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Costa Rica: CAFTA threatens to turn water into merchandise

Latinamerica Press | November 4, 2007

COSTA RICA: CAFTA threatens to turn water into merchandise

María Flórez-Estrada.

Free trade agreement will make water distribution more unequal for country’s poorest communities.

For large companies water is a like a gift from the heavens, but for small-scale farmers, searching for this valuable and oft-wasted resource is an onerous task.

Even though some politicians, environmentalists and international bodies say that the time is now to fix Costa Rica’s unequal and disorderly water distribution, the Free Trade Agreement between the United States and Central America and the Dominican Republic - which Costa Ricans approved in a referendum Oct. 7 - has made this more unlikely than ever.

A congressional debate on the Water Resource Law has been stalled for five years and “it’s now even more improbable that it will pass,” says José María Villata, a parliamentary advisor who hosts an environmental television show broadcast by the University of Costa Rica.

On transnationals’ benefit

A major problem to fairer water distribution in Costa Rica is that CAFTA prohibits taxes on the exportation of water.

“Water is also sold as merchandise: bottled. This means that the country cannot prohibit or restrict its exportation by transnational companies,” Villalta says.

The agreement will impede Costa Rica from giving priority to improving water access to local communities, small businesses or national cooperatives compared to US transnational companies, he added.

On the contrary, the pact sets the obligation to give a “not less favorable” treatment to US companies, ignoring the deep differences in size and economic power of between these ones and the national sectors.

When the water law was debated in parliament, José Miguel Zeledón, director of the water department in the Environment and Energy Ministry under the previous administration, said that the current plan, from 1998, is “perverse” because it charges according to the size of the water consumption: the more you use, the less you pay.

While tourism companies that use large quantities of water for their pools or to water golf courses paid about US$0.01 per cubic meter, a Costa Rican individual who uses water from a rural well - using a sliver of what tourism companies use - paid about $0.19 per cubic meter.

Later, a decree was issued to change this price scheme but the changes are gradual and negotiated with the production sectors, explains Esteban Monge of the Center for Environmental and Natural Resource Law.

The Environment and Energy Ministry is currently in charge of managing the water resources, and institutions like the Costa Rican Electricity, Aqueducts and Sewage System Institute have some autonomy in granting concessions, but under CAFTA, state authorities will be potentially powerless before commercial priorities.

Villalta notes that CAFTA’s method of handling disputes between the state and investors will give multinational companies the privilege to question decisions by national authorities before private international arbitration courts, when they feel that their investments have been affected.

Illogical situation

In Costa Rica, 82.8 percent of the population has access to drinking water, but only 2.5 percent of the waste waters are treated, according to the Human Development Report of the United Nations Development Program (UNDP).

Three-quarters of the country’s groundwater destined for human consumption are vulnerable to contamination.

A recent study by the National University found potentially carcinogens in the aquifers in the area of Barva, north of San Jose, which supplies more than 500,000 people.

There are also major problems in the treatment of water for human consumption. According to a study by the state-run Aqueduct and Sewage System Institute in 2000, of the 2,033 aqueducts, 990 had water that was not safe for drinking.

This issue is affects particularly the fund-lacking Rural Water and Sewage System Associations.

Vanessa Zamora, an official of the UNDP’s environment and energy department, said that there is a lack of care in water sources. “That’s why we see in the newspapers on a daily basis that there is contamination, where anyone has direct access to dump chlorine, dead animals, etc.,” she said.

She added that decreased public spending for water treatment and the abusively low rates charged to big hotel companies should be top issues for the government.

While the daily water consumption per person in Costa Rica is between 250 and 350 liters a day, tourists in the country consume between 400 and 800 liters a day.

Even though water is vital for rural communities here, a large portion of the water is used by hotels to water their exclusive golf courses.

“They’re producing community conflicts with this disassociation between the private tourism sector, the government and community. The rates that hotel companies pay are abusive.

Your use of water is not going to be the same than that of a hotel with 500 rooms. The problem with water is not its scarcity, but instead, the resource’s poor distribution,” she said.

CAFTA was approved by just 30 percent of the electorate - passing with a victory of just 2 percentage points. Many analysts agree that the voter abstention rate of 41 percent was a resounding call against neoliberal policies in Costa Rica.

But because of what the outcome means, Villalta warns that it is not the time to “let one’s guard down” in the defense of water. Costa Ricans should stand firm against the merchandising of the resource under the trade pact.

“The country should actively get involved in the “Keep Water out of the WTO” campaign. Founded in 2005, the campaign proposes taking water out of not only World Trade Organization’s agreements and negotiations - included in the sections about services, market access agreements, cross-border services and investments - but all bilateral investment and trade agreements.

 source: LP