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Memorandum submitted by AquaFed Introducing AquaFedAquaFed is the International Federation of Private Water Operators. Membership of the Federation is open to companies of all sizes and from all countries, it aims to contribute to solving water challenges by making Private Sector know-how and experience available to the international community. It brings together more than 250 water companies that serve people in 38 countries. The Federation represents operators working in the field that range from very small local businesses, through mid-size companies to some of the largest international operators. A high proportion of the companies that are members of AquaFed are operating in the developing world. The Federation is an international organisation. It seeks to support the activities of its members or specific country based associations by involving itself in issues that have an international dimension. AquaFed does not operate at a national or sub-national level. It takes great care not to infringe on or substitute itself for national or local interests in any country. AquaFed was formed to respond to a recurrent demand from numerous international institutions for the private sector water operators to create an association that would enable these institutions to talk with the operators collectively as an industry. Created in 2005, AquaFed is still a young organisation. It is continuing to grow its membership and its outreach. For further information about AquaFed, please visit our web site at www.aquafed.org We reiterate our position of not involving the Federation in issues that concern domestic policy. In addition our role is not to comment on British international policy. We are clearly not conversant with all the activities of DFID or other relevant parts of the British Government. For the avoidance of doubt, in this submission we represent companies that are operating in developing countries, including countries that receive British development assistance. Our response does not necessarily represent the views of all the British private water operators, and our submission should be construed with this clearly in mind.
Submission of evidence 1. AquaFed, the International Federation of Private Water Operators, is pleased to take this opportunity to respond to the call to give evidence to the International Development Committee's inquiry into DFID and the World Bank. In this response, AquaFed represents companies from several nations as well as Britain that are operating in developing countries including those that receive British development assistance. This response may not represent the views of British water operators that are not members of the Federation. 2. AquaFed was pleased to have had the opportunity to have made a contribution to the previous inquiry on water and sanitation (WAS WE 27 & Uncorrected Evidence 57). The executive summary of the former is annexed to this memorandum. A number of the points that we made in those submissions, appear relevant in the context of this inquiry. In particular our comments on measuring performance and supporting good governance as a precondition to achieving sustainable results. We encourage the British Government, DFID and the World Bank to pursue these objectives through coordinated policies and actions.
1. Stimulating projects that maximise results for the poor 1. To meet its objectives, it is important for the British Government and for British taxpayers that DFID manages the expenditure of the money entrusted to it in the most efficient and effective manner to achieve the best results. 2. This requires DFID to measure the results in terms of lives improved where the money is spent. It needs to compare this ultimate measure with the money provided by taxpayers to obtain an indicator of the efficiency of the processes that it uses to undertake its work. 3. Pooling some of the UK's aid money with other countries through Multilateral Financial Institutions can be an effective way of working. But DFID needs to know what proportion of the money that is passed to the World Bank reaches those in need in the field. DFID needs to measure its own contribution to the MDGs even if its funds pass through third-party agencies. 4. This also means that DFID needs to set its own conditions when accepting to contribute financially to a project or a policy in the water sector. These conditions need to be understood and agreed between all the parties and designed to maximise the impact of the aid on the poor people. 2. Answering the needs of water sector: Securing financial leverage and targeting local authorities' needs 5. Three high-level world panels have issued to governments the same recommendations in the past 4 years. The "Financing Water for All" reports chaired by M.Camdessus in 2003 and by A.Gurria in 2006 and the Hashimoto Action Plan released in 2006 by the UN Secretary General's Advisory Board on Water & Sanitation all recommended that donors like DFID use significant parts of their development aid: - to mobilise increased volumes of non-aid financing flows by using ODA as a catalyst that facilitates the application of funds from other sources to water projects - to target the needs of local authorities / operators through facilitating their access to finance 6. Working together DFID and the Multilateral Financial Institutions can do more to achieve these goals in the water and sanitation field when they engage in supporting specific projects or in enhancing local financial markets conditions for water utilities. 3. Continuing joint applied research for Development 7. The World Bank is a leading organisation in promoting and conducting applied research into development processes and in providing high level policy advice. Much of its work is supported by the real field experience gained on projects that it sponsors. In the water and sanitation sector, initiatives like the Water and Sanitation Program (WSP) and the Public Private Infrastructure Advisory Facility (PPIAF) give very practical insights into real problems and propose sustainable solutions to them. These are good examples of pooled efforts. This effort must be continued. 4. Even-handed and continuous support to development agents to maximise efficiency in the field 8. When DFID or the World Bank partner with development agents, such as NGOs, private sector investors or operators in projects, especially in experimental or pilot projects, they should see these projects through to their conclusion, maintaining an even-handed and fair approach between these agents, the host governments and the taxpayers. This is necessary to maximise efficiency in the field through the continued commitment of all potential actors. 9. In this context it is particularly important that DFID and the World Bank maintain consistent support to operators who agree to undertake projects in weak governance zones to further international development objectives such as the MDGs. To meet these policies in weak governance zones, these companies are required to assume risks and to make long term commitments that need continuous institutional support. DFID, the World Bank and other International Institutions should recognise that ensuring long term support to these projects is essential to meet the objectives and contributes to strengthening the governance systems in the countries where they are undertaken.
October 12, 2007
ANNEX Memorandum submitted in October 2006 by AquaFed to the International Development CommitteeExecutive Summary 1. AquaFed, the International Federation of Private Water Operators, is pleased to take this opportunity to respond to the call to give evidence to the International Development Committee's inquiry into water and sanitation. In this response, AquaFed represents companies that are operating in developing countries including countries that receive British development assistance. This response does not represent views of British water operators. 2. Being an international Federation of private operators, AquaFed has restricted its comments and evidence to matters of general interest or concern to development at the worldwide level. We have tried to avoid making any specific points about British policy or the conduct of DFID, since these are national issues largely beyond our remit. 3. AquaFed is encouraged by much that the White Paper contains. We very strongly support the emphasis on governance, creating effective states and combating corruption. These are essential prerequisites for development and poverty alleviation. We look forward to seeing how these policies can be turned into actions, and how they might lead the way in international development. Our members would be pleased to be involved, where appropriate at field level. 4. Water and sanitation feature throughout the paper, but we consider that these essential services, should have a still higher profile. Water and sanitation services underpin and enable so many of the other development objectives and all of the MDGs. 5. Our members' experience at many different scales in the developing world clearly shows that private sector operators can make a very useful contribution to water and sanitation development objectives. In recent years, their contribution has often been misrepresented. Their ability to perform in the field has been impaired by many of the issues discussed in the paper, including lack of good governance and corruption. 6. In our evidence, we make the distinction between "governmental" and "operational" issues. Both are essential and need to work in close association and partnership with each other. Governmental issues can only be carried out by properly empowered government structures. For water and sanitation, these usually need to be local governments or water authorities. Operational activities can be carried out by a wide range of organisations from public and private sectors, civil society, and even individuals. Almost all the challenges facing water services delivery are the same irrespective of which sector the operator comes from. Our evidence therefore advises against treating the sectors separately. 7. International donors and aid agencies should continue to work to make sure that local decision-makers have the choice of the full range of options including effective methods for supporting the existing public sector, as well as the various different institutional ways in which the private sector can be called upon to make its contribution. 8. International donors should contribute to facilitate access to long-term finance at reasonable interest rates for local operators, public or private. 9. We have outlined a number of practical points that we believe would enhance the ability of all operators, including the private sector, to deliver more and better services thereby reducing poverty and contributing to meeting the MDGs. These include actions by donors and governments in: o Targeting results o Reinforcing rule of law to build confidence o Providing Financial support and using ODA to catalyse other funding o Implementing recent developments in international financing o Involving commercial banks and micro financing o Supporting local governments and their choice of service delivery model o Engaging in capacity building o Facilitating transfer of technology and know-how o Stimulating more projects o Implementing the right to water o Focusing on practical and case specific solutions o Supporting the participation of operators of all sizes including small-scale operators o Encouraging Public Private Partnership contracts o Contributing to the anti-corruption drive o Assisting Water Operators Partnerships o Sponsoring and supporting research and development.
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