Memorandum submitted by the World Business
Council for Sustainable Development (WBCSD)
1. INTRODUCTION
1. The World Business Council for Sustainable
Development (WBCSD) would like to submit written evidence in response
to the above inquiry.
2. The World Business Council for Sustainable
Development brings together some 180 international companies in
a shared commitment to sustainable development through economic
growth, ecological balance and social progress. Our members are
drawn from more than 30 countries and 20 major industrial sectors.
We also benefit from a global network of more than national and
regional business councils and partner organisations.
3. Our mission is to provide business
leadership as a catalyst for change toward sustainable development,
and to support the business license to operate, innovate and grow
in a world increasingly shaped by sustainable development issues.
4. Our objectives include:
— Business Leadership—to be a
leading business advocate on sustainable development; Policy
Development—to help develop policies that create framework
conditions for the business contribution to sustainable development.
— The Business Case—to
develop and promote the business case for sustainable development.
— Best Practice—to demonstrate
the business contribution to sustainable development and share
best practices among members.
— Global Outreach—to contribute
to a sustainable future for developing nations and nations in
transition.
2. THE WBCSD
AND WATER
5. Water and wastewater management have
been among the sustainable development issues that have concerned
the WBCSD for many years. Water and poverty alleviation was one
of the key issues that the Council selected for its focus at the
World Summit on Sustainable Development in Johannesburg in 2002.
It published a report entitled Water for the Poor. Another
subject is energy and climate change.
6. Over the last two years the WBCSD has
been conducting one of its major "council" projects
on water. This project has been concentrating on water as a business
issue, which is seen to be of growing importance as pressure on
this vital natural resource increases. It has been recognised
that without water there can be no business, or that "business
cannot thrive in societies that thirst". Water is vital
to business, and business is vital to social and economic development.
7. The project has produced two important
documents that we would like to place before the International
Development Committee, since we believe that these are relevant
to the water and sanitation inquiry. The first of these documents
is called Collaborative Actions. It examines the different
ways in which business can and should engage with the rest of
society over water issues. The second document is a report called
Business in the World of Water—WBCSD water scenarios
to 2025. This outlines three different scenario stories that
describe alternative water futures as they develop over the coming
20 years.
8. We believe that all three of the documents
cited above are relevant to the enquiry and therefore present
them briefly in turn. They address many of the issues set out
in the terms of reference for the inquiry, particularly the role
of the private sector, public private partnerships, governance,
financing, capacity building, urbanisation and economic development,
and societal issues.
3. WATER FOR
THE POOR
9. This document was researched and written
following the Bonn water conference, as a contribution to taking
forward some of the Bonn Recommendations to the World Summit on
Sustainable Development. While some of the details and case studies
are now dated, the discussion in the paper is still highly relevant
to the inquiry. In this context, we would also suggest that your
inquiry should revisit the conclusions of the Bonn conference.
10. The paper examines the imperative of
providing water services to the poor from three angles: the business
case, governance and capacity building and financial resources.
11. We summarise these with extracts from
the executive summary in the following three sub-sections.
3.1 The Business Case
12. The WBCSD believes that there is a strong
business case for doing more to deliver fresh water and basic
sanitation to those billions of poor surviving without access
to this resource so vital to life.
— Access to clean water is one prerequisite
to poverty alleviation.
— Access to basic water sanitation
improves public health immediately.
— Access to safe water supply and sanitation
accelerates movement towards sustainable development.
13. The urban mega-cities of the developing
countries will be the growth markets of the future. Most forecasted
population growth will take place in these cities. It makes economic,
environmental, and social sense that these urban centres be good
places in which to work and conduct business. Water services for
the poor will be crucial in assisting developing countries become
part of the affluent world. Business cannot succeed in societies
that fail. The potential for market expansion to serve the world's
four billion poor should be viewed as a business opportunity.
14. This report discusses several of the
most important recommended actions of the Bonn conference along
with business suggestions to move the agenda forward.
3.2 Governance and capacity building
15. Water for the Poor starts with
governance and capacity building, because without enabling framework
conditions, many nations are doomed to continue the failed policies
of the past. This means the status quo for the 1.2 billion people
without access to fresh water.
16. Neither the public sector nor the private
sector can deliver water services efficiently in the absence of
an enabling framework. The argument whether water should be provided
by the public or the private sector loses sight of the core problem.
The issue is not public versus private. The issue is efficient
versus inefficient. For something so basic as water, society cannot
afford inefficiency. Water for the Poor puts forth the
hypothesis that public private partnerships to deliver water services
are the best—most efficient—way forward.
3.3 Financial resources
17. The report addresses how to make sound
financing changes to ensure that fresh water will be affordable
for the poor.
18. Water for the Poor endorses the
recommendation of the Bonn Conference and that from the Second
World Water Forum (The Hague 2000) calling for full cost recovery
pricing to be phased in as soon as possible. The WBCSD report
proposes financing changes to ensure that fresh water will run
towards the poor at prices that are affordable—or to use
creative tariff charges that cross subsidize the poor through
above-cost charges to affluent consumers and those using large
quantities of water. The pricing issue is directly related to
the governance and capacity building issues in chapter one. The
public, both rich and poor, need assurance that they are obtaining
water at fair costs. An independent regulatory authority to protect
the public interest and the investors as well is one way to provide
this assurance. Only then will there be a degree of public confidence
to support water prices needed to operate and maintain an efficient
system and finance new infrastructure to serve the poor.
19. The single greatest myth preventing
action is that the "poor cannot afford to pay for water service".
The poor who are not connected to a functioning water distribution
system already over-pay for water.
20. The WBCSD report also makes four specific
recommendations on how Overseas Development Assistance funds for
water could be used most effectively.
21. The business community is in agreement
with Bonn Action 16 to "make water attractive for private
investment".
22. Many of the ideas and actions proposed
in the "Water for the Poor" document have been developed
since through the work of the WBCSD focus area on development.
However since in general this work covers a wider range than water
and sanitation, we will not refer to them further here. They may
be of interest in the wider context of the International Development
Committee's ongoing work. The WBCSD would be pleased to make this
work known to you if an opportunity arises.
4. COLLABORATIVE
ACTIONS
23. Collaborative Actions for sustainable
water management—The role business can play as an
active stakeholder in collaborative processes for water management,
is a discussion paper, designed to assist businesses to engage
with other stakeholders over water related issues. It examines
three different types of situation and illustrates them with case
studies. We believe that this work is relevant to the aspects
of your inquiry relating to stakeholder involvement and governance.
24. Sustainable water management requires
collaboration between business, civil society and governments;
none of these sectors can deliver it on their own. Business has
a key role to play, but must work proactively with other sectors
in order to achieve lasting results. To clarify this business
role, the collaborative actions have been divided into three sections
as follows.
25. The first set of situations is called
"business taking the lead". Here businesses can
take a lead through their own activities and demonstrate sustainable
water management in their operations, products and services.
26. "Working with civil society"
shows how businesses can work in partnership with local communities.
This section includes actions and case studies showing where businesses
can work with local communities to ensure better water provision
for those communities.
27. "Supporting good governance
and development" presents actions and case studies showing
how business can work in responsible interaction with governments.
By helping governments take the lead, and working together with
all stakeholders, businesses can help to achieve lasting improvements
in water management.
28. The 14 different case studies illustrate
from real business experience the way different activities can
contribute to good corporate and social governance and how these
actions can help to resolve many of the issues raised in the inquiry's
terms of reference.
5. BUSINESS IN
THE WORLD
OF WATER
29. Business in the World of Water—WBCSD
water scenarios to 2025, is the report produced in conjunction
with the scenario planning project. Close to 200 participants
from different cultural and professional backgrounds were involved
in this 2.5-year project. Nearly half were from business; the
rest were from NGOs, governments, and academia, and other institutions
dealing with water issues.
30. Through a series of facilitated regional
workshops, the key issues and drivers that are likely to affect
the future of water and wastewater for business over the coming
20 years, were identified. These are described in the report under
the headings of "People", "Planet", "Past
legacies", "Politics" and "Policies".
31. Based on this understanding, three different
and contrasting scenario stories were developed. Each of these
tells a different story of they way water issues might play out
in the future. The stories have been called "H",
"2", and "O".
32. H is a story about the efficiency
challenge, which requires business to make the very most of
every available drop of water. The efficiency challenge calls
for the business response of innovation—in producing
new products and services, as well as avoiding or addressing the
legacy constraints (for example, established infrastructure and
technology standards, social habits and attitudes, and standard
business practices). Legacy behaviours and norms may have been
appropriate in the past (for example, in a context of abundant
cheap energy) and within a certain socio-economic and political
context (for example, national food security and the priority
this gives for agricultural water uses), but not for current or
future conditions (for example, increasing urbanization and post-industrial
economies).
33. 2 is a story about the security
challenge, which is to ensure that water is allocated or redistributed
and managed effectively and that there is enough (in volume and
quality) to meet all needs, including of those facing serious
water shortages, and of the ecosystem services and products on
which livelihoods and economies depend. The security challenge
calls for business to pay close attention to its social licence
to operate and its ability to demonstrate the validity of
its demands for allocations of water. Allocating a scarce resource
inclusively and fairly to ensure security for more people raises
issues of:
— Representation—Who participates
in the decision-making process and how.
— Legitimacy—What forms
of data, evidence and judgements are acceptable?
— Equity—Ensuring that
decisions are made fairly, especially when some may involve some
stakeholders giving up what they already have.
— Competency—How effectively
decisions are reached and implemented? How to face sudden crises,
or changing circumstances?
34. O is a story about the interconnectivity
challenge. This requires consideration of the interconnectivity
of larger contexts and many diverse stakeholders. Human security
and development cannot be isolated from the health and viability
of the earth's underlying life support systems. The challenge
to business in a global environment of increasing accountability
is to understand the business role in water governance—how
to fit into this dynamic, ill-defined, unpredictable set of systems
that culminates at the level of a truly global, interconnected,
whole system.
35. This scenario planning work contains
a number of innovative ideas and suggestions that we hope will
be of use in your deliberations.
6. NEXT STEPS
36. Scenarios offer both a framework to
assess and evaluate business practices and strategies, but also
can provide a platform for structured dialogue. Workshops will
be organised in individual companies, groups of companies or multi-stakeholder
gatherings.
37. The WBCSD Water Project has recently
identified the value to our member companies of an automatic water
metrics tool to link external data with a company's water inventory.
We will be developing this tool over the next year.
7. CONCLUSION
38. We trust that this material and our
comments will be useful to your inquiry. Please contact us if
you need additional information or clarification. We would be
pleased to elaborate with verbal evidence if you require.
October 2006
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