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Michael James Bowes An analysis of the private water provision in Great Britain. By Michael James Bowes Of Cornell University Law School Submitted for the degree of Doctor of Law (JSD) (January 2014) (i) Copyright © 2014 Michael James Bowes All Rights Reserved (ii) Abstract Michael James Bowes (JSD) Cornell University 2014 An analysis of the private water provision in Great Britain. In 1989 England and Wales transferred their public provision of water to the private sector. This was the largest public to private water transfer ever to have happened in the Western World. The main objective of this study is to determine if there has been a positive or negative impact on provision due to this privatisation and whether this provision can be called effective. In order to ascertain the effective nature of the provision and to determine whether there has been an improvement or deterioration, six key performance criteria have been devised from the most critical areas in the provision of water. Various forms of information were gathered which include statistics from regulators, corporate providers and secondary sources. In addition a series of elite interviews were carried out which included a variety of stakeholders including; corporate providers, quasi- autonomous non-regulatory organisations, charities and consumer bodies. This study shows that although the systems in England and Wales have areas which need to be improved, all six of the key performance criteria have improved since privatisation and that the current system of private provision is effective. Biographical Sketch Michael James Bowes is a qualified solicitor in both Scotland and England. He obtained his initial law degree (LLB with honours) in 2004 from Glasgow University and completed half of his honours grades at the National University of Singapore. Following this he obtained Diplomas in both Scots and English Law from the Glasgow Graduate School of Law and Nottingham Law School. He also passed his English Transfer Examinations allowing him to practice in England. Professionally he practised law in a large commercial firm for two years to qualify as a solicitor, subsequently he taught commercial law at Glasgow University for a year. After teaching, he has worked for a variety of institutions ranging from the United Nations, Hedge funds and the Council of Europe. At Cornell University he obtained a (LLM) Master of Laws degree in (2009) and following enrolled for a Doctorate in Law (JSD), which is the purpose of this submission. (iii) Dedication Dedicated to My Parents Mr Jim and Mrs Katrina Bowes. Their support has been only been exceeded by their love. My Father is my best friend and my Mother is my hero. And My dear Grandmother Mrs M Scott. Her joy for life is shown in the happiness of those she loves. “Every day I wake up and try to make someone happy!” (iv) Acknowledgements Many thanks to my Chairman and Committee for their support: Professor Gregory S Alexander Professor Eduardo M Peñalver (Chairman) Professor Keith Porter Professor Laura Underkuffler I would like to thank the many who contributed to the invaluable interview process of the Thesis. I would also like to thank: Professor Jim Murdoch who has been a constant academic mentor and friend, Dean Charles Cramton for his support, Dr David Benson for his guidance on methodology, Miss Victoria McNicol for her administrative skills and Mrs Mary-Jane porter for her cooking. (v) An analysis of the private water provision in Great Britain. Table of Contents Chapter 1 Introductory Chapter – Water The Most Important Compound Part 1 Importance of the Topic Research Claims and Objectives Global Problem with the Provision of Drinking Water Part 2 Private Sector Provision Part 3 Chapter Components and Objectives (vi) Chapter 2 Current Literature and Methodology Part 1 Current Literature Part 2 Methodology Chapter 3 The Transformation to Privatisation Chapter 4 Scotland Chapter 5 Legislation and Governance (vii) Chapter 6 England and Wales Part 1 The Regulators Part 2 England Part 3 Wales Chapter 7 Sustainability Part 1 Catchment Management and Sustainable Development Part 2 Ofwat and Sustainable Development Needed Improvements (viii) Chapter 8 Global and National Problems and the Future of Water Part 1 Recent water problems in Great Britain Part 2 Future Global Concerns Part 3 Elements which have aided effective provision Concluding Remarks (viii) APPENDIX Appendix 1 Industry Interviews Appendix 2 Global Water Statistics Appendix 3 The Hydrological Cycle Appendix 4 Water Statistics for the United Kingdom Appendix 5 The Factors Behind Water Scarcity Appendix 6 Bottled Water Appendix 7 Water Companies’ Information Appendix 8 Water Companies Corporate Web-pages (xi) Appendix 9 Countries with Ownership Interest not in The UK Appendix 10 Water Companies Share Prices Appendix 11 Water Companies Revenue and Profit Appendix 12 Private Purchase Example Appendix 13 Staff Employed and Contracted Appendix 14 Fieldwork (RELU) 2010 Appendix 15 Fieldwork (Crete) 2010 Appendix 16 Fieldwork (Wetlands) 2009 /2010 REFERENCES Reference List (x) List of Tables Table 1 Example Costs of Domestic Water Table 2 Virtual Water Content of Consumer Goods Table 3 The Privatisation Timeline Table 4 Charges of Water and Waste Services by Scottish Water 2012-2013 Table 5 2008 Water Test Findings of Rivers and Lochs Table 6 Rights and Responsibilities of Water Ownership and Use Table 7 Average Household Bills 2012/13 – Water and Sewage Providers (xi) List of Abbreviations EA / The Environment Agency The British Government Agency concerned with pollution and flooding. http://www.environment-agency.gov.uk/ CCW / The Consumer Council for Water This body represents the interests of consumers in England and Wales and deals with complaints against water providers. http://www.ccwater.org.uk/ DEFRA / The Department for the Environment, Food and Rural Affairs The British Government department concerned with environmental protection. http://www.DEFRA.gov.uk/ DWI / The Drinking Water Inspectorate This regulatory body monitors the quality of drinking water provided by the water companies in England and Wales/ (xii) DWQR / The Drinking Water Quality Regulator for Scotland This regulatory body monitors the quality of drinking water provided in Scotland/ http://www.dwqr.org.uk/ NAWC / National Association of Water Companies (USA) This is an association of private water and sewage providers in the United States of America. NGO / Non Governmental organisation Ofwat / The Water Services Regulation Authority This is the regulator who monitors price in England and Wales. http://www.ofwat.gov.uk/ Quango / Quasi Autonomous Non-Governmental Organisation RELU / The Rural Economy and Land Use Programme This is an academic programme which is focused on the rural economy. http://www.relu.ac.uk/ UN / The United Nations WICS / The Water Industry Commission for Scotland This is the regulator who sets the price for water customers in Scotland. http://www.watercommission.co.uk/ (xiii) Chapter 1 Introductory Chapter – Water The Most Important Compound Introduction Our Planet is consumed and comprised mostly of water, over two thirds is comprised by liquid water in the seas, over one twentieth is composed of ice and the majority of most living things are comprised primarily of water. As Ball states, “We call our home Earth, but Water would be more apt.”1 Water is a unique and irreplaceable resource, which is necessary for life. The adequate provision of water is of paramount importance in any country. Provision comes in many forms, one of which is by private corporations as in England and Wales. The basic claim of the Thesis is that water provision in England and Wales has improved since the transfer from public to private ownership and that the current private provision can be deemed to be effective. It is the principle focus of this study to scrutinise private provision and in particular the private 1 Ball P “Life’s Matrix. A Biography of Water ” University of California Press, 2001 1 provision in England and Wales, to ascertain if there is effective provision in these countries and to determine whether privatisation has had a positive or detrimental impact to this provision. The island of Great Britain is unique in that it has three systems of provision under one head of state (Her Majesty Queen Elizabeth II) in one kingdom, two of those systems are different forms of private provision and England is unique in that it was the western world’s largest ever water transfer from public to private provision. In addition the author being British was able to access and interview elite individuals connected with the provision and regulation of water. These combined factors has allowed a work to be produced which gains completely new knowledge into a unique sector of a topic which is globally important. Part 1 of this chapter begins with highlighting the global problem and international concerns surrounding the adequate provision of drinking water. The importance of the topic is then further illustrated both by discussing water as necessary and irreplaceable to humanity, as a legal human right and also as a commercial product. Part 2 of this chapter introduces private sector provision to the reader, different forms of privatisation are then discussed including the systems in England and Wales. Part 3 highlights the main areas of discussion and their objectives in all of the chapters of the text. 2 Research Claim and Objectives The principle claim behind the work is that since privatisation water provision has improved in England and Wales and that the service being provided can be called effective. In order to establish this claim certain objectives have been accomplished and are listed below: This Thesis will evaluate water provision in Great Britain, with particular focus given to the system of private provision in England and Wales. The Thesis will first determine to what extent water as a resource and its method of provision is an important area for discussion.
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