3º Forúm Mundial da Água - Carta em inglês da delegação holandesa/Both Ends

Ms A.M.A. van Ardenne-van der Hoeven
Minister for Development Cooperation
Ministry of Foreign Affairs
Postbus 20061
2500 EB
The Hague
Fax: 070-3485301

Amsterdam, 11 March 2003

Dear Ms. van Ardenne:

We are writing to you as head of the Dutch delegation to the Kyoto Ministerial conference on Water and the preceding Third World Water Forum. Bearing in mind the outcomes of the WSSD and the Bonn Freshwater Conference, we would like to express our hope that Kyoto will promote concrete implementation of commitments made in these fora.

These hopes are partly based on the numerous initiatives established which do help to satisfy the acute water needs of poor people in sustainable ways. Many such initiatives, e.g. by the Agha Khan Foundation and UNICEF, are supported by Dutch bilateral aid and private institutions.

However, as the 3rd World Water Forum approaches, we perceive an increasing tendency to shift away from the growing consensus on the basic principles of water management. This week the World Panel on Financing Water Infrastructure (hereafter referred to as Camdessus Panel) launched its report, strongly recommending privatisation and large-scale infrastructure projects. The week before, the World Bank adopted its Water Resources Sector Strategy. The two reports hold much in common. The basic assumption is one of an increasing water scarcity crisis that can only be solved by huge investments in large scale infrastructure and through private corporate financing.

Regrettably, neither of the two reports balances its views with the observation that sustainable water management calls for a continuous effort for investing time and financial resources into institutional capacity building, the setting up of participatory decision making processes and the need for a more enabling environment for local initiatives and appropriate technologies. Since the Camdessus Panels report, will be presented to the ministerial conference in Kyoto for endorsement, we feel it is opportune to look more closely into the contents, source, and status of the report, and to place the report in a wider perspective.

Water resources management should be guided by the principles of human rights (see the recent decision by the UN DECA, establishing water as a human right), a livelihood approach and the UNCED/WSSD principles of sustainable development. It has to focus on the empowerment of disadvantaged groups, democratic decision making and to ensure a general consensus on the wise use of natural resources. These issues should receive priority in all policies and programmes, as a precondition of sustainable management of water resources.

To stop further degradation of land and water resources and to counter the marginalisation of vast numbers of rural people and subsequent migration to the urban slums, the consolidation and rehabilitation of water and land-use practices should be one of the major concerns of the 3rd World Water Forum. Rehabilitation of degraded resources, notably river basins and related ecosystems - e.g. wetlands and mangroves, coastal ecosystems, forests, pastures - will contribute to sustainable production of food and other essential needs.

No technical fix will be effective unless underlying causes of ecosystem/water mismanagement and unequal distribution are simultaneously addressed. The main problems are insufficient institutional capacities, the lack of democratic decision making processes and of accountability by decision making bodies, not the absence of technical skills or financial resources. There is a continuous need for investments that strengthen and develop reliable water management institutions and legal frameworks that allow for participation of all water users, effective decentralisation, transparent and accountable water governance, and equitable management and regulation of services. Also, there is a need to consider the impacts of first world subsidies and international trade agreements on sustainable water management and food production in developing countries.

The Panels recommendations do not address the previous mentioned priorities. The Camdessus summary report makes suggestions to attract and increase funding and investments for the water sector. We can not escape the impression that the Panels recommendations are top-down and self-serving. It recommends an increase in subsidies and risk reduction, to entice the private sector. It is our understanding that the Panel held no public consultations and therefore lacks a clear democratic mandate. Out of the 21 members, the overwhelming majority represent multilateral financing institutions and the corporate sector. There was no representation from municipalities, public services, farmers organisations or other local peoples organisations.

One of the major shortcomings is that the Panel fails to address the needs of the rural areas. This, despite the fact that the great majority of the worlds population without access to safe drinking water and sanitation live in rural areas and depend on dry-land and rain-fed agriculture. In fact, its focus on promoting private investments is basically irrelevant for rural areas where water companies can rarely profit from supplying poor and dispersed populations. Whereas the Panel mentions water resource management, it does not indicate how additional funds and investments may benefit ground water restoration and watershed protection, or institutional capacity development apart from project development.

The thrust of the Panels recommendations, however, is for a dramatic increase in direct public and private funding into major irrigation, dams and other well-justified water storage and transfer schemes. This is extremely worrying. It fails to recognise the evidence that most of these capital intensive and centralised projects do not prioritise serve the water needs of the poor, are environmentally destructive and economically inefficient. It is unacceptable that the Panel does not refer to the recommendations of the World Commission on Dams (WCD).

While there is a need for more targeted investments in water services and sanitation - which may include infrastructure, large and small - the aim should be to meet poor peoples water needs through the establishment of appropriate technologies, supported by capacity building in poor communities. In fact, the UN-affiliated Water Supply and Sanitation Collaborative Council (WSSCC) estimates that if decentralised, small-scale and technologically appropriate solutions were favoured, all the worlds people could be provided with adequate water supply and sanitation with the expenditure of USD 9 billion a year, i.e. less than a third of current spending on water and sanitation infrastructure in developing countries.

The Panel disregards international law, such as the CBD, ILO, Ramsar, and CCD by calling for the removal of unnecessary internal brakes on multilateral water lending, implying that international financial institutions should violate their own operational directives…. and suggesting the OECD to revise its Consensus Rules to permit more flexible use of export credit for water projects. The Panel completely ignores the growing debate on the need to subject export credits to greater public control and to apply social and environmental standards. While calling for relaxation of safeguards, the Panel does not offer any safeguards in the form of e.g. pro-poor benchmarks or criteria to guide funding and investment policies.

The Panel recommends that opportunities are opened-up for sub-sovereign bodies to attract funds. It omits, however, further reference to the broad range of private, public and semi-public institutions which can play and do play a pivotal role in water delivery. One would expect the Panel to elaborate how to enhance this enormous under-tapped institutional potential, which is often well positioned to administer (scarce) funds and to serve the water needs of disadvantaged groups.

Finally, the Panel suggests that donors should support new regional initiatives such as NEPAD, the Nile Basin Initiative and the Mekong Committee, without indicating the need for these bodies to evolve into genuine participatory frameworks.

We have listed a summary of our critique on the Camdessus report in the attached annex.

Like many other NGOs, Both ENDS has been continuously involved in constructive dialogues, e.g. through the Dialogue on Water, Food and Environment and through active facilitation of NGO input in the 2nd World Water Forum and the WSSD. In addition, it is developing a series of proposals on locally-rooted, integrated river basin management, in which local actors are taking the lead in sustainable, equitable approaches to river basin management. We are deeply concerned that the Panels recommendations will harm the cause of human rights, local livelihoods needs and environmental security. It seems to turn back the clock on water management.

We sincerely hope that the Kyoto ministerial conference becomes inspired by investment strategies which stem from genuine sustainable water management and delivery initiatives, which are guided by a livelihood approach, institutional development and reform and the UNCED principles of sustainable development.

We look forward to collaborate with you and other members of the Dutch delegation.

Yours sincerely,

on behalf of Both ENDS,

Sjef Langeveld,
Director

C.c.: Ms. M.H. Schultz van Haegen-Maas Geesteranus, minister for Transport, Public Works and Water Management, members of the Dutch delegation to Kyoto; Ms Karin Roelofs; Mr Bert Diphoorn; Mr Durk Adema, DGIS; Mr Micheael Camdessus, Chair of the World Panel on Financing Water Infrastructure; Mr Ravi Narayanan, Director WaterAid; Mr Joe Briscoe, The World Bank; Ms Verele van de Weerd, UNEP; Mr Frank Rijsberman, Chair Consortium for the Dialogue on Water for Food and Environment.

Annex to letter to Ms A.M.A. van Ardenne-van der Hoeven
Comments on the report by the World Panel on Financing Water Infrastructure

1. The Panels recommendation that DAC should allow guarantees to be reported as aid, seriously undermines the OECDs ODA targets, leads to pollution of bilateral ODA-budgets and may proof a disfavour to recipient countries. By suggesting that the OECD should revise its Consensus Rules to permit more flexible use of export credit for water projects, the Panel steps out of reality. There is growing public and political debate on the need to subject export credits to greater public control and to apply social and environmental standards.

2. The Panel makes a strong plea to direct public funding and private funding into major irrigation and other large infrastructure schemes. The Panel thereby fails to consider the growing body of evidence that most of these capital intensive and centralised projects do not serve the water needs of the poor with priority. These schemes are often economically non-sustainable and lock-up scarce budgets which should have been invested in better tailored pro-poor food production and water delivery systems.

3. The summary report does not address the water needs of dry land rainfed agriculture on which most poor people depend.

4. The great majority of the worlds population without decent access to safe drinking water live in rural areas. The Panels summary report does not even mention rural areas. Its focus is on promoting private investments is basically irrelevant for rural areas where water companies can rarely profit from supplying poor and dispersed populations.

5. The Panel recommends that Aid donors and IFIs should resume lending for, dams and other well-justified water storage and transfer schemes. It is unacceptable that the Panel does not refer to the recommendations by the World Commission on Dams (WCD).

6. The Panels recommendation that IFIs should remove unnecessary internal brakes on their water lending is cause for deep concern. It implies that the Panel comes close to persuading IFIs to violate their own operation directives. By doing so the Panel would in fact also disregard international law, as enshrined by international conventions such as the CBD, ILO, Ramsar, CCD and ILO.

7. The Panel does not offer any pro-poor benchmarks and criteria to guide funding and investment policies and to address the hosting-recipient societies vulnerabilities, specific needs and local conditions. Consequently, following the Panels recommendations is likely to enhance polarisation, conflict and reduce environmental security.

8. It is positive that the Panel recommends that opportunities are opened-up for sub-sovereign bodies to attract funds. However, the Panel omits further reference to the broad range of private, public and semi-public institutions which can play and do play a pivotal role in water delivery. One would expect the Panel to elaborate how to enhance this enormous under-tapped institutional potential, which is often well positioned to administer (scarce) funds and to serve the water needs of disadvantaged groups.

9. Though the Panel does mention water resource management, it does not indicate how additional funds and investments may benefit ground water restoration and watershed protection. The Panel seems not in tune with ongoing, more creative, attempts to make stakeholders invest in sustaining environmental services.

10. The Panel suggests that donors support promising new regional initiatives. Regional initiatives, such as NEPAD, the Nile Basin Initiative and the Mekong Committee still need to proof that they become genuine participatory frameworks. Adherence to the Panels recommendations may seriously hamper these initiatives to open up, to become rooted in local ownership and to address poor peoples water needs.