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Multinational corporations take action on water scarcity

August 31, 2014 at 4:09 PM EST
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HARI SREENIVASAN: For more we are joined by Pilita Clark, environment correspondent for the Financial Times and author of the recent series, a world without water. So, let’s just set the stage a little bit. How significant of a problem is water scarcity?

PILITA CLARK: Well, water scarcity, it’s an interesting term. I mean, often there’s not so much a problem with a physical shortage of water around the world, but increasingly what there is, is a real problem of competition for supplies of available water and that’s happening for a range of reasons but fundamentally the drivers are a growing population, an increasingly wealthy population and to some extent climate change as well is playing a part in it.

HARI SREENIVASAN: And so in your reporting you’re saying some of the CEOs are actually starting to say, you know climate changes almost takes up all the oxygen in the room, water scarcity is far more pressing. Well, what are companies doing about it?

PILITA CLARK: Well companies are doing a range of things. I mean, the chairman of Nestle, Peter Brabeck, said that to me and his company has spent more than 40 million dollars alone in the last year on trying to figure out ways of using less water in their factories, making sure whatever water they do use when it is returned to the environment it’s discharged in a reasonably clean fashion. Coca-Cola has spent more than, or close to 2 billion dollars since 2003 making sure that all of its bottling plants around the world adhere to those sort of strictures and a number of companies actually in other sectors are doing some even more interesting things, more expensive things.

BHP Billiton and Rio Tinto, two of the world’s biggest miners last year agreed to approve a 3 billion dollar desalination scheme in Chile for one of their copper mines that they jointly operate there. And it’s going to desalinate water from the coast of Chile and then pump it up around 10 thousand feet up to their copper mines. And the reason they are doing that is because they don’t want to be competing with local towns and farmers for fairly scarce water supplies up there. They’re also potentially getting in ahead of legislation in that country because law makers have been looking at making it mandatory for miners to do this sort of desalination work before they can operate.

And that’s the sort of a pattern that we are seeing across the world where regulation to try to ameliorate this competition for water supplies or to try to ensure that competition between the biggest users, who are often farmers, they global take up around or use around 70 percent of water, make sure that competition between farmers and industry stays at a minimum.

HARI SREENIVASAN: So some of these local communities who are pushing back say that it is a race to privatize water. Here was a, what was a ubiquitous resource was and now it is becoming more expensive. It was almost a resource that we thought of as absolutely free.

PILITA CLARK: Well that’s right, that’s certainly been the case for companies. And they have been able to use it largely for free or for very little cost. It raises some interesting points because farmers are even able to use it at lowers costs. In fact SABMiller which is one of the companies that I spoke to, they are one of the world’s biggest brewers and they made a point that, you know, they’re not really worried about the physical cost of water.

But the point they make is that farmers can often use water for a fraction of that cost and so what happens is because they are able to do that they use so much of the available resources, often ground water resources, which are not always replenishable. And that puts more pressure on companies and other users around, in the surrounding areas. And, you know, it is a very difficult situation. Countries want to be, want to have independent sources of food. They also want to make sure that they have a flourishing farming sector, so they don’t want to remove subsidies or make it any more difficult for farmers that might be the case than normally.

They find it very difficult to address this situation where, to make it more expensive for farmers to operate and that’s why we see these, this competition for water supplies growing in a lot of parts of the world.

HARI SREENIVASAN: Alright, Pilita Clark of the Financial Times, thanks so much.

PILITA CLARK: Thank you.