Water Corruption

What is Corruption?

(Adapted from KLITGAART et al. 1996)

There are many definitions of corruption. Most broadly, corruption means the misuse of office for personal gain. The office is a position of trust, where one receives authority in order to act on behalf of an institution, be it a private, public, or non-profit. Corruption means charging an illicit price for a service or using the power of office to further illicit aims. Corruption can entail acts of omission or commission. It can involve legal activities or illegal ones. It can be internal to the organisation (for example, embezzlement) or external to it (for example, extortion). The effects of various kinds of corruption vary widely. Although corrupt acts sometimes may result in a net social benefit, corruption usually leads to inefficiency, injustice, and inequity.

In an equation, corruption is monopoly plus discretion minus accountability: Corruption = Monopoly + Discretion − Accountability (KLITGAART 1988).This equation is very useful and relevant for understanding the problems posed for the water sector, as it highlights the aggregate effect of monopoly and discretionary power, which are common in water institutions (PLUMMER 2008).

Water and Corruption: A Destructive Partnership

(Adapted from WHO and UNICEF 2010, PLUMMER 2008, PLUMMER and CROSS 2006)

Water corruption catalyses the worldwide water sector crisis – it is corruption in resources and services vital for life and development. Each year, millions of people die of waterborne diseases because access to safe drinking water and adequate sanitation has not been prioritised. In 2010, more than 1.1 billion people live with inadequate access to safe drinking water and more than 2.6 billion people lack access to improved sanitation. Despite successes in many regions, the population without access to water and sanitation services is increasing. “Corrupt practices exacerbate these gaps, removing investment that might be used to extend services to the poor, diverting finance from the maintenance of deteriorating infrastructure and taking cash from the pockets of the poor to pay escalated costs and bribes for drinking water” (PLUMMER 2008).

The impact of corruption in the water sector can also be environmental: The lack of infrastructure for water and sanitation management whether man-made (e.g. dams, inter-basin transfers, irrigation, water supply and sanitation services) or natural (e.g. watersheds, lakes, aquifers, wetlands) in developing countries presents a management challenge almost without precedent. The ever-increasing impact of climate change and the lack of human and financial capacity to manage the water legacy (see also creating policies and a legal framework) result in far greater shock in developing countries, making the poorest countries ever more vulnerable. Corrupt practices that increase pollution, deplete groundwater and increase salinity are evident in many countries and are closely linked to deforestation and desertification across the globe. Stemming the leakage of funds from the sector is vital to address these issues.

At the heart of all these failures is the crisis of governance in water – a crisis in the use of power and authority over water and how countries manage their water affairs: Institutional dysfunction (see also building an institutional framework), poor financial management and low accountability show that many governments are not able to respond to the crisis, and weak capacity and limited awareness leave citizens and non-governmental organisations in many countries unable to demand change.

Who Is Involved in Water Corruption?

(Adapted from PLUMMER AND CROSS 2006)

Corruption in the water and sanitation sector involves a vast range of stakeholders:

• International actors (donor representatives, private and public companies, and multinationals)
• National and local construction companies
• Consultancy firms and suppliers
• Large and small operators
• A range of middlemen
• Consumers
• Civil Society Organisations
• National and sub national politicians
• Civil servants and utility staff
• Enforcement Bodies

Corrupt activities between these stakeholders occur at a range of institutional levels, with different stakeholders often involved in one or more types of corruption.

Anti-Corruption

(Adapted from KLITGAART et al. 1996)

As development processes in the water and sanitation sector are extremely hampered by water corruption, it is crucial for local (and national) governments to fight it. Generally, the following points need to be faced in the fight against water corruption:

• Improve of positive incentives facing employees/ officials in the water sector: In many areas pay levels have fallen so low that employees in the water sector literally cannot feed their families without moonlighting or accepting side payments. Even more important is to strengthen the linkages between pay and performance, and promotion and performance, which in many cases have badly eroded.
• Increase of effective penalties for corruption: Because of weak or corrupt investigatory, prosecutory, and judicial systems, accusations of corruption seldom stick. If they do, the penalties are often minimal in practice. As a result, the expected penalty for corruption does not deter. Local leaders can be creative in devising disincentives, such as firing or suspending employees, using the press to create publicity, inviting the denunciation of corrupt water sector employees/ officials by professional groups, personnel transfers to less desirable jobs, and so forth.
• Limited monopoly: Promote competition in the public and private sectors. Avoid monopoly-granting regulations when possible.
• Clarified official discretion: Simplify rules and regulations. Create “bright lines” that circumscribe duties and discretion. Help citizens learn how public systems are supposed to work (through brochures and manuals, help desks, laws (see also creating policies and a legal framework) and rules in ordinary language, publicity/ media campaigns radio/ awareness raising, the use of citizen-service-providers, etc.). Improve citizens’ oversight of what the local government is doing. Social control and pressure are helpful means against corruption.
• Enhanced accountability and transparency: Clear standards of conduct and rules of the game make accountability easier. So does openness in bidding, grant-giving, and aid projects. Accountability depends on internal auditors, accounting, ombudsmen, inspectorates, specialised elements of the police, and specialised prosecutors. But it also should involve citizens, unions, NGOs, the media, and business in a variety of ways, including citizen oversight boards, hot lines, external audits, inquiry commissions, and so forth. Local governments can help external actors by generating and disseminating more information about public service effectiveness. Finally, local governments should encourage the private sector to police its own participation in corrupt schemes of procurement, contracting, regulating, and so forth.