Multinational Monitor

JUL/AUG 2008
VOL 30 No. 1


No Escape: Marketing to Kids in the Digital Age
by Jeff Chester and Kathryn Montgomery

The Youngest Market: Baby Food Peddlers Undermine Breastfeeding
by Annelies Allain and Joo Kean

Intoxicating Brands: Alcohol Advertising and Youth
by David Jernigan

How Things Work: The FTC's Revolving Door
by Robert Weissman

Fighting Demons: Addressing the Perils of Financial Innovation
by Richard Bookstaber


Commercializing Childhood: The Corporate Takeover of Kids' Lives
an interview with Susan Linn

Pill Pushers: Pharmaceutical Marketing in an Overmedicated Nation
an interview with Melody Petersen

Reverend Billy and the Church of Stop Shopping
an interview with Bill Talen

The Debt Creators: Shady Lending, Misleading Marketing and Hard Times
an interview with José García


Letters to the Editor

Behind the Lines

Marketing Mania, Commercial Colonization

The Front
Freedom Flows in South Africa | Development and the Desert

The Lawrence Summers Memorial Award

Greed At a Glance

Commercial Alert

Names In the News


The Front

Freedom Flows in South Africa

The use of prepayment water meters violates a constitutional guarantee of equality and a right to water, a South African High Court ruled in April.

        Prepayment water meters require users to pay up front. No credit is awarded, as is the case with metering in wealthier neighborhoods. Beginning in 2000, in South Africa, water utilities have installed prepayment water meters to replace both communal and household taps in poor rural and urban areas. Poor households find themselves going weeks without access to water if they cannot purchase prepaid credits.

In 2006, five residents in Phiri township (a part of Soweto) filed suit against the city of Johannesburg and the Johannesburg water utility, alleging prepayment meters are unconstitutional.

The residents also claimed that the city was failing to provide a promised 25 liters of free water per day to residents — and that residents needed access to a larger guarantee of free water to meet basic needs. The High Court agreed.

Prepayment meters were introduced as part of a new policy to provide 6,000 liters (1,585 gallons) of free water per household per month. In Phiri, after the first 6,000 liters of water, residents were required to pre-pay before receiving any additional water. Judge Moroa Tsoka ruled that the requirement to prepay for water — which applies only to households in poor, traditionally black areas such as Phiri — violates South Africa’s protected right to equality. 

“The Constitution guarantees equality,” he wrote. “It is therefore inexplicable why some residents of the city are entitled to water on credit plus free allocation of 25 liters per person per day or 6 kiloliters per household per month, yet the people of Phiri, such as the applicants, are denied water on credit. In spite of the fact that they are poor, they are expected to pay water before usage. Their counterparts, who are affluent and mainly in rich and white areas, irrespective of how much water they use, are entitled to water on credit. The differentiation, in my view, contravenes the right to equality.”

The High Court also held that South Africa’s free basic water policy, which theoretically provides 25 liters of water per person per day for free, was inadequate to fulfill the constitutionally guaranteed right to water. Utilities have traditionally provided 6,000 liters of free water monthly, without considering the number of people living in a home. By way of comparison, the average U.S. household uses more than 9,000 liters a day. Phiri households, like other township households, are typically larger than presumed by the utility policy and therefore are disadvantaged by the policy. Under the utilites’ 6,000 liters a month arrangement, an average person in Phiri gets by with only 12.5 liters of water per day — just about enough to flush a toilet once. As part of the implementation, Johannesburg Water, one of the defendants, handed out leaflets explaining to residents how to “budget” their water.

The court held that the 6,000 liter per household per month policy failed to give individuals 25 liters per day. It also ruled that, especially given the importance of clean water to people with HIV, the South African constitutional guarantee of a right to water required that people receive 50 liters per day of free water.

Ruled the court: “To deny the applicants the right to water is to deny them the right to lead dignified human existence, to live a South African dream: to live in a democratic, open, caring, responsive and equal society that affirms the values of human dignity, equality and freedom. The denial would perpetuate the decades-long poverty, deprivation, want and undignified existence of the recent past.”

The High Court also called the use of prepayment water meters discriminatory and procedurally unfair, because they did not give residents an opportunity to challenge a water cut-off. 

The High Court case follows years of struggle for township residents to guarantee the right to water in a meaningful way. Phiri has been the center of organizing, leading to numerous confrontations with authorities who, according to activists, failed to take the problems seriously.

“We have tried all avenues available to negotiate with the city council about the problems,” says Dale McKinley, spokesperson for the Anti-Privatization Forum, “but the council laughed it off and stuck to their line that the meters are the way forward.”

Johannesburg’s water policy traces back to a more general attitude of paternalism among the ruling elite, says Patrick Sindane, organizer for the Coalition Against Water Privatization. “People fought and died for the principles embedded in the Constitution,” Sindane says. “The ANC Freedom Charter stated that each person would get 50 liters of water per day. But the priorities quickly changed. What you find today is a few elites on the top who are making decisions and not understanding the reality on the ground.”

The case brought to light the reality of households unable to obtain water for their basic needs. Many residents claim that they are now worse off than during apartheid. One of the claimants, Vusimuzi Paki, recalled battling a shack fire to no avail because there were no funds left for water. Two children died in the fire.

Jennifer Makoatsane, the lead claimant in the case, reported how households were pitted against each other in a daily struggle to provide basic water: “Sometimes we would go sneak at night. There’s a gate in my neighborhood at the opposite end, and I would go sneak at night and use their water.”

Makoatsane lives with eight other family members who survive on her mother’s pension of approximately $115 a month. There is no money left to pay for additional water. Instead, every member of the household shares the bath water. The toilet is flushed with water used for laundry or cleaning. Still, her family usually has water for only half of the month.

When introduced in Phiri in 2004, the Johannesburg water utility made prepayment water meters the only option other than complete disconnection of water supply. Most residents therefore reluctantly accepted the meters. Lindiwe Mazibuko, a third claimant, first rejected the prepayment meter. Instead she traveled nearly two miles to get water from a reservoir in Chiawelo. After the reservoir was closed for her use, Mazibuko reluctantly accepted a prepaid water meter.

Civic campaigners say prepaid meters and reduced access to water has contributed to public health problems throughout the country. Notably, a KwaZulu Natal project implemented in 2000 has been closely linked to a massive cholera outbreak that killed hundreds after communities turned to polluted rivers for drinking water when they could not afford the water from pre-paid communal taps that were previously free.

The court called the “various social policies adopted by the respondents [Johannesburg city] both irrational and unreasonable.” The judge also noted that prepayment water meters are outlawed in the UK due to the negative social impact of water cut offs with no opportunity for human intervention to thwart unjustified deprivations.    

Johannesburg Mayor Amos Masondo accused Judge Tsoka of legislating from the bench. “Judges are not above the law,” he said. “We don’t want judges to take the role of Parliament, the role of the national council of provinces, the role of the legislature and the role of this council. Judges must limit their role.” Johannesburg plans to appeal the verdict.

Internationally, water activists are celebrating the ruling and vowing to continue challenging the use of prepayment meters and discrimination against the poor. Prepayment water meters have spread rapidly throughout Africa and are used in Tanzania, Lesotho, Namibia, Nigeria, Egypt and beyond. The newly formed African Water Network has made it a priority to combat the use of prepayment water meters. In Mumbai, India, activists have hailed the decision as they seek a stop to prepayment meters in Mumbai’s slums.

— Maj Fiil is the former director of Water for All.
She has worked with groups involved in the
prepayment meters case over the past seven years.

Development and the Desert

Ciudad Juarez, Mexico — The Anapra region of Ciudad Juarez is dry and dusty, the road leading there lined with junkyards. In spring, fierce winds blow dust so thick it stings the skin and fills the ears and nostrils of residents scurrying to tend their pigs and chickens on small farms dotted with shacks made from cinder blocks, scraps of wood and box springs.

The area is known as a transfer point for the brutal international drug trade, and at least eight women’s bodies have been found here, part of the femicide for which Juarez is infamous.

It is a seeming no-man’s land. But local businesspeople and government officials see a far different future for this chunk of desert. It is the location for the planned cross-border Jeronimo-Santa Teresa project, a huge if somewhat amorphous development plan described as including a new city of up to half a million residents; an expanded trade corridor; a new maquila industrial park; and a tourist destination complete with casinos.

A key chunk in this development is the area known as Lomas de Poleo in Anapra, a community founded in the 1970s largely by migrants from Vera Cruz and other southern areas of Mexico in search of a humble plot of land to raise a few animals. Over the decades, the community — more than 300 families at its peak — has petitioned for title to the land under Mexican land reform laws. The land’s ownership chain is a complicated saga including the company Carbonifera, several murky private sales, appropriation by the federal government after tax default and the current residents’ ongoing claims. At least one federal document proclaims the land national property. But brothers Jorge and Pedro Zaragoza, from one of the richest business families in northern Mexico, are now claiming the land is theirs, inherited from their father who they say bought it in 1963.

No one showed much interest in the destitute parcels until 2002, when the Jeronimo project plans became public knowledge and the Zaragozas began trying to kick residents out of Lomas de Poleo. Since then, the residents and the Zaragoza brothers — scions of local gas, dairy and Corona beer franchises, among other industries — have been locked in a grueling, litigious and often violent struggle over the land. The Zaragozas have erected a concrete and barbed wire fence around the disputed area, with the roads blocked by guard shacks where armed private security guards allegedly harass residents and prevent visitors and food deliveries.

“I can’t get tortillas or water, I can’t care for my animals, my friends can’t visit, I’m very afraid, especially when my son goes to work and I’m alone,” says Irene Caldera, an elderly woman from Zacatecas who has lived in Lomas de Poleo with her son Salvador Aguero, 56, for 19 years.

Cecilia Espinosa, of the Paso del Norte Human Rights Center, says the private guards prevent food delivery trucks from entering and have even prevented individual residents from bringing in food and construction supplies to fix their houses. “The only providers they allowed in,” she says,  “were Corona and Lecheria Lucern” — the Zaragozas’ own companies.

Three deaths in 2005 have been attributed to the struggle — a man beaten to death as his house was destroyed and two children who died in a fire residents say was arson. (The government blamed it on faulty wiring). Other beatings and physical clashes have been common. The local church was destroyed, and rebuilt. More than 40 homes have been demolished. Residents blame these acts on “guardia blanca” — paramilitary mercenaries, with alleged ties to violent drug gangs — hired by the Zaragozas.

At the Zaragozas’ behest, the government utility cut off electric service to much of the area, even after residents had paid out of pocket just a year earlier to construct the electric infrastructure.

Residents have been offered new houses on small plots of nearby land. A number of families have taken the offer, but the 70-plus families who remain in the disputed area say the new plots are too tiny to raise animals.

Juarez Mayor Reyes Ferriz backs the Zaragozas’ claim of ownership, and says there are fewer than 20 families still in the disputed area.

“The landowner has possession and registered title to the land,” says Ferriz. “He allows easements for the possessors of property on the land” — the Lomas residents. Ferriz said the disputed area “will not be valuable for 20 or 30 years,” and that it is not geographically central to the border development plans.

The federal government has yet to take a definitive stance, though the federal human rights commission (without binding power) recently said the residents’ human rights were being violated.

Pedro Zaragoza was appointed to the bi-national New Mexico-Chihuahua Commission to promote development and tourism, convened by the former Chihuahua governor and New Mexico Governor Bill Richardson in 2003. The Jeronimo-Santa Teresa plan has also drawn opposition in the United States, most notably in El Paso,  where it is feared it will mean the gentrification of the city’s historic Segundo Barrio neighborhood. Since controversy over Lomas de Poleo broke out, U.S. municipal officials and developers have distanced themselves from the Mexican side of the project.

Veronica Leyva, a Juarez-based organizer with the bi-national Mexico Solidarity Network, calls it ironic that the Zaragoza Foundation, a philanthropic entity funded by the family, promotes anti-poverty and child welfare programs at the same time the Lomas de Poleo families are being harassed and repressed. (A spokesperson at the foundation said no one was available for an interview.)

On April 10, the anniversary of revolutionary Emiliano Zapata’s murder and a day of protest throughout Mexico, Lomas de Poleo residents and their supporters rallied outside the municipal hall in Juarez, collecting signatures on a petition demanding the government recognize the land as federal property and remove the Zaragozas’ guards.

“We have more rights to the land than them,” says Aguero, brandishing a copy of the 1975 federal decree denoting the existence of 25,000 hectares of federal land including Lomas de Poleo. “If they think they own the land, why did they wait until four years ago to tell us? Now it is convenient for them.”

Leyva sees the Lomas de Poleo issue as part of a larger picture of corruption and intimidation in the border region, which is often convenient for powerful business and development interests.

“The femicide, the exploitation in the maquilas, the corruption is all linked,” she says. “It’s all about a lack of human rights which is very profitable for some people.”

— Kari Lydersen


The July/August Lawrence Summers Memorial Award* goes to Roy Innis, chair of the Congress of Racial Equality, for comments made during his address to the 33rd Annual Meeting of the Resource Development Council for Alaska.

“There is an excellent example of this attack on economic civil rights right here in Alaska:  the recent listing of the Polar Bear under the Endangered Species Act. …

In raising [energy] prices, this listing will also visit the worst economic harm upon the low-income families and further handcuff the poor into the bondage of poverty. ..

I call on every one gathered here today, and every caring, thoughtful citizen in our great nation to join with me in challenging these Energy Killers, these modern day Bull Connors and George Wallaces, who are standing in the door, trying to prevent poor Americans from achieving Martin Luther King’s dream of equal opportunity and true environmental justice.”

Source: Resource Development Council, < sspeech.html>.

*In a 1991 internal memorandum, then-World Bank economist Lawrence Summers argued for the transfer of waste and dirty industries from industrialized to developing countries. “Just between you and me, shouldn’t the World Bank be encouraging more migration of the dirty industries to the LDCs (lesser developed countries)?” wrote Summers, who went on to serve as Treasury Secretary during the Clinton administration and is the outgoing president of Harvard University. “I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that. ... I’ve always thought that underpopulated countries in Africa are vastly under polluted; their air quality is vastly inefficiently low [sic] compared to Los Angeles or Mexico City.” Summers later said the memo was meant to be ironic.

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