Water Integrity Network

Introduction and Background

Water Integrity Network (WIN) is a coalition of individuals and organisations self-purportedly “support(ing) anti-corruption activities in the water sector worldwide...” and promoting “solutions-oriented action and coalition-building between civil society, the private and public sectors, media and governments.” WIN notes on their website, “If corruption in water worldwide is to be successfully contained, it requires the establishment and sustained functioning of local, national and international cross-sector coalitions made up of all stakeholders.” WIN uses itself as a “primary example” of one of these coalitions. Indeed WIN does link itself with various stakeholders, notably however, with many pro-privatisation agencies such as the World Bank Water and Sanitation Programme (WSP), Aquafed – an international water industry lobby group described by the now Senior Water Advisor to the President of the UN General Assembly and National Chairperson of the Council of Canadians, Maude Barlow, as a “player in the elite transnational water policy network.” Additional high-profile partners and organisations with a pro-privatisation persuasion, which WIN claims make “good partners” include: Global Water Partnership (GWP), World Water Council, and Cap-Net.

Corruption takes many forms and occurs in both the public and private sector as WIN does indeed suggest. However, WIN’s emphasis and focus concerning corruption is on the individual or the individual misdemeanour, or that corruption is somehow indicative of the public sector in general. What is missing from WIN’s analysis of corruption, and this is evident from a survey of their ‘Glossary and Acronyms’ index, which serves to define the parameters and nature of corruption as understood by WIN – and they do this by defining frequently used concepts in the water governance community - is a systemic analyses of the reasons for and nature of corruption.

For example, to explore WIN’s ambiguity over the private sector, especially in terms of WIN's ambiguous position concerning the private sector's profit motive as the primary source corruption, we turn to WIN’s definition of integrity. Integrity, as defined by WIN refers to “the need for public officials to be honest in carrying out their functions and to ensure that they are immune from being corrupted. It requires that holders of public office do not place themselves under any financial or other obligation to individuals or organisations that may influence them in the performance of their duties” From this definition one may deduce that integrity, according to WIN, is a question of confidence only concerning public officials and that corruption originates and arrives in the form of public corruption.

Conversely, however, one could argue that corruption is, in the first instance, predicated on the existence of a private sector. The Public Services International Research Unit (PSIRU), based at the University of Greenwich, argues, “corruption is a systemic feature of privatisation processes.” They continue, “corruption happens because bribery is a method by which companies can gain higher returns: either by winning contracts or concessions which they would not otherwise have won, or by gaining contracts or concession on more favourable, and so more profitable, terms.” The World Bank itself, in an article entitled, “The Political Economy of Corruption: Causes and Consequences”, suggests, “... the privatisation process itself can create corrupt incentives.” In other words, corruption has come to play an integral part of the privatisation process where private firms compete for billions of dollars worth of procurement contracts. Indeed, as WIN notes, public officials are often complicit in corruption schemes. However, and as the World Bank confirms, “corruption thrives in an environment where the power of individual members of society is measured in terms of access to people in power… ” In other words, wealth and power in the private sector is often defined by access to public figures in power; but again, this is symptomatic of the need for the private sector to continuously seek out higher returns. The World Bank points out, “bribes are paid for two reasons: to obtain government benefits and to avoid costs.”

In terms of WIN's analyses of corruption, there is a disproportionate amount focusing on ‘governance’ rather than within the bidding, acquisition, leasing or concession processes - in other words, the processes of commercialisation. And though WIN notes that governance and corruption are both public and private sector problems, it would seem that WIN overwhelmingly employs these terms (corruption and governance) in reference to public sector management and Third World countries. For example, in the “Advocating for Integrity in the Water Sector” policy paper, WIN suggests, “The water sector, especially in the developing world, has certain fundamental characteristics, some shared by public service generally, which make it prone to corruption...” Such a statement, clearly, paints the public sector with a broad brush and, moreover, is constructed in such a way that readers may come away perceiving the public sector, and in particular the public water sector, especially within Third World countries, as unfavourable and/or undesirable. Similarly, WIN suggests that “a large flow of public money” is an additional dimension which makes the water sector “particularly susceptible to corruption.” One may draw the conclusion, then, that this is the rationale, support or justification for increased privatisation; for what are the other options other than to keep water, and indeed large amounts of public funds that are much needed for construction and improvement projects in the water sector, in public hands? Surely the answer is increased commericalisation of public institutions or full-scale privatisation. Furthermore, readers may come away with a sense that corruption is an issue that can indeed be addressed by the private sector. In the same document WIN suggests, “Private investment in water is growing in countries already known to have high risks of corruption, posing particular challenges for international investors...” There perception is that there is more concern here about the needs of private investors than the need for water and its provision to stay in public hands. This analysis, it should be said, is carried out at the expense of a more holistic view of corruption that would explore corruption as a systemic problem. Indeed, it is important to note, as WIN does, that corruption is a problem that affects both the private and public sector; however, a holistic view would explore the systemic nature of the problem of corruption and view corruption as symptomatic of the nature of the privatisation process.

Defining Corruption

Defining corrupt activities is problematic. Definitions could be said to depend on ones world view. The World Bank rightly state "Corruption means different things to different people" . The Water Integrity Network define corruption as "The misuse of entrusted power for private gain. This applies not just to financial gain, but also to the kind associated with the furtherance of political ambitions, the promotion of one’s political party, family or business interests, or the furthering of one’s career. There are two generally accepted kinds of corruption – grand and petty. Grand corruption pervades the highest levels of government and distorts its central functions. Petty corruption involves the exchange of small amounts of money, the granting of minor favours or the employment of friends and relatives in lower positions" . Partner of the Water Integrity Network, the World Bank assert, “Corruption is the abuse of public funds and/or office for private or political gain”. Transparency International state "Corruption involves behavior on the part of officials in the public sector, whether politician or civil servants, in which they improperly and unlawfully enrich themselves, or those close to them, by the misuse of the public power entrusted to them" .

Once again the common theme amongst all these definitions is the focus on corruption amongst public officials within the public sector. Such a narrow focus fails to capture the broad range of ptential corrupt activities and practices. Take one sentence from one defintion. Their could be a swathe of different possible interpretations of the notion of "The misuse of entrusted power for private gain". This could be applied in various ways, indeed even when considering the actions of people and organisations which in some countries are entirely legal. Depending on the mindswet or political viewpopint some observers could define the selfish actions of a few for private gain corrupt, in that they have abused the power they have for private, self gain and which are detrimental to the interests and material subsistence of the many. This could apply in the private water. A private water company, who wins a private contract to supply water to a mass of people puts water prices up and makes it unaffordable, proceeds to make exhorbitant profits, cherry picks the profitable areas and doesnt supply in the poorer areas, makes connections of water prohibitively expensive for the poor and disconnects water to those connected but unable to pay their bills, may not be tightly defined as corrupt but perhaps would be its moral equivalent.

The Water Inegrity Global Corruption Report (2008) did not mention the practice of gaming in its chapter discussing England and its water industry. David Hall describes gaming, he writes

"Under the privatised system, the regulator, OFWAT, is responsible for setting price limits and incentives so that the companies, while making a profit, can deliver the service, and the prices, that consumers want. The water companies are responsible to their shareholders for achieving the best possible return. The system is intended to result in regulations which create incentives for the companies to improve their performance, but also creates incentives for the companies to try and arrive at a more favourable deal for themselves at the expense of consumers".

In attempting to garner themselves a 'more favourable deal' some of the English Water companies have indeed done so at the expense of customers. Yet despite, 'Transparency International' defining corruption as those who "improperly and unlawfully enrich themselves, or those close to them, by the misuse of the public power entrusted to them" the Global Corruption Report did not see fit to include these instances in its pages. Yet the profits made by the English companies as a result of pocketing monies supposed to be for investment are not insignificant sums.

Hall calculates,

"For the period 1995-2000 as a whole, capital investment totalled £17.5 billion - 10%, or £1,900 million, less than had been assumed when OFWAT set the price limits. This resulted in a corresponding boost to company profits.

The pattern continued in the subsequent period, 2000-2005. This was again obvious after the first year: capital expenditure for 2000-2001 was £700 million below projected levels. The underspend continued during the rest of the period, and capital expenditure for the full period 2000-05 was around £1.7 billion lower than the assumptions underpinning price limits over the five years as a whole, at £17.7 billion, compared with the £19.4 billion assumed, a shortfall of 9%. This again provided a boost to profits. From the last ten years, the companies have enjoyed windfall profits of over £3.4 billion as a result of these underspends. As a result: “Profits are at the highest levels that we have seen over the last five years.” .

Likewise, lobbying and the interface between lobbying, think tanks, transnational policy networks and political and governing institutions could be interpreted as bordering on corrupt activity. The disproportionate access and influence enjoyed by elite, powerful actors in the policy and political process could be interpreted by some as improper behaviour. The interchange between political office and business is in the eyes of some a dubious activity. The water industry is not immune to this activity. Suez and Veolia appear to have a strategy that identifies and recruits experienced political operators. Etienne Davignon of Suez is an ex European Commissioner, adviser to Commissioner Michels, trustee of the powerful Brussels Think Tank Friends of Europe and influential figure in the sinister Bilderberg Group. At Veolia, Executive President Joachim Bitterlich is an ex adviser to Chancellor Kohl. Such activity to some may seem entirely normal. To others, such connections and closeness between business and politics may be too close and disconcerting. The Water Integrity Network appear to be in the former category, thus supporting the [World Bank]] statement that "Corruption means different things to different people".

Affilliations

The private lobbyist Aquafed is a valued member of the Water Integrity Network. Donal O'Leary, Senior Advisor at Transparency International (TI), which hosts the WIN Secretariat, stated when Aquafed joined, "I want to highlight the importance of tackling corruption in all areas of the water sector. This multi-stakeholder coalition can play an important role in initiating and supporting pro-poor actions to combat corruption. I am very happy that Aquafed is on board, as this organisation can make a valuable contribution to the anti-corruption efforts of the WIN" . The co-founders of Aquafed, Suez and Veolia, have both been implicated in cases of corruption . Jack Moss, of Aquafed, is a steering committee member of the Water Integrity Network and a contributor to the Global Corruption Report .

Organisations partnering the Water Integrity Network are all listed on their Forming Coalitions for Advocacy Page. Partners include the World Water Council and the Global Water Partnership .

Founding Members

According to WIN:

WIN was founded in 2006 by some of the most active and well-known international water sector organisations and the leading global anti-corruption organisations. The founding members are:

• IRC International Water and Sanitation Centre The IRC International Water and Sanitation Centre is a globally known water and sanitation organisation and has facilitated the sharing, promotion and use of knowledge so that governments, professionals and organisations can better support poor men, women and children in developing countries to obtain water and sanitation services they use and maintain.
• Stockholm International Water Institute (SIWI) The Stockholm International Water Institute (SIWI) is a policy institute that seeks sustainable solutions to the world’s water problems. SIWI manages projects, synthesises research and publishes findings and recommendations on current and future water, environment, governance and human development issues. SIWI also hosts one of the other WIN partners, the Swedish Water House, a government-funded initiative that promotes network-building among Sweden-based internationally oriented academic institutions, consultants, government agencies, civil society organisations, and other stakeholders.
• Transparency International (TI) Transparency International, the global civil society organisation leading the fight against corruption, brings people together in a powerful worldwide coalition to end the devastating impact of corruption on men, women and children around the world. The TI secretariat is based in Berlin and is host to the WIN secretariat.
• Water and Sanitation Program-Africa (WSP-AF) The Water and Sanitation Program (WSP) is a multi-donor partnership of the World Bank with the goal of helping the poor gain sustained access to improved water supply and sanitation services. The program disseminates best practices across regions and places a strong focus on capacity building by forming partnerships with non-governmental organisations, governments at all levels, community organisations, private industry, and donors.

• The WIN is currently funded by the Stockholm International Water Institute (SIWI) | German Federal Ministry of Economic Development and Development (BMZ)
• The WIN secretariat is hosted by: Transparency International-Secretariat (TI-S)



People

The steering committee of the Water Integrity network appears to compose multi-stakeholder representation. There is a UN representative, institute members, government related members, research centre members, community and national representatives, a World Bank official, a private sector lobbyist and a Transparency International representative. Some could argue that the stakeholders represented on the steering committee are not as multi-faceted as could be. For instance, there is no Trade Union nor public utility representation. Moreover, the steering committee membership is disprortionately made up of people linked to organisations with a record of desiring an increase in private sector participation in the water and wastewater sector. Notably, the World Bank who have links to several of the members in shape or form.

Donal O'Leary was a World Bank official, prior to his appointment as Senior Water Adviser to Transparency International . Jack Moss represents the private lobbyist Aquafed. Janelle Plummer is an adviser to the World Bank, she has written extensively on corruption. John Butterworth represents the International Water and Sanitation Centre, amongst others they enjoy partnerships with the Global Water Partnership and the World Bank sponsored Water and Sanitation Programme (WSP). The Rural Water Supply and Sanitation Fund Development Board, (Nepal), is funded by the World Bank . Moreover, the Rural Water Supply and Sanitation Fund Development Board are undoubtedly in favour of private sector solutions in the provision of water and wastewater services' Stating, "The main objective of the Government to establish and operationalize the Board is to gradually transfer the water supply and sanitation service delivery responsibility to the private sector. With this objective, the Board is designed to operate in partnership with SOs and communities, and obtain the services of national SAs to provide it technical, institutional, and operational assistances in various stages of scheme implementation" .

WIN Steering Committee

• Dr. Håkan Tropp - Chair Project Director Stockholm International Water Institute (Sweden)
• Dr. John Butterworth Programme Officer, Knowledge Development & Advocacy IRC – International Water and Sanitation Centre (Netherlands)
• Jack Moss Senior Adviser Aquafed (France) - The pre-eminent corporate lobby group for the international water industry.
• Dr. Donal O’Leary Senior Adviser Transparency International (Germany)
• Melody Diobodo Ogwezzy Chief Executive and Programme Coordinator Community Integrity Initiative (Nigeria)
• Janelle Plummer Anti-Corruption Adviser World Bank
• Ramesh Kumar Sharma Regional Manager Rural Water Supply and Sanitation Fund Development Board (Nepal)
• Antonio Tujan Jr. International Director IBON Foundation (Philippines)
• Henk Van Norden Senior Adviser Water, Environment and Sanitation (WES) section - UNICEF (United States)
• Franz-Josef Batz Gesellschaft für Technische Zusammenarbeit (GTZ), Water Politics Department (Germany) .

Website

Water Integrity Network