4. Strengthening water governance in Cape Town: Policy recommendations
This chapter suggests ways forward and policy recommendations to upscale the use and effective implementation of policy and economic instruments to bridge identified governance gaps in Cape Town and South Africa. It suggests in particular, strengthening water resource management and financing at the catchment level, promoting innovative approaches to manage water balance and complete water allocation reform, improving the economic regulation and financial sustainability and efficiency of water and sanitation services, enhancing capacity, as well as strengthening transparency, integrity and engagement.
Key water governance challenges identified for Cape Town and South Africa encompass issues related to policy and institutional fragmentation, scale mismatch, policy coherence, capacity, data and information, funding, regulation, integrity, transparency, stakeholder engagement, trade-off management and evaluation (see Chapter 3). Building upon these challenges, policy recommendations were formulated to bridge identified governance gaps (Table 4.1).
Establish a single catchment management agency (CMA) covering the Western Cape Water Supply System territory
The National Water Act mandates the decentralisation of water resources management through CMAs. However, the rollout process of CMAs has been stalled for more than a decade, thus hampering decentralisation of water resource management at the catchment level. This situation has resulted in challenges with regard to co-ordination across levels of governments and sectors throughout the Western Cape territory. As such, resuming and completing the establishment of CMAs is crucial to overcome the current lack of co-ordination and further strengthen the integration of water resource management for the Western Cape.
Indeed, catchment organisations are important tools for co-ordinating water policy at the territorial level, as suggested by the Principle 2 of the OECD Principles on Water Governance (OECD, 2015[1]), which calls for “managing water at the appropriate scale(s) within integrated basin governance systems to reflect local conditions and foster co-ordination between the different scales”. They can be useful to manage water at the appropriate scale through integrated basin governance to reflect local conditions and foster multi-level co-operation for the management of water resources; to encourage sound hydrological cycle management and promote adaptive and mitigation strategies. Finally, they can help manage water risks, thus supporting and reinforcing water security.
In a study dated 2020, the Water Research Commission (WRC) published a report listing priority actions to pave the way for CMA rollout resumption and completion (Box 4.1).
1. Support the National Department for Water and Sanitation (DWS) in committing to a clear strategy for establishment, which includes negotiation with key stakeholders and a clear communication strategy empowering officials on the ground in their interactions with stakeholders.
2. Document and present in clear (non-specialist) language the achievements and experiences of the two existing CMAs as an argument for establishing CMAs and practical guidelines emerging from experience.
3. Develop a clear and mutual understanding with the trade unions involved, about the public nature of CMAs, as well as details of the transition to CMAs of certain DWS functions, as it will affect their members. Moreover, their support will help implement CMAs.
4. Work with stakeholders who have been part of CMA establishment processes, especially in catchment management fora, and win back their trust.
5. Make sure that CMAs are oriented towards and willing to effect transformation in Water Use Allocation as well as institutions managing water, such as Irrigation Boards and Water User Associations, and that powerful local actors are not in a position to dominate CMA decision-making.
6. Understand the concerns of the National Treasury about funding CMAs and support the DWS in presenting a clear case to the National Treasury. This should include the need for funding based on water use charges as well as direct fiscal support for public interest functions.
Source: Munnik, V. (2020[2]), “The reluctant roll-out of Catchment Management Agencies: Assessing the key risks and consequences of delays in finalising institutional arrangements for decentralised water resource management”, http://www.wrc.org.za/wp-content/uploads/mdocs/2943_final.pdf.
Furthermore, to avoid potential territorial conflicts between catchments in the Western Cape, stakeholders have argued that a single CMA covering the entire Western Cape Water Supply System (WCWSS) territory could be favoured compared to two or three CMAs. This would provide a single and integrated co-ordination institution acting at the most relevant scale for water resource management in the Western Cape. In September and October 2020, the National DWS issued a Gazette Notice proposing to amend and expand the Breede-Gouritz Water Management Area (WMA) to include the Berg-Olifant WMA, thus creating a single CMA covering both catchments. This proposal marks a positive evolution after many delays and uncertainties with regard to CMAs rollout. For instance, the 2017 DWS review of institutional arrangements for water resource management culminated with the announcement of a proposal to establish a single national entity, the National Water Resource Management Agency (DWS, 2017[3]). The business case for this entity stated that the CMAs established or in the process of being established would be converted into regional units of the National Water Resource Management Agency. This proposal illustrated the reluctance from the national government to proceed with decentralisation and the attempt of “repurposing”1 over public institutions.
Along with the possible creation of the Breede-Olifant CMA, the progressive delegation of powers and functions (see below) should also be resumed and completed. Currently, the Breede-Gouritz CMA is endowed with initial functions focusing mainly on co-ordination missions at the catchment level, as stated in the National Water Act (NWA) (see Chapter 3). However, in addition to these initial functions, which limit CMAs’ reach and effectiveness, complementary powers and functions may be delegated by the National DWS, as stated in Schedule 3 of the NWA (see Chapter 3). Box 4.2 provides international examples of substantive functions carried out by basin organisations, including strong multi-level consultation mecanisms.
In the European Union, the Water Framework Directive gives high importance to the participation of stakeholders and society in general, but this is done at a consultative level. This type of consultation and open debate is particularly relevant at the beginning of the preparation of the river basin plans, when an extensive public consultation process is mandatory to identify the so-called “significant questions”. The resulting plan must respond to those significant questions largely identified by the water users and civil society. Meanwhile, the government of each member country has to designate the “competent authority” that is responsible for water management at the basin level. Representatives of water users and civil society in state councils and basin committees should be selected to guarantee genuine and recognised representativeness and should keep close links with the sector that they represent in order to share information and convey consensual positions of the sector on the most relevant matters.
In Spain, “confederaciónes hidráulicas”, which are part of the Ministry of Environment of the central government, manage the river basins that are shared by more than one autonomous region. In each basin there is a river basin council in which the governments of the autonomous regions participate. The river basin councils are consultative bodies and river basin plans prepared by the “confederaciónes hidráulicas” are discussed and previously approved by these councils, and finally adopted by the Council of Ministers following consultation of the National Water Council. All executive powers stay in the hands of the “confederaciónes hidráulicas”, which means in the hands of the Ministry of Environment.
In Portugal, the 2005 Water Law created hydrographical region administrations that are regional public institutes with full executive powers dependent from the Ministry of the Environment and in close articulation with the national agency responsible for water. There are corresponding hydrographical region councils of a consultative nature that help to identify key issues and need to be consulted at various predefined situations. The river basin plans require prior approval of the councils and then they are approved by the Council of Ministers; central authorities are also responsible for all matters related to the conventions regulating transboundary basins, although some measures can be delegated to the hydrographical region administrations.
In the Netherlands, water boards are an autonomous level of the organisation of the state in political terms. To give them democratic legitimacy, there are general elections for water boards, and there are even some political parties specialising in this level of public authority. However, in administrative and financial terms, they are submitted to the rules and to the inspection of the provinces and the central government and heavily controlled by them. They are a level of government in the Dutch Constitution and enjoy specific taxation powers and a governance framework (functional democracies).
In Germany, the Länder are basically responsible for water management and have to build consensus about shared river basins, namely in the process of preparing river basin plans. In some cases, like in the Rurh River basin, there are users’ associations with delegated powers promoting a consistent basin approach. There is no dominion of the Länder, and the Bundenstag and the federal government produce legislation that all Länder have to obey. The federal government is also responsible for international conventions on transboundary rivers (such as the Rhine, the Danube, the Odra or the Elbe).
Source: OECD, (2015[4]), Water Resources Governance in Brazil, https://doi.org/10.1787/9789264238121-en
The priority action listed in the National Water and Sanitation Master Plan (DWS, 2019[5]) to “establish financially sustainable CMAs across the country, and transfer staff and budget and delegated functions, including licensing of water use and monitoring and evaluation of water resources” seems to point in the direction of delegating complementary functions to CMAs. However, this priority action was to be completed by 2020, which is still not the case. As a result, uncertainties remain with regard to the pace of the reform and its possible form and outcomes.
These uncertainties also exist with regard to the origin of the Breede-Olifant CMA staff. Currently, in the two established CMAs, a majority of the staff members worked previously for the National DWS. Incentivising and securing staff movement from the DWS to the CMA is an important step to ensure that skilled and experienced staff joins the Breede-Olifant CMA to come. In 2018, one-third of senior management posts remained unfilled and one-quarter of professionally qualified posts. In its 2018 annual report, the Breed-Gouritz CMA recognises that “the South African labour market is characterised by skills shortage which poses major challenges to many organisations and the water sector and the Breed-Gouritz CMA are no exceptions to this situation. These challenges manifest especially during the acquisition of skilled talent that require registration with professional bodies like Professional Engineers, Hydrologists, Geohydrologist, Freshwater Ecologist, Industrial Technicians among others. The skills shortage is a serious impediment to the entire recruitment value chain especially in the core functions of the business” (Breede-Gouritz Catchment Management Agency, 2019[6]).
Make better use of abstraction and pollution charges
Although water resource management charges and waste discharge charge exist in South Africa, the waste discharge charge is not implemented and the water resource management charge is set too low to serve as an incentive and effective economic instrument to manage water resources and to collect needed revenues for the financial sustainability of the sector, thus not delivering their economic nor financial function in the end.
Despite the provisions embedded into the Pricing Strategy for Water Use Charges (DWS, 2007[7]), stating that these charges should be set so as to fully recover costs associated with activities required “to protect, allocate, conserve, manage and control the water resources and manage water quality”, no detailed costing method is set forward. Furthermore, the recovery of environmental and opportunity costs are not clearly indicated. This absence of a sound method should be addressed to reap the benefits of these economic instruments. To design an effective charging scheme, some key elements should be considered such as the alignment of these economic instruments with other water policy objectives, the link between water charges and the licence system, the incentives it provides to improve water resources quantity and quality, or the flexibility and adaptability of this charging scheme (Box 4.3).
How will the charges scheme link with permitting systems?
How will your charging scheme fit in with other mechanisms to manage water resources, in particular, the use of permits to set limits and conditions on abstraction and discharges? And will your permitting and compliance monitoring systems ensure that charges are calculated fairly and accurately?
Ideally, the locations of all abstractions and discharges would be identified and would all be controlled (or nearly all if a risk-based approach is taken) through permits backed up by routine compliance monitoring and enforcement where necessary. The permits would then form the basis for the approach taken in the charging scheme and the specific charge related to each user. All abstractions would have a means of measurement designed to ensure compliance with volumetric limits. Other permit conditions, such as restrictions on abstraction at low flows, would also have a means of ensuring compliance. Discharges should also have a volumetric limit and means of measurement, as well as emission limits to protect the environment and human health for the parameters in the discharge. There should be an agreed basis for monitoring the quality of the discharge at a frequency that meant that the results were statistically significant, auditable and appropriate to the type of process involved.
Designing the charging scheme
How will you structure the charges so that they align with the policy objectives? For both abstractions and discharges, will you use the volume authorised on the permit or the actual volumes abstracted or discharged? The latter requires more effort to oversee: the water user or your inspector will need to record and report the volumes, there must be a means of measurement of certified accuracy in place (e.g. a calibrated meter) because otherwise, you could be over- or under-charging. Your billing system must also be capable of calculating different charges according to the volume at the billing frequency that you choose.
Do you want to impose a separate administrative charge to cover the costs of managing and carrying out the technical determination of applications for new permits or revisions to existing ones?
Do you want your abstraction charges to send signals about the degree of water stress and incentivise reduced consumption? And what do you mean by “water stress” or “water scarcity”: if it is stress as a result of excessive abstraction, will you rely on charges alone to achieve a sustainable balance with the available resource or will you also take other measures to reduce abstraction (e.g. by buying out entitlements or by forcible reductions in authorised volumes)? If scarcity is more dynamic, such as from low rainfall and the risk of drought, what will trigger the charging response? And how will you ensure that charge payers are aware of what is happening on a dynamic basis and, where possible, have access to advice about how to reduce their consumption?
For discharges, what signals do you want to send to polluters and how costly do you want to make the act of pollution? If you want to incentivise a reduction in pollution load from toxic substances, do the permits specify limits on, for example, pesticides, hydrocarbons, metals, cyanides etc.? And how will you reflect this in the charges scheme through a sliding scale from cooling water through to discharges from chemical works and mining operations? If you want to see improved water quality to protect human health and support target ecosystems, can you use charges to help achieve this faster than through the use of progressively tighter limits in environmental quality standards-based permits?
Do you want to send signals about the value of effluent as a resource? In other words, where, when and in what volumes effluent discharges are made is important to other water users (providing that the quality is within permitted limits) and, although these matters can be specified in permits, do you want to reward discharges that benefit resources? Similarly, do you want to penalise abstractions through higher charges where the net return is low because the water has evaporated, been incorporated in a product, lost through leakage or taken up by growing crops?
How will you ensure that your charging schemes are flexible and adaptable to changes in water demand, environmental stress, climate change and droughts? And what feedback mechanism will you build in to allow for periodic reviews of its effectiveness?
Source: OECD (2017[8]), Water Charges in Brazil: The Ways Forward, https://doi.org/10.1787/9789264285712-en.
A review of international experience in setting and governing economic instruments for water resources management shows that water abstraction charges are commonly managed at the subnational level. In South Africa, they are differentiated for each WMA. The level of the water charge is usually differentiated by the type of user (domestic, industry, agriculture), like in South Africa, but also by water source (groundwater or surface water) with higher charges often imposed on groundwater than on surface water. Moreover, specific rates are sometimes applied to special zones, specific aquifers or rivers that are facing higher water stress or scarcity (Box 4.4).
In Portugal, the Water Resources Tax (Taxa de Recursos Hídricos, TRH) implements the basic idea that the user of water resources must compensate the cost generated to the community and/or restore the benefit the community grants (“polluter pays” and “user pays” principles). The TRH is due on a yearly basis and the debtor entity is the user of water resources. The TRH compensates: i) the advantage resulting from the privative use of public water; ii) the environmental costs related to the activities likely to cause a significant impact on water resources; and iii) the administrative costs regarding planning, management, supervision and water quality and quantity assurance.
The structure of the TRH is the following:
E is the amount paid for the discharged effluent, including chemical oxygen demand and biochemical oxygen demand expressed in kg.
I is the amount paid for the gravel and sand taken from the bed and margins of the river course expressed in m3.
O is the amount paid for the occupation of the “public water domain” by any sort of infrastructure or construction, expressed in m2.
U is the amount paid for the use of water, expressed in m3, subject to public planning and management.
Although the parcels A and U relate both to abstracted water (in cubic metres), A corresponds to the appropriation for a privative use of the water itself as a public asset, while U compensates for the planning and management of the river basin. This distinction has an interesting consequence: if the source of water is private (basically groundwater), only TRH = U is considered because there is no appropriation of public water; if the source of water is public (basically all surface water, except spring water occurring in private land while it stays inside that private property), the water charge is given by TRH = A+U, which pays for the public water (A) and for planning and management activities (U).
This approach circumvented the need of declaring all water as public because it was found out that such a measure would cause an enormous reaction from farmers who are used to look at water in wells as part of their properties that actually determines to a large extent the value of the land. However, the fact that groundwater is considered “private” does not mean that it is not subject to “public discipline”, namely because the use that is made in one property may interfere with the availability in neighbouring properties. Therefore, although it is considered “private” water, it is subject to licensing procedures but there is no reason to pay for “A” corresponding to the appropriation of a public asset.
Recently, a new parcel “S” was added to the water charges, aiming at promoting the sustainability of water services in the hinterland and in mountainous areas where the cost of water services is much higher than in the more flat and more affluent coastal areas.
According to the original Decree-Law No. 97/2008, revised in 2017 (Decree-Law No. 46/2017), typical values per cubic meter for the component A are EUR 0.0032 of water used for irrigation and fish farming, EUR 0.00002 for hydropower production, EUR 0.0027 for cooling thermoelectric stations and EUR 0.015 for domestic supply. These values can be aggravated by up to 20% in scarcity-affected areas of southern Portugal. The discharge of 1 kg of BOD is charged EUR 0.37 and 1 kg of total nitrogen and total phosphorus are charged EUR 0.17 and EUR 0.21 respectively. The extraction of 1 m3 of gravel or sand is charged EUR 2.5. The occupation of the public domain varies from EUR 0.002/m2 (hydropower production and fish farming) to EUR 10/m2 (permanent beach occupation for commercial uses). The new parcel S was introduced in 2017 with a value of EUR 0.004/m3. These values may seem quite low but it should be taken into account that they are applied to hundreds of millions of cubic meters or thousands of square meters.
These values may be multiplied by some aggravating or dis-aggravating factors, including a scarcity factor. Indeed, the water charge for the abstraction of public water for private uses includes the use of a shortage coefficient which varies across the river basin region. It is calculated by multiplying the base value of the respective use by the volume of water drawn, diverted or used expressed in cubic meters and by the applicable shortage coefficient. The coefficient of shortage is applied differently by river basin region:
1 for PTRH1, PTRH2 and PTRH3 (including Ave, Cávado, Douro, Leça, Lima and Minho Basins)
1.1 for PTRH4 and PTRH5 (including Lis, Mondego, Oeste and Vouga Creeks and Tejo Basin)
1.2 for PTRH6, PTRH7 and PTRH8 (comprehending Algarve, Mira and Sado Creeks and Guadiana Basin).
This component is applicable to the following sectors: agriculture, fish farming, aquaculture, hydraulic energy production, thermal energy production, public water supply systems and other cases. Although it cannot be claimed that the shortage coefficients used in Portugal measure in an accurate way the water resource cost, they constitute a first attempt for charging water scarcity.
Of note: since 2008, water supply and sanitation service providers include abstraction charges in the retail tariffs, dependent on the actual use and the type of user. The proceedings are earmarked to a water protection fund (50%) or finance Basin Water Authorities (40%) and the National Water Authority in charge of water resources management (10%).
Source: OECD (2017[8]), Water Charges in Brazil: The Ways Forward, https://doi.org/10.1787/9789264285712-en.
Charges are volumetric in most cases – like in South Africa, with the user paying a unitary rate per cubic metre abstracted. Alternative structures include, for example, fixed charges per hectare for non-metered agricultural abstraction or a price per megawatt-hour for energy production. For groundwater abstraction, increasing block tariff structures are sometimes in place.
Pollution charges are usually calculated based on pollution volume and content, and differentiated according to the sector (e.g. industries or agriculture) (Box 4.5). More countries have adopted pollution charges compared with abstraction charges. However, examples of pollution charges for diffuse source pollution remain limited. The heterogeneous impacts and damage costs of diffuse water pollution make their management more difficult than point source pollution. Additional reasons for the slow uptake of pollution charges in the management of diffuse water pollution may include: political resistance from polluters; limited data on the costs of environmental degradation; difficulties in measuring diffuse sources of pollution and attributing them to landowners.
Pollution charges are typically collected at the local level and since charges are often earmarked for environmental funds and water protection (treatment, monitoring, enforcement, etc.), the money usually remains at the local level. There is a large variation in how and for which pollutants water pollution charges are implemented in different countries or regions.
In France, water pollution charges are differentiated according to water users, such as households, agriculture and industry – although they can be the same between users. Charges for pollution with domestic origin are based on the water consumption of the household. Table 4.2 compiles the pollution charge for domestic users for the Adour-Garonne River Basin (one of the six river basins in France) and Table 4.3 those for non-domestic users.
These charges contrast with those for livestock and pollution with non-domestic origin in agriculture and industry, which are based respectively on number of livestock (above a certain level) and discharged pollutants. In the following table, we report the pollution charge for non-domestic users for the Adour-Garonne River Basin.
Prioritise cost-effective green solutions to augment water yields in the WCWSS
During the water crisis, water use from the WCWSS exceeded the system yield. This situation calls for a review of water requirements among users, which is currently being done through the revision and update of the WCWSS Reconciliation Strategy. For the long-term planning of WCWSS water resources, the level of assurance of supply for the domestic and industrial sectors is set at 97%. This level is used to determine the yield of the dams. In the case of irrigation, the WCWSS long-term assurance of supply reaches 91% which is higher than in other catchments because of the type of crops. As stated in the updated Reconciliation Strategy, agriculture will be curtailed first and more frequently than domestic and industrial users and the current curtailment rules may, therefore, need to be reviewed. Many types of water balance review mechanisms are possible, allowing for temporary or regulated water allocation transfer among water users. In a context of increasing water scarcity and high marginal costs of new water production, these mechanisms can generate economic benefits while addressing equity and redress concerns (see next section on effectively redressing past inequities). Box 4.6 provides the example of the water resource management model implemented in the state of Ceará (Brazil) that includes negotiation mechanisms to review water balance among users to promote an efficient use of water.
The experience of the state of Ceará is characterised by the search for a specific model adapted to the Brazilian semi-arid region. Progress achieved, with the support of World Bank loans, can be largely characterised as follows:
Management of water stored in dams, given scarcity problems derived from multi-annual seasonality of precipitation and high evaporation that occur in semi-arid regions.
Allocation of water to multiple uses, based on socially negotiated decisions in users’ collegiate structures (principally users’ associations of the reservoirs), based on established relationships between water height and stored volume that provide reliable projections of water availability in the short and medium terms.
Transport of raw water over long distances, over the limits of watersheds, reaching the major demand sites, especially the Metropolitan Region of Fortaleza, where the largest demands for industrial and domestic consumption are concentrated.
Collection of charges for the services of non-treated water storage, transport and distribution provided to the industrial users and to the concessionaires of domestic supply (those charges are formally different from the charges associated with the abstraction of non-treated water).
Adoption of mechanisms of negotiation among water users, allowing for changes in water allocation in order to increase the efficiency of water use (sectors with higher added value may pay for subsidising the reduction or suspension of activities of users with less added value – particularly irrigation with high demand).
Promotion of local associations of small users in order to facilitate the negotiation processes for water allocation.
A single state agency, the COGERH, created as a mixed economic enterprise acting in all the state territory and beyond the limits of the river basins, interconnecting reservoirs and systems for water transfer, being responsible for the operation and maintenance of the entire system.
A Secretariat for Water Resources that keeps all the competences of the state, notably those concerning the granting of permits and the systematic inspection of compliance.
An agency for the construction of water-related public works (SOHIDRA), and another one for the collection of hydro-meteorological data (FUNCEME).
A total collection of Brasilian Real 57 million in 2012, with a large part used to cover the operational costs of the raw water storage and transport systems.
Ceará water management is oriented towards the process of conciliation of conflicts among the multiple uses of water in a Brazilian semi-arid region, both for rural uses (family-based agriculture and large irrigation schemes), and metropolitan use in Fortaleza (urban and industrial consumption). Therefore it addresses both the bulk and retail dimensions of water supply, from a regional point of view and based on large infrastructures held by the state, and formulates new projects to satisfy expanding needs, according to the profiles of water users and uses. An additional merit of the system is the consistency of available data for supporting the processes of negotiation, which are crucial to reallocating water among users and generating higher added value. The real operation and maintenance costs of dams, canals, conduits and other equipment are fully covered by the charges that are collected for the non-treated water supplied, always rigorously metered. Hence, Ceará’s water resources management system relies on governance, governability, financial consistency, in addition to a regional development strategy.
Source: OECD, (2015[4]), Water Resources Governance in Brazil, https://doi.org/10.1787/9789264238121-en
In the 2019 WCWSS Reconciliation Strategy update, five water balance scenarios were developed to compare future water demand with current and future available yield depending on investment options (Figure 4.1). The water augmentation options include alien vegetation clearing, water conservation and demand management, groundwater development, desalination, water reuse and surface water augmentation.
Source: DWS, (forthcoming[9]),Western Cape Water Supply System Reconciliation Strategy, Status Report 2019
These options include a mix of grey and green infrastructure2 with water conservation and demand management being the most effective solution to increase the system yield (Table 4.4).
At the city level, the 2019 Water Strategy (City of Cape Town, 2019[10]) also relies on a mix of grey and green solutions for its augmentation programme. Furthermore, it recognises that nature-based solutions are among the most cost-effective solutions to increase water yields (Box 4.7). As such, they have been prioritised along with water demand management and improvements of the management and effectiveness of the integrated surface water systems (Table 4.5). In addition, nature-based solutions such as IAPs clearing allow the creation of an important number of jobs which generates additional positive externalities in Cape Town and its surrounding areas where the unemployment rate reaches 29% (Statistics South Africa, 2020[11]).
Green infrastructures are defined as “a strategically planned network of natural and semi-natural areas with other environmental features designed and managed to deliver a wide range of ecosystem services. It incorporates green spaces (or blue if aquatic ecosystems are concerned) and other physical features in terrestrial (including coastal) and marine areas” (European Commission, 2013[13]). They are increasingly recognised as part of the answer to water challenges in OECD countries, especially when cities compete with other users (e.g. agriculture and thermal energy) to access the water they need and when water management is considered in relation to land use and other policies.
The United Nations Environment Programme (2014[14]) lists green infrastructures for water resource management, some of which are useful in an urban context. Colin Green (OECD, 2013[15]) adds demand management and local processing of black or grey water to this list. Technologies related to sludge recycling, wastewater-energy generation and water cycle energy efficiency could also be considered. Energy efficiency translates water utilities’ objective of minimising and translating costs into opportunities to generate additional revenues. Energy-related technologies have ancillary benefits in terms of energy and climate policies. Green infrastructures provide solutions to all four risks that determine urban water security: droughts, floods, pollution and ecosystem resilience. Most of the technologies inventoried in Table 4.6 are mature. Some have been in use for centuries, e.g. Venice has relied on rainwater harvesting since its infancy and Paris adopted in the 19th century a three-pipe system supplying non-potable water to uses that did not require potable water.
The benefits of green infrastructures are increasingly well-documented. The Nature Conservancy (McDonald, 2014[16]) has computed that if cities invested in watershed conservation, 700 million people could receive better-quality water and water utilities could save USD 890 million a year in water treatment costs. Watershed conservation may be particularly relevant to low-income cities that cannot afford the capital and operation and maintenance (O&M) costs of built infrastructures.
Source: Adapted from UNEP (2014[14]), Green Infrastructure Guide for Water Management: Ecosystem-based Management Approaches for Water-related Infrastructure Projects, United Nations Environment Programme; OECD (2013[15]), Barriers to and Incentives for, the Adoption of Green Water Infrastructure, OECD, Paris; OECD (2015[17]), Water and Cities: Ensuring Sustainable Futures, https://doi.org/10.1787/9789264230149-en.
An optimised portfolio of grey and green infrastructure appears critical to build and sustain water security and resilience. The population growth and urbanisation of African cities require increased investment in water resource management. So far investments have primarily targeted “grey” infrastructure, including reservoirs, distribution pipes and treatment plants. The connection between urban water security and upstream catchment, as shown by a study from The Nature Conservancy (The Nature Conservancy, 2016[18]), underlines the pressing need to expand and develop water source protection through “green” infrastructure and land management. The example of Nakivubo wetland in Kampala is also advocating for green infrastructure investment as being among the most cost-effective solutions for water resources management (Box 4.8).
The Nakivubo Wetland, one of several large wetland systems that are found within and around the city of Kampala, is severely degraded. Polluted water from the city passes through the wetland before entering Inner Murchison Bay.
In the late 1990s, it was ascertained that the water treatment service performed by the wetland yielded a significant cost saving for the nearby Ggaba Water Treatment Works. However, as the city has continued to grow, pollution flows into the wetland have increased significantly, while the size and assimilative capacity of the wetland have decreased. As a result, the nearby water treatment works has been upgraded twice and new treatment works have been sited far from the city.
Fisheries in Inner Murchison Bay have also all but collapsed and the wetland itself has become the site of slum development. These concerns, as well as the increasing shortage of public open space areas in the city that are available for recreation, have led to the city’s consideration of the rehabilitation of the Nakivubo Wetland, both to restore its functioning and to create the opportunity for a recreational area with associated possibilities for economic development. In this study, a sequential set of interventions was identified to restore the wetland to a level where economic benefits could be realised. This “treatment train” included improved sanitation infrastructure and measures, extending and upgrading the wastewater treatment works, wetland rehabilitation, conservation measures and investment in recreational facilities. Excluding some of the required sanitation work which is already underway, the proposed fix would incur an initial cost of USD 53 million, with ongoing maintenance and operating costs of USD 3.6 million per year. Benefits of the project would include water treatment cost savings of USD 1 million (limited because of sunk costs) and recreational benefits exceeding USD 22 million per year. The net present value of the project over 15 years would be in the order of USD 80 million (- USD 24 to USD 220 million) and the internal rate of return would be in the range of 20% (4% to 34%), depending on assumptions.
The restoration would also enhance the feasibility of creating a waterfront development next to the wetland. Nevertheless, the initial capital costs are high, and such a project may well not be undertaken due to financial constraints and political intractability. There are important lessons to be learned from this study. Considerable environmental, economic and fiscal costs have been incurred by allowing the built environment to encroach on and largely eradicate a crucial part of the city’s natural capital endowment. A green urban planning paradigm would have yielded the sustained flow of benefits outlined above. It is now too costly and, from a political point of view, impractical to restore the wetland to a state where these benefits can be achieved. This lesson holds for the many additional wetland areas that could become engulfed as Kampala continues to grow. Most wetlands within the existing urban area have already been effectively lost. Without proactive interventions, the wetlands outside of the present urban core will also be destroyed and the cumulative impacts on Murchison Bay and any economic activities around the bay, including the viability of future waterfront development, could be significant. One of the main challenges in achieving such interventions will be institutional. Greater Kampala extends well beyond the boundaries of the Kampala Capital City Authority (KCCA), which originally encompassed the entire city. Unless the KCCA area is adjusted accordingly (as has been done in other countries), the problems that will arise in a growing city will be in areas under multiple other jurisdictions. Recreational benefits would exceed USD 22 million per year.
Source: Turpie, J. et al. (2016[19]), “A preliminary investigation of the potential costs and benefits of rehabilitation of the Nakivubo Wetland, Kampala”, in Promoting Green Urban Development in Africa, World Bank, Washington.
Furthermore, a way forward could be to explore augmentation solutions that are designed according to circular economy principles, i.e. making efficient use of natural resources as primary materials and optimising their reuse; planning and carrying out activities in a way to close, slow and narrow loops across value chains; and designing and building infrastructure to avoid linear lock-in to avoid material waste. The circular economy is expected to generate positive impacts on the environment through reducing atmospheric emissions, increasing the share of renewable energy and recyclable resources, as well as reducing the use of raw materials, water, land and energy (Box 4.9).
The circular economy is a new socio-economic paradigm promoting a shift towards a restorative and regenerative economy. The growing interest in the circular economy is due to three main factors: i) restrictions on access to resources, due to current megatrends such as demographic growth, urbanisation and climate change; ii) technological development, through which the circular economy is more attractive and viable for businesses and operators; iii) socio-economic opportunities emerging from moving from a linear approach of “take, make and dispose” to a circular system, including better access to services and job creation.
The water sector has been applying circular principles for a long time. Managing water in a circular way implies: reducing the use of water in the production cycles; ensuring more sustainable water flows; reusing water for specific purposes taking into account the effects on health and the environment; and generating energy and recovering of a wide variety of materials from wastewater treatment. For example, activities consist of generating biofuels from sewage sludge to provide energy; using wastewater biosolids as an organic fertiliser to preserve soil, while improving water quality through the recovery of nutrients (nitrogen and phosphorus) from wastewater effluents; or using wastewater sludge for the manufacture of construction materials forming part of aggregates, bricks, cement, mortars or concrete.
According to the results of the OECD Survey on the Circular Economy in Cities and Regions, a total of 66% of circular economy initiatives focus on the water and sanitation sector, after the waste sector (78%). Water can be treated for reuse in recharging aquifers, supplying agricultural systems as well as for refrigeration in industrial processes, irrigation of parks and gardens, street washing and even for drinking water. For example, in Singapore, in 2003, the Public Utilities Board (PUB), Singapore’s national water agency, introduced NEWater, high-grade reclaimed water produced from treated used water, which exceeds the drinking water standards set by the World Health Organization and the US Environmental Protection Agency. NEWater is used primarily for non-potable industrial purposes at wafer fabrication parks, industrial states and commercial buildings.
There are also examples of circular wastewater facilities. In the city of Granada (Spain), the public water utility company transformed the concept of a wastewater treatment plant into a biofactory by producing energy and new materials. In 2019, the biofactory almost reached its 100% energy self-sufficiency goal while 18.91 million m3 of treated water were reused for irrigation and for the maintenance of the minimum ecological flow of the local Genil River. In addition, from the 16 525 metric tonnes of fresh sludge material produced in the biofactory in 2019, 14.3% was reused for compost and 85.7% for direct application in the agricultural sector. A similar example exists in Santiago del Chile (Chile) where three biofactories – La Farfana, La Florida and Mapocho-Trebal – located in the metropolitan region currently treat 100% of the wastewater of Greater Santiago. The biofactories allow a clean portion of water to be returned to the Mapocho River and the rest to the farmers on the metropolitan region.
Many cities and regions in the OECD area incorporate water into their circular economy strategies. For example, Amsterdam focuses on closing local nutrient cycles. It combines water reuse techniques with educational programmes and procurement tools; the Barcelona Metropolitan Area prioritises the creation of a water cluster and provided funds for research and development (R&D) in the sector. It promotes the creation of the water cluster with different stakeholders and adopts an intersectoral approach, in relation to the interplay of the water sector with others, such as food and design. Water-related initiatives in Flanders consist of supporting companies in closing water loops and facilitating demonstration projects. The Partnership Circular Flanders created different spaces for stakeholder collaboration with a strong technical innovation approach. In Rotterdam, actions concentrate in the health sector through filtering wastewater, while Paris is advancing in wastewater-energy recovery to heat and cool public buildings and using technology to monitor water consumption in green public spaces.
The transition to a circular economy does not come without obstacles. Matching the biological and technical cycles of cities and regions and the various ways in which resources can be repurposed and reused, from water to energy, is a complex task for integrated master plans, which reflect interests and motivations within a very complex urban society. In developing and emerging economies, enabling conditions and the right investments could leapfrog developed countries in digital and materials innovation aimed at sustainable production and consumption patterns.
Source: OECD (2020[20]), The Circular Economy in Cities and Regions: Synthesis Report, https://doi.org/10.1787/10ac6ae4-en.
Manage water allocation trade-offs between equity and efficiency
Beyond the review of the water balance and requirements within the WCWSS, many water stakeholders recognise the need to revisit the water allocation regime to face growing pressures on water resources and redress inequities in water use distribution.
Provision for the Ecological Reserve
The National Water Act (NWA) in its Section 3 requires that water reserves be determined for water resources, i.e. the quantity, quality and reliability of water needed to sustain both human use and aquatic ecosystems, so as to meet the requirements for economic development without seriously impacting on the long-term integrity of ecosystems. The reserve is one of a range of measures aimed at the ecological protection of water resources and the provision of basic human needs. South Africa’s ambitious approach to the protection of the environment through the concept of a priority allocation to an environmental reserve, embedded within the Water Act of 1998, was heralded at the time as international best practice. However, although environmental flows should be included in the water regime, this is not always the case in practice. Box 4.10 provide specific examples of how certain countries are dealing with in-stream flows and concretely implementing an environmental reserve.
When designing an allocation regime and setting a long-term abstraction limit, it is important to decide whether or not to include some or all entitlements in this limit. The most common approach is to set aside the amount needed for environmental needs, non-consumptive uses, and transfers to other systems (including downstream obligations) as a prior right and then to allocate the remainder to take water for consumptive purposes.
An alternative approach, being tested in Australia, is to assign some water to the environment as an entitlement to a share of all inflows and define this entitlement separately from the arrangements used to ensure that base flows, for example, are maintained. In the Murray-Darling Basin, a Commonwealth Environmental Water Holder has been established and by 2019 is expected to hold around one third of the Basin’s water entitlements. Under this new arrangement, it is not possible for the government to allocate water to consumptive users without making a pro rata allocation to the Commonwealth EnvironmentalWater Holder.
Australia is moving to this approach in order to put environmental water on the same footing as all other water users. Under this arrangement, allocations are made in proportion to the number of entitlements held in the interests of the environment, no matter how dry or wet it is. As a result, administrators are not able to transfer environmental water to other users.
In the United States, non-governmental groups have been buying water to ensure that the environment is looked after. A well-known example is the OregonWater Trust, which became a programme of The Freshwater Trust in 2008.
Source: OECD, (2015[21]), Water Resources Allocation: Sharing Risks and Opportunities, https://doi.org/10.1787/9789264229631-en
Failure to provide adequate environmental flows can lead to a wide range of negative and often unexpected impacts (Box 4.11). Freshwater systems provide a wide range of ecosystem services and those services depend on particular flow regimes. A study by Turpie et al. (2017[22]) valued ecosystem services in South Africa at an estimated ZAR 275 billion (USD 18.9 billion) per annum. This includes many services beyond traditional “conservation” objectives and can include services such as:
Further, international experience shows it is extremely difficult to recover water for the environment once it has been allocated for consumptive use. This highlights the importance of reserving appropriate flows for environmental purposes from the outset (Box 4.12).
Freshwater systems provide a wide range of ecosystem services. Changes to the natural flow regime can affect the ability of a river to provide these services. Poor water allocation practices can mean that many of the services that rivers provide – for free – can be lost, with significant impact on dependent human communities. Examples from the international experience include:
Heightened flood risk – such as in Yellow River, China, where overallocation resulted in the build-up of sediment and changes to river morphology. This led to the river being perched above the floodplain and created a significant increase in the risk of flooding. Dedicated flows, representing around 35% of the mean annual flow, are now provided as part of the allocation regime to improve sediment movement as part of efforts to reduce the risk of flooding.
Saltwater encroachment and related environmental declines – such as in the Indus River, Pakistan, where overallocation and massively reduced flows at the river mouth led to saltwater intruding around 64 kilometres inland, resulting in the loss of approximately 1.2 million acres of farmland.
The outbreak of pest species – such as in the Orange River, South Africa, where hydropower development resulted in more stable base flows, thus creating a habitat for blackflies. This led to blackflies reaching pest proportions, with significant impacts on cattle production.
Declines in fish and other aquatic populations – such as in the Yangtze River, China, where changes to the downstream flow regime as a result of the construction of the Three Gorges Dam have caused a decline in juvenile fish stocks of the 4 major carp species of up to 95%, with subsequent effects on fisheries production.
Source: Speed, R. et al. (2011[23]), “Policy measures, mechanisms, and framework for addressing environmental flows”, International Water Centre, Brisbane.
A significant majority (76%) of countries responding to the OECD survey on water allocation indicated that minimum environmental flows are defined. A wide range of methodologies to do so was reported. For example, in Israel, in some places, a minimum quota of water has been set aside and must be allocated to ecosystems. In Slovenia, the ecologically acceptable flow is set depending on the type of water use and type of ecological needs. In England and Wales, environmental flow indicators are used as an indicator of the flows required by the environment. In Portugal, minimum environmental flows are determined on a case-by-case basis. In China, the warning-level river flow against the drying out of a downstream river course shall not fall below 200 cm3/sec at Xiaheyan hydrological stations. In the Murray-Darling basin, Australia, the Basin Plan limits water use at environmentally sustainable levels by determining long-term sustainable diversion limits for both surface and groundwater resource. A key component of the Basin Plan is the environmental watering plan, which co-ordinates all environmental watering across the basin.
Of the examples indicating that minimum environmental flows/sustainable diversion limits are taken into account, 82% take freshwater biodiversity into account in the definition of e-flows and 64% take terrestrial biodiversity into account. For example, in France, the minimum biological flow and the reserve flow required are based on the observation of ecological needs.
Source: OECD (2015[21]), Water Resources Allocation: Sharing Risks and Opportunities, https://doi.org/10.1787/9789264229631-en.
Effectively redressing past inequities
Replacing the previous Water Act 1956 that was racially discriminating for water allocation, the 1998 National Water Act abolished riparian rights, although pre-existing water use is recognised, provided it was legal in the two years prior to its promulgation. The NWA also removed the notion of private owner and declared water as a national resource owned by all South Africans. As such, the NWA provisions aimed to redress past inequities through redistribution of formal water use rights, primarily through the process of “compulsory licensing”, which allows the DWS to review all water uses in an area that is or is soon likely to be under water stress or where it is necessary to review prevailing water use to achieve equity of access to water. This is done by converting existing lawful water use into licences.
Although it provided a significant step forward, the NWA did not detail how redistribution should be carried out in practice, which is why the situation did not evolve much in the absence of a practice-oriented policy to guide allocation reform. As a result, in 2008, the DWS launched a Water Allocation Reform Strategy (WARS) aiming to redress persisting inequities through a number of mechanisms including the provision of financial support to resource-poor farmers or the processing of licences and/or general authorisations to support the uptake of water by historically disadvantaged people. The WARS set ambitious targets to reach:
30% of allocable water allocated to previously disadvantaged individuals by 2014, at least 50% of which should be in the hands of women.
More recently, in 2013, the National Water Resources Strategy and National Water Policy Review prioritise equity criteria in (re)allocation decision-making. However, despite prioritising equity outcomes, once again, these have not been clearly defined, nor have the complex trade-offs of reallocation been considered in sufficient details to support decision-makers. As explained by Rawlins (2019[24]), “there is a clear disjuncture between legal and policy objectives defining priorities for both new allocations and reallocations. Initial allocations are assessed on a first-come, first-served basis. If a water use licence meets the required criteria, it cannot be declined in favour of an application not yet submitted, even though it may produce a more socially, economically or environmentally favourable outcome”. This partly explains the slow rollout of compulsory licensing, with only 3% of average water availability reallocated through this process (Kidd, 2016[25]). As a result, existing lawful uses which were intended to serve as a transitionary measure to enable the implementation of a new system to reallocate water rights, tend to be anything but transitional. This situation applies to both South Africa as a whole and the Western Cape region.
If the completion of the water resource management decentralisation is soon achieved, a way forward could be to delegate complementary powers and regulatory functions to CMAs so that they are legally entitled “to manage and monitor permitted water use within its water management area” and “to make rules and regulate water use” (DWS, 1998[26]). With these clear and coherent mandates, CMAs would have in their hands policy instruments as well as economic instruments (through the water resource development charge) to implement water (re)allocation at the catchment level. They would thus have the necessary tools to respond to water allocation long-term environmental, economic and social objectives while ensuring the involvement of water stakeholders.
Strengthen economic water regulation
Since 2015, the DWS contemplated a pricing strategy review and an economic regulator reform. However, both projects stalled and remain incomplete as of today. In the course of the Pricing and Economic Regulations Reforms (PERR) project, the DWS conducted extensive work and consultation regarding three possible economic regulation institutional arrangements: an internal branch within the DWS, a government component and a national public entity. “Based on the assessment criteria and external stakeholder preferences established during the consultation process, the preferred institutional option for the economic regulator is the establishment of an external regulator, as a national public entity. This option allows for the greatest separation of roles between DWS as a regulated body, and the economic regulator. It also allows for the necessary freedom in terms of the recruitment and appointment of the highly skilled technical staff that will be required to perform this function effectively. It builds on the relatively successful National Energy Regulator of South Africa model” (DWS, 2013[27]). However, in a contradictory PERR presentation (DWS, 2013[28]), the preferred option is stated to be a National Government Component, outside the DWS. More confusion is added when looking at the figure illustrating the five-pillar turnaround strategy as displayed in the National Water and Sanitation Master Plan (DWS, 2019[5]), where the economic regulator seems to sit under the DWS authority (Figure 4.2).
In the 2018/19 Budget Vote speech (DWS, 2018[29]) to the National Assembly, the minister reiterated the project of installing a National Water Resources and Services Regulator. The Annual Performance Plan 2019/20 to 2021/22 of the DWS also reiterates the objective of establishing an independent regulator endowed with regulatory functions including licensing, water pricing, regulatory performance management, consumer protection and infrastructure investment. However, the process still needs to be completed, and the National Water and Sanitation Master Plan does not set any timeframe nor a deadline for the completion of this long-lasting reform.
Source: DWS (2019[5]), National Water and Sanitation Master Plan, http://www.dwa.gov.za/National%20Water%20and%20Sanitation%20Master%20Plan/DocumentsReports.aspx.
The OECD Principle 7 of Water Governance (OECD, 2015[1]) underlines the importance to ensure that sound water management regulatory frameworks are effectively implemented and enforced in pursuit of the public interest. In a fragmented and politicised sector such as water and sanitation services, improving the regulatory environment and limiting political interference requires establishing a regulatory authority that enjoys a certain degree of independence:
De jure independence, through explicit reference in the law.
De facto independence through a mix of governance features and operational modalities, involving independent decision-making, i.e. decisions that are taken without being subject to government assessment; staffing based on technical grounds rather than political criteria; protection of the board and top management from political interferences; and a budget which does not depend primarily on the government (Box 4.13 and Box 4.14).
A majority of water regulators surveyed by the OECD are legally independent regulatory bodies. Exceptions include Romania, where the regulator is an authority subordinated to a minister. In Flanders, Belgium, the regulator is a sub-entity of a governmental agency and has mainly an advisory role. In the case of Indonesia, the regulatory body is independent but has a purely advisory capacity. In Estonia, the regulatory duties for water supply and sanitation (WSS) have been vested in the competition authority (Figure 4.3).
Source: OECD, (2015[30]) The Governance of Water Regulators, https://doi.org/10.1787/9789264231092-en
De jure independence through explicit reference in the law is achieved for 22 regulators.
De facto independence of regulators is ensured through a mix of governance features and operational modalities:
Decisions taken without being subject to government assessment (28 regulators).
Staffing based on technical grounds rather than political criteria (28 regulators).
Protection of the board and top management from political interferences (26 regulators).
Budget which does not depend primarily on the government (23 regulators).
In 13 cases, the regulator combines both de jure and all de facto conditions, achieving, at least on paper, the organisation most likely to ensure independence (Figure 4.4).
Source: OECD (2015[30]), The Governance of Water Regulators, https://doi.org/10.1787/9789264231092-en.
The OECD has produced guidance on how to establish and implement independence with regulators (2017[31]) which identifies five key dimensions of independence (Figure 4.5).
Each of the five dimensions includes practical guidelines that can be considered as the basic and necessary institutional measures to create a culture of independence which establishes and maintains the capacity of regulators to act independently, based on an analysis of regulators’ institutional processes and practices within the OECD Network of Economic Regulators. The guidelines also include a set of aspirational steps that could be taken to bolster a culture of independence and safeguarding regulators from undue influence.
Source: OECD (2017[31]), Creating a Culture of Independence: Practical Guidance against Undue Influence, https://doi.org/10.1787/9789264274198-en.
In addition to preventing the abuse of monopolistic power, regulatory authorities can be created with the purpose to fulfil many other missions, which include, for instance, the protection of consumers’ rights, in particular, ensuring the provision of goods and services of proper quality and in sufficient amount at economically reasonable prices (Box 4.15). Regulatory authorities should pursue equity goals and pay special attention to poor households. To fulfil these goals, regulatory arrangements should promote water and sanitation access expansion, pro-poor tariff level and structure that foster service access, a flexible approach to service quality or mechanisms to address complaints from all customers including marginalised ones.
The reasons to create the National Commission for the State Regulation of Energy and Utilities of Ukraine are clearly defined in its statute:
Balance interests of economic entities, consumers and the state.
Ensure the transparency and openness of activity on the markets of natural monopolies and adjacent markets in the sphere of heat supply and centralised water supply and sewerage.
Protect the rights of consumers, in particular, ensuring the provision of goods and services of proper quality and in sufficient amount at economically reasonable prices, stimulating improvement of their quality and meeting the demand on them.
Shape price and tariff policy and ensure its transparency for markets.
Ensure the self-repayment of activity of subjects of natural monopolies and economic entities on adjacent markets.
Provide equal possibilities for consumers to access goods (services) on markets, which are in the state of natural monopoly.
Limit the influence of subjects of natural monopolies on state policy and stimulate competition on adjacent markets in the sphere of heat supply and centralised water supply and sewerage, recycling and disposal of waste to ensure the effective functioning of the respective spheres.
Source: OECD (2015[30]), The Governance of Water Regulators, https://doi.org/10.1787/9789264231092-en.
In Kenya, the water and sanitation regulator, WASREB, has developed a Pro-poor Water and Sanitation Services Guideline that supports utilities to expand service in the underserved low-income areas (WASREB, 2015[32]). In addition, each regulated utility reports yearly on a number of pro-poor performance indicators that include water coverage in low-income areas, level of services in low-income areas, or compliance to standards for water kiosks. Utilities are then ranked according to a weighted score based on those indicators and their yearly evolution is monitored and disclosed publicly.
In Zambia, 60% of the urban population live in low-income or peri-urban areas with the highest population growth and the lowest water and sanitation service coverage (NWASCO, n.d.[33]). Utilities lack the financial means to extend services to these areas where mostly underprivileged and poor people live. To address this situation, the Government of Zambia established a Devolution Trust Fund (DTF) through the water regulator, the National Water Supply and Sanitation Council (NWASCO), in 2001. The DTF is a basket financing instrument with the aim to assist the water supply and sewerage utilities to extend public water distribution systems and onsite sanitation in low-income areas. In comparison to the rehabilitation and construction of water systems with networks and household connections, projects funded by the DTF need relatively small amounts of funds but have a great impact on the living conditions of the urban poor.
Quality standards are a key determinant of service costs and hence, of tariff levels. Keeping tariffs affordable while ensuring an appropriate level of cost recovery can be achieved through the adaptation of service quality standards to local needs. Quality regulation, therefore, needs to be flexible and consider the trade-offs between quality and price, so that quality standards and requirements can be adapted to the circumstances in different service areas. Initiatives, such as flow limiters, the use of plastic-bodied water meters, ground tanks and semi-pressure water service levels, were first introduced to South Africa by the water service of eThekwini (Box 4.16).
In eThekwini (South Africa), Durban Metro Water Services experimented alternative service standards in order to meet the needs of customers in poor areas. Varying quality standards were proposed to customers so that they could choose between a range of options with differentiated price/quality characteristics. For example, eThekwini Metro Water Services developed semi-pressurised water systems with the provision of a roof tank as an alternative to a full pressurised system (which may be unaffordable). In such a system, water is reticulated using small diameter piping, which is laid along the major access routes or tracks located within the informal area. At appropriate intervals, connections are made to this reticulation and a manifold, which allows approximately 20 houses to connect to the water main, is installed. Each consumer receives a 200-litre water tank that is serviced by a water bailiff every day. This system results in a low level of unaccounted for water because of the low pressure and effective customer demand management. Overall water consumption through such a service delivery system is estimated to be up to 50% less than conventional systems to communities of similar profile. The approach nevertheless provides sufficient water to households to maintain a basic level of hygiene and health. In areas where this system could not be installed, standpipes/water dispensers are provided to supply informal communities as an interim measure. Furthermore, water sachets or tankered water are supplied in the case of prolonged service interruptions. Finally, water boreholes are available where there is no water reticulation.
Source: World Bank (2006[34]), “Taking account of the poor in water sector regulation”, Water Supply & Sanitation Working Notes, No. 11; eThekwini (2019[35]), Water and Sanitation Service Level Standards, 13th edition, July 2019/2020.
Consumer representation and protection is a critical function of regulators particularly in a sector where access to services is vital to fulfilling basic human needs. In Zambia, NWASCO, which regulates the water and sanitation sector, has a very lean structure with offices in Lusaka only. However, in wanting to ensure that NWASCO is present on the ground for first-hand information and addressing consumer complaints, Water Watch Groups (WWGs) have been established, comprising customers from the service areas. The WWGs have delegated power and duties from NWASCO. Membership to the WWG is voluntary and does not attract any remuneration for the services provided. NWASCO, however, endeavours to provide WWGs with stationery, transport and other necessary logistics to enhance their smooth operations. Due to poor service delivery and the increasing number of unresolved complaints, many people were willing to serve as volunteers. The Lusaka WWG was the first to be established as a pilot project in 2002. The demand for WWGs has increased with more people appreciating the added value and impact on the ground. Consequently, in towns where there are no WWGs, people are requesting to be recognised as WWGs. However, due to the demand of monitoring as well as the cost involved, NWASCO has been cautious with the establishing rate of WWGs. Currently, there are 8 WWGs across the country.
The WWGs functions include the representation of consumers’ interests, the follow-up of unresolved consumer complaints, the improvement of the communication between consumers and providers, the arbitration in conflicts between consumers and service providers, the collection of information on providers’ performance, NWASCO information on regulations effectiveness and the proposition of possible adjustments, poor consumer information with regard to their rights and obligations, and consumer information with regards to the role and functions of NAWSCO. To fulfil these functions, WWGs hold public meetings with consumers and meetings to review/validate complaints. They engage in outreach and publicity programmes via awareness meetings, television and radio broadcasts. They submit periodic reports to NWASCO including feedback from consumers. They participate in workshops, conferences, etc. They assist in the recruitment and training of new WWGs.
In addition to the above-mentioned regulatory examples on equity goals, regulation ultimately ought to be effective to balance a range of economic, social and environmental interest and manage the associated trade-offs. In recognising the need for the development of such an effective WSS regulatory framework, six regulators from the Eastern and Southern African region established formal co-operation on water regulation issues (Table 4.7). The ESAWAS Regulators Association was thus created in 2007 as an informal gathering of regulators to share experiences and knowledge, and was later formalised in 2010.
Once South Africa has defined and implemented its regulatory arrangement in the water sector, a way forward could be to engage in communities of practice, be they regional or international, to take part in benchmarks, share and learn about good practices. Joining the ESAWAS Regulators Association, whose objectives include capacity building and information sharing at the international, national and regional levels and regional regulatory co-operation to identify and encourage the adoption of best practices to improve the effectiveness of WSS regulation, could serve that purpose.
Improve the efficiency and financial sustainability of water and sanitation services
As is the case in many countries, the revenues from water and sanitation tariffs do not cover the operation, maintenance and renewal costs of the water sector in South Africa. This is partly a consequence of the real costs not being reflected in the price of water. Nevertheless, the financial sustainability of water and sanitation services crucially depend on revenues raised through tariffs, in addition to subsidies (Box 4.17).
Setting the right tariffs for domestic water use is a challenging task. In many cases, utilities do not know the cost of the service and operate inefficiently, which adds costs to the provision of services. In addition, from a political standpoint, charging below cost can be seen as paying off. However, it is in general counterproductive. When tariffs are set below cost recovery, the provider must either rely on government subsidies or cut back on service, maintenance and investment. Generally, tariffs that are below the costs (at least of operation and maintenance) result in poor service, asset deterioration and an inability to invest to meet growing demand. There are four main objectives embedded in the design of water and sanitation tariffs: i) financial sustainability; ii) economic efficiency; iii) environmental conservation; and iv) social fairness. In order to accommodate these objectives, three dimensions of tariff policy are relevant: tariff levels, tariff structure and the tariff setting and revision process.
Financial sustainability: Water tariffs are a key element of long-term financial sustainability of water operators and of systems. Low levels of tariffs, coupled with inadequate compensation from other sources of revenue – typically taxes (and international transfers in developing countries) – over the long run lead to a vicious circle of bad maintenance and deterioration of services that affect users’ willingness to pay and might, in turn, induce a decrease in bill collection rate and further reduction of revenue for the sector.
Economic efficiency: Prices provide important signals to providers and users that drive economic efficiency, i.e. that allow allocating water with priority to uses with the highest value to society and service provision at the cheapest costs.
Environmental conservation: Appropriate pricing of water supply and sanitation services contributes to environmental conservation when it is used to manage demand and discourage “excessive” uses of water. To this effect, increasing block tariffs are typically used.
Social fairness: Social fairness generally implies that the water tariff treats similar customers equally and that customers in different situations are not treated the same. Social fairness accommodates affordability concerns, i.e. poor households are able to obtain adequate supplies of clean water. In practice, however, the debate on whether tariffs are the appropriate tool to address affordability concerns is lively. Increasing block tariffs, the traditional policy tool used to achieve social objectives, have raised many criticisms as they may not be appropriate if poor households consume more water than richer ones and if the poor are not connected to the water systems. Cross-subsidies have shown limitations over time when shifts in the balance between subsidised and subsidisers were not anticipated. Targeted subsidies for water consumption have also been criticised, pointing out that precise targeting requires good administrative capacity. Subsidies supporting connections to water networks have proved more helpful for the poor than subsidies to water consumption.
Source: OECD, (2010[37]), Pricing Water Resources and Water and Sanitation Services, https://doi.org/10.1787/22245081.
As explained in Chapter 3, in Cape Town, revenues from water and sanitation invoices effectively cashed in represent 66% of the water produced, which strongly reduces the financial base of the service. Overall, subsidies represent approximately 18% of the funding sources of the city of Cape Town water and sanitation service. However, in a context of pandemic crisis, fiscal constraints may reduce the amount of available subsidies both at the national and local levels, thus jeopardising further the financial situation of water and sanitation services across South Africa. As a result, Cape Town water services must improve their technical and economic efficiency and undertake utility turnaround efforts.
Indeed, service providers should not only approach cost recovery through increases in tariff levels but should also in priority seek efficiency gains, as there exist many areas for improvement (staff efficiency, collection ratio, metering level, energy costs, etc.). Moreover, thorough assessment and monitoring of all costs will help set up tariff calculations and levels that are sufficiently cost-reflective to drive long-term financial sustainability.
Over the past five years, a customer service turnaround project supported by the United States Agency for International Development (USAID) was implemented in the Cape Town water and sanitation service. During the drought crisis, Cape Town residents were made very aware of their water usage and reviewed more closely their bills and rates. This led to a significant increase in customer enquiries and a backlog of unresolved customer issues. In response to the customer problems and the loss of revenues (due to lower collection ratio) during the drought, the USAID project contributed to reform the Water and Sanitation Department customer service system, which improved public trust in the department as well as revenue collection (Box 4.18).
Like many other municipal water companies or utilities, Cape Town’s water problems are compounded by a fragmented organisational structure. The city’s water system is managed by many different work units:
The Department of Water and Sanitation (meter reading, service request resolution, debt management, field operations, billing system, data management, etc.).
The Executive Director of Area Management at the City Contact Centre.
The city’s Chief Financial Officer and Revenue Department (customer billings and certain debt management activities).
The Executive Director of Corporate Services at the city’s Information and Technology Department.
The city’s Water and Sanitation Department has consolidated water and sanitation customer service operations into one organisation. This will improve the efficiency and teamwork among the various operating units involved in water management. The new Customer Service Branch will have a single manager who reports directly to the Executive Director of Water and Sanitation. Six work units will exist within the organisation, including the four business areas outlined above. In addition, there will be a business analysis group responsible for information and technology, as well as a finance and administration unit.
Based on a diagnosis, an action plan was developed, centred on four major work units where issues were identified either as causes or results of deficient customer service and operational inefficiencies: i) metering and meter reading; ii) customer billing; iii) collections and debt management; and iv) customer care and call centres (Figure 4.7). These four business domains make up 95% of the customer relationship management reform effort and directly or indirectly impact revenue flows.
Source: United States Agency for International Development, (2020[38]) Water Sanitation and Hygiene Finance project
Furthermore, the French Development Agency (AFD) recently announced a transversal programme aiming at supporting the financial sustainability of the city of Cape Town water service. This 18-month programme, starting late 2020 and named Long-Term Technical Assistance to the City of Cape Town for the Financial Sustainability of Water and Sanitation Services will target:
The development of an investment plan with capital expenditure level meeting the city’s growing needs and sustaining the service by continually upgrading and/or replacing assets.
The cost-effective total spending, with incremental and ongoing improvements in service performance and efficiency.
The development of a sound and sustainable revenue model comprising a mix of tariffs, grants and other revenue. This objective includes effective data management, accurate billing, low levels of estimated readings, good meter management and up-to-date records. This is planned to be achieved through a comprehensive metering system upgrade (670 000 meters) to yield significant revenue increases and customer service improvements.
The implementation of a tariff model able to generate sufficient tariff revenues.
The development of a sustainable, equitable and well-targeted subsidy scheme to promote affordability.
In addition to these ongoing programmes aiming to improve the efficiency and financial sustainability of Cape Town water service, complementary actions can be implemented to better assess and monitor the performance of the service. Key performance indicators (KPIs) are widely and commonly used in the water and sanitation sectors around the world as steering and managing tools to measure change and monitor improvement against specific goals (Box 4.19). The city of Cape Town Water and Sanitation Department has set up 36 KPIs to assess and monitor the service quality. They are part of a broader corporate monitoring and appraisal system at the city level. For each of these 36 KPIs a target value is defined each year and KPI monitoring is shared monthly with the Water and Waste Portfolio Committee, the Executive Mayor and the Mayoral Committee, and the City Council. However, the yearly result achieved for each KPI is not publicly available.
In Peru, 35 performance indicators are grouped into two high-level areas: provision of services and business management. Every high level has three sub-levels and two sub-levels respectively (Table 4.8).
Some of these performance indicators are used to set the management goals of the water companies. The main management goals are related to increasing coverage and improvement of the service quality such as:
The tariff increases authorised by the regulator are subject to compliance of these management goals.
In Portugal, the indicators are grouped into three high-level areas: protection of user interests, operator sustainability and environmental sustainability (Table 4.9). ERSAR, the regulator, has created a technical guide which establishes all of the definitions for the data and indicators, and the methodologies to collect the information. For each of the 16 indicators per service, there are reference brackets that define if the service is good, average or unsatisfactory. The process, from the collection, in office validation and onsite auditing of all the information provided, until the disclosure of the information to the general public, follows an annual cycle.
Many urban water utilities in Africa routinely use data and KPIs to guide their water and sanitation services management policies (Table 4.10). These data and information are also publicly communicated in their annual report available on the organisation’s website. These data encompass: water quality and quantity; water demand and supply; economic, environmental and social sustainability of the service; and human resources management. As such, KPIs are not only a powerful steering tool but also a successful exercise of transparency and accountability.
Furthermore, the ESAWAS started in 2013 a benchmarking exercise among large water and sanitation utilities located in Eastern and Southern African countries. To do so, a set of ten common KPIs was identified along with associated Minimum Service Level guidelines (Table 4.11). Adopting these ten KPIs and taking part in this regional benchmark could be an opportunity for Cape Town water service to be compared with peers and learn from good practices. Such an approach also allows to identify the service main strength and weakness areas, thus forming a basis for decision-making in order to craft measures to improve utility effectiveness (Table 4.12).
The capacity gap is another important challenge for the water sector in South Africa, especially since it often has a spill-over effect on the information gap which can, in turn, generate an accountability gap. Institutional strengthening and capacity building at all levels is crucial for effective governance of water policies in response to the challenges of the 21st century. For instance, such capacity building is a prerequisite for effective channelling of financial resources to make investment projects happen, or to prioritise investments according to their cost-benefit for the society, or to implement utility efficiency turnaround.
The National Water and Sanitation Master Plan acknowledges that “an effective water sector requires human resources capacity for different functions at different institutions – both in terms of numbers to meet the demand for specific skills; and competencies in terms of skills, qualifications and experience” (DWS, 2019[5]). It also refers to a skills gap analysis conducted by the Water Research Commission (WRC) in 20153 looking at numbers of staff and their skills relative to required skills. This analysis showed significant skills gaps in all water sector institutions, including DWS, CMAs, Water Boards and Water Services Authorities. This gap is further recalled by the Engineering Council of South Africa in a report dated 2015 stating that South Africa has 1 engineer per 2 600 people, compared with international standards of 1 engineer per 40 people.
Although there are robust but generic overarching principles and strategies in the field of capacity development (Skills Development Levies Act, National Qualifications Framework Act, National Skills Development Strategy III and National Development Plan), it seems that the operationalisation of skills development remains a vivid challenge in the South African water sector. The National Water and Sanitation Master Plan (DWS, 2019[5]) foresees a water and sanitation sector skills capacity needs analysis (including a mapping throughout the water value chain), and the elaboration of a skills and institutional capacity development strategy for the sector. However, these documents have not been produced yet.
Peer-learning and exchange of practices across water operators and practitioners could be supported and promoted, for instance, by the Energy and Water Sector Education and Training Authority (EWSETA) which is the responsible institution for co-ordinating and facilitating skills development and capacity building in the water sector. In order to fulfil its missions, this institution has developed a six-year plan (from 2015 to 2020) which includes detailed strategic objectives linked to four different programmes and associated with performance indicators. The evaluation and monitoring of the strategic plan are done yearly through a performance report. However, the data reported are not disaggregated enough to distinguish results and achievements between energy, renewable energy, gas and water services sectors.
A possible way to start addressing the capacity gap is to include within the updated National Water Strategy at the national level, and into an action plan at the city level, a section dedicated to capacity building and development operationalisation for the water sector. As stated in OECD Principle 4 of Water Governance (OECD, 2015[1]), the level of capacity of responsible water institutions should be adapted to the complexity of water challenges which have to be addressed. Countries and cities can identify, as part of their national and local development plans, training needs for water resources and management. They should also provide the required working conditions to retain trained personnel. Levels of governments must assess their own capacity to equip their water specialists so that they are enabled to implement the full range of activities for integrated water resources management. Information, education and communication support programmes must also be an integral part of the development process (Box 4.20).
Furthermore, the 2015 WRC study points out an interesting outcome regarding the characteristics of the capacity gap that the water sector is facing. This research work performs an assessment of whether the higher education system in South Africa was producing enough qualified people to fill the capacity gaps. Data from the Department of Higher Education and Training’s management information system showed that the number of civil engineering graduates had doubled from 2010 to 2014 from approximately 1 000 to 2 000 graduates per year. The graduation numbers of other relevant engineering and science qualifications that can apply to the water sector also increased dramatically over the same period. These findings tend to show that the capacity issue rather lies in the percentage of graduates that enter the water sector as opposed to other sectors and that enter the public sector as opposed to the private sector, as noticed by the report. Trying to answer these questions, the study underlines that, “while many institutions offer generic engineering, science and technology qualifications that could be applied in the sector, only two public universities (Venda and University of the North) have specific water-related courses and qualifications” (Vienings and Lima, 2015[40]).
Adapt the level of capacity of responsible authorities to the complexity of water challenges to be met and to the set of competencies required to carry out their duties, through:
1. Identifying and addressing capacity gaps to implement integrated water resources management, notably for planning, rule-making, project management, finance, budgeting, data collection and monitoring, risk management and evaluation.
2. Matching the level of technical, financial and institutional capacity in water governance systems to the nature of problems and needs.
3. Encouraging adaptive and evolving assignment of competencies upon demonstration of capacity, where appropriate.
4. Promoting the hiring of public officials and water professionals that uses merit-based, transparent processes and are independent of political cycles.
5. Promoting education and training of water professionals to strengthen the capacity of water institutions as well as stakeholders at large and to foster co-operation and knowledge-sharing.
Source: OECD (2015[1]), OECD Principles on Water Governance, https://www.oecd.org/gov/regional-policy/OECD-Principles-on-Water-Governancebrochure.pdf.
A way forward, as highlighted by the Engineering Council of South Africa, could be to restore and expand mentoring programmes to attract and accompany graduates towards a professional level. These programmes used to foster a culture of training engineering graduates toward registration. They used to be performed by bodies that were adequately staffed with qualified professionals who could plan training programmes, supervise work experience and mentor candidates. This could be resumed through induction of graduates to observe the work of competent engineers and perform specific processes under close supervision. Such consolidating skills and learning programmes could help increase the conversion rate of candidates to registered professionals. Bearing in mind that 61% of registration candidates are black whereas 74% of registered professionals are white, the bridging capacity gap needs to be addressed through targeted transformation and equity measures. In addition, implementing such programmes poses multifaceted problems which include organisational commitment of water institutions to perform induction programmes, adequate supply of supervisors and mentors, and technical bursaries.
At the utility level, skills and capacity gaps can be addressed through a dedicated action plan. In Namibia, the national water utility has developed a human resources strategy. It is a long-term plan setting objectives to be achieved in the field of human resource development in the organisation. It encompasses the following three dimensions:
“Human resources development” that include training and development activities, as well as induction, internal and external bursaries, job attachments or internships.
“Talent management” that include graduate development programmes, understudy programmes, succession management programmes.
“Human resources development centre” that include internal and external vocational training courses, monitoring and evaluation, or student support.
In Uganda, the National Water and Sewerage Corporation develops a 5-year Strategic Direction which is regularly monitored in publicly available reports. This strategic document lists key deliverables in four Strategic Priority Areas. The 4th Strategic Priority Area is dedicated to productivity and capacity development and comprises the following “strategic focus areas”: skills development, R&D, business re-engineering and staff productivity. For each of these “strategic focus areas”, deliverables are defined along with a corresponding timeframe.
Strengthen transparency and integrity
Culture of consequences
Transparency and integrity efforts have to be supported by a culture of consequences. When procurement rules are broken with impunity and illegal directives from political heads are not questioned, the absence of consequences gives an incentive to continue. Enforcement mechanisms that provide appropriate responses to all suspected violations of public integrity standards by public officials should be implemented. This is key for public infrastructure investment, especially large-scale projects that are particularly vulnerable to corruption and mismanagement. Budget overruns, delays and white elephants are common. Yet, public infrastructure also presents an opportunity for the government to showcase integrity and enhance citizens’ trust. Governments can capitalise on such major events and investments by applying the OECD Integrity Framework for Public Infrastructure (OECD, 2016[41]) and demonstrate that infrastructure projects can be productive, transparent and free from corruption.
The OECD Integrity Framework for Public Infrastructure aims to assist governments and private sector actors in mitigating corruption risks in public investment by identifying corruption entry points over the entire public investment cycle (Figure 4.8). The framework identifies tools and mechanisms to promote integrity in public investment, including measures for promoting ethical standards, managing conflict of interest, strengthening monitoring and controls, and increasing transparency. The instrument can be applied at the national and subnational levels and across sectors.
Innovative open contracting models
Municipal procurement is regulated by the Municipal Finance Management Act No. 56 of 2003 (MFMA) and its regulations, including the Municipal Supply Chain Management Regulations (2005). These regulations specify the minimum requirements but municipalities are allowed to apply stricter standards. Another recommendation would be to make greater use of open contracting models. Allowing free access, through an online portal, for all stakeholders, including potential domestic and foreign suppliers, civil society and the general public, to public procurement information notably related to the public procurement system (e.g. institutional frameworks, laws and regulations), specific procurements (e.g. procurement forecasts, calls for tender, award announcements) and the performance of the public procurement system (e.g. benchmarks, monitoring results) are key measures to enhance the transparency of public procurement systems. Monitoring and analysing public procurement information is also essential to foster greater accountability of the contracting authority. This can be done through various innovative tools (Box 4.21).
Source: OECD (2016[41]), Integrity Framework for Public Infrastructure, https://www.oecd.org/corruption/ethics/Integrity-Framework-For-Public-Infrastructure-Brochure.pdf.
Integrity pacts are mutual commitments between public and contracting parties to refrain from corruption and guarantee transparency during a procurement process. An independent third party, usually a civil society organisation (CSO), is given access to documents and procedures and ensures adherence to the integrity pact.
E-procurement envisages moving away from a paper-based procurement system so that the process takes place on a publicly available platform. At the very least it requires the publication of procurement information on an e-procurement platform.
Open contracting data standards prescribe standards for what information should be published and how. The use of this standard ensures that there is uniformity and standardisation of data which improves data quality and allows for comparison and analysis.
Red flag monitoring uses algorithms to analyse data and pick up anomalies. A set of procurement norms are built into the software and when a procurement practice violates a norm, the system generates a red flag notification. Members of civil society are then able to investigate this further in order to determine whether the deviation amounts to corruption or non-compliance with procurement law.
Source: Corruption Watch/WIN (2020[42]), Money Down the Drain: Corruption in South Africa’s Water Sector, Corruption Watch and the Water Integrity Network.
Water sector as an “island of integrity”
As suggested by Corruption Watch and the Water Integrity Network report Corruption in South Africa’s Water Sector (2020[42]), designating the water sector as “an island of integrity” could also be a way forward. This phrase refers to institutions that are successful at reducing corruption despite being in a context of endemic corruption. Although there is no formal definition of “islands of integrity”, it could take the form of “an anti-corruption forum” gathering “key stakeholders including law enforcement agencies, relevant government departments and agencies, representatives of the private sector, regulators and civil sector organisations active in water and in combating corruption. Reports of corruption and gross irregularities could be submitted to the forum and allocated to the agency best placed to address them. The involvement of the Auditor-General of South Africa and other Chapter 9 institutions4 would further strengthen the forum” (Corruption Watch/WIN, 2020[42]).
Strengthen engagement
Engaging stakeholders and promoting accountability are also key aspects to prevent political interference and its adverse effects. In a rapidly changing and connected world where climate change, population growth, urban development, rising water need for energy and food, natural disasters and water shortage are likely to damage societies and the environment, stakeholders must be empowered to act together to shape water governance. Stakeholders that compose the water sector play a crucial role in determining the outcome of a given policy or project. They can initiate and support it but they can also oppose efforts, attempt to block them or divert them to serve their own aims. Stakeholder engagement provides opportunities to share objectives, experiences and responsibilities and to be more supportive of solutions that will be reached while voicing and addressing concerns and interests. As such, stakeholder engagement is a means for groups and individuals to share tasks and responsibilities in a sector where they often contribute to challenges as well as solutions (Box 4.22). In Lusaka, for instance, the Lusaka Water Security Initiative, a multi-stakeholder collaboration system comprising the public sector, the private sector, civil society and international actors, was set up through a memorandum of understanding (MoU) to foster dialogue, knowledge sharing and awareness-raising, planning and project development among stakeholders (Box 4.23).
Currently, the institutional framework in Portugal includes the regulatory authority (ERSAR), the environmental and water resources authority (Portuguese Environment Agency), the public health authority (Directorate-General for Health), the consumer protection authority (Directorate-General for the Consumer), the competition authority (Competition Authority) and the financial support management authority.
The success of the Portuguese public policy owes much to the good articulation between the aforementioned state-level bodies and the municipalities, but also to the participation of other stakeholders. The Portuguese National Water Council is the consultation body, independent from the government, where public administration bodies, municipalities, operators, consumers, non-governmental organisations, experts, research centres, universities and representatives from business associations engage to discuss the Portuguese public policies for water. This forum contributes to the coherence between the sector and regional interests and is a relevant platform to promote discussion over public policy and the national water plans. In the case of water services, two other consultative bodies are in place – the Consultative Council and the Tariff Council – both within the regulatory framework. The inclusion of all relevant stakeholders in policymaking is part of a co-operative environment, which highlights and explains the existence of a broad consensus in the Portuguese water sector and in the Portuguese society about the fundamentals of the public policy for water.
Source: ERSAR (2017[43]), The Portuguese Public Policy for Water Services (1993-2016).
LuWSI is a multi-stakeholder collaboration system between the public sector, private sector, civil society and international actors working towards the vision of water security for the residents and businesses of Lusaka. LuWSI partners engage in dialogue and leadership, analysis and knowledge generation, advocacy and awareness-raising, planning and project development. The initiative was founded in 2016 and currently has over 20 partners from all sectors. LuWSI is not, as of yet, a registered legal entity but rather a voluntary partnership of partners, bound together through an MoU.
The organisational structure of LuWSI is made up of:
A Knowledge and Advocacy Committee and a Projects and Collaboration Committee.
Project teams – implementing bodies for individual projects under LuWSI.
LuWSI is committed to its vision “Water security for all to support a healthy and prosperous city”. Water security is key to economic growth, human well-being and sustaining a green city. All LuWSI partners are committed to working together to make this vision a reality.
LuWSI mission is to strengthen multi-stakeholder collaboration to safeguard Lusaka’s water resources while enhancing the sustainable and timely access to water and sanitation for all. Co-operation is crucial if the complex issue of water security is to be addressed sustainably. Water security is everybody’s business and every organisation and individual can contribute to improving the water situation in Lusaka.
Core functions
Assess, prioritise and monitor water security threats and solutions.
Develop and implement projects; mobilise new actors and resources.
LuWSI has five Water Security Action Areas, which were prioritised by its partners in 2016 during a series of strategy development workshops. These action areas are the focus of LuWSI’s projects and their partners’ activities:
Source: LuWSI (n.d.[44]), Homepage, https://www.luwsi.org/ (accessed on 2 February 2021).
Critical aspects of governance should guide stakeholder engagement frameworks. Fair and equitable access to engagement opportunities is key to ensure a balanced and representative process that takes into account diverse ideas and opinions. Being transparent and open about the ways to identify stakeholders, choose engagement mechanisms and define the objectives pursued can help to raise interest among stakeholders and to develop an understanding of and support for the final decisions. It is not sufficient to provide platforms for stakeholders to share their ideas as decision-makers must also clearly demonstrate how these ideas are taken into account. Procedural transparency and timely disclosure of information, including alternative solutions, are therefore critical to ensure the legitimacy of decision-making processes and their outcomes. Engagement processes may bring together groups with opposing views who fear that their views will not be taken into account. Showing participants what the intention of the process is and how their input will be considered is important to ensure productive discussions and exchange of opinions. It is also important that decision-makers be able to trust the quality and value of input from non-technical experts (Table 4.13).
Crises, change or emergency-driven situations also have an impact on stakeholder engagement. Crises shed light on the weaknesses of governments to properly assess the risks and call upon them to set up preventive measures to mitigate their impacts. As such, they are often windows of opportunity for new ideas to emerge and create a social and political environment with a potential for developing partnerships as was the case with the creation of the Water Resilience Advisory Committee (WRAC) in Cape Town.
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Notes
← 1. This concept refers to “the organised process of reconfiguring the way in which a given state institution is structured, governed, managed and funded so that it serves a purpose different to its formal mandate” (OECD, 2015[46]).
← 2. Green infrastructure (GI) is a nature-based solution that encompasses all actions that rely on ecosystems and the services they provide to respond to various societal challenges such as climate change, food security or disaster risk.
← 3. Integrated Water Sector Skills Intervention Map based on a sector skills gap analysis report to the Water Research Commission by A. Vienings (Water Concepts) and M. Lima (Onyxx Human Capital) (co-project leaders) (2015[40]).
← 4. Chapter 9 Institutions refer to a group of organisations established in the South African Constitution to guard democracy. The institutions are the Public Protector, the South African Human Rights Commission, the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities, the Commission for Gender Equality, the Auditor-General, the Independent Electoral Commission, and an independent authority to regulate broadcasting.