EXECUTIVE SUMMARY
The purpose of this report has been to document and discuss:

1. How privatisation has been promoted by international financial institutions and other donors as a strategy for financing water services.
2. Effects on the poor of different kinds of privatisation of water services in developing countries.
3. Policy recommendations for the provision of water to the poor.

The report reviews how the World Bank and other international institutions and donors have promoted privatisation during the last two decades through privatisation conditionalities and a focus on the private sector as the solution to financing needs in the water and sanitation sector. The World Bank says it acknowledges the difficulties with privatisation, but remains wedded to its belief in the underlying rationale of private participation and continues to find new ways to encourage private investment.

Case studies from Africa, Latin America and Asia, show that privatisation involving  multinationals often leads to higher prices for the poor, disconnections and in some cases cancellation of contracts, leaving water infrastructure in a worse state than before. The reality on the ground contradicts the continued enthusiasm of international institutions and donors for privatisation as a solution to global water needs. Alternative forms of water management and provision, for example, local cooperatives and small-scale communitycontrolled initiatives, provide examples of different, more viable solutions.

Our conclusions are:

• Water privatisation has failed to deliver to the poor
• Water privatisation has undermined the human right to water
• Water privatisation has taken place at the expense of democratic principles and with minimal accountability to local citizens
• Privatisation leads to foreign control and monopoly
• Developing countries have not proven profitable for multinational companies
• With strong and competent public authorities, private actors may have a role

Our recommendations to the Norwegian government are:

Regarding the international financial institutions (World Bank, IMF, etc.):

• ensure that water privatisation is not included as a condition for financial support from the World Bank or any of the IFIs;
• reduce support to institutions, funds and partnerships that, without exception, support private sector development in the water sector;
• ensure that governments have the right to subsidise water to secure adequate access for all;
• advocate the World Bank’s abandonment of their push for privatisation in all activities and on all levels;
• cancel the debt of developing countries in order to free public funds for expanding the access to water;
• advocate a World Bank strategy aimed at improved public and community-controlled water delivery.

Regarding Norwegian bilateral aid:

• ensure that recipient countries are not forced into privatisation;
• ensure that water privatisation is not made a condition of Norwegian multilateral and bilateral aid, loans or debt forgiveness;
• ensure that water supply is affordable for the poor;
• gain and demonstrate the consent of civil society before policies of water privatisation are promoted, and involve them in questions of regulation and decision-making;
• strengthen transparency, governance and user participation in the water sector, and be open-minded to private ownership or operations on the community level if the public service does not work;
• pay more attention to questions of locallevel power and politics as well as locallevel understandings of water and sanitation issues.

Regarding WTO and GATS negotiations:

• take the position that all countries should withdraw their requests to developing countries about privatisation of services in the water sector through the GATS agreement;
• renegotiate bilateral and regional trade and investment agreements which enable private water corporations to claim undue “compensation” from public authorities via arbitration cases;
• ensure that governments have the right to subsidise water to secure adequate access for everyone.