|Water System Employees' Response/ WATER's Position Paper on the Water Sector Reform Act of 2012|
|Written by Water System Employees' Response (WATER)|
Junk SB 2997! Stop water privatization! Defend our jobs, fight for public service!
A POSITION PAPER ON SENATE BILL 2997 – WATER SECTOR REFORM ACT OF 2012
The said body calls on governments of the world to scale up efforts in ensuring clean, adequate and accessible water especially in poor countries. The challenge now therefore lies in putting this commitment into concrete actions.
In the Philippines, a study made by Independent Think Tank IBON Foundation reveals 16 out of 100 families in all income classes do not have access to safe water. Since the privatization of water in 1997, the people’s access to water has worsened. Contrary to World Bank and the Asian Development Bank’s claim that the privatization of the Metropolitan Waterworks and Sewerage System (MWSS) has been successful, water rates have continued to increase with the two private firms Maynilad and Manila Water which acquired the former MWSS increasing their basic charges by 449% and 845% respectively. While service areas of Maynilad never experienced 24/7 water availability, a water shortage also occurred in 2010 which reached water rationing proportions in various areas being serviced by both companies.
Aside from the big number of state employees who lost their jobs, this all the more bolsters our position that the government should stop privatizing water utilities and review the privatization of MWSS. However, recent developments prove otherwise.
During President Aquino’s first Legislative-Executive Development Advisory Council (Ledac) meeting in February 2011, he proposed to Congress a draft bill creating a Water Regulatory Commission that will supposedly rationalize the economic regulation of water utilities. The bill empowers the proposed agency to take over the regulatory functions of all existing water agencies. In August, Aquino proposed the creation of a superbody to address what the government deemed as the issue of fragmentation of various government agencies.
Taking cue from thereon, Senator Edgardo Angara filed Senate Bill 2997 or an Act institutionalizing reforms in the water industry, rationalization, allocation and distribution of service areas, provision of incentives for infrastructure development or for new clean, efficient and ecological technologies, reorganizing the National Water Resources Board, creating local water supply and sanitation companies, amending for the purpose certain laws and for other related purposes or otherwise would be known as the Water Sector Reform Act of 2012.
The Water System Employees Response (WATER), the national federation of employees unions and associations in the country’s water districts and other water systems representing more than 30,000 members do hereby raise our strong opposition to SB 2997 based on the following:
1. SB 2997 IS PRIVATIZATION OF WATER SERVICES
The proposed bill is basically premised on “water as a human right but also an economic good”.
Water is first and foremost a human right. Its provision for mankind is vital to life as it is urgent for development. To treat water as an economic good means putting profit over and above public service. Treating water as a commodity and therefore a big business opportunity opens up the floodgate to intensified privatization.
Under the proposed bill, “the water industry shall as be a priority investment sector that will regularly form part of the country’s investment priority plan”. Local Water Supply and Sanitation Companies shall be empowered to enter into Public and Private Partnership projects ranging from management contracts, concession agreements and others for the provision of water and sanitation services. Incentives for investment in the water industry is provided for in the form of “income tax holiday for the 1st 10 years, duty-free importation of machinery, equipment and materials, special realty tax rates on equipment and machinery, net operating loss carry-over, accelerated depression and tax credit on domestic capital equipment and services”.
Experiences of countries worldwide that have implemented water privatization show that public-private partnership (PPP) has even worsened the problem. Aside from the higher rates being charged by privatized utilities, PPP projects collects additional usage fees.
Scarce water resources are more likely to be monopolized by the rich for purposes other than regular household water usage at the expense of poor families who simply cannot afford higher rates imposed by PPP projects which aim for increased returns or profit from their investment.
We firmly believe and our own experience tells us that it is the state that is still in a better position to provide water services because of its constitutional mandate to ensure the delivery of public goods and services including water.
2. AMALGAMATION OF WATER SERVICE PROVIDERS WOULD CREATE NEW MONOPOLIES OR STRENGTHEN EXISTING ONES
The bill calls for the amalgamation of water service providers within each Provincial Water Resource Zone (PWRZ) into one or more Local Water Supply and Sanitation Companies (LWSSCs) with “the exemption of Manila, autonomous regions, special economic zones and special areas” which will be considered separate PWRZs.
The amalgamation process being referred to is none other than the mergers of water service providers, the most common of which are the country’s more than 500 water districts. This would mean the concentration and control of assets, personnel, market and resources in the hands of a few, private business, local politicians or bureaucrats. The grant of the power to exercise of the right of eminent domain to these LWSSCs shall also set a perilous precedent which can be subject to grave abuse of authority.
3. LAY-OFF OF THOUSANDS OF WATER UTILITIES EMPLOYEES
All employees and personnel of the existing water districts including the local government unit service providers, numbering about 30,000 nationwide shall be in danger of losing their jobs. The supposed provision on hiring preference, separation pay and other benefits (albeit hinged on condition of administrative viability) would not suffice to assuage their apprehensions.
Based on concrete experiences of employees caught in the line of privatized or merged agencies or in government sponsored reorganization, the issue of job security is always the least of the government or the private firms concern.
No amount of benefits or separation pay would be acceptable in exchange for jobs and job security given the country’s ballooning unemployment rate.
4. THE PROPOSED LEGISLATION WOULD CREATE ANOTHER LAYER IN THE ALREADY TOP-HEAVY BUREAUCRACY PERPETUATED BY A SYSTEM OF PATRONAGE AND SPOILS.
Despite the non-admission and even outright denial, SB 2997 shall create a water superbody, with all the powers and perks bestowed upon the few, auspicious chosen individuals or personalities who shall head and constitute the board of the agency. Positions with corresponding perks shall be created which essentially would be another bequest and leverage for the administration’s election financers and supporters.
If the government is really serious in making our dwindling water resources benefit the people through the provision of clean, safe and accessible water services, it should rethink and junk its pro-privatization position. Greater allocation in the annual national appropriations for water services and even state subsidies should be the direction to improve existing facilities, support the operations of small water services providers and improve the capacities of current water districts to increase their service connections and bring down water rates and supply water straight to the Filipino’s homes, especially the poor and the marginalized.
Hence, we stand by united in our calls:
Junk SB 2997! Stop water privatization!
Defend our jobs, fight for public service!
RUDY ARANJUEZ ERIC AVANZADO RAMIR CORCOLON
NATIONAL PRESIDENT VICE PRESIDENT FOR LUZON SECRETARY GENERAL
ARMANDO BAINO ALEX ESPIEL
To access case study presentations on the effects of the water privatization/public-private partnership in (English) Manila, Nepal, Jakarta and (in Spanish) Spain, Ecuador, and Chile. Click here.
Brief write-ups on other private joint venture cases in India, China, Malaysia and Sri Lanka are available here.