Examination of Witnesses (Questions 140
- 159)
TUESDAY 12 DECEMBER 2006
PROFESSOR TOM
FRANKS, MS
VICKY CANN
AND MR
ANTONIO MIRANDA
Q140 John Battle: And should donors
and NGOs be supporting that capacity building and reinstating
training?
Mr Miranda: Absolutely, yes.
Q141 Ann McKechin: Professor Franks,
you mentioned in your written evidence that DFID should actively
support critical and analytical work in water governance. We have
heard this morning from Professor Cairncross about how municipal
authorities should try and incorporate the informal and sometimes
the illegal market which provides water and sanitation. So I wonder
to what extent a donor such as DFID could help to promote better
regulation, given the fact that there is such a large informal
market in existence in the developing nations.
Professor Franks: It is certainly
very important for DFID to continue to work at a better understanding
of how informal community organisations can work to provide services
for their communities, and sanitation in particular. We had a
very interesting seminar just two weeks ago when Professor Duncan
Mara, who is an expert on sanitation, and I do not know whether
he provided evidence, was talking about condominial sewerage in
Brazil[1].
There were some very interesting ideas there, that condominial
sewerage requires community organisation, which we know from many
other sectors within the general water sector are quite difficult
to develop, so I think DFID needs to continue to support improved
understanding of how communities work together at the local level
and to accept that there will be differences in different locations
in different contexts.
Q142 Ann McKechin: So it is good
to have an individualistic approach to whichever country it happens
to be operating in rather than a uniform policy?
Professor Franks: I think so.
To be honest, in everything that I have heard this morning I think
we are all striving with a dilemma. We want to get more bang for
our bucks and yet we know that water and sanitation is a very
individualised, contextualised sector and it is difficult to get
these solutions that operate in many different contexts and on
many different scales.
Q143 Ann McKechin: We have mentioned
about corruption and I think all the evidence this morning has
been that it is not the same as governance but it is part of the
problem and is an issue that needs to be tackled. Again, just
what do you consider are the best strategies that work in the
water and sanitation sector? You were talking about major contracts
and John Battle was talking about at some stage there will be
major contracts involved, particularly with private contractors.
Is there some way in which DFID could provide advice on contracts
and the best way to try and combat corruption in that process?
Professor Franks: Corruption is
important in this sector, as in many other sectors, and I am pleased
to see that there are a number of different initiatives under
way. There is the Water Integrity Network, there is increasing
emphasis on better procurement procedures and that is operating
in this country. I can see some of the big players in the market
looking and feeling quite uncomfortable because the questions
are being asked. I think DFID can continue to support good practices
in procurement. We do know what they are. It is amazing to me
that Nigeria did not even appear to be attempting to follow good
procurement practices until quite recently and now the pressure
is coming on them and they are beginning to get better at it.
Q144 Ann McKechin: You are talking
about one of the major countries in Africa. It does seem surprising
if bilateral donors or multilateral donors are involved in these
contracts that there has not been some sort of consensus about
what procurement policy should be used in terms of investment.
Do you not think there is a need for donors to reach some agreement
about how procurement policies should be used for loans and grants
provided by them?
Professor Franks: We understand
how procurement in a general sense should be done and most of
the international financing agencies have similar approaches to
procurement. I guess the problems now may be appearing because
we are beginning to look at different arrangements. We are moving
beyond the traditional contractor/client relationship. We are
looking for different types of financing, different partnerships.
My colleagues on either side are right into that, and that, I
suppose, is bringing us into areas of procurement that we perhaps
do not have so much experience of and maybe there is something
that could be done there to start to formalise that experience
and see what is best practice.
Mr Miranda: May I add something
on this issue? We usually have news and information about conditionalities
which are imposed by international financial institutions in general.
It would be very welcome if in this regard there were conditionalities
for accountability, transparency and democratic decision-making
processes. This helps very much in tackling corruption and mismanagement
not only of money but also of the situation of the population.
Q145 Hugh Bayley: This question is
to both Professor Franks and Mr Miranda. What proportion of capital
works for water and sanitation in the developing world would you
estimate is lost through corruption and what proportion of water
in those countries is not paid for by customers because of some
corrupt practice?
Professor Franks: On the first
one, the corruption, I have done no studies. I cannot speak as
a result of actual investigation but at our recent seminar someone
said, the figure is that 40% is lost through corrupt practices,
and the speaker who said that said, "Look: there is absolutely
no evidence that it is anything like as high as that". That
interested me because without going into a study how can you tell,
but I did not get the feeling that it is so very high. It is important
but solving corruption is not going to solve our problems.
Mr Miranda: I have heard the same
numbers but I have another remark to make. Two weeks ago I was
at a meeting promoted by OECD and the World Bank in Paris and
it was a little bit scary because there were big players in the
water sector, including the big multinationals, and then the corruption
issue was raised and I was surprised when they said, "Welcome",
but then the corruption that they were mentioning was about meter
readers receiving bribes. Okay, this is not the main part of the
problem for sure. We have a high level of corruption in the water
sector. I do not think it is very different from other sectors.
I do not see any reason to believe that water corruption is more
than energy corruption or anything else. Again, thinking about
sustainability, if we want to decrease the level of corruption
let us increase the level of transparency and accountability again.
A clear environment on the decision-making process helps very
much in this but I have heard the same number, 20%. I think it
is a very high number to be believed in this way and I do not
know about the roots of this research.
Q146 Hugh Bayley: May I ask a further
question? If the antidote to losses from the sector to corruption,
whether it is 40% or 20%, is transparency what would your order
of priorities be for whether transparency is needed within government
ministries, within local government, within the private sector?
Who are the biggest culprits and where would transparency produce
the biggest dividend for the poor? If 20% of the money is stolen
then 20% of the poor do not have toilets or water. Where do you
target the transparency measures?
Mr Miranda: Of course, we are
talking about different institutional frameworks, depending on
the country. In countries where the decision-making process is
centralised by national governments, of course, you have to have
accountability and transparency at the federal level, but as a
principle I would say that this should be a bottom-up process,
meaning that the communities that eventually will benefit by some
intervention, some works, should be the first to listen about
the issue. Ordinary people are not engineers, are not biologists,
but they can play a very important role in asking essential questions
and they have the sense of reality that many times our experts
do not have, so it is coming from the roots and listening, and
I bring the vision from a public sector decision-maker, as I am.
If you go to the neighbourhoods, if you hear from them about their
needs and you build together with them these mechanisms to follow
up things before sending a request for loans or grants to other
countries, this will help very much for sustainable services.
Q147 Hugh Bayley: Are public sector
institutions or providers more susceptible to losses through corruption
than private companies?
Mr Miranda: I do not think so.
I will give you an example about the Brazilian situation. After
privatisation of the electricity providers some studies showed
that corruption was the same or had become worse. Private sector
practices have corruption as well between themselves. They are
accustomed to asking for commissions to purchase from this supplier,
not from the other, so it happens all the time in car sales and
everything that you can imagine, but, of course, if you have weak
legislation, if you have weak justice procedures, it facilitates
dishonest public managers practising corruption, but again, if
they have to be accountable, if they have to be transparent, things
become more difficult for them.
Ms Cann: Could I follow up on
that point about public operators? Certainly some of the reformed
public operators that we have looked at in Dhaka in Bangladesh
and in Phnom Penh in Cambodia, a reformed and restructured public
operator absolutely prioritised paying staff a decent wage and
that, I think, has been very significant in tackling the low level
corruption because previously the workers were not on a reasonable
wage and so therefore there was a real incentive for them to take
backhanders and do connections in a not appropriate way. That
simple fact of paying a decent living wage as part of the wider
restructuring has been very significant in tackling the local
level corruption which is part of the problem in terms of people
not having faith in the delivery body.
Hugh Bayley: But the same applies to
the private sector.
Chairman: That has partly been answered.
Joan Ruddock is trying to get in.
Q148 Joan Ruddock: Yes, I have seen
a number of my questions being answered before I have even reached
them, but I will ask a different witness to reply perhaps. Mr
Miranda spoke about what I think he saw as the value of having
more locally rather than nationally and centrally controlled structures,
not least in terms of transparency and possibly affecting corruption.
I wonder if Professor Franks could tell us how he thinks local
government structures can be strengthened in the water and sanitation
sector given that there is a lack of capacity and perhaps a lack
of capacity building, as Mr Miranda has suggested.
Professor Franks: There is a need
for capacity building and I would absolutely agree that the main
need is at the local government level, the district level. We
do quite a lot of capacity building but very often we retreat
into training as the easy thing to do in capacity building and
I think we all realise that training only has a limited value
in itself. It needs to be done within a context, and I very much
agree with the previous witness from the IWA that we should be
looking at complementary ways of supporting capacity building
and this idea of networking and exchange visits and twinning and
so on. I am sure there is good potential in that area. Good capacity
building needs to take place within a good policy environment
but primarily it then has to balance what we do with the individual,
how the individual develops their own skills and how the institutions
can be changed and improved in order to allow them to practise
their new skills. I think local level exchanges are a very important
way ahead.
Q149 Joan Ruddock: How do you think
governments can be assisted so that they can support local officials
better, and particularly, as Vicky Cann alluded to just now, the
question of the payment of such officials?
Professor Franks: Clearly rates
of pay are significant. The low level corruption that makes it
difficult for a Tanzanian villager to get their water or their
services or whatever is a great problem and so any processes which
allow more realistic salaries to be paid and better conditions
for those whose responsibility it is to deliver services must
be a good thing. Again, the problem is how is it done at the individual
level and how can it be done across a country like Tanzania? These
are not easy issues and I wish I had an answer for that. It is
certainly something that we should be trying to support.
Q150 Chairman: It is interesting
that in Malawi, for example, DFID have a particular programme
for supplementing the pay of medical staff, nurses and doctors.
Is there scope for doing that, both to help recruit and train
people? Would that be a contribution that would strengthen the
base?
Professor Franks: It could be
good. I pick up on Mr Miranda's point about sustainability. I
am afraid we have got many examples round the world where we set
such structures in play and then, for whatever reason, they no
longer operate.
Q151 Chairman: Sustainability is
obviously a key part of that. If we are saying that this is the
most off-target MDG, and we talk about health and AIDS and malaria,
the reality is that the public health area in this context is
going to reduce the pressure on other health services because
you do not then have children dying and being hospitalised with
diarrhoea and other related illnesses. The question, I suppose,
is how do you strengthen the capacity and is there a role for
DFID in doing that?
Professor Franks: Capacity building
does work in many different situations and we know that it requires
a combination of training and institutional development of one
sort or another. I suppose the need for this sector is to prove
that it is better to invest pounds in capacity building, in water
and sanitation, because that has benefits in other sectors.
Q152 Chairman: Perhaps I can turn
to Mr Miranda. You have been running a municipal water authority
in Brazil for many years and you mentioned earlier the importance
of democratisation, transparency and accountability. I guess from
our briefing that this is talking from experience rather than
theory.
Mr Miranda: Yes.
Q153 Chairman: I wondered if you
could perhaps share with us how in Recife you have done this.
We note that you particularly involve women in the decision-making
process. How have you managed to do that? How does this democratisation
function? From your point of view to what extent do you think
it has helped you deliver the services better than you might have
been able to by just being a benevolent dictator in charge of
the city services?
Mr Miranda: We are part of a more
comprehensive initiative which we call in Brazil participatory
budgeting. It means to involve the population in decision-making
about budgets or investments for the next year. People elect their
representatives and they discuss among themselves the priorities,
and of course the money is not enough to cover even one tenth
of the amount, but they manage to reach an agreement among themselves
with the participation of the public sector only as a mediator
in the discussion as a whole in providing budgets and technical
solutions for the needs that they declare, so it is not out of
the blue, this participatory model on water and sanitation. It
is part of a bigger context. In the case of Recife, it had what
we call the municipal conference, meaning 20 neighbourhood meetings
raising the issue of the need for improvement of water and sanitation
delivery in the city. Out of these 20 meetings we had an election
of delegates. 4,000 people participated at these 20 meetings and
elected their representatives and we had a seven-month long process
of capacity building. We brought everyone to the scene to talk
with these people, people who were defending privatisation, people
who were opposing privatisation, people who were defending municipal
participation as the solution of the modernisation problems or
who said, "No, this is too big for municipalities. It needs
to be addressed by national government". After this seven-month
long process 163 decisions were taken. It is a very important
point. This process as a whole was set up by the mayor as a deliberative
process, meaning that he would accept any decision that was taken
by this process. In the end we had very important decisions. One
of them was to avoid privatisation. Now let me talk a little about
conditionalities, how bad they can be if they are chosen wrongly.
We were negotiating along with the World Bank at that time, partly
from the municipality of Recife and the stakeholders. There was
a clause imposing privatisation of the projects, the perimeter
of the projects, 150,000 people. Because of this process of discussion
with the delegates of this conference we could stop this process
and we could say to the World Bank very firmly, and the mayor
could say it very loudly, "We will not sign this loan contract
with this clause", and the negotiations almost ended. It
was not a small amount of money. It was an US$84 million appeal
for the Recife situation.
Q154 Chairman: When was this?
Mr Miranda: 2004.
Q155 Chairman: Because the World
Bank maintain that they are not making these kinds of conditions
and have not been for some time, so in 2004 they were trying to.
Mr Miranda: I am afraid that it
will take some time before practice follows the speeches. Anyway,
we could avoid this clause and it was in the last round in Washington
and the delegation of the World Bank actually had left the room.
They said, "We do not discuss it. There will be no loan",
and I was very much backed by my mayor in saying, "We are
not going to sign". Then they asked for five minutes and
came back 30 minutes later and said they were going to make a
very exceptional measure in that case and they would not impose
this clause. The point is, regardless of whether the decision
is about the involvement of the private sector or not, this must
come from the communities. We can never take a decision like that
without listening. We have other very good examples in Brazil
that we do not have enough time to talk about, but in Porto Alegre
since 1961 there has been a supervising committee that is composed
of supervisory organisations, professional organisations. There
are 13 members. One member is appointed by the mayor. The other
12 members by municipal law are appointed by their own organisations
and this has worked since 1961 and works very well. Mayors come,
mayors go, and sometimes change from one extreme of political
wing to the other, but the utility, the municipal department,
is always improving. To give you an idea, the average surplus
is 20%, meaning that 20% of the revenues are 100% dedicated to
new investments, to improvements in the system. There is one of
the cheapest tariffs in Brazil. Secondly, 99.9% of programmes
are very close to catchment areas, there is 80-something per cent
of coverage on sewerage and 70-something per cent of the sewerage
is treated and that figure is improving. There will be 100% for
everything hopefully over the next three or four years, due to
supervision from outside of government, so this is very important.
Q156 Chairman: On the particular
point about women's participation, I was going to ask you what
specific difference did the view of women make? To what extent
did you change what you were doing because of the views that the
women had?
Mr Miranda: If water and sanitation
are lacking in terms of efficiency, women and children are the
most affected of all. There are mechanisms in some places in Brazil
that ensure women's participation. In Recife it was not needed
to ensure any kind of mechanism because they were there already,
and as the main actors of this process they raised their voice
and they were part of this mechanism. Most of the delegates at
that conference I have mentioned were women. There are a lot of
places where they have to ensure that X% of the delegates should
be women but needless to say in Brazil and any developing country
the women are the ones that suffer most in terms of lack of water
and sanitation services.
Q157 Ann McKechin: I wonder if you
could say to what extent you think the fact that you may have
had relatively strong municipal and regional government had a
part to play in creating a successful water authority and also,
just to mention the gender aspect, what is the percentage of female
representation on municipal and local councils?
Mr Miranda: We have different
performances for that. For instance, in Porto Alegre they have
no women among these 12 but they have a role on the approval of
the budget. In terms of management—you mean the elected
officials, right?
Q158 Ann McKechin: Yes, the elected
councillors.
Mr Miranda: They follow up. They
are a kind of check and balance. They are monitoring. There are
the direct representatives from the civil society organisations
and then there is another layer which could be the municipal councillors.
Q159 Ann McKechin: I am only trying
to find whether it is because there may have been already representation
of women on municipal and local councils that the issue of gender
was then incorporated into discussions.
Mr Miranda: Maybe this is a good
question. I do not have a ready answer for that but I will reflect
on that.
1 BCID Seminar on Water Governance for Africa, Bradford
Centre for International Development, University of Bradford:
Low-cost water supply and sanitation technologies: Too low-cost
for adoption? Duncan Mara, School of Civil Engineering, University
of Leeds. Copy placed in the Library. Back
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