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Water and Sanitation: The Business Case
A paper prepared by Business Action for Sustainable Development (BASD)
August 2002 – WSSD Johannesburg

JOHANNESBURG, 28 August 2002 - Water and sanitation are essential for Sustainable Development

  • Poverty alleviation and preventative health care (SOCIAL)
  • Economic growth (ECONOMIC)
  • Ecology and environmental improvement (ENVIRONMENT)

Investing in water and sanitation is an investment in Public Health! Therefore sanitation must be added to the UN Millennium goals for water.

Business and industry is action oriented. With the rest of society it wants to accelerate the pace of improvement. To do this it offers some key messages to government.

KEY MESSAGES

  1. Add sanitation to the UN Millennium goal for water
  2. Create an enabling environment to encourage essential investment in water infrastructure
  3. Use ODA more effectively to assist local communities to build capacity to manage water efficiently and attract private sector investment
  4. Involve all water stakeholders, including business as a key partner, in water decision making at all levels
  5. Full cost recovery to ensure that water services are sustainable and continue to operate

Good water, sanitation and hygiene in the community unlock opportunities in many cross-cutting issues: e.g. education, gender, youth, biodiversity….

There is a business case for investment in water and sanitation. It is time to move from words to action. Improving water, sanitation and resulting hygiene means healthier and more productive employees and customers who can participate in wealth generation and sustained economic growth. Business prefers to operate in areas where its customers and employees are not at risk from a lack of safe drinking water and basic sanitation and poor health and hunger that follows. Business needs access to water in order to produce goods and services.

To make progress there is a need to create an enabling environment to encourage new investment in water infrastructure. This requires governments to put in place:

  • Effective water law and regulatory mechanisms to provide an investment friendly environment
  • A decision making process that is open, transparent and accountable to water service customers
  • Improve governance and stamp out corruption
  • Full cost recovery for water services so that water systems are sustainable – governments will decide how to finance these costs through user charges and general revenue
  • Appropriate pricing policies to send conservation and investment signals – recognizing that special arrangements will be needed for those unable to pay the full cost

More effective targeting of Overseas Development Assistance (ODA) can help local and national governments in creating this enabling environment. Use ODA:

  • To build capacity and improve governance
  • To assist those who cannot pay the full cost of service
  • To leverage additional private sector investment in water and sanitation infrastructure

Since Rio industry has been active and made significant progress. In 1998, in cooperation with UNEP, WBCSD published 20 case studies demonstrating how industry has reduced water consumption per unit of production, recycled water, and reduced pollution and actively encouraged water conservation. (Industry, Freshwater and Sustainable Development). Industry is committed to continuous improvement of water management in all sectors.
At the World Summit in Johannesburg, WBCSD launched its third water report, Water for the Poor which is an action oriented road map for delivering water services to the poor. The key messages are:

  • Accelerate the introduction of public-private-partnerships to improve and expand water service to the poor through an open and democratic process
  • Improve the basic framework conditions at local and national levels to encourage greater private sector investment and participation in water services through a wide-range of partnerships
  • Create regulatory mechanisms and good governance systems to (1) protect the public interest from excessive charges, (2) ensure that water service providers recover the full cost of providing the service, and (3) ensure service levels promised are delivered.

Governments must own and control water on behalf of all their citizens. Business is advocating efficient delivery of water services by everyone including the private sector.