THE GLOBAL TRADE IN WATER
from the booklet
The global water crisis and the commodification
of the world's water supply
A Special Report issued by the International
Forum on Globalization (IFG)
by Maude Barlow
National Chairperson, Council of Canadians
Chair, International Forum on Globalization (IFG) Committee
on the Globalization of Water
The water privateers are now also setting their sights on
the mass export of bulk water by diversion, by pipelines and by
supertanker. Modified tanker deliveries already take place in
certain regions that are willing to pay top dollar for water on
an emergency basis. Barges carry loads of freshwater to islands
in the Bahamas and tankers deliver water to Japan, Taiwan, and
Korea. Turkey is preparing to sell its water by shipping it on
converted oil tankers and through pipeline from the Manavgat River
to Cyprus, Malta, Libya, Israel, Greece and Egypt.
In the summer of 2000, Israel began negotiations to buy over
13 billion gallons of water a year from Turkey; the tankers are
already moored to huge yellow floating stations two miles offshore,
awaiting delivery orders. Turkey's water company says it has the
pumps and pipes to export four to eight times that amount.
To deal with droughts in southern European countries, the
European Commission is looking into the possibility of tapping
into the sources of water-rich countries such as Austria. If its
plans to establish a European Water Network are realized, Alpine
water could be flowing into Spain or Greece, rather than Vienna's
reservoirs, within a decade. "This means that in theory we
could supply everyone in the European Union, all 370 million of
them," declares Herbert Schroefelbauer, deputy chairman of
Verbund, the country's largest electrical utility. A high-tech
pipeline already transports quality spring water from the Austrian
Alps to Vienna, and the proposal to extend this system to other
countries is creating great unease among Austria's environmentalists,
who warn of the damage bulk exports could have on the sensitive
Gerard Mestrallet of Suez Lyonnaise is planning another Suez
Canal-this time in Europe. He has announced his intention to build
a giant 160-mile aqueduct to transport water from the Rhone River
through France to the Catalonian capital, Barcelona.
To address England's growing water crisis, some political
and corporate leaders are calling for large-scale exports of water
from Scotland, by tanker and pipeline. Already, several British
companies are exploring the possibility of water exports and one
Scottish entrepreneur told The Scotsmail that Scottish companies
are also interested. Complicating the political sensitivities
is the fact that Scotland still has a publicly owned water system,
while British water is run by privatized companies. Ironically,
some of these companies have been lukewarm to exports because
the scarcity of water in England has kept prices and profits high.
Professor George Flemming of Strathclyde University claims
that it would be relatively simple to extend pipelines and natural
waterways that already exist between the north of Scotland and
Edinburgh to London and other parts of England. However, support
for water sovereignty in Scotland is strong. When Scotland's water
authority, West of Scotland Water, publicly sounded out a plan
to sell surplus water to Spain, Morocco and the Middle East, public
reaction forced it to back off. Still, many see this reluctance
as temporary. Flemming believes that England and Wales are running
out of water because of global warming and that imports of bulk
water are inevitable.
In Australia, United Water International has secured the contract
of the water system of Adelaide (located in southern Australia)
and has developed a 1 5-year plan to export its water to other
countries for computer software manufacturing and irrigation.
Domestic companies were not allowed to bid for this contract because
it was assumed that a large transnational would increase the value
of the water exports, now expected to be in the range of $628
Several companies around the world are developing technology
whereby large quantities of freshwater would be loaded into huge
sealed bags and towed across the ocean for sale. The Nordic Water
Supply Company in Oslo, Norway, has signed a contract to deliver
7 million cubic meters of water per year in bags to northern Cyprus.
During the Gulf War, Operation Desert Storm used water bags to
supply water to their troops.
Aquarius Water Trading and Transportation Ltd. of England
and Greece has begun the first commercial deliveries of freshwater
by polyurethane bags, towed like barges through waterways. The
company, whose corporate investors include Suez Lyonnaise des
Eaux, delivers water to the Greek Islands where a piping system
links the bag to the main water supply on the island. Aquarius
predicts that the market will soon exceed 200 million metric tons
per year. The company's bag fleet consists of eight 720-ton bags
and two 2,000-ton versions. The larger bags hold two million liters
of water each. Aquarius has completed research and development
on bags ten times larger and is searching for the capital investment
to produce them. The company has its sights set on Israel, and
claims to have the interest of several major water companies.
Nowhere are dreams for the trade in water as big as they are
in North America. Every few years, plans to divert massive amounts
of Canadian water to water-scarce areas of the United States,
Asia and the Middle East by tanker, pipeline, or rerouting of
the natural river systems, are raised only to be shut down by
public protest. One of the largest proposed diversion projects
was called the GRAND Canal-the Great Recycling and Northern Development
Canal. It originally called for the building of a dike across
James Bay at the mouth of Hudson Bay (both of which now flow north)
to create a giant freshwater reservoir out of James Bay and the
twenty rivers flowing into it. A massive series of dikes, canals,
dams, power plants and locks would divert this water at a rate
of 62,000 gallons a second down a 167-mile canal to Georgian Bay,
where it would be flushed through the Great Lakes and taken to
the U.S. Sun Belt.
The NAWAPA-the North American Water and Power Alliance-was
a similar scheme. The original plan envisaged building a large
number of major dams to trap the Yukon, Peace and Liard rivers
into a giant reservoir that would flood one-tenth of British Columbia
to create a canal from Alaska to Washington state and supply water
through existing canals and pipelines to thirty-five American
states. The volume diverted would be roughly equivalent to the
average total annual discharge of the St. Lawrence River.
In the early 1 990s, a consortium named Multinational Water
and Power Inc. spent $500,000 promoting the diversion of water
from the North Thompson River (a tributary of the Fraser River)
into the Columbia River system for delivery by pipeline to California.
In the last decade, these projects have quietly been drawing
support again from the business community in Canada. In 1991 Canadian
Banker magazine said that water export would become a multi-million
dollar business "The concept of NAWAPA... remains a potentially
awesome catalyst of economic and environmental change."
In the same year, Report OH Business magazine stated "Pollution,
population growth and environmental crusading are expected to
put enormous pressure on the world's supply of freshwater over
the next ten years. Some of Canada's largest engineering companies
are gearing up for the day when water is moved around the world
like oil or wheat or wood...What will be important is who has
the right to sell it to the highest bidder."
Meanwhile residents of water-scarce regions continue to live
in denial. In a July 1998 article for The Atlantic Monthly titled
"Desert Politics," writer Robert Kaplan notes the blind
faith of people living in the Arizona desert believing that some
magical solution to their water shortage will manifest itself
while they Id continue to build in an area never meant for human
habitat in these numbers. He notes that more than
800,000 people live in greater Tucson alone and four million
in Arizona, a tenfold increase in seventy years. According to
Wade Graham of Harper's Magazine, municipal development in Phoenix
is occurring at a rate of an acre every hour. Kaplan writes,
"Maybe, as some visionary engineers think, the Southwest's
salvation will come ultimately from that shivery vastness of wet,
green sponge to the north Canada. In this scenario a network of
new dams, reservoirs, and tunnels would supply water from the
Yukon and British Columbia to the Mexican border, while a giant
canal would bring desalinized Hudson Bay water from Quebec to
the American Midwest, and supertankers would carry glacial water
from the British Columbian coast to Southern California-all to
support an enlarged network of post-urban, multiethnic pods pulsing
with economic activity."
CANADA AND ALASKA: OPEC OF WATER!
The call to export water by supertanker is heating up again
in Canada after a lull of a few years. In British Columbia, a
number of export companies such as Western Canada Water, Snow
Cap Water, White Bear Water and Multinational Resources were already
lined up for business when the government banned the export of
bulk water in 1993. One project was to involve a Texas company
prepared to pay for a fleet of 12 to 16 of the world's largest
supertankers (500,000 deadweight tons) to operate around the clock.
Under one contract, the annual volume of water to be shipped to
California was equivalent to the total annual water consumption
of the city of Vancouver.
The British Columbian government that made the decision to
ban bulk water exports is politically committed to this position;
however future governments in B.C. might easily reverse this policy,
opening a floodgate of export proposals. Canadian water expert
Richard Bocking explains that the same companies would transport
oil and water, in some cases, emptying oil on one leg of the trip,
and carrying water home on the return voyage
"Water export from the B.C. coast would involve huge
supertankers, operating year round on tight schedules. They would
wind their way through tortuous coastal waterways, maneuvering
around islands and reefs in an area where no well-developed marine
traffic management system exists. There are strong and often turbulent
tidal currents in coastal inlets where winter winds often reach
"These huge tankers would travel through waters that
are amongst the world's finest for recreational boating and fishing.
Pods of killer whales move regularly through these waters. Along
with commercial and sports fisheries, spawning for almost the
entire commercial oyster industry of coastal B.C. is located here.
The enormous fuel tanks of supertankers are full of bunker C fuel,
the worst possible grade of oil in environmental terms. With currents,
winds, rocks, and reefs intersecting with tight ship schedules,
the stage is set for tragedy on a grand scale."
In recent years, two other Canadian provinces received corporate
applications to allow the export of bulk water for commercial
profit. In the spring of 1998, the Ontario Ministry of the Environment
approved a plan by Nova Group to export millions of liters of
Lake Superior water by tanker to Asia. However, the province later
rescinded the grant after an outcry from the International Joint
Commission; (then) U.S. Secretary of State Madeleine Albright,
who claimed that the United States had shared jurisdiction over
Lake Superior; and the public, most notably those living in the
Great Lakes area of Canada and the United States. The other application,
a request to export 52 billion liters of water a year from pristine
Gisborne Lake in the Newfoundland wilderness, seemed poised to
receive the go-ahead, given recent statements made by Newfoundland's
new premier, Roger Grimes. The company, McCurdy Group of Newfoundland,
plans to ship the water to the Middle East by supertanker.
Newspaper and business publications are intensifying the debate.
In February 1999 the National Post called Canada's water "blue
gold" and demanded that the government "turn on the
tap." Its business columnist, Terence Corcoran, added fuel
to the fire "Canada is a future OPEC of water. Here's a worthwhile
long-term bet By 2010, Canada will be exporting large quantities
of freshwater to the U.S., and more by tanker to parched nations
all over the globe.
"The issue will not be whether to export, but how much
money the federal government and the provinces will be able to
extract from massive water shipments. Rather than resisting the
idea of water exports, Canada will end up scrambling to head the
WWET, the World Water Export Treaty, signed in 2006 by 25 countries
with vast water reserves. Using the OPEC model, they will attempt
to cartelize the world supply of water and drive the price up."
The Calgary Heraid's editorial board agreed, "Canada has
plenty of freshwater, so let the commercial exports begin."
However, Canada isn't the only water-rich region being eyed
by transnational business. A Canadian company, Global Water Corporation,
has signed an agreement with Sitka, Alaska, to export 18 billion
gallons (58 billion liters) per year of glacier water to China
where it is to be bottled in one of that country's "free
trade zones" to save on labor costs. Although the company
brochure acknowledges that there is a severe water crisis in China,
it entices investors "to harvest the accelerating opportunity...as
traditional sources of water around the world become progressively
depleted and degraded" and laments the fact that the government
of British Columbia in Canada has placed a ban on bulk water exports.
The company is now engaged in a "strategic alliance to
plan an international strategy to move water globally in bulk
tankers" with the Signet Companies, an international maritime
shipping company based in Houston, Texas. Signet has been engaged
in the bulk movement of water since 1986 when both Western Canada
Water and its predecessor contracted the shipping company for
the "design, development, analysis and implementation of
an international water transport system." As Global explains,
"Water has moved from being an endless commodity that may
be taken for granted to a rationed necessity that may be taken
But Global is only one of the many companies with interests
in Alaskan water. Alaska has become the first jurisdiction in
the world to permit the commercial export of bulk water. The Ataska
Business Monthly bluntly states, "Everyone agrees water has
21st century potential as an export from Alaska, and communities
from Annette Island to the Aleutians are thinking about turning
on the tap." The journal reports that a Washington-based
company has begun shipping city tap water from Alaska on barges
to be bottled in Kent, Washington, and that several other projects
are in the works.
Alaska's water resources are staggering, reports the pro-export
Alaska Business Monthly. For example, it suggests that if Sitka
filled a million-gallon tanker per day, this would still be less
than 10 percent of its current water usage. In Eklutna, Alaska,
Brian Crewdson, assistant to the general manager of the Anchorage
Water and Wastewater Utility, estimates the export potential to
be as high as 30 million gallons (90 million liters) per day.
He reports that in 1995 a Mitsubishi-leased tanker taking
on petroleum by-products for processing overseas also loaded a
couple of millions of gallons of Eklutna water for shipment to
Japan. He believes this may have been the first tanker shipment
of water out of the United States and when word got out, he received
calls from companies interested in doing business in New York
City, Washington D.C., and Charleston, S.C. Crewdson adds that
there is more money in bulk water exports than bottled water exports.
One entrepreneur who is poised to profit from Alaskan water
exports spent much of his career shaping water policy in the public
sector. Ric Davidge, president of Arctic Ice and Water Exports,
served in the U.S. Department of the Interior as chairman of the
Federal Land Policy Group and was a key advisor to both the federal
and state governments in the clean-up operations for the Exxon
Valdez oil spill. As Alaska's director of water, Davidge was responsible
for initiating the marketing of the state's water and established
the policy framework that allowed for the export of water. Soon
after he set the export wheels in motion, he moved into the private
sector and began a water export business. He is now known as "Alaska's
Davidge's curriculum vitae states that he provides a "wide
range of consulting services to foreign and domestic companies
developing bulk and bottled water exports from Alaska." Clients
include companies from Saudi Arabia, Taiwan, Alaska, Washington,
Canada, South Korea, Tanzania, Japan, Mexico, California and Nevada.
There are some who say that bulk export of water is too expensive
to be economically viable and suggest that the future lies with
desalination. However, the World Bank points out that the world
has already tapped all its low-cost, easily accessible water reserves;
the financial and environmental costs of tapping new supplies,
however they are developed, will be two to three times more than
those of existing investments and the demand will be there even
if the sources are expensive.
While desalination will be used by some countries, it is a
very expensive process and is fossil fuel intensive. Massive desalination
projects would be possible only to those countries with abundant
energy supplies, and would seriously add to global warming-a crisis
already exacerbated by freshwater diversion.
Davidge points out that the price of water on a dollar-per-unit
basis is already higher than refined gasoline. "Everything
from soft drinks to French wine to microchips will get many times
more expensive as area reserves of clean water are drawn down."
He argues that desalinated water is more expensive to produce
and more environmentally destructive than bulk water shipments
in tankers and water bags.
Quebec businessman Paul Barbeau of Aquaroute, Inc., a company
"dedicated to water transportation in bulk," agrees.
He says that water can be easily exported by tanker vessel on
very short notice. He claims that at his former company, Enercem
Tankers, he converted and operated a petrol carrier into a water
carrier which was used to transport Canadian water to the Bahamas.
"Capturing water is easy. A floating ship can simply pump
what may be declared as a water ballast. This is done daily on
any coastal or ocean-going vessel or even more simply with any
barge as there are already some on the Great Lakes. The tools
to export water afloat are already there. What is missing is the
precise development in law to prevent an uncontrolled practice."
Even some environmentalists believe that water commodification
and trade is inevitable. Says Allerd Stikker, "It could very
well be that in the beginning of the 21st century clean water
will start to become a major regional and inter-regional commodity,
being produced and traded in volumes undreamt of today."
Especially in light of economic globalization, it is a myth
that large cross-border transfers of water are not economically
feasible. The only difference between these and other mega-projects
is that water becomes a product transferred across borders. These
megaprojects are identical in purpose to domestic water projects
and governed by the same economic analysis. There is no reason
to believe that current massive government subsidies to industry
and agribusiness are going to end anytime soon. Transnational
corporations operating in water-intensive industries are going
to expect local governments to find and fund the water supplies
they need before making investment and production decisions.
BOTTLED WATER BECOMES BIG BUSINESS
Where there is a demand for the trade of water across borders,
it is already well underway. The trade in bottled water is one
of the fastest-growing (and least regulated) industries in the
world. In the 1970s, the annual volume was 300 million gallons.
By 1980, this figure had climbed to 630 million gallons, and by
the end of the decade, the world was drinking two billion gallons
of bottled water every year. But these numbers pale in comparison
to the explosion in bottled water sales in the last five years-over
20 percent annually. In 2000 over 8 billion gallons (24 billion
liters) of water was bottled and traded globally, over 90 percent
of it in non-reusable plastic containers.
In Canada, the amount of water extracted by bottlers has grown
by more than 50 percent in less than a decade; bottlers, who pay
no fee for the water they capture, have the legal right to extract
about 30 billion liters a year-1,000 liters for every person in
the country. Almost half of it is exported to the U.S.
As the world's freshwater supply becomes more degraded, those
who can afford it are favoring the packaged item, even though
bottled water is subjected to less rigorous testing and purity
standards than tap water. A March 1999 study by U.S.-based Natural
Resources Defense Council (NRDC) found that much bottled water
is no safer than tap water and some is decidedly less so. One-third
of 103 brands of bottled water studied contained levels of contamination,
including traces of arsenic and E. coli and at least one fourth
of bottled water is actually bottled tap water, the study found.
Alongside the giants of the industry, such as Perrier, Evian,
Naya, Poland Spring, Clearly Canadian, La Croix and Purely Alaskan,
there are literally thousands of smaller companies now in the
business. As well, the big soft-drink players are entering the
market en masse. PepsiCo has its Aquafina line and CocaCola has
just launched the North American version of its international
label, Bon Aqua, called Dasani. CocaCola predicts that its water
line, which is just processed tap water and sells for more than
gasoline, will surpass its soft-drink line within a decade.
These companies are engaged in a constant search for new water
supplies to feed the insatiable appetite of the business and are
engaging in the trade of water by tanker shipments and by purchasing
water rights from farmers. In rural communities all over the world,
corporate interests are buying up farmland to access wells and
then moving on when supplies are depleted. In South America, foreign
water corporations are buying vast wilderness tracts and even
whole water systems to hold for future development.
Sometimes these companies leave dried-up systems in a whole
area, not just their own land. A ferocious debate has been taking
place in Tillicum Valley, a picturesque fruit and wine district
in British Columbia. Clearly Canadian Beverage Corp. has been
mining the ground water of the region so relentlessly that local
residents and orchard growers say the company is "draining
their water supply dry."
Of course, the global income gap is mirrored in inequitable
access to bottled water. The NRDC reports that some people spend
up to 10,000 times more per gallon for bottled water than they
do for tap water. For the same price as one bottle of this "boutique"
consumer item, 1,000 gallons (3,000 liters) of tap water could
be delivered to homes, according to the American Water Works Association.
Ironically, the same industry that contributes to the destruction
of public water sources-in order to provide "pure" water
to the world's elite in non-reusable plastic- peddles its product
as being environmentally friendly and part of a healthy lifestyle.