people's water power in uruguay
sebastian valdomir and alberto
villarreal, redes/friends of the earth
uruguay
On 31 October 2004 , more than 64% of
Uruguay 's population voted to establish
water as a basic human right, to retain the
public provision of water and sanitation,
and to ensure sustainable and participatory
water management. In other words, they
voted to ensure that their water services
are managed by the people for the
people.
uniting to defend water and life
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This was an overwhelming rejection
of the privatization of water foisted
upon Uruguay by the IMF and the World
Bank and by the liberalization of
water services planned in the WTO and
the Free Trade Area of the Americas .
REDES/Friends of the Earth Uruguay ,
public water unions, local community
organizations and others had worked
in the Commission in Defense of Water
and Life to achieve this victory.
The Uruguayan government had been
granting concessions to water
companies, including subsidiaries of
Suez (Aguas de la Costa) and Aguas de
Bilbao (Uragua), to help meet the
country's sanitation requirements.
However, the companies never
delivered on their contractual
commitments for sanitation; the
quality of the service they provided
was poor; and water and sanitation
tariffs were extremely high.
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When they were rejected by the Uruguayan
people, the companies turned to
international treaties to force the new
government - which had supported the water
vote - to change track. Suez and Aguas de
Bilbao threatened to sue the Uruguayan
government for millions of dollars in
compensation, claiming that the results of
the vote breached their contracts under
existing bilateral investment treaties with
France and Spain . Faced with the threat of
multi-million dollar payouts, and at the
same time holding the record for the
world's highest per capita level of
indebtedness (as a percentage of GDP),
Uruguay was in a difficult position. The
government initially capitulated, allowing
the companies to continue to operate until
2015.
Public opposition finally brought about
a more forceful approach. Eventually, Aguas
de Bilbao's concession was cancelled due to
repeated breaches of contract. The company
dropped a planned lawsuit against the
government and agreed to leave the country
in October 2005, although it was allowed to
retrieve financial guarantees it had made.
In the case of Suez 's subsidiary, the
government may ultimately buy the
corporation out.
While these settlements are less than
ideal, they demonstrate the power of
collective opposition. Environmentalists,
trade unions and local community
organizations can express their opposition
through plebiscites and popular
referendums, and confront the power of
corporations by exercising direct
democracy. This is an effective first step
in rolling back the power of corporations.
