PP3739/12/2005 ISSN 0127 - 5127 / RM4.00 / 2005:Vol.25No.2 Aliran Monthly : Vol.25(2) Page 1 COVER STORY Why privatise water? Privatising water authorities is nothing more than the transfer of wealth to the private sector by Anil Netto omething is happening SS while Malaysians are in SSS deep slumber. And you can’t say it is not going to affect us - because everyone needs it. Yes, your water supply is in danger of being privatised, if it is not already transferred to pri- vate hands. And you know what that means, right? Think of the soaring highway tolls and the skyrocketing postal rates for snail mail. (And when we say snail mail, it really is snail mail now!) Water cannot become the property of those seeking profits Before you could say, “Ais kosong satu!” Parliament passed the Con- Most Malaysians hardly noticed stitution Amendment Bill on 18 when the government reneged on January 2005, transferring supply its promise, which it made on 19 and management of water away January 2005, to set up a Parlia- from the respective states to the mentary Select Committee to so- federal level. The move sparked licit the views of the public. In criticism from Parliamentary Op- March, the Minister responsible position Leader Lim Kit Siang. “It for water, Lim Keng Yaik, said the is putting the cart before the horse Select Committee process would for Parliament to proceed with the be by-passed as the government Constitution Amendment Bill was already familiar with the 2004 without first being requested problems facing the industry. by the State Legislative Assem- What about the problems facing Suhakam: The right to water is a basic blies,’’ as required under the Con- the public, who have to contend human right stitution, he said. with the ever-increasing cost of living? Obviously, our ordinary comprising 26 civil society groups Two more Bills - The Water Indus- Ali, Ah Kow and Arumugam do to raise the alarm. The coalition try Bill, which is shrouded in se- not seem to figure very highly in has handed in protest memoran- crecy, and a Bill to establish a regu- the priorities of the ministry and dums to Parliament and the na- latory National Water Services the government. tional human rights commission, Commission (SPAN) - are ex- Suhakam, arguing that the right pected to be read in Parliament So it is left to the newly set up Coa- to water is a basic human right, a soon. lition Against Water Privatisation, common good that should not be Aliran Monthly : Vol.25(2) Page 2 EDITOR'S NOTE The lead story by Anil Netto looks at the proposed privatisaton of water and raises the fundamental CONTENTS question “Why privatise a profit-making entity?” It provides a range of views culled from a forum in Penang held on World Water Day. COVER STORY ••• Why privatise water? 222 Another case of privatisation is that of Pos Malay- ••• Penang Declaration 888 sia, which recently announced unjustified hikes in postal rates. Read Aliran’s open letter to the media exposing the firm’s confusion and unpreparedness FEATURES in its hasty implementation of these new rates. ••• A police state yet again 999 ••• End occupation of Iraq 111111 This obssession with the market, along with plain ••• Mother Nature in crisis 161616 greed, is leading us to environmental catrastrophe, ••• Understanding Fatwa in the says Young Malaysian, in his piece ‘Mother Nature Malaysian context 232323 in crisis’. The turn to the market is also threatening Malaysian context 2323 social cohesion, encouraging repression and pro- ••• Putting compassion back into moting individualism, argues John Hilley in another politicspoliticspolitics 272727 piece. ••• Block Burma from chairing ASEAN 313131 ••• Confusion reigns: Postpone Such repression was evident when civil society new rates, Pos Malaysia 373737 groups recently engaged in an anti-war demonstra- tion in Kuala Lumpur. Sarajun Hoda provides an ••• A victorious conclusion 404040 eyewitness account of the peaceful protest, which was greeted by water cannons and riot police. REGULARS ••• Thinking Allowed 191919 One person who stood up against the might of the ••• LettersLettersLetters 33 state was Oscar Romero of El Salvador, who was ••• Current Concerns 353535 assassinated 25 years ago. Martin Jalleh highlights the life of this exemplary man, who took the side of the oppressed. OTHERSOTHERSOTHERS ••• Heart to heart: Remembering & One group of downtrodden workers, however, had Re-living Remero 131313 reason to celebrate in Malaysia. Letchimi Devi, re- ••• Subscription Form 181818 counts the 10-year struggle of 14 ex-workers of Brae- mar Estate which led to victory when they finally received free houses from a developer. Finally, Rajen Devaraj looks at the whole issue of fatwa, the law and the role of our elected representa- Published by tives in deliberating on and determining what con- stitutes a punishable offence. Aliran Kesedaran Negara (ALIRAN) 103, Medan Penaga, 11600 Jelutong, ALIRANALIRANALIRAN is a Reform Movement dedicated to Penang, Malaysia. Justice, Freedom & Solidarity and listed on the Tel : (04) 658 5251 Fax : (04) 658 5197 roster of the Economic and Social Council of the United Nations. Founded in 1977, Aliran welcomes Homepage : http://www.aliran.com all Malaysians above 21 to be members. Contact the Hon. Secretary or visit our webpage. Printed by Percetakan Tujuh Lapan Enam Sdn. Bhd. No. 16, Lengkangan Brunei, 55100 Pudu, Kuala Lumpur. Aliran Monthly : Vol.25(2) Page 3 subjected to the profit motive. But He also warns that privatisation don’t hold your breath if you think could lead to the introduction of that alone will halt the privatisa- prepaid water cards (banned in tion: Suhakam must have a huge the UK in 1987) and profiteering. store-room to file away all those This could hurt the poor, who reports and memoranda. might resort to less healthy sources of water supply, which The protest here mirrors a similar could seriously jeopardise their campaign in neighbouring Indo- health. “Water should be in the nesia, where civil society groups hands of the state and the people,” have asked Indonesia’s Constitu- he insists. Santiago was speak- tional Court to review the Water ing at a World Water Day talk held Resources Act, which facilitates at the Aliran office on 22 March privatisation. They argue that the 2005. Act, passed last year as required by a World Bank loan package, Charles Santiago: But why privatise a Water tariffs soar compromises the Indonesian gov- profit-making government-owned entity? ernment’s ability to ensure access The experience in cities across to water for the poor. Earlier, in He notes there are new plans to Asia and elsewhere is that when December 2004, the Constitu- privatise the water utility and multinationals enter the scene or tional Court annulled the Elec- raise tariffs by 40 per cent in the when private participation is in- tricity Law, which promoted de- next three or four years. “But why troduced, water tariff rates invari- regulation and privatisation in privatise a profit-making govern- able soar. For instance, in Manila, Indonesia’s power industry, in a ment-owned entity?” asks San- the government touted water pri- move that civil society groups tiago, adding that the profits vatisation as the solution to a lauded as a victory against the should instead by reinvested and looming water crisis. Instead of neo-liberal agenda of global finan- used to replace old pipes instead the promised lower rates, how- cial institutions. of handing the organisation over ever, Maynilad Water Services, to the private sector. which holds Manila’s west zone The Malaysian government’s ar- concession, raised tariffs by as gument for privatisation is that Privatisation of water, he said, much as 400 per cent between state governments have no money has nothing to do with effi- 1997 and 2003 winthin a period to change old water pipes and ciency. “It is the transfer of of six years! Manila Water Com- that non-revenue water (un- wealth from the state to the pri- pany, the east zone billable water due to leakages and vate sector or individuals,” he concessionaire, raised water tar- unpaid water bills) or NRW is says, bluntly. Commenting on iffs by 700 percent in the same high. the privatisation in Selangor, he period. “Our private firms will do notes that the private sector was the same,” predicts Santiago. Why privatise allowed to cherry pick the prof- “People will suffer, especially the a profitable itable parts such as the water poor.” govt-owned entity? treatment plants, which were privatised. The loss-making sec- It is not necessarily true that pub- But Charles Santiago, coordinator tor, such as the distribution net- licly managed water utilities are of Monitoring Sustainability of work where leakages occur and inherently inefficient. Cities like Globalisation, cites the perform- old pipes need to be replaced, re- Osaka, Phnom Penh and Penang, ance of the Perak water authority mained with the government. where water is publicly managed, since 1998. Despite a high NRW “The government does not want have outperformed Manila and of 51%, the water authority has to pump money to the state sec- Jakarta, cities with massive priva- seen its profits soar from RM11 tor, but would rather give loans tisation arrangements, in several million in 1999 to RM47 million and guarantees to private key performance areas. Osaka, for in 2003. firms,” he complains. instance, has NRW of 7 percent, Aliran Monthly : Vol.25(2) Page 4 an outstanding performance; promotes Integrated Water Re- that PBAPP is already a privatised Phnom Penh records 26 percent, source Management principles entity, that privatisation is already and Penang a commendable 18 and public-private partnerships - here and it is something we have percent.