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:

LESSONS LEARNED FROM THE IRRIGATION SECTOR IN INDONESIA Brief By Michael Dunford, Diana Suhardiman, and Peter Mollinga Published in 2017 with IWMI This joint WIN and IWMI brief discusses the characteristics of corruption in the Indonesian irrigation sector, in particular of the upeti practice: a complex, institutionalized system in which subordinates are expected to funnel resources upwards to their superiors in exchange for better positions and social benefits. Understanding the dynamics of such a system is crucial to realign and better target our anti-corruption work. Standard approaches focused on lessening the financial appeal of corruption will not be as effective for corrupt practices that have become intrinsic to how work relations are structured and developed. This brief points to a paradigm shift in how we address corruption, with a more critical, politically and culturally-oriented approach. Download (pdf, EN)

In 2013, the eight-story Rana Plaza building, which houses many garment manufacturing units in Dhaka, collapsed, leading to the death of more than a thousand workers. The primary reason for the collapse is a structural fault, which itself is due to non-adherence to prescribed standards for buildings. This incident brought international attention to the garment industry in Bangladesh, where clothing is manufactured for some of the world’s most famous brands. This led to numerous efforts to raise concerns and address challenges that exist within the garment and textile manufacturing sector in Bangladesh: human rights violations, poor work environment, flouting of laws, corruption, and public and environmental health damage. The violation of pollution control laws with the discharge of untreated wastewater into Dhaka’s rivers and lakes is one such key challenge. In early 2017, Transparency International Bangladesh (TI-B) and the Bangladesh Water Integrity Network (BAWIN) with support from WIN, undertook a study to understand the integrity concerns around the implementation of laws to protect water bodies from garment industry pollution. The study Use and Effectiveness of Effluent Treatment Plants (ETPs) in the Garments’ Industry of Bangladesh: a Water Sector Integrity Perspective was published in June 2017. What does the study reveal? This report points towards poor implementation of laws, inadequate monitoring from government agencies, and factories’ underuse of ETPs. These wastewater treatment plants are the basic treatment facilities that are required to treat effluents at a factory before discharge. They help in reducing the biological oxygen demand (BOD) and keeping water bodies healthy. In the case of the use of dyes and colours, the ETP with additional features functions to reduce the chemical oxygen demand (COD) too. The rivers around Dhaka city are already polluted by textile effluent. While production increases day by day, ETP performance has not. Buyers push to drive down prices so factory owners look for ways to cut costs. Improving ETP performance becomes less of a priority, especially as space is limited in garment factories, an additional constraint. The other side of the garment industry growth engine The textile and garment industry is a major driver of the Bangladesh economy, accounting for nearly 80% of export earnings and contributing more than 12% of the national GDP. ‘Made-in-Bangladesh’ is an internationally recognized badge of quality and has bolstered the country’s image worldwide. Annual turnover of nearly 23 billion USD is predicted to more than double to 50 billion USD by 2021. The textile firms contribute to the wealth and prosperity of the country but in the process, they are destroying the surrounding environment on which farmers and others depend for their livelihoods. According to the Ministry of Environment and Forests, the water of the rivers surrounding Dhaka city where wastewater is discharged without adequate treatment is highly polluted. The rivers have been characterized as ecologically critical areas. Few textile factories in Bangladesh maintain wastewater treatment processes at the necessary level to meet discharge standards. - Discharge of wastewater from garment factories in Bangladesh. Copyright: enrac. Legal provisions for ‘red industries’ and their implementation Under Bangladeshi law, the garment industry falls under ‘red industries’. These pose the highest environmental threats. Environmental law mandates that all Red category wastewater producing industries, including textile dyeing plants, must use Effluent Treatment Plants (ETP) to treat wastewater before discharge. Factories must also obtain an Environmental Clearance Certificate (ECC) by conducting an Environmental Impact Assessment (EIA) and having it approved by the Department of Environment (DoE). Prior approval is also required from the DoE before designing and starting a high-polluting industry, including textile factories. But going by the new BAWIN and TI-B study, there is no effective EIA system and the DoE only published non-statutory guidelines for industrial projects. This weakens the compliance mechanism to ensure the proper implementation of environmental laws. The report further states that the Environment Management Plan is not followed in the day-to-day operations of a textile factory. There is only a low chance that a factory will in fact be penalized for failing to meet environmental standards. More than 70% of respondents in the study said that environmental laws are not implemented properly. Regulatory weaknesses Why are environmental laws not implemented properly? According to the Dhaka Watershed Report of the World Bank (2011) the DoE, like the national regulatory agency, is acutely short of manpower and logistical resources. Polluting factories are seldom inspected. Communities living around industrial clusters informed the report authors that inadequate monitoring and inconsistent enforcement are the main reasons for the fact that factories dispose of untreated effluent into wetlands or rivers. It was reported that agencies often do take mild actions but appeals by industries lead to withdrawal or reduction of punishment. In community and stakeholder consultations, it was suggested that ambiguity and corruption may cause these irregularities. As a result, farmers, fishermen, and others who rely on water bodies have seen a reduction in their livelihoods and an increase in the prevalence of diseases. On the positive side, there have been efforts to address some of these issues. For example, since 2010, the DoE has deployed mobile magistrates, which help sanction more polluting companies. There are still big gaps, however. A review of the National Water Act 2013 for Bangladesh conducted by the global apparel brand H&M identified a number of issues and made recommendations that may offer useful ways to improve water sector integrity through improved effectiveness of ETPs in the textile industry. The report claims that it is less expensive to pay penalties than to invest in ETPs. Legal weakness put the entire enforcement system at risk of inefficiency and corruption. As long as weaknesses and loopholes exist, polluters will bypass wastewater treatment to gain higher profits. Underperforming ETPs The BAWIN and TI-B report estimates that the proportion of factories with ETPs is between 40 and 80%. It has been reported that the volume of wastewater generated by factories is within the capacity of the ETPs used by the textile industry. However, it is widely acknowledged that many of the installed plants are not designed according to standards or are not operated in an appropriate and responsible manner. The main factors causing this poor performance of ETPs are a lack of knowledge and technical capability, a lack of monitoring, and poor record keeping. Owners are also often reluctant to run ETPs effectively full-time to minimize the costs of the expensive chemicals consumed in the treatment process. There are no accountability mechanisms. Factory managers and regulators consulted for the study expressed different views regarding the problems in inspection processes. Factory managers indicated that the frequency of inspections varies between factories, as does the quality of the inspections. In some cases, water samples are not collected and no action is taken if a factory is non-compliant. Sometimes, additional unofficial payments are required for environmental certificates. It is also reported that there are cases where officials seem to have put pressure on company owners by creating false test reports. DoE officials report that inspection officers do not always get adequate support from factory managers. Sometimes inspectors are barred from entering factory premises or managers delay their entry so that ETPs can be turned on. Some factories conceal drains through which they dispose of untreated waste. Punitive measures are difficult to implement because of weak political willingness to impose punishments or appropriate actions for environmental violations. When the violators are politically active they can bring strong pressures to bear on the regulatory bodies. - Water quality testing of polluted water sample for ETP evaluation study. Copyright: enrac. Integrity in the garments industry: everyone needs to do more The rich set of policies and laws that Bangladesh has should provide should be a strong backing for better wastewater management for the garment industry. Enforcement is too weak, however. The report shows a clear lack of transparency and accountability in environmental decision-making processes in Bangladesh. Weak governance has resulted in undue influence on state institutions to achieve growth rather than sustainable environment management practices. For the country to reach its ambitious SDG goals, it will be crucial to address these challenges. The government must enforce its rules and make sure industries comply. There is space for an advisory and regulatory watchdog in this sector to oversee activities and make suggestions for improvements, undertake advocacy campaigns, and enforce action against violations. Factories have corporate social and environmental responsibilities and they should comply with rules that can be rewarding and sustainable for them. The international agencies that are investing in the improvement of governance in the garment sector and reputed global brands that source their garments from the country need to take this issue up urgently to ensure that public health, workers’ rights, and healthy ecosystems are protected and need to contribute to strengthening integrity within the garment industry. Political commitment, skilled human resources, and institutional capacity are all required to ensure proper enforcement of rules and regulations for pollution control and protection of the environment. Report recommendations Transparency: Greater transparency requires strengthening rights to information and researching the extent of social and economic damage. Greater clarity and definitions are needed on the responsibilities and licensing and enforcement powers such as those currently divided between the Departments of Textiles and the Department of the Environment. Adequate enforcement of water regulations requires full-time monitoring of effluents and ETP functions. Awareness needs to be raised among textile owners and their Apex Organizations about pollution and their legal and social responsibility to prevent it. The DoE should make Local Government Institutions aware of how to use their powers to minimize pollution and support Upazila Fisheries Committees in ensuring acceptable water quality in wetlands and fishery areas. The DoE should accredit and appoint competent third-party organizations to monitor textile companies regularly on its behalf in addition to conducting its own monitoring. Accountability: Greater accountability requires clearer lines of responsibility and stronger sector capacity. Greater integration of responsibilities by the Ministry of the Environment and Forests with related ministries will help to identify common goals and start a dialogue on strengthening institutional ownership. A review of the ECA 1995, the ECR 1997 and the Water Act 2013 is needed to establish a consistent approach to conducting EIA and issuing project approval for water-related projects. The DoE needs the skills, staffing levels and resources required to perform its watchdog and enforcement roles, especially in monitoring Environmental Impact Assessments. The country should incorporate a market-based ‘polluters pay principle’ system with appropriate economic incentives, rewards, disincentives and penalties. The Water Resources Planning Organization (WARPO) requires a clearer mandate and the resources to operate a project approval system with integrity. Participation: Participation must ensure places at the table for civil society, the private sector and excluded groups to balance stakeholder interests. An appropriate system is required for public consultation to ensure informed decision-making and grievance redress, especially for local people affected by water pollution. National and community-level bodies should be established and validated to monitor the water quality of khals, beels and rivers, and the results used to determine anti-pollution measures, operating permits, and actions (including legal actions) against offending industries. Anti-corruption: Corruption can be tackled by ensuring a stronger role for regulators and making participation and transparency mandatory. A licensing system for industrial withdrawal from groundwater sources is required with a strong monitoring system by the DoE and the Water Resources Planning Organization (WARPO). The DoE regulatory bodies should be decentralized and strengthened to monitor effluent treatment plants and systems. The DoE and WARPO should create a more effective mechanism for penalties, such as fines, loss of tax and duty concessions, blacklisting or even removal of operating licenses. Environmental courts should be strengthened to ensure the punishment of polluters. Administrative interference should be minimized to decrease corruption and increase transparency. The legal process should be simpler and quicker when action is taken against the alleged improper extraction of water or pollution. Download the full report: Thank you We would like to thank all contributors to the study on the Use and Effectiveness of Effluent Treatment Plants (ETPs) in the Garments’ Industry of Bangladesh: a Water Sector Integrity Perspective, in particular the authors—ENRAC, Transparency International Bangladesh, BAWIN— and Peter McIntyre, for his editing and review.

WIN launched a baseline study to map integrity and corruption risks in the water and sanitation supply in Benin in March 2017. The study is based on the results of participatory assessments of Transparency, Accountability, and Participation (TAP) for water and sanitation, which are being carried out using the Annotated Water Integrity Scan (AWIS) tool. Using AWIS is a way to quickly gather information on perceived levels of TAP without letting results be overtly skewed by the perspectives of stakeholders with the loudest voices. The tool helps different stakeholders examine in particular: policy and legislation, regulation, projects and investments, service delivery, and anti-corruption in the water sector, in terms of TAP. A workshop on urban water was held in the capital Cotonou, June 7th to 8th, with 45 different stakeholders of urban water and sanitation supply in Benin. Of the three pillars of TAP, Accountability scored lowest at the workshop. Participants were of the opinion that the legal framework is in place and available, but that enforcement is too limited, giving way to corruption and abuses of all kind. These first insights will be completed with additional information from the findings of other AWIS workshops in other sub-sectors, as well as data from household surveys and case studies. The final conclusions will be published before the end of the year. First high-level forum on good governance in Grand Popo, Benin (15-17 June 2017): participants confirm the need for better oversight and more capacity for the judiciary The First High Level Forum on Governance was organized to assess the work done in terms of fighting corruption and promoting integrity in the public sector in Benin. The Constitutional Court of Benin and FONAC (Front des Organisations Nationales Anti-Corruption) led the forum with the financial support of USAID. 150 participants came together from the government, private sector, civil society organizations, donors, and the media. The findings of the Forum are in line with those of the AWIS workshops so far. Participants concluded that a legal framework is in place but that enforcement is weak and capacities for enforcement are woefully insufficient. There are currently only 150 judges for the whole country and three financial auditors to scrutinize public accounts. Impunity is an issue. A set of recommendations was released at the end of the forum: Learn from integrity promotion activities in the water sector and conduct an integrity risk and corruption map in every sectoral department to define priority actions to be taken. Use Integrity Pacts as a public procurement tool to promote transparency, accountability, and participation, and prevent corruption. Enhance the human and financial capacities of the judiciary. Implement all the recommendations from the assessment of the National Integrity System in Benin. Their implementation of these recommendations will be assessed at the next edition of the forum in 2018.

Uganda has placed integrity in the water sector high on the development agenda by pursuing an explicit good governance strategy in the provision of water supply and sanitation services. In 2006, the Ministry of Water and Environment (MWE) established a multi-stakeholder Good Governance Working Group (GGWG) tasked with recommending specific measures to promote and monitor transparency, accountability and good governance. Since 2009, GIZ has supported the GGWG with Technical Advisory services, such as those of current Good Governance Advisor Rosemary Nakaggwa, who has supported the sector in developing governance indicators. This is in addition to GIZ’s support for the development of an independent regulatory authority in Uganda. To discuss their views on integrity and their take on the progress that the GGWG is making in promoting integrity in water in Uganda, we caught up with Rosemary Nakaggwa and Eng. Gilbert Kimanzi, the former chairperson of the GGWG and current Assistant Commissioner under Water for Production in the Ugandan Ministry of Water and Environment. An interview with Rosemary Nakaggwa and Eng. Gilbert Kimanzi. Why is it so important to work on water integrity in Uganda? Gilbert: It is important to work on the promotion of water integrity issues because you want to measure the effectiveness of the delivery of services. If you do not promote integrity, there is a lot of leakage and waste. We advocate to deliver: once we get the resources, we need to put them to good use, and this needs to be measured. We have to do this effectively and efficiently because we are not anywhere near our targets. Since you have begun working on promoting water integrity, what do you feel are the most significant changes that have occurred in the water sector? Rosemary: There is more sharing of information and I see people trying to be more accountable at various levels. The issue of corruption is still a very big one, not only in the water sector but also at a broader level in the entire country. Corruption limits the improvements in terms of Transparency, Accountability, and Participation, but at the same time, the work on TAP is reducing the breeding grounds for corruption. Gilbert: The most significant change is the recent development of indicators on good governance and integrity. Specific indicators have been developed, against which we measure progress in governance in the water sector. The other change that can be noted is that, over the years, we have developed a culture of measuring the cost of delivery of services. The sector is not very well funded, but the unit cost of the delivery of services needs to be checked. We check whether costs go up, and monitor why this happens. We have been doing this for the last 7 or 8 years. We also track grants that were sent to local governments. We now have an institutional framework to track those grants and to look at the effectiveness of the delivery of services using those grants. Those grants cover rural water supply and sanitation, operation and maintenance, and work done in small urban centres. We are also looking to monitor grants for sanitation development. What other specific activities have you been carrying out to promote integrity? Can you give examples? Rosemary: In Uganda what has been done through the GGWG has been to first of all increase awareness of Transparency, Accountability, Participation, and Inclusiveness. This was done through training that were designed specifically for the water sector. We launched awareness campaigns with partners that have helped make governance a more common topic of discussion at meetings. We also conducted studies to evaluate existing guidelines and to what extent they involve integrity components. For example, when looking at the allocation of grants, we evaluated whether there is equitable distribution of the grant to all regions. Guidelines were redesigned to take into account the conclusions on how inequitable the allocation was. An integrity risk mapping was carried out too. Can you tell us more? What was the added value of such a mapping? Rosemary: The risk mapping was done in 2009, to help better target resources and identify priority areas on which the sector should focus. The allocation of responsibilities was then also identified as a key issue. The plan is to have another study to see to what extent we have achieved our targets and to see whether we still face similar risks as compared to the start. However, the focus will also have to be more on anti-corruption, even though corruption is a cross-sectoral issue that is, therefore, more difficult to tackle. Gilbert: The first thing we developed is a baseline, indeed. If you are going to measure something, you better have a baseline. We established an action plan, which has actions for different sub-sectors which are monitored on a quarterly basis. Progress is then reported to the water sector working group, where senior officials are involved. Monitoring per quarter has been good practice and is significant. We have also raised the profile of the leadership of the GGWG: the GGWG is now a recognized sub-sector working group. Recently, I handed over the chairmanship of the group to the under-secretary in charge of finance and administration in the Ministry of Water and Environment. The GGWG has been trying to help set up an independent water regulator in Uganda. Where do you see the big challenges and opportunities with such an action? Gilbert: I would say the biggest challenge is that the National Water Sewerage Corporation does not want a regulator. They feel they would be put under scrutiny. They deliver services but they don’t want to be accountable to the customer up to the last dollar. They do all sorts of things to delay the setting up of the regulator. However, every service or measure should be regulated. You need a good regulator who sets standards and tariffs and ensures that the quality of service is monitored and budgets are approved. There is a big demand and opportunity for it, but we have been dragging our feet. Rosemary: I think from my perspective, when you look at integrity and the totality of good governance, we definitely need to have contracts in place and agree on guidelines and principles in a participatory manner. This can only happen if there is a clear separation of roles, from the service providers, implementers, policymakers, water providers, and water users. You need to have a body that tries to ensure that all parties involved do not compromise each other or do not end up abusing each other, because one party might be more powerful than the others. This is the regulator. The will to set up such an independent regulator is maybe not entirely there yet: Uganda as a country still has many challenges. What are the plans of GIZ and the Ministry to assess the good governance indicators? Gilbert: We are working with the focal point officers on the indicators on integrity. What we have done and continue doing is that every focal point officer needs to keep track of the progress made in implementing the recommendations in relation to these indicators. Someone from the GGWG meets with these officers to check what is being done. Indicators 4 and 5 on budget allocation, for instance, are reported on a monthly or quarterly basis. Someone from the secretariat checks the quarterly progress reports and compares the data. We need to look at sustainability so that each sub-sector continues to provide the data. Sometimes we want to carry out a one-month assessment to see whether data is coming but are limited by personnel and financing. What are the next steps? How do we move forward for integrity? Gilbert: Strengthening the secretariat of the GGWG is a first step. Not many people like to talk about governance, and good governance and integrity are not the first point of call. Strengthening the secretariat is one of the affirmative actions to bridge the gaps we still face. We have a lot of support from technical advisors, but it should also involve more financing to get tracking studies going. The key is to also strengthen the personnel and budget of the GGWG. Moreover, raising the profile of the GGWG and working on good governance and integrity is also crucial, for instance by putting someone higher in the hierarchy to take over the chairmanship of the GGWG. And of course, we must continue to ensure that recommendations and progress reports are submitted to the sub-sectors. Rosemary: We first focused on making sure duty bearers perform to the best of their abilities. Some still act irresponsibly and abuse is visible. It is a priority. But now, I also see an increase in the awareness of rights holders. More people are getting to know their rights. The challenge is for them to implement or demand such rights given the environment. We need to focus more on getting back systems of action, effective monitoring, rewards for good work and sanctions where necessary. As the duty bearers are trying their best to do their work, the right holders also should have the capacity to demand for better services. An independent regulator will in this regard be important. Thank you! (These interviews were edited slightly for clarity.)

The XVI World Water Congress took place in Cancun, Mexico, from the 29th of May to the 3rd of July 2017 with “Bridging Science and Policy” as a topic. During the event, more than 1100 participants from 68 countries discussed the crucial role that the water and sanitation sector has in achieving the 2030 Agenda for sustainable development. WIN presented work led in collaboration with The Nature Conservancy (TNC) in Latin America, which is aimed at strengthening transparency and trust in stewardship initiatives like Water Funds. Science is by definition a neutral discipline based on experimental data and independent of political ideologies. But policymakers can be reluctant to accept scientific facts as primary evidence for policymaking, especially if these facts contradict special interests or are poorly understood. Two factors worsen this situation: the possibility to manipulate and distort data to fit certain interests, and the complexity of science for a non-specialized audience. The combination of these two factors can decrease people’s trust towards science. The intense political debate on climate change sciences is an obvious illustration. At the time of the Congress, the United States government announced its official withdrawal from the Paris Agreement. Although not a surprise, the news struck participants, resonating as a deep failure in the fight for protecting the planet from the negative impacts of climate change. A key ingredient for bridging policy and science is integrity. More transparency, accountability, and participation can help build trust and reinforce the synergy between science and policy. It is essential that water sector stakeholders take into account integrity principles and conflicts of interest more seriously, use science as evidence for better policymaking and steer scientific enquiry towards the most pressing social needs. Clarifying links to integrity risks when we discuss key water sector issues and policy solutions, can be a strategy to innovate and plan new ways of bridging the gap. In Cancun, this possibility remained implicit for now, but some stepping stones were set. It’s up to us water integrity practitioners to push further and clear away a more inviting path. Integrity is an implicit, cross-cutting issue in the water sector Water security was on everyone’s lips at the Congress. We heard it in the context of Integrated Water Resources Management (IWRM), the water-energy-food nexus, and water governance. In every case, water security conveys a central message: we need to make sure that water is and will be available to sustain livelihoods, human well-being, and healthy ecosystems. In many sessions, the examples that were presented in relation to water security were about conflicts or success stories of shared water resources around the world. Sharing scarce resources fairly and sustainably is central to the concept of water integrity and as such water security is very closely connected. Without a direct reference to integrity, participants also expressed their interest in many other integrity-related topics, for example: The lack of data on people not accessing water services, compared to the availability of data on water users. The few incentives to reduce non-revenue water, compared to the relative ease of getting investments for new infrastructure. The way better information does not necessarily imply better decisions because of the complexity of the decision-making process The importance of accountability to increase investors’ trust. The key role of civil society in fighting corruption and the challenging environment for such work. In relation to the last point, the Cancun Declaration released at the end of the event does urge for collaboration and engagement, in particular with civil society. It’s a small step in terms of recognizing integrity risks explicitly but a step in the right direction nonetheless. ‘They (water specialists) must engage with civil society to assert the role of water in human rights and nature.’ – Cancun Declaration Paths to introduce integrity into the water discussion Congress participants intensively discussed the water-related goals of the 2030 Agenda for Sustainable Development. The discussion highlighted the importance of interdisciplinary collaboration and the ‘3 “I”s’: Institutions, Infrastructure and Investments. It is important to note that these 3 elements relate to important integrity risks: misuse of key positions, bribery and collusion in procurement, and lack of transparency in the public budget. Integrity can be a new way to think of issues at hand and jointly develop fair, effective, and sustainable solutions. Water governance is another important and clear entry point. Good governance and water integrity go hand in hand. The Organizations of Economic Co-operation and Development (OECD) presented their latest work from implementing their principles on water governance, which emphasise integrity, transparency and trust. The new phase of the OECD Water Governance Programme includes a platform where water practitioners can share their experiences. The aim is to activate a fruitful dialogue for water governance. Integrity to support and enable water stewardship: integrity in Water Funds In Cancun, WIN presented the work it has carried out with TNC and the Water Fund of Medellin, Colombia. Water Funds are water stewardship initiatives in which public and private actors work together to provide water security to metropolitan areas by investing in natural infrastructure. These initiatives have been very successful and are currently considered a model of good practice. Many sessions during the Congress discussed different aspects of their structure. Water Funds rely on technical and scientific data to design their action plans. But such collaborative basin management also requires mechanisms to ensure open accountability, participation, and clear access to information for all stakeholders involved. Open collaboration and knowledge sharing among Water Fund stakeholders have been essential to their success. This relies on trust. WIN’s work on Water Funds (and World Water Congress presentation) focused on: The importance of trust and transparency as essential elements for the success of multi-stakeholder processes; The joint efforts of WIN and TNC to make Water Funds more transparent, secure and participatory; How a better understanding of the success of these initiatives in terms of integrity and effectiveness will be paramount to securing investments and fine-tuning their multi-stakeholder structures. The presentation led to a lively discussion. Some questioned the importance of participation, particularly that of civil society and of the youth. In response, we highlighted the big challenges for water governance in places where civic space is constrained and the importance of new technologies towards transparency. We argued that the experience of the Water Funds is a good example of how important it is to understand the positions, needs and interests of all actors.

Collective and organized action is crucial to reduce corruption and inefficiency. Water Funds are a good approach to make this a reality. – Mr. Alejandro Calvache (TNC) The Nature Conservancy (TNC) is a charity organization that works globally to protect ecologically important lands and waters for nature and people. TNC works together with communities, businesses, governments, multilateral institutions and other non-profit organizations. TNC launched the Latin American Water Funds partnership across Latin America and, more recently, Water Fund projects in North America, Asia and Africa. Water Funds are a model of long-term environmental conservation for watersheds that supply water to cities and communities. Mr. Alejandro Calvache is the coordinator of the Water Funds programme* in The Northern Andes and Southern Central America Region. He leads the use of technical and financial tools to promote long-term conservation schemes of supplying water basins. The governance of water supply systems has always been a pivotal theme for TNC, especially in Latin America. As a consequence, integrity is both a concern and a target. Water Funds are meant to offer a solid and transparent structure to channel public and private funds into trustworthy platforms for conservation initiatives. In this context, integrity can a) increase the effectiveness of such platforms, b) help achieve greater credibility and reduce reputational risks, c) foster long-term engagement with investors and communities, and d) build more trust among involved stakeholders. We conducted an interview with Mr. Calvache, who has worked with TNC for almost ten years, to find out why Water Funds have been so successful and what challenges TNC still faces in further promoting water integrity in the water sector of Latin America. How is TNC currently contributing to transparency in the water sector in Latin America? TNC has advanced a game-changing approach to improve key ecosystems responsible for water provision in several cities across Latin America. The Water Fund approach combines state-of-the-art science, better governance models, economic principles and collaboration with key stakeholders from the public and private sectors as well as civil society. This encourages participation and transparency in the water sector in Latin America. By focusing on the governance of water provision, TNC is committed to ensuring that water is used and supplied in a transparent manner, where all investments are glassy and expenditures are properly tracked. In Water Funds, large water users in cities like Bogota, Medellin, Quito, Rio de Janeiro, Mexico City and others, now invest in watershed protection projects. These projects are varied and can focus directly on reforestation or also contribute to helping local farmers improve their practices and diversify their income. By reducing the flow of sediments into the water, such activities have led to improved water quality at a fraction of the cost of building water treatment plants. Nature benefits from these projects too: restored forests and grasslands are key to capturing water and sheltering wildlife. To date, TNC has established 20 Water Funds in Latin America, which seek to increase public-private partnerships and collective action to increase transparency in water management. What current and future challenges do you see to reducing corruption in the water sector in Latin America? With regard to current challenges, we see the difficulty for public and private water-related initiatives to be articulated in an organized manner. We are working very hard to avoid dispersion. Collective and organized action is crucial to reduce corruption and inefficiency. Water Funds are a good approach to making this a reality. As for future challenges, these relate more to the ability to secure long-term financing for watershed conservation based on nascent water regulation frameworks, with clear control mechanisms in which civil society plays a permanent role. What factors have ensured that the Water Fund in Medellin has become so successful? First, the commitment from key stakeholders from the early stages of the design phase was crucial to setting up a successful Water Fund in Medellin. For example, Empresas Publicas de Medellin, the environmental authorities, and the private sector were strongly involved from early on. Second, cutting-edge science helped identify Water Fund goals in terms of areas for intervention and return on investment. Third, a clear and balanced public/private governance model established to operate the Water Fund was crucial. Finally, permanent dialogue between different Water Funds within Colombia and across the Latin-American region plays an important part in ensuring that the Water Funds operate successfully. What did the collaboration between TNC and WIN bring so far to the already ambitious objective of the Water Funds? The collaboration between WIN and TNC has brought additional tools that help evaluate and improve the performance of Water Funds. A first gulp from the glass of water integrity, which also helped in starting this collaboration, was the analysis of the governance structure in the Medellin Water Fund. The collaboration between WIN and TNC allowed the Medellin Water Fund team to assess current results and propose solutions to increase efficiency and transparency. Both these elements are very important to build trust and secure Water Fund operations in the long run. We are exploring how to use the methodology in other operational Water Funds in Latin America. There are several actions that TNC wants to focus on in the future to further promote participation and transparency in the way Water Funds operate. These actions have been explored in collaboration with WIN. We want to further strengthen governance models of operational Water Funds. This could mean defining clear enabling conditions for consideration before the design of new Water Funds, to make sure any new Water Fund is efficient, transparent and sustainable. TNC will also be implementing robust science-based monitoring protocols to quantify key impacts in water quality, water regulation, and economic and socio-economic benefits delivered by Water Funds on a regular basis. Where do you see key areas of collaboration with the Water Integrity Network in further pushing for more integrity in the water sector of Latin America? Together with the WIN, we see opportunities to share best practices, lessons learnt and experiences in designing Water Funds in the region. TNC would like to replicate the Water Fund model in different geographies across the world. Collaboration with partners can help us jointly improve the health of watersheds and can play a role in increasing the scale of results in watershed conservation initiatives. The experience WIN is bringing into this partnership transcends the mere integrity assessment and supports the need for more participated approaches in funding the water sector. WIN can help TNC in identifying replicable ways to ensure the right balance of interests gravitates towards watersheds. And, since WIN is a global network, strong collaboration is essential to reach such a scale across the world. *About The Water Fund Programme Water Funds operate through investments and leveraged resources generated and assigned to preserve the basin through conservation actions. These funds aim to invest in nature to increase water security in 40 Latin American cities by 2020. These investments are focused on keeping intact natural areas, restoring the lands along the watershed and river corridors and implementing management practices that minimize the impacts of the activities of land use in the quality and quantity of water. The Water Fund in Medellin, Colombia is one of the most successful Water Funds in the region. This particular Water Fund is capable of collecting public and private funds for the conservation of the watersheds providing water to Valle de Aburrá, including the City of Medellin. In early 2016, WIN discussed with TNC the possibility of making Funds even more transparent, secure for investors and communities, and capable of building trust among stakeholders. It is crucial to have mechanisms to strengthen accountability and promote different levels of participation, to ensure that people of the basins can have access to relevant information on results.