We are representatives of farmers and fishers, indigenous peoples and urban poor organizations, human rights advocates, environmentalists, Church leaders and civil society advocates, brought together by our common desire to defend our right water and keep water as part of the commons.

We affirm our collective belief in the following core principles:

  • Water is life. It is the lifeblood of the Earth and the primary link between the climate, economic, socio-cultural systems;
  • Water is a human right as recognized and upheld by the United Nations. It is therefore the duty of the State to ensure the protection and fulfillment of the right to water, including the promotion and support of community stewardship;
  • Water is a public good, the governance and management of which should remain in public hands, including peoples and communities as well as the State;
  • All attempts, whether public or private, to enclose the commons to the exclusion of disadvantaged, marginalized and underprivileged must be firmly resisted;
  • The neo-liberal dogma that assigns to the market the role of the arbiter of value of water is unacceptable and must be rejected.

Trends in Water Privatization

The recent push by the Aquino administration and Congress to institute policy reforms in the water sector will transform water into a commodity that can be bought and sold in the market.   Water is essential for life and the sustainability of ecosystems. Subjecting water and its ecosystem functions to the market will only mean greater control of water resources by corporations.

The policy rhetoric emphasizes the need for more efficient management and allocation of increasingly scarce water resources as the main driver behind these efforts. The truth, however, is that it is the global push by private corporations and neo-liberal financial institutions to treat water as a commodity and to transform the commons into a new area for profit-making that is at the heart of current attempts at implementing so-called reforms.

Water privatization in the Philippines began as early as the 1990’s when the Philippine government privatized the Manila Waterworks and Sewerage System (MWSS), the first ever large-scale privatization in Asia, under the guise of resolving the water crisis in Metro Manila. The supposed goal of the MWSS privatization, which is to bring clean water to every household in the metropolis twenty-four hours a day, did not materialize. Instead many, especially poorer communities, have remained without access to sufficient and safe water, while the government had to bail out one of the private water concessionaires. Meanwhile, the water companies and their financial intermediaries raked in huge profits over the years as water tariffs rose by 1,000 percent.

But despite the country’s dismal experience in the privatization of the MWSS, the government continued to adopt the tenets of privatization in water embodied in the policy framework of Integrated Water Resource Management (IWRM). Pushed by international financial institutions like the World Bank and the Asian Development Bank and global institutions like the Global Water Partnership, the IWRM advances the concept of water as an economic good. IWRM dramatically departs from the traditional concept of water as being part of the commons and pushes for the adoption of tradable water rights and participation of users, primarily corporations in water resource development and management. Stripped of its rhetoric of “efficient water use and sustainable management of scarce resources”, IWRM merely institutionalizes property rights in water through mechanisms such as full-cost water pricing, to the detriment of “low-value” water users such as poor farmers, settlers, women and indigenous peoples.

The adoption of IWRM began in mid- 2000, when the Arroyo administration established river basin councils and began formulation of river basin development plans, that were extensively prepared through loans and grants from international financial institutions. The Aquino administration continued these initiatives with the revival and re-organization since last year of these river basin councils, which often are captured by local elite interests. It also adopted IWRM in its water sector development plan, as contained in the Philippine Development Plan (2010-2016). Moreover, it has strongly promoted Public Private Sector Partnership (PPP) in the water sector–another form of privatization that maintains a minimum presence of government but allows corporations to undertake investments, operations and management of water projects. In the irrigation sector, the government continues with the reforms begun by the Arroyo administration, notably the downsizing of the National Irrigation Agency (NIA), the adoption of the irrigation management transfer (IMT) or transfer to water user associations of the operations and maintenance (O&M) of large-scale national irrigation systems, increase in irrigation fees and the piloting of volumetric water pricing, which are precursors to bulk water trading.

More recently, both houses of Congress have filed several bills to provide the legal basis for the adoption of IWRM and the full-scale privatization of water in the country. Senator Edgardo Angara’s S.B. 2997, aims to institute wide-ranging reforms in the water industry that will provide the needed incentives for private companies to invest in the water sector, including the reorganization of the National Water Resources Board; the rationalization, allocation and distribution of water service areas; provision of incentives for infrastructure development or for new, clean, efficient and ecological technologies; and the privatization of local water facilities under LUWA through the creation of Local Water Supply and Sanitation Companies. Its counterpart in the Lower House, is HB 5497 authored by Reps. Quimbo and Nograles, known as the Water Sector Reform Act of 2012. Another senate legislative proposal on water is  SB  3105 which seeks to  adopt and institutionalize  the  Integrated  River  System  Management  Approach  as  a  systematic  framework  in addressing river water management and development and establish a  comprehensive river  administration  system  for  flood  control,  water  use  and  environmental conservation.

Meanwhile, ADB funded projects to institutionalize IWRM such as the $100 million Agusan River Basin IWRM and the $120 million Integrated Natural Resource and Environment Management (INREM) program of the DENR, which is designed to rehabilitate and protect four major river basins, are likewise in full swing. Besides introducing water trading rights and payment for environment services (PES), these projects rely on the PPP model as a key strategy in water resource development and watershed management.

The concepts of trading water rights and PES are also embedded in the government’s National Climate Change Action Plan. The irony is that watershed management and reforestation are being pursued not to restore the degraded resource base for its ecological value but to provide companies the opportunity to engage in carbon trading mechanisms under the UNFCCC Reducing Emissions from Deforestation and Forest Degradation (REDD) scheme. REDD provides the mechanism for valuing forests for their carbon credits which can then be traded by companies in international carbon markets.

Such initiatives are located in the global drive by international institutions like World Bank, UN agencies and donor countries to attach economic value to water and nature and their functions–initiatives which are also creating new markets where they can be traded. These concepts are further bolstered by the emerging Green Economy paradigm introduced in the Rio Plus 20 Summit declaration. While the summit did not reach a decisive consensus on the Green Economy, transnational companies came out with a parallel declaration acknowledging nature as capital and agreeing to put more investments and financing on instruments that place financial value on nature and its functions such as carbon sequestration, biodiversity conservation, water stability, and soil fertility.

But long before these UN initiatives, many of the elements in the Green Economy such as water rights trading and water commodification were already being pushed by international financial institutions, through loan conditionalities to client countries like the Philippines.


Impacts and Implications

IWRM and the emerging concepts that assign financial value to nature and its functions are bringing about the privatization and commodification of water and commons. Appropriation of water and natural resources by those who have the capital logically leads to dispossession of people and communities who depend on these resources for their livelihoods yet continue to face tenurial insecurities. Water and watersheds are integral to the life of the people and ecosystems; as such they are regarded as commons and held in trust by States for the people whom they represent. Allowing private rights over water and commons violates fundamental human rights. Indigenous peoples and communities who have, since time immemorial, acted as the custodians of rivers and forests and exercise control over their ancestral lands and territories are deprived of their access to and control over resources, alienating them from their land and culture.

Meanwhile, water, power, mining and agri-business corporations are being granted the rights to re-possess, expand and explore land, water, mineral and natural resources in the guise of efficient water management. For instance, the Philippine government has already approved 35 hydropower contracts since early 2012, signalling increased private sector investments in water projects. State-owned hydropower dams have been sold such as the Magat or are in the process of being privatized such as the Pulangi IV and the Casecnan Multipurpose Dam.  Domestic power firms such as Aboitiz Power, Lopez-owned First Gen Prime Holdings, Oriental Energy and Power Generation Corp have applied for hydropower generation contracts, taking advantage of the huge financing that are pouring into the water and power sector. The Magat hydropower dam privatization in 2007 is the biggest power privatization, where Statkraft Norfund Power Invest AS (SN Power) of Norway partnered with Aboitiz Equity Ventures in purchasing the plant, facilitated by a $100 plus million loan acquisition from the International Finance Corporation. Since then, a total of $6 billion in investments have gone into mostly hydropower generation projects in the Philippines. SN Power of Norway, has acquired two other hydropower dams, Binga and Ambuklao.

The privatization of hydropower dams such as in Magat has led to dwindling irrigation supply to farms in Isabela, as well as the destruction of local fish culture, further reducing incomes of rural people dependent on agriculture. Indigenous peoples in Bukidnon and Cotabato claim that the proposed construction of the Pulangi V hydropower dam will lead to displacement of their communities as this project will submerge portions of the 38 barangays in these two provinces, and result in the decimation of local livelihoods such as fishing and barter/trading as water volume and flow will be seriously altered, making navigation in Pulangi River more dangerous. More importantly, their way of life, identity, culture and traditions will be destroyed since Pulangi River is considered to be a sacred river by the lumad in the area.

Water conflict has intensified in many communities where appropriation of water resources by private companies has taken place. For instance, in the upper river basin of Bukidnon, banana and pineapple companies have taken over not only the fertile lands, but also the rivers and tributaries that supply water to surrounding farms by indigenous peoples thus forcing the latter to leave their farms. Mining companies in Mindanao are likewise using up huge volumes of water and contributing to excessive pollution of rivers and creeks. Unfortunately, these are the same companies that are now applying for reforestation of degraded uplands and protected areas in order to take advantage of carbon trading opportunities under REDD.

Moreover, evidence of displacement and eviction of communities is rising. In Nakar, there is a reported eviction of 3,100 families living in watersheds. The government’s National Greening Program, which is intended to make the country REDD-ready, is creating conflicts among indigenous peoples groups.

Indeed, the commodification of water and watersheds and their appropriation by various players is accelerating. This process leads to, and is facilitated further by, the growing financialization of water and nature in general. The economic value put into water and nature and the emerging concepts of ecosystem functions, are creating markets for valued elements of ecosystems and thus create opportunities for financialization. Recently, there are reports of water-based investment funds such as hedge funds and water certificates being traded in major stock markets. More profoundly, financialization of nature is now altering concepts and values of nature giving rise to concepts such as natural capital and ecosystem services–both of which can be traded. Such schemes are reinforcing existing unjust social relations.

Moreover, the privatization and commodification of water threatens the sustainability and integrity of waters, water systems, watersheds in interconnected human and natural ecosystems. The reference of the IWRM to an integrated approach to water-related problems does not go beyond mere lip service as the concept itself of privatizing water fails to acknowledge the interconnectedness of water and natures’ hydrology and the sustainability of life and ecosystems.

Finally, the current water reform bills and government actions to institutionalize IWRM are undermining public policies that limit private control of water, watershed, land and minerals (as expressed in the Constitution) and that exercise regulation on the use, allocation, development and exploitation of water resources. National laws such as the Philippine Water Code provides restrictions on water rights by allowing only the right to use water and not title ownership rights. Proposals in Congress that call for the institutionalization of IWRM will directly erode the public character of water and undermine government’s regulatory function to protect public interest in water resources. The recent push to change the “economic” provisions of the Constitution may also be seen as a way to redefine property rights over natural resources to fit in with the strategy of government to attract private investments in these sectors.

Our Response

We commit to stopping proposed legislations and programs that will institutionalize water privatization and commodification, including policy incentives for investments in water, watersheds and natural resources that are leading to dispossession and displacement of farming and indigenous peoples’ communities as well as destruction of rural livelihoods.

We will work towards developing concrete and viable alternatives to water privatization that puts back to public and community control and governance our water resources. In this endeavor, we will build upon the numerous efforts and initiatives of civil society and movements to resist water privatization in the Philippines, including the campaigns, research and movement building already done in order to generate the broadest opposition to the privatization and push for PPP in the water sector.

As a first step, we will work towards building a national campaign coalition to stop the passage of water reform bills in Congress through active legislative lobby and public information campaigns.

We will bring up the demands put forward by the People’s Forum on Water held in Manila on May 3, 2012 to the relevant government agencies and the general public.

We will endeavor to advocate public control over water resources, based on the principles of human right to water, gender rights and democratic participation of peoples and communities in water governance.

We will also engage actively in the discourse on IWRM, green economy and other neo-liberal policies of government on water and watershed management that treat water and nature as economic goods in order to expose their pro-corporate agenda.

We will engage in active information and education campaign to inform communities on the policies, impacts and implications of IWRM and resource grabbing (green grabbing).

We commit to exposing the role of international financial institutions and corporations in the global push for water privatization and commodification. We will work to unmask corporate interests behind water reforms, policies, programs and projects.

We commit to monitor the on-going PPP and other investment schemes  in hydropower and other water resource development, watershed protection, REDD and special economic zones that are appropriating land and water for profit-taking by domestic and multinational companies.

Finally, we will support communities that are directly resisting the appropriation of their land, water and territories by private companies and similar interest groups.

VENUE: Fersal Hotel, Quezon City
DATE: August 1, 2012