Who wants to get a monopoly right to the state's water resources?
The State Water Agency presented a vision for the creation of the joint-stock company “Water of Ukraine”. The dispute over who will control the reclamation systems has been going on for a long time. Two departments are fighting for this area - the Ministry of Ecology and the Ministry of Agrarian Policy. We are talking about two different philosophies: environmentalists are trying to retain the right to manage water bodies and water management structures as much as possible, and farmers are trying to gain the most effective access to them to conduct agricultural business.
But while the two ministries were sorting things out, the Office of the President developed its own vision of the problem. There they decided on the path that the state had already taken in the case of forests. Let us remind you that the government has already created, bypassing parliament, the state enterprise “Forests of Ukraine”. In the future, as the government decree provides, it has every chance of becoming a joint stock company, and this is a likely path to further privatization. But as for water, “Water of Ukraine” should become a joint-stock company at the start.
The curator of the reform in the forestry industry is the Deputy Head of the Office of the President Rostislav Shurma. And as it turned out, he also took up the reform of the water industry.
Last September, Ermak’s deputy stated that after “Forests of Ukraine” there would be another similar project, because they are now “working with water.” And the ultimate goal in all this is the maximum number of economic functions that can be transferred to private owners, transferred through privatization.
Who fought for control of the water
The fight for control of water resources has begun since the 2019 presidential elections. The chairman of the committee on environmental issues, people's deputy Oleg Bondarenko (“Servant of the People”) tells how the discussions took place: “Indeed, there was a lively discussion about who should control the State Water Agency. The Ministry of Agrarian Policy made the first attempts to gain control over the agency, but our committee on environmental issues did not allow this.”
As a result of this struggle, an intermediate agreement was reached: water as a resource should be managed by the water agency and environmentalists, and the reclamation infrastructure should be managed by farmers, who prepared legislation in order to increase their influence on reclamation systems. So, a few days before the full-scale invasion, the law “On the organization of water users and stimulation of hydraulic reclamation” was adopted. And now another bill (7577) on irrigation systems is being prepared, which was essentially submitted by members of the Agrarian Committee.
Director of the Institute of Hydrobiology, corresponding member of the National Academy of Sciences of Ukraine Sergei Afanasyev criticizes this approach and emphasizes that the primary task is to preserve the ecological state of water. According to the scientist, everything was as clear as possible before and the water sector was one of the first to move to the real implementation of European principles: “That was until this distribution for land reclamation and water management began. European integration obliges us to take care of the ecological condition of surface water bodies - this is the primary task of the State Water Agency. But, in my opinion, not very right things happened, we took out all these “reclamation issues” and transferred them to the State Agency for Land Reclamation and Fisheries, but at the same time we forgot that any water body is an integral ecosystem. This is what the farmers have essentially taken control of, and the State Water Agency is now gravitating towards the Ministry of Environment. This is where our water sector is now. I don’t really understand what concept they want to implement at NJSC “Water of Ukraine,” but what I read caused me concern.”
Afanasiev notes: if we follow the example of the creation of the State Enterprise “Forests of Ukraine”, then the forest in this case is considered as a resource that is traded:
“But water is not just a resource. So we can really lose the most important thing - habitat for fish, shellfish, algae, and undermine the self-cleaning and self-reproducing ability of our rivers and lakes. And this jeopardizes our European integration.”
The head of the expert department of the Ukrainian Environmental Group NGO Petr Testov notes that perceiving forests, land, and water as sources of income are the approaches of the last century: “The concept of ecosystem services has long been used in the world. It is necessary to evaluate not the cost of a cubic meter of water or wood, but the total impact of forests or water bodies on the environment and human life. There is already a negative example of the law “On the organization of water users and stimulation of hydraulic reclamation” - the “effective” use of reclamation systems by farmers by increasing water intake after reconstruction led to the disappearance of water in the ponds that were used by local residents. And the shallowing of the Tnya and Tenka rivers within the Green Lagoon reserve. In many cases, it is better not to modernize reclamation systems, but simply to dismantle and restore the swamps. This would be a truly modern environmental policy. Unfortunately, the emphasis only on the economic component of natural resources is a consistent policy of the Office of the President, and the central authorities remain in the role of executor.”
The State Water Agency plans to complete the process of creating NAC “Water of Ukraine” by the end of this year. A completely logical question arises: who will gain control over one of the most valuable resources?
What awaits us and who benefits from it?
Now the State Water Agency is responsible for the ecological state of the country's water resources. Here they explain why we need “Water of Ukraine” this way: “Limited water resources require their more efficient use. The existing model does not meet modern needs. Among the biggest shortcomings: significant underfunding, virtual lack of control over water use, deteriorated infrastructure - more than 90%, lack of transparent pricing, and the like. The creation of the national joint-stock company “Water of Ukraine” aims to ensure water accounting, fair pricing, optimization of organizational processes and infrastructure management. This is an opportunity to attract investments for modernization and development, reconstruct main canals, implement projects for the construction of hydropower facilities and the installation of solar panels on water bodies.”
In a presentation recently presented by the State Water Agency during the United for Nature forum. Agenda for Ukraine talks about the benefits expected from creating a joint stock company, one of them is an additional annual GDP growth of 1.2%.
A teacher at the Kiev-Mohyla Academy, ex-Deputy Minister of Ecology Mikhail Khorev, who studied the presentation, notes: “Here it must be emphasized that they will not create a state enterprise, but a joint-stock enterprise. Water cannot be ordinary. When we talk about a joint stock company, profit appears as a measure of efficiency. Profitability is the main indicator for the activities of joint stock companies. If there are losses, then the shareholders are unhappy - and then the price of the product should rise. And then the state, since water must be accessible, will provide subsidies. This won't work. There was already an attempt to do something similar in North Macedonia, Bulgaria, Georgia, and they abandoned it.”
The fact that water is a special resource is stated in the directive of the European Parliament and the Council: “Water is not like any other commercial product, it is rather a heritage that must be protected, protected and treated appropriately.”
People's Deputy Olga Vasilevskaya-Smaglyuk (“Servant of the People”) resigned from the board of the State Forestry Agency precisely because she did not agree with the creation of the State Enterprise “Forests of Ukraine,” which in the future could become a joint-stock company. She explains: the creation of NJSC “Water of Ukraine” is a long and voluminous process. “It almost always entails the loss of resources “on the road” to corporatization in favor of private interests, mass layoffs and centralization of management. Future corporatization, which, as I understand, is in the plans of the initiators, will likely lead to a decrease in the quality of services, unreasonably high salaries for governing bodies and the supervisory board, procurement fraud and a complete lack of accountability,” notes the deputy.
People's deputies from the pro-government party are surprised that such issues are resolved without the participation of the Verkhovna Rada, which must work out legislative changes related to the new distribution of functions, both in the case of the creation of the State Enterprise “Forests of Ukraine” and in the case of the NJSC “Water of Ukraine”.
“Regarding the idea of creating the NJSC “Water of Ukraine,” I would like to note that I don’t see anything other than the desire of individual “businessmen” (I can’t call them statists) to steal the national natural wealth of water from citizens. They have already done this with the country’s forests, now using the same scheme, they want to do this with water. And all this is done bypassing parliament, because the ideological inspirers of this understand that the Rada will not allow such decisions to pass. So we went through the government. But I would like to warn those who sign such documents that they will have to answer for this over time, but those who push the signatories to such decisions will sit abroad and spend the funds stolen by your hands. So think twice!” – notes people’s deputy Alexander Aliksiychuk (“Servant of the People”).
By the way, in the fall, Rostislav Shurma, when commenting on his plans for water, focused exclusively on the role of the government and did not mention parliament at all: “Our understanding is that the Cabinet of Ministers and executive authorities should be focused on rule-making activities, on regulation, on establishing specific rules , but, according to the experience of many countries, there should be a single large economic entity - a single mega-holding, where economic functions will be concentrated.”
But Shurma’s area of interest is not only water or forest resources. He also lobbied for legislation related to agricultural land. Now one of the scandalous bills, which is positioned as an initiative to quickly attract investment and restore Ukraine, is already preparing for the second reading (9627).
