Leading global scholars at CUHK examine how legal structures, including IP rights, and the private sector can be a boon or bane to the provision of water.
(Photo Credits: CUHK)
One does not have to be a pessimist to see that the glass of water is half empty: while the world population tripled in the last century, the use of water increased six fold. Only two percent of all water is fit for human consumption (including agricultural or industrial use). The rest of the water is too salty or frozen.
Fresh water, once considered a free public good and a relatively uncomplicated topic for regulators, has turned into an economic good mired in human rights, geopolitical threats and many legal issues. Access to safe, fresh water can no longer be taken for granted. How water is used in a country can have dire consequences for the access of water to consumers. A bleak point in case is Kenya where they produce and export roses, depleting local lakes, and importing water that is more expensive than soft drinks.
Blue gold
Dr Julien Chaisse, Associate Professor at Chinese University of Hong Kong (CUHK) explains the significance of water services for Hong Kong.
“This Special Administrative Region largely relies on water imported from the Mainland,” he says, “Shenzhen City water is supplied by the French water service company Veolia in the context of a concession contract that runs until 2043. For China, at least 40 other major cities have agreed on the same type of contract which involves massive foreign investment.”
Chaisse observes a privatization of water services, “It is not bad in itself but it raises a number of economic and legal issues. It is a rather new development that water has come to be controlled by significant private interests.”
He explains that the inability of public authorities to provide coverage to their citizens prompted a rise in water-services privatization contracts between foreign investors and states, such that 10 percent of global consumers now receive their water from private companies.
Today, a growing number of businesses are engaging with the water services industry. It is estimated that by 2025, annual spending on water infrastructure in OECD countries will exceed $1 trillion,” he says, “Such economic promise and opportunity largely explains why water has earned the moniker of earth’s ‘blue gold’. Blue gold is a huge economic business which must be regulated at the global level.”
Bottom-up
From depletion and pollution of water sources to expected floods due to global warming, international water related challenges are legion. Some believe that there should be one organization that coordinates and deals with these problems in order to avoid fragmentation of policy.
Dr Laurence Boisson de Chazournes, law professor at University of Geneva and WTO panellist, is not amenable to the creation of an ‘omnipotent’ organization. “I do think there is a need to strengthen relations between existing organisations, as well as to give visibility to this consortium of institutions,” she says.
Professor Bryan Druzin, law professor at Chinese University Hong Kong (CUHK), has a different take on international governance of water: it should arise from the bottom-up. “Participants themselves create the regulatory framework within which their behaviour is then constrained,” he says, “This quality is important because the lack of a centralised coercive authority necessitates a different set of administrative tools to establish sustainable cooperation than on the domestic level.”
Is there a place for liberalisation of the water ‘market’ and commodification for fresh water in case governments are not capable of guaranteeing access to water for their populations? Or should access to water exclusively be a public affair? Boisson de Chazournes suggests that a public-private hybrid might be preferable.
“Because of the uniqueness of water, public interest should be guaranteed,” she explains, “This does not prevent the involvement of the private sector under conditions guaranteeing access to water and public interest.”
Innovation
Intellectual property rights could play a role to drive innovation to improve access to fresh water. Professor Bryan Mercurio, and Outstanding Fellow of the Faculty of Law CUHK, emphasises the importance of patents for water technology.
“Patents are instrumental in promoting access to clean water. At present, water technology is expensive and still a work-in-progress. […] Patents are the key to promoting research and development in this promising technology,” he explains, “Desalination, for instance, has the potential to resolve water issues for many living in parched lands. But it is expensive, inefficient and has many negative externalities. In order to become widely used, it will have to become cheaper and greener through innovation. ”
Mercurio notes that patents add to the cost of the final product and could possibly reduce access to the technology for a set time period through the monopoly rights it grants.
“But this is a small price to pay for the technological advances needed in order to increase efficiencies and reduce costs and negative externalities,” he says. “Compulsory licensing of green water technologies is not the answer. Water technologies are not like pharmaceuticals, they are not the finished product and they are not easy and cheap to replicate.”
Comments here are taken from CUHK’s conference “Managing the Globalization of Sanitation and Water Services: ‘Blue Gold’ Regulatory and Economic Challenges” held on 23-24 March 2015. The United Nations Climate Change Conference (COP21) will be held in Paris December 25 2015.
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Dr. Danny Friedmann
Dr. Danny Friedmann (龍知權) is a Research Associate at Center for Rights and Justice, Lecturer at Faculty of Law, Chinese University Hong Kong. He is an intellectual property rights expert and maintains the IP law blog IP Dragon (http://www.ipdragon.org/).”]
