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Is South Africa outsourcing its water resources strategy to the private sector?

Private sector involvement in water services has been the face of struggle over the last decades. With growing attention to the scarcity of water and its importance as a resource, the private sector has shifted its focus to water resources. Although certainly a generalisation, many companies are land and water grabbing, developing new technological solutions, and asserting itself into key decision making forums at the national and international level. Their agenda is to establish a level of control that will extend and secure their profits for decades to come.

South Africa is in the process of updating its National Water Resources Strategy, which should guide water sector approaches and policies. Yet while all stakeholders await the long promised consultation and participation on this strategy, the Department of Water Affairs has established a far-reaching strategic partnership with big business, to the exclusion of public interest groups and local government.

At the World Economic Forum on Africa in late 2011, South Africa announced its partnership with the Water Resources Group (WRG), an influential public-private global network on water. Its key partners include The Coca-Cola Company, International Finance Corporation, Nestlé, PepsiCo, Swiss Agency for Development and Cooperation and Veolia Environment.

The focus of the WRG in South Africa appears technical. It is framed by the expectation of Water demand rising by 52% over the next 30 years alongside declining water supply, “largely attributable to urban and industrial growth” (since “South Africa has enacted legislative action freezing growth in agricultural water use demand”). Its two key focus areas are described as:

1. On Water conservation / demand management

  • Increasing water use efficiency (in agriculture, industry and households)
  • Leakage reduction from distribution networks (municipal and others, including irrigation)

2. On Diversifying the water mix

  • Reuse of effluent
  • Desalination (sea water and acid mine drainage)
  • Use of groundwater (development and sustainable management of groundwater resources, in particular for rural areas)”

Consistent with these focal areas, “a small public-private task team will explore the potential for industry-municipality collaborations to upgrade and rehabilitate inadequate / deteriorating wastewater treatment infrastructure (noting however, that wastewater treatment remains the responsibility of municipalities). This exploration will be placed within the wider economic analysis of the contributions such collaborations can provide to closing the water demand/supply gap by 2030).” (http://www3.weforum.org/docs/NR_SADWA-WRG_PartnershipDeclaration_2011.pdf)

The main aim is to identify a pipeline of potential projects and a strategy for their replication, as well as establishing public-private expert collaborations.

To oversee progress on these projects, a South African Strategic Water Partners Network will be co-chaired by the Director General of the Department of Water Affairs and a representative from South African industry. The NEPAD Business Foundation will coordinate its activities and monitor progress. Although seemingly multi stakeholder, it is comprised of government and business/ industry/ finance, with civil society organisation representation limited to the World Wildlife Fund South Africa (which has never participated as a stakeholder in national water sector events).

The South African Water Caucus, a progressive group of CSOs and social movements, has written to the Minister expressing its concern:
“We believe that the DWA-WRG partnership will severely skew priorities away from public interests (including the right to water, protection of water catchments, etc.) and towards private ownership and control of a resource that is becoming ever more precious and precarious in terms of sustainable use and access. By requesting the partnership, is the Minister outsourcing the DWA’s strategic thinking to the private sector?”

It is not the process per se, but the implications of process that are concerning. The Water Caucus highlights the following concerns:

  • The lack of transparency in this process may perpetuate government’s historical lack of transparency in engaging with business– and its impact: “Guaranteeing low-cost water to profit-seeking companies will make it near to impossible to meet requirements of the water reserve”
  • “Handing over groundwater resources cannot be done through private contracts or partnerships prior to rigorous impact assessment, analysis, public debate and inclusion in an agreed NWRS.” Worldwide we have seen how lowering of water tables through extraction, often by a single company, can have devastating impacts on poor people who rely on borehole water.
  • The promotion of *desalination needs careful consideration* in light of its contribution to climate change due to high fossil-fuel derived energy use and local environmental impacts.
  • The need to question assumptions about South Africa’s ‘growth path’ and whether certain uses of water are socially, economically and environmentally acceptable. Examples include bottled water, tree plantations, and agrofuel crops.

“Partnerships” with the Water Resources Group now exist in Jordan, Mexico, India, and South Africa and are being developed with China and other countries. They appear poised to become national arms of the “green economy” in the water sector.

If we do not find a way to ensure that national water resources strategies are socially and environmentally sensitive, we may find our struggles in water services delivery to have been the tip of the proverbial iceberg.