My village in Herefordshire's Golden Valley boasts its own water company - The Peterchurch Water Company - owned by the local residents who receive their water from it. The source of supply is a natural spring that flows into St Peter's Well on the side of the gentle valley through which the less-than-mighty River Dore trickles lazily before joining the Monnow, a tributary of the far mightier River Wye. Legend has it that while on his way to Rome St Peter himself consecrated the well and put in an immortal trout which remains the symbol for the village today.
Shaping landscapes physical and cultural
Water has of course shaped both our physical and cultural landscape for millenia. It occupies a defining place in our natural and social history and connects the two in the story of human civilisation. As the source of life and the most basic of human needs it has also held a special spiritual and symbolic significance in diverse cultures and beliefs. To many, access to water is a human right and to make an exclusive claim to something that falls unbidden from the sky and finds its own course through our landscapes is an offence to moral intuition. In all societies for all of history water has usually been viewed as a form of public property, freely available to all as a gift of nature or God.
Water is a global resource with local consequences. It does not respect political and administrative boundaries. It is not so much a renewable resource as a replenishable one. The problem is ensuring it is in the right place and the right time; in the right quantity and of the right quality. For thousands of years societies have learnt to adapt locally to the consequences of having too much, too little, or too late. But anthropogenic climate change risks rapid and unpredictable changes to hydrological patterns faster than human beings - and other species - can adapt. The intergovernmental panel on climate change (IPCC) has warned: "water and its availability and quality will be the main pressures on, and issues for, societies and the environment under climate change." And when there is not enough to go around then there is the ever present risk of conflict over access to water as it loses its status as a public good.
Water, water everywhere but...
In the objectifying world inhabited by economists, water is viewed as a "good" or a resource - public or common pool respectively depending on the conditions of scarcity. In both cases it is either impractical or costly to exclude others from the use of a locally fixed supply of (usable) water. Pure public goods are usually provided by the state, since the "free rider problem" would ensure that they remain underprovided otherwise. State property is "owned" on behalf of the people. But once there is not enough to go around and if the state cannot exercise some form of control a tragedy nevertheless looms.
According to the economist's utilitarian instinct a problem arises when one person's use leaves less for the next person, which must be solved for the sake of overall human welfare. In this calculation, no-one can claim a natural right to water. A "property right" must be assigned or else accept the inevitable fate of any unowned resource for which there is "open access" (res nullius) - the so-called tragedy of the commons. Who should own the right to the benefits that water bring depends, in the economist's parlence, on the transaction costs assocated with each alternative. The most important of which is the cost of excluding others from it.
An alternative to state ownership is typically advanced in a set of arrangements which involve some form of private sector participation or partnership. Turning a water resource into a form of private property by assigning the rights of ownership to individuals or corporations, perhaps in the form of a concession, are the remedies favoured by some neo-liberally inclined economists. Without private property a market failure persists - or more precisely, a market is missing altogether. Some form of full or partial privatisation enables a market to be created in which a price can be established to ration a scarce resource. Access to water is, literally, no longer a free-for-all. Users pay and the rent accruing to the resource owner can be directed to investment in infrastructure, water quality and ensuring efficient univeral security of supply.
At least in theory. But it is one that is usually hotly disputed wherever it is proposed. To many, the commodification of something freely provided by nature is still a form of robbery. Exclusion is simply unjust. In the developing world tariff rises that have followed privatisation or partnership have often been met with public displays of opposition. Privatisation and reform of the water industry in Brazil in the 1990s was viewed with popular suspicion and dissent. During the next decade many multi-national companies pulled out of Latin America all together.
When Right Is Might?
A form of de-facto privatisation sometimes arises from a process of creeping encroachment, rather than a formal assignment of rights. Others are excluded from the resource not by an act of law or by contract, they are simply muscled out. We might regard this as an illegitimate appropriation of a right. Coca-Cola's bottling plants in India were blamed for drying farmers fields, lowering and polluting the water table. In 2007, more than 400 people in Varanasi protested at the district magistrate's office demanding that Coke's Mehdiganji plant, with its veracious demand for hundreds of thousands of litres of water, be shut down. The license of another Coca-Cola plant in Kerala in 2004 had already been revoked due to local water shortages and pollution blamed on the company.
Access to safe and clean water is a justice issue. Where disparities in income persist, privatisation - de facto or de jure - raises issues of fairness and entitlement. In the Rawlsian liberal conception of justice, a fair distribution of resources under whatever institutional arrangement must be consistent with the primacy of individual liberty and inequalities tolerated only to the extent that it benefits the least advantaged. On this count experiments with various forms of quasi-private property right over water resources in the developing world have proved inconclusive. The effects of tariff rises, for example, on the poorest in society remain a matter of some academic dispute even if access to water is widened across the whole population. Entitlement theory deploys a different set of arguments. Nozick's distributive justice englobes the principles of justice in acquisition, transfer, and rectification. But can water as private property really meet the principle of just acquisition? If a property right can be established in a Lockean scheme by the mixing of one's labour, then no-one can stake a claim to untreated fresh water abstracted directly from nature.
Rights or Relationships?
Justice requires a search for an alternative that satisfies our moral intuition as well as distributional and procedural demands. Solutions inspired by neo-classical economic theory have centred on regulation or rights over public goods or common pool resources. When a large number of users have independent rights to the use of water resources, licensing and permitting are the controls through which use and access is distributed by the State. To many neo-liberals this is a second-best solution at best. At worst, it is a source of rent-seeking and government failure. Establishing private property rights in a market-based solution offer the hope of greater efficiency, safe and universal supply. In both cases, rights and duties have to be imposed and enforced by the state - a potentially difficult and costly task.
In recent decades the New Institutional Economics has examined more closely communal or customary forms of resource ownership and use. It seems the fate of a common pool resources is not necessarily the tragedy of eco-system collapse. Elinor Ostrom has shown how collective action in the right conditions can give rise to viable alternative common property regimes. Ostrom conducted her research amongst pastoralists in Africa and amongst villagers in western Nepal who jointly owned and managed irrigation systems. Here the property right is held by a collective, typically a small local community or village with a shared interest in a resource.
Collective action has been shown to be successful when a localised property right can be upheld over a relatively fixed or immobile resource with clearly defined boundaries and localised externalities. Where the transaction costs are lower than alternative institutional arrangements it makes more economic sense. It requires a small like-minded group of people who have commonly held rights over the resource but it is not possible to allocate an individual share of the benefits. Social capital, in the form of common values and trust, is a critical factor. Ostrom adds other communally determined institutional "design principles" for establishing rules: collective choice arrangements, monitoring, graduated sanctions, and a procedure for resolving conflicts. A common property regime (CPR) is therefore defined by a set of social relations, not simply by the assignment of a property right.
Corporate Water Responsbility
Since water has a commercial value to business, its growing scarcity poses a risk. Increasingly, companies are recognising both the risks and opportunities posed by water scarcity. Tighter regulatory action in response to pressure on water supplies is widely anticipated and both the droughts in China and the disruption caused by floods in Thailand have seen water move up the corporate agenda. Water issues are shifting to the boardroom: water is not only viewed as a regulatory and cost issue but increasingly of strategic importance.
On the basis that you can't manage what you can't measure, both the Carbon Disclosure Project's water initiative and the Water Footprint Network are working to improve standards of measurement and reporting. Some major corporate users of water are going further by engaging stakeholders and building relationships with local communities. For example, Tanzania Breweries Limited (TBL), a subsidiary of SABMiller, held workshops with local stakeholders in Dar es Salaam, made a detailed study of the river basin, and drew up a set of actions to improve water efficiency in the area. These included educating farmers and working with local authorities to prevent leakages from infrastructure.
Advocates of corporate responsibility acknowledge that water is a shared resource, the use of which use imposes costs on others. Some prefer the phrase "water stewardship" as an alternative to the cold instrumentalism implied by water resource management. It imples a duty of care. But, strictly speaking, stewardship means looking after something that actually belongs to someone else. More likely, corporate use of the term is intended to reassure the rest of society - other stakeholders in the resource - that corporations recognise an obligation to share it. It is the language of precedural fairness in corporate behaviour. But evoking a principle of stewardship plucked from its ethical roots expresses a sentiment devoid of any moral power. It does not define the normative content of the relationships between stakeholders as moral agents, whether in terms of rights, duties, or the common good.
Meeting the challenge together
We may ask: whose interests are really being pursued when companies claim to be stewards of a shared resource? And is it in the corporate instinct to treat members of the local community as a means to an end, or an end in itself? Such scepticism is reasonable. The water risks referred to by corporations are framed by their own goals. The language of stakeholder engagement appeals to principles of collaboration and participation. But there is a world of difference between participation and mere consultation; just as there is between informed consent and empowerment. If engagement is really about efficiency in decision-making and minimising the risk of damaging conflict it is unlikely to seek to empower others. And unless stakeholder participation in local resource management addresses inequalties in power relations it can hardly be called participation at all.
If private sector corporate interests are to be welcomed in resolving the water challenges of the future, new institutional arrangements will need to be designed in which there is a genuine commitment to building the local capacity to ensure they are sustainable. Real multi-stakeholder partnerships must include public and private actors, but also local NGOs, civil society organisations, as well as local communities. It requires all parties to define a shared goal and build trust by seeing the world through the eyes of others in Kant's kingdom of ends. Corporations will need to learn to properly understand the livelihood choices faced by the poor; their risks and vulnerabilities, not just its own.
The right to water may in a sense be assigned by the award of a license, permit, or the monopoly of a long term concession over vital infrastructure. But in any morally relevant sense, a right to a shared interest in water resources can only be secured by mutual consent and mutual obligation before it can be regarded as a legitimate right. It is through a normative ethic of discourse that the trust, shared norms and rules necessary for the stable collective or communal arrangements discerned by Ostrom can be built upon a solid bedrock of social capital. Working at a watershed scale isn't just about defining system boundaries by geography and hydrology. It is about forging relationships with the people that form part of the whole system. It is as much about the content of those relationships as the ecosystem services they share.
