Water Privatization and People's Struggle to
Protect Common Water Rights in Sri Lanka.

Herewith we are sending you a brief message that MONLAR prepared to be presented at the World Water Forum Related NGO Forum in Kyoto, Japam this mont by Ms. Sumika perera of the Women's Development Foundation. Kurunegala, Sri lanka. It gives some latest information about the situation in Srilanka related to attempted water privatisation and people's responses.

I represent Women's Development Foundation, an organization working among rural women for the last 20 years.

The entire history of Sri Lanka, its economy and culture and the way of life of the people have been closely associated with water. Life of al humans and all other living beings depend on water. Water has been considered sacred and treated as a free gift of nature given to all, to be shared by all forms of life with due care and attention.

The ancient irrigation and water management systems are considered to be the greatest achievement in the history of Sri Lanka. They are considered to be part of the "world heritage". The lessons to be learnt from the extensive systems of ecological irrigation and water management even today are of tremendous value, as the whole world is beginning to pay serious attention to an imminent water crisis.

The ancient people of Sri Lanka and their rulers have had a deep understanding of the importance of water and the way water should be utilized with care and respect.

Sri Lanka has had a very long period of development of ancient irrigation systems. These systems have been built over a period of 17 centuries beginning about 500 years Before Christ. A symbolic expression of this understanding and approach to water is the farms saying of King Parakrama Bahu, the Great "Do not let a single drop of water falling from the sky flow into the sea, unutilized for human welfare"

But the attitude of using water for human benefit, then, was in no way an approach that disregarded or discarded the fact that water is life, essential for all life. Thus in the ancient irrigation systems its behavior within the natural hydrological cycle was not tampered with.

Governments of independent Sri Lanka until 1977 (25 years ago) gave highest priority to development of small farmer based domestic good production. Rice farming was seen as the most important economic activity. Restoration of some of the ancient irrigation schemes and irrigated agriculture by small farmers was the names of achieving food security and rural development. In the first three decades after independence Sri Lanka achieved considerable Social Development.

A complete reveal of this economic strategy was introduced in 1977 when Sri Lanka began the policies of market liberalization, privatization and export orientation. In relation to water, irrigation and domestic agriculture this reveal of policies has proved to be extremely destructive. During the last 25 years there has been a near complete break down in rural food producing agriculture.

Adoption of chemical input dependent agriculture since mid 1960 has created huge problems of pollution, cost of production in rice and other food crops has become extremely high while privatization of agricultural market internally has reduced the price of agricultural produce such as paddy and other domestic food to such low levels that all farmers have become extremely indebted. Rural poverty and indebtedness has increased resulting in farmer suicides, hunger and malnutrition.

World Bank recommends privatization of water and full cost pricing of water as a means of discouraging paddy farming.

In March 1996 World Bank in its recommendations on domestic agriculture water privatization and water marketing were recommended as a strategy of encouraging the shifting from "low value" domestic production to "high value" export crop production. They also recommended land titling granting "free hold titles" to all small holder framers to encourage them to sell their land and more out of agriculture.

Proposals included in the new PRSF (Sri Lanka's Poverty Reduction Strategy) agreed upon between the Government and the World Bank in June 2002 cleanly says that public - private sector partnership in water, Sewerage and Sanitary services should be promoted. Based on these agreements the Government is about to finalize a new National Water Resources Policy and a National Water Resources Act.

  1. To enable public-private sector partnerships in water supply projects in all urban areas, which would lead to pricing and marketing of water by big International Water Companies to be invited.
  2. Issuing of Water Entitlements by the National Water Resources Authority is a mechanism suggested for diverting water away from irrigation and agriculture to other uses ("multiple") such as urban supplies, for industrial purposes, electricity generation, tourism and related purposes.
  3. Mechanisms and infra structure development for water marketing (cementing of irrigation chemicals, setting up a water measuring devices, rehabilitation and renewal of irrigation systems, training farmers in measuring irrigation water and valuing of water utilized have already been introduced).
  4. Introduction of "Tradable Water rights and transferable water entitlements" is another device of getting farmers who have traditional water rights to sell away their water rights.
  5. PRSP clearly suggests "full cost pricing of domestic water supplies" to enable private water companies to charge commercial rates for water.

Public - Private sector partnership in water supply and water management in Sri Lanka is clearly a mechanism that would compell people to make a double payment for water.

There is a large number of projects listed in the PRSP for infra-structure development in irrigation and water supply. 1000s of millions US$ (Over US$ 5000 million) would be borrowed for these infra structure development projects.

Water multi-national companies are then to be invited to use such infrastructure already developed with public funds.

But, they would be given the right to "Price water:" and sell to all types of consumers, domestic consumers, small farmers and others on the assumption that these multi national water companies spend for water management and supply infra-structure.

People's resistance against Water Privatization and Water Marketing.

Since 1996 when the WB recommended Water Privatization people's organizations such as MONLAR (Movement for National land and Agricultural Reform) has been engaged in public education and debates with the WB and Government against these destructive proposals.

In the year 2000 when the Draft National Water Resources Policy formulated by the Government became known there were very large people's campaigns and agitation's against Water Privatization and marketing. This campaign was launched by a much bigger alliance of people's organizations. It was named "The Alliance for Protection of Common Water Rights" on 22nd to 25th September 2002 there was a pilgrimage across the country "Pilgrimage for Common Water Rights" joined by thousands of people . Hundreds of organizations joined in the campaign. The Government then withdrew its proposals and declared that there was no invitation of water marketing or privatization. However, the drafting of legislation and setting up of institutions such as the National Water Resources Authority continued without any public consultation.

These operations were funded heavily by the World Bank and other international Agencies. These measures were a part of a bigger strategy pushed by the WB and big business to bring about a major structural Reform in the rural agricultural sector.

When the previous government delayed the process of economic and infra structures development package the WB and IMF imposed pressure on the Government restricting and delaying their loans. Due to economic hardships imposed on the people resulting from such loan restrictions public agitations engineered by big business and the more pro-WB opposition, the UNF resulted in a change of Government at the end of 2001.

Government that took over power at the end of 2001 has undertaken a process of legalizing the full package of policies for economic reforms. Agreements were reached with WB, IMF, and others in June 2002 on the PRSP, which contains proposals of privatizing almost all remaining Government enterprises, services, and national resources such as forests, minerals, fisheries and water.

Water privatization includes,

  1. Public private sector partnerships in water supply, sanitary services and public utilities in all major city and urban areas.
  2. Full cost pricing of all water including water for household consumption.
  3. Issuing of water entitlement as a means of diverting domestic food production to export cash crop production. From small farmer based domestic agriculture (largely subsistence agriculture) to commercial agriculture by big investors.
  4. Very heavy public investments in water infra-structure development projects and inviting multi-national Water Companies on long years of tax holiday with liberalized market policies.

Reasons for Public protest against water privatization policies.

The people's campaigns against the proposed National water Resources Policy and Act have been based on the following concerns and demands.

  1. Water is a natural right of all people and all living beings and nature. Therefore water should remain as "commons" and not be converted into a commodity.
  2. Any policy or programme for water management and conservation should be formulated with very wide consultation and participation of people. The present policies and plans have been formulated without any such participation with heavy influence of the new Institutions set up by the international agencies pushing for water privatization. Such as the ADB, World Water Forum related bodies, WB, some European Governments interested in expanding markets for water companies.
  3. Converting water into a market commodity will deprive millions of poor people of their right to water and Water Services. Such commoditization of water will also have very serious impact on food security and on natural environment.
    The type of infra-structure for such commercial distribution and management would be financially prohibitive and ecologically destructive. Possible total destruction of the ecological irrigation approaches in Sri Lanka would be a tremendous loss that would make it impossible to revive these ecological approaches.
  4. Water marketing is part of a bigger strategy of getting over a million (1.8 million families) of small farmers to sell their land, give up agricultural livelihoods and migrate to urban areas as "cheap labour" or destitute. (PRSP includes land policies for such commercialization of land and promoting migration).
  5. Being a country that is rich in water resources privatization and commercialization of water could lead to damaging trends in water exports making water more expensive to the local water users who are far too poor to make any payment for water.
  6. The argument given for inviting Private sector for water marketing is that water management to prevent a crisis requires very heavy investment. The PRSP says that the investment required in Sri Lanka during the period of 2001 to 2010 is Rs 50 Billion. It says that the Government can not finance even half of this investment. The essential pre-requisite to attract private investment is to price water. Therefore "full cost Pricing" of water is recommended, taking into consideration the affordability . PRSP also says that the household water consumers are subsidized with earnings from other sectors that use water. This ,it says , should be prevented. Therefore, full cost pricing of domestic water supplies is recommended.

But, out of 108 projects included in the PRSP there are 19 projects that are directly Infra-structure development projects connected with water managements and water supplies. The amount to be borrowed for these projects add to US $ 951 Million = Rs. 95,100 million = Rs. 95.1 Billion. Thus the borrowing made by the people of Sri Lanka is already much higher than the estimated investment in Infra structure development in water.

Therefore, when it is suggested that the water users in Sri Lanka should pay the private sector water companies, to be invited. these companies are not really making any investment in developing water infra structure, but the water users are compelled to pay twice, or more than twice, firstly to repay the loans taken for water infrastructure and secondly to pay the companies their charges for water. This is a totally unacceptable situation.

A Success Story - Struggle against Water Privatization.

On March 6, 2003 the Minister for Water Resources had prepared to present the new Revised National Water Resources Policy and the Act for discussion at the Parliamentary Advisory Committee. The Government party MPs knew that there would be massive public protests against this. There already exists massive campaigns against the overall policy of privatization and sale of public assets and suppression of Workers and Human Rights.

The Governments MPs disagreed with the idea of bringing Water Policy and Act for debate in Parliament.

The Prime Minister, on March 6, 2003 made a public statement that he was against introduction of the Water Policy Bill in Parliament. He also said that he wouldn't obey all the dictates of the World Bank. He criticized the Water Minister for attempting to introduce this Bill. Thus the Government has withdrawn against public pressure.

However, the people's movements do not accept this as an honest statement of Government Policy, because the PM and the key ministers of the Government has already agreed with the PRSP, which is considered a formulation of the Government of Sri Lanka, where water privatization, Public - Private Partnership in water, Sanitation and Sewerage are already included.

The Country Director of WB, Mr. Peter Harrold admitted at a meeting with representatives of the Alliance for Protection of National resources and Human Rights (ANRHR) on February 26th, 2003 that PRSP is already finalized and agreed upon, and therefore it would be very difficult to reverse.

The struggle therefore, continues. We the people of Sri Lanka are very happy and strengthened by the world wide campaigns of people against water privatization and marketing. We would therefore join in the struggle for water as commons by the movement of the world. For further information and links on water issues.

Contact : Movement for National Land and Agricultural Reform (MONLAR)
And: Alliance for Protection of National Resources and Human Rights
926/2A, Kotte Road, Athul Kotte,
Sri Lanka.
E - mail : monlar(AT)sltnet.lk
Fax/Tel: 074 - 407663.

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