Challenges of Governance in the management of water services

1. Challenges of Governance in the management of water services WASPA Annual Conference 8-9th September 2011

2. Table of contents • Definition • Governance in the WSS • General principles of governance • Challenges in Governance • Service delivery • Legal Environment • Institutional Environment • Economic Environment • Leadership

3. Governance (1) • Supremacy • Ascendancy • Domination • Power • Authority • Control: Antonym – weakness The use of power to achieve certain goals eg. Universal water service access

4. Definition of governance (2) . • corporate governance refers to the establishment of an appropriatelegal, economic and institutional environment that allows WSS institutions to thrive as institutions for advancing long-term shareholder value and maximum human-centered development while remaining conscious of their other responsibilities to stakeholders, the environment and the society in general

5. Principles of Good Governance (UNDP.)(3)

6. (4)

7. 2.Governance In The WSS (1) Section 47 (h) and (j) of Water Act 2002 states that WASREB shall: • Develop guidelines for and provide advice on the cost effective and efficient management and operation of water services. • Monitor the operations of agreements between water service boards and water service providers and take appropriate action to improve their effectiveness.

8. Governance in WSS (2)

9. Governance in WSS (2) • Leadership • Directors appointments • Strategy and values • Company performance • Compliance • Communication • Accountability to shareholders. • Relationship with stakeholders • Balance of powers • Internal procedures • Board performance and assessment • Management appointments and developments • Technology • Risk management • Solvency

10. Governance in WSS (3) Ensuring Standards of Governance: • Institutional set up – entry criteria • Boundaries of decision making at the AGM • Standards of using money • Standards of operation of the business • Limitations on ownership • Succession planning in BOD • BOD to meet criteria for appointment – minimum levels of literacy and work engagement • Directors to be openly and competitively sourced • Competitive recruitment of staff • Schedule of duties for BOD and for staff • Set the remuneration levels of the BOD • Performance orientation of the business

11. Challenges in Governance – service delivery (1) • Socio-Political • Inequity (coverage/access) • Affordability • Improved living conditions (service standards) • Inadequate public participation (Transparency & Accountab.) • Supply/Demand • Infrastructure (inadequate/old) • Water resource availability (climate variability/change) • User competition • Population growth • Increased per capita demand • Water quality standards • High NRW • Financial • Lack/unreliability of funding • Past underinvestment • Unsustainable tariffs • Environment/Public Health • Public health needs/risks • Environmental health • Water conservation • Managerial: • Low efficiency • Low capacity • Lack of managerial autonomy • Low transparency • Poor accountability • Low consumer responsiveness All of these are governance challenges themselves or at least related to governance!!!

12. Challenges in service delivery (2) • Lack of transparency & accountability in governing • Abuse of power in decision making and acquisition • Deficiencies in the management of water supply and sanitation- the whole chain collapses on itself • Poor/ineffective investments, poor service delivery, poor/low revenues • Non-fulfillment of the needs of the population • (a) consumer discrimination – the underserved & (b) consumer frustration – the badly served • Ultimately, threatens human lives (public health) & sector sustainability

13. 4.Challenges in Legal Environment • Power is exercised through legal instruments . • Currently the Transfer Plan was not fully implemented • Rules under Water Act are missing • By laws for governing license areas are missing • Agency status between WSP and WSB has taken over 5 years to accepted • Without clear rules of the game any change is threatened and opportunity to exercise power to enhance service and protect assets and resources is lost

14. Challenges in Institutional structure • Multiple reporting channels • Multiple asset ownership systems – who maintains what • Essence of agency relationship not appreciated- extent of its depth not utilized by both parties – in recruitment ,planning , budgeting , investment in infrastructure , human resource and reporting • Completion of Transfer Plan- tussle of assets and human resource • Areas of water service still outside the regulatory framework and distorting the regulated sector

15. Challenges in the economic environment • Clarity of Finance flows for all infrastructure development • Best value for money in standards of design, construction, operation and maintenance of facilities in WSS • Respect for the financial standards in the licence and SPA especially the contingency fund, revenue account and the lease fees • Compliance with all laws- especially procurement and financial • Protection of revenue flows in the WSS after the consumer pays her bill. • Setting of realistic tariff charges that sustain growth of water services • Planning and respecting with the plan

16. Conclusion • Gains have been made- governance standards have been adopted by most WSPs only few are lagging behind • Board room etiquette in most WS institutions has been on an upward trend- there are still problems • Human resource base is undergoing transformation through retraining and recruitment of qualified staff • WSS institutions are adopting plan based governance • There is improved response to consumer issues

17. Conclusion • License and SPA being identified as the basic document of governance in the water services sectors • AGMs beginning to focus on performance of service provision • Service provision improving in regulated sector • More hours of supply are being noted in some areas • NRW is beginning to reduce in some areas • Openness is infiltrating in the WSS

18. The future Good governance in the water sector Will ensure . . . • (Public) accountability for decisions relating to the water system (governance; public reporting/ participation) • Effective exercise of oversight responsibilities (separation of policy, regulation, asset holding and service provision ) • Competence and effectiveness in management and operations (capacity development, competitive recruitments and merited appointments) • Full transparency in decision making (where does the money go; why does it have to go there and full reporting) • Balancing of equity, efficiency and effectiveness in performance; financial sustainability (pro-poor regulation; sustainable tariffs, transparent subsidies, value for money in investments) • Protection of public health and safety (water quality and effluent standards, enforcement) • Environmental protection (WRM regulation)

19. Sustaining service delivery • Leadership will sustain the gains made • Leadership will ensure that the legal framework is strengthened , improved and implemented • Leadership will use the resources at hand to ensure value for money in infrastructure development and sustainable management • Leadership will inspire the human resource in the WSS to serve so that every drop counts • Every change looks like a failure in the middle. — Rosabeth Moss Kanter • "Clarifying the value system is the greatest contribution a leader can make." — Peters and Waterman