"Water Mafias" Put Stranglehold on Public Water Supply

Tasha Eichenseher, National Geographic News 21 Aug 08;

Worldwide corruption driven by mafia-like organizations throughout water industries is forcing the poor to pay more for basic drinking water and sanitation services, according to a new report.

If bribery, organized crime, embezzlement, and other illegal activities continue, consumers and taxpayers will pay the equivalent of U.S. $20 billion dollars over the next decade, says the report, released this week at the World Water Week conference in Stockholm, Sweden.

The water sector is one of most corrupt after health and education, added Håkan Tropp, chair of the Water Integrity Network (WIN), an advocacy group and report co-author.

That's because the poor often don't have a voice in strategic water policy decisions, said Christian Poortman, head of the anticorruption group Transparency International (TI), which collaborated with WIN on the study.

Skyrocketing Prices

In developing countries, corruption bumps up household water prices by at least 30 percent, experts say.

In Honduras, for example, residents who either cannot afford connections to centralized water systems or live in places where water is not easily accessible pay 40 percent more for informal water supplies, said TI's Donal O'Leary.

The water is often delivered in trucks or pushcarts by entrepreneurs, who in some cases secure supplies illegally from a bigger water company, O'Leary explained.

In Bangladesh and Ecuador, mafia-like groups often collude with public water officials to prevent access to cheap water services.

The United Nations Development Programme (UNDP) estimates that countries such as El Salvador, Jamaica, and Nicaragua spend more than 10 percent of their income on water services, in part due to corruption. In comparison, those in developed nations such as the United States pay approximately 3 percent.

Even so, developed countries are not immune: Bribery is associated with large-scale wastewater contracts in Milan, Italy, and sewer bills are inflated in San Diego, California.

Beyond the Tap

Corruption in water industries also affects farming and energy production, TI's Poortman said.

Expensive contracts for hydropower and dam projects are the most susceptible, and experts expect the disparities to worsen as climate change and the fuel crisis takes hold.

For instance, to prepare for climate change, countries will create more large-scale water storage projects. Likewise, as gas and oil become less reliable energy sources, investments in hydropower are expected to increase.

TI estimates that there will be up to U.S. $60 billion invested annually over the next decade in hydropower and dam projects.

In agriculture, nearly 25 percent of irrigation contracts in India involve some kind of corrupt deal, mostly with the government, Poortman said.

"Lack of access [to clean water] is not just about scarcity—more than anything it is because of failing governments," he said.

While corruption with large-scale projects is dramatic, "it is the petty corruption, which generally involves local police and officials, that affects people everyday," added Teun Bastemeijer, program manager for WIN.

Slow to Change

As anticorruption movements gain momentum, governments should start to pay attention, and employees and citizens will be more likely to report cases of corruption, said Jack Moss of AquaFed, an international association of private water companies.

"There is a fundamental change, but a slow one," he added.

Poortman points to successes in India and China, where pollution maps and citizen "report cards" have helped draw attention to water abuses.

A massive U.S. $8 billion hydropower and canal project in the African nation of Lesotho often tops the list of examples for how water corruption can be shut down.

Contractors from multinational companies in Europe and Canada were accused of offering the Lesotho government bribes for the project contract.

In 2002 the chief executive of the Lesotho Highlands Development Agency was charged with accepting U.S. $6 million and sentenced to jail for 18 years. Some of the companies were also prosecuted and barred from World Bank contracts for a short while, said WIN's Bastemeijer.