$75 billion of water investments lost to corruption annually

Mismanagement threatens SDGs, says new report.

Mismanagement threatens SDGs, says new report

International agencies, governments, private companies, local authorities and communities spend hundreds of billions of dollars on infrastructure and water services. However, ten per cent of those investments, equating to in excess of $US75 billion, is lost to corruption each year. This is the finding of a new report Water Integrity Global Outlook (WIGO), the first publication to focus solely on corruption within the water sector. It concludes that corruption must be reduced or eliminated to ensure that the Sustainable Development Goal (SDG) of ‘availability and sustainable management of water and sanitation for all’ will be achievable.

A leaking pipe. Photo: Francois Molle / IWMI
A leaking pipe. Photo: Francois Molle / IWMI


“There’s recognition that to achieve the SDGs we need to work on developing democratic institutions and increasing accountability,” explains Floriane Clement, a researcher in institutional policy and analysis at IWMI who contributed to the report. “It’s really a question of governance. From the agriculture point of view, if you look at large-scale water irrigation systems, for example in Asia, there have been several studies on how corruption and unethical practices have affected the performance of these systems, especially when managed by bureaucracies.

Whereas corruption reports often portray bureaucrats as the villains, corruption practices might also be prevalent among farmer managers and water user groups especially when these groups are dominated by rural elites, not accountable to farmers.”

The report finds that no part of the financing system, public or private, is immune from corruption or integrity failures. Often, corruption can be ‘built in’ to projects from the outset. “My research in Indonesia illustrates how corruption rules are embedded in project management procedures, with projects highly dependent on donor funding,” explains Diana Suhardiman, Senior researcher and Sub-theme leader in Governance and Political Economy at IWMI. “It highlights the existence of systemic corruption and the importance of social relationships and organizational culture in shaping institutionalized corruption. When corruption rules are perceived as social norms embedded in the broader political structures, there is a need to shape a more politically and culturally grounded anti-corruption strategy.”

The WIGO report, published last month by the Water Integrity Network (WIN), to which IWMI contributes, highlights some specific cases of large-scale corruption. Occurring within public institutions, as well as in interactions with the private sector, these have leached money from water development programmes.

It is not all bad news, however. The study also highlights circumstances where integrity has been designed in to water-sector initiatives, inhibiting corruption from taking root. For example, in Zambia, the National Water Supply and Sanitation Council (NWASCO) monitors commercial utility companies and takes action if persistent performance problems are encountered. And a climate-finance tracking project is in place to ensure proper use of funds in Bangladesh. IWMI contributed two positive case studies to the report, one highlighting ways to improve accountability within multiple-use water systems and another showing lessons learned from a project to introduce a water permit system.

Clement believes that a combined top-down and bottom-up approach is needed to tackle corruption within the agricultural water sector. Making new laws, legislation and policies can contribute to reducing corruption, she says, but is not enough. “We need to support civil rights movements and empower local people so they have the ability to make government officials accountable,” she urges. “Supporting representative and downwardly accountable civil society organizations at different scales, and instigating capacity-building programmes, can help to achieve this. We tend to focus on how to change incentives within the bureaucratic systems at a national level but corruption is so embedded in political culture, social norms and everyday practices that we also need local people to demand change.”

The need to tackle water integrity issues has gained momentum in recent years. The idea for a report grew out of the first ever Water Integrity Forum held by WIN in the Netherlands in 2013. In 2015, the OECD Ministerial Council ratified a set of principles on water governance, endorsed by public, private and non-profit organizations. And the UN Secretary General and UN Global Compact have established a CEO Water Mandate, to help private companies with water sustainability policies to commit to ‘transparency and disclosure in order to hold themselves accountable’. By late 2015, 144 companies had endorsed the mandate. IWMI is currently working with WIN to publish a joint research report on water integrity definitions and discourses, which will be published later in the year.

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