New Report Reveals Widespread Corruption in Water Sector

Photo: Alex Zahnd

"Corruption in the water sector puts the lives and livelihoods of billions of people at risk." So begins the Global Corruption Report 2008 by Transparency International, the first report to document the extent of corruption in the water sector worldwide. With climate change making water scarcity a growing concern in many poor parts of the world, and the cost of corruption in the water industry raising the price for water services 10-30 percent worldwide each year, the need for reform is clear. "Without increased advocacy to stop corruption in water, there will be high costs to economic and human development, the destruction of vital ecosystems, and the fuelling of social tension or even conflict over this essential resource."

A section on large-scale hydropower calls the sector a "breeding ground for corruption," and further states:

Few other infrastructure projects have a comparable impact on the environment and people. The hydropower sector’s massive investment volumes (estimated at US$50–60 billion annually over the coming decades) and highly complex, customised engineering projects can be a breeding ground for corruption in the design, tendering and execution of large-scale dam projects around the world. The impact of corruption is not confined to inflated project costs, however. Large resettlement funds and compensation programmes that accompany dam projects have been found to be very vulnerable to corruption, adding to the corruption risks in the sector.

One of the essays, co-authored by International Rivers, describes how corrupt large dams are crowding out investments in better alternatives:

"In nature, water always flows downstream. In the geography of power relations, clean water tends to flow to the rich and powerful, while waste water tends to flow to the poor. An important reason for this anomaly is corruption, which has contributed to a political economy that favors large, capital-intensive projects over small-scale approaches.

The report has positive examples as well as extensive recommendations. Key to change, the editors state, is transparency and participation for water governance. "Participation by marginalised groups in water budgeting and policy development can provide a means for adding a pro-poor focus to spending. Community involvement in selecting the site of rural wells and managing irrigation systems helps to make certain that small landholders are not last in line when it comes to accessing water. Civil society participation in auditing, water pollution mapping and performance monitoring of water utilities creates important additional checks and balances."