The Privatisation Two-Step: Is Three Waters A Masterpiece Of Misdirection?

Profit Uber Alles: The sort of people who see nothing objectionable in taking over another country’s water resources are unlikely to be put off by the objections of its citizens. Where there’s a will, there’s a way – all the investors have to do is find it.

IF CABINET FAILS to scrap Three Waters and start again, New Zealand may very quickly come to resemble Bolivia. Not the Bolivia of today, where a socialist government elected by a huge majority holds sway, but the Bolivia of 1997. That Bolivia had been ordered by the World Bank to privatise its water – on pain of being refused the loans it so desperately needed to keep its economy afloat. Taken over by French and American corporations, Bolivia’s water resources were very quickly priced beyond the reach of its poorest – that is to say, its indigenous – citizens.

Unsurprisingly, the Bolivian Government soon found itself in the grip of a massive popular uprising. In 2005, after five years of unrelenting struggle, the indigenous Bolivians forced their government to terminate the concessions granted to the French and the Americans.

In place of these foreign-owned private corporations, a publicly-owned water utility, the Empresa Pública Social de Agua y Saneamiento (EPSAS) was established. A strong case can be made that the popular struggle to reclaim Bolivia’s privatised water resources laid the groundwork for the nation’s sharp political turn to the Left. Indigenous interests in water, and socialism, it would seem, go hand-in-hand.

That being the case, one can easily imagine that a foreign investor, or group of investors, anxious to get their hands on New Zealand’s abundant water resources, would be particularly sensitive to the likely response of its indigenous citizens. As the sole possessors of Aotearoa for half-a-millennium, the Māori are linked to its lands, forests and fisheries by immensely strong bonds of lineage and tradition. Any attempt to place those resources in the hands of foreigners would provoke resistance every bit as strong as the indigenous Bolivians’.

Nor would the Māori stand alone. New Zealanders’ experience of the neoliberal privatisations of the 1980s and 1990s – and the partial privatisation of energy generators in the 2010s – has left a sizeable portion of the population implacably hostile to the privatisation process. The idea that something as basic to human existence as water might be handed over to private, profit-seeking interests has become a very hard sell.

But, the sort of people who see nothing objectionable in taking over another country’s water resources are unlikely to be put off by the objections of its citizens. Where there’s a will, there’s a way – all the investors have to do is find it.

Investors making a close study of New Zealand will quickly realise that Māori are the key interest group to neutralise. If the privatisation of water could be disguised as the indigenisation of water, then not only would the potentially unrelenting opposition of Māori be finessed away, but also the opposition of those Pakeha concerned to restore self-determination to Māori after nearly two centuries of colonisation. All the foreign investors need to identify is an appropriate vector through which their two-step process – indigenisation to privatisation – can be realised. (Interestingly, exactly the same two-step process was employed by the Fourth Labour Government to finesse the first wave of privatisations back in the 1980s: corporatisation to privatisation.)

The most obvious vectoral candidate is the National Iwi Chairs Forum. This is an outgrowth of the Treaty Settlement Process – the New Zealand state’s inspired mechanism for de-radicalising Māori nationalism by setting-up a series of neo-tribal capitalist buffers between the traditional/professional Māori elites and the urbanised, poorly-educated and culturally unmoored Māori working-class. The leaders of these tribal corporations are already more than half-way into the deracinated world of global capitalism – a fact they keep well-hidden from their own people behind swirling veils of Māori mysticism.

Enlist the support of these commercial rangatira, and the journey towards the privatisation of water will be underway long before the nation realises. And if an iwi already seething with bitter historical resentments steps forward to lead the process of detaching New Zealand’s water resources from the state, then so much the better. What’s more, any politician willing to front this iwi power grab is bound to become a lightning-rod for all manner of racially-charged criticism and abuse. Cui bono from this cynical exercise in political misdirection? Who else but the true instigators of the project: the always silent, always patient, foreign investor/s.

That this exercise might be all-too-real is attested to by the involvement of those front-of-house facilitators of foreign direct investment – the international credit-rating agencies. Advising the Sixth Labour Government (represented primarily by Local Government Minister Nanaia Mahuta) on what was now being called “Three Waters” was Standard & Poor’s (S&P Global Ratings). It’s advice was unequivocal: make sure the entities charged with the management of New Zealand’s drinking, storm and waste water are hermetically-sealed from democratic interference. Above all, keep their books and the State’s books entirely separate.

Had political journalists not been so distracted by the so-called “co-governance” arrangements built into the Three Waters proposal, the credit-rating agency’s stipulations would have pointed clearly to the project’s ultimate goal. What could be easier to privatise than a stand-alone, financially “independent” entity, slowly sinking beneath an insupportable burden of foreign debt?

Before that point could be reached, however, the whole process had to be turned into a hot mess of White Supremacists versus De-Colonisers. In this regard, the Three Waters legislation’s author, Nanaia Mahuta, could hardly have performed more obligingly. The deeper the project’s critics dug into the details of the legislation, the more evidence they found for the argument that Three Waters was all about the indigenisation of Aotearoa-New Zealand’s water. Not the least important feature of the legislation in this regard were the “Te Mana o Te Wai” statements – directives relating to both the public and private use of water that have the force of law, and that only Māori can issue!

Among the most vocal critics of Three Waters has been the radically neoliberal Act Party. Its active participation in the debate raises an intriguing (and potentially worrying) question. Is Act just another dupe of the foreign investors’ bait-and-switch operation, or is it surreptitiously giving them a helping hand? Act has always been a strong advocate of privatisation – an objective that would be made considerably easier by thoroughly discrediting the option of indigenisation and, along with it, the whole idea of public ownership.

In an ironic twist to this story, the first person to realise the long-term privatisation agenda built-in to the Three Waters project may well have been Nanaia Mahuta herself. Certainly, it would explain the Minister’s panic-stricken, last-minute attempts (in collusion with the Greens) to entrench anti-privatisation provisions in her legislation. If this is what happened, then it is difficult to avoid feeling sorry for the Minister. She could not adequately explain why her drastic (and arguably unconstitutional) amendments were necessary, because to have done so would have been to acknowledge her stalking-horse role in a project most New Zealanders would have condemned as unconscionable.

One crucial outcome of the entrenchment debacle, however, is that Mahuta’s fellow ministers were no longer content to rely upon her assurances that Three Waters was a sound and necessary project. Accordingly, they took a much closer look at the legislation. In doing so, they could hardly avoid the alarming question: “Is there anything in this legislation to prevent Iwi corporations from entering into agreements that could ultimately facilitate the privatisation of one or more of the four Three Waters entities?”

The answer to that question will be indicated by just how decisively Prime Minister Hipkins rejects Three Waters. Getting rid of the co-governance provisions will not be enough. If the legislation continues to empower the four entities to take on debt that is ultimately redeemable out of the pockets of New Zealand’s ratepayers, then the momentum towards their ultimate sale to foreign investors will not be slowed. If that is Hipkins’ decision, however, then either he, or his successors, will eventually be confronted with the same sort of popular uprising that convulsed Bolivia.

And in that battle, Māori and Pakeha will be fighting shoulder-to-shoulder. Proof that caring for and managing the waters of Aotearoa-New Zealand is the responsibility of all its peoples – and theirs alone.

This essay was originally posted on The Daily Blog of Friday, 17 February 2023.