Jakarta unites against corporate control of water

April 2, 2013

Shayda Edwards Naficy

Challenge Corporate Control of Water

The Coalition of Jakarta Residents Opposing Water Privatization is an inspiration for activists around the world. Jakarta’s story exemplifies the threat of privatized water as well as the courage and ability of communities to draw the line in favor of human rights over corporate profits.
Last week, Jakarta’s governor announced his intention to cancel the Indonesian city’s private water contracts. Returning Jakarta’s water to public control will require vigilance and commitment from the community and its representatives. But the persistent and creative organizing that has brought the city to this point gives great cause for optimism.
Reclaiming Jakarta’s water will be a victory with global impacts. For millions of residents the stakes are no less than their most precious common resource. Victory here will also be a major setback for water privateers and institutions like the World Bank promoting this failed model.

Fifteen years too long: a water privatization nightmare

In 1997 and 1998, water systems in Jakarta and in Manila, Philippines were similarly privatized under pressure from creditors led by the World Bank. Both Southeast Asian cities were divided into east and west zones, with separate corporate contracts for each. Together, Manila and Jakarta brought over 14 million new “customers” to private water. Like Jakarta, the consequences in Manila have been devastating, especially for the poor and vulnerable.
In Jakarta, people’s rights have been systematically violated. Water users have faced challenges typical of private water: limited access, intermittent quality and service and the third highest prices in Asia. To ensure universal access to water, operators must maintain and invest in infrastructure.  But under private control, Jakarta’s water revenues have been diverted to support corporate profits.
That’s why Jakarta’s residents have taken action, petitioning lawmakers and the courts for justice. They have also taken to the streets in direct protest of water profiteering. A citizen lawsuit challenging the legality of the water privatization is currently underway; Indonesia’s 1945 Constitution mandates public control of water in the common interest.
And the tide began to turn for Jakarta in October 2012. Suez Environnement announced it would sell its controlling share of the west zone corporation. Public and regulatory pressure and resistance to further rate hikes had pushed the corporation to withdraw from Jakarta at last.
Reflecting the public sentiment, the director of the public water authority called on the governor to repurchase the water utility and manage the system for the public interest.

Corporate cronyism

But Suez executed the sale almost immediately -- without even waiting for legally required approvals -- to Manila Water Corporation (MWC): the very corporation that manages half of Manila’s water. MWC was created and backed by the World Bank, which retains an ownership stake through its private investment banking arm. The World Bank has used its clout as creditor and advisor to the Philippine government and architect of the privatization to nurture its investment. The resulting plan has created artificial profits for MWC to the detriment of public health, equity and the human right to water in Manila.
This illegitimate transfer from Suez to MWC deprives Jakarta officials of a critical opportunity. The current contract runs until 2022; terminating early can be difficult and costly. A repurchase could allow a smoother return to public control.
Not only that, an MWC takeover in Jakarta would make the World Bank part owner of that utility as well. Equity ownership gives the World Bank a financial stake in ensuring that the system is run for a profit. As the largest external source of funding for water in developing countries, the World Bank has an obligation to avoid such a glaring conflict of interest. Development assistance for water must be governed by public authorities with the mandate and expertise to make locally appropriate choices for public and planetary health and well-being.
This is why Corporate Accountability International’s campaign to Challenge Corporate Control of Water stands with the activists in Jakarta, and also poses a direct challenge to the World Bank. This powerful institution must stop driving the global corporate-water grab, divest its investments in private water and ensure that its funds support water access for all.

A call to action

Jakarta residents have been clear and consistent in demanding termination of the private contract. A sale to Manila Water will not solve the problem of profiteering and neglect. The photo above depicts a World Water Day (March 22) protest at City Hall, with posters calling for an end to private water, a halt to the sale to MWC and a reminder that “Women Should be at the Center of Water Governance.”
The World Bank has supported water giants like Suez to expand. It has also created and nurtured a new generation of water privateers into transnational status in their own right.
But the people’s commitment to management of water for the public interest is undeterred. The creative and hard work of Jakarta activists stands as a lesson and inspiration to us all. The governor’s recent announcement is a not only a victory for Jakarta but an affirmation of the axiom attributed to Gandhi: “When the people lead, the leaders will follow.”
Please support the work of KRuHA (the people’s coalition for the right to water) by sending messages of solidarity to the officials whose contact information follows. Call on them to exercise their due authority by blocking the sale to Manila Water and instead returning Jakarta’s water to public control.
Send your messages to:
Ir. Joko Widodo, Governor of Jakarta
Email: dki@jakarta.go.id
Twitter: @jokowi_do2
Ir. Basuki Tjahaja Purnama, MM, Vice Governor
Email: btp@ahok.org
Twitter: @basuki_btp
Suharto, Sh. Mhum, head of Central Jakarta District Court
Re: Citizen Lawsuit, Case No. 527/pdt.G.2012/PN.JKT.PST
Email: info@pn-jakartapusat.go.id
Shayda Edwards Naficy is the director of the campaign to Challenge Corporate Control of Water.