Fri, November 01 2013 18:25
Jakarta Water Privatisation
Groups demand delay on Palyja buyout

The Coalition of Jakarta Residents Opposing Water Privatization (KMMSAJ)is advising Governor Joko ÂJokowi Widodo to delay his plan to buy theshares of private water operator PT PAM Lyonnaise Jaya (Palyja).

KMMSAJ lawyer Arif Maulana said on Tuesday that his team, who was nowfiling a lawsuit to annul the work contracts between city water operatorPT PAM Jaya and its foreign partners Palyja and PT Aetra Air Jakarta(Aetra), had sent a subpoena to the Governor regarding the latterÂs planfor French company Suez Environnment to acquire a 51 percent stake.

ÂThe subpoena is advice for the governor not to make a move in regard tothe water privatization issue pending a court decision, he said, addingthat the letter was sent on Oct. 3.

Jokowi, however, insisted to continue with the acquisition plan.

The negotiation is ongoing and we will continue with the acquisition planas we have allocated the budget this year, Jokowi said at City Hall onTuesday, arguing that it would take longer to re-insert the plan into theannual budget.

Jokowi pointed out that it would be easier to just retract the lawsuitshould the cityÂs acquisition plan be completed. Â[The coalition] was the one who encouraged the city administration totake over the water firm. DonÂt just easily change things, he said.

Arif said the coalition had asked the court to order all parties,including the city administration, not to take any legal measure, such astrading stocks or assets, with both private firms before the court made adecision estimated early next year.

City-owned developer PT Jakarta Propertindo recently received a capitalinvestment of Rp 600 billion (US$54 million), which will be used tocomplete the acquisition. Meanwhile, KKMSAJ estimated that it cost aroundRp 9 trillion to buy the shares of two companies.

Arif further said the acquiring of the share could also be perceived as aform of violation to the residents rights as it had yet to involve thepublic in making the decision.

ÂBuying the stocks will not solve the problem as the public cannot ask forresponsibility from both private companies, he said.

According to the coalition, the partnership with both Palyja and Aetra hashindered public access to affordable clean water. In its 16th year ofoperation, both Palyja, which manages the west side of the city and Aetra,which manages the east side, only fulfilled the needs of 34.8 percent ofJakartans.

The contracts have also kept the city deep in debt with dual financingthat differentiates between the price PAM Jaya pays operators to supplywater to households and prices charged to customers, allowing the firms tobook huge profit by overcharging customers.

Corry Elyda and Sita W. Dewi, The Jakarta Post, Jakarta | Jakarta | Wed, October 30 2013, 8:36 AM

Thu, October 24 2013 12:22
corporate influence within the global water policy
Observations from the Budapest water summit

Prepared by:

Muhammad Reza and Sigit Budiono, KRuHA
Meera Karunanananthan, Blue Planet Project
Satoko Kishimoto, Transnational Institute
orgen Magdahl, FIVAS
Gabriella Zanzanaini, Food & Water Europe
David Boys, Public Services International

From October 7-11, we attended the Budapest Water Summit as a fact-finding initiative to further our understanding about corporate influence within the global water policy agenda. The Budapest Water Summit was organized by the Hungarian government and the United Nations in partnership with the World Water Council (WWC), the corporate-led multi-stakeholder forum and private think-thank involved in organizing the controversial World Water Forum.

The Summit is aimed at feeding into the post 2015 Sustainable Development Goals (SDG) agenda of which Hungary plays a key role as co-chair of the Open Working Group at the United Nations. We are highly concerned about the role the World Water Council plays at such events as a partner to the United Nations despite not having a democratic mandate. This is a continuation of the WWC’s lobbying of the UN to advance corporate interests.

While there appeared to be consensus from various sectors gathered at the Summit that there should be a dedicated goal on water, we fear that the SDG process lacks meaningful public engagement.

We are particularly concerned about the tremendous corporate engagement through multi-stakeholder processes, which have crowded out public participation. The SDG process does not replace concrete obligations of states to implement the human right to water.

We call for concrete action from governments on implementation of the human right to water starting with domestic policy and national action plans focusing on sufficient funding and resources for responsibilities pertaining to the human right to water and greater involvement of communities and local governments.
The human right to water requires sustainable public financing for public services through global tax fairness and cross-subsidization. We reject the full cost-recovery and private public partnership strategies that have been forced onto public operators who have been denied access to sustainable public funding.
We are concerned to see the extent to which international financial institutions have emphasized private sector solutions and forced public utilities to run along business lines, downplaying social and environmental impacts of privatization and corporatization taking strong public solutions off the table in discussions about access to water and sanitation services.

We are concerned about tensions between the WASH framework - which focuses specifically on universal access to water and therefore cannot ignore social justice needs - and more nebulous ‘nexus’ and ‘green economy’ frameworks which appear to grant industries greater access to water resources. It is not acceptable for the international community to withdraw its support for achieving universal access to water and sanitation.
This remains a great challenge and intentional efforts should be strengthened. We need a human rights framework that prioritizes frontline communities who pay higher prices and suffer most the effects of water pollution. Such a framework would block market-based pricing schemes or water allocation schemes, which deny marginalized communities access to water and sanitation services and water for livelihoods and subsistence economies. This rights-based approach was sorely lacking at the Budapest Water Summit.

At the business forum component of the summit, we heard about market-based solutions such as payment for ecosystem services and polluter-pays strategies, which emphasize green growth and the use of market signals and incentives to determine access and behavior.
We call instead for strong environmental regulation based on the precautionary principle and public control of water resource allocation. Market-based schemes have denied communities their rights to decide how their water supplies are managed.

Rather than incentivizing polluters we demand the punishment of corporate environmental and human rights crimes and ensure that communities have access to reparation.
We are concerned about the heavy emphasis on high-tech solutions that reflect business priorities and allow the focus to be placed on post-pollution treatment, rather than prevention or protection of water resources. These expensive technological choices are made over the needs of communities for appropriate, locally managed and low-cost solutions. This is also part of the agenda of the national donor agencies, which focus on using aid to win contracts for their country’s corporations.

We cannot meaningfully talk about sustainability as long as there is a failure to acknowledge that corporate rights have undermined human rights and those investment protection mechanisms and free trade agreements have undermined rights of communities to say no to water polluting projects. For example, as we speak mining companies are using international trade tribunals to sue governments in Latin America to defend their right to pollute and over-extract.

The merit of potential SDGs depends on their ability to address the human rights, social and environmental justice concerns of communities around the world.


For more analysis on the Budapest Summit, please read:

1. Budapest Water Summit offers mirage of water for all

2. Blunt speaking on reality of privatised water opens up important debate at Budapest water summit

3. Fighting the Corporate Agenda in Budapest

Thu, June 06 2013 16:24
Reclaiming Our Water
Jakarta is Taking Over Its Water

(Translated from Kompas Daily Newspaper, 5 June 2013 by Irvan Zamzami)

JAKARTA, KOMPAS -- after years managed by foreign private firm, Jakarta Provincial Government will take over the shares of PT Palyja, one of the clean water operators. The repurchase is exercised to improve the quality of water services in the capital.

This plan was officially delivered by Jakarta Governor Joko Widodo (Jokowi) in front of the delegations of the French Ministry of Foreign Commerce during their visit to City Hall, Tuesday (4/6).

"This is not a preconceived plan. We take this seriously because this is a matter of principle. We prepare the funds for the share repurchase," said Jokowi.

Forty French delegations visited the City Hall. The delegations were led by Foreign Trade Minister Nicole Bricq. The meeting was divided into two, the government delegations met Jokowi, business delegations met the Vice Governor of Jakarta Basuki Tjahaja Purnama. PT Palyja share repurchase plan by the provincial government became the main subject.

Palyja is one of the water operators in Jakarta that has been operating since 1997, beside of PT Aetra. A total of 51 percent of Palyja’s shares are owned by French private firm, Suez Environment, the rest is owned by a national private firm. Previously, Palyja planned to sell its shares to a Philippine company, Manila Water.

The repurchase plan, according to Jokowi, is a "decent" step. However, if Palyja refuses to sell its shares, the government will take the second plan.

"The second plan is not meant to be revealed here," said Jokowi.

According to Jokowi, this is a big decision. Its purpose is to make the water service is oriented for the benefit of the people, not profit oriented. "We have to be bold," he said.

The share repurchase of the water operators by Jakarta provincial government is possible. According to the cooperation agreement with PT Palyja and PT Aetra, a share repurchase can be exercised after ten years of cooperation.

"Entering ten years of the cooperation agreement, I had encouraged the government to purchase the operators’ shares. The consideration, is that the management of water in Jakarta has yet to improve. However, the government at that time did not have enough courage to make decision. It is just now the plan is officially presented to the public," said expert in hydrology from University of Indonesia, Firdaus Ali.

Separately, Meyritha Maryanie of PT Palyja’s Public Relations said Palyja management did not know the plan. They also were not present at City Hall.

"We do not have the control over the share sale or share acquisition. The management remains fully committed to serving the citizens," she said.

Some organizations affiliated in People’s Coalition to Resist Jakarta Water Privatization (KMMSAJ) also organize citizen support. They are LBH Jakarta, Indonesia Corruption Watch (ICW), Kiara, KRuHA, and Jabotabek Women's Solidarity.

“According to the 2010 Central Bureau of Statistics’ data, only 34.8 percent of Jakarta residents covered by clean water service. This proves the poor performance of the private operators, "said Tama S Langkun of ICW.

The coalition also provides assistance for Jakarta citizens to donate money. The raised fund will be given to the Governor to help taking over the clean water management from the private operators.

According to a report from the Public Services International Research Unit in UK, by February 2011 there are already 51 cities in the United States, France, Germany, Canada, and other countries terminated the contract.

Mon, January 28 2013 15:43
Citizen Lawsuit Against Water Privatisation
Government and Operators Sued by Citizens

Translated from Kompas daily newspaper, 29 January 2013

JAKARTA, KOMPAS – Citizens sued the government over the not optimum quality of clean water service. They demanded the cooperation agreement between Jakarta’s Regional Drinking Water Utility and two private operators to be terminated. Clean water management should be undertaken by PAM Jaya again.

The lawsuit which is filed by 14 citizens is in the second time of mediation process in Jakarta Pusat’s district court, Monday (28/1).

There are seven defendants; they are the President, Vice President, Public Works Minister, Finance Minister, the Governor of Jakarta, and the President Director of Regional Drinking Water Utility (PAM Jaya). Two operators, namely PT PAM Lyonnaise Jaya and PT Aetra Air Jakarta, also become defendants.

The plaintiff’s attorney, Arif Maulana, said, the cooperation agreement between PAM Jaya and the operators have to be terminated because it violates some regulations, some of them are Paragraph 33 Point 3 of UUD 1945 (The Constitution), Law Number 7 Year 2004 on Water Resources, and Regional Regulation Number 13 Year 1992 on PAM Jaya.

“Because of the cooperation agreement, clean water management have been turning to prioritize business profit. As the result, the average of Jakarta water tariff is very high, Rp. 7.800 per cubic meter,” Arif said.

The water supply to customers is also frequently stopped because there are often network damages or insufficient raw water. Besides, the water is not equally distributed throughout Jakarta. This condition harms the citizens, especially the poor.

“The water is often yellowish, smells chlorine, and even not running. I only use PAM water for laundry, cooking, and taking a bath. For drinking, I have to buy bottled water,” said Nurhidayah, a resident of Cilincing, Jakarta Utara.

PAM is ready to manage the water

PAM Jaya’s attorney, Abdul Fickar Hadjar, said, their part is ready to implement court order or the policy of the utility owner, the government of Jakarta.

“Even if the cooperation agreement with the private operators has to be terminated, we are ready to manage the water. The important thing is, the water should be well available and the water tariff doesn't burden the consumers,” he said.

PAM’s water tariff policy, according to Fickar, is the domain of Jakarta provincial government and parliament. He proposed to arrange a meeting with the governor of Jakarta to discuss the issues.

Tamin M Zakaria Amin, the attorney of Public Works Minister, said, the cooperation agreement between PAM Jaya and the operators is not in the context of privatization. “This is private sector involvement to improve water service to citizens,” said Tamin.

He said that it needs a joint meeting with the provincial government to see the issues clearly and transparently.

Sun, December 09 2012 15:21
Water Grabbing - Bottled Water Industry
Karangasem villagers say no to water exploration

The Jakarta Post. by Luh De Suriyani on 2012-12-10

Residents of Peladung village in Karangasem regency, east Bali, have strongly rejected an investor’s plan to explore the village’s groundwater resources with a view to producing bottled water.

Dressed in traditional Balinese attire, hundreds of residents held an open vote at a packed gathering on Sunday declaring that the exploration plan of PT Tirta Investama, the producer of Aqua bottled water, would certainly harm their water resources and lead to water scarcity in the future.

Numerous interested parties attended the gathering, including village community leaders, officials from Karangasem regional administration, the management of PT Tirta Investama, environmental activists and members of the subak traditional farming organizations.

“All the members of the village have strongly rejected the investor’s plan to explore our groundwater. We hope Karangasem administration will not issue a license for such an investment,” said I Komang Putu Alit, secretary of Peladung village.

Prior to the vote, environmental activists from the Indonesian Forum for the Environment (WALHI) Bali and experts from the Indonesian Geologists Association (IAGI) presented the facts on possible environmental damage that could occur should the water exploration take place. Meanwhile, staff from the company also presented the benefits that people could gain from this investment.

In early October, Karangasem administration granted PT Tirta Investama an operation permit to drill water from two ground wells located near to the village’s fertile subak farms, on the border of Padangkerta and Peladung villages.

The issuance of the operation permit allowed the company to explore and drill for groundwater at a depth of 100 meters and to process the water for bottling within a one-year
period with the option to extend.

“The local people have never been informed about the investment plan and the issuance of a permit for water exploration here,” said Putu Alit.

Head of Padangkerta subdistrict, Putu Eddy Surya Arta, said that the permits did not need to be explained as the investor had just started taking samples of water to examine its quality. “If the investor finds that the water quality does not meet with the required standard, then they will stop the exploration,” he said.

Arta admitted that he supported the investment plan, saying that the business activity could possibly open employment opportunities for local people.

Yusuf Soenardi, head of PT Tirta Investama’s factory, said that company had just collected samples and materials from the groundwater wells and the soil layers. “We are not going to insist on continuing our exploration, it depends mostly on the readiness and willingness of the local administration and the people,” Soenardi said.

The company, he said, had consulted with the provincial administration and had obtained support from the Bali Industry and Trade office.

I Wayan Putu Mudita, a village resident, said that previously he had warmly welcomed the plan hoping that the village’s youth would have a chance to work for the company. “After listening to the facts and information on the long-term impact on our environment, I now feel quite scared over our gloomy future,” Mudita said.

Suriadi Darmoko, deputy chairman of WALHI Bali, comprehensively portrayed the negative impact of the planned groundwater exploration on water-scarce Karangasem regency.

“Peladung and Padangkerta villages are the regency’s last water resources since other water resources, like Tirta Gangga, Lempet and Kelutuk, ran out of water due to the long drought and overuse of water since the year 2004,” Darmoko said.

Located 200 meters above sea level on the slopes of Mount Agung volcano, Peladung and Padangkerta are blessed with abundant water and fertile soils for agriculture. The two villages produce 50 percent of Karangasem regency’s rice.

“Giving a license for water exploration to a private company will also mean giving up the future of Karangasem to this party. We must be very cautious and we must consider the future of our youth,” he warned.

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