In Mexico, the Supreme Auditor of the Federation (ASF, by its Spanish initials) is responsible for public accounting audits. Every year, they publish audit reports on public programmes and works. These are an invaluable source of data that shows how the government plans, deploys and operates programmes designed to deliver public services to the people. Through these, a relatively complete image can be constructed of how the Mexican government works, and how decisions that affect the everyday life of the citizens – both urban and rural – are taken. Our organization, ControlaTuGobierno (CTG) has been using these reports as a source of information for our workshops with grassroots communities. We know from experience that civil society engagement can play a very important role in enriching the work of the Supreme Audit Institution, in particular through social audits and through the tracking of audit reports on specific public institutions. From 2000 - 2016, the ASF carried out 222 reviews of the public works and programmes planned and operated by the National Water Commission of Mexico (CONAGUA as it is known in Spanish) and published the reports. Since 2014, we have conducted research reviewing all 222 of these reports – yes you read that correctly – including 31 reports on the performance of CONAGUA on Drinkable Water, Sewerage and Sanitation Programmes, which were studied in depth. We are now working on structuring the information contained in these reports, thanks in part to the ASF’s public system to consult the reports online. Our quest here was to find out what these audit reports reveal about the performance of CONAGUA. The initial questions set out were: How have the reports been used so far? How do marginalized communities effectively use this public information for active engagement? And does evidence gathered by civil society organizations complete the panorama that the official reports outline? Our experience shows that civil society engagement can play a key role to enrich the Supreme Audit Institution’s tasks and contribute to tracking the recommendations they make about public institutions' performance. Findings in an unexplored official source The first approach of ControlaTuGobierno to this enormous amount of information was to focus on a descriptive analysis of the number of audits per year; the type of actions derived from the audit exercise; as well as the budget amounts audited and recovered. This allowed us to highlight findings about the most audited States, the number of recommendations made by the ASF, and the audited amounts. Many of the findings point to irregularities in the use of the budget. Along the sixteen years of audits analysed, the ASF asked CONAGUA to return the money related to expenses up to 75 billion Mexican pesos (around 6 billion US dollars) [1], of which only 740 million pesos (1 per cent of this amount) were recovered. The lack of reliability in the information that CONAGUA offers as official data is even more alarming. For example, in 2011 the ASF highlighted that CONAGUA had no documentation and/or methodological evidence to support the improvement reported in their publication 2010 Situation of the Drinkable Water, Sewerage and Sanitation subsectors. According to their numbers, access to drinking water increased 6% in 10 years and sanitation coverage scaled from 79% to 96% in the same period. Considering the fact that CONAGUA does not consistently measure and produce this information, the fundamental question is what is the basis on which they plan and design their programmes. As another example, according to a 2014 ASF audit, CONAGUA agreed that communities in situations of extreme food poverty would be the target population of a programme designed to build sanitation facilities. However, CONAGUA did not prove that it had any updated and disaggregated information to locate these populations in the territory. Our research also throws light on certain limitations of the financial auditing and administrative approach that the ASF uses to audit. This is reflected in a lack of sustainability, human rights and gender perspective criteria. Proof of that is the fact that the ASF approach considers water resources as a matter of national security rather than a human rights issue. Finally, our analysis shows that despite crucial institutional failures and irregularities – such as failure in fulfilment of programs’ goals, lack of transparency in selection criteria of projects, overall opacity and incomplete information of financial performance – being reported year after year, the recommendations from the ASF were ignored and the same bad practices continued to be documented in subsequent Supreme Audit exercises. - Unloading dock of Poinsettia. The neighbourhood of Caltongo, Xochimilco municipality, Mexico City. This picture was taken during a walk along the Avenida Nuevo León made with press and other media members to put in the public eye the misdeeds and problems caused by the repaving works. The works could have potentially caused damage to the drinking water network had the women of the neighbourhood not kept watch. Conclusion These findings have shown that the water scarcity and pollution issues that we witness in our fieldwork with communities[2] are the product of a series of fallacious administrative practices playing out at different governmental levels and therefore a deep-rooted and ubiquitous problem. As our work is directly connected with grassroots communities that have been facing multiple problems with the proper delivery of public services such as drinking water and sanitation, our experience has shown us that access to official information – such as these audit outcomes – is essential to scale local demands to a higher level of government (either State or National). In 2018, Mexico went through a change in political administration. We believe that these findings, and the information contained in the reports, can help communities around the country to make proposals that encourage changes at the community level through better decision-making in the design and the use of available budgetary resources. - Wastewater treatment plant. Cocotitlán municipality, State of Mexico. This treatment plant is one of the very few plants that operate in the Amecameca and La Compañía river basins. The plant was designed to help clean up these rivers. Although it works properly, the water that comes out of the plant is polluted again as it reaches the rivers, making the process useless. Crops irrigated with wastewater surround the facilities. The picture was taken during a visit with agricultural producers of surrounding fields. References [1] Around 6,168 million dollars, considering 1 dollar=12.16 Mexican pesos, the historical mean between 2000-2016 according to data obtained from the Bank of Mexico. [2] The communities we work with are located in between Mexico City and the State of Mexico margins. About the authors ControlaTuGobierno has been working since 2013 with grassroots communities, both, urban and rural, in different areas around Mexico City. Our main goal is to help marginalised communities to take control of the public decisions that affect their everyday life. We believe the right to information is a key that helps to open the gate to claim other basic rights such as water and sanitation. Controlatugobierno.com Twitter: @ControlaTuGob FB: ControlaTuGobierno Links CONAGUA through the lens of the Supreme Auditor of the Federation reports: 2000-2016 (complete workbook in Spanish) First Meeting of Auxiliary Watershed Organizations: Good Practices, Limitations, Lessons, and Prospects (A brief report of the encounter among different autonomous water committees, academic experts, and Mexican NGOs organized by CtG in 2017)

CASE STUDIES FROM KENYA Case studies Published in 2018 with Caritas Kenya The Integrity Management (IM) Toolbox for small water supply systems is an innovative participatory approach to coordinate efforts between communities and local governments to improve the quality of services provided from small water supply systems in rural and marginalized areas. The IMT-SWSS is designed for community groups managing a small water supply system to help them improve their performance and compliance by analysing the way they currently manage their water system, identifying current problems, and selecting adequate tools. From this basis, community members define action plans, which are implemented through a long-term coaching process. Tools have been reviewed under the lens of the Human Rights to Water and Sanitation and look specifically at the engagement of disadvantaged groups, including women. Implementing partners have identified five case studies from Kenya, highlighting key achievements, challenges, and lessons learnt. Downloads:

Textile and ready-made garment production is one of the most water-intensive industries in the word, as access to this vital resource is essential for cotton cultivation, textile dyeing, and finishing. The water footprint of fashion is estimated at around 20% of all industrial water worldwide. How the fashion and garments industry approaches water sustainability in the face of a changing climate and increasing competition over resources is therefore crucial on both fronts of water use and water pollution. According to WWF, it can take up to 2,700 litres to produce the cotton needed to make a single T-shirt. Toxic chemicals can be discharged into water bodies from the textile dying process when appropriate effluent treatment measures are not taken. This not only affects the water bodies, but also has long-term implications on public health, food production, and the environment. The textile industry has been key to economic development in many countries, and is tied to job creation and economic empowerment. With water use predicted to increase by 50% between 2007 and 2025 in developing countries, and 18% in developed ones, governments and communities have a growing interest in environmental and water sustainability, as well as in understanding how the industry manages the resource. The textile and ready-made garments industry is a major driver of the Bangladesh economy, yet water pollution in the industry causes severe environmental damage across the country. Even though a regulatory framework for wastewater management exists, it is inadequately enforced due to the country’s weak institutional system and presence of high-level of corruption. A recent study published by the Water Integrity Network and Transparency International Bangladesh suggests that, ‘a plethora of policies and laws have been enacted and institutional frameworks have been put into place to govern and guide water governance and management […] Lack of supervision from any advisory and regulatory watchdog in this sector means that there is no organization overseeing activities from planning to operation, making critical comments and suggestions for improvements through systematic investigations, undertaking advocacy campaigns, and enforcing action against violations’. Most companies operating in the garment and textiles sector of Bangladesh are suppliers of multinationals that are legally obligated to provide oversight on their suppliers. However, the existing laws and regulations are not adequately enforced, and the water sources in the vicinity of the factories are highly polluted. Supply chain accountability has become a growing concern for brands. And despite important initiatives taken by the apparel industry, notably after the 2013 Rana Plaza tragedy that claimed an estimated 1,135 lives, there is still plenty of room for improvement. Effective wastewater management is one area where sustainable solutions already exist, and can be implemented. There are frameworks and guidelines in place; dialogues must be opened and capacity supported, for actors to achieve compliance. Water use and water pollution in the garment industry both severely impact on the public, private, and civil sectors. Although there are many initiatives that bring together buyers, factories, and experts to improve technical processes – Partnership for Cleaner Textile (PaCT) in Bangladesh – or chemical management – Better Mill Initiative in China – there is a need to bring the debate beyond the water sector and open it to the public, and engage the garment companies for a deeper understanding of public value. WIN and partner Your Public Value are advocating for building a dialogue with various stakeholders, including Global Brands, to jointly design an approach to tackle the problem of wastewater pollution in Bangladesh. Download infographic (pdf, EN) Download report (pdf, EN)

INTEGRITY RISK MAPPING OF THE WATER SECTOR IN BENIN Research and risk assessment Published in 2018 with GWP / PNE Benin Pour une compréhension globale et approfondie de la vulnérabilité actuelle et future du secteur aux phénomènes de corruption et autres pratiques contraires à l’éthique au niveau national, le PNE-Bénin, WIN et la coopération néerlandaise à travers l’Organisation néerlandaise pour le développement au Bénin (SNV Bénin) et le programme OmiDelta, ont accompagné le ministère de l’Eau et des Mines (MEM), dans la mise en place de la présente mission d’élaboration d’une cartographie des risques d’atteinte à l’intégrité dans le secteur de l’eau et de l’assainissement au Bénin, et accessoirement dans le secteur de l’irrigation agricole. L’objectif principal est de contribuer à l’amélioration de la gouvernance et de la performance du secteur de l’eau et de l’assainissement à travers l’établissement d’une situation de référence, assortie de recommandations stratégiques et opérationnelles pour prévenir et réduire les risques de déficit d’intégrité et autres pratiques contraires à l’éthique dans le secteur aux niveaux national, départemental et communal. Les objectifs spécifiques de l’étude sont, entre autres de : faire l’état des lieux des risques de déficit d’intégrité dans le secteur de l’eau et de l’assainissement prenant en compte les différentes fonctions du secteur, les principaux acteurs du dispositif institutionnel, les relations qui les lient, leurs activités et leurs procédures, etc. ; documenter les études de cas et bonnes pratiques en matière de prévention et de lutte contre la corruption à différents niveaux du secteur ; proposer des actions et recommandations stratégiques et opérationnelles dont la mise en œuvre permettra de prévenir et d’atténuer les risques d’intégrité et autres pratiques contraires à l’éthique tant au niveau national, départemental que communal dans le secteur etc. Le rapport de synthèse présente les principaux résultats de l’étude, les recommandations ainsi que les grands chantiers de promotion de la gouvernance dans le secteur de l’eau au Benin. Télécharger Résumé: Etudes de cas: Download:

Working paper By Carmen Fernandez Fernandez (WIN Associated Consultant) with inputs from the Centre for Rural Development (Seminar für Ländliche Entwicklung, SLE). Published in 2018 This working paper on land grabbing examines the link between land and water grabbing, the people that are most impacted by this, and legal frameworks related to both land and water rights, with special focus on Kenya and Ethiopia. The document examines integrity risks in the Ethiopian government’s leasing of land and water resources to foreign investors, and the land reform process in Kenya after the launch of the 2010 Kenyan Constitution. It also identifies how powerful actors are taking control of land and water resources at the expense of poorer, local communities. Land and water grabbing refers to the capturing of both land and any water resources that the area encompasses. Corruption in land governance plays a huge role in land grabbing, and integrity risks manifest through bribes, flawed decision-making processes, circumventing official procedures, and institutional fragmentation. Download (pdf, EN):

LESSONS LEARNED FROM WATER INTEGRITY ACTION UNDER WIN’S STRATEGY 2011 – 2016 WIN’s Lessons Learned Report captures experiences and challenges faced whilst working on water integrity between 2011 – 2016. The report demonstrates that working to improve water integrity is not always a straightforward matter. Approaching the topic, targeting interventions, interpreting key principles, and prioritizing actions can be considerable challenges. The lessons outlined in this report highlight how WIN and its partners have faced these challenges, and how we are moving forward to effectively support improvements in water management and WASH services. Lesson 1: Corruption happens everywhere. Keeping it hidden makes it thrive. Being transparent about it can build trust. Lesson 2: It is critical to carefully evaluate how far one can go when discussing corruption and only gradually push the limits. Lessons 3: Being sensitive about the topic means taking into account cultural relativity and using positive entry points to generate discussion and action. Lesson 4: Prevention is a sign of due diligence: it can build trust with financing partners and ensure effectiveness of projects. Lesson 5: Concerted action for advocacy and tool implementation is key, even if it is difficult to keep up. Lesson 6: Political will or top support helps. Lesson 7: Acting at lower levels and building up momentum for integrity is possible and effective. Lesson 8: Transparency is not just about opening up the account books. Lesson 9: Civil society and the media play a key role in independent monitoring and reviews of budgets or service levels. Lesson 10: Empowered, capacitated regulators can be strong change agents in the fight against corruption. Lesson 11: Ensuring stakeholder engagement is a slow process but if it is real and multi-directional, integrity work will be stronger. Lesson 12: Integrity programmes require thorough assessments and context analyses, detailed stakeholder mapping, and quality follow-up. Download the full report here:

WIN and PNE-Benin are excited to announce that the Charter of Good Governance for Water Integrity in Benin is now available in digital and hardcopy formats. A hard copy of the Charter – which is an example of good practice in promoting integrity in the sector – will be distributed to the various actors in the Benin water sector, both at the national and regional levels. It aims to inspire key players to improve governance within the framework of their professional activities. Downloads (FR only): REPUBLIQUE DU BENIN: APPUI TECHNIQUE: FINANCEMENT: CHARTE POUR LA GOUVERNANCE DU SECTEUR DE L'EAU ET DE L'ASSAINISSEMENT AU BENIN. REPUBLIQUE DU BENIN: MECANISME D'OPERATIONNALISATION DE LA CHARTE POUR LA GOUVERNANCE DU SECTEUR DE L'EAU ET DE L'ASSAINISSEMENT AU BENIN.

By Kevin Bender, Consultant, Development Finance Specialist In the efforts to increase integrity in the water and sanitation services sector throughout the developing world, the role creditworthiness can play in creating systemic change is often overlooked. Commercial lenders must hold utility borrowers to a high standard of operational, managerial and financial performance and require reliable, and often public, reporting of this standard. This reporting, whether mandated by a commercial lender or by a regulator, directly increases accountability and can lead to increased transparency. Moreover, if the required reporting is available to the public, stakeholders’ involvement in the oversight of the management of the utility should benefit as well. Private sector lenders, whether commercial banks or institutional lenders via capital markets, are highly skilled in assessing creditworthiness — the ability and willingness of a borrower to repay debt in a timely manner. The majority of this risk assessment depends on quantitative factors found via financial statement analysis. Simply requiring utilities to produce audited financial statements is often a great step in operational management and greatly increases accountability. Deeper creditworthiness analysis incorporates qualitative factors, such as corporate governance, often including community participation in the decision-making process. Although we have found no direct studies on the correlation of creditworthiness and integrity in the water sector in the developing world, there are reasons to believe that increasing, or even simply measuring creditworthiness will lead to increased accountability of water utilities . Regulatory mandates can and should lead to increased transparency and provide an opportunity for increased stakeholder involvement in decision-making and oversight. To illustrate this, we can turn to the example of Kenya, where the government has pursued a steady process of increasing transparency and accountability of the water sector. The Water Services Regulatory Board (WASREB), the regulator, created a sector-wide system to collect and report operational ratios and corporate governance indicators. These indicators are published in its annual Impact report [1]. Recently, to facilitate commercial lending to the sector and further increase integrity, WASREB included a Creditworthiness Index covering over 40 utilities in Kenya. While it is early days for the index, it is clear the index has increased utility accountability and transparency. COMMERCIAL FINANCE There are many potential benefits, as well as plenty of challenges, associated with water utilities in the developing world being able to access commercial borrowing to finance water infrastructure. The obvious benefit is that commercial financing provides additional sources of funding to often cash-strapped public budgets. In addition, long-term repayable finance, regardless of being sourced from commercial or public sources, matches the financing of an asset to the life of the asset — allowing current and future users to pay their share of the cost of the infrastructure via the tariff. However, arguably the greatest potential benefit of commercial financing is the required improvement in institutional management skills and efficiency in the sector. Commercial financing forces utilities to incorporate private sector best practices as commercial lenders will only lend to entities with acceptable credit risk. The measurement of creditworthiness is a quantification of these best practices. Water, being a public good, is often run via public water utilities. However, public entities can be less transparent than private ones, particularly private companies subject to commercial financing via the capital markets such as a listed equity or commercial debt. Companies listed on stock exchanges are regulatorily bound to a high level of transparency; however, not many water utilities in the developing world are listed on stock exchanges. If commercial finance is not compelling utilities to be more accountable and transparent, regulators can put in place similar reporting requirements on utilities. CREDITWORTHINESS, CREDIT ANALYSIS, AND CREDIT RATINGS Creditworthiness assessment, whether done internally at a bank or by an independent rating agency, provides lenders an objective evaluation of a utility’s credit risk and an accurate predictor of default risk. The assessment identifies operational, financial and governance issues that the utility must target to strengthen or uphold its creditworthiness. A regulator with this information gains an increased ability to identify individual utility and overall systemic weaknesses, particularly if the entire sector is reporting on creditworthiness. To assess the creditworthiness of borrowers, lenders review both quantitative and qualitative factors. Quantitative factors rely on financial statement analysis and look mainly at financial ratios. Financial ratio analysis is broken down into categories: technical indicators (e.g. Non-Revenue Water, collection rates, billing rates); revenue indicators (e.g. revenue diversification, tariff differential); cost indicators (e.g. staff costs/Operational Expenditure, Operations and Maintenance coverage, EBITDA/revenue); and liquidity/insolvency indicators (e.g. cash/current liabilities, debtor days, debt service coverage ratio, grant dependency). Qualitative factors include corporate governance, management and staff capacity, legal and regulatory framework, economic issues and stakeholder support. In most developing economies, commercial lenders have little knowledge of the water sector and utilities often have no experience with or history of commercial borrowing. Without a standard approach to rating water utilities, lenders have limited inputs and ability to assess the relative risk of water supply projects. To introduce credit assessment of water utilities for lending, technical assistance is often required for both utilities and lenders [2]. Regulators can develop a system of creditworthiness standards and reporting on their own or facilitate partnerships with credit rating organizations. For example, the Government of the Philippines created the Water District Credit Rating System, classifying districts on a scale of creditworthiness. Water districts assessed as creditworthy are deemed ready for private investment. Less creditworthy are targeted for technical assistance aim at addressing their weaknesses. Under this system, water utilities identify operational and financial weaknesses to improve their creditworthiness and bankability. Such sector-wide creditworthiness reporting systems allows utilities, lenders and regulator to benchmark the utilities with one another as well as with other corporate entities. SCALE OF COMMERCIAL FINANCE AND INTEGRITY There is reason to assume that the more developed the sector financing system is, the more sophisticated credit analysis will be, which in turn implies stronger systemic integrity. In a system where the sector solely relies on public funding, it is often only the Ministry, or possibly a national auditor, that has the responsibility to review the operating capacity of the utility. With no responsibility to payback the financing, there is little incentive for the Ministry to assess the creditworthiness of the utilities. The next step toward commercial financing and creditworthiness assessment is often a structure where the utility receives pass-through concessional financing from a donor, replicating the process of commercial finance. In this type of lending the utility assumes the responsibility of repaying the loan; however, the repayment risk still lies with the government. The donor may offer some level of technical assistance to perform an increased level of creditworthiness assessment, but the accountability has only increased slightly, and the transparency only increases by one player, the donor. Commercial bank financing, often partially guaranteed in the initial stages, greatly expands the oversight and reporting assessment to include a private bank, and likely an independent auditor. While the results of this assessment is rarely made public, the information that a commercial bank is willing to assume some if not all of the credit risk of the utility provides some increase in the level of public information available. In addition, regulators should have public guidelines stating minimum levels of operational capacity required for a utility to include the cost of borrowing in the cost recovery to set the tariff. Capital market borrowing, via local bond issues, is likely to achieve the highest level of transparency. Bond issuances often require a credit rating performed by a licensed credit rating agency. Rating agencies require that the rating, and any updates/reviews from the rating agency, are made public. One challenge to note is that not many developing economies have local bond markets sufficiently advanced to allow water utilities to issue bonds. KENYA: INTEGRITY EVOLUTION TO A CREDITWORTHINESS INDEX As mentioned above, regulators can play a key role in increasing integrity by guiding the sector toward creditworthiness and commercial finance. The Kenya water sector, driven by WASREB, has witnessed significant increases in accountability and transparency of the utilities as well as the Water Services Boards under the Ministry of Water and Irrigation. The Water Act of 2002, transformed the Kenya water sector to a more private sector-like structure by separating water utilities into agents for the asset holding Water Services Boards and licensing the utilities under the Kenya Companies Act. The Act also created WASREB as an independent regulator. In 2008, WASREB released its first annual Impact report [3], reporting on the operational and technical efficiencies of 25 of the largest utilities as well as the 7 public sector Water Services Boards. In the same year, through technical assistance funding, Nairobi Water and Sewerage Company and the public entity Athi Water Services Board received local currency credit ratings from Global Credit Rating Company and published the reports [4]. In 2010, Kenya adopted a new constitution recognizing access to safe and sufficient water and sanitation as a basic human right. In 2011, WASREB continued its efforts to deepen the integrity of the sector by publishing a one-off utility shadow rating report [5] assessing the credit rating of 43 utilities in Kenya, further increasing the transparency and accountability of the largest water utilities. In 2014, WASREB developed an indicator on corporate governance based on their corporate governance guidelines and began tracking the correlation between the corporate governance score and the technical/operational score of utilities in the Impact report. WASREB believed that utilities with governance standards “are better placed to attain financial sustainability and deliver better services to their consumers .” The governance indicator is calculated on six indicators: utility supervision, information and control systems, financial management, service standards, human resources, and the community participation in the decision-making. As full shadow credit ratings are too costly to perform annually, WASREB created the Creditworthiness Index [6] in 2015. The index provides a simple snap-shot of the financial and operational performance of the utilities. The Creditworthiness Index is automated and calculated from data collected by WASREB. Currently, the creditworthiness index and the corporate governance indicator are incorporated with the operational and technical reporting in the annual Impact Report [7]. These three components of the Impact Report provide the foundation for full credit analysis. Local lenders, utility managers, WASREB, local governments (who own the utilities), and civil society are free to use this public information to facilitate the Constitutional right of access to safe and sufficient water and sanitation for all. About the Author: Kevin Bender is a Development Finance Specialist, currently working as an independent consultant. He was formerly a Senior Financial Specialist at the World Bank, working on the Kenya Urban Commercial Financing for Water and Sanitation Technical Assistance program. In this capacity he worked directly with utilities, county governments, local banks, multiple Government of Kenya entities and the donor community to establish the legal, regulatory and knowledge environment for commercial lending to water utilities Notes [1] https://wasreb.go.ke/downloads/WASREB_Impact_Report9.pdf [2] https://www.wsp.org/sites/wsp.org/files/publications/WSP-Lenders-Toolkit-Commercial-Financing-Water-Sanitation-Kenya.pdf [3] https://wasreb.go.ke/downloads/WASREB_Impact_Report1.pdf [4] http://documents.worldbank.org/curated/en/419831468009295190/pdf/518170WSP0Afri1Box342050B001PUBLIC1.pdf [5] https://www.wsp.org/sites/wsp.org/files/publications/WSP-Financing-Urban-Water-Services-Shadow-Ratings-Kenya.pdf [6] https://openknowledge.worldbank.org/bitstream/handle/10986/23754/Kenya0Water0Se0thiness0Index0Report.pdf?sequence=1&isAllowed=y [7] https://wasreb.go.ke/impact-report-9/

AND THE CRUCIAL ROLE OF JOURNALISTS IN HIGHLIGHTING INTEGRITY FAILURES By Huda Awan, Intern at WIN Water scarcity — a dystopian reality Earlier this month, news outlets reported that Day Zero – the day that Cape Town would officially run out of water – will no longer fall this year. The narrative and tone of Day Zero-related headlines have indicated the onset of a rather dystopian reality, where the pushing forward of the day when one of the world’s major cities will completely run out of water is considered good news. First, Day Zero was pushed to April, then May, June, July, and now it has been moved out of the 2018 calendar completely — provided Cape Town’s inhabitants continue adhering to a stringent regime of water conservation and reuse. What Day Zero and its coverage have ultimately demonstrated is that society is and will be changing profoundly in the coming years. Water, which is essential to all human life and activity is becoming increasingly scarce; UN-Water has stated that by 2025, almost one-fifth of the global population is likely to be living in countries or regions with absolute water scarcity, while two-thirds of the population will most probably live under conditions of water stress. How society adapts to such conditions as the pressure on water resources increases is a question that is becoming more pertinent by the day; it is a question that is already dominating domestic and international politics in drought-ridden regions of the world, and will continue to do so for years to come. An equally important question, however, which remains unsatisfactorily answered and examined — is how do societies get themselves into the critical situation of water scarcity in the first place? Climate change is undoubtedly a central thread, given its effects on the water cycle, as is evidenced by the situation in Cape Town. But another less widely discussed thread is that of corruption. A workshop hosted by Transparency International (TI) and the Water Integrity Network (WIN) aimed to address just that. In February, a group of twelve journalists gathered in TI’s Berlin office during their study tour with the Institute for Journalism in Norway. The tour was designed to give journalists a deeper understanding of pertinent societal issues. The workshop organized by WIN, TI’s Climate Programme and MiCT (a non-profit organisation that implements media development projects in crisis regions), focused on corruption in two seemingly niche, but vitally important areas; the water sector and climate finance. Water scarcity is as much a corruption issue as it is a climate change one “Corruption is the abuse of entrusted power for private gain.” – Transparency International Most people in developed countries probably take access to clean and safe water for granted, and may not necessarily put the words ‘water’ and ‘corruption’ together. The reality is that in many regions of the world, the water sector is highly prone to corruption for a number of reasons, and it can be attractive to exploit for personal interest by those working within it, when considering the large amount of public and private investment needed, for instance to develop water infrastructure. Compounding this is the complexity of the sector; water governance tends to be broad and dispersed across various agencies, and its management requires highly technical scientific and engineering expertise, meaning that a relatively selective number of people have a comprehensive understanding of and, by extension, control over the sector. Because of this complexity, it becomes harder for others who do not have this specialised expertise to identify when things are going wrong and to hold those in charge to account. These are the key factors that WIN outlines as contributing to water sector corruption. Although there is a lack of comprehensive research on just how much money leaks out of the sector due to corruption, the water sector is a high-risk area for corruption, and corruption takes on many forms. There are countless cases of important water projects remaining unfinished due to funds being embezzled, arbitrary and unfair tariffs being set for water usage, funding being spent on inappropriate or poorly constructed infrastructure to ‘cut costs,’ bribes being demanded for water services, and facilities being subject to poor operation and maintenance (see the Water Integrity Global Outlook 2016 for more information on this). Whatever form it takes, corruption and lack of integrity in the water sector has profound effects because it ultimately makes water services more difficult to access, and especially the poor, marginalized and voiceless are affected most. When monetary resources are diverted away from the development of sustainable water infrastructure, operation and maintenance costs, or inappropriately spent, the result is sub-standard service delivery, or sometimes even a complete absence of water provision. This seriously aggravates the problem of water scarcity. Water sector corruption has been an ongoing saga in South Africa , and a report published by the South African Water Caucus last November on the state of affairs at the Department of Water Sanitation does not point to any improvements. Of the many issues the department faces, “poor financial management (including overspending, accruals and corruption allegations), considerable policy and institutional uncertainty and incoherence, major challenges to institutions that are critical for water governance, deterioration in … infrastructure due to lack of maintenance and investment and significant deficiencies in reporting, compliance monitoring and enforcement” raise considerable concerns about how transparently projects and processes are being managed, and whether those in charge are being held accountable. But how linked are Cape Town’s current water woes to corruption? More nuanced writing on water shortages in Cape Town has made compelling cases that corruption has worsened what could’ve been an avoidable fate. For example, Dr. David Olivier, a post-doctoral fellow at the Global Change Institute, has argued that the water crisis has been driven more by politics than by drought, and an article published by The Atlantic last month also identifies the city’s issues as having been exacerbated by corruption. Climate finance — adding fuel to the fire? Acknowledging the role of corruption in growing water scarcity is important because too often the problem is examined only as a climate change issue. This is not to negate the importance of addressing climate change as a factor — but without a comprehensive understanding of how the effects of climate change are exacerbated by poor governance, solutions that are put forward for climate-related problems such as water scarcity may be rendered ineffective. One such solution is climate finance, which TI highlighted at the Berlin workshop. Climate finance refers to money that is invested to help countries prevent global warming and adapt to its worst effects. The United Nations Framework Convention on Climate Change (UNFCCC) commits industrialised countries to channel up to US$ 100 billion a year by 2020 to support developing countries in mitigating and adapting to the effects of climate change. In a handbook TI has designed for journalists interested in covering climate finance corruption, it is stated that the “stakes involved in financing such programmes are high; how these funds are spent could save the lives of millions now, and ensure billions in the future are set on a safe path.” But they also warn that the governance structures involved in responding to climate change problems may not be strong enough to manage the threats effectively, pointing out that “some of the most climate-vulnerable countries in the world also fare the worst on their Corruption Perceptions Index.” A noteworthy example from TI’s research and investigations into tracking where climate finance actually ends is that of $3.1 million of national climate funding being used to build ‘climate resilient housing’ in south-west Bangladesh, in the aftermath of Cyclone Aila. Investigations by TI’s Bangladesh Chapter revealed that these ‘houses’ were not even built with walls; according to TI Bangladesh, this was so that the department responsible for carrying out the project could halve their costs and take credit for building more structures. Water scarcity is more and more so being viewed as a climate change problem, a problem that will inevitably require climate finance in order to fund projects that make the water sector more ‘climate ready.’ In 2014 – 2015 , around US$4.1 billion was given to the Water Supply and Sanitation sector globally, making up about 9 per cent of total climate-related development finance. Given increased levels of climate change-induced water scarcity, particularly in developing countries, it is probable that the share of climate finance the water sector will receive in coming years will increase. However, as water sector corruption is in part motivated by the huge amounts of money the sector requires, committing further funding to the sector in the form of climate finance, without comprehensively considering where weak governance, transparency and accountability may be compromised and taken advantage of, could simply end up as money down the drain. Connecting the dots — the role of journalists What investigations into climate finance by organisations such as TI and GermanWatch bring to fore is that climate finance is not something that can simply be slapped on to climate change problems such as water scarcity. This is not to say that climate finance will not be instrumental in combatting these problems. Rather as TI puts it: ‘we need to highlight corruption cases in climate finance to make climate finance work better, not because we think climate finance is a bad idea.’ The workshop organised by TI and WIN in February aimed to emphasise two main points; first, that some very pertinent and relevant societal issues are aggravated by corruption, and second, that journalists need to make that connection in their reporting so as to improve wider understanding of how these problems are being mismanaged, and what factors might hinder the effectiveness of their solutions. From WIN’s perspective, investigations into the water sector are pivotal to revealing corrupt practices that affect water availability. Journalists can and should play an important role in breaking down the technicalities of the water sector, and communicating important investigative findings to the broader public. Moreover, journalists are a crucial means through which advocacy messages can be delivered, and a voice can be given to disadvantaged social group and stakeholders affected by water sector corruption. TI’s presentation on climate change highlighted that ‘climate change communicators have done a good job of turning technical topics such as greenhouse gas emissions into a widely understood and recognised problem’; however, journalists need to bring the conversation further by shedding the same light on the solutions available for these problems, starting with climate finance. Journalists have a huge role to play not only familiarising broader audiences with climate finance, but also in tracking funds committed to projects in the name of climate mitigation and adaptation. This is particularly important for money committed to the water sector, given the integrity risks that already exist within the sector.

WIN’s latest resource is an introduction to the topic Land and Water Grabbing: A discussion of integrity implications and related risks, which discusses the integrity implications and risks of land and water grabbing. The essay examines the link between land and water grabbing, the people that are most impacted by this, and legal frameworks related to both land and water rights. Land and Water Grabbing describes the impacts of land and water grabbing in Kenya and Ethiopia. It examines integrity risks in the Ethiopian government’s leasing of land and water resources to foreign investors, and the land reform process in Kenya after the launch of the 2010 Kenyan Constitution. This summary document identifies how powerful actors are taking control of land and water resources at the expense of poorer, local communities. Land and water grabbing refers to the capturing of both land and any water resources that the area encompasses. Corruption in land governance plays a huge role in land grabbing, and integrity risks manifest through bribes, flawed decision-making processes, circumventing official procedures, and institutional fragmentation. This resource was developed by Carmen Fernandez Fernandez (WIN Associated Consultant) with inputs from the Centre for Rural Development (Seminar für Ländliche Entwicklung, SLE). Download the full document:

Working paper Published in 2017 By Binayak Das (WIN), Elske Koelman (WIN), Claire Grandadam (WIN), Frank van der Valk (WIN), and Grit Martinez (WIN associated consultant) This working paper outlines key risks that limit transparency, accountability, and participation in wastewater management, letting corruption thrive. Drawing on several case studies from different regions, it illustrates how these risks play out, what can be done to address them, and the difficulties involved in doing so. Download (pdf, EN)

AGREEMENTS AMONG PROJECT OWNERS, BIDDERS/CONTRACTORS, AND CSOS TO ABSTAIN FROM ILLICIT PRACTICES Integrity pacts are agreements between project owners and bidders that they will abstain from bribery, collusion, and other corrupt practices during their bidding and for the duration of the contract once awarded. Integrity Pacts include a monitoring system typically led by CSOs. Integrity Pacts are meant to detect and eliminate corruption risks from the procurement and contract management processes. The breach of an integrity pacts should trigger sanctions for those involved. In the case of a contractor, this could imply loss of contract, fines, and debarment from future tenders. These sanctions are a powerful deterrent for corrupt behaviour. HOW IT WORKS The distribution of responsibilities between the project owner and the bidder/contractor is individually arranged for each integrity pact, which is why there is no one-size-fits-all recipe. Nevertheless, every integrity pact process should involve the following steps: Learn about the integrity pact and issues of corruption in public contracting in the water sector, and read about successful examples. Plan the integrity pact process (when to start, who to involve, communication, etc.). Undertake initial activities, such as deciding on implementation arrangements and monitoring arrangements. Prepare the integrity pact documents and make sure to have appropriate legal support. Sign the integrity pact (project owner and bidders, etc.). Monitor the procurement process and take action if the pact is breached. Once the bidding is closed, ensure that contract execution is in line with the obligations set in the integrity pact. RESOURCES See the Manual - What is an Integrity Pact and how can it be implemented Also available in French: Training guide for facilitators: