'It is unscientific to manage surface and groundwater separately' interview with Barbara Schreiner, Executive Director Water Integrity Network (WIN)

Barbara Schreiner began working in public water sector management two decades ago when she joined the Ministry of Water Affairs in the post-apartheid South Africa. Upon retirement as a government official, she began working as a consultant and founded a not-for-profit organization called the Pegasys Institute, which focused on finding African solutions to challenges in water governance and infrastructure, particularly in sub-Saharan Africa.

In addition, she has served and continues to be active on boards of various organizations, including as a member of the boards of International Water Management Institute (IWMI); and of the International Steering Committee of the Global Water Partnership. She has also served as the deputy chairperson of the Isimangaliso Wetland Park World Heritage Site, and chairperson of the Water Research Commission of South Africa. She has written extensively on issues of water governance, poverty and gender, with several papers to her credit as author/co-author, in addition to serving as editor of several books on the subject.

Currently she serves as the executive director of the Water Integrity Network (WIN), an open network of partner individuals, organizations, and governments promoting water integrity to reduce corruption and improve public water sector performance delivery worldwide.

BR Research interviewed Barbara Schreiner along the sidelines of 4th Karachi International Water Conference, organized by Hisaar Foundation last month, where she stressed on the need for integrity in the management and governance of public and private water sector service delivery. Below are the edited excerpts of her conversation with BR Research, focusing on lessons from South African public sector water management experience relevant to resource governance in Pakistan:

BR Research: Let's begin with your experience working in the public sector of South Africa. What lessons can you share with respect to integrity for developing countries such as Pakistan striving to develop similar systems in water resource management?

Barbara Schreiner: The big lesson around water management is that writing a good legislation is a lot easier than trying to implement it. The South African policy was globally recognized as the gold standard of legislation in water sector resource management, and was adopted by several other countries, with delegations coming in from countries within the region such as Kenya and as far as China to re-write it into their own legislations.

Yet, implementation has been hugely problematic. And before I explain the challenges faced in more detail, the key learning that we drew from that experience is that if a legislation is over ambitious in its scope, it results in incredibly complex procedures that become impossible to successfully implement.

The issues faced were primarily one of translating legislation and policy into practice. This included lack of implementation capacity and resistance to new legislation. Of course, certain challenges faced were unique to the South African environment due to its then recent political history that compounded the problem.

Subsequently, there have been severe issues of integrity, as currently the South African water sector is riddled with corruption. It spread out from the national level right down to the municipal level, despite strong anti-corruption legislation and strong procurement procedures.

BRR: Initiatives for introduction of water pricing were taken during your stint as an advisor to the water affairs ministry. Did that entail pricing for all consumption sectors, or only for the revenue-based users?

BS: Broadly speaking, two pieces of legislation cover water sector management in South Africa. First is the National Water Act which covers resource management of 'raw water' - water abstracted directly - and falls under the purview of national water department. Then there is the Water Services Act, which includes utility service delivery which is the domain of municipal authorities.

Under the National Water Act, the federal water department is responsible to come with a Water Pricing Strategy every five years. This includes how charges for raw water will be constructed. Based on this, as the service provider each municipality must come up with its tariff.

The basic principle of National Water Act is that every user of raw water must pay a price for it - whether it is agriculture, mining, commercial or household. But the way those charges are calculated is different. For example, agriculture receives a massive hidden subsidy, whereas other sectors largely pay the full cost of resource provision.

In the most recent version of pricing strategy that I worked on as a consultant to the government, it was recommended that the subsidy to agriculture water use be phased out. If the sector is to be subsidized, it must be done so through a transparent process by the department of agriculture, instead of as an implied subsidy by national water department.

The problem with untargeted subsidies previously provided to agriculture is that it is need-blind. By that I mean that highly lucrative farms that supply to international winemakers receive water at the same price as small farms that only produce staple crops.

The subsidy is misused and mistargeted mainly because it is not in alignment with the agriculture policy. Why? Because the water department has no clue about the agriculture policy. It's a blanket subsidy that all farmers get equally.

Our recommendation is that the subsidy should instead be provided by the agriculture department so that if, for example, staple crops are to be subsidized under the agriculture policy, only staple growers should get a subsidy on agricultural water and that should be the end of it.

Let me clarify that the blanket subsidy is still firmly in place. But the discussions have been opened with the department with recommendation that charges be calculated on a scheme basis so there is no blanket charge across the country.

This way, the charges shall come to reflect the true cost of infrastructure, capital cost, maintenance cost, among others. For example, all users of a particular large dam should receive a particular charge; concurrently, infrastructure tariff for users of water from a smaller dam should be comparably cheaper.

Of course, counter arguments are made for a uniform tariff across the country, but there are strong reasons to oppose this as it encourages inefficient use.

BRR: Are the operational costs calculated for each consumption sector differently?

BS: No. The operational costs are calculated for the system as a whole and applied equally across all consuming sectors minus the subsidy provided to the agriculture sector.

BRR: How is this different from purview of the water services delivery?

BS: Water service level involves service delivery authorities at municipalities and districts at local level. As I mentioned before, the water services authorities are expected to set the tariffs under the regulations and framework set by the national water department.

Essentially, these have to be a rise-and-block tariffs with a built-in protection for the poor. Under the national policy, six thousand liters of water per indigent household per month is free-of-charge. This in my opinion can be seriously flawed. Afterall, a household may be indigent one month and not in the following.

The municipalities receive transfers from the national level, grants that are aimed at covering the operational costs of water provision to poor communities. Similarly, municipalities also receive capital grants for infrastructure. Rest of the costs are made part of the tariffs.

Ideally, when a rise-and-block tariff is constructed, the aim is that enough revenue is collected to cover all costs. Part of the challenge faced was that a large number of municipalities did not have a particularly good asset registry or asset maintenance plan. Thus, most of the time they are not even aware of the status of the infrastructure and what it would cost to repair/restore it.

In many cases, the tariffs were calculated a long time ago and, thus the inflation and disrepair over time has not been factored in. Moreover, local politicians do not want the tariffs recalculated, as that keeps their constituents, currently paying token amounts, happy. Those tariffs need to be recalculated in a scientific way.

BRR: Let's take the conversation to water markets and resource trading. Should these be modeled on a demand driven model or on principles of true cost recovery?

BS: No, I do not believe water should be commoditized in any way, even if it is for bottled water. But let's separate two things here.

One is water pricing, that is a tool used by state intended to recover the true cost of system which includes cost of infrastructure, maintenance, and management. Although it is true that in some cases, states have used water pricing to drive efficiency, but it presents a complex problem because its needs an appreciation of elasticity of demand before a certain price may be charged to have an impact on efficiency-of-use.

For example, studies conducted in South Africa showed that water tariffs in agriculture need to be increased by four times to drive efficiency. As you may appreciate, politically speaking, this is near-impossible.

In contrast, what drives the market is the value of water to the private consumer. In South Africa, one hectare of irrigation water is worth ten thousand dollars. This price tag drives the water trade, as it can earn hard cash.

Understand that the market cannot going if there is an abundance of water. However, if the supply is constrained, the trading becomes active. For a long time, water trading was allowed in South Africa, almost entirely between farmers. However, as municipal demands increased, people began to buy water from farmers which became problematic, as the market mechanism began to reallocate resource to arguably a less efficient, non-revenue consuming sector - that is, households, as they have a higher degree of demand inelasticity.

This led to a moratorium being placed in water trading. Of course, there is also a political economic context that serves as a backdrop. From an equity perspective, the public policy objective was to move water from minority to majority black neighborhoods, whereas permission to trade water was having the opposite effect.

The problem with water trading is that certain fundamentals need to be in place before water trading can happen. For example, water consumption needs to be recorded in an up-to-date and trustworthy way. Water trade, in my opinion, should not be allowed to happen randomly between people.

BRR: Why can the process sequence not be in reverse? That is, first have the markets going, and then let the trading volume provide the requisite data on title and consumption?

BS: The more relevant question for public policy is whether the state should have a control over water resource, its allocation, and impact on environmental flows among other considerations.

Water is not easily transferable as other commodities. Consider that if a user at point B downstream a river or tributary abstracts a certain amount of water only to sell it upstream to another user at point A, that may have a very different environmental impact compared to if the sequence were reversed. Thus, water may be traded but it must go through the department.

BRR: What is your experience of working with groundwater regulation in South Africa?

BS: Under the 1956 act, groundwater was essentially considered private water. Essentially, this means that those who have access to groundwater under their property could use it free-of-charge.

That was changed under the 1998 legislation. Today, all water is considered a part of the same hydrological cycle. And a license for use is needed from national water department in order to access ground or surface water above a certain amount.

Of course, there are certain ground water control areas where problems had arisen due to excess abstraction. Restrictions were imposed by the national water department in various areas as to how much water they're allowed to use based on environmental considerations.

BRR: Under the National Water Policy recently announced in Pakistan, establishment of groundwater authorities has been seen as a welcome development. What is your comment?

BS: The notion that ground and surface water are separate is unscientific. They are not. A lot of ground water is drawn from the base flow of the river; thus, effectively when groundwater is abstracted, it affects the river flow. To argue that groundwater can fill in where rivers are running is irresponsible. Therefore, a conceptual shift needs to happen.

A lot of countries manage ground and surface water separately, so your country is not alone in adopting this approach. However, it is ludicrous. Ideally speaking, even the subject of water quality is closely intertwined with surface and ground water volumes abstracted and should be dealt with using an integrated approach.

BRR: Agriculture sector in Pakistan is censured for its high-water footprint and low efficiency. Up to 90 percent of the resource is consumed by this sector, which only contributes to twenty percent of the GDP due to over reliance of high delta low value crops. What are your recommendations to increase water use efficiency, considering the sector employs two fifths of work force with 80 percent of export directly or indirectly coming agri-based commodities?

BS: It needs to be reiterated that efficiencies in agriculture can only come from the agriculture department. In my experience, water managers understand precious little about the subject yet are made responsible for its management, especially of irrigation systems.

Coming to water footprint of agriculture. People speak of agriculture sector consuming ninety percent of the resource as if it is a bad thing. That is how it is in almost every country, as it should be. Comparisons between agriculture's share in water consumption and its GDP contribution smacks off poor analysis. Even if the sector generated only one percent of GDP with the same water footprint, what is the alternative?

If agriculture was to be done away with due to its low productivity and high-water use, we would all die of starvation! Just because water used in mining or industries generates more value, does not mean it can replace agriculture. It is only natural that agriculture's contribution to GDP will decrease as an economy grows, that's how percentages work afterall!