Peter Brabeck
Chairman, Nestlé
10:20

Water Can’t Be Free

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Peter Brabeck, former CEO and now Chairman of Nestlé, thinks we’ll run out of water faster than we will oil, unless we change how much it’s considered a human right.

Peter Brabeck

Peter Brabeck assumed the top spot at Nestlé in 2008, after overseeing its strategic transformation into the world's foremost nutrition company. Since joining Nestlé in 1968, he has been in leadership positions in multiple countries, including Chile, Ecuador, and Switzerland. Since 1987, he has been based at Nestle's headquarters in Vevey. Mr. Brabeck is the Chairman of the board of directors of Nestle (since 2005). From 1997 to 2008, he was also the CEO of Nestle. Mr. Brabeck-Letmathe is a member of the boards of directors of L'Oreal SA, Paris (since 1997), and Roche Holding SA, Basel (since 2000). He is also a member of the Foundation Board of the World Economic Forum and a member of the European Round Table of Industrialists.

Transcript

Question: Are global conversations like the World Economic Forum effective?

Peter Brabeck: It always depends on what your promise is. The promise of the World Economic Forum is help to improve the state of the world. I think in this respect, this claim, the World Economic Forum, has been leading up to it.

Has it been performing sufficiently? Has it been able to help solve all the problems? No, I don’t think so, because this is such a vast challenge that one single institution cannot do it.

But has it been helpful? Many of the issues to be discussed being brought up to the attention of the world public opinion, yes.

A very good example is the water issue. When it came to my mind that for the sustainability, first of the company that I’m chairing, but also, for humankind, the most important issue is water. I used the forum of Davos in order to speak about the subject, and I can you tell at the first meeting, about four years ago [i.e. circa 2005], there were about ten people in the room who were interested in the subject. If you have been this year [i.e. 2009] to Davos, you would have seen that there were several major dialogues going on.

And today, if I look at the media, I can see a higher level of recognition of water being the issue that we have to tackle, than perhaps climate change, which I think is absolutely right. I have said before, we will be running out of water long before we will be running out of oil.

A forum like Davos helps enormously to identify new issues that are critical for the world, but also to help and to work on how we can find solutions. For example, in the case of water, the World Economic Forum has created a global agenda group where we have more than 25 universities united and where we are now talking about what the solutions are to this problem and what we can propose to governments--concrete action steps--in order to help to solve those problems. So in this sense, I think this has been very helpful and I think the World Economic Forum has a major role to play in helping to improve the state of the world.

Question: Can we solve the water problem?

Peter Brabeck: I don't think that there is one institution alone that can be up to this challenge that water means because there is one fundamental and crucial difference between CO2 and water.

Let's suppose today we decide, you and me, that we are not emitting one kilo of CO2 into the air. We have made our small impact. But if you and I decide today that we will not take a shower in Switzerland in the morning, we have not solved the problem of the water in the Sahel region, in the Punjab region, in China and in the Midwest of the USA.

Contrary to CO2 where you can have, and you have to have, a global view on the program, in the case of water, in order really to solve this problem, it can only be solved on a local or regional basis. And to make things worse, it is on this local and regional basis, in most cases, it is not one-nation solution, it's a several-nation solution.

If you look at one of the most politically delicate aspects of the Middle East—it’s the water supply for Israel, Jordan, Syria, and Palestine. Not one of those countries can solve its water problem alone. If they are not working together, if they do not understand there is one water basin, and how we are using this water in all its aspects from the moment it comes to earth--how we put it, how we keep it, how we use it, how we share it with each other--you cannot solve this problem. And that's the difficulty with water.

Question: How is the human right to water extreme?

Peter Brabeck: I think that's a very, very crucial question and it is being brought forward by some NGOs in a very simplistic manner. They are saying water is a human right; therefore, it's not a commercial material.

My answer to this is, yes, you're right. Water is a human right.

The 25 liters of water that we need as a minimum, as a person, in order to live decently, which is my four to five liters of liquid which I have to take to me, which is about the four or five liters for the cleaning. It's about the four or five liters that we need in order to clean the dishes. Yes, this is a human right. But I don't think it's a human right to fill up my swimming pool, to wash my cars, to water the golf course, or even to water the garden. I don't think this is a human right.

And if we do not understand that the water which is a human right is the smallest part of the water that we are using, and that the big parts which can be, just to give you a figure, I mentioned we need about 25 liters per day per capita. We are using in the United States about 400 liters per day. So this 380 liters of water; I don't think is a human right. This should have a price. Why? Because if you do not put the price, we would not make the investments which are necessary in order to use the most precious of the resources that we have in a more responsible manner.

We cannot go on that we are losing in the developed countries, I'm speaking now about Europe, about the United States, that we are losing more than 30 percent of our water supply because we don't have sufficient infrastructure because the infrastructure is completely deficient. It cannot be that we are losing 55, 60, 70 percent of the water supply in developing countries because all the tubes have huge leakages and the water is getting lost. We cannot continue to use the water and irrigation systems, which are thousands of years old and are not being upgraded and that we would, therefore, say that according to the OECD [i.e. The Organisation for Economic Co-operation and Development (OECD)] we would need every single year an investment of one trillion dollars just to keep up the infrastructure of the water supply. In relative, we are spending a little bit more than five hundred billion, not even half of this.

So the water situation gets worse and worse. And if you do not give a value to the water, those investments are not going to be made because nobody has an interest to invest because you don't have an economical return. If the value of water is zero, any investment will never yield. If the water has at least a decent price, an investment might yield. And that's why we don't make the investment.

Those who emotionally appeal that water should not have any price because it is a human right, they don't look into reality. In those countries where there are not sufficient investments made in infrastructure, the ones who are paying most for the water are the poorest of the country. If you look at the statistics, you will see that a rich person in New York pays about ten to fifteen percent the price for one cubic meter water than the poorest in Bangladesh or somewhere in India. And this is the injustice.

This is when you don't give value to the water. It's not the rich that are paying the price. It's the poor who pay the highest price. Why? Because there is no infrastructure. Therefore, there is no fountain. Therefore, those poor people have to buy the water by big trucks and the price of those trucks is about six to eight times as much as what the normal water supply would be costing.

So there is a complete misconception or a misreading of the reality by saying water is human right, therefore it shouldn't have any price. The outcome is that the poorest are paying even more. Or they have to walk, like in Africa. The average walking time for ladies and for children is six hours per day in order to walk to the next fountain and to carry the ten liter or twenty liter pack on their head home.

Six hours on average for every lady and children in this country. This is what you get when water doesn't have a price.

Recorded on August 25, 2009.


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