Indonesian court bans monopoly on water resources

Indonesian court bans monopoly on water resources
People stand in line for water in the Petamburan area of West Jakarta in this Sept. 2, 2011, file photo. Water scarcity and distribution have become major issues in Jakarta.

In a move to maintain access to clean water, the Constitutional Court has revoked a law that had allowed the private sector to monopolize water resources.

The landmark decision puts an end to the 2004 Water Resources Law, which paved the way for concessions of water resources by companies that sold packaged tap water.

While delivering the verdict on Wednesday, the panel of justices argued that the law contravened the Constitution, which stipulates the right to water as a basic right and mandates the state to control and regulate water resources.

The judges later decided that the private sector could not be granted exclusive rights to water resources, such as rivers, springs, lakes and swamps, but may apply for licenses to sell a specified amount of water that would be decided by the government and local residents.

"The private sector cannot monopolize water resources and can only sell a limited volume of water," said justice Aswanto.

The court has also banned the sale of clean water to other countries.

The verdict also reinstates the previous 1974 Water Law until a new law is deliberated.

Experts applauded the decision, saying that it had returned full control over water resources to the government. Energy and mining law expert Bisman Bakhtiar heralded the court's decision, saying that it would push the government to be stricter on water distribution companies nationwide.

"The private sector should not have full control over water resources. The commercialization of water is not prohibited but the government can now be stricter on the companies to ensure that no one company is monopolizing the water resources," he told The Jakarta Post on Thursday.

Since the government had the power to distribute water-use permits, Bisman said, it must specify the amount of water and where water distribution companies were allowed to extract water.

He added that the government must also impose strict sanctions on companies that draw water from resources they are not permitted to.

"This should not be imposed just on big companies. The government should also closely monitor the smaller companies for violations," he said.

Sudaryatmo, a member of the Indonesian Consumers Foundation (YLKI), echoed Bisman's sentiment, adding that the government should draw up an essential commodities act to prevent interference from outside forces, much like India did in 1955.

"The court's decision has made it clear that water is an essential commodity. If the government creates an essential commodities act, it can dictate which commodities it fully controls," he said.

Sudaryatmo said that in the current system, bottled-water prices followed market fluctuations. If an essential commodities act was imposed, the government would have the power to adjust price limits and penalize those selling such commodities above the set limits.

Both Bisman and Sudaryatmo said that the revocation of the law would have little impact on those who currently relied on bottled water due to a lack of clean-water resources.

"I don't think there will be a water crisis. It is unlikely that the companies will stop selling the amount of water they do now. The change would only affect how companies produce and distribute their products," Bisman said.

Edo Rakhman of the Indonesian Forum for the Environment (Walhi) said the repeal of the law should be a boon for locals living near water resources.

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