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Water governance at stake

Investing in infrastructure for water is important, but how we govern water is more critical than ever. 

The global financial crisis put environmental issues on the back burner, but there are signs, notably in new commitments on greenhouse gas emissions by Europe, the US and China, that the international community and governments in general are back in action regarding environmental policy. This renewed attention must also be applied to water.

There are serious challenges to confront, but also opportunities to grasp. Approaches to resolving water run to the heart of overcoming climate-change adaptation, for instance. It will be an essential consideration as population growth surges and competition becomes more intensive for resources among farmers, industries, office blocks and energy suppliers. Our entire ecosystem and life support will depend on how we manage this challenge.

When it comes to any policymaking, "what to do" is only the start; "who does what", "why" and "how" are just as important. The aqueducts of the Roman Empire were great architectural and engineering achievements, but arguably the main ingredient of their success was broad, innovative and foresighted governance. In modern times, more than ever, addressing water challenges must go far beyond questions of infrastructure, or financing, maintenance and operations. Only good governance will help avert the environmental, humanitarian and economic devastation of the looming water crisis. In fact, we can just as well turn the crisis into an opportunity to promote inclusive, green growth.

Water is particularly sensitive to multilevel governance, involving local, regional and even global players from various public and private-sector backgrounds. It is a complex sector, capital-intensive, monopolistic (90% of water systems are run by large public-sector firms), with spillovers on many related domains, from energy to health care and farming, not to mention biodiversity. Demands for water cut across sectors, places and people, as well as time and space.

The context for freshwater management has radically changed in the last 25 years. Better and more accessible information can shed greater light on poor practices. Some positive developments have rung in new headaches. Take decentralisation. This has resulted in opportunities to customise policies to local realities, but has created more institutional fragmentation, making it harder to resolve regional or national problems, such as flooding or water pricing. Indeed, there is an increasing realisation that bottom-up, inclusive decision-making that involves a range of protagonists and stakeholders is the best way forward.

It ensures coherence, integrity and transparency for a start, and enables a proper holistic assessment of capacity and needs. It enables flexibility and swifter action, and more inclusive, sustainable practices.

The OECD is developing Principles on Water Governance to help governments navigate the tenets of good public policy on water, and distil what they need for their own challenges. The new principles will promote efficiency and effectiveness in water management and outcomes, and for that, trust and engagement are key.

Stakeholders matter

California is facing a punishing fourth year of drought. Temperatures have been higher than usual in the sunny state–the largest in the US with a population of 38 million–while precipitation and ice pack have been low. Climate change may be one reason, and the public authorities are taking action to ensure that the taps do not run dry.

California is not alone. In Brazil–the home of the world’s largest rainforest and largest river by volume–both Rio de Janeiro and São Paulo face their worst-ever water shortages.

But consider also social protests against major infrastructure projects, such as the Sivens dam in France, and against new water charges in Ireland. Or take Korea, where the Four Rivers restoration project still divides opinion, although the project ended officially in 2011.

How much governance is to blame in any of the above problems is a matter of debate; what is clear is that governance holds the key to solving them.

Governments now acknowledge that policies, however well-intentioned, need stakeholder engagement for their "implementation" on the ground. Anyway, people demand it: they are more educated than before, and in today’s expanding middle class, the top-down heavy approach no longer washes. Decision-makers will be forced to make tough choices about how to manage water for inclusive growth and the environment. Suppliers, dam engineers, wastewater treatment, water supply services, technology, health and safety standards, but also users in villages, cities, market gardens and cross-border valleys: stakeholder engagement has particular importance in water because it is a highly decentralised, fragmented and complex interdependent sector.

A preliminary step is to address public awareness gaps to explain how water is currently managed, by whom and at what cost. Engaging stakeholders can help build consensus for any new water tariffs or water sharing regimes, and can raise awareness on current and future water risks. This would make future action easier to take.

No government can say engagement was not possible: a range of options, including communication, consultation and co-production, have been tried and tested, and the more involved along the chain, the better the outcome. In all cases, going beyond a tick-the-box approach is essential, since projects need to garner trust, accountability and legitimacy, and be sustained. After all, when it comes to water, no project is ever entirely finished.

Figuring out who to engage with can be a daunting task for policymakers. The corporate sector factors governance into its risk assessment frameworks and strategies. As risks of flood intensify, property developers are also gaining influence, as spatial development generates long-term liabilities. Long-term institutional investors, such as pension funds and insurance companies, are also now investing more in water infrastructure. Other players in the water landscape have gained traction, particularly environmentalists.

Some stakeholders whose voices are all too often unheard, particularly women, young people and the poor, should be involved to improve outcomes. At the same time, consultation "fatigue" is a risk to avoid, and it helps to be clear and forthright about how people’s input will actually be used. Engagement with broad groups helps to ignite the political will and leadership needed to deal with typical shortcomings, such as staff and funding, legal issues, inertia, and resisting lobbies. Stakeholder engagement mechanisms can be more or less formal, more or less costly, more or less timely and relevant. It helps to carry out a regular evaluation of the costs and benefits, to provide the evidence base for better decision-making in the future.

An OECD report, Stakeholder Engagement for Inclusive Water Governance, argues that decision-makers who take a systemic, inclusive and foresighted approach are more likely to realise better outcomes and more robust returns on their investment in time and money. It advises policymakers on six basic principles.

First, map all those who have a stake in the outcome of any water project, and their responsibilities, motivations and interactions. Second, define the line of decision-making and how stakeholder engagement will contribute. Third, aim for result-oriented stakeholder engagement, with the proper financial and human resources and information. Fourth, carry out regular assessments of stakeholder engagement. Fifth, embed engagement processes in clear legal and policy frameworks, making them a required part of organisational structures and principles. Sixth, customise engagement to specific issues and keep the process as flexible as possible.

The OECD report contains a checklist to help adhere to these principles, with priority questions and indicators to help governments identify areas of improvement. Water pressures and trends may paint a rather sobering picture, but by working with an eager public to find and implement solutions, policymakers can ensure that this vital resource is managed wisely and responsibly for all.

 

References

OECD (forthcoming), Stakeholder Engagement for Inclusive Water Governance, OECD Publishing.

OECD (2012), OECD Environmental Outlook to 2050: the Consequences of Inaction, OECD Publishing.

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Water governance programme

www.oecdobserver.org/water

www.oecd.org/water

7th World Water Forum 2015

©OECD Observer No 302 April 2015