Popular Movement Stands Up to Privatization

by Jason Wallach, Upside Down World

When residents in Santa Eduviges entered their second month without running water, everyone knew something had to be done. A meeting was called. Community members expressed outrage that the water company’s $7 per month bill always arrived on time, but taps barely flowed. When they did, the liquid that came out was an ugly brown.

Anger quickly turned toward system operator Roberto Saprissa. He received the money, but was doing nothing to fix the system’s problems. They complained that service under Saprissa was deficient, polluted and un-hygienic—even after a number of meetings with governmental officials. The company simply did not respond to anyone.

The community discussed the issue and came to a decision. Their demand? De-privatize the town water system and turn over its management to El Salvador’s national water agency, ANDA (Administración Nacional De Acueductos Y Alcantarillados).

Days later, on Sept. 7, residents of this small community near the San Salvador suburb of Soyapango, overtook the Gold Highway that leads into the capital. Young and old occupied the busy thoroughfare from the morning rush until 6 PM. The community made their demand clear: “Give us clean water and put our system under government control.” That evening, police fired tear gas to dislodge the crowd and arrested five people.

While dozens of communities in El Salvador have occupied roads demanding water service, the particular conflict that confronted this village of 300 people—and their unusual demand—could be replicated if El Salvador’s Legislative Assembly approves a controversial General Water Law. The proposed legislation would shift water administration from the national to the municipal level and obligate local governments to sign “concessions”—or contracts with private firms—for up to 50 years.

The proposal has become a lightning rod for opposition from religious and civic groups who say it amounts to a privatization of the country’s water.

Congressmen from the ruling ARENA party have signaled that the legislation could be submitted for Assembly debate before the end of the year. ARENA, which has occupied El Salvador’s executive branch for 17 years, is counting on votes from the right-wing National Reconciliation Party for the 44-vote majority. But legislators are confident of passage. A similar bill was retracted last August by popular pressure and the familiar election-year reticence of ruling party to tackle controversial issues.

Who Wants Privatization?

Since the early 1990‚s the international financial institutions (IFIs), like the Interamerican Development Bank (IADB), have encouraged the privatization of water systems throughout Latin America through “Structural Adjustment” loans. The IFIs require governments to open water management to private investment as a condition for receiving loan money, which is usually destined for infrastructure repair or new construction.

The IADB stopped using the word “privatization” after the 2000 disturbances in Cochabomba, Bolivia. In that conflict over water privatization, tens of thousands marched until the local government annulled a water management concession with a subsidiary of the US-based Bechtel corporation. Today, the IADB prefers terms like “concessions,” “decentralization,” or “private sector participation.” But critics say whatever the euphemism, the result is privatization.

The US-based consumer watchdog Public Citizen reports that the IDB and World Bank together administer about 133 different water and sewage-related projects, funded to the tune of $9.7 billion. The majority of these projects are in Africa and Latin America, while most of them include some type of “hydro-sector reform.”

In El Salvador, the IADB approved loan 0068-ES, “Reform Program For the Water Sector and the Potable Water and Sanitation Sub-sector.” One of the main functions of the loan is to transfer state-run water companies “under a decentralization of services with private sector participation.” The IADB directed $36 million of the loan for the “promotion of such private sector participation (PSP) using specialized consultants to give support and financial advice to the government towards the effective organization of PSP schemes.” The text is from a document entitled “Executive Summary of the Reform Program For the Water Sector and the Potable Water and Sanitation Sub-sector (ES-0068), IADB, 1998,” The word “scheme” is the Bank’s, from the English original.

The focus of the IADB’s hydro-related projects is to implement a systemic shift of management from public water companies to corporate board rooms.

ANDA: History from Above and Below

For residents of Santa Eduviges, deciding on ANDA management was to opt for the lesser among various evils. The national entity is mired in corruption scandals and has been the target of extreme budget cuts by President Tony Saca. Its budget was slashed 15% last year to its lowest level since 2000—a perplexing reduction in a country where the need is great. The percentage of rural Salvadorans with potable water hovers around 60%.

In mid-September, El Salvador’s Court of Accounting (an agency equivalent to the US GAO) implicated two ex-presidents of ANDA, Carlos Perla and Manuel Arrieta, in a corrupt well-drilling deal worth $7.5 million. In January, Perla, who has fled with his family to France, failed to appear at two hearings where he was accused of fraudulent deals on 13 separate contracts totaling $42 million. Indictments alleged that in one case, Perla accepted a $2 million bribe from two Spanish firms that sought lucrative government contracts on the Lempa River, which provides about 60% of El Salvador’s potable water.

While it is clear that the state-run ANDA isn’t the smoothest-sailing ship in the sea, many believe it remains the most accessible and accountable entity for communities scrambling to meet the urgent need for water.

ANDA workers responsible for repairing water systems agree. They say they want to work, but the government has engaged a plan to discredit the agency and thus, justify privatization as a solution to poor service. In fact, workers say, even without the proposed General Water Law, a de facto privatization is already taking place.

“People complain about ANDA’s slow response time” says Wilfredo Romero, general secretary at SETA, the union of ANDA workers. “But delays happen not because workers don’t want to work. We do. To make repairs, we need an assignment order from management.”

Those orders, argues SETA’s press secretary Jorge René Cordoba, “are prioritized for systems that are planned to be concessioned off. The rest have to wait their turn.” SETA members argue that municipalities that reject water concessions are put at the end of the line. As a result, service has slowed to a crawl in San Salvador, where Mayor Violeta Menjívar opposes concessioning the city’s water services.

SETA took out half-page ads in the nation’s two biggest daily newspapers opposing the General Water Law, which according to the ad, “would privatize water and condemn thousands of our compatriots to suffer thirst for the inability to pay…”

SETA members are also motivated by the string of recent privatizations in El Salvador’s telecommunications and electricity sectors. In both cases, the private contracting led to the layoff and firing of thousands of workers. Many of these workers were forced to re-apply for the same jobs at half the pay with none of the state-provided benefits. The average ANDA worker makes about $300 month.

Workers aligned with SETA have paid a price for their resistance to privatization. On the night of July 18, an anonymous death threat was slipped under the SETA office door. Hearkening the memory of El Salvador’s death squad past, the letter was signed by the previously unknown “Viva Mi Major!” Movement—or, My Major Lives!

“My Major” is a direct reference to Major Roberto D’Aubuisson, the deceased founder of the ARENA party and a School of the Americas graduate. D’Aubuisson is generally considered the intellectual author of El Salvador’s death squads, which throughout the 80’s executed and disappeared thousands of Salvadorans who struggled for social and economic justice.

The reference was not lost on SETA general secretary Romero. At a press conference on the subject convened by the union, he said: “The Constitution gives us the right to form any type of labor union. This repression is a sign that we’re doing our job well.”

Environmental Realities

“Water doesn’t come from the faucet, it comes from the watershed!” exclaims Angel Ibarra of the National Ecological Union of El Salvador (UNES). It’s a phrase he has repeated to grassroots groups, legislators, and anyone else who will listen. The stout Ibarra has argued for years about the need to develop a national plan aimed at protecting El Salvador’s river systems and aquifers.

He says that deforestation, which has left only 2% of El Salvador’s original forest intact, has contributed to the deterioration of water quality. He says the major threats to water quality include proposed mines and dams. Fertilizer run-off and untreated sewage are not being addressed by the government, nor are they considered in the proposed General Water Law. The result, says Ibarra, is a damaged water cycle that fails to meet the needs of the growing Salvadoran population.

Together with the Catholic-based charity, CARITAS, the UNES has developed its own alternative General Water Law. The UNES proposal advocates public not corporate control of water, declaring: “The state should assume principal responsibility [for water], including financial responsibility, since water should not be converted into merchandise, or subjected to workings of the market.”

The UNES/CARITAS plan places watershed care at the center of any water reform in El Salvador and calls for a holistic conservation plan aimed at protecting rivers, aquifers and springs. It also calls for a government-regulated rate scale, which charges corporate customers at higher rates than households.

CAFTA’s Hidden Influence

As political parties gear up to debate the General Water Law, the Central American Free Trade Agreement (CAFTA) will quietly form the background for the discussion. Under CAFTA, multinational water companies must be given “national treatment,” though they are not obligated to sell water nationally. If a new concessions law is passed, as President Saca and the IDB wish, multinational corporations could start bidding over El Salvador’s lavish supply with an eye toward more lucrative consumer markets.

According to Alejandra Castillo of the Committee in Solidarity with the People of El Salvador (CISPES), CAFTA’s public service provisions were practically written for the multinational water companies.

Castillo explains that CAFTA rules guarantee that a country cannot voluntarily reduce the export level of a good or service provided. Therefore, if El Salvador becomes a water exporter, CAFTA, not national policy makers, will decide whether water will flow in El Salvador’s homes or be sold internationally.

CAFTA also gives corporations the right to sue national and local governments if a company feels that its “right to profit” has been infringed. Laws ensuring that local populations be prioritized in the provisioning of water, as well as environmental laws guaranteeing water quality could be viewed as “barriers to trade.” In the case of NAFTA, from which CAFTA was modeled, the threat of corporate lawsuits has often been enough to deter or overturn anti-corporate legislation.

“If we take the electricity sector and telecommunications as guides, privatization has meant higher rates, lower quality, less access, and less sovereign control over our public services,” said Castillo. “CAFTA multiplies those effects, since it brings in the international heavy hitters and the rules they play by.”

People Claim Their Right to Water

In July, over 100 activists held a national gathering to jumpstart efforts to defend the public right to affordable water access. In September, a second gathering was held in which participants inaugurated the “National Forum for the Defense of the Sustainability and the Right to Water.” The Forum plans to make their first public announcement on Oct. 17, which coincides with the “Day of the ANDA Worker.” A mobilization and march is also planned for the near future. According to the group’s charter, its mission is to “stop [legislative] proposals that work against the sustainability of water” and to “promote alternatives to uncontrolled urbanization, mines, and dams that threaten the quality and renewal of water resources.”

Back in Santa Edviges, one community among hundreds craving affordable access to potable water, the community celebrates. Five residents who were arrested in the Sept. 7 protest were released with all charges dropped. And the community won a rare signed agreement with ANDA committing the state-run company to assume control of their small water system. People were generally satisfied with their tactics, but fear repression and possible sabotage by Sabrissa, the former owner.

However, the fate of the rest of El Salvador’s water systems lies in the balance. ANDA director Cesar Funes—a champion of the privatization cause—has signaled that the government’s Water Law is 80% complete and will be submitted for debate by El Salvador’s Legislative Assembly before the end of the year. Activists at the UNES and SETA have vowed to fight its passage. The coming months will decide whether the future of El Salvador’s water will be decided by a central water agency, by multi-national water companies, or by the people themselves.


Jason Wallach is an editor at UpsideDownWorld.org, a website uncovering activism and politics in Latin America. He is based in El Salvador.

This story originally appeared Sept. 27 on Upside Down World

See also:

“El Salvador: No Business as Usual as CAFTA Takes Effect”
by Paul Pollack, WW4REPORT #120, April 2006

Reprinted by WORLD WAR 4 REPORT, Oct. 1, 2006
Reprinting permissible with attribution