Unbundling water from land

Water is on everyone’s lips. Right and Left, farmer and city dweller, big business and green business. Everyone agrees it’s a big issue and something needs to be done. And, for the most part, almost everyone seems to be agreeing on what should be done: privatise water and trade it. On January 1, 2007, water trading came into force in Australia. What does this mean and why should we be worried?

Water and land

Water fits land like a glove fits a hand. It follows the lay of the land, pools in hollows and flows between inclines. Water and land are not only intimate, they shape one another. Water seeps through the soil, jumps down cliffs; rocks bounce through streams, clatter along shorelines. Each in relationship with the other. This seems almost too obvious to state. So why do I? I do so because new laws are coming into force that separate land from water, water from land.

Separation is a long-used method of big business, big science and big government, those who are purveyors and beneficiaries of global markets. Separation is the first action of colonisers who take the land and the resources from the original inhabitants.

By paying little or nothing for the land and its resources, colonisers have always made a handsome profit. Crown Land is land claimed by the English monarchy for its own purposes: half a world away, sight unseen, the Crown can claim land that is the land of Indigenous inhabitants. And yet, Native Title, if claimed, can only be recognised when continuous connection can be shown by the Indigenous inhabitants.

The players have shifted. Instead of monarchies and Indigenous peoples, we now have corporate governments and governing corporations. Each is pocketing what the other does best: governments pocket money from corporations and corporations pocket political power.

How does this apply to water? Governments are about to allow trading of water rights. It used to be that land users bordering rivers had use rights over water from the river. Water was allocated, sometimes unfairly, but the water could only be used by the landowner or the land user.

What is about to happen is that the water, through laws that unbundle land and water, can be separated from the land. This means that water not used by the landowner or the land user can be sold to another party who does not own or use land bordering the river.

This shift in national law has been accompanied by changes to state laws. For example, in Victoria there is a new 2006 law on Separation of Land and Water Titles. This law is to be followed in 2007 by a law on Unbundling of Land and Water. Both follow on from a 2006 national law on Water Trading. It no longer matters whether one votes Labor of Liberal, since both parties are eagerly participating in these separations.

As water is separated from land, the reciprocal relationship between the two will be snapped (as if chopping the fingers out of the glove). When that happens, environmental degradation will occur on the one hand and those with the most money will profit on the other.

The international context

How does Australia sit in relation to water politics internationally? Privatising of water is a huge multi-billion dollar global business dominated by three corporations - Suez-ONDEO, and Vivendi-Veolia based in France, and RWE-Thames Water based in Germany. These super companies control 70 per cent of the world’s water market (Barlow and Clarke: 2002).

Their control comes through water “concessions”. The last time the word “concession” was used regularly in this way was during the colonial era when land grants or “concessions” were given to colonisers to ease their investment in the colony.

The water concession in Adelaide is held by United Water International - jointly owned by Vivendi (France), RWE-Thames Water (Germany) and Kellogg Brown and Root (USA). United Water is developing plans for bulk water exports in their Adelaide water concession (Barlow and Clarke 2002).

As one of the driest cities anywhere in the world, it makes no sense to export water from Adelaide. Since they also control Ballarat’s water, they could start planning to export water along the same pipeline that is needed currently to bring water into this very dry inland Australian city.

Bechtel, a US-based company which, like Kellogg Brown and Root, has been active in “reconstruction” in Iraq, also has concessions elsewhere in Australia.

While the water trading discussion is currently focused on talk about trade within Australia, the endgame is about exporting water from Australia, the driest continent.

There are two recent moves that suggest this. The Australia US Free Trade Agreement (AUSFTA) enables US-based companies special access to Australian markets. Water was not excluded from the treaty. The result is that US-based companies such as Bechtel, Halliburton, and Kellogg Brown and Root can move into operating in Australia without meeting any arduous requirements.

The other international treaty that affects water in Australia is the General Agreement on Trade in Services (GATS) that applies to all countries who are members of the World Trade Organisation, that is 149 countries with 32 more with observer status, is a very broad trade agreement covering all services - and once water is tradable, once it is transferable between private parties, it becomes a service. The interesting thing about GATS is that it includes water in its “rules and regulations”. Although it is possible for governments before ratifying the agreement to name “exclusions”. The GATS text identifies a host of ways in which water can be considered a service:

It has sections that cover sewer services, freshwater services, treatment of waste water, nature and landscape protection, construction of water pipes, waterways, tankers, groundwater assessment, irrigation, dams, bottled water, water transport services, and the like. In the second round offer made by Australia in May 2005 there are exclusions on “the provision of water for human use, including water collection, purification and distribution through mains” (AFTINET June 2005).

Somewhat surprisingly, Australia has named water as an exclusion to the GATS agreement. Surprising  because we have had, in the Howard Government, a gung-ho attitude to free trade for the past decade. But there is one thing Howard likes better, and that is to kowtow to the Bush administration. So, when water was excluded by Australia from the GATS agreement, there was celebration among Fair Trade activists.

But I fear that this celebration came too quickly. I say so because water is not excluded from the AUSFTA, but its exclusion from GATS heightens the ability of US-based water corporations to make very big profits in Australia. As the Europeans have a head start on water corporations, the exclusion of water from GATS is likely a gift to US-based water lords.

In the lead up to the AUSFTA, it was clear that there were going to be many downsides for Australians in this agreement. One I highlighted at the time was: “Water and other utility services will be increasingly privatised and public ownership and access threatened. The result is profit at the expense of access and safety” (Hawthorne 2003).

With many of the US-based companies finding a foothold in concessions around the country in metropolitan and regional centres, it may well be that in excluding water from GATS but not from the AUSFTA we have simply swapped one lot of water lords for another.

The water on our planet is one of the crucial ingredients that makes life possible. Without water none of us can survive more than a few days. Access to water should not be a tradeable resource. Separating water from land is just the first move in a number of legal rewritings which we can expect to see in coming years.

If you think Howard’s move on saving the Murray Darling Basin is important, look closer, read the small print, look out for separations. They are markers of far worse things to come.

Confusing citizens by claiming one thing while doing another is becoming a frequently used strategy by governments to persuade us that they really have our interests at heart. While Howard claims to speak against postmodernism, his political shillyshallying with multiple moves and shapeshifting flexibility is an indicator of just how well he has learnt the postmodern tango. Don’t be fooled by this bipartisan concern about water. It is rooted in profit-making and unaccountability.