Governance key to improving water services

April 1, 2006
The United Nations report cites corruption as the primary reason why clean drinking water remains unobtainable for 1.

The United Nations report cites corruption as the primary reason why clean drinking water remains unobtainable for 1.1 billion people, according to Transparency International (TI).

Private sector investment in water services is declining, according to the UN World Water Development Report 2, as major water companies have withdrawn from numerous financially risky and politically unpopular concessions. And a few governments have ended long-term privatization contracts, forcing out water companies under controversial circumstances, such as in Bolivia and Tanzania last year.

Yet the supply of clean drinking water remains seriously inadequate. The World Health Organization (WHO) estimates that 1.1 billion people still do not have access to an adequate supply of drinking water and some 2.6 billion do not have access to basic sanitation. Over half of these people live in China and India, and are among the world’s poorest.

Ironically, consumers in developing countries are increasingly relying on bottled water purchased from private vendors and bottled-water companies at prices far higher than public tap water. These consumers must often choose between drinking polluted tap water and buying bottled water, if they can afford the expense. An estimated 6,000 people, mainly children, die from water-related illnesses every day, according to UN Secretary-General Kofi Annan, in a statement issued on World Water Day, 22 March 2006. The consumption of unsafe water is the leading cause of death in Pakistan, accounting for approximately 35% of reported deaths, according to the UN and World Bank. Two surveys conducted by Pakistan’s Ministry of Science and Technology (2005) and Institute of Public Health (2006) found 75% and 80%, respectively, of tap water in Lahore to be contaminated, mostly from sewage seeping into water supply pipes. Industrial wastes discharged illegally into drainage channels also make their way into groundwater, the city’s source of drinking water. More than 100 people died between May and July 2005 from contaminated drinking water in Pakistan.

Obviously Pakistan’s water quality problems are not unique to developing countries, so it should be no surprise why the bottled water industry is worth an estimated US$ 100 million per year and continues to grow. Or that the Millennium Development Goals of halving the proportion of people without access to safe drinking water and sanitation by 2015 will not be met.

Some critics contend this trend is just another effort by business to privatize water resources in countries where national governments should focus on improving water supply infrastructure and services. This argument assumes that the business sector is one entity with a shifting strategy. Instead, private water companies such as Suez, Veolia, and RWE/Thames Water are not benefiting from the boom in bottled water sales. Global beverage companies, including Coca-Cola, PepsiCo, Nestlé, and Danone, are cashing into this consumer market.

Governments, not private companies, are primarily responsible for improving access to safe drinking water. Delegates from 148 countries agreed upon this principle in their formal declaration adopted on the last day of the 4th World Water Forum, held in Mexico City, Mexico, on 22 March 2006. Most speakers at the global forum did not support the privatization of water supply authorities. Currently, public water operators still provide an estimated 90 percent of water supply services.

Presented at the Forum, the UN report emphasizes the importance of governance in managing the world’s water resources and tackling poverty, according to UNESCO, the agency that headed the joint effort of 24 UN agencies involved in water management. Governance systems, the report says, “determine who gets what water, when and how, and decide who has the right to water and related services. Such systems are not limited to ‘government,’ but include local authorities, the private sector and civil society.” The report blames “mismanagement, corruption, lack of appropriate institutions, bureaucratic inertia, and a shortage of new investments in building human capacity as well as physical infrastructure” for the failure to increase safe water supplies.

Corruption costs more than US$ 1,000 billion in bribes paid out each year, according to the World Bank Institute (WBI), and in the water sector, 64% of the operating costs of African water utilities results from corruption of some form. The German organization Transparency International (TI) launched its Water Integrity Network (WIN) initiative at the Forum to ensure that aid money for water sector development and scarce public monies are used to improve water supplies. Supported by the Stockholm International Water Institute (SIWI) and the World Bank, the initiative promotes pro-poor actions to combat corruption in the water sector. Its forum session provided examples of how to establish anti-corruption coalitions for the water resources and service management sector.

The initiative has already achieved some success. In Colombia, the TI national chapter Transparencia por Colombia, designed a pioneering method based on TI’s Business Principles for Countering Bribery to demonstrate that bribery does not have to be an inherent part of doing business. Since April 2005 more than 150 national and international firms in Colombia’s water sector have joined its anti-bribery association. In the Philippines, more than 100 local organizations are actively uncovering corruption activities in water projects.

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