The Grinch: "Why there's a light that won't light on one side...I'm going to fix it up there, and bring it back here..."

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There appears to be a central reason why CELA supports the Annex. Referred to repeatedly in "Why the Canadian Environmental Law Association (CELA) is supporting new drafts of the Great Lakes Charter Annex" by Sarah Miller, July 1/05, that reason is the "return flow condition", described by Sarah below:

"Applicants will have to prove that there is no reasonable alternative including conservation in the watershed where the water will be transferred. Return flow will be required of the same water withdrawn to the source lake watershed and this water must meet all water quality standards. Medium range transfers have all the additional conditions as larger transfers except that while other Great Lake jurisdictions will be notified, regional review will not be requisite and they may elect to return their flow to another Great Lake basin." - Sarah Miller p.6.

Again Sarah states, "There are no exemptions from costly return flow provisions that require applicants distant from the Great Lakes to build infrastructure to return water back to the Lakes. These costs could be prohibitive to most applicant communities. Additionally, applicants must prove there is no reasonable alternative in the watershed they are currently in - including conservation, that the return flow is only Great Lakes water and meets all water quality standards and that they have taken a precautionary approach by demonstrating their diversion will not endanger ecosystem integrity. Collectively these requirements would be prohibitively costly and difficult to meet." p.5

Sarah thus mentions three conditions: the 'conservation first' condition, and 'no negative impacts' condition, as well as the 'return flow' condition. Many of us working at the grassroots, however, have had years of experience funding our own peer reviews to counter industry "studies" that say industry activities have no "environmental or cumulative impact". And, for the same reason of unreliable industry-generated 'research', it is too easy for companies to say that other alternatives have been explored. In reality, these two 'conditions' are easy loopholes for corporations to jump through.

Therefore, the repeated references to hard "conditions"; [ "enshrining protections from diversions" p.2, "conditions which will act as deterrents" p.2, "tools to prevent unnecessary overuse and wastage" p.2 "a prohibition on diversions" p.3 "environmental-based regulation" "standards" pp 3,4. "protecting sustainability" p.5] are based on no clear limit except an assumption that the "return flow" condition will prove to be too costly for those who seek to transfer and divert water.

So let's consider this "return flow" condition in light of municipal water system ownership.

"The world's largest for-profit water service corporations have set their sights on North America: Suez and Vivendi (now Veolia) from France and RWE-Thames from Germany. All three have major subsidiaries in North America - United Water, U.S. Filter, and American Water. [with subsidiary Canadian Water in many Canadian municipalities]. These corporations specialize in taking over public water services from cash-strapped governments and running them on a for-profit basis. Contracts often cover a 25-to-30 year term...In January 2003, Suez, closely followed by Vivendi (Veolia) and RWE, announced that they were going to target cities in the United States and Canada for their expansion. Their stated goal was to transfer 70 per cent of the water services in both countries from public to private hands over the following ten years." pp.77/8, "Inside the Bottle" T. Clarke, Polaris Institute.

Multinational corporations who run municipal water and sewage treatment plants in many cities throughout the Great Lakes (and beyond) will find it no trouble at all to fulfill the "return flow" condition of the Annex: They simply divert water from one of their subsidiary plants to the other, either physically or through water credit exchanges. Already single corporations running many municipal water systems on a given Lake or watershed filter, sell, filter the water again when it comes back as sewage, and "return" it to the Great Lakes Basin. Presto. "Return flow" condition fulfilled, and lots of money made in the bargain.

How do corporations ensure their shareholders and CEO's will continue to profit from water transfer? There are a number of existing mechanisms:

1) Under "full cost accounting" clauses, included in Ontario's draft Water Source Protection Act, financial "return on investment" ie) profits, are guaranteed for corporate shareholders and CEOs who run municipal water systems.

This clause has been misunderstood by environmentalists, who define "full cost accounting" as the 'polluter pays' principle, and the cost of environmental damage. A linguistic coup by the corporate sector has successfully retained another key to profit from water exploitation.

2) Expanded metering and increased municipal consumer water rates. As an example, when Canadian Water Services was given the contract for water servicing in the town of Brighton, Ontario, water rates rose over 300 %. (Brighton Independent Newspaper 04/05.). This is a pattern which has been noted by many NGOs working in developing countries which have had water privatization forced upon them by the World Bank as part of debt restructuring or debt "relief".

3) Water service/ infrastructure corporations have entered into the business of selling bottled water, the most lucrative market. "Vivendi has bought into US Filter, producer of Culligan, purified water sold in water carboys or large water jugs that dispense water in the home or office. Roche Claire, a subsidiary of Suez also specializes in water carboy sales...Suez and Vivendi via their subsidiaries can also provide the Big 4 [Pepsi, Coke, Nestle and Danone] with purified water needed for their carbonated and juice products." p. 78, Clarke, "Inside the Bottle".

On a visit last week to the Saquenay region of Quebec, I picked up a bottle of "Aquafina", produced by Pepsi. On the label under ingredients was printed, "Coming from public water distribution of Mississauga, Ontario".

PepsiCo has "annual revenues of around $27 billion (US)" p. 17, Clarke, ibid.

4) Public subsidy of private profits through public taxation: For example, the Town of Campbellford, Ontario, is raising its municipal residential taxes to pay for water servicing contracts (Brighton Independent, 05).

The province is also using taxpayer's money to "partner with" the private sector in major water infrastructure projects: "So today I am announcing the creation of a new agency that will apply expertise and best business practices to infrastructure financing, planning and construction management. The Ontario Infrastructure Projects Corporation will support ministries, municipalities and the broader public sector in their transactions with the private sector." [Ontario Infrastructure Projects Corporation - Toronto Board of Trade, May 9, 2005. Speech by David Caplan, Minister of Public Infrastructure Renewal. http://www.pir.gov.on.ca/userfiles/HTML/cma_4_41958_1.html .]

The Canadian federal government is also promoting P3s through the Parliamentary Undersecretary for Public Private Partnerships, and annexation with the United States in water management. We can recall the leaked document of the trade meetings of the 'Three Amigos' - Martin, Bush, and Mexico's Fox, at Bush's Waco Texas ranch this spring, which stated "...neither Mexican oil nor Canadian water are off the table" (link to document at www.canadians.org <http://www.canadians.org> ).

Trade negotiators are to wait until water transfers and trade are publicly acceptable in Canada. Until then, trade in water is being couched in the virtuous (Grinch-like) language of "protection and restoration": Last week Foreign Affairs Canada released a report on the "Security and Prosperity Partnership of North America" http://www.fac-aec.gc.ca/spp/SPP-report.PDF , supporting annexation with Bush's America, including it's foreign and immigration policy and resource sharing:

"Joint Canada-U.S. review of the Great Lakes Water Quality Agreement: The review is an opportunity to ensure that the Agreement continues to be a visionary statement guiding not only governments, but also members of the Great Lakes community, in the continued protection and restoration of the Great Lakes."
http://www.fac-aec.gc.ca/spp/spp-menu-en.asp : (thanks to Brent Patterson at the Council of Canadians for this quote.)
The U.S. is moving to privatize its municipal water systems as well. With the new Great Lakes Regional Collaboration, set up through an Executive Order of President Bush http://www.glrc.us/ , federal money will go directly to assist the privatization of municipal water systems.

For example, the section "Areas of Concern: Sediments" http://www.glrc.us/documents/AOC_sediments.pdf is a lovely read on the noble desire of the Collaboration to clean up the Great Lakes polluted sediment beds. It is also indicates the mechanism: providing a "one-stop shop" for coordination (p.28) , federal funding and "nonfederal matching funds" p.29, promoting centralized technological solutions to waste treatment, and private corporate appropriation of public funds for water treatment:

"Some elements of the Legacy Act should be fine-tuned to enable more effective use of its funds. Maintenance of effort provisions should be dropped; the life of appropriated funds should be extended; the Act’s original intent to permit potentially responsible parties (PRPs) to participate as the nonfederal sponsor should be clarified and reiterated; and restrictions on disbursements to non-federal sponsors should be lifted. Specific recommendations are included in the appendix." p.28.

Thus, through a number of political and economic initiatives, the way is being paved for large-scale privatization of water systems in North America, publicly subsidized, to support the profits of multinational shareholders, and their ability to transfer water in pursuit of those profits. The Grinch of Water Infrastructure Privatization promises to take our precious wetlands, springs, lakes, to "fix them up there, and bring them back here".

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Unfortunately, because of clauses in our trade agreements, when we allow the Grinch to enter a sector, that aspect of the sector cannot be later closed without triggering 'expropriation' suits. Companies/ Grinches can claim government reimbursement of lost profits, a completely unsustainable scenario, financially for the public, and environmentally. Many such suits have already been in the courts, the Sunbelt case, the Metalclad case, etc. Corporations have won every time.

Unfortunately as well, there is a lack of understanding displayed in CELA's article regarding the relationship between trade and environmental law: Sarah states, "these [Annex] standards cannot erode existing laws" p.4. - in reference to tougher Ontario laws which she hopes could be used to stop some takings approved by the Annex. However, the Annex will, indirectly, erode existing laws; by opening the door for water transfers to be treated under trade regimes such as NAFTA and the GATS. There is extensive literature on these cases, see for example publications of the World Wildlife Fund.

The political reality is that the provinces have no sovereignty under NAFTA, and allowing Ontario "input" is a patronizing gesture at best.

In it's July 1/05 article, CELA is encouraging us to wait 10 years for the Annex to be implemented, working and spending our efforts in this direction. While we appreciate the efforts that have been given by many already, indeed many excellent forums have developed for dialogue around these issues, this really is not the time to cave into an agreement whose direction and mandate was crafted for entirely different purposes. We appreciate the efforts which have succeeded in shifting some of the ground in negotiations. But please note that the key elements, for the corporate water privatizers, are still in place.

Inter- and Intra- Basin transfers will still take place, triggering the opportunity for companies to open up and apply the trade agreements to limit environmental regulation in these areas. "Return" conditions will not be onerous at all, but in fact will provide further opportunity for multinationals to profit from the water, coming and going, taking and "restoring" it, over and over again, subsidized by public taxes and sales through pipes and various sizes of bottles. A sweet deal for private interests, especially if they can get good PR at the same time for 'protecting and restoring' the water.

But what a deal for the water - diverted, transferred, drained, shifted, pumped back...hardly something environmentalists can support. The status quo is not acceptable either. But perhaps instead of putting more of our energies into the long-term project of the Annex, why don't we join forces to promote something new together which would really do the trick ?

In terms of trees, and other 'trinkets', like oil, the Grinch of Corporate Privatization has already traded beyond the point of 'no return' .