Who Controls Ecuador’s Water?

It is a well kept secret that Bechtel won a contract to privatize the water in Ecuador’s largest
city, Guayaquil, just months after the massive citizen protests that threw Bechtel out of Bolivia.
In October 2000, a local Bechtel subsidiary, Interagua, signed a 30-year concession contract to run
the water and sanitation services in Guayaquil. The privatization process was promoted by loans from
the Inter-American Development Bank and a guarantee from the Multilateral Investment Guarantee Agency
(MIGA), a World Bank agency. Now, more than six years later, the residents of Guayaquil are demanding
damages from the company for water contamination, an end to water cut-offs, and a return to local,
public control.

On Sept. 28 residents in Guayaquil gathered in front of the offices of the undersecretary of the economy
to protest the contract. On Oct.18 thousands gathered to proclaim that water is a human right, demanding
that their "water debts" are forgiven and that their water services are reconnected. A local
advocacy organization, the Observatorio Cuidadano de Servicios Publicos (Citizen’s Observatory of Public
Services), is seeking to stop the water cut-offs through legal action.

One in six people in the world lack access to clean and affordable water and thousands of children
die of water-borne diseases every day. Corporations like Bechtel seek to profit from providing water,
often elevating the narrow interests of their companies and its shareholders above social and environmental
goals. Around the world, privatization has led to large rate hikes and poor service, while failing
to solve the problem of lack of access, leaving the poorest communities with no water services at all.
This is now the situation in Guayaquil, where there are hundreds of documented complaints due to the
appalling service of Bechtel’s subsidiary, Interagua. The citizens of Guayaquil are demanding accountability
from the company. The Ecuadorian regulatory agency ECAPAG recently fined Interagua $1.5 million for
contractual violations. Some of the problems that face the residents of Guayaquil include:

  • Repeated residential water cut-offs for up to 12, 24, 36, or more hours at a time;
  • Residential water cut-offs of senior citizens and other low-income residents due to inability to
  • Failure to extend services to specific neighborhoods, especially low-income residents;
  • Failure to meet contractual obligations for rehabilitation and expansion of services;
  • Public health problems such as respiratory problems, skin rashes, asthma, and diarrhea due to lack
    of wastewater treatment;
  • Environmental contamination due to lack of wastewater treatment;
  • Hepatitis A outbreak in June 2005, investigated by local authorities (Commission for Civic Control
    and the Public Defender’s office) who concluded that the water was "not apt for human consumption."

The Failure

In 2006, Bechtel’s total revenue amounted to $20.5 billion and Interagua’s operations in Guayaquil
earned $300 million in revenue. Despite these profits, Interagua did not initiate the rehabilitation
programs it had promised. Concerns and complaints mounted over broken pipelines, floods due to malfunctioning
sewage systems, exorbitant water rates, poor water quality, and environmental damage due to the lack
of wastewater treatment during this first five-year period. Lack of investment in storm drainage forced
many residents to suffer the health effects of constant flooding. In 2002 the company was treating
only 5% of the sewage and releasing the rest, including fecal material, and domestic and industrial
waste directly into the local river, Guayas.1 The health department
began to issue reports documenting health problems that children were experiencing in communities located
north of the city, such as Acuarelas del Río and Guayacanes, where the sewage was being released.
The health problems included skin rashes, asthma, and gastric problems such as diarrhea.

Along with overflowing sewage and illegal dumping, unsafe tap water has also contributed to the serious
health crisis. Residents complain about the "nauseating" and "unbearable" odor
coming from the tap water.2 Interagua has refused to make public
information regarding water quality. In June 2005 over 150 children were infected with Hepatitis A
from drinking dirty tap water. The outbreak was concentrated around the western suburbs of Guayaquil
where 76% of residents described their water as cloudy and foul-smelling. Interagua denied responsibility
for the outbreak but studies have shown that it was a combination of the nonfunctional sewage system
and poor water quality that contributed ultimately to the outbreak of Hepatitis A.3 The Commission for Civic Control and the Public Defender’s office declared that Interagua held some responsibility for the Hepatitis A outbreak and concluded that the water was "not fit for human consumption." But problems persist including repeated cut-offs of water service that last for more than 24 hours, which is illegal unless the company provides alternative sources of water for the residents. In some areas Interagua cut the water for 23 hours a day in order to evade the responsibility of providing an alternative water source. In addition, the company continues to cut off water services when consumers accumulate too much debt.

Taking Back Control

Guarantees and loans provided by the World Bank and the Inter-American Development Bank have ensured
a profitable investment for one of the world’s most influential corporations, Bechtel. But, similar
to the experience of many other cities across the world, water privatization has not solved water problems
in Guayaquil. Instead, Bechtel has delivered water not suitable for drinking, refused to expand access
to services, cut off water to those unable to pay, and neglected responsibilities to provide wastewater
treatment compromising the local environment and public health.

The Observatorio Cuidadano de Servicios Públicos is working tirelessly to document Bechtel’s
contract violations. The group—which brings together numerous civil society organizations in Guayaquil
to monitor and help improve public services—has exposed the constitutional, legal, and contractual
violations of Interagua and is working to ensure that action is taken. They will continue to organize
and demand that water and other public services be locally and publicly owned, controlled, and managed
with active citizen oversight and participation.

The recognition of water as a human right and the push for citizen oversight and participation in
public services is also being acknowledged and supported on an international scale. The United Nations
Committee on Economic, Social, and Cultural Rights adopted the human right to water on Nov. 26, 2002
and the United Nations Development Program’s Human Development Report of 2006 calls on all governments
to enshrine the right to water in enabling legislation. The human right to water is indispensable for
leading a life of human dignity. Everyone should have secure access to sufficient safe water and sanitation
to meet their basic human needs. To ensure that safe and affordable water is available to the 1.2 billion
people across the globe that currently do not have proper access, international financial institutions
and aid agencies need to abandon failed policies and stop pushing countries to privatize water services.
Governments need to involve residents in solutions and recognize the human right to clean and affordable

End Notes

  1. El Universo, "Tratamiento de aguas servidas no supera
    el 5% en plantas de Interagua," Guayaquil Ecuador, June 8, 2002.
  2. "El agua llega turbia a las redes de 4 zonas del sur," El
    , Nov. 2005.
  3. Aguita Amarilla, Observatorio Cuidadano de Servicios Publicos,
    October 2007, quoting from reports of the Commission for Civic Control (Oct. 3, 2005) and the Public
    Defender’s office (Oct. 7, 2005).