Into the lion’s den: Confronting the World Bank on privatized water

Posted on 12 October 2013
IBON International Update #3
World Bank – October 12, 2013
Washington, D.C., October 11—Corporate Accountability International (CAI) and IBON International joined forces in Washington, D.C. this week to challenge the World Bank Group on its role in privatized water utilities.
CAI is a membership organization with a 35-year track record on protecting human rights, public health and the environment from corporate greed and abuse around the world. It is currently pursuing a campaign to challenge corporate control of water.
IBON on the other hand has consistently opposed water privatization since the 1990s and is the secretariat of the regional Water for the People Network (WPN) with members in the Philippines, Sri Lanka, Nepal, Mongolia, Bangladesh, and Vietnam. WPN challenges water-related policies, structures and institutions that compromise the people’s right to water. The network also proactively seeks community-based, pro-people solutions to such problems.
Shayda Edwards Naficy, CAI’s international water campaign director, and Jennifer del Rosario-Malonzo, IBON’s development finance program manager, met with the International Finance Corporation (IFC) Head of Water and Municipal Infrastructure; the WB Executive Director (ED) for the Philippines; and a number of WB ED Advisors to discuss concerns on privatized water utilities such as in the case of Metro Manila.
Naficy and Malonzo highlighted problems including incessant water tariff hikes that impact the poor’s access and right to water, broken promises of universal coverage and better quality of service, and issues of accountability and corporate abusive practices.
Meeting the IFC
The water advocates met with three representatives of the IFC, WB’s private sector arm, including the Global Head of Water and Municipal Infrastructure, Elena Bourganskaia; a water industry expert with years of experience working in the private sector; and a communications officer.
In this unique opportunity, a member of the Philippine movement against water privatization faced representatives of the IFC—the primary institution responsible for the privatization. Malonzo directly confronted the IFC regarding Manila Water and the Bank’s promotion of private water. While it was a civil clash of opposing views, some interesting information and opportunities for further engagement emerged that can strengthen the campaign moving forward.
The IFC officials emphasized that the finance institution mainly considers sustainability of investments or, in other words, ensuring cost recovery. Malonzo and Naficy meanwhile argued that such emphasis on cost recovery has meant unaffordable water services that impact access of poor communities, an issue that should be taken into account by the IFC as part of the WB that is supposedly about development.
IFC’s involvement also assumes a conflict of interest as it has been the Philippine government’s adviser on water privatization, while holding equity shares in Manila Water. The push for privatization of the Metropolitan Waterworks and Sewerage System (MWSS) in 1997 came from the agency’s massive debts incurred from the WB and other international financial institutions. IFC became the government’s consultant in the privatization project and it designed the Concession Agreement that the MWSS signed with Maynilad and Manila Water, the two private water concessionaires serving the country’s national capital region.
Global Region: