2005 - 2006 - Pinsent Masons Water Yearbook 2012

PART 4: APPENDIX 2: PRIVATE SECTOR PARTICIPATION
services they operate. Such practices get minimal exposure at anything beyond the local level,
as it is accepted modus operandi for providing these services.
The Camdessus Report’s Recommendations
‘Corruption’ is mentioned 11 times and ‘corrupt’ a further two times in the Camdessus Report on
"Financing Water for All" (CR). CR notes that corruption can arise among public and private,
local and international participants in the water sector. The impact of independent NGOs such
as Transparency International, has been limited by the reluctance of governments, multilateral
institutions and companies to adopt their recommendations on a consistent basis. CR’s specific
recommendations with regards to water and corruption can be summarised as:
• Capacity building is to be encouraged
• Water policies need to be defined and implemented
• Leadership ought to be of a high calibre
• The multiplicity of opportunities ought to encourage healthy competition
• NGOs and stakeholders should be encouraged to expose corrupt practices
• Companies are urged to co-operate to develop methods for promoting ethical behaviour
• The public sector needs to develop standards that place their behaviour above reproach
• Private participation transactions should be made more transparent
• Develop best practice and model clauses in the legal agreements for private participation
Its recommendations are well meaning and hard to dispute. Indeed, they are of such a broad
and generous nature that at first it appears churlish to query them. They do, however, need to
be implemented and to take effect by the CR’s proposed 2006 reporting deadline.
The private sector needs to acknowledge its structural failings in communicating that there are
challenges to PSP playing a leading role in developed economies, while being a material part of
the process of providing universal access to water and sanitation services in urban areas. There
is an urgent need for the private sector to sponsor independent research so that a process of
engagement can begin.
Define corruption
The cost of corruption can only be understood when stakeholders know where this is happens
and how it affects people’s lives. So, before concerns about corruption can be addressed, we
need a commonly accepted set of definitions as to what corruption is and is not. There is also a
need to differentiate between what might be called ‘actual’ or fiscal corruption and ‘moral’
corruption, where bidders abuse the tender process by submitting a loss-leading bid in
anticipation of a successful re-negotiation procedure afterwards.
What is it?
Country – Bribes demanded at the Government/Ministerial level
Municipal – Bribes for contracts, bribes for services or for avoiding billing/penalties
Corporate – Companies bribing in order to gain contracts
When does it take place?
Water allocation and billing – Avoidance of bills, setting up illegal connections, getting access,
etc
Regulation – Avoidance of penalties over illegal abstraction/connection, discharges, etc
Procurement and contracting – Bribes for the award of goods/service provision contracts
383 Pinsent Masons Water Yearbook 2005-2006