Managing the Globalization of Water Services in a World Affected by Climate Change: Regulatory and Economic Challenges

This research group examines the international law that governs the globalization of water services, to identify gaps and the need for changes, and to relate the legal framework to economic issues surrounding water provision including the economic rationale for protection of foreign investments.

The project contrasts the economic-legal view on international investment to the notion of water as a nascent human right. The two aspects of water—investment protection and human rights—are increasingly contradictory. While the scarcity of water has intensified the movement towards a human right to water, private control over water utilities is increasing. In particular, the project examines how arbitral tribunals have dealt with the failure of contracts to manage privatized water supplies by focusing on economic cases of water privatization. The globalization of water services illustrates the clash of foreign investors’ protection with human rights protection as the state's responsibility. This tension is only emerging but will intensify rapidly since more investors will seek access to fresh water in new countries.

There is therefore an impending risk of emergence of global monopolies in this scarce commodity, which would be detrimental to many people, especially under climate change. These risks and challenges demand a proper regulatory answer, which should include an economic, legal and human rights perspective on water services. 

The expected outcomes of this project are:

  • To improve the understanding of current international legal framework in relation to internationalization of water services, to identify gaps in that framework (especially under the threat of possible climate change) and to propose changes to fill those gaps.
  • To investigate the nature of water as a resource, especially the nascent human right to water and its interaction with water pricing.
  • To assess whether host states need greater certainty in managing private investment contracts governing the supply of their water by foreign consortia.
  • To inform policymakers and stakeholders about the implications of ‘globalization’ of water services for the capacity to adapt to climate change in relation to response options for water resources.
  • To suggest legal developments which might enable states to better manage vital water services, even after privatization to foreign companies.

Milestones 

The project includes the organisation of three workshops and one international conference. Each WUN partner has hosted one event (Sydney: understanding the economics and business of water services; Maastricht: understanding the human right dimension of the access to water; Leeds: mapping the nascent securitization of water; and CUHK: delimitating the application of the international law of foreign investment to water services). The workshops involved researchers on the project, but also other researchers, representatives of business, legal profession and governments. The structure of the workshops maximize the international, but also the regional impact of the project.

The research project will result into a series of journal publications and into an edited volume late 2015.

  • Julien Chaisse & Debashis Chakraborty (2013) ‘From science to law of subsidies: an empirical and political analysis of fisheries international trade’, in Bryan Mercurio and Kuei-Jung Ni (eds)Science and Technology in International Economic Law: Balancing Competing Interests (London: Routledge) 241-259 [Purchase: Routledge Website]
  • Julien Chaisse (2014) ‘The Investment Version of Asian Noodle Bowl-- Proliferation of International Investment Agreements’ Asian Development Bank Working Paper No.128, April 2014 (64 p.) [Full text: Asian Development Bank (Free)]
  • Gary Dymski (2014) ‘The financialization of water services and the financial securitization of water: reflections, fears, dreams’ WUN Workshop, Maastricht University Brussels Campus, 26-27 June 2014 [Full text]
  • Tiho Ancev and Samad Azad (2014) ‘Joint Measurement of Economic and Environmental Performance of Water Industries’ WUN Workshop, Maastricht University Brussels Campus, 26-27 June 2014 [Full text]
  • Legally Wet: How the Law Can Help Quench the Thirst for Fresh Water, 23 June 2015, Harbour Times [Full text]

  • Professor Julien Chaisse, Chinese University of Hong Kong
  • Professor Bryan Mercurio, Chinese University of Hong Kong
  • Professor Bryan Druzin, Chinese University of Hong Kong
  • Professor Anatole Boute, Chinese University of Hong Kong
  • Professor David Chen, Chinese University of Hong Kong
  • Professor Leïla Choukroune, Maastricht University
  • Professor Peter Van Den Bossche, Maastricht University
  • Professor Tihomir Ancev, University of Sydney
  • Samad Azad, University of Sydney
  • Professor Gary Dymski, University of Leeds
  • Professor Francesc Hernandez-Sancho, University of Leeds
  • Professor Laurence Boisson de Chazournes, University of Geneva
  • Professor Francesc Hernandez-Sancho, University of Valencia
  • Professor Jansen Calamita, British Institute of International and Comparative Law

Responding to Climate Change