Camdessus Report

The Word Panel on Financing Water Infrastructure, comprised of twenty prominent figures with experience in government, international financial and development institutions, corporations, NGOs, and the financial sector – also called the Camdessus Panel – held seven meetings between 2002-2003 in order to compose a report that would call for an increase in private sector participation in water delivery and infrastructure. The final report entitled “Financing Water For All” - coined the Camdessus Report - was written by James Winpenny and presented at the 3rd World Water Forum in Kyoto, Japan in March 2003 by the panel’s chair - ex-managing director of the International Monetary Fund (IMF), Michel Camdessus. The report is seen as a landmark report for the water industry inasmuch as it calls for the restructuring of institutional and financial frameworks in water infrastructure so as to create a favourable investment climate for water corporations. The report calls for substantial reform in legal frameworks – reforms that promote corporate-friendly constitutional environments where water corporations may operate. Reform features include:

corporate laws permitting the structure of corporate vehicles; the concept of freedom of contract for a project and the enforceability of commercial contracts; adequate investment protection laws; clear authority for the public sector to enter in public-private partnerships; lenders able to obtain effective security; supporting banking laws; sector specific legislation; confidence in the impartiality and competence of the judiciary, if local enforcement is necessary..

GWP categorizes the Panel’s 87 recommendations according to thematic importance:

• Enhancing Sub-sovereigns’ access to finance

• Decentralisation of water services and fiscal relationships

• Promoting local capital markets

• Promoting private sector participation

• Adapting financial policies and instruments to the need of the water sector

• Capacity building and technical assistance

• Increasing aid to the water sector

• Improving aid effectiveness

• Water policy and water sector framework

• Monitoring and reporting.

All of these recommendations have as their primary impetus the integration of the private sector and/or the development of economic frameworks/structures that favour private sector participation. Recommendation #5 of the report states, “Governments should create an enabling environment for the participation of the private sector in the delivery of infrastructure services.” In the same vein, recommendation #14 states, “Contracts for private sector participation should be standardized and promoted, enabling sub-sovereigns to employ private companies under incentive-driven contracts to raise efficiency and performance” .

In other words, these legal reforms encourage and/or promote public private partnerships (PSP) and/or the outright private production and distribution of fresh water goods and services. These free market reforms promote conditions where water corporations would have a legal right to and full recognition of private property as well as the ability and certainty to operate with no or minimal government infringement. According to the report, the legal rights of corporations would and should be protected by enforcement procedures informed by a market-friendly judiciary system. Moreover, the report proposes institutional and financial guarantees to corporations and lenders that there be no or minimal investment risk. Furthermore, as Holland points out, the report “advocates the use of public funds to pay for the preparation of private concession contracts and tenders…and to guarantee corporate profits in cases of currency devaluation”. Recommendation #21 specifically proposes: “A Revolving Fund should be created, using grants to finance the public preparation and structuring costs of complex projects such as private participation projects and other innovative structures” . In effect, this report encourages and legitimizes the siphoning of public dollars by way of direct and indirect public subsidization of private profit. Commenting on the report in a presentation made to the Centre for Civil Society of Durban, South Africa, Erik Swyngedouw argues:

As in the past, in such cases capital turns to the public sector expecting sufficient financial support to permit the further expansion of capital investment. However, the ideological stupor of the unreconstructed Washington Consensus does not permit an easy retooling of the private-public interface. Water companies are already actively positioning themselves with the key national and international agencies in an attempt to pave the way for a change of policy that would simultaneously improve profitability and assure the companies’ continuing expansion, but based on significant public subsidies..