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NEWS: Nestle head says company in talks with Alberta to trade in water

Peter Brabeck

Peter Brabeck

The Edmonton Journal reports, “A controversy over water management has boiled up in Alberta over a media report in which the chairman of a major food company suggested the province is looking at the idea of allowing water to be traded and sold on an exchange like a commodity.”

“‘We are actively dealing with the government of Alberta to think about a water exchange,’ Peter Brabeck, chairman of Nestle, told Reuters following a speech in Geneva on Tuesday. He told the wire service that Alberta is a good place to consider the concept, in part because there is expected to be increasing competition for water between agricultural producers and the petroleum sector. If water was treated more like oil, with prices for the product fluctuating according to supply and demand, it would encourage users to treat it with more respect, he said. Potentially, an exchange system could help to curb a shrinking availability of fresh water in many parts of the world, Brabeck said. ‘You see what happens when demand is growing. The market reacts and people start to use oil in a more efficient way,’ he told Reuters. ‘One thing that does not move at all is the price of water.’ …As part of his visit (to Edmonton last year), Brabeck spoke about the benefits of giving water a price that reflects the true cost of treating and transporting it. Governments shouldn’t subsidize or hide the cost of commercial water because that provides no incentive for companies to use it efficiently, he told The Journal.”

“Emma Lui, a water campaigner with the Council of Canadians, said she agrees with Brabeck’s goal of promoting conservation, but not with his method. ‘We are reluctant to price water and make it a commodity because we don’t know how climate change is going to affect future water supplies,’ she said. ‘To say that only a certain amount can be set aside for drinking water and the rest can be sold, we don’t support that.’ Lui said most people are aware of the need to conserve water already, and a market provides no guarantee of less consumption. ‘It could send the wrong message, in that if a company was able to afford whatever the price may be, then they would be able to use it as much as they wanted, or pollute it.'”

“Alberta Environment denied that any negotiations are taking place to institute a formal exchange. ‘We’ve never considered going as far as what he is talking about — not even close to that,’ spokeswoman Cara Tobin said. However, Environment Minister Rob Renner acknowledged there is an emerging debate around the idea as a potential way to encourage water conservation. He couldn’t recall whether he spoke with any Nestle executives, but said he has heard from many people on both sides of the issue. ‘I think there will come a day, at some point in time, where we need to value water. Whether that means in the form of a regulatory regime or whether it means in some form of a market remains to be seen,’ Renner said. ‘Not all water is consumed for the purpose for maintaining basic necessities of life. And so the issue really is, how do we allocate the rest of the demands for water in a fair and equitable way?'”

The article concludes, “There is already an exchange system of sorts in southern Alberta, in which holders of water licences are permitted to transfer, trade or sell a portion of their water allotment to other organizations that need it. …It’s unclear if that transfer system could eventually be extended to the rest of the province, though the government is currently conducting a lengthy review of its water management policies… A major report delivered last week by a government-appointed economic panel recommended the province adopt a market system that would allow water allocations to be sold or leased at a price determined by supply and demand. The market would be overseen by a new Alberta Water Authority, which would also develop a plan for water infrastructure and maintain a database of water information.”

The full article – which includes comments from Alberta’s opposition parties and Water Matters – can be read at