Oldspeak: “Water, is of course the most important raw material we have today in the world, it’s a question of whether we should privatize the normal water supply for the population. And there are two different opinions on the matter. The one opinion, which I think is extreme, is represented by the NGOs, who bang on about declaring water a public right. That means that as a human being you should have a right to water. That’s an extreme solution. The other view says that water is a foodstuff like any other, and like any other foodstuff it should have a market value. Personally I believe it’s better to give a foodstuff a value so that we’re all aware that it has its price, and then that one should take specific measures for the part of the population that has no access to this water, and there are many different possibilities there. The biggest social responsibility of any CEO, is to maintain and ensure the successful and profitable future of his enterprise. For only if we can ensure our continued, long term existence will we be in the position to actively participate in the solution of the problems that exist in the world. We’re in the position of being able to create jobs… If you want to create work, you have to work yourself, not as it was in the past where existing work was distributed. If you remember the main argument for the 35-hour week was that there was a certain amount of work and it would be better if we worked less and distributed the work amongst more people. That has proved quite clearly to be wrong. If you want to create more work you have to work more yourself. And with that we’ve got to create a positive image of the world for people, and I see absolutely no reason why we shouldn’t be positive about the future. We’ve never had it so good, we’ve never had so much money, we’ve never been so healthy, we’ve never lived as long as we do today. We have everything we want and we still go around as if we were in mourning for something.” -Peter Brabeck-Letmathe, CEO, Nestle
“It’s important to note that this is not simply the personal view of some random corporate executive, but rather, that it reflects an institutional reality of corporations: the primary objective of a corporation – above all else – is to maximize short-term profits for shareholders. By definition, then, workers should work more and be paid less, the environment is only a concern so much as corporations have unhindered access to control and exploit the resources of the environment… With this institutional – and ideological – structure (which was legally constructed by the state), concern for the environment, for water, for the world and for humanity can only be promoted if it can be used to advance corporate profits, or if it can be used for public relations purposes. Ultimately, it has to be hypocritical. A corporate executive cannot take an earnest concern in promoting the general welfare of the world, the environment, or humanity, because that it not the institutional function of a corporation, and no CEO that did such would be allowed to remain as CEO. This is why it matters what Peter Brabeck thinks: he represents the type of individual – and the type of thinking – that is a product of and a requirement for running a successful multinational corporation, of the corporate culture itself.” -Andrew Gavin Marshall
“Behold! The convoluted sociopathic logic of the corporation! Only by privatizing all water, setting a ‘market value’ for it and selling it for profit can we “actively participate in the solution of the problems that exist in the world“. Never mind that water has been a universal bounty of the earth given freely for millions of years. Never mind that 1 in 10 people on earth lack access to clean water. Never mind that the active participation in solutions of most corporations is to poison water, and render it undrinkable to create products that are generally toxic to humans and the environment. Never mind that only 2.53 percent of earth’s water is fresh, and some two-thirds of that is locked up in glaciers and permanent snow cover, which are coincidentally being destroyed and melted away, useless; as a result of the global warming and climate change that stems from activities like infinite growth and resource extraction required to maintain a”successful and profitable future” for corporations. And how repugnantly reality detached is the 000.1% thought to believe that “We’ve never had it so good, we’ve never had so much money, we’ve never been so healthy, we’ve never lived as long as we do today. We have everything we want. ” Ask the 80% of the world’s population living on less than 10 dollars a day how healthy, free of wants, long lived, & how good they have it. This man embodies the ethos and worldview of the dominant institution of human civilization on our planet. If this remains so, despite his desire to create a positive image of the world and its future, the times to come will be very bleak indeed. Think Feudalism on steroids and cocaine. Not a good scene. “
By Andrew Gavin Marshall @ Andrew Gavin Marshall:
In the 2005 documentary, We Feed the World, then-CEO of Nestlé, the world’s largest foodstuff corporation, Peter Brabeck-Letmathe, shared some of his own views and ‘wisdom’ about the world and humanity. Brabeck believes that nature is not “good,” that there is nothing to worry about with GMO foods, that profits matter above all else, that people should work more, and that human beings do not have a right to water.
Today, he explained, “people believe that everything that comes from Nature is good,” marking a large change in perception, as previously, “we always learnt that Nature could be pitiless.” Humanity, Brabeck stated, “is now in the position of being able to provide some balance to Nature, but in spite of this we have something approaching a shibboleth that everything that comes from Nature is good.” He then referenced the “organic movement” as an example of this thinking, premising that “organic is best.” But rest assured, he corrected, “organic is not best.” In 15 years of GMO food consumption in the United States, “not one single case of illness has occurred.” In spite of this, he noted, “we’re all so uneasy about it in Europe, that something might happen to us.” This view, according to Brabeck, is “hypocrisy more than anything else.”
Water, Brabeck correctly pointed out, “is of course the most important raw material we have today in the world,” but added: “It’s a question of whether we should privatize the normal water supply for the population. And there are two different opinions on the matter. The one opinion, which I think is extreme, is represented by the NGOs, who bang on about declaring water a public right.” Brabeck elaborated on this “extreme” view: “That means that as a human being you should have a right to water. That’s an extreme solution.” The other view, and thus, the “less extreme” view, he explained, “says that water is a foodstuff like any other, and like any other foodstuff it should have a market value. Personally I believe it’s better to give a foodstuff a value so that we’re all aware that it has its price, and then that one should take specific measures for the part of the population that has no access to this water, and there are many different possibilities there.” The biggest social responsibility of any CEO, Brabeck explained:
is to maintain and ensure the successful and profitable future of his enterprise. For only if we can ensure our continued, long term existence will we be in the position to actively participate in the solution of the problems that exist in the world. We’re in the position of being able to create jobs… If you want to create work, you have to work yourself, not as it was in the past where existing work was distributed. If you remember the main argument for the 35-hour week was that there was a certain amount of work and it would be better if we worked less and distributed the work amongst more people. That has proved quite clearly to be wrong. If you want to create more work you have to work more yourself. And with that we’ve got to create a positive image of the world for people, and I see absolutely no reason why we shouldn’t be positive about the future. We’ve never had it so good, we’ve never had so much money, we’ve never been so healthy, we’ve never lived as long as we do today. We have everything we want and we still go around as if we were in mourning for something.
While watching a promotional video of a Nestlé factory in Japan, Brabeck commented, “You can see how modern these factories are; highly robotized, almost no people.” And of course, for someone claiming to be interested in creating jobs, there appears to be no glaring hypocrisy in praising factories with “almost no people.”
It’s important to note that this is not simply the personal view of some random corporate executive, but rather, that it reflects an institutional reality of corporations: the primary objective of a corporation – above all else – is to maximize short-term profits for shareholders. By definition, then, workers should work more and be paid less, the environment is only a concern so much as corporations have unhindered access to control and exploit the resources of the environment, and ultimately, it’s ‘good’ to replace workers with automation and robotics so that you don’t have to pay fewer or any workers, and thus, maximize profits. With this institutional – and ideological – structure (which was legally constructed by the state), concern for the environment, for water, for the world and for humanity can only be promoted if it can be used to advance corporate profits, or if it can be used for public relations purposes. Ultimately, it has to be hypocritical. A corporate executive cannot take an earnest concern in promoting the general welfare of the world, the environment, or humanity, because that it not the institutional function of a corporation, and no CEO that did such would be allowed to remain as CEO.
This is why it matters what Peter Brabeck thinks: he represents the type of individual – and the type of thinking – that is a product of and a requirement for running a successful multinational corporation, of the corporate culture itself. To the average person viewing his interview, it might come across as some sort of absurd tirade you’d expect from a Nightline interview with some infamous serial killer, if that killer had been put in charge of a multinational corporation:
People have a ‘right’ to water? What an absurd notion! Next thing you’ll say is that child labour is bad, polluting the environment is bad, or that people have some sort of ‘right’ to… life! Imagine the audacity! All that matters is ‘profits,’ and what a wonderful thing it would be to have less people and more profits! Water isn’t a right, it’s only a necessity, so naturally, it makes sense to privatize it so that large multinational corporations like Nestlé can own the world’s water and ensure that only those who can pay can drink. Problem solved!
Sadly, though intentionally satirical, this is the essential view of Brabeck and others like him. And disturbingly, Brabeck’s influence is not confined to the board of Nestlé. Brabeck became the CEO of Nestlé in 1997, a position he served until 2008, at which time he resigned as CEO but remained as chairman of the board of directors of Nestlé. Apart from Nestlé, Brabeck serves as vice chairman of the board of directors of L’Oréal, the world’s largest cosmetics and ‘beauty’ company; vice chairman of the board of Credit Suisse Group, one of the world’s largest banks; and is a member of the board of directors of Exxon Mobil, one of the world’s largest oil and energy conglomerates.
He was also a former board member of one of the world’s largest pharmaceutical conglomerates, Roche. Brabeck also serves as a member of the Foundation Board for the World Economic Forum (WEF), “the guardian of [the WEF’s] mission, values and brand… responsible for inspiring business and public confidence through an exemplary standard of governance.” Brabeck is also a member of the European Round Table of Industrialists (ERT), a group of European corporate CEOs which directly advise and help steer policy for the European Union and its member countries. He has also attended meetings of the Bilderberg group, an annual forum of 130 corporate, banking, media, political and military elites from Western Europe and North America.
Thus, through his multiple board memberships on some of the largest corporations on earth, as well as his leadership and participation in some of the leading international think tanks, forums and business associations, Brabeck has unhindered access to political and other elites around the world. When he speaks, powerful people listen.
Brabeck has become an influential voice on issues of food and water, and not surprisingly so, considering he is chairman of the largest food service corporation on earth. Brabeck’s career goes back to when he was working for Nestlé in Chile in the early 1970s, when the left-leaning democratically-elected president Salvador Allende was “threatening to nationalize milk production, and Nestlé’s Chilean operations along with it.” A 1973 Chilean military coup – with the support of the CIA – put an end to that “threat” by bringing in the military dictatorship of Augusto Pinochet, who murdered thousands of Chileans and established a ‘national security state’, imposing harsh economic measures to promote the interests of elite corporate and financial interests (what later became known as ‘neoliberalism’).
In a 2009 article for Foreign Policy magazine, Brabeck declared: “Water is the new gold, and a few savvy countries and companies are already banking on it.” In a 2010 article for the Guardian, Brabeck wrote that, “[w]hile our collective attention has been focused on depleting supplies of fossil fuels, we have been largely ignoring the simple fact that, unless radical changes are made, we will run out of water first, and soon.” What the world needs, according to Brabeck, is “to set a price that more accurately values our most precious commodity,” and that, [t]he era of water at throwaway prices is coming to an end.” In other words, water should become increasingly expensive, according to Brabeck. Countries, he wrote, should recognize “that not all water use should be regarded as equal.”
In a discussion with the Wall Street Journal in 2011, Brabeck spoke against the use of biofuels – converting food into fuel – and suggested that this was the primary cause of increased food prices (though in reality, food price increases are primarily the result of speculation by major banks like Goldman Sachs and JPMorgan Chase). Brabeck noted the relationship between his business – food – and major geopolitical issues, stating: “What we call today the Arab Spring… really started as a protest against ever-increasing food prices.” One “solution,” he suggested, was to provide a “market” for water as “the best guidance that you can have.” If water was a ‘market’ product, it wouldn’t be wasted on growing food for fuel, but focus on food for consumption – and preferably (in his view), genetically modified foods. After all, he said, “if the market forces are there the investments are going to be made.” Brabeck suggested that the world could “feed nine billion people,” providing them with water and fuel, but only on the condition that “we let the market do its thing.”
Brabeck co-authored a 2011 article for the Wall Street Journal in which he stated that in order to provide “universal access to clean water, there is simply no other choice but to price water at a reasonable rate,” and that roughly 1.8 billion people on earth lack access to clean drinking water “because of poor water management and governance practices, and the lack of political will.” Brabeck’s job then, as chairman of Nestlé, is to help create the “political will” to make water into a modern “market” product.
Now before praising Brabeck for his ‘enlightened’ activism on the issue of water scarcity and providing the world’s poor with access to clean drinking water (which are very real and urgent issues needing attention), Brabeck himself has stressed that his interest in the issue of water has nothing to do with actually addressing these issues in a meaningful way, or for the benefit of the earth and humanity. No, his motivation is much more simple than this.
In a 2010 interview for BigThink, Brabeck noted: “If Nestlé and myself have become very vocal in the area of water, it was not because of any philanthropic idea, it was very simple: by analyzing… what is the single most important factor for the sustainability of Nestlé, water came as [the] number one subject.” This is what led Brabeck and Nestlé into the issue of water “sustainability,” he explained. “I think this is part of a company’s responsibility,” and added: “Now, if I was in a different industry, I would have a different subject, certainly, that I would be focusing on.”
Brabeck was asked if industries should “have a role in finding solutions to environmental issues that affect their business,” to which he replied: “Yes, because it is in the interest of our shareholders… If I want to convince my shareholders that this industry is a long-term sustainable industry, I have to ensure that all aspects that are vital for this company are sustainable… When I see, like in our case, that one of the aspects – which is water, which is needed in order to produce the raw materials for our company – if this is not sustainable, then my enterprise is not sustainable. So therefore I have to do something about it. So shareholder interest and societal interest are common.”
Thus, when Brabeck and Nestlé promote “water sustainability,” what they are really promoting is the sustainability of Nestlé’s access to and control over water resources. How is that best achieved? Well, since Nestlé is a large multinational corporation, the natural solution is to promote ‘market’ control of water, which means privatization and monopolization of the world’s water supply into a few corporate hands.
In a 2011 conversation with the editor of Time Magazine at the Council on Foreign Relations, Brabeck referred to a recent World Economic Forum meeting where the issue of “corporate social responsibility” was the main subject of discussion, when corporate executives “started to talk about [how] we have to give back to society,” Brabeck spoke up and stated: “I don’t feel that we have to give back to society, because we have not been stealing from society.” Brabeck explained to the Council on Foreign Relations that he felt such a concept was the purview of philanthropy, and “this was a problem for the CEO of any public company, because I personally believe that no CEO of a public company should be allowed to make philanthropy… I think anybody who does philanthropy should do it with his own money and not the money of the shareholders.” Engaging in corporate social responsibility, Brabeck explained, “was an additional cost.”
At the 2008 World Economic Forum, a consortium of corporations and international organizations formed the 2030 Water Resources Group, chaired by Peter Brabeck. It was established in order to “shape the agenda” for the discussion of water resources, and to create “new models for collaboration” between public and private enterprises. The governing council of the 2030 WRG is chaired by Brabeck and includes the executive vice president and CEO of the International Finance Corporation (IFC), the investment arm of the World Bank, the administrator of the United Nations Development Programme (UNDP), the chief business officer and managing director of the World Economic Forum, the president of the African Development Bank, the chairman and CEO of The Coca-Cola Company, the president of the Asian Development Bank, the director-general of the World Wildlife Fund (WWF), the president of the Inter-American Development Bank, and the chairman and CEO of PepsiCo, among others.
At the World Water Forum in 2012 – an event largely attended by the global proponents of water privatization, Nestlé among their most enthusiastic supporters – Brabeck suggested that the 2030 Water Resources Group represents a “global public-private initiative” which could help in “providing tools and information on best practice” as well as “guidance and new policy ideas on water resource scarcity.”
Brabeck and Nestlé had been in talks with the Canadian provincial government of Alberta in planning for a potential “water exchange,” to – in the words of Maclean’s magazine – “turn water into money.” In 2012, the University of Alberta bestowed an honorary degree upon Peter Brabeck “for his work as a responsible steward for water around the world.” Protests were organized at the university to oppose the ‘honor,’ with a representative from the public interest group, the Council of Canadians, noting: “I’m afraid that the university is positioning themselves on the side of the commodifiers, the people who want to say that water is not a human right that everyone has the right to, but is just a product that can be bought and sold.” A professor at the university stated: “I’m ashamed at this point, about what the university is doing and I’m also very concerned about the way the president of the university has been demonizing people who oppose this.” As another U of A professor stated: “What Nestlé does is take what clean water there is in which poor people are relying on, bottle it and then sell it to wealthier people at an exorbitant profit.”
The Global Water Privatization Agenda
Water privatization is an extremely vicious operation, where the quality of – and access to – water resources diminishes or even vanishes, while the costs explode. When it comes to the privatization of water, there is no such thing as “competition” in how the word is generally interpreted: there are only a handful of global corporations that undertake massive water privatizations. The two most prominent are the French-based Suez Environment and Veolia Environment, but also include Thames Water, Nestlé, PepsiCo and Coca-Cola, among others. For a world in which food has already been turned into a “market commodity” and has been “financialized,” leading to massive food price increases, hunger riots, and immense profits for a few corporations and banks, the prospect of water privatization is even more disturbing.
The agenda of water privatization is organized at the international level, largely promoted through the World Water Forum and the World Water Council. The World Water Council (WWC) was established in 1996 as a French-based non-profit organization with over 400 members from intergovernmental organizations, government agencies, corporations, corporate-dominated NGOs and environmental organizations, water companies, international organizations and academic institutions.
Every three years, the WWC hosts a World Water Forum, the first of which took place in 1997, and the 6th conference in 2012 was attended by thousands of participants from countries and institutions all over the world get together to decide the future of water, and of course, promote the privatization of this essential resource to human life. The 6th World Water Forum, hosted in Marseilles, France, was primarily sponsored by the French government and the World Water Council, but included a number of other contributors, including: the African Development Bank, African Union Commission, Arab Water Council, Asian Development Bank, the Council of Europe, the European Commission, the European Investment Bank, the European Parliament, the European Water Association, the Food and Agricultural Organization, the Global Environment Facility, Inter-American Development Bank, Nature Conservancy, Organisation for Economic Co-operation and Development (OECD), Organization of American States (OAS), Oxfam, the World Bank, the World Business Council for Sustainable Development, the World Health Organization, the World Wildlife Fund; and a number of corporate sponsors, including: RioTinto Alcan, EDF, Suez Environment, Veolia, and HSBC. Clearly, they have human and environmental interests at heart.
The World Bank is a major promoter of water privatization, as much of its aid to ‘developing’ countries was earmarked for water privatization schemes which inevitably benefit major corporations, in co-operation with the International Monetary Fund (IMF), and the U.S. Treasury. One of the first major water privatization schemed funded by the World Bank was in Argentina, for which the Bank “advised” the government of Argentina in 1991 on the bidding and contracting of the water concession, setting a model for what would be promoted around the world. The World Bank’s investment arm, the International Finance Corporation (IFC), loaned roughly $1 billion to the Argentine government for three water and sewage projects in the country, and even bought a 5% stake in the concession, thus becoming a part owner. When the concession for Buenos Aires was opened up, the French sent representatives from Veolia and Suez, which formed the consortium Aguas Argentinas, and of course, the costs for water services went up. Between 1993, when the contract with the French companies was signed, and 1997, the Aguas Argentinas consortium gained more influence with Argentine President Carlos Menem and his Economy Minister Domingo Cavallo, who would hold meetings with the president of Suez as well as the President of France, Jacques Chirac. By 2002, the water rates (cost of water) in Buenos Aires had increased by 177% since the beginning of the concession.
In the 1990s, the amount of World Bank water privatization projects increased ten-fold, with 31% of World Bank water supply and sanitation projects between 1990 and 2001 including conditions of private-sector involvement, despite the fact that the projects consistently failed in terms of providing cheaper and better water to larger areas. But of course, they were highly profitable for large corporations, so naturally, they continued to be promoted and supported (and subsidized).
One of the most notable examples of water privatization schemes was in Bolivia, the poorest country in South America. In 1998, an IMF loan to Bolivia demanded conditions of “structural reform,” the selling off of “all remaining public enterprises,” including water. In 1999, the World Bank told the Bolivian government to end its subsidies for water services, and that same year, the government leased the Cochabamba Water System to a consortium of multinational corporations, Aguas del Tunari, which included the American corporation Bechtel. After granting the consortium a 40-year lease, the government passed a law which would make residents pay the full cost of water services. In January of 2000, protests in Cochabamba shut down the city for four days, striking and establishing roadblocks, mobilizing against the water price increases which doubled or tripled their water bills. Protests continued in February, met with riot police and tear gas, injuring 175 people.
By April, the protests began to spread to other Bolivian cities and rural communities, and during a “state of siege” (essentially martial law) declared by Bolivian president Hugo Banzer, a 17-year old boy, Victor Hugo Daza, was shot and killed by a Bolivian Army captain, who was trained as the U.S. military academy, the School of the Americas. As riot police continued to meet protesters with tear gas and live ammunition, more people were killed, and dozens more injured. On April 10, the government conceded to the people, ending the contract with the corporate consortium and granting the people to control their water system through a grassroots coalition led by the protest organizers.
Two days later, World Bank President James Wolfensohn stated that the people of Bolivia should pay for their water services. On August 6, 2001, the president of Bolivia resigned, and the Vice President Jorge Quiroga, a former IBM executive, was sworn in as the new president to serve the remainder of the term until August of 2002. Meanwhile, the water consortium, deeply offended at the prospect of people taking control of their own resources, attempted to take legal action against the government of Bolivia for violating the contract. Bechtel was seeking $25 million in compensation for its “losses,” while recording a yearly profit of $14 billion, whereas the national budget of Bolivia was a mere $2.7 billion. The situation ultimately led to a type of social revolution which brought to power the first indigenous Bolivian leader in the country’s history, Evo Morales.
This, of course, has not stopped the World Bank and IMF – and the imperial governments which finance them – from promoting water privatization around the world for the exclusive benefit of a handful of multinational corporations. The World Bank promotes water privatization across Africa in order to “ease the continent’s water crisis,” by making water more expensive and less accessible.
As the communications director of the World Bank in 2003, Paul Mitchell, explained, “Water is crucial to life – we have to get water to poor people,” adding: “There are a lot of myths about privatization.” I would agree. Though the myth that it ‘works’ is what I would propose, but Mitchell instead suggested that, “[p]rivate sector participation is simply to manage the asset to make it function for the people in the country.” Except that it doesn’t. But don’t worry, decreasing water standards, dismantling water distribution, and rapidly increasing the costs of water to the poorest regions on earth is good, according to Mitchell and the World Bank. He told the BBC that what the World Bank is most interested in is the “best way to get water to poor people.” Perhaps he misspoke and meant to say, “the best way to take water from poor people,” because that’s what actually happens.
In 2003, the World Bank funded a water privatization scheme in the country of Tanzania, supported by the British government, and granting the concession to a consortium called City Water, owned by the British company Biwater, which worked with a German engineering firm, Gauff, to provide water to the city of Dar es Salaam and the surrounding region. It was one of the most ambitious water privatization schemes in Africa, with $140 million in World Bank funding, and, wrote John Vidal in the Guardian, it “was intended to be a model for how the world’s poorest communities could be lifted out of poverty.”
The agreement included conditions for the consortium to install new pipelines for water distribution. The British government’s Department for International Development gave a 440,000-pound contract to the British neoliberal think tank, Adam Smith International, “to do public-relations work for the project.” Tanzania’s best-known gospel singer was hired to perform a pop song about the benefits of privatization, mentioning electricity, telephones, the ports, railways, and of course, water. Both the IMF and World Bank made the water scheme a condition for “aid” they gave to the country. Less than one year into the ten-year contract, the private consortium, City Water, stopped paying its monthly fee for leasing the government’s pipes and infrastructure provided by the public water company, Dawasa, while simultaneously insisting that its own fees be raised. An unpublished World Bank report even noted: “The primary assumption on the part of almost all involved, particularly on the donor side, was that it would be very hard, if not impossible, for the private operator [City Water] to perform worse than Dawasa. But that is what happened.” The World Bank as a whole, however, endorsed the program as “highly satisfactory,” and rightly so, because it was doing what it was intended to do: provide profits for private corporations at the expense of poor people.
By 2005, the company had not built any new pipes, it had not spent the meager investments it promised, and the water quality declined. As British government “aid” money was poured into privatization propaganda, a video was produced which included the phrase: “Our old industries are dry like crops and privatization brings the rain.” Actually, privatization attaches a price-tag to rain. Thus, in 2005, the government of Tanzania ended the contract with City Water, and arrested the three company executives, deporting them back to Britain. As is typical, the British company, Biwater, then began to file a lawsuit against the Tanzanian government for breach of contract, wanting to collect $20-25 million. A press release from Biwater at the time wrote: “We have been left with no choice… If a signal goes out that governments are free to expropriate foreign investments with impunity,” investors would flee, and this would, of course, “deal a massive blow to the development goals of Tanzania and other countries in Africa.”
The sixth World Water Forum in Marseilles in 2012 brought together some 19,000 participants, where the French Development Minister Henri de Raincourt proposed a “global water and environment management scheme,” adding: “The French government is not alone in its conviction that a global environment agency is needed more than ever.” A parallel conference was held – the Alternative World Water Forum – which featured critics of water privatization. Gustave Massiah, a representative of the anti-globalization group Attac, stated, “Should a global water fund be in control, giving concessions to multinational companies, then that’s not a solution for us. On the contrary, that would only add to the problems of the current system.”
Another member of Attac, Jacques Cambon, used to be the head of SAFEGE’s Africa branch, a subsidiary of the water conglomerate Suez. Cambon was critical of the idea of a global water fund, warning against centralization, and further explained that the World Bank “has almost always financed large-scale projects that were not in tune with local conditions.” Maria Theresa Lauron, a Philippine activist, shared the story of water privatization in the Philippines, saying, “Since 1997, prices went up by 450 to 800 percent… At the same time, the water quality has gone down. Many people get ill because of bad water; a year ago some 600 people died as a result of bacteria in the water because the private company didn’t do proper water checks.” But then, why would the company do such a thing? It’s not like it’s particularly profitable to be concerned with human welfare.
In Europe, the European Commission had been pushing water privatization as a condition for development funds between 2002 and 2010, specifically in several central and eastern European countries which were dependent upon EU grants. Since the European debt crisis, the European Commission had made water privatization a condition for Greece, Portugal, and Italy. Greece is privatizing its water companies, Portugal is being pressured to sell its national water company, Aguas do Portugal, and in Italy, the European Central Bank (ECB) and the Commission were pushing water privatization, even though a national referendum in July of 2011 saw the people of Italy reject such a scheme by 95%.
In this context, among the global institutions and corporations of power and influence, it is perhaps less surprising to imagine the chairman of Nestlé suggesting that human beings having a “right” to water is rather “extreme.” And for a very simple reason: that’s not profitable for Nestlé, even though it might be good for humanity and the earth. It’s about priorities, and in our world, priorities are set by multinational corporations, banks, and global oligarchs. As Nestlé would have us think, corporate and social interests are not opposed, as corporations – through their ‘enlightened’ self-interest and profit-seeking motives – will almost accidentally make the world a better place. Now, while neoliberal orthodoxy functions on the basis of people simply accepting this premise without investigation (like any religious belief), perhaps it would be worth looking at Nestlé as an example for corporate benefaction for the world and humanity.
Nestlé’s Corporate Social Responsibility: Making the World Safe for Nestlé… and Incidentally Destroying the World
As a major multinational corporation, Nestlé has a proven track record of exploiting labour, destroying the environment, engaging in human rights violations, but of course – and most importantly – it makes big profits. In 2012, Nestlé was taking in major profits from ‘emerging markets’ in Asia, Africa, and Latin America. However, some emerging market profits began to slow down in 2013. This was partly the result of a horsemeat scandal which required companies like Nestlé to intensify the screening of their food products.
Less than a year prior, Nestlé was complaining that “over-regulation” of the food industry was “undermining individual responsibility,” which is another way of saying that responsibility for products and their safety should be passed from the producer to the consumer. In other words, if you’re stupid enough to buy Nestlé products, it’s your fault if you get diabetes or eat horsemeat, and therefore, it’s your responsibility, not the responsibility of Nestlé. Fair enough! We’re stupid enough to accept corporations ruling over us, therefore, what right do we have to complain about all the horrendous crimes and destruction they cause? A cynic could perhaps argue such a point.
One of Nestlé’s most famous PR problems was that of marketing artificial baby milk, which sprung to headlines in the 1970s following the publication of “The Baby Killer,” accusing the company of getting Third World mothers hooked on formula. As research was proving that breastfeeding was healthier, Nestlé marketed its baby formula as a way for women to ‘Westernize’ and join the modern world, handing out pamphlets and promotional samples, with companies hiring “sales girls in nurses’ uniforms (sometimes qualified, sometimes not)” in order to drop by homes and sell formula. Women tried to save money on the formula by diluting it, often times with contaminated water. As the London-based organization War on Want noted: “The results can be seen in the clinics and hospitals, the slums and graveyards of the Third World… Children whose bodies have wasted away until all that is left is a big head on top of the shriveled body of an old man.” An official with the United States Agency for International Development (USAID) blamed baby formula for “a million infant deaths every year through malnutrition and diarrheal diseases.”
Mike Muller, the author of “The Baby Killer” back in 1974, wrote an article for the Guardian in 2013 in which he mentioned that he gave Peter Brabeck a “present” at the World Economic Forum, a signed copy of the report. The report had sparked a global boycott of Nestlé and the company responded with lawsuits.
Nestlé has also been implicated for its support of palm-oil plantations, which have led to increased deforestation and the destruction of orangutan habitats in Indonesia. A Greenpeace publication noted that, “at least 1500 orangutans died in 2006 as a result of deliberate attacks by plantation workers and loss of habitat due to the expansion of oil palm plantations.” A social media campaign was launched against Nestlé for its role in supporting palm oil plantations, deforestation, and the destruction of orangutan habitats and lives. The campaign pressured Nestlé to decrease its “deforestation footprint.”
As Nestlé has been expanding its presence in Africa, it has also aroused more controversy in its operations on the continent. Nestlé purchases one-tenth of the world’s cocoa, most of which comes from the Ivory Coast, where the company has been implicated in the use of child labour. In 2001, U.S. legislation required companies to engage in “self-regulation” which called for “slave free” labeling on all cocoa products. This “self regulation,” however, “failed to deliver” – imagine that! – as one study carried out by Tulane University with funding from the U.S. government revealed that roughly 2 million children were working on cocoa-related activities in both Ghana and the Ivory Coast. Even an internal audit carried out by the company found that Nestlé was guilty of “numerous” violations of child labour laws. Nestlé’s head of operations stated, “The use of child labor in our cocoa supply goes against everything we stand for.” So naturally, they will continue to use child labour.
Peter Brabeck stated that it’s “nearly impossible” to end the practice, and he compared the practice to that of farming in Switzerland: “You go to Switzerland… still today, in the month of September, schools have one week holiday so students can help in the wine harvesting… In those developing countries, this also happens,” he told the Council on Foreign Relations. While acknowledging that this “is basically child labor and slave labor in some African markets,” it is “a challenge which is not very easy to tackle,” noting that there is “a very fine edge” of what is acceptable regarding “child labor in [the] agricultural environment.” He added: “It’s almost natural.” Thus, Brabeck explained, “you have to look at it differently,” and that it was not the job of Nestlé to tell parents that their children can’t work on cocoa plantations/farms, “which is ridiculous,” he suggested: “But what we are saying is we will help you that your child has access for schooling.” So clearly there is no problem with using child slavery, just so long as the children get some schooling… presumably, in their ‘off-hours’ from slavery. Problem solved!
While Brabeck and Nestlé have made a big issue of water scarcity, which again, is an incredibly important issue, their solutions revolve around “pricing” water at a market value, and thus encouraging privatization. Indeed, a global water grab has been a defining feature of the past several years (coupled with a great global land grab), in which investors, countries, banks and corporations have been buying up vast tracts of land (primarily in sub-Saharan Africa) for virtually nothing, pushing off the populations which live off the land, taking all the resources, water, and clearing the land of towns and villages, to convert them into industrial agricultural plantations to develop food and other crops for export, while domestic populations are pushed deeper into poverty, hunger, and are deprived of access to water. Peter Brabeck has referred to the land grabs as really being about water: “For with the land comes the right to withdraw the water linked to it, in most countries essentially a freebie that increasingly could be seen as the most valuable part of the deal.” This, noted Brabeck, is “the great water grab.”
And of course, Nestlé would know something about water grabs, as it has become very good at implementing them. In past years, the company has been increasingly buying land where it is taking the fresh water resources, bottling them in plastic bottles and selling them to the public at exorbitant prices. In 2008, as Nestlé was planning to build a bottling water plant in McCloud, California, the Attorney General opposed the plan, noting: “It takes massive quantities of oil to produce plastic water bottles and to ship them in diesel trucks across the United States… Nestlé will face swift legal challenge if it does not fully evaluate the environmental impact of diverting millions of gallons of spring water from the McCloud River into billions of plastic water bottles.” Nestlé already operated roughly 50 springs across the country, and was acquiring more, such as a plan to draw roughly 65 million gallons of water from a spring in Colorado, despite fierce opposition to the deal.
Years of opposition to the plans of Nestlé in McCloud finally resulted in the company giving up on its efforts there. However, the company quickly moved on to finding new locations to take water and make a profit while destroying the environment (just an added bonus, of course). The corporation controls one-third of the U.S. market in bottled water, selling it as 70 different brand names, including Perrier, Arrowhead, Deer Park and Poland Spring. The two other large bottled water companies are Coca-Cola and PepsiCo, though Nestlé had earned a reputation “in targeting rural communities for spring water, a move that has earned it fierce opposition across the U.S. from towns worried about losing their precious water resources.” And water grabs by Nestlé as well as opposition continue to engulf towns and states and cities across the country, with one more recent case in Oregon.
Nestlé has aroused controversy for its relations with labour, exploiting farmers, pollution, and human rights violations, among many other things. Nestlé has been implicated in the kidnapping and murder of a union activist and employee of the company’s subsidiary in Colombia, with a judge demanding the prosecutor to “investigate leading managers of Nestle-Cicolac to clarify their likely involvement and/or planning of the murder of union leader Luciano Enrique Romero Molina.” In 2012, a Colombian trade union and a human rights group filed charges against Nestlé for negligence over the murder of their former employee Romero.
More recently, Nestlé has been found liable over spying on NGOs, with the company hiring a private security company to infiltrate an anti-globalization group, and while a judge ordered the company to pay compensation, a Nestlé spokesperson stated that, “incitement to infiltration is against Nestlé’s corporate business principles.” Just like child slavery, presumably. But not to worry, the spokesman said, “we will take appropriate action.”
Peter Brabeck, who it should be noted, also sits on the boards of Exxon, L’Oréal, and the banking giant Credit Suisse, warned in 2009 that the global economic crisis would be “very deep” and that, “this crisis will go on for a long period.” On top of that, the food crisis would be “getting worse” over time, hitting poor people the hardest. However, propping up the financial sector through massive bailouts was, in his view, “absolutely essential.” But not to worry, as banks are bailed out by governments, who hand the bill to the population, which pays for the crisis through reduced standards of living and exploitation (which we call “austerity” and “structural reform” measures), Nestlé has been able to adapt to a new market of impoverished people, selling cheaper products to more people who now have less money. And better yet, it’s been making massive profits. And remember, according to Brabeck, isn’t that all that really matters?
This is the world according to corporations. Unfortunately, while it creates enormous wealth, it is also leading to the inevitable extinction of our species, and possibly all life on earth. But that’s not a concern of corporations, so it doesn’t concern those who run corporations, who make the important decisions, and pressure and purchase our politicians.
I wonder… what would the world be like if people were able to make decisions?
There’s only one way to know.
Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, with a focus on studying the ideas, institutions, and individuals of power and resistance across a wide spectrum of social, political, economic, and historical spheres. He has been published in AlterNet, CounterPunch, Occupy.com, Truth-Out, RoarMag, and a number of other alternative media groups, and regularly does radio, Internet, and television interviews with both alternative and mainstream news outlets. He is Project Manager of The People’s Book Project, Research Director of Occupy.com’s Global Power Project, and has a weekly podcast show with BoilingFrogsPost.