of becoming susceptible to greater corporate involvement (and perhaps take-over) should things continue the way they are now. Although the global climate crisis necessitates multilateralism, the premise under which corporations involve themselves will always be tainted with ulterior motivations (namely profit and control).

[embed][/embed] Academic Articles consulted: Bond. P, 2010, "Water Health and the Commodification Debate", Review of Radical Political Economics, Vol. 42 no. (4), pp. 445–464 McDonald. D & Ruiters. G, 2005, Ch. 1: "Theorizing  Water Privatization in South Africa", in McDonald & Ruiters (eds), The Age of Commodity: Water privatization in Southern Africa, Earthscan UK

Disclaimer: The author notes the defamatory remarks or sentiments made in this article against prominent institutions or persons and as such, explicitly expresses the views held in this article are entirely his own and do not reflect those of the Media24 Group. 

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