The Global Water Grab by Shiney Varghese

Dandelion Salad

by Shiney Varghese
Institute for Agriculture and Trade Policy
January 18, 2013

Little Waterfall

Image by Dandelion Salad via Flickr

Writing in National Geographic in December 2012 about “small-scale irrigation techniques with simple buckets, affordable pumps, drip lines, and other equipment” that “are enabling farm families to weather dry seasons, raise yields, diversify their crops, and lift themselves out of poverty” water expert Sandra Postel of the Global Water Policy Project cautioned against reckless land and water-related investments in Africa. “[U]nless African governments and foreign interests lend support to these farmer-driven initiatives, rather than undermine them through land and water deals that benefit large-scale, commercial schemes, the best opportunity in decades for societal advancement in the region will be squandered.”

That same month, the online publication Market Oracle reported that “[t]he new ‘water barons’—the Wall Street banks and elitist multibillionaires—are buying up water all over the world at unprecedented pace.” The report reveals two phenomena that have been gathering speed, and that could potentially lead to profit accumulation at the cost of communities and commons —the expansion of market instruments beyond the water supply and sanitation to other areas of water governance, and the increasingly prominent role of financial institutions.

In several instances this has meant that the government itself has set up public corporations that run like a business, contracting out water supply and sanitation operations to those with expertise, or entering into public–private–partnerships, often with water multinationals. This happened recently in Nagpur and New Delhi, India. In most rural areas, ensuring a clean drinking water supply and sanitation continues to be a challenge. For-profit companies such as Sarvajal have begun setting up pre-paid water kiosks (or water ATMs) that would dispense units of water upon the insertion of a pre-paid card. It is no surprise that these are popular among people who otherwise have no access to clean drinking water.

With climate change, however, the water crisis is no longer perceived as confined to developing countries or even primarily a concern related to water supply and sanitation. Fresh water commons are becoming degraded and depleted in both developed and developing countries. In the United States, diversion of water for expanded commodity crop production, biofuels and gas hydro-fracking is compounding the crisis in rural areas. In areas ranging from the Ogallala aquifer to the Great Lakes in North America, water has been referred to as liquid gold. Billionaires such as T. Boone Pickens have been buying up land overlying the Ogallala aquifer, acquiring water rights; companies such as Dow Chemicals, with a long history of water pollution, are investing in the business of water purification, making pollution itself a cash-cow.

But chemical companies are not alone: GE and its competitor Siemens have extensive portfolios that include an array of water technologies to serve the needs of industrial customers, municipal water suppliers or governments. (In the last year and a half two Minnesota based companies have become large players in this business—Ecolab, by acquiring Nalco and Pentair by merging with Tyco‘s Flow Control unit—both now belonging to S&P’s 500.)

The financial industry has also zeroed in on water. In the summer of 2011, Citigroup issued a report on water investments. The much quoted statement by Willem Buiter (chief economist at Citigroup) gives an inkling of Citigroup’s conclusion: “Water as an asset class will, in my view, become eventually the single most important physical-commodity based asset class, dwarfing oil, copper, agricultural commodities and precious metals.” Once again, several others had already seen water as an important investment opportunity, including GE’s Energy Financial ServicesGoldman Sachs and several asset management firms that are involved investing in farmland in Asia, Africa, South America and Eastern Europe.

Given these recent trends, initiatives that track the water use of companies or map information regarding water related risks could be double edged. Some examples include the ‘water disclosure project’ and the ‘water-mapping project’. Both are initiated by non-profits/ think-tanks, the former by UK-based Carbon Disclosure Project and the latter by the US-based World Resources Institute. While distinct, they are linked by their shared constituency: global investors concerned about water-related risks. These initiatives could help companies identify and reduce their water footprint, or could lead to company investments that follow water and grab it.

The Carbon Disclosure Project’s water disclosure project seeks to help businesses and institutional investors understand the risks and opportunities associated with water scarcity and other water-related issues. According to its most recent report, issued on behalf of 470 investors with assets of $50 trillion USD, over half the respondents to their survey have experienced water-related challenges in the preceding five years, translating into disruptions in operations, increases in expenses and other detrimental impacts.

Aqueduct Alliance and its water mapping project, which aims to provide companies with an unprecedented level of detail on global water risks, seems at one level a direct response to the findings of the global water disclosure reports by CDP. General Electric, Goldman Sachs and the Washington-based think tank World Resources Institute are the founding members of the Aqueduct Alliance. All of them identify water-related risks as detrimental to profitability, continued economic growth and environmental sustainability. The water maps, with their unprecedented level of detail and resolution, seek to combine advanced hydrological data with geographically specific indicators that capture social, economic, and governance factors. But this initiative has given rise to concerns that such information gives companies and investors unprecedented details of water-related information in some of the world’s largest river basins.

Many of these investors, described as the “new water barons” in Jo-Shing Yang’s article “Profiting from Your Thirst as Global Elite Rush to Control Water Worldwide,” are the same ones who have profited from speculating on agricultural contracts and contributing to the food crisis of the past few years. The food crisis and recent droughts have confirmed that controlling the source of food—the land and the water that flows under or by it—are equally or even more important.

closer look at the land-related investments in Africa, for example, show that land grabbing is not simply an investment, but also an attempt to capture the water underneath. At the recent annual Global AgInvesting Conference (with well over 370 participants), the asset management groups and global farm businesses showcased their plans, including purchases of vast tracts of lands in varying locations around the globe. With tools such as water maps, such investors are further advantaged. The global rush for land grabbing, as well as the resistance to it, shows that all stake-holders—pension funds, Wall Street or nation-states on the one hand or the people who currently use these lands and waters, and their advocates on the other—are well aware of the life-and-death nature of land (and water) grabbing, especially in the case of developing countries.

National and international regulatory mechanisms must be put in place to ensure that basic resources such as land, water and the means for accessing fresh water do not become merely the means for profit accumulation for the wealthy, but are governed in a way that ensures the basic livelihood of those most dependent on it. The last session of the Committee on World Food Security  (a United Nations mechanism set up to address the food crisis) was a good starting point, and has set in motion a series of consultations on principles for agricultural investments. Civil Society Organizations are tracking the various ways in which regulations may develop in national contexts: simply facilitate land grabbing, mitigate negative impacts and maximize opportunities or block (or roll-back) land grabbing altogether. Ultimately, any policy approaches must prioritize local communities’ access to food and water: Any water-related investments needs to be about allaying their livelihood risks and enhancing their ability to realize their rights, whether it is in developing countries or developed countries.

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A World Without Water

Fracking’s Lure, Trap and Endless Damage by Ralph Nader

The Demise of the Ogallala Aquifer: A Looming Catastrophe by Cameron Salisbury

Blue Gold World Water Wars (2008; must-see)

Libya: Oil, Banks, Water, the United Nations, and America’s Holy Crusade by Felicity Arbuthnot

General Zinni: Global warming a serious security threat (video)

Those Who Control Oil & Water Will Control The World

9 thoughts on “The Global Water Grab by Shiney Varghese

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  6. this is super scary,from the same people who are chem trailing,g m oing,poisoning 50% or more of the earths water,murdering millions world wide every year in their pursuit of money,and since the majority of americans refuse to stand up en mass to these madmen,we are all in big trouble!!!!!!!!how much more of this evil are you folks willing to put up withbefore you realize that all the talking about it will never stop these insane people,only action,like millions of brave/fedup people in other countrys,have been doing!!!

  7. It is always important to understand something basic about “Water”. Every projection, every prediction about the future of “water” i have ever seen, is based on the current “Energy equation”. Meaning, that the current cost and scarcity of energy is what determines the cost and scarcity of water. When energy is cheap and plentiful, so is water.

    First, billions of gallons annually are used, and polluted… by oil, methane gas, and coal mining / refining. Curtail this dramatically by use of alternative energy means, and this water can now be used for agriculture.

    Second, with a different energy paradigm; currently “too expensive” means of obtaining water suddenly become “do-able”. Such as deep water drilling/ pumping, pumping over large distances (such as pipelines from Greenland to southern North America), desalinization, and atmospheric collection. The expense of these are mostly about the cost of Energy… electric pumps are the single largest used of electricity on the planet. Change that variable (and IT IS A VARIABLE FOLKS, even though most people blindly accept energy as it “always was”), and suddenly both food and water are cheaper.

      • I completely concur. Thank you Steve. Intermediate technologies and (I must stress) “appropriate” innovation, through cleantech and biomimicry for example, are indeed serving your argument well, but they are still blocked and delayed by vested corporate systemics.

        Excellent article by Shiney Varghese. Thank you Lo!

        “Owning” the global commons is as delusional as patenting DNA or privatising living blood-banks (ie us!) thereby literally farming the population. It is however, made easy for those who are insane enough to think it not only possible, but inevitable, by the prevailing value system.

        Clearly, sustaining livelihoods and conserving resources is the proper business of ethically motivated and intelligently run government & non-gov. administrative partnerships; not by slavishly following the GoldmanSachs model of trading in fraud and scarcity and consumer-led destruction to the material advantage of manic elites, who do not even understand what true wealth is.

        Successful organic land-water-and-peasant-based solutions that integrate sustainable forestry & mixed permaculture, must engage both scientifically and aesthetically with our oceans and the global marine eco-system. This must be central to our climate-change mind-set. The entire atmospheric cycle is integral to healthy forest/marine inter-action, and therefore intimately entangled in the mutual dynamics of all continental bio-diverse regional cultures.

        The criminal industrialists must be challenged by the constituency of humanity itself, in the name of Art not artifice, if we are take back our lives.

        Their corporate logic is fatally flawed, because the whole system is predicated on detached and vicarious benefits for the many to the cumulative advantage of the amoral, corrupt and corrupting, xenophobic few.

        This concentration of symbolic controls is the hands of unenlightened profanes is the greatest threat humanity has ever faced.

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