By IPS Correspondents
UNITED NATIONS, Jun 25 2008 (IPS)

The world’s growing water crisis – with nearly 1.2 billion people lacking a steady water supply and more than 2.6 billion without adequate sanitation – is fundamentally a crisis of governance, with corruption as one root cause, says a new report by Transparency International.

According to the Global Corruption Report 2008, overuse and pollution have made water-based ecosystems the world’s most degraded natural resource, and by 2025 more than 3 billion people could be living in water stressed countries.

The human consequences of the water crisis are devastating, and affect women and poor people most of all.

The report says that about 80 percent of health problems can be linked back to inadequate water and sanitation, claiming the lives of nearly 1.8 million children every year and leading to the loss of an estimated 443 million school days for children who suffer from water-related ailments.

The U.N.’s Millennium Development Goals (MDGs) call for a 50-percent reduction in the number of people living without adequate sanitation or toilets by 2015, but experts say that target and others will be missed if corruption issues remain unaddressed.

“Corruption in water not only affects the sanitation side of the MDGs, but also elements like literacy rates,” said Hakan Tropp, of the Water Integrity Network.

The Transparency International (TI) report focuses on several key subsectors. The first is water resources management, which involves safeguarding the sustainability and equitable use of a resource that has no substitutes.

The report notes that water corruption has often gone unpunished due to collusion between the private sector and powerful elites.

“[Just] 15 years ago, in many countries it was absolutely legal for a large company to deduct the cost of bribing from their taxes in order to win a contract,” said Dr. Donal O’Leary, a senior advisor to TI.

In China, bribery to avoid the enforcement of environmental regulations has reportedly contributed to a situation in which the aquifers in 90 percent of Chinese cities are polluted and more than 75 percent of river water flowing through urban areas is considered unsuitable for fishing and drinking.

The report notes that in general, corruption can be found in at every point along the water delivery chain, from policy design and budget allocations to operations and billing systems. Whether poor or rich, corruption hurts all countries and affects both private and public water services.

In wealthier countries, most corruption surrounds the awarding of contracts in the building and operating of municipal water infrastructure, a market of 210 billion dollars annually in Western Europe, North America and Japan alone.

In developing countries, corruption is estimated to raise the price for connecting a household to a water network by as much as 30 percent.

“With corruption in the water sector and [costs associated with] climate change, it is estimated that the MDGs will be 50 billion dollars more expensive,” said Huguette Labelle, chair of Transparency International.

The third water sub-sector examined in the report is irrigation, accounting for 70 percent of global water consumption. In turn, irrigated land helps to produce 40 percent of the world’s food.

Yet irrigation systems can be monopolised by large users. In Mexico, the wealthiest 20 percent of farmers reap more than 70 percent of irrigation subsidies. Moreover, corruption in irrigation exacerbates food insecurity and poverty.

The fourth sub-sector covered in the report is hydropower, whose massive investment volumes (estimated at 50-60 billion dollars annually over the coming decades) and highly complex engineering can be a breeding ground for corruption in the design and execution of large-scale dam projects around the world.

According to the report, while water governance spills across agencies, water management is viewed as a largely technical issue in most countries. It also involves large flows of public money, putting the sector at high risk for corruption.

Private investment in water is growing in countries already known to have high risk of corruption. Informal providers continue to play a key role in delivering water to the poor, and corruption in this essential service most affects those with the weakest voice.

However, when governments create accountability mechanisms, the situation can improve.

“In the Indian city of Bangalore, for the past 10 years, the citizens were given report cards,” Tropp said. “They are evaluating the services provided by the public sector and reporting on them. What we have seen is that after these report cards have been in effect, there were various improvements in the sanitation and water services. This illustrates that citizens can do something. They can take action at the local level.”

The report warns that the fight against corruption should not harm the lifestyles of the poor – for example, a crackdown on informal service providers may eliminate an important way for the poor to secure reliable access to water.

Instead, it recommends strengthening regulatory oversight of water management and use, ensuring fair competition for and accountable implementation of water contracts, and adopting transparency and participation as guiding principles for all water governance.

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