Launch of Global Corruption Report on water by TI

New report shows how corruption undermines the global response to the water crisis, climate change and food shortages

Corruption in the water sector is a root cause and catalyst for the global water crisis that threatens billions of lives and exacerbates environmental degradation, according to the Global Corruption Report 2008: Corruption in the Water Sector, released in New York on 25 June 2008 by Transparency International (TI).

When corruption occurs, the cost of connecting a household to a water network increases by up to 30 per cent, raising the price tag for achieving the Millennium Development Goals for water and sanitation by a staggering US$48 billion, according to expert estimates in the report.

The report, the first of its kind to explore the impact and scope of corruption in different segments of the water sector, identifies a range of problems, from petty bribery in water delivery to procurement-related looting of irrigation and hydropower funds; from covering up industrial pollution to manipulation of water management and allocation policies.

“Corruption’s impact on water is a fundamental governance problem, yet it is not sufficiently addressed in the many global policy initiatives for environmental sustainability, development, and food and energy security. This must change,” said Huguette Labelle, Chair of Transparency International.

Examples

For the Philippines, which has allocated close to US$1 billion for irrigation and related agricultural improvements, the report presents case evidence of how corruption has hindered the building and performance of irrigation dams. In India, a country at the centre of the crisis, corruption is estimated to add at least 25 per cent to irrigation contracts and the proceeds help maintain a corrupt system of political handouts and compromised oversight. In the end, investment costs rise, systems are rendered inefficient and small farmers are left especially vulnerable to water shortage.

Corruption in drinking water and sanitation emerges at every point along the water delivery chain; from policy design and budgeting to building, maintaining and operating water networks. It drains investment from the sector, increases prices and decreases water supplies. One result is that poor households in Jakarta, Lima, Nairobi or Manila spend more on water than residents of New York City, London or Rome.

Industrialised countries are not immune. Corruption has plagued the tendering of water contracts in cities like Grenoble, Milan, New Orleans and Atlanta. Likewise, cases of bid rigging and price-fixing in water infrastructure provision have surfaced in Sweden, while in Chicago water budgets fell victim to misuse for political campaigning.

Recommended actions

Key actions recommended by the experts to governments against corruption in the water sector include:

• Establish transparency and participation as guiding principles for all aspects of water governance.
• Strengthen regulatory oversight.
• Ensure fair competition and accountable implementation of water projects.

Read the full press release .