Water Resources Management Group,
Att: John Briscoe, Senior Water Advisor World Bank
1818 H St.,
NW Washington,
DC 20433

(A) Contents of the strategy

1. No clear principles

As explained in International Rivers Network’s critique, the proposed strategy claims to be based on a certain degree of international consensus on water resources management, but misrepresents and distorts several important principles agreed upon in the last few years. One result is that not enough emphasis is put on ensuring access to water for all, and protection of the environment. It is alarming that the strategy fails to state clearly how the World Bank as a responsible financing institution will support national governments in complying with such important principles as the one on allocation of Agenda 21, Chapter 18:
In developing and using water resources, priority has to be given to the satisfaction of basic needs and the safeguarding of ecosystems.
2. No clear statement of priority to low-input, high-reward solutions
The draft strategy makes the point that great investments are needed for infrastructure in the water sector, but fails to express clear priority to small-scale and decentralised initiatives such as demand side management or rainwater harvesting, which can provide huge benefits with low input. Such solutions are particularly important for the majority of those without access to safe water, the rural poor.
Reading the draft strategy, one is left with the impression that the World Bank will mainly engage in (or require for engagement) privatisation schemes and large infrastructure, which are the areas explained in most detail in the strategy.
At the NGO consultation in Washington, you explained this approach as responding to a request by the Board of focusing on how the Bank should deal with contentious projects, and that it would not imply that the Bank would not involve in non-contentious projects. Still, we find it strange that a strategy of this kind would not present the full picture of the Bank’s engagement in the water sector.
3. Focus on solutions that are inadequate for the poor and the environment: private sector involvement and large-scale infrastructure We find the focus on privatisation and large-scale infrastructure contradictory to the Bank’s objective of poverty reduction.
The production of water services is a natural monopoly, i.e. it would be profitable to let one actor deliver the service. Thus, involving the private sector will not necessarily lead to the creation of a competitive situation where users are better off than they were before. This means that in delivering water services, private actors are not necessarily more efficient than public ones (on the contrary, the opposite is more likely since private actors are more dependent on making profit). Furthermore, without public regulations, no initiative will exist for private actors to supply poor groups with water or introduce water saving policies.
Markets will not provide for an equitable and sustainable allocation of scarce water resources, especially in areas with severe poverty or in undemocratic and corrupt regimes. In countries without strong regulating authorities, policies such as water pricing, so-called “full cost recovery”, and private delivery of water services, may threaten the access for marginalised groups to water for basic needs. Therefore, these measures must not be set as preconditions for loans to developing countries.
Similarly, for high-risk, high-reward projects (i.e. large infrastructure) to provide any benefits for the poor, and even avoid negative impacts for this vulnerable group and for the environment, the projects have to be developed within a framework of strong regulations from the public sector. The most recent and comprehensive set of recommendations to ensure this has been proposed by the World Commission on Dams in 2000. Noting the Bank’s statement that the Water Resources Sector Strategy would be the main tool for it to implement WCD recommendations, and noting the apparent commitment from the World Bank to return to large infrastructure projects, it is doubly alarming that the strategy does not simultaneously make it clear that the World Bank as an important financing institution will contribute to complying with the WCD recommendations for the projects it supports.

Recommendations:

• The priorities for the World Bank’s engagement in the water resources sector should be reviewed, and the strategy should express clearly these priorities.

• The World Bank should concentrate on providing assistance to borrowing countries in finding the optimal solutions to their water and energy problems, instead of rushing to provide financing for large-scale infrastructure.

• The strategy should establish the World Bank’s commitment to implementing WCD recommendations.

(B) Consultation by random

Unfortunately, we find reason to question whether the public consultation process of the draft strategy is merely an exercise of duty for World Bank management, or if the Bank staff sincerely acknowledges the value of input from a variety of stakeholders, and commit to incorporating these into the final strategy.
For one part, we have serious concerns about the public consultation in which FIVAS took part in Washington. 20 NGOs were invited, but only 11 representatives were present at the consultation. Of these, only three were from NGOs outside the US. Two organisations, including FIVAS, had originally not been invited, and were only allowed access after having contacted their respective regional offices at the Bank. There were no representatives from developing world NGOs, although some had been invited.
The date for the consultation was set only a month in advance, which is little time for NGOs outside the US to plan for participation. The date also coincided with the preparatory meetings in Bali for the World Summit on Sustainable Development. Many of those invited to the consultation, and others who would have been interested, were probably in Bali at the time.

Additional important perspectives could obviously have been presented, had more organisations from a wider range of countries and contexts been present. It came as a surprise to most participants that the consultation was for NGOs only. Most had expected to meet with other stakeholders and hear their views. There are of course both advantages and disadvantages for each group of stakeholders to be heard separately. Due to the chosen format, the consultation ended up being largely a one-way communication by NGOs who raised unanimous concerns, and there were no real discussion either within the group or between the group and the Bank. The session therefore ended well ahead of schedule.

World Bank management was represented by only one person, Senior Water Advisor Briscoe. We find this to be a major disadvantage for the process. Not only would a broader participation from the Bank have indicated a wish to hear the NGOs’ views, and increased their chance of being heard. If more staff had been present, there would also have been more opportunities for discussion, and the risk for misunderstandings or misinterpretation of the input when taking it back to the drafting committee, would have been reduced. It should be said that Mr. Briscoe did indeed sum up and present the input at the end of the day, but it remains unclear how this information will be used in the further process.

Recommendations:

• The NGOs present asked for two kinds of output from the consultation:
1) A summary of the input from the consultation and the other regional and stakeholder consultations, and
2) a matrix showing how the input had been incorporated (or not) into the next draft of the strategy.
These outputs should be made available for review at the World Bank’s web pages. The Senior Water Advisor promised to discuss this issue with the management, but FIVAS cannot see any reason why there should be a problem sharing this information.
• The final draft should also be made public before it is taken to the Board. This is necessary for NGOs and other stakeholders to be able to see whether their concerns are reflected in the strategy. In general, FIVAS is worried that the input given in the consultation and in written comments will not be taken into account.
• Public consultations should be announced widely and well in advance, also via member country governments, and they should be opened for application by all interested stakeholders. Participants from each stakeholder group should be selected to reflect geographical distribution, and invited to join consultations in their own region.
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We hope that our concerns will be taken into account in the further process of the strategy.
Yours sincerely
Tonje Folkestad, general manager