Water Rights Between Social Enterprise and Social Activism

Water rights between social activismand social enterprise

Bronwen MorganProfessor of Law and Australian Research Council Future, UNSW School of Law, Australia

Sarika SeshadriPhD Candidate, University of Bristol, UK

Water rights involve an amalgam of property rights and socio-economic rights that possessan inescapable regulatory dimension. The resulting uneasy mix of public responsibilitiesand private property regimes means that the details of the legal entity structure involvedare central to the viability and effectiveness of implementing water rights on the ground.Small-scale social enterprise structures offer a fascinating site for exploring the tensionsendemic to the field of water rights. This article explores the ways in which the entrepre-neurial energies of business approaches to the implementation of water rights articulatewith the impetus for structural change embedded in practices of social activism. Ourmain purpose is to interrogate too easy an assumption of uni-dimensional or static relation-ships between social activism and social enterprise. We argue that there are multiplediverse relationships possible between them, including oppositional, evolutionary, comple-mentary, and dialectical relations. We illustrate these shifts empirically with examples fromIndia and Bolivia. The article stresses the ambiguous potential of both empowerment andoppression when business methods are used to secure social outcomes, including thosepromised by the guarantee of a human right to water.

Keywords: water rights, social enterprise, social activism, governance, development

1 INTRODUCTION

Water rights involve an amalgam of property rights and socio-economic rights thatpossess an inescapable regulatory dimension.1 The regulatory aspects of ‘makingrights real’2 often involve positive state regulation, and this has posed a number ofchallenges to the conceptualization of a human right to water as a right against astate. Perhaps paradoxically, one set of practices that partially responds to this concep-tualization challenge is to implement a socio-economic right, such as the right towater, through delegation to private enterprise. If the private sector is responsiblefor operational delivery, then the ‘public’ responsibility of the state can more easilybe conceptualized as being that of ensuring universal access and other social respon-sibilities in the provision of access to water embodied in the regulatory dimension of

1. B Morgan ‘The Regulatory Face of the Human Right to Water’ (2004) 15 Journal ofWater Law 179; B Morgan, Water on Tap: Rights and Regulation in the TransnationalGovernance of Urban Water Services (Cambridge University Press, Cambridge, May 2011).2. C Epp, Making Rights Real: Activists, Bureaucrats, and the Creation of the LegalisticState (University of Chicago Press, Chicago, 2009).

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water rights. But this move has led to criticism of rights-based approaches as beingprey to marketization3 and to individualization.4 The use of private business structuresand methods to deliver access to water as an operational matter has been equally con-tentious.5 Commentators frequently stress how the collective and networked nature ofwater, combined with its essential nature and its salience to distributive justice, tendsinevitably to draw in either or both state or community-level control.6 Overall, thisuneasy mix of public responsibilities and private property regimes means that thedetails of the legal entity structure involved (whether that be a community-led orga-nization, a regulated private company, or a corporatized state company) are central tothe viability and effectiveness of implementing water rights on the ground. This cre-ates a context where small-scale social enterprise can seem to offer hope for bridgingthe tensions endemic to the field of water rights, as we argue below.

To understand why social enterprises occupy this important bridging space, con-sider two competing and incompatible valences given to the notion of water ‘rights’.One stresses water rights as collective social and economic entitlements embedded ina social movement for structural change, focused largely on collective responsibilityoften instituted through states. The other is tied more closely to private property rightsand to private legal entities that compete to provide services in a market setting. Asone of us has argued at greater length elsewhere,7 these competing visions structuredmany of the political conflicts over access to water in the 1990s and 2000s in settingsas diverse as Bolivia, Chile, France, South Africa and New Zealand. But morerecently, hybrid governance structures have become pervasive in the institutional ima-gination of those responding to the challenge of access to water,8 including amongstthose who seek to implement it in terms of a fundamental human right. And socialenterprises – often taking the form of trading organisations using business methodsthat channel the bulk of their surplus income to support a social or environmental mis-sion – are a focal instance of a hybrid governance structure. Their ‘social’ facets reso-nate with the first understanding of water rights articulated above, while their status asan ‘enterprise’ is more in tune with the second. This gives them their apparent brid-ging potential, particularly when operating at a small scale where entrepreneurial zealfor a social mission, organizational flexibility and inspirational leadership all seemmore visible and accessible than in large-scale public–private partnerships.

3. A Grear, ‘Human Rights, Property and the Search for “Worlds Other”’ (2012) 3(2) Journalof Human Rights and the Environment 173–95.4. K Bakker, ‘The “Commons” Versus the “Commodity”: Alter-globalization, Anti-privatization and the Human Right to Water in the Global South’ (2007) 39 Antipode 430–55.5. JE Castro, Water, Power and Citizenship: Social Struggle in the Basin of Mexico,(Palgrave Macmillan, Houndmills, Basingstoke and New York, 2006); Morgan, Water onTap (n 1); E Swyngedouw, Social Power and the Urbanization of Water: Flows of Power(Oxford University Press, Oxford, 2004).6. See e.g., K Bakker, Privatizing Water: Governance Failure and the World’s Urban WaterCrisis (Cornell University Press, Ithaca, NY, 2010).7. Morgan, Water on Tap (n 1). This source used different terminology: the discussion of‘managed liberalization’ and ‘public participatory governance’ in the book is roughly equiva-lent here to the use of ‘social enterprise’ and ‘social activism’ respectively.8. P Marin and AK Izaguirre, ‘Private participation in water: toward a new generation ofprojects’ (2006) 14 Gridlines, The WorldBank, <http://documents.worldbank.org/curated/en/2006/09/7091102/private-participation-water-toward-new-generation-projects>, accessed 23October 2013.

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Social enterprises have attracted a rapidly growing literature9 that focuses in particularon legal structures, personnel issues, sources of funding and different ways of measur-ing outcomes. But these foci have been explored primarily from a perspective that seesthem as innovations in internal corporate governance practices, even when they chal-lenge the ‘corporate’ facet of such practices. Such accounts neglect an underexploredaspect of the growing enthusiasm for social enterprise: its relationships with social acti-vism. This is a more outward-facing concern than the issues dominating the literature todate. It requires an exploration of just how the entrepreneurial energies of businessapproaches articulate with the impetus for structural change embedded in practices ofsocial activism. This is an important task; one that reveals the extended contours ofthe ‘diverse economies’ that, as Gibson-Graham stresses, are already present in ourmidst.10 Indeed, to implement a human rights-based vision of economic and socialdevelopment, we would argue that it is necessary to ‘take back the economy’, as Gibson-Graham and her colleagues have more recently urged11 – and revealing the relation-ships between social activism and social enterprise is a crucial first step.

Our main purpose in this article is to interrogate too easy an assumption of uni-dimensional or static relationships between social activism and social enterprise.We argue that there are multiple diverse relationships possible between them, includ-ing oppositional, evolutionary, complementary and dialectical relations. Evolutionaryrelations occur where activism creates a political space that entrepreneurs can fill withinstitutional vehicles that support the first vision of water rights articulated above:water rights as collective social and economic entitlements. Complementary relationsare not entirely dissimilar, but they envisage less continuity – and in particular lessdirect communication – between activism and enterprise: these are understood tobe distinct practices that take place in separates arenas without any sense of one setof practices leading to the other. Finally, dialectical relations overtly acknowledge thetension between the commitments, assumptions and practices of activism and enter-prise, but instead of setting them off against each other they draw productively onthose conflicts to produce a structural shift to a different (and always temporary) equi-librium. In the course of a particular trajectory of events, relationships between thesame actors can shift in nature from one type to another.

We illustrate these shifts empirically with examples from India and Bolivia. Weweave the theoretical challenge of the hybrid space between activism and enterprisedirectly into the details of the empirical examples, rather than separating them descrip-tively. We do this to emphasize that understanding the practices of these important sitesis, in a performative sense, part of a theoretical reorientation, and not a ‘test’ of the‘effectiveness’ of social enterprise in terms of its instrumental impact on the humanright to water. What is at stake in that theoretical reorientation is the development ofa way of being-in-common that is continually alive to the ambiguous potential of

9. See e.g., C Borzaga and J Defourny (eds) The Emergence of Social Enterprise (Routledge,London, 2001); M Bull and H Crompton, ‘Business Practices in Social Enterprises’ (2006)2(1) Social Enterprise Journal 42–60; R Dart, ‘The Legitimacy of Social Enterprise’ (2004)14(4) Nonprofit Management and Leadership 411–24; A Nicholls, Social Entrepreneurship:New Models of Sustainable Social Change (Oxford University Press, Oxford, 2006).10. JK Gibson-Graham, A PostCapitalist Politics (University of Minnesota Press,Minneapolis, 2006).11. JK Gibson-Graham, J Cameron and S Healy, Take Back the Economy: An Ethical Guidefor Transforming Our Communities (University of Minnesota Press, Minneapolis, 2013).

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both empowerment and oppression when business methods are used to secure socialoutcomes, including those promised by the guarantee of a human right to water.

2 HYBRID SPACES BETWEEN SOCIAL ACTIVISM AND SOCIALENTERPRISE

Hybrid initiatives drawing on elements of both social activism and social enterpriseare increasingly important and interesting channels for responding to the challengesof environmental change. One way of understanding their emergence is to situatethem in relation to a shift in the traditional forms and aims of environmental activismas it has developed since the 1960s and 1970s. In 2008, the Green Alliance, a UnitedKingdom (UK) think tank on environmental issues, argued that a ‘new green politics’was emerging.12 The novelty was three-fold: first, advocacy focused on government isincreasingly supplemented or even displaced by social mobilization focused on com-munities. Secondly, an emphasis on social goals is augmenting the narrower focus onenvironmental goals. Thirdly, a largely instrumental preoccupation with institutionaldesign is shifting towards a concern with values and identity. The hybrid initiativeswe are interested in are emerging in sites shaped by this ‘new green politics’: spaceswhere community-based strategies mobilize cultural and social values in an effort toshift both everyday practices and underlying identities.

The growing influence of a ‘new green politics’ defined in this way can be seen ina gradual shift occurring in the context of relevant literature in this area. A relativelyrecent surge of interest in social enterprise13 has, after an initial focus on more ‘socialpolicy’ areas such as health, education and employment, begun to incorporate ‘green’social enterprises as the innovative edge of such developments.14 Until very recently,however, this has still been viewed, at least in scholarly terms, as a very separate set ofendeavours from those of social movements and social activists, whether focusing onthe nature of activism more broadly15 or on climate change more specifically.16 Theconcerns of these two areas of scholarship have been, traditionally, quite distinct.Social enterprise studies17 focus on business structure, management dilemmas, gov-ernance options and, perhaps the closest to the concerns of social activism, corporatesocial responsibility (CSR). But even in relation to this last, there has been a long-standing critique of CSR for not being sufficiently activist.18 By contrast, social

12. S Hale, The New Politics of Climate Change (Green Alliance, London, 2008).13. C Borzaga and J Defourny (n 9).14. S Manwaring and A Valentine, ‘Risk Issues and Social Enterprise in Canada’ (2011) 24The Philanthropist 199–206.15. D Della Porta, H Kriesi and D Rucht (eds), Social Movements in a Globalizing World(Macmillan, New York, 2009).16. A Jamison, ‘Climate Change Knowledge and Social Movement Theory’ (2010) 1 WIREsClimate Change 811–23.17. Borzaga and Defournny (n 9); B Gidron and Y Hasenfield, Y (eds) Social Enterprises:an Organizational Perspective (Palgrave Macmillan, London, 2012); C Low, ‘A Frameworkfor the Governance of Social Enterprise’ (2006) 33 International Journal of Social Economics376–85; A Nicholls, n 9.18. See, e.g., R Lipschuz and K R Raman, Corporate Social Responsibility: ComparativeCritiques (Palgrave Macmillan, Basingstoke, 2010); R Shamir, ‘Between Self-Regulation andthe Alien Tort Claims Act: On the Contested Concept of Corporate Social Responsibility’(2004) 38 Law and Society Review 635.

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movement literature concerns itself with political mobilization and collective actionaimed at structural systemic social change.19

As the ‘new green politics’ takes hold, however, the site of such change increasinglyshifts beyond government, to both communities and business. Two illustrative siteswhere fascinating activities take place in increasingly hybrid zones that blend aspectsof both social movement and social activism are Transition Towns and the ‘sharing econ-omy’. Transition Towns are urban areas where community groups have made a focusedcommitment to forge responses to the twin challenges of climate change and peak oil,beginning with voluntary collective action at the neighbourhood scale. They have cap-tured the attention of a wide range of scholars, particularly human geographers, whohave perceived the inherent hybridity of the development. Some for instance, exploreTransition Towns as an instance of an emergent social movement20 while others havecharacterized them as a market niche in a changing social economy.21 As specific initia-tives both within and beyond the purview of Transition Towns mature, they are bothincreasingly sectorally focused (food, water, energy, transport etc.) and more likelyto take the form of a trading enterprise – but still inspired by a vision of systemic changewhere politics, ethics and economics are entangled inseparably. Some explorations ofthese more specific sectoral initiatives still reflect the bifurcations of the divided intel-lectual history of this field. For example, political scientists typically emphasize theemergent collective identities embodied in such initiatives.22 By contrast, ‘transitionmanagement’ perspectives, which sustainable development literature often drawsupon,23 focus more on the governance of economic processes seen in more traditionalcapital enterprise terms. But the shift, which takes up both the social goals and the cul-tural identity dimensions of the ‘new green politics’, is increasingly acquiring the char-acter of a distinct integrated, albeit deeply contested, space. It is variously referred to asa ‘sharing economy’,24 a ‘solidarity economy’,25 or as ‘community-based grass-roots

19. R Lipshuptz, Global Environmental Politics: Power, Perspectives and Practice (CQPress, Washington, DC, 2004).20. PJ North, ‘The Politics of Climate Activism in the UK: A Social Movement Analysis’(2011) 43(7) Environment and Planning A 1581–98; B Poland (PI), R Haluza-Delay,C Teelucksingh, P Antze, C Ling, L Newman, ‘Resilience, Equity and the Developmentof Ecological Social Practices: Examining the Transition Town Movement in Canada’<http://www.transitionnetwork.org/sites/www.transitionnetwork.org/files/TT%20SSHRC%201pg4distrib.pdf>.21. G Seyfang and A Haxeltine, ‘Growing Grassroots Innovations: Exploring the Role ofCommunity-based Initiatives in Governing Sustainable Energy Transitions’ (2012) 30(3) Envir-onment and Planning C: Government and Policy 381–400.22. D Schlosberg, ‘Political Challenges of the Climate-Changed Society’ (2013) 46(1) PS:Political Science and Politics 13–17.23. J Rotmans, R Kemp and M van Asselt, ‘More Evolution than Revolution: TransitionManagement in Public Policy’ (2001) 3 Foresight 15–31; J Schot and F Geels, ‘StrategicNiche Management and Sustainable Innovation Journeys: Theory, Findings, Research Agendaand Policy’ (2008) 20(5) Technology Analysis and Strategic Management 537–54; A Smith,A Stirling and F Berkhout, ‘The Governance of Sustainable Sociotechnical Transitions’(2005) 34 Research Policy 1491–510.24. J Orsi, Practicing Law in the Sharing Economy: Helping People Build Cooperatives,Social Enterprise and Local Sustainable Economies (American Bar Association, Chicago,2012), quotation from inside front book cover.25. E Miller, ‘Solidarity Economy: Key Concepts and Issues’, in E Kawano, T Masterson andJ Teller-Ellsberg (eds) Solidarity Economy: Building Alternatives for People and Planet (Centrefor Popular Economics, Amherst, 2010).

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innovation’.26 And most notably, thus far few have paid much sustained attention to therole and salience of law in these initiatives and projects.

What does this shift mean for law? From an oppositional perspective of the rela-tionship between social activism and social enterprise, law appears in two very differ-ent guises, or focal senses. From the perspective of social activism, law is often thedirect target of social change, and its content embodies collective social identity.Negatively, laws that are viewed as harming society or embodying injustice are thetarget of change; positively, new laws are promoted that would express a more pro-gressive identity. The focal image of law here is one of command, prohibition, ordirective that aims to prevent or compensate harm. Important test cases and strategicclass action litigation often loom large, often focusing on judicial review actionsagainst the state and on civil society institutions that support such actions. Courtsappear as a forum for challenge and protest against existing legal situations.27

By contrast, from the perspective of social enterprise, law is an indirect enabler ofexchange relations, its focal image more facilitative than regulatory. Procurement law,tax laws, statutory provision for non-company corporate structures: these are the stuffof the legal support structures ‘needed to support and enable SMEs [small and med-ium enterprises] to capitalize on the opportunities of a low-carbon economy’.28 Lawhere is focused on constructing either a framework of incentives or the skeleton oflegal personality as preconditions for more generalized production of social benefit.In the (small) literature on law and social enterprise, the typical focus is on legal mod-els for business entities, comparing the structure and efficacy of Community InterestCompanies, cooperative models, or ‘B Corp’ certification, for example.29 In somevery recent literature,30 we have seen emerge the same productive hybridity wehave noted above, where the energy facilitated by the creation of novel legal entitiesis explored not only for its capacity to foster productive (social) enterprise, but alsofor the degree to which it lends itself to the potential to challenge the existing legaland political status quo.

The increasingly blurred boundaries between these two focal images of law arereflective of the ‘new green politics’. Facilitative law engages more directly with busi-ness and social goals than with the more traditional state institutions and ‘green’ goalsthat are the focus of regulatory law, without jettisoning the activist mission that hasfor some time characterized the engagement between regulatory law and environmen-tal politics. In short, to paint the relationship between the two focal images of law as asimplistic dichotomy is misleading. It is better understood as a constitutive relation-ship, one illustrated by exploring in some detail two struggles over access to water.These struggles depict a diverse array of links between social activism and socialenterprise that illustrate this underlying ambiguity about law beautifully. The first

26. G Seyfang and A Smith, ‘Grassroots Innovations for Sustainable Development: Towardsa New Research and Policy Agenda’ (2007) 16(4) Environmental Politics 584–603.27. See, e.g., L Vanhala, ‘Legal Opportunity Structures and the Paradox of LegalMobilization bythe Environmental Movement in the UK’ (2012) 46(3) Law and Society Review 523–56.28. J Chong, S Asker, A O’Rourke and S White, Green Chrysalis: Small and Medium SizedEnterprises: Innovation and Transformation towards Australia’s Low-carbon Economy, Reportfor the Australian Business Foundation (Institute for Sustainable Futures, University ofTechnology Sydney, Sydney, 2012).29. K Raz, ‘Toward an Improved Legal Form for Social Enterprise’ (2012) 36 New YorkUniversity Review of Law and Social Change 283.30. G Smith and S Teasdale, ‘Associative Democracy and the Social Economy: Exploring theRegulatory Challenge (2012) 45(2) Economy and Society 151–76.

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struggle, from Bolivia, occurred during the wave of liberalization of the transnationalwater services market in the 1990s and early 2000s. The second struggle, from India/UK, is a product of the last decade, illustrating an increasing trend of small-scaletransnational partnerships, which is arguably a reaction against the large-scale public–private partnerships of the 1990s and early 2000s such as the one that catalysed theBolivian events we narrate below.31

2.1 Bolivia

In April 2000, the Bolivian government terminated a forty-year concession contract toprovide water services to the city of Cochabamba that had been awarded only monthsearlier to a large multinational joint venture. The termination flowed from what hasbecome known as the ‘Cochabamba water war’, a passionate uprising by social acti-vists that caught the imagination of both scholars and activists, and which became acritical juncture in the political history of the human right to water.32 In many repre-sentations, it has stood for a victory of human rights over corporate rights in a con-ceptual framework that puts activism and enterprise into a highly conflictualopposition.

However, other modes of relating activism and enterprise emerge if we consider ina little more detail the process of giving concrete institutional flesh to the diffuse poli-tical claims articulated by the Bolivian social activists. These were not in fact articu-lated in the language of rights for the most part (this was an interpretive gloss given byNorthern non-governmental organizations (NGOs) supporting the activists). Therewere two principal claims, each of which involved a nuanced engagement betweenactivist energies and the details of establishing enterprise structures.

The first aim was to protect the ‘uses and customs’ of indigenous peoples and localcommunities in relation to water, and focused on a unique legislative drafting processthat enacted a broadly evolutionary relationship between activism and enterprise. Thesecond was to institutionalize ‘social control’ of the Cochabamba water company (viaan elected board that included civil society members). This second aim was embeddedin aspirations of a dialectical relation between activism and enterprise. Ultimately,success in achieving these aims was very limited at the micro-level of the company,despite the fertility of the relationship between activism and enterprise at the statutoryand constitutional level, as we outline below.

31. There is a biographical link between these two that reflects an individualized instance ofsuch a reaction. One of us wrote in 2004 about the intractability of political divisions in relationto the Bolivian story and speculating on how publicly spirited bottled water projects (such asSan Francisco’s bottling of local water on a non-profit basis) might provide a more hopefulway forward, by funding clean water initiatives on a small scale: B Morgan ‘Water: FrontierMarkets and Cosmopolitan Activism’ (2004) 27 Soundings: a Journal of Politics and Culture10–24. Soon afterwards, Frank Water was featured in the press, and a relationship was struckup that led to the research collaboration involving both authors.32. O Olivera and T Lewis, ¡Cochabamba! Water War in Bolivia (South End Press, CambridgeMA, 2004); V Shiva, Water Wars: Privatization, Pollution and Profit (South End Press,Cambridge MA, 2002); S Spronk, ‘Struggles against Accumulation by Dispossession inBolivia: The Political Economy of Natural Resource Contention’ (2007) 34(2) Latin AmericanPerspectives 31–47; J Shultz and M Draper, Dignity and Defiance: Stories from Bolivia’sChallenge to Globalization (University of California Press, Berkeley, 2008).

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2.1.1 Creativity in statutory drafting and corporate governance

Between 1998 (i.e. beginning prior to the explosive social conflict of the water war)and 2004, a network of Bolivian civil society groups, research organizations andNGOs,33 Bolivian state officials,34 and transnational financial and research supportentities,35 engaged in participatory legislative drafting that created new rights overwater use known as ‘registers’ and ‘licences’ (the latter amending an existing cate-gory). Registers were collective water rights allocated to indigenous and peasant com-munities and farmers’ unions according to their traditional ‘uses and customs’. Therights were held collectively, for multiple uses, in perpetuity and for free. Licenceswere similar, albeit for ‘the useful lifetime’ of the service, and were available forsocial non-profit organizations, especially peri-urban water cooperatives, of whichCochabamba had a significant array with a powerful tradition of user involvementand democratic participation. Both registers and licences were contrasted with conces-sions, which protected individual property rights, were time-limited, and were tied toregulatory monitoring and regulatory taxes.

Legally, this creative statutory work transformed the oppositional relationship ofactivism and enterprise into an evolutionary one. The political space created by theactivists was filled with a reimagined form of enterprise structure that allowed alter-native legal orders coterminous with the indigenous communities’ way of life to flour-ish. Importantly, however, the legal utility of this creative work was undermined overtime by a combination of financial conditionality from banks, and executive apathyfrom the state. The Bolivian state presided over many years’ delay in passing thedetailed regulations that would actually implement the new water law. This allowedbanks to argue that the Cochabamba water company could not be granted a register ora licence in the wake of the water war, as its legal status was too uncertain. In effect,this paralysed the alternative institutional imaginary at the micro-level.

The limitations of the legislative victory were one important part of the explanationfor disappointing outcomes in relation to the second aim of the activists: to establish‘social control’ of the Cochabamba water company. Those activists had fought on thestreets for a conception of water that mutually embedded and blurred conceptions ofrights, life and common property. Post-conflict, they gained control, fairly abruptly, ofCochabamba’s water services, with the responsibility for clearly delineating theoperational consequences of these new conceptions – a responsibility that requiredthem to deploy technical expertise more typical of managing an enterprise than ofmobilizing collective action. For the activists, this was an unexpected outcome andset of responsibilities. Nor, as the next five years made clear, was it an outcomethat successfully built upon the energies and achievements of those involved in thesocial movement.

33. Comité de Gestión Integral del Agua en Bolivia – Committee for Integrated WaterManagement in Bolivia (CGIAB).34. Via an Inter-institutional Water Council (CONIAG) with representatives from five differ-ent Ministries (agriculture, sustainable development, economics, housing and basic services), aswell as five civil society representatives (from peasants, irrigators, indigenous people, privatesector and academia).35. The Inter-American Development Bank funded the early stages of the participatory legis-lative drafting processes. In the later stages funding came from the Canadian developmentresearch organization IDRC and the Swiss government, while international NGOs involvedin sustainable development and food security issues funded many of the water-related NGOsthen operating in Bolivia.

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There were several challenges. Internal conflict developed between former activistswho vociferously rejected institutionalized politics and those willing to work withpolitical parties, particularly the Mayor, who had originally facilitated the transna-tional concession contract. Campaign literature for the social movements madevividly clear that while ‘politics’ represented an obstacle to social change, the solutionwas not technical expertise, but rather more extensive direct participation by thoseaffected. Accusations of corruption highlighted the limitations of ‘politics’ as nar-rowly inscribed in existing institutions: ‘jobs for the boys’ and dubious uses ofexpenses plagued the company after the water war as much as before, with onecivil society representative quoted as saying that the company was ‘still a space forrobbing money’.36 Finally, paralysis or apathy undermined the social control aspira-tions. Immediately after the ‘water war’, transnational partnerships had emerged tooffer technical assistance to the company (for example, from the international publicsector union Public Services International), but the company lacked the technicalcapacity to take proper advantage of these opportunities37 and the momentum waslost. Further, mobilizing electoral energy for the elected civil society members ofthe water company’s board of directors turned out to be extremely difficult: in thefirst elections just a year after the water war, less than 4% of eligible voters casta vote.38

Supplementing these internal failures were pressures from the external legal frame-work. As one commentator said:

[The company] is now in a very difficult situation, because it is a public system, controlledby public entities, like the municipality, with social participation. There were elections lastweek. But at the same time, they are being forced to operate like a private company to rein-vest, reinvest and pay their loans.39

At a deeper level, there was a basic incommensurability between the motivatingenergy and focus of the social movement activists and the tasks involved in runningthe water company. The activists were concerned with collective identity and socialjustice, and with participatory democratic process as the means to address theseissues. As one of their supporters commented:

They understood that this was not just a fight for water, but a nation’s fight for the rights ofthe poor against the interests of the multinationals and Bolivia’s elite. The people understandwhen the time has come to fight.40

But for the day-to-day mundanities of running the company, it was necessary to careabout the fight as a fight for water, and to care about delivering water more than aboutthe way in which it was representative of broader political currents. This was thelacuna that undermined a productive dialectical relationship between enterprise andactivism: the lack of interest in the day-to-day mundanities and operational issuesat the coalface of service delivery.

36. Shultz and Draper (n 32).37. Jim Shultz, Executive Director of the Democracy Centre, interviewed by Carolina Fair-stein, Cochabamba, 27 February 2004.38. Shultz and Draper (n 32).39. Rocio Bustamente, lawyer, San Simon University Agronomy Faculty, interviewed bySusan Buell, Cochabamba, 15 May 2004.40. Shultz (n 37).

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2.1.2 ‘Mixed companies’ and constitutional rights

This lacuna was less a consequence of endemic apathy or constraints on technicalefficacy, and more an implication of the alienating effects of functional specializationand large-scale modernist bureaucratic organization. For example, at the same time(and in the same geographical area) as the low-participation elections for the newwater company board, the Association of Community Water Systems of the SouthernZone (a federation of hundreds of water committees run on a cooperative basis bygeneral assemblies) continued to mobilize enormous participatory energy. Thenetwork of organizations involved in the legislative reform of water laws had consi-derable legal and technical acumen as well as participatory energy devoted to concreteinstitution-building. But this participatory energy and legal-technical acumen wasmobilized when the issue of water was integrated into the broader social and materialcontext of people’s lives – when it was under their control as part of their livelihood,with multiple aspects of territorial integrity, service delivery and social justice. Whenwater became a specialized modernist object of sector-specific corporate governance,a technical vision of ‘water as service’ divorced from dimensions of territorial integ-rity and social justice, the activists’ coalition had little to contribute beyond process.

To some extent, the trajectory narrated above suggests that the evolutionary poten-tial of the relationship between activism and enterprise – the capacity for activistenergy to create a stable and enduring form of enterprise that expressed the ongoingpolitical goals of the movement – was undercut by a more enduring oppositional rela-tionship between the two. But two developments that occurred some years after theevents narrated above suggest how a detailed engagement with the legal implicationsof entity structure is at the heart of creating a more productive dialectical relationship.In January 2009, after several years of consultations that built on the legacy of theactivist energies of the ‘water war’, Bolivia approved a new constitution that specifi-cally recognizes access to water as a fundamental human right (Article 20).41 Thesame clause also forbids concessions or privatization in the water and sewage sector,but allows public companies, community companies and cooperatives and mixedcompanies to provide essential services.42 This would appear to consolidate, at theconstitutional level, precisely the aspirations of the activists that had fed into the stat-utory level with the Water Law43 enacted some years earlier. But the full picture ismore complex. The careful reference to ‘mixed’ echoed a very specific regulatory

41. ‘Bolivia, Political Constitution of the State, 2009’ in World Constitutions Illustrated(ed. J J Ruchti), translated by Embassy of Bolivia, Washington DC, available at <http://www.scribd.com/doc/73770823/Bolivia-2009-Official-Translation>, accessed 6 November 2013.42. Clause 20 reads (emphasis added): ‘Every person has the right to universal and equitableaccess to basic services of potable water, sewer systems, electricity, gas services in their dom-icile, postal, and telecommunications services. II. It is the responsibility of the State, at all levelsof government, to provide basic services through public, mixed, cooperative or community enti-ties. In the case of electricity, gas and telecommunications services, these may be provided bycontracts with private companies. The provision of services should respond to the criteria ofuniversality, responsibility, accessibility, continuity, quality, efficiency, equitable fees andnecessary coverage; with social participation and control. III. Access to water and sewer sys-tems are human rights, are not the object of concession or privatization, and are subject to aregimen of licensing and registration, in accordance with the law.43. Ley Numero 2066 Ley de Servicios de Agua Potable y Alcantarillado Sanitario of 11April 2000 and Ley Numero 2878 de Promoción y Apoyo al Sector Riego of 8 October2004, which should be read together.

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strategy that had taken place in the murky terrain of presidential decrees and technicalassistance since the end of the water war in 2000. Developed with the assistance of theGerman Society for International Cooperation (GiZ), a model of ‘mixed companies’had been introduced by presidential decree. This decree took advantage of theongoing vacuum in the formal regulatory framework left by the strategic delay in pas-sing regulations implementing the water law.

Focused on providing a model of corporate governance, rather than on specifyingparticular rights over water, the model had several features that diluted – or evenextinguished – the regulatory pluralism so hard fought for in the water law. First,mixed companies would be supra-municipal, aggregating large numbers of smalllocal water provider systems into larger units in ways that many feared was a precur-sor to privatization. Although this risk was neutralized by Clause 20 of the 2009 Con-stitutional discussed above, several other features of the ‘mixed company’ modeloperated at a level much less constrained by the constitutional clause. Mixed compa-nies’ jurisdiction was based on concessions, which would replace the alternative cate-gories of register and the amended form of licence created by the water law, andwould eliminate the advantages discussed above to the holders of such rights. Themodel also transferred the capital (pipes, facilities, land, etc.) to the company aslegal owner (as opposed to collective ownership and control by user communities),and also precluded the possibility of contracting with collective user associationsinstead of individual consumers. Finally, even though mixed companies could rightlyclaim a ‘public’ dimension (given that their shares were held jointly by the region’scitizens, cooperatives and municipalities), the applicability of commercial law meantthat private corporate partners could be involved and shares could be sold, thus dilut-ing the longevity of any ‘social control’.

Looking at the decade-long struggle to consolidate the activist energy of theCochabamba water war, we can see that the nuances of legal entity choices weresites of vital importance. In this terrain, the capacity to build enduring institutionsthat embodied the activists’ commitments was the object of ongoing struggle, particu-larly between the national state, the local activist and transnational providers offinance. That struggle led to an unusually detailed constitutional clause where the spe-cificities of legal entity form were written into a broad constitutional commitment toguarantee access to water. However, a level of specificity unusual for constitutionallaw was still far too general to provide security for financial lenders. The ‘GiZmodel’, embodied in a presidential decree that sidestepped legislative approval ofany regulatory framework, thus clawed back a considerable portion of the terrainshaped by activist energies. The productive dialectical relationship between activismand enterprise that subsisted at the level of both political struggle and formal generallaw was very difficult to translate into enduring success at the micro-level of everydaygovernance. As we shall see below, some parallel trajectories in our second exampleemerge, even in a setting where activist energies are from the outset much moredirectly embedded in the practices of enterprise.

2.2 Frank Water/Naandi

Frank Water is a UK-based social organization that harnesses ethical consumerism inthe North to fund the provision of safe drinking water in the South. Using the slogan‘Drink Me, Save Lives’, the organization sells a range of bottled water products in theUK. It then transfers the profits to partner organizations that set up safe water projects

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overseas. Initially, Frank Water’s partners comprised an Indian NGO and a US-basedtechnology provider. They in turn worked with local governments in India (the Pan-chayats) to set up water purification units in rural villages. As the following narrativeaims to demonstrate, this dual-facing initiative can be seen as founded on both com-plementary and dialectical relations between activism and enterprise. Osberg andMartin argue for the complementarity of activism and enterprise in enterprise-inflected terms.44 Social activists, they argue, may lack a solution to advance oncethey successfully shift a status quo they are protesting against. Social entrepreneurs,then, who have spent years innovating and proving a sustainable model may have theperfect solution: social activism therefore creates demand for the produce orservices of social entrepreneurship. In more activist-inflected terms, one might saythat social activism prises open the political space in which previously disadvantagedgroups and actors acquire more collective agency and power. In the story that unfoldsbelow, many challenges emerge in sustaining the activist-inflected version of thestory. In a sense, the Frank Water story shows opposition where there appears tobe complementarity, while the Bolivian narrative demonstrates the need for comple-mentarity where there appears to be opposition.

2.2.1 Dual identity

Frank Water is constituted as a dual legal structure. It was initially set up in 2005 as astandard private company (Frank Water Ltd), but in 2007, the organization also set upan affiliated charitable body (Frank Water Projects), primarily in order to facilitate thetransfer of funds to its partner organizations overseas.45 Formally, this dual legalstructure suggests that the relationship between activism and enterprise is an opposi-tional one, best embodied in the separate arenas of charity and private companyrespectively. However, the set of practices and commitments embodied on the groundby the social enterprise is considerably more complicated than this – in ways thatdemonstrate that a dual legal structure does not by itself resolve the tension. The com-plexity has two threads of particular importance for the argument in this paper. First,the ‘enterprise’ arm of Frank Water (Frank Water Ltd) contains strands of activismthat in a sense seek to sow the seeds of the demise of the very sector (bottledwater) in which it trades. From this perspective, the relationship between activismand enterprise is complementary rather than oppositional. But second, the ‘activism’

arm of Frank Water (Frank Water Projects) is in fact caught in a web of perpetual ten-sions between charity, social justice and commercial business incentives. This webcan best be made sense of by stressing that an oppositional relationship between acti-vism and enterprise remains highly significant, even if it is never the whole story.These two threads are illustrated in the following sections, first by exploring selectedaspects of Frank Water Ltd’s positioning within the UK ‘ethical bottled water’market, and secondly by narrating some important trends in Frank Water Project’stransnational partnerships.

44. RLMartin and S Osberg, ‘Social Entrepreneurship: The Case for Definition’ (2007) StanfordSocial Innovation Review 27.45. Charity Commission, ‘Frank Water Projects (registration number 1121273): CharityFramework’ <http://www.charitycommission.gov.uk/search-for-a-charity/?txt=1121273>accessed 5 January 2013; Frank Water, ‘Frequently Asked Questions’ <www.frankwater.com/faqs/> accessed 18 November 2012.

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2.2.2 Ethical bottled water

Bottled water has grown from being a niche luxury item to a mass marketed consumergood.46 ‘Ethical bottled water’ brands have proliferated, meaning a bottled water pro-duct from which a proportion of profits are donated to the provision of drinking water,usually in the South. In addition, the label ethical denotes a commitment to organiza-tional ethics as well as environmental standards. For example, the ethical water brandBelu states that it is ethical on the basis of its charitable donations as well as its envir-onmental credentials.47 Frank Water meanwhile states that it is ‘an ethical enterprisethat is concerned for all stakeholders; the spring, distributors, retailers, staff, andabove all customers and fundraisers’.48 At the same time, each of these ethical aspectsmust be balanced with the demands of the competitive bottled water industry. Theways in which different ethical water brands have dealt with these tensions dependsin part on the extent to which they have been shaped by either the field of business orthe third sector. Thus in the area of organizational ethics, the Charity Commissionspecifies that commercial ventures with charities must declare either the percentageor fixed sum per product that is donated to charity.49 Brands such as Water4Ethiopia,which is produced by a charity, specify that they donate 100% of their profits to chari-table projects.50 When the business-oriented Volvic ran an ethical campaign, however,the organization made the opaque claim that they would fund the provision of 10 litresof water for every litre purchased in the UK.51

Generally, however, ethical water is an environmentally destructive product whichreinforces, rather than overrides, existing social divisions when it comes to access towater.52 Furthermore, the way in which bottled water has been marketed reinforceswater as a product associated with status, rather than with a universal right. Froman activist perspective, the first concern is therefore that by participating in the bottledwater industry, ethical waters are ultimately undermining the universal right to water.Secondly, by incorporating a charitable donation into a consumer good, ethical watersmake it ‘easy’ for customers to feel as though they are doing ‘one good thing’.53 Froman activist perspective, this discourages critical questioning of the structural factorsgenerating poverty in the first place, and the associated lack of safe drinking water.

46. PH Gleick, Bottled and Sold: The Story Behind our Obsession with Bottled Water (IslandPress, Washington DC 2010).47. Belu, ‘Ethics Overview’ <http://www.belu.org/ethics/ethicsoverview/> accessed 9November 2013.48. Frank Water, ‘Frank Water Philosophy of Business (and Eco Policy)’ (Frank Water 2011)<http://www.frankwater.com/wp-content/uploads/2010/12/FRANK-Water-Philosophy.pdf>accessed 5 January 2013.49. Charity Commission ‘RS2- Charities and Commercial Partners’ (Charity Commission 2002)<http://www.charitycommission.gov.uk/frequently-asked-questions/faqs-about-running-a-charity/fundraising/can-we-raise-money-through-commercial-participation> accessed 5 January 2013.50. Water4Ethiopia, ‘Home Page’ <http://www.water4ethiopia.org/> accessed 9 November2013.51. The Grocer, ‘Volvic Supports Africa with 1L=10L Campaign’ (2006) The Grocer10 November 2006, <http://www.thegrocer.co.uk/topics/volvic-supports-africa-with-1l10l-campaign/114714.article> accessed 5 January 2013.52. Gleick 2010 (n 46); E Royte, Bottlemania: How Water Went on Sale and Why We BoughtIt (Bloomsbury, New York, 2008).53. Global Ethics, ‘Do one good thing’ <www.onedifference.org/do-one-good-thing>accessed 15 August 2012.

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Whilst similar to the other ethical water companies in some respects, FrankWater Ltd(hereafter ‘FWL’) adopted a novel approach, in particular by pursuing a strategy as aninside ‘agitator’.54 As FWL’s former Managing Director described it: ‘[t]he aim is tonot throw stones against the bus but get on it and steer it’.55 This was embodied inpart by explicit acknowledgement of the paradox of trying to fund the global provisionof public water by selling bottled water. FWL marketed itself as perpetually in motionaway from its original identity: ‘[FWL] is a tap water company. Its mission is to fundsustainable tap water facilities. But paradoxically – it raises funds by selling bottledwater’.56 Essentially FWL sought to undermine, rather than support the bottled waterindustry. The aim was to harness the market whilst it existed but ultimately to pushfor its decline, viewing it as unsustainable in the long term. The organization builtthis semi-paradoxical mission into its business strategy in three ways: by limitingsales of water to a regional area and refusing to stock supermarkets; by campaigningagainst the bottled water industry and in favour of public fountains and ultimately, bybranching into tap water alternatives.57 By selling tap water alternatives, such as refillbottles, the organization found a future niche to ultimately replace the sale of bottledwater. The combination of these strategies was, for FWL, part of an explicit commit-ment to a social justice-oriented approach. Through these strategies, FWL sought toinfuse its enterprise activities with a measure of activism. More specifically, FWLsought to interrogate the all too comfortable opportunity provided by ethical consumer-ism to consumers to ‘buy’ their ‘salvation’.58 Interrogating the relationship between acti-vism and enterprise illuminates the wider field of power in which FWL’s dual structurewas embedded, and problematizes the statement that is easy to do ‘one good thing’, byraising the further question, a good thing for whom? Is a ‘good thing’ for the consumerthe same as for Indian villagers affected by a lack of safe water? Furthermore, how willthe increasing commercialization of water affect marginalized groups within those vil-lages? The critique made by FWL of their own industry’s business model opens up thepossibility for critical questioning of the structural factors generating poverty and theassociated lack of safe drinking water in the first place.

2.2.3 Partnerships

To explore this wider field, we need to say more about the partnerships Frank Water’scharitable arm (Frank Water Projects, hereafter ‘FWP’) established in order to carryout its ‘activist’ goals. When FWP first began funding projects it worked with twopartners: a US-based technology supplier, WaterHealth International (WHI) and anIndian NGO, the Naandi Foundation. They in turn worked with local Panchayats

54. L Oppenheim, ‘Katie Alcott of Frank Water on Being an Insider Rebel Within the BottledWater Industry’ (Treehugger 2010) <www.treehugger.com/green-food/katie-alcott-of-frank-water-on-being-an-insider-rebel-within-the-bottled-water-industry-interview.html> accessed7 August 2012.55. Email from TomAlcott, former Managing Director FrankWater Ltd to author (16 November2012). On file with the authors and available on request.56. Frank Water 2011 (n 48).57. Frank Water 2011 (n 48); M Mellor, ‘Frank Trustees’ Meeting’ (Vodaphone Foundation2010) <http://worldofdifference.vodafone.co.uk/blogs/matthew-mellor/frank-trustees-meeting/>accessed 11 July 2011; Oppenheim 2010 (n 54).58. S Žižek, ‘First as Tragedy, Then as Farce’ (Royal Society for the Encouragement of Arts,Manufactures and Commerce 2009) <www.thersa.org/events/video/archive/slavoj-zizek-first-as-tragedy,-then-as-farce> accessed 11 July 2011.

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through what they termed a ‘tripartite’ agreement.59 This was not, however, a large-scale Public–Private Partnership (PPP), based on partnerships between state ornational governments and large, often multinational, businesses. Instead, this was apartnership between village councils, a private technology supplier and a third sectorNGO and its donors. FWP funded projects through Naandi, and the structure of thepartnership was designed so that each sector would act as a check against the excessesof the other (see Figure 1). As Naandi suggested:

The SDW [Safe Drinking Water] model […] provides for an inbuilt regulation of privateagencies in an important sector such as water that surely cannot be subjected to dictatesof profitability in the name of economic viability […] While official legitimacy is necessary,insulating routine operations and maintenance from interference by local politics is equallycritical for sustaining managerial autonomy to guarantee product quality and equitableoutreach.60

The argument was that the public and third sectors would keep a check on the profit-eering of the private sector, whilst the private sector would help to address the parti-sanship and inefficiencies of the public and third sectors.61

In the tripartite model, each partner had a clear set of roles and responsibilities. Theprivate sector partner would provide the technology and part-financing; Naandi wouldact as the community interface; and the community, supported by donors such asFWP, would provide the remainder of the funds. Local government Panchayatswould provide formal legitimacy, ‘social-administrative support’, land and a watersource, and eventually take over ownership of the projects.62 The vision was of a‘win–win’ partnership that created a trajectory towards state responsibility (in accor-dance with the 73rd amendment to the Constitution, whereby Panchayats are the leg-ally responsible bodies for water provision).63 The Naandi Foundation was an IndianNGO founded in 1998 by four prominent business leaders who sought to create anorganization that would explicitly ‘merge the professionalism of business with thepassion of the NGO sector’.64 As one analysis noted: ‘[w]hile a nonprofit by its con-stitution, Naandi is run like a corporation with business principles in mind’.65

However, in practice the everyday business practices employed to secure ‘effi-ciency’ (primarily through ‘scaling up’) put pressure on the capacity of both Naandiand FWP (both formed as charitable entities) to prioritize the social and equitable

59. Naandi Foundation and WaterHealth India (WHIn), ‘The Blue Revolution’ (PromotionalBrochure, Naandi Foundation and WaterHealth India 2008). On file with the authors and avail-able on request.60. Naandi Foundation, ‘1998–2009: 10 Years of Changing Lives’ (Annual Report, NaandiFoundation 2008), at 34.61. Ibid. See also B Mau, Massive Change (Phaidon Press 2010).62. Naandi Foundation and WHIn 2008 (n 59).63. Naandi Foundation (n 60); Naandi Foundation and WHIn (n 59); Christie Cabral, PatriciaLucas and David Gordon, ‘Monitoring Microbial Water Quality in India: Policy Timelineand Trajectory’, (2009) Aquatest Working Paper 02/09 <www.bristol.ac.uk/aquatest/more-info/publications/> accessed 23 October 2013.64. Naandi Foundation, ‘Annual Report: November 1, 1998–March 31, 2001’ (AnnualReport, Naandi Foundation 2001), at 3.65. J Katz and SMahnat, ‘Bringing SafeWater to India’s Villages and Communities: TheNaandiFoundation’ (Globalens 2010), a Case Study for the William Davidson Institute, University ofMichigan <http://globalens.com/casedetail.aspx?cid=1428987>, accessed 19 November2011, at 4.

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aspects of providing safe water projects. Two illustrations of this can be given, eachrelating to a different private sector partner of Naandi. Naandi’s first private sectorpartner was WHI, a US-based technology firm that specializes in providing low-cost drinking water purification systems to underserved communities.66 WHI suppliedand maintained the technology, trained local operators to manage the day-to-day run-ning of the plant,67 and part-financed the projects. However, this last role was chal-lenging and in 2004 the firm was bought out by a social venture capital firm, PlebysInternational. The new owner tried to establish a mix of user-pays and commercialbank loans to fund the safe water projects (both capital setting-up and ongoingcosts), and where ‘community contributions’ were impossible, external donors suchas FWP were asked to contribute instead.68 Tensions quickly emerged. From a busi-ness perspective, there was pressure to scale up rapidly to reduce costs and increaserevenue. Within three years, WHI and Naandi had set up around 300 projects.69

However, the strain caused by rising interest rates on commercial loans and lower-than-expected project income led to equipment delays and to the closure of 50 pro-jects for financial unsustainability, undermining Naandi’s social priorities on theground. One example of strain between FWP and Naandi occurred when it emergedthat two projects had been part-funded by Coca Cola.70 Naandi, on the ground andresponsible for service provision, was closer to the ‘enterprise’ pressures generatedby private sector partners, while FWP sought to argue a social justice case, contending

Donoror

Bottled Water Buyervia FRANK Water

Ltd

FRANK water

Sustainable CommunitySafe Water System

Community TechnologyPartner

LocalNGO

Figure 1 Simplified model of partnership structure

66. WaterHealth International (WHI) <www.waterhealth.com/> accessed 23 October 2013.67. Naandi Foundation and WHIn (n 59).68. Naandi Foundation, ‘Changing Lives’ (Annual Report, Naandi Foundation 2006).69. Naandi and WHIn (Field diary notes from meeting between author and Naandi and WHInteams in India, 20 February 2008). On file with the authors and available on request.70. H Sehambi, ‘Report of Project Field Trip (Issues): 01–09 November 2010’ (InternalDocument, Frank Water 2010). On file with the authors and available on request.

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that accepting funding from a corporation that has been accused of undermining thehuman right to water legitimizes their operations.71 Naandi responded by stressingthat that the immediate needs of water users must take priority, as explained byFWP’s Project Manager:

Do they take money from organizations they disagree with, such as coca cola [sic], or dothey let people die? He concluded that they take the money and save lives.72

For FWP however, the connection to Coca Cola would undermine their organizationalprinciples, and they therefore objected to this co-funding.73 As a result, Naandi agreedto ‘re-allocate’ the projects and apologized for the oversight.74

This is just one example of a wide range of tensions that FWP began to resolve bydrafting a formal memorandum of understanding (MoU), specifying, amongst otherissues, that FWP’s funding should be directed to the poorest villages, and thatthere should be no co-funding from political donors or large corporates.75 In asense, Naandi and FWP were experimenting with ways of making activism and enter-prise co-exist in an uneasy dialectical relationship.

Before this MoU was finalized however, Naandi separated the water division oftheir organization, and transformed it into a ‘social for-profit’76 called NaandiWater, which would be a joint venture between Naandi and Danone, a large (North-ern) multinational company. This intensified tensions between the various partners insuch a way that the oppositional relationship between activism and enterprise argu-ably became dominant. The joint venture was motivated by a desire for capitalfunds and professional support for scaling up. However, for FWP, the partnershipwith Danone itself was problematic. Danone is a large multinational, with its head-quarters in France, whose brands include dairy goods, bottled water, and otherfood and drinks products.77 In particular, Danone was the parent company of bothEvian and Volvic, both companies that FWP had explicitly targeted in its anti-bottledwater campaigns. As FWP pointed out to Naandi, FWP’s customers bought FWP‘because it is not Evian or Volvic’.78 A partnership with Danone would thereforenot only run contrary to the organization’s values, but would have concrete

71. See for example A Aiyer, ‘The Allure of the Transnational: Notes on some Aspects of thePolitical Economy of Water in India’ (2002) 22 Cultural Anthropology 640; V Shiva, WaterWars, n 32; G Drew, ‘From the Groundwater Up: Asserting Water Rights in India’ (2008)51 Development 37.72. Email from Harmeet Sehambi, Project Manager Frank Water Projects, to author (7 October2010). On file with the authors and available on request.73. Email from Harmeet Sehambi to author (13 October 2010). On file with the authors andavailable on request.74. Email from Adrien Couton, former Chief Executive Officer Naandi Water, to HarmeetSehambi and Katie Alcott, Director Frank Water (13 October 2013). On file with the authorsand available on request.75. Frank Water Projects and Naandi Foundation, ‘Memorandum of Understanding (draft)’(Internal document, Frank Water 2010). On file with the authors and available on request.76. Naandi Foundation, ‘Why a Social For-profit–Adaptations in the Work of Naandi Founda-tion’ (Internal Document, Naandi Foundation 2010). On file with the authors and available onrequest.77. Danone, ‘Our Brands (Danone)’ <www.danone.com/en/brands/business/fresh-dairy-products.html> accessed 24 October 2013.78. Frank Water, ‘Questions for Naandi’ (Internal document, Frank Water 2010). On file withthe authors and available on request.

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reputational costs which in turn could negatively impact on FWP’s funding. FWPwas also concerned that Danone wanted the partnership as a foothold in emergingmarkets for providing bottled water and baby milk (although Naandi stressed thatthere was no evidence for this).79

FWP’s concern, partly on behalf of Naandi, was that Naandi was under-valuingtheir local knowledge and expertise, placing ‘a low value on intangible assets, IP[intellectual property] and past performance when this is the main part of the assettransfer’.80 For FWP, Danone had a strategic interest in gaining knowledge of howto operate in the Southern context. They would therefore be benefiting, at a smallcost to them, from all of the experience that Naandi and FWP had acquired by takingrisks in the past.81 This was not to deny that Danone, and in particular the individualsworking for the company, had social objectives in mind. Whilst the overt interests ofDanone’s social business division, Danone Communities, and its staff were similar toboth FWP and Naandi’s (i.e. help provide safe drinking water to the poor), it wasDanone’s underlying structural interests that concerned the staff at FWP.82

To be sure, once Naandi partnered with Danone, there were observable shifts in itspractices. Naandi adopted the very language its staff had previously criticized WHIfor using. For example, Naandi began to refer to ‘customers’ rather than ‘benefici-aries’.83 Moreover, although to some extent, this private sector language had alwaysbeen present in Naandi (particularly at the managerial levels), the now broader lin-guistic shift was also underpinned by new structural changes to Naandi’s everydayoperating practices. These changes included alterations to practices and policiesaround the price of the water sold to villagers, the target population, cost-cutting,and monitoring and evaluation. The combined effect of these changed practices andpolicies was that rather than trying to ensure equitable coverage across a whole villagebased on need, the aim was now to provide safe water to a financially viable popula-tion ‘at scale’, and only in larger villages.

In view of these developments, FWP requested that their projects should remainseparate from the new for-profit structure so that the profits would not accrue toNorthern investors such as Danone’s shareholders.84 FWP also requested separateselection processes for its sites, so that social rather than commercial criteria wouldtake precedence.85 This reoriented the relationship between activism and enterprisein this setting to one of opposition rather than complementarity. FWP also startedworking with new partners, whose activities were more firmly rooted in the third sec-tor. As of November 2013, FWP had three new partners, all of whom are registerednot-for-profit social organizations.86 This change in partners also affected the nature

79. Danone, ‘2010: A Solid Showing’, a message from Pierre-André Térisse, CFO,<www.danone.com/en/company/introduction.html> accessed 30 December 2011.80. Tom Alcott (Field diary notes from meeting between Naandi and Frank Water in the UK,17 August 2010). On file with the authors and available on request.81. Ibid.82. Email from Tom Alcott to author (16 November 2012). On file with the authors and avail-able on request.83. Naandi (Field diary notes from meeting between Naandi and the University of Bristol, 16August 2010). On file with the authors and available on request.84. Frank Water and Naandi (Field diary notes from meeting between Frank Water andNaandi in the UK, 17 August 2010). On file with the authors and available on request.85. Ibid.86. Frank Water, ‘October Activity Report’ (Internal Document October 2013). On filewith the authors and available on request; Bala Vikasa Social Service Society

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of the projects being implemented. As noted above, the shift in Naandi had led to areduced emphasis on equity. By contrast, one of FWP’s new partners, Gram Vikas,has pioneered an approach based on 100% inclusion.87

The overall trajectory of the FWP story shows that when activist energies areembedded in an enterprise structure from the outset, the emphasis is much more on thefacilitative aspect of legal entity choice, and on the quasi-contractual agreements thatstructure partnerships between different legal entities. FWP’s creative choices andrepeated attempts to re-secure a priority of social goals were ultimately limited by theeffects of the wider web of partners that Frank Water as a whole was working with.The legal and accounting priorities of these partners created a more oppositional relation-ship with the activist underpinnings of both arms of Frank Water as a whole (FWL andFWP). Much of this incompatibility seems to be rooted in problems of scale, as well as inembedded assumptions about how to maintain sustainable growth ‘professionally’.Together with the Bolivian story, the narratives concerning Frank Water’s choicesraise larger questions about the entanglement of finance and law, and suggest importantquestions (beyond the scope of the current article) relating to what a set of principles forfinancing activist-inflected social enterprise might look like. But we do not take up thosequestions here: in what remains, we reflect on the implications of our case studies for thenarrower question of the role of law in in the relationship between activism and enterprise.

3 IMAGINING HYBRID ECONOMIES

The two examples we have worked through show the multiple and shifting relation-ships that endure between activist energies and the forms of enterprises in initiativesthat seek to implement the human right to water. In reflecting on the implications ofthese multifaceted empirical narratives, we return to the schematic opposition betweenregulatory and facilitative law identified at the outset of this article and infuse it with amore nuanced sense of its constitutive ambiguity. This has two angles, each of whichreverses the associations traced between a focal image of law and the diptych of socialactivism and social enterprise. First, there are important ways in which law matters inthe context of social activism in terms of its ability to construct a framework of incen-tives. We can see this in how important the internal governance of the ‘social model’for the Cochabamba water company was, as well as the acceptability to banks of thenovel legal structures drafted by the activist influence on the Bolivian water law. In abroader setting, Smith and Teasdale argue, in an interesting reflection on the legal andregulatory conditions that would need to be in place to support a transition towardsassociative democracy,88 that social enterprise and its associated politics of entity for-mation and governance is an important site for answering these questions. Their fram-ing of the issue moves quickly from the social activist vision of associativedemocracy,89 and bearing a natural resonance with social activism, to an exploration

<http://www.balavikasa.org/> accessed 9 November 2013; Gram Vikas <http://gramvikas.org/>accessed 9 November 2013; People’s Science Institute <http://peoplesscienceinstitute.org/>accessed 9 November 2013.87. Gram Vikas, ‘Water and Sanitation’ <http://gramvikas.org/index.php?act_id=2&page_id=18> accessed 9 November 2013.88. Smith and Teasdale (n 30).89. Drawing on P Hurst, Associative Democracy: New Forms of Economic and Social Govern-ance (Polity Press, London 1993).

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of the legal aspects of entity formation in detail. Thus their questions begin with acti-vism, but forms of enterprise are crucial to their answer.

Smith and Teasdale note a range of problems in any intervention into the internalstructure of associations that highlight how trying to embed democracy internallywithin economic entities cuts against the grain of facilitative law (although they donot frame it in those terms). The problem is that law in this area is fundamentally per-missive rather than regulatory – it does not require democratic participation or auditthe quality of participation and representation. Thus the incentives to pursue a socialmission remain within the discretion of an initiative’s founders. Even though theentity structure may allow for such a prioritization, it has no inbuilt mechanism to pre-vent ‘mission drift’. Even where specific types of legal entity are typically associatedwith democratic participation at the internal governance level (as with the cooperativeform, which Phelan and his colleagues argue is an important pathway to ecologicalsustainability),90 this requirement can be overridden and hierarchical management struc-tures put in place.91 Other types of permissive legal structures are imaginable – forexample, if local government gave contracting preferences for associations with highdegrees of internal democratic participation – but even here, often existing lawsin other areas (such as current procurement law) conflict. In short, in the context offacilitative legal structures, it is challenging to wed the forms of law available withthe political objectives of associative democracy. Facilitative forms of law are morefocused on creating economic entities whose goals and objectives remain within the dis-cretion of those who govern the company. Stakeholders who become unhappy with thedirection pursued by a particular social enterprise (or partnership of social entities) are,at least from the point of view of the formal legal aspects of the entity structure,assumed to be able to ‘exit’ from that arrangement rather than to use their ‘voice’ tochange its direction.

There are, then, inherent limitations in the capacity of formal law to ensure that thestructural ambitions of activist change are not lost in the day-to-day operations ofsocial enterprise. This observation returns us to one of the key facets of the ‘newgreen politics’: the importance of cultural identity. And here we can observe the sec-ond reversal: that of the focal image of law linked to social enterprise. For lawincreasingly appears capable, in the context of social enterprise, of generating anew collective identity potentially capable of challenging mainstream economic rela-tions. The general sense of fresh collective identity is extremely palpable in the fieldsof social enterprise generally (critical commentary speaks wearily of the ‘messianicidentity’ that pervades the field)92 and collaborative consumption.93 Certainly, asthe narrative of Frank Water showed, when progressive movements challenge main-stream institutional practices, they frequently find that long-term institutionalizationof such challenges requires them to turn back to the very repertoire of legal and gov-ernance strategies they initially sought to challenge. However, a recent book by

90. L Phelan, J McGee and R Gordon, ‘Cooperative Governance: One Pathway to a Stable-state Economy’ (2012) 21 Environmental Politics 412–31.91. K Zeuli and R Cropp, Cooperatives: Principles and Practices in the 21st Century(University of Wisconsin Center for Cooperatives, Madison, 2004).92. P Dey and C Steyaert, ‘The Politics of Narrating Social Entrepreneurship’ (2010) 4(1)Journal of Enterprising Communities: People and Places in the Global Economy 85–108.93. R Botsman and B Rogers, What’s Mine Is Yours: The Rise of Collaborative Consumption(Harper Publishing, London, 2010).

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Janelle Orsi explicitly argues that law itself can be reconstituted and reimagined in thecontext of a sharing economy. She summarizes:

To most law students and lawyers, practicing transactional law isn’t an obvious path to sav-ing the world. But as the world’s economic and ecological meltdowns demand that we re-design our livelihoods, our enterprises, our communities, our organizations, our foodsystem, our housing, and much more, transactional lawyers are needed, en masse, to aidin an epic reinvention of our economic system. This reinvention is referred to by manynames—the ‘sharing economy,’ the ‘grassroots economy,’ the ‘new economy.’ This neweconomy facilitates community ownership, localized production, sharing, cooperation,small scale enterprise, and the regeneration of economic and natural abundance. Sharingeconomy lawyers make the exploding numbers of social enterprises, cooperatives, urbanfarms, cohousing communities, time banks, local currencies, and the vast array of uniqueorganizations arising from the sharing economy possible and legal.94

Orsi’s is not an idiosyncratic view. The broad idea of a sharing economy is gainingincreasing traction, with coverage from the Economist and Forbes in recent months.95

The notion that this was a development that merited explicit and targeted support wastaken up in San Francisco at local government level, when in March 2012 a SharingEconomy Working Group was established aimed at ‘nurturing the growth [of thesharing economy], modernizing ... laws, and confronting emerging policy issues andconcerns’. Although the justification for this policy development was expressed verymuch in the language of enterprise (the sharing economy can ‘leverage technologyand innovation to generate new jobs and income ... in every neighbourhood and atevery income level’), commentators argue that the underlying trends are much morecompatible with social activism:

The ‘shareable city’ is a more dramatic departure in development policy than the goodmayor lets on. Instead of pursuing strategies based on big taxpayer subsidies for big-capitalprojects managed by political and corporate elites, the San Francisco ‘shareable cities’ visionaims at decentralized participation by ordinary citizens and neighbourhood groups in con-junction with nimble, socially attuned startup businesses.96

This vision has much in common with what activists in both Bolivia and the small-scale entrepreneurship of Frank Water sought to achieve in relation to water rights.(Perhaps it is no accident that San Francisco developed a municipal bottled watercompany just two years before Frank Water was established).97 And as the empiricalnarratives have shown, it is a vision that blends social activism and social enterprise indiverse and multi-layered relationships. Perhaps the key lesson of those multi-layeredrelationships that one can draw from our two examples is how vulnerable the threemore ‘constructive’ varieties of relations (evolutionary, complementary and dialecti-cal) are to dissolving back into an oppositional relationship. One implication of this isthat there is still an important role for regulatory law to play, in continuing to prise

94. J Orsi, Practicing Law in the Sharing Economy (n 24).95. The Economist, ‘All Eyes on the Sharing Economy’, cover story of March 9, 2013 edition;Forbes, ‘AirBnB and the Unstoppable Rise of the Sharing Economy’, cover story of February 11,2013 edition.96. D Bollier, ‘A New Development Paradigm: The Sharing City’, <http://bollier.org/new-development-paradigm-sharing-city>, accessed 23 October 2013.97. <http://www.sfgate.com/news/article/Bottled-Hetch-Hetchy-arrives-with-a-splash-2626271.php>.

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open space for institutional creativity; for the vulnerability of the activism–enterpriserelationship is arguably an effect of the narrowness of the major institutional logicsthat animate banks and corporate donors. More specifically, these actors are extremelynarrowly sensitive to an economic perspective that prioritizes price signals, individua-lized property rights and activities taking place at an aggregated scale. But creativeregulatory law (such as Bolivia’s water law, or certification schemes that might recog-nize the social priorities of Frank’s mission)98 that is open to the very unevenness ofthe multiple relationships between activism and enterprise can foster change overtime. If the cultural identity shifts charted in our imaginary hybrid economy flowover time into institutional design at the macro-level, then the evolutionary, comple-mentary and dialectical potential of activism to infuse enterprise will find full release.

4 CONCLUSION

We wish to conclude by being tentatively – perhaps provocatively – schematic aboutthe uneven and contingent landscape of hybrid relations between social activism andsocial enterprise. The two stories we have told conjure up different ways of imagin-ing, narrating and institutionalizing such hybrid relations. One way might emphasize asocial enterprise that delivers water services under the watchful eye of a regulator andNGOs well versed in certifying those services as human rights-compliant against care-fully specified metrics and protocols. Another way might emphasize a communitycooperative that provides access to water on a universal basis, prodded by activistNGOs and ‘social consultancies’ that ensure extensive participation, deliberationand community involvement. These are not necessarily incompatible visions, buttheir language and their implicit trajectory are divergent, and potentially all themore so as small-scale actors in these spaces grow, establish themselves and routinizetheir practices. One thing this article has hopefully demonstrated is that the formernarrative is one that can foster powerful new collective identities, just as the lattercan be the engine of justly distributed economic growth. But to say this is not to sug-gest that both visions are interchangeable, or that their malleability necessarily pro-motes ‘win–win’ solutions. Rather, the language and practices of specific projectsmatter, and the balance between, for example, community participation and ‘socialimpact’ metrics will place any particular initiative in a specific position along a spec-trum between activism and enterprise. Where that position is located profoundlyaffects the possibility of securing water rights as collective entitlements, underpinnedby a social movement for structural change and embedded in institutionalized collec-tive responsibility that takes seriously obligations of universal access. There are twoimportant implications from the discussion in this article for keeping alive such a pos-sibility that we would emphasize in closing. The first has to do with cultural identity,

98. An example of such a scheme (Frank has not explored either) might be the UK SocialEnterprise Mark (<http://www.socialenterprisemark.org.uk/>) or B-Lab certification: see e.g.,S Magdaluyo, ‘B Lab is Building a New Sector of the Economy: But Can We Trust Who isBehind the Wheel?’, Research Paper for Graduate School of International Relations and PacificStudies University of California, San Diego, <http://irps.ucsd.edu/assets/001/503688.pdf>,accessed 23 October 2013. Of course voluntary certification schemes are not formal regulatorylaw in a technical sense, but are an increasingly important part of the transnational regulatoryfield: T Bartley, ‘Certification as a Mode of Social Regulation’ in D Levi-Faur (ed), Handbookon the Politics of Regulation (Edward Elgar Publishing, Cheltenham, 2011).

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that third limb – the other two being community mobilization and the pursuit of socialvalues – of the ‘new green politics’ discussed in the opening section of this article.The second has to do with the niceties of legal entity structures.

We have seen from the narratives and the subsequent analysis above that formallegal institutions have limits, especially when law takes a facilitative form. In thatlight, social relationality is arguably more central to the potential for such hybridinitiatives to gain traction. And increasingly, such relationality is shaped by whatTherborn99 calls non-class forms of politics (cyber-politics, sub-politics, life-politics),all of which are more individualistic than earlier forms of rebellion such as Marxism,feminism and environmentalism. Harnessing these ‘forces of irreverence’ to workwith more long-established rebellious behaviours would, Therborn argues, make pos-sible a ‘trans-socialist’ coalition that better taps into contemporary identities. Non-class forms of politics tend to gel better with enterprise and business ideas: thus Dere-siewicz argues that:

Today’s ideal social form is not the commune or the movement or even the individual crea-tor as such; it’s the small business. … The small business is the idealized social form of ourtime. Our culture hero is not the artist or reformer, not the saint or scientist, but the entre-preneur ... Autonomy, adventure, imagination: entrepreneurship comprehends all this andmore for us. The characteristic art form of our age may be the business plan.100

In observations such as these, there may well seem a tendency for enterprise to out-weigh activism, and we are certainly not suggesting ourselves that business plans canprovide a solution to the endemic tensions we have explored here. Too much empha-sis on this would neglect the multitude of external forces that shape business strate-gies, and the importance of how businesses make choices regardless of their formallegal entity status. What is striking about the quote above is the absence of anysense of a tension between protest and compliance, arguably surprising in light ofthe traditional connotations of social activism and social movements. This absenceof tension between protest and compliance is at least partly attributable to a genuinecultural shift in what is regarded as adventurous, creative and linked to inspiringsocial change. Such a shift would also make sense of an otherwise puzzling patternof claims in social enterprise circles: that entrepreneurs take direct action, whileactivists seek to create change through indirect action by influencing others.101 Giventhe centrality for activists of a very different form of direct action through civil –and sometimes unruly – disobedience, this perspective misses the implicit positive(and direct) vision of activism that seeks to protest against contemporary structuresand institutions.

And here, there is another important cultural identity shift occurring, and that is theincreasing interest from traditional activists in working through an alternative positivevision that would enact systemic structural change.102 Arguably, provision of ser-vices, especially via enduring organizational operations, sits inherently uneasilywith protest. However, where provision is based on a systemic challenge to existingmodels, as the ‘sharing economy’ arguably is, then protest dynamics do exist, and the

99. G Therborn, ‘Class in the 21st Century’ (2012) 78 New Left Review 5–29.100. W Deresiewicz, ‘Generation Sell’, New York Times, November 12 2011, <http://www.nytimes.com/2011/11/13/opinion/sunday/the-entrepreneurial-generation.html?pagewanted=all&_r=0>, accessed 23 October 2013.101. See e.g., Martin and Osberg (n 44).102. See Orsi, Practicing Law in the Sharing Economy (n 24), opening chapter.

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potential for much greater political contestation (if such systemic challenges expand)is considerable. It is at this point that the importance of formal legal niceties returns,and it is attention to these niceties that we would urge for exploring the activist poten-tial of forms of social enterprise. Detailed scholarly engagement with the variousdimensions of legal entity choice by small-scale social enterprises seeking to imple-ment a human right to water is, we would argue, a worthy focus of further research.Legal entity choices both allocate property rights and define the scope of participatorypower for those affected by an organization’s activities. They are therefore crucialfoundations of the capacity to implement transformative visions. As developmentscholars have observed, ‘institutions come with their own foundational myths thatdeliberately obscure the social conflict the institution was designed to solve’.103

The lesson of this article is twofold: first, activism is part of the silenced history ofany enduring form of enterprise, and debates over legal entity forms need to be re-infused with an appreciation of the multiple trajectories that activism can takewhen building new institutions. Second, legal entity choices are vital terrain forthose who seek to secure water rights, and in the context of contestations aroundthe human right to water, mastering them is an unfinished task.

103. L Pritchett and M Woolcock, ‘Solutions When the Solution is the Problem: Arraying theDisarray in Development’, Centre for Global Development, Working Paper No 10 (2002),<http://international.cgdev.org/sites/default/files/2780_file_cgd_wp010.pdf>, at 17, accessed 23October 2013.

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