국제연대 관련자료

The Current status and problems of water privatization in Korea

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The Current status and problems of water privatization in Korea

2003. 3. 22

‘Mulsarang’(I Love Water), Volunteer Group of KFEM

The KFEM(Korean Federation for Environmental Movement) is a largest and most influential
environmental civic group in Korea with 52 branches and 87,000 volunteer members
nationwide. It has obtained many outstanding results on water issues including
‘Withdrawal of Dong River Dam’ and now has a wide sphere of action on ‘Improvement of
Sustainable Water Resources Management’ as one of the three main agendas in 2003.

1. Current Status of Drinking Water

l Feature of Water Resource
70 percent of the annual total precipitation is concentrated in Summer (between June and
September). Thus floods occur in summer and in other season we have water shortage.
South Korea has an average precipitation of about 1,274 mm annually, which is 30 percent
more than the world average but the average annual precipitation per capita is only about
10% of the world average.
Therefore, wide variations of precipitation in season, time and region make water
resources management hard to handle.

l Current Status of Waterworks
ㅇ Supply of Drinking Water
As of end of December 2001, 94.1 % of the total population is supplied with tap water and
5.9% with well water and underground water. Almost 100 % of metropolitan and small-and-
medium sized cities is supplied with water supply facilities and a little bit lower in
agricultural and coastal areas. Areas without drinking water resources are secured by
water quality management. Therefore, Korean people are supplied with water in terms of
quality and quantity.
Daily supply per capita 374 liters, ( 361 liters when industrial water use is excluded )
which is the lowest level since 1994, is owing to decrease of water use by water savers,
water-saving movements and reduction of water leakage through replacement of aged
pipelines.
The nationwide average water rate of 2001 is 489.1 KRW per ton, which is 85.9 % of the
production cost 569.1 KRW per ton up from 75.2 % of 2000.

ㅇ Operating Bodies
Waterworks are currently operated by local autonomy governments and state-run companies.
Putting operation in private hands has been approved and carried out since 2001.

** Ten years ago, the Seoul City Government drove to transfer the control of waterworks
from local autonomy governments to state-run companies for achieving efficiency and
specialty but failed due to resistance of related organizations. However, it is still
being retried for improvement of management efficiency.

l Current Status of Sewage System

ㅇ Status of sewage system distribution
As of the end of 2001, the sewage system distribution rate based on population is 73.2%
and the volume of capacity of 184 sewage treatment plants is 19,230,000 tons per day.
The above rate of metropolitan cities is about 100 %, which is higher than that of small-
and-medium sized cities.

ㅇ Operating Bodies
The operation of sewage system has been done by local autonomy governments but entrusted
to private organizations since 1997. 118 sewage treatment plants, 64% of the total, are
run by private organizaitons as of the end of December 2001, jumping up from 42% as of
the end of December 2000 and in the course of acceleration.

** In 2002, Inchon Metropolitan City entrusted the construction and operation of its
sewage treatment plant to Vivendi in partnership with Samsung Engineering, which led the
entry of a multinational.

l Roll-out of Drinking Fountain Water
The sale of drinking fountain water was approved in 1994 and full-scale water
privatization is on the course. The Korean market volume of drinking fountain water
reached 300 billion KRW in 2002 and about 80 companies are participating now. The price
of tap water is 1 to 2500 compared to that of drinking fountaion water on the market.
Also, distrust toward tap water enlarged the market of water purifier rapidly and its
expected volume is 1.3 trillion KRW.

2. Current Status of Drinking Water Use

l Current Status
ㅇ Survey on utilization of drinking water
55~67.5% : Boiling tap water
12.5~22% : Using water purifier
10.1~18% : Underground water or local mineral water
3~10.1% : Fountain water on sale
0.9~2.5% : Tap water

ㅇ Increase of distrust toward tap water
Few people (0.9~2.5%) drink tap water without additional safety facility.
Reason : smell of disinfectant, pollution of waterworks resources, worn out water
pipelines and suspicion of management of water purification plants.

l Safety Comparison by Water Quality Test
ㅇ Research result of incongruity rate at Seoulites’ request
Contrary to citizens’ use rate and anxiety, the order was ① Tap water ② Water purifier
③ Fountain water on sale ④ Local mineral water and underground water

3. Water Issues in Korea

l Establishment of Drinking Water Safety

ㅇ Tap water safety ( detection of virus and protozoa )
Some scholars assert that they have detected virus and protozoa from tap water. The
Korean government have refuted to this and civic groups have requested countermeasures
for establishment of tap water safety, leading to controversies.
There have been social issues in the recent 10 years and thus distrust toward tap water
expanded but paved the way to reinforce the standard of water quality.

ㅇ Safety of public drinking water like mineral water site and well water
In 2001, 11.1 % of 3,565 samples lacked the quality guideline, lower than 16.7% of the
second half of 1999 and 14.8% of the second half of 2000.
But in September 2002, 22.6 % of 1,758 samples lacked the quality guideline, higher than
that of the previous year. The pollution of water resources increased.

l Reckless Water Resource Development of KOWACO
The Korea Water Resources Corporation, an affiliated organization of Ministry of
Construction and Transportation, predicts 1.8 billion tons of water deficit around 2011
and plans new 12 large dams for its preparation.

However, no common consent on demand and supply brought about controversies and residents
in the future dam-construction regions are carrying out anti-dam campaigns through
nationwide network, ‘National Action for Anti-Dam’, along with KFEM and other
environmental civic groups.

Under discussion is disorganization or privatization of the Korea Water Resources
Corporation that has committed reckless expansion and ecology destruction such as land
supply, industrial complex, dam construction and water purification facility.

l Entrustment of waterworks and sewage system to private sector
The Korean government ratified the law to entrust waterworks and sewage system run by
local autonomy governments to private organizations such that some local governments plan
to do so.

In August 2001, Masan city agreed on the contract with the joint-venture company of Korea
Water Resources Corporation and Vivendi, France but the Masan city labor union of public
servants, the Masan city congress and civic groups are strongly against this and so the
nullification is expected.

l Improvement of water management system and Beginning of water demand management
Currently, water resources in Korea are managed based on administrative region and
various central ministries and authorities take separate control of quantity and quality
of water. Thus, under heated discussion are changes from administrative-region base to
watershed base and integrated management of quantity and quality.

Besides, low water rate, 85 % of production cost, leads to overuse of water compared with
other OECD member countries and Ministry of Environment and civic groups focus on demand
management to save water.

l Controversy over fluoridation
37 of nationwide 589 water purification plants are equipped with fluoride-inserting
machines and additional 11 plants plan to introduce the machines. Therefore, 5.97 million
people who are supplied with fluorided tap water, will rise to 7.2 million people, which
is about 15% of the total national population.
Opinions of civic groups on fluoridation of tap water are different and this has brought
about a social controversy. This contributed to the annulment of fluoridation plans of 3
local autonomy goverments.

4. Current Status on Water Privatization and Roles of NGOs

l Local autonomy governments’ standpoint on waterworks privatization
According to the survey on cities and provinces, 63% of local governments are in a
positive position on waterworks privatization and 40% of them took it into consideration.
However, few local governments have plans for it in the near future.

l Core issues on water privatization and state-run companies in the Korean
situation
South Korea has maintained the system of putting whole control of SOC in hands of the
central government. Especially, the central and local governments hold ownership and
management of water-related facilities and those are entrusted to state-run companies
under Ministry of Environment and Ministry of Construction and Transportation.

Concern of NGOs and people that privatization may do harm to publicity by pursuit of
profits prohibits privatization of public sector, for example, railroad, postal service
and so on.

Water Problems caused by low water rate and state-run companies
The central government has taken the initiative of supply of drinking water and so there
hasn’t been infringement of human rights, supply suspension and increasing burden of
lower income class. On the contrary, lower water rate less than production cost and poor
demand management bring about excessive water consumption. This gives Ministry of
Construction and Transportation an excuse to build large dams through the Korea Water
Resources Corporation.

State-run companies in Korea have enjoyed their monopolistic position to induce fat
organization and imprudent management and to reduce efficiency. But they promote
unreasonable business expansion for enlargement of their organizations.

Corporations of local autonomy governments need specialzed human resources and take a
lukewarm attitude for technology investment to provide unsatisfactory service.

Therefore, South Korea is in urgent need of its efficient system in order to check local
autonomy governments and state-run companies.

Civic groups agree to privatization and disorganization of some water-related state-run
companies that are mad at mammoth finance and dam construction along with careful
investigation and discussion on alternatives.

l Position and Roles of Korean NGOs

Korean civic groups has led democratization in Korea as the third sector and played
important and influential parts in many fields like environmental protection and
surveillance on conglomerates.

On water problems, Korean NGOs’ main concerns were safe quality and appropriate quantity
and their activities improved the management of rivers and water resources and reinforced
the standards of tap water, drinking fountain water and discharge water from sewage
treatment plants. Also, they are carrying out anti-dam campaigns to block large dam
construction.

ㅇ Privatization of Tap Water
– The government permitted privatization for management efficiency but expected strong
resistance of NGOs because of concerns over skyrocketing of tap water rate and supply
suspension would rarely introduce privatization. Besides, few local autonomy governments
have plans, with the exception of Masan city, and so NGOs don’t have practical
alternatives and countermeasures.

However, Korean NGOs worry about ‘Is there another proper alternative if privatization
is not alternative to overcome the limit of local autonomy governments and state-run
companies?’ or ‘Is partial introduction of privatization plausible?’. To find out
desirable and pracitcal alternatives is the biggest assignment. (We want to listen to
experiences of other countries. )

ㅇ Building up strict surveillance over Korean companies in overseas countries
South Korea is a member of OECD and many Korean companies enter the foreign market for
economic cooperation. But some companies construct large dams and commit indiscreet
destruction of local ecology system.
Korean NGOs keep their eyes on them and it needs information provided by foreign
activists because it is more effective for Korean NGOs to struggle with Korean companies.

5. Proposals to cope with matters on water privatization
l Consolidation of international water network and information share on water
privatization policies of multinationals
The Korean governments allowed privatization of waterworks run by local autonomy
governments and state-own companies and so multinationals begin to enter the Korean
market.
The state-run companies team up with multinationals to win water-related projects in
foreign countries.
Therefore, it is important to hold back their plans by sharing information on
multinationals at real-time base through ordinary-times network.
l Request the international community to make earlier enforcement of WSSD follow-
up measures
Joint activities are necessary, urging earlier carry-out of the international community,
based on Paragraph 23 ∼ 27 of ‘Implementation of WSSD’ adopted in Johannesberg which
describe the support of access to safe water.
Criticism and surveillance on international organizations and multinationals that take
advantage of World Water Forum as a means of business expansion and marketing and make
excessive and unjust demand for some countries.

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