By John Scanlon, Head, Environmental Law Programme, IUCN, and Sebastian Winkler, Senior Policy Officer, IUCN *

Over the past few years States have adopted ambitious, yet necessary, targets for improving access to safe drinking water and basic sanitation, both through the UN Millennium Declaration and the World Summit on Sustainable Development (WSSD) Johannesburg Plan of Implementation. Extraordinary efforts will be required if these targets are to be met, and the best way to meet them was explored at the 12th Session of the Commission on Sustainable Development (CSD-12), as well as at the 3rd World Water Forum in Kyoto last year. Issues explored included the role that privatisation, liberalised trade and investment -- and the use of market instruments more generally -- can play in achieving these targets.

The CSD-12 focus on water and sanitation needs to be looked at in the context of broader WSSD commitments, such as those to develop integrated water resource management and water efficiency plans by 2005, to significantly reduce the rate of biodiversity loss by 2010, and, in the widest sense, to manage our natural wealth sustainably. The challenge is to keep our eye on the immediate needs of the billions of people without access to safe drinking water and basic sanitation, while ensuring the provision of clean water in the longer term. The latter will not be achieved without taking a holistic approach to water resources management, or without conserving our natural ecosystems as an integral part of the infrastructure needed to deliver water to our homes. The international community's response has often been too narrowly confined to debates about distribution of water between competing sectors and needs, and has largely failed to address water within an ecosystem context from source to sea.

How is all of this relevant to the multilateral trade debates and in particular the General Agreement on Trade in Services (GATS)? International rules developed under the GATS could impact domestic water policy and legislative options. Whether it does depends upon the outcome of current negotiations and the commitments made by individual States. WTO Members would need to tailor their GATS commitments carefully with the relevant exemptions and exceptions in place in order to safeguard 'policy space' for the use of public policy instruments designed to ensure equitable access to water and sanitation. Alternatively, Members may wish not to liberalise supply of drinking water at all, depending on domestic needs and priorities. However, negotiating pressures for concessions perhaps as part of a larger package of 'trade-offs' in WTO and regional negotiations may arise. In that case, Members may be faced with multilateral rules and disciplines -- the implications of which might not be clear.

Thus, there are some key questions that must be explored such as: how compatible are emerging international trade and investment rules with the ability of countries to adopt strong domestic laws and policies for resource management, environmental protection and equitable access to water and sanitation services? Can one liberalise trade in services while adequately addressing environmental and equity issues, and if so how is this done? The need for water resources management to be able to adapt to changing conditions also remains a challenge. How the need for certainty in trade and investment rules should be reconciled with the need for flexibility in resource management -- for example in relation to water allocation, pollution control licences, licence fees and the recognition of customary rights -- is often not yet addressed in legislation.

While the role of privatisation and the use of market instruments more generally generated much discussion -- counter-balanced by discussions of human rights, equity, the legitimate role of government and environmental considerations -- the issue of trade in services did not feature prominently at CSD-12. Issues of trade liberalisation and agricultural subsidies were indeed raised by the G77/China and by Australia, but were not debated. The lack of discussion of trade-related issues represents a lack of awareness of their relevance to the water and sanitation debate. However, the level of interest is expected to increase, as the possible implications of the GATS on the provision of water become better known.

* The views expressed in this commentary are those of the authors and do not necessarily reflect the views of any organisation.