Frequently asked questions on water integrity - A primer by the Water Integrity Network
FAQ: What is integrity ?
This is synonymous with honesty and refers to the need for public, private and civil society sector representatives to be honest in carrying out their functions and resist corruption. It requires that holders of public or private office do not place themselves under any financial or other obligation to individuals or organisations that may influence their ability to perform their duties.
The main pillars of integrity:
1. Transparency
– This refers to the right of citizens to access relevant information. Openness and public access to information are vital, so that water-users can understand the decision-making processes that affect them. This makes citizens knowledgeable about the standards to expect from public officials and enables them to protect their rights.2. Accountability
– Accountability is a broad concept and it entails several dimensions and is often used in different ways. Some see it as a mechanism to hold people and institutions accountable, whereas others may see it as a concept referring to the actual application and implementation of rules and standards. Accountability in a democratic sense according means an individual in a public function or a public institution must answer for their actions. This includes political, administrative, and financial dimensions.3. Participation
– Participation is a term with many different meanings. Some stress that it refers to the most basic indication of democratic rule that whoever is affected by a decision should, one way or another, directly or indirectly, have the chance of intervening in and influencing such decisions. It is also argued that participation fosters ownership in the sense that decisions are increasingly accepted and implemented by the involved actors. WIN believes in civil society’s right and responsibility to play a role in the water sector decision-making process and in holding officials and those in public service to account. It is important to make use of available data and information to monitor decision-making and progress on governance and corruption.4. Integrity
– This is about the need for public, private and civil society sector representatives to be honest in carrying out their functions and to resist extortion and banish corruption. Holders of public or private office should not place themselves under any financial or other obligation to individuals or organisations that may influence their ability to perform their duties or put water services and a clean environment at risk.According to Transparency International, “Corruption is the abuse of entrusted power for private gain.” Corruption is about breaking socially established expectations of appropriate behaviour, and this is why a cultural approach is so important. Corruption is an exchange of either economic or social resources. Corruption does not only take place in the public sector, it also occurs in non-governmental organisations and private enterprises. Common examples include cutting red tape in applications for reservoir water abstraction or expediting a household’s connection to municipal water supplies. Falsifying water meter readings, for example, is an equally corrupt practice if it takes place in a private water company as in a public utility.
Within corruption, there is:
1. Grand corruption
pervades the highest levels of government and distorts its central functions. It is typically less frequent but involves larger sums of money being paid as kickbacks, e.g. during the procurement process for large-scale infrastructure projects and purchasing of equipment and materials.2. 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. By contrast, it is more frequent and involves lesser sums of money or favours. Petty corruption might involve very small amounts, the frequency of such transactions means that the aggregate amounts can be very large.While petty corruption is generally applied at the level of the service provision (micro level), grand corruption takes place at macro level, which is, only open to a selected group of persons. These manage specific information, decisions, and contracts, where much larger sums are dealt with and where decisions affect a large population.
The various forms of corruption are:
1. Bribes and kickbacks
One of the most cited form of corruption; they may include the payment of a fixed sum, a percentage of a contract or in-kind favours. It is given to unduly influence some action or decision on the part of the recipient or beneficiary. Users for example may pay a small amount of money to have their meter reading falsified and bills lowered or to speed up repairs or the connection process. This can equally occur at higher levels within the chain of service provision.
2. Collusion / complicity
An arrangement between two or more parties designed to achieve an improper purpose, including influencing improperly the actions of another party. The most common form of collusion is when bidders agree among themselves on prices and “who should win.” This may or may not involve paying bribes to government officials so that they may “turn a blind eye” to the practice.
3. Fraud
Based on manipulation or distortion of information for private gain including the falsification of receipts and other documents. The use of misleading information to induce someone to turn over money or property voluntarily, for example, by misrepresenting the amount of people in need of a particular service.
4. Favouritism, clientelism, cronyism and nepotism
The use of entrusted power to provide preferential treatment to friends, family, business partners, political parties etc. This form of corruption often goes beyond individual interest and may include attempts to realign power structures for the accumulation and maintenance of power, status and wealth. Thus, it represents the infiltration of non-democratic paths to political and economic domination.
5. Extortion
The use of coercion to force an action or induce complicity. It can include threats of violence or of exposing damaging information in order to induce cooperation.
6. Embezzlement and theft
This includes the direct taking of money or property for personal enrichment out of public property. Not all cases of theft are considered corrupt, as it depends who is being stolen from, and if entrusted power is being abused. It might involve diversion of public funds to one’s own bank account or stealing equipment from the water utility’s warehouse.
1. Complexity
Many water infrastructure projects are marked by their complexity making it difficult to standardize and oversee. This is a real challenge for transparent procurement.
2. Voice
Those who are most severely affected – the poor, marginalized, future generations as well as the environment–are least likely to push successfully for redress and stronger accountability.
3. Regulation
The regulatory landscape in water is fragmented and water as such is difficult to coordinate among diverse interest groups. Regulatory loopholes invite corruption.
4. Water governance spills across agencies
Water often defies legal and institutional classification, creating a regulatory lacuna and leaving governance dispersed across countries and different agencies with many loopholes to exploit.
5. Water management is viewed as a largely technical issue in most countries
Managing water is still predominantly approached as an engineering challenge. Consideration for the political and social dimensions of water, including corruption issues and their costs, is limited.
6. Water involves large flows of public money
Water is more than twice as capital- intensive as other utilities. Large water management, irrigation and dam projects are complex and difficult to standardise, making procurement lucrative and manipulation difficult to detect.
7. Private investment in water is growing in countries already known to have high risks of corruption
Nine of the ten major growth markets for private sector participation in water and sanitation are in countries with high risks of corruption, posing particular challenges for international investors.
8. Informal providers, often vulnerable to corruption, continue to play a key role in delivering water to the poor
Informal water providers provide important bridging functions in many developing countries to bring water to the poor. They often operate in a legal grey zone, however, making their operations vulnerable to extortion and bribery.
9. Corruption in water most affects those with the weakest voice
Corruption in water often affects marginalised communities, the poor or – in the case of its impact on the environment – future generations. These are all stakeholders with a weak voice and limited ability to demand more accountability.
10. Water is scarce, and becoming more so
Climate change, population growth, changing dietary habits and economic development all exacerbate local water scarcities. The less water there is available, the higher the corruption risks that emerge in control over the water supply.
Some lessons:
1. Prevent corruption in the water sector, as cleaning up after it is difficult and expensive
When corruption leads to contaminated drinking water and destroyed ecosystems, the detrimental consequences are often irreversible. When subsidized water gives rise to powerful agricultural industries and lobbies, refocusing subsidies on the poor becomes more difficult.
2. Understand the local water context, otherwise reforms will fail
One size never fits all in fighting corruption, but this is particularly the case in the water sector, where conditions of supply and demand, existing infrastructure and governance systems vary widely. Understanding local conditions and the specific incentive systems that underpin corruption is a prerequisite for devising effective reforms.
3. Cleaning up water corruption should not be at odds with the needs of the poor
The costs of corruption in the water sector are disproportionately borne by the poor. Pro-poor anti-corruption efforts should focus on the types of service provision that matter most to them, such as public standpipes or drilling rural wells. Such efforts need to be designed so that they do not undercut peoples’ basic livelihoods: for example, a crackdown on informal service providers may eliminate an important way for the poor to secure reliable access to water.
4. Build pressure for water reform from above and from below
Ending corruption in the water sector requires breaking the interlocking interests and relationships that are perpetuating the problem. This is a formidable challenge. Leadership from the top is necessary to create political will and drive institutional reform. Bottom-up approaches are equally important to curbing corruption, by adding checks and balances on those in power that include the monitoring of money flows or benchmarks of utility performance.
Some recommendations:
A number of promising strategies and tools to tackle corruption in water resources management, drinking water and sanitation, irrigation and hydro power are required. A particular country’s dynamics determines the right mix and sequence of anti-corruption reforms, but the following is a summary of the most promising recommendations.
1. Scale up and refine the diagnosis of corruption in water – the momentum and effectiveness of reform depend on it
Much work remains to be done on studying the scope and nature of corruption in water. Tools such as corruption impact assessments for different areas of the water sector, public expenditure tracking or poverty and corruption risk-mapping help to shed valuable light on different aspects of the puzzle. These tools need to be refined, adopted widely across the water sector and adapted to specific local contexts to lay the foundations for targeted reform.
2. Strengthen the regulatory oversight of water management and use
Government and the public sector continue to play the most prominent role in water governance and should establish effective regulatory oversight, whether for the environment, water and sanitation, agriculture or energy. There are a number of institutional reforms that can make regulatory capture less likely and therefore should be prioritized: capacity building and training for regulatory staff, the provision of adequate resources (human, financial, technical and administrative), the creation of a clear institutional mandate, the implementation of transparent operating principles and the introduction of a public consultation and appeals process.
3. Ensure fair competition for and accountable implementation of water contracts
In many countries, the private sector has embraced basic anti-corruption measures as part of its standard operating procedures, but more must be done for this to have an impact on water. Governments and contractors can enter into integrity pacts (IPs) for public procurement processes. The large investment demand in the water sector means that export credit agencies, commercial banks and the lending wings of international financial institutions can play an important role in fighting corruption and should expand their due diligence requirements to include anti-bribery provisions.
4. Adopt and implement transparency and participation as guiding principles for all water governance
Transparency lays the foundation for public oversight and accountability and must come to characterize how water sector business is done by public and private stakeholders alike. Too often, commitments to this principle have not been translated into action. There are, however, some examples of how transparency is being practiced in water governance in the Global Corruption Report 2008 – from opening up project budgets to disclosure of performance indicators. These must be repeated and used as the basis for learning and improvement.
Increased participation has been documented throughout the Global Corruption Report 2008 as a mechanism for reducing undue influence and capture of the sector. Participation by marginalized groups in water budgeting and policy development can provide a means for adding a pro-poor focus to spending. Community involvement in selecting the site of rural wells and managing irrigation systems helps to make certain that small landholders are not last in line when it comes to accessing water.
Civil society participation in auditing, water pollution mapping and performance monitoring of water utilities creates important additional checks and balances. Transparency and participation build the very trust and confidence that water governance demands and civil society plays a critical role in turning information and opportunities for participation into effective public oversight.
Estimates by the World Bank suggest that 20–40 per cent of water sector finances are being lost to dishonest practices. The Global Corruption Report 2008 (GCR) of Transparency International and Water Integrity Network highlights that corruption takes place in all water sectors and concludes that availability and access to water are not necessarily due to water scarcity and demographic growth, but are an outcome of governance failures.
One of the causes of this poor governance is a lack of integrity, transparency, and accountability. Corruption in water takes many forms (embezzlement of funds, bid-rigging and collusion, bribery, kickbacks, extortion and nepotism) and affects many areas (health, food security, poverty reduction plan, environmental sustainability and political stability) and ultimately, it is the poor, women and marginalised communities that suffer the most.
Corruption in the water sector comes in many different forms and the scope varies across types of water practices, governance structures and the perceptions and norms of actors involved. Typical examples of corruption include falsified meter readings, distorted site selection of boreholes or abstraction points for irrigation, collusion and favouritism in public procurement, and nepotism in the allocation of public offices.
In the water sector, observers’ estimate that 20 per cent to 70 per cent of resources could be saved if transparency were optimised and corruption eliminated (GCR 2008). Lack of integrity and accountability is not specific to a given country or region. There are particular characteristics in the water sector which make it vulnerable to unethical practices, such as large monopolies, high level of public sector involvement, and large-scale construction, which are the same throughout the world.
These characteristics are not exclusive to the water sector, but unlike many other sectors, compromised integrity in water has a direct impact in human health and livelihoods, and thus demands our greatest attention. Different kinds of institutions, including public, private, and non-profit, can be susceptible to corruption. Corruption thrives in situations with multiple and complex regulations and uncontested official discretion cover expenditures from the eyes of the public.
Situations where someone has a monopoly over a good or a service; has the discretion to decide whether others receive that good or service and how much is received, and has no accountability or transparency in decision-making, usually end in officials giving way to corruption. This is true in the public, private and non-profit sector and in rich and poor countries alike.
The separation of powers and the introduction of checks and balances, transparency, a good system of justice, clearly defined roles, responsibilities and rules all tend to reduce opportunities for corruption to occur. A democratic culture, where there is real competition for water projects, and good control systems where people (employees, clients, overseers) have the right to information and the right of redress, makes it easier to expose corrupt parties and limit its spread.