United Nations
Commission on Sustainable Development

Background Paper


      REPORT OF THE EXPERT GROUP MEETING ON STRATEGIC APPROACHES
                      TO FRESHWATER MANAGEMENT


                Harare, Zimbabwe, 27- 30 January 1998


TABLE OF CONTENT

                                                        Paragraph    Page

  I.  Introduction                                         1-6         5
        
 II.  Strategic approaches to freshwater management:       7-14        6
      policy options for consideration by the 
      commission on sustainable development and 
      policy-makers: an overview

III.  Key recommendations for an integrated approach      15-42        8
      to freshwater management
      A.  General                                         15-17        8
      B.  Capacity building                                 18         8
      C.  Information management                          19-20        8
      D.  Environment and development                     21-23        9
      E.  Economics and finance                           24-28        9
      F.  Participation and institutions                  29-33       10
      G.  International co-operation                      34-42       11

Annex I:  Water as a Key Resource in Sustainable          43-58       13
          Development - Report of Working Group 1

  I.  Introduction                                        43-44       13

 II.  The stresses                                        45-48       13

III.  Integrated water resources management               49-51       14

 IV.  The implications for policy responses and           52-55       14
      management strategies                  

      A.  The development of national and sub-national    52-54       14
          water policy and programmes
      B.  Developing management strategies                  55        16

  V.  Implementing the management strategies              56-57       17

 VI.  Transboundary water systems                           58        18


Annex II:  Freshwater Ecosystems and Water Quality        69-74       19
           Report of Working Group 2

  I.  Introduction                                          59        19

 II.  The role of freshwater ecosystems and protection    60-73       19
      of water quality in integrated water resources 
      management               
      A.  Proposed actions in the area of freshwater      63-66       20
          ecosystem management                  
      B.  Proposed actions to protect water quality       67-71       22
          and human health                 
      C.  Overall goal for protecting freshwater            72        24
          ecosystems and water quality
      D.  Support, in financial and operational terms,      73        24
          the integration of ecosystem approaches and 
          water quality into integrated water
          resources management

III.  Suggested objectives for the Commission on            74        24
      Sustainable Development

Annex III:  Economic and Financial Issues                 75-106      26
            Report of Working Group 3

  I.  Introduction                                        75-76       26

 II.  Economic and financial concerns in the development  77-81       26
      and utilisation of water resources

III.  Reasons for analysing economic and financial          82        27
      issues in the water sector

 IV.  Strategic principles and related actions and 
      their implementation                                83-94       28
      A.  Goal 1: Ensure the integration of water           83        28
          into the national economy, recognising it 
          as a social and economic good, vital for the
          satisfaction of basic human needs, food 
          security, poverty alleviation, and the 
          protection of ecosystem functioning, and 
          applying economic instruments in its 
          management          
      B.  Goal 2: Ensure efficiency, transparency         85-86       29
          and accountability in water resources 
          management as a precondition for sustainable
          financial management
      C.  Goal 3: Ensure the establishment of 
          public/private partnerships                       87        30
      D.  Goal 4: Ensure financial sustainability         89-90       31
      E.  Goal 5: Ensure adequate financing of the          91        32
          water sector                                      
      F.  Goal 6: Ensure financing of water resources       93        33
          data knowledge base as a basis for analysis 
          and research for better understanding and
          decision making
      G.  Goal 7: Ensure that provision is made for         94        33
          economic costs analysis of extreme events 
          or chronically prone areas to flooding and
          drought

 IV.  Priority areas in need of financing                   95        33

  V.  Strategies/Actions for cost reduction                 96        34

 VI.  Summary of key issues and recommended actions       97-106      35

Annex IV.  Participation and Institutions for            107-117      37
           Integrated Water Resources Management
           Report of Working Group 4

  I.  Introduction                                       107-109      37

 II.  Enhanced participation for improved integrated     110-111      37
      water resources management

III.  Key actors and fulfilment of their role            112-114      38

 IV.  Improvement of the institutional and               115-116      39
      participatory framework for integrated water 
      resources management

  V.  Summary of key recommendations                        117       41


       I.    INTRODUCTION

1.  The Expert Group Meeting was hosted by the Government of Zimbabwe
and organised by the United Nations Department of Economic and Social
Affairs. The main objective of the Meeting was to provide an expert
contribution to the forthcoming deliberations on «Strategic Approaches
for Freshwater Management» that will take place in the Ad hoc Working
Group of the UN Commission on Sustainable Development (New York, 23-29
February, 1998) and, later, during the sixth Session of the CSD (New
York, 20 April - 1 May, 1998).
       
2.  The Meeting was Co-Chaired by Mr. Robert Ainscow of the United
Kingdom and Mr. Sibekile Mtetwa of Zimbabwe. At the opening of the
Meeting, the Honorable Mrs. Joyce Mujuru, Minister of Rural Resources
and Water Development of Zimbabwe, delivered a statement of behalf of
the Host Country. The Meeting was attended by more than 170 experts
from developed and developing countries and countries with economies in
transition, international organisations from both within and outside of
the United Nations, and from the non-governmental organisations and
major groups of the civil society. 
       
3.  In addition to the Plenary meetings, four Working Groups were
established in order to ensure an in-depth consideration of a number of
specific themes on the agenda, namely «I. Water as the Key Resource in
Sustainable Development», «II. Freshwater Ecosystems and Water
Quality», «III. Economic and Financial Issues», and «IV. Participation
and Institutions for Integrated Water Resources Management». The
deliberations in each of the Working Groups were led by two Moderators
as follows: Working Group I - Mr. James Bruce (Canada) and Ms. Krishna
Singh (India); Working Group II - Mr. Ingvar Andersson (Sweden) and Mr.
Armando Bertranou (Argentina); Working Group III - Mr. Torkil Jonch-
Clausen (Denmark) and Mr. Se'kou Toure' (Co^te d■Ivoire); and Working
Group IV - Mr. Mohammed Jellali (Morocco) and Mr. Jean Claude Vial
(France).

4.  The participants noted a number of recent or forthcoming regional
and international activities related to freshwater, in particular the
adoption of the Cape Town Declaration of December 1997 and the
preparations for the Ministerial meeting on Water Resources and
Sustainable Development to take place in Paris in March 1998.

5.  The participants expressed their appreciation to the Government and
people of Zimbabwe for hosting the meeting and the hospitality extended
to its participants. They also expressed their gratitude to the
sponsors of the meeting - the Governments of Denmark, France, Ireland,
the Netherlands, Sweden and the United Kingdom, and to the European
Commission. 

6.  The report of the Meeting is presented as the co-chairmen■s summary
prepared in collaboration with the moderators. It attempts to assess -
in broad terms - the overall outcome of the Meeting and to draw a
number of key conclusions from the discussions held. The co-chairmen■s
summary is accompanied by the reports of the four Working Groups (Annex
I - IV). Thy outline in much greater detail the main recommendations
and proposals made by the participating experts regarding actions
required - at the local, national and international levels - in order
to expedite the implementation of Chapter 18 and other water-related
provisions of Agenda 21. Some of the proposals and recommendations
included in the report may not enjoy the support by all of the
participating experts and may therefore need to be further discussed in
the future, in particular in the context of the policy dialogue on the
strategic approaches to freshwater management under the aegis of the
Commission on Sustainable Development.


       II.   STRATEGIC APPROACHES TO FRESHWATER MANAGEMENT: POLICY
             OPTIONS FOR CONSIDERATION BY THE COMMISSION ON SUSTAINABLE
             DEVELOPMENT AND POLICY-MAKERS: AN OVERVIEW

7.  The rationale for sustainable development and the links between
development and environment were clearly articulated in Agenda 21. The
specific proposals concerning freshwater in Chapter 18 and other
related provisions continue to be a basis for action. Since 1992, some
countries have made progress on a path towards implementing the
recommended actions at national and local levels through the adoption
of integrated approaches to freshwater management. There are a number
of areas, outlined in this report, which continue to build on Agenda
21. Nonetheless, there are other areas where more strategic actions are
still needed in order to adapt to continually changing social and
environmental circumstances and to address fundamental concerns of
poverty alleviation, public health, food security and energy
generation.

8.  Demands for freshwater are driven by increases in population growth
and sectoral pressures for both consumptive and non-consumptive uses.
The sectoral demands include agriculture (irrigation and drainage), the
provision of domestic water supply and sanitation, industry, energy
generation, environmental requirements, amenity and tourism. The nature
of these demands are further complicated by changes in patterns of
consumption as a result of industrialisation, rural/urban shifts,
migration, and unaccounted for water and are set against clear limits
and variability in the available resource. It is increasingly clear
that unprecedented demands for water supplies are resulting in
continued degradation of the resource base and intensified competition
for high quality water. A characteristic of these stresses is that all
their components are not equally distributed in time and space.

9.  There is evidence of progress in improving some aspects of
freshwater resources management since 1992. Marked improvements in
water quality have occurred in a number of river basins where public
pressures for action have been strong. Lower discharge of toxic
substances have reduced public health risks and improved the habitats
of fish and wildlife in some river basins. New technologies and water
demand management have resulted in improved efficiency in water use in
irrigation, industrial processing and municipal supplies. Improved soil
and water conservation through the explicit linkage of water with land
and forestry policies has halted land degradation in vulnerable
landscapes. Institutions for integrated water management have been
strengthened in several developing countries along with the adoption of
new or improved water policies, information systems and action plans
resulting in improvements in water use efficiencies, water quality and
related ecosystems. Industrialised countries are replacing outmoded
policy and regulatory frameworks as circumstances and socio-economic
circumstances change. Several initiatives toward comprehensive and
participatory river basin management, including international river
basins, are replacing purely administrative and technical solutions.
International networks in support of integrated water resources
management have been created. 

10.  However, while many lessons have been learned, overall progress
has been neither sufficient nor comprehensive enough to reduce general
trends of increasing water shortages, deteriorating water quality and
growing stresses on freshwater ecosystems. There is a compelling case
for integrating these approaches to freshwater management into national
economic frameworks as keys elements in policies for sustainable
development and poverty alleviation. Socio-economic productivity can be
enhanced and environmental integrity conserved as a result of this
integration. 

11.  Integrated water resources management - within a national economic
framework - is essential for achieving efficient and equitable
allocation of water resources and thus for promoting sustainable
economic development and poverty alleviation. The adoption of an
integrated approach to environmentally sustainable management of water
resources is also fundamental for protecting freshwater ecosystems,
water quality and human health. At the same time, the financial
sustainability of the water sector - together with policies for
financial burden sharing and for ensuring access by the poor - are a
prerequisite for the successful implementation of integrated water
resources management. In order to be effectively implemented,
integrated water resources management should also include institutional
and legal capacity building, human resources development and
participatory approaches. The basis for a strategic approach to
integrated freshwater management can be founded on a set of key
elements which bring together all the relevant parties and their
particular socio-economic and environmental concerns that are bound by
freshwater.

12.  Most decisions and actions related to water take place at local,
sub-national and national level since physical and socio-economic
settings are diverse. However, local actions may have national and even
regional implications for related areas of natural resource management.

13.  There is much to be done, but an integrated approach is the way
forward since it offers means of reconciling competing demands with
dwindling supplies and a framework in which hard choices can be made
and where effective operational actions can be taken. It is valuable
for all countries and at all stages of development.

14.  The view of the Expert Group meeting was that the future will
present many challenges for the sustainable development of freshwater
resources. Nevertheless, the judgement of the experts was that, in
spite of the current serious concerns regarding scarcity and
degradation of the quality of freshwater resources in large areas of
the world, water need not become a limiting factor for sustainable
development and human welfare. A series of crises, potentially with
regional and even global implications, can be averted if vigorous
action is taken now toward an integrated approach to freshwater
resources management. Key recommendations in this regard are set out
below .


       III.  KEY RECOMMENDATIONS FOR AN INTEGRATED APPROACH TO FRESHWATER
             RESOURCES MANAGEMENT


             A.     General

15.  Sustainability. There is a need to recognise water as a social and
economic good with a vital role in the satisfaction of basic human
needs, food security, poverty alleviation and the protection of
ecosystems. The principle of sustainability must underpin an integrated
approach to managing freshwater resources in order to maintain and
extend the benefits derived from natural freshwater systems. 

16.  Water policy and integrated management. As recommended in Agenda
21, it is essential for all countries to develop national, and where
relevant sub-national, water policies and continually review these
policies as circumstances change. Fundamental to this process is the
concept of an integrated approach to the planning, allocation,
development, and management of freshwater resources at the level of
river basins and aquifers. The basic management unit should be
designated in these policies as river basins and aquifer units. 

17.  Management of the Resource. The management of the demand for, and
the allocation of, water resources should be based on principles of
equity and efficient use to promote sustainable development including
health, the satisfaction of basic human needs, food security and
environmental protection.


             B.     Capacity Building

18.  Capacity Building. Institutional and human capacities at national
and local levels will need substantial strengthening if an integrated
approach is to be implemented. The need to strengthen capacity at local
levels is especially strong; the training of local entrepreneurs has an
important role in implementing actions. There is also a need to promote
the use of indigenous technologies and knowledge, in addition to the
transfer of appropriate technologies.


             C.     Information management

19.  Information Management. There is a need to finance, establish and
maintain effective data collection and dissemination, information
management systems and research in order to provide a sound basis for
policy formulation, planning and investment decisions and operational
management of freshwater resources. The collection of all freshwater
resource and related socio-economic and environmental data and
information needed for policy decisions, planning and management action
and monitoring, should have a high and continued priority. 

20.  Indicators of Progress. Governments need to adopt, implement and
monitor national water-related indicators of progress in achieving
integrated water resources management, including water quality
objectives. This should take account of the CSD work in this area. 


             D.     Environment and development

21.  Ecosystem integration. The conservation of freshwater and related
ecosystems is vital to sustainable development. These ecosystems are
themselves users, water regulators and providers of freshwater-based
resources (including fisheries). It is therefore necessary to promote
an ecosystem approach in integrated water resources planning,
development and management within the framework of river basin and
aquifer systems. 

22.  Human Interactions with the Environment. There is a need to ensure
that effective local and national systems are in a position to bring
about productive and sustainable interactions between human activities
and the ecological functioning of freshwater systems and to minimise
downstream impacts including estuarine and marine environments and to
reduce losses from droughts and floods.

23.  Water Quality and Environmental Sanitation. There is a need to
safeguard water quality as regards human health, productive uses of
water and the protection of freshwater ecosystems. There is a need to
implement measures, including sanitation programmes which have been
notably neglected, to safeguard water quality recognising that poor
environmental sanitation is the leading cause of human sickness in
developing countries. 


             E.     Economics and finance

24.  Economics. Water planning and management needs to be integrated
into the national economy, recognising the vital role of water for the
satisfaction of basic human needs, food security, poverty alleviation,
ecosystem functioning and taking into account special conditions of
non-monetary sectors of the economy.

25.  Allocation. Water needs to be considered as a finite and
vulnerable resource, and a social and economic good, and the costs and
benefits of different allocation - social, economic and environmental-
need to be assessed. The use of various economic instruments is
important in guiding allocation decisions.

26.  Accountability. It is essential to ensure efficiency, transparency
and accountability in water resources management as a precondition for
sustainable financial management.

27.  Covering Costs. All costs must be covered if the provision of
water is to be viable. Subsidies for specific groups, usually the
poorest, may be judged desirable within some countries. Wherever
possible, the level of such subsidies and who benefits from them should
be transparent. Information on performance indicators, procurement
procedures, pricing, cost estimates, revenues and subsidies needs to be
provided in order to ensure transparency and accountability, to
maintain confidence and improve investment capacities in the sector.

28.  Financial resources. Increased financial resources will need to be
mobilised for the sustainable development of freshwater resources if
the broader aims for sustainable economic and social development are to
be realised, particularly in relation to poverty alleviation. Evidence
that existing resources are used optimally will help mobilise
additional finance from national and international sources, both public
and private.


             F.     Participation and institutions

29.  Participation. There is a need to ensure the implementation of
participatory approaches to freshwater resources management based on the
recognition of the social and economic values of freshwater and its
related ecosystems. Programmes to raise awareness of the issues,
particularly among youth, are important. It is important that
stakeholders at all levels be involved in a transparent approach for
policy making, planning and management, as a ■bottom up■ and ■top-down■
process.

30.  Legislative and Regulatory Framework. A legislative and regulatory
framework should be established in order to facilitate integrated water
resources management strategies and to ensure that the capacity exists to
apply the legislation and to enforce regulations. Such framework should
be conducive to private sector investment and the involvement of local
service providers.

31  Institutional Development. There is a need to design and adapt
institutions to effect an integrated approach to policy analysis and to
integrated water resources management for specific environmental and
socio-economic settings. The role of Government needs to be clearly
defined, with a distinction between the functions of standard and
regulation setting and control on the one hand, and the direct management
and provision of services on the other, and between the role of
government at all levels and the roles of the private sector and other
stakeholders.

32.  Partnership. The establishment of an enabling environment should be
promoted, with specific mechanisms, that facilitate partnerships between
public, private and community organisations, local authorities, NGOs and
all public and private actors.

33.  Enhancing the role of women. Women should have an equal role with
regard to water resources management at local, national and international
levels.


             G.     International co-operation

34.  Support for national action. International co-operation and
partnership in support of national actions are essential for achieving
sustainable development, particularly in the water sector. This
includes the need for mobilising and providing new and additional
financial resources to developing countries as set out in Agenda 21, as
well as the need for enhancing international co-operation is such areas
as capacity building, transfer of technology, research and information
exchange.

35.  Promoting a common approach. The United Nations system should play
an active role in harmonising, at international and national levels,
the recommendations being made to countries for integrated water
resources management strategies.

36.  Information exchange. Governments should promote vital information
exchange and dissemination through the greater use of Internet and
other modern means of communication.

37.  Donor-recipient dialogue. Governments and the international
community need to strengthen consultation mechanisms aimed at improving
donor/recipient dialogues for the mobilisation of financial resources
in a well-targeted and predictable manner, based on national action
plans with a special focus on integrated water resources management
which recognises the need of the poorest communities.

38.  Regional consultations on drought and flood preparedness. There is
a need to establish or strengthen mechanisms for regional consultations
on drought and flood preparedness and early warning systems and
mitigation plans at local and national levels, regional emergency funds
and/or collective insurance programmes. At the international level,
there is a need to maintain support of these activities following the
close of the IDNDR (1999).

39.  International Watercourses. Riparian States are encouraged to co-
operate among each other on matters related to transboundary water
resources, building on existing agreements principles, arrangements,
instruments and programmes of action, taking into account the interests
of all riparian States concerned. Such efforts, upon common requests of
concerned States, may need to be supported through international co-
operation.

40.  Water-Related International Conventions and Programmes for Action.
In the formulation and implementation of integrated water resources
management policies and programmes, there is a need to take into
account actions to implement a number of existing Conventions and
Programmes of Action relevant to freshwater, in particular conventions
on Biodiversity, Desertification, Climate Change, Wetlands (RAMSAR) and
International Trade in Endangered Species (CITES) as well as the Global
Programme of Action for the Protection for the Marine Environment from
Land-Based Sources of Pollution.

41.  The Expert Group Meeting invites the Commission on Sustainable
Development to give consideration to the general conclusions and
recommendations outlined above, together with more detailed proposals
for action contained in the annexed reports of the four Working Groups.
It is hoped that the CSD will support these recommendations and
proposals for action, thus promoting an integrated approach to
freshwater management at all levels while ensuring that national action
is supported through adequate means of international co-operation.

42.  Furthermore, the Expert Group Meeting recommends that the CSD
invites countries to submit, by 2002, information concerning their
national water policies and related plans and progress in their
implementation.


                             ANNEX I

        Water as a Key Resource in Sustainable Development

                    Report of Working Group 1


       I.    INTRODUCTION

43.  The Working Group■s discussion was based upon a recognition that
water is fundamental to sustainable development and a basic component
of national and regional ecosystems. In many parts of the world,
current patterns of development and use are not sustainable,
environmentally, socially and economically.

44.  The four stage discussion process was; (a) a brief consideration
of the stresses on freshwater; (b) a brief consideration of the role of
integrated water resource management in easing the stresses and
resolving competition for limited water resources; (c) a more detailed
consideration of the policy responses and choices, the development of
strategies or lines of approach and the choice of management options;
and (d) the articulation of actions at international, regional,
national and local level (in which ■local■ comprises all sub-national
levels from states, provinces, regions, municipalities, districts down
to community level).


       II.   THE STRESSES

45.  There are a number of unprecedented demands for water supplies,
resulting from population growth and sectoral pressures, both as
consumptive and non-consumptive uses. This includes in particular,
agriculture (particularly irrigation and drainage), the provision of
domestic water supply and sanitation, industry, energy production,
environment/amenity(including tourism)/ecosystems, changes in patterns
of consumption as a result of industrialisation, rural/urban shifts,
migration, and unaccounted for water. A characteristic of these
stresses is that all their components are not equally distributed in
time and space. All are seeking to maximise the stream of social and
economic benefits from a limited resource base.

46.  Unprecedented impacts on the water resource base include reduced
base flows, declining aquifer reserves, point and non-point pollution
to surface and groundwater, background levels of contamination, and
climatic variability and hydrological uncertainty. These together are
having unprecedented impacts on socio-economic development, which can
lead to deteriorating public health (indicating that health aspects
need to be explicitly factored into the planning process) users forced
to internalise the externalities of other users (leading, for example,
to upstream/downstream disputes), increasing costs of water
development, limitations on development, and impacts on national
security.

47.  This can result in the degradation of the resource base,
intensified competition for water quantity and quality (for example,
agriculture looking for high volumes of low quality water,
municipalities looking for small volumes of high quality water) and the
loss of productivity related to water.

48.  The strategic challenges is to ensure sustainability of the
resource in the face of the above stresses. 


       III.  INTEGRATED WATER RESOURCES MANAGEMENT

49.  There is a compelling case for adopting integrated water resources
management approaches, although some past attempts have not been fully
successful. To achieve success, water management should be conducted
within a national economic framework as a key element in sustainable
economic development and poverty alleviation. When doing so, countries
should ask precisely what role water resources management can play in
(a) promoting socio-economic productivity through co-ordination and
integration of sectoral policies and explicit linkage of water in the
economic framework and planning process; (b) promoting sustainability -
maintaining the asset value of the water resource base; (c) mitigating
climate change by using energy from water and the use of solar and wind
energy for water pumping; (d) promoting soil and water conservation
through explicit linkage of water with land and forestry policies; (e)
promoting peace and security through co-operation in the management of
international water systems. 

50.  Such management can also provide for: (a) reconciling equity and
efficiency in the allocation of resources, provision of water services
and the protection of the resource base, that is who pays ? and who
benefits ? and; (b) promoting the use of best practices and appropriate
technologies for managing water demand and supply.

51.  Integrated water resources management is most effective when
conducted in the spatial framework of the river basin or aquifer and
should be supported by integrated information management systems.


       IV.   THE IMPLICATIONS FOR POLICY RESPONSES AND MANAGEMENT
             STRATEGIES


             A.     The Development of National and Sub-national Water
                    Policy and Programmes

52.  The Commission on Sustainable Development (CSD) should urge, as
recommended in Agenda 21, that each country adopt a national water
policy and accompanying programmes, where this already exists, review
and revise such policy and programmes as necessary. The CSD should call
upon countries to submit information on their policy and national
programmes in the year 2002. Policies should be developed in an open
and transparent process with the participation of all stakeholders.

53.  In some large countries, the responsibilities for the development
and implementation of such policies and programmes may need to be
divided between national and sub-national (state/province) entities.

54.  The elements of such national instruments could include, inter
alia:

(a)    The formulation and implementation of research, monitoring and
       information management programmes for understanding the quantity
       and quality of the resource base and its variability in time and
       space, and the social and economic forces affecting them;

(b)    The allocation of water resources, taking into account the
       principle that access to safe drinking water and sanitation is
       essential for satisfying basic human requirements, that other
       allocations should be based upon consideration of economic
       efficiency and equity, and that allocations should be based on
       sustainability of the resource base, including an ecosystem
       approach and environmental protection;

(c)    The incorporation of health concerns into the freshwater
       management process through the adoption of explicit health
       objectives in planning, the use of health indicators in routine
       monitoring and the assessment of health outcomes in evaluation;

(d)    The protection of the aquatic environment, including wetlands,
       from local and diffuse pollution sources and from threats posed
       by exotic influences to maintain physical and chemical balances
       and biological integrity;

(e)    The management of demand as a key part of the policy, focusing on
       water conservation through re-cycling and re-use and where
       appropriate to be driven by pricing policies and by adopting best
       practices and appropriate technologies;

(f)    The management of water supply in order to deal with annual and
       inter-annual variations, to support food security and other
       purposes;

(g)    The provision of appropriate mechanisms for management of land
       and water resources on an integrated basis within natural
       hydrological and hydrogeological units (river basins and
       aquifers), providing for necessary interactions with
       administrative organisations where provincial, municipal and
       district boundaries do not coincide with basin or aquifer
       boundaries;

(h)    The inclusions of provisions for coping with hydrological extreme
       events and disturbances, particularly droughts and floods and
       erosion, through implementation of programmes of drought
       preparedness and flood protection and mitigation including
       adequate monitoring and early warning systems;

(i)    The development and sustenance of appropriate institutions
       including cross-sectoral water councils and recognising needs for
       capacity building, public information and education.


             B.     Developing Management Strategies 

55.  Finding strategic management approaches to implement the policy
and to support social, economic and environmental policies, as well as
promoting the long term sustainability of the water resource base
requires a choice among a number of management tools. Institutional
design, economic instruments, advocacy, public education, ( i.e. the
whole range of management tools) can be considered. Particular
attention need to be paid to ensuring that the poor benefit from the
strategy adopted. However, given that it is not possible to do
everything at once and given the known constraints, the thematic areas
in which strategic cross-sectoral interventions are possible are
outlined below:

(a)    Build awareness at all levels (International, regional and at
       shared basin/aquifer level). This includes the role of education
       and the recognition of the needs of specific groups, such as
       women;

(b)    Build capacity including strengthening participatory frameworks,
       promoting community ownership and management, developing water
       resources management skills and institutions at basin/aquifer
       level, developing operational monitoring and evaluation
       procedures; developing operation and maintenance and, promoting
       public - private sector partnerships;

(c)    Promote an enabling environment through;(i) declaring a water
       policy with explicit recognition of basin and aquifer management;
       (ii) continuously monitoring and evaluating policy and action
       plans; (iii) developing an effective legal and regulatory
       framework including those needed within a basin/aquifer
       framework; (iv) ensuring effective regulation; (v) decentralising
       the implementation of regulatory and operational functions to the
       extent practical; (vi) adopting appropriate instruments for
       allocation; and (vi) sustaining water and socio-economic data and
       information systems;

(d)    Ensure sound sectoral strategies through: (i) setting sectoral
       targets and developing visible state, process response
       indicators, ensuring that targets are directed especially towards
       the poor; (ii) extend sustainable water supply and sanitation
       services; (iii) increasing agricultural/aquaculture productivity
       and food production per unit of water; (iv) promoting water
       conservation through judicious use of procedures and technology,
       old as well as new; (v) harmonizing water resources management
       and energy sector strategies; (vi) promoting soil and water
       conservation as part of basin-wide strategies; (vii) integrating
       erosion and flood control with land and forestry development; and
       (viii) integrating water/soil/air pollution control measures;

(e)    Cope with variability and change including; structural and non-
       structural solutions for flood damage reduction; reducing impacts
       of flooding on inhabitants of affected areas, and developing
       programmes for drought preparedness;

(f)    Promote regional co-operation through: (i) developing approaches
       to international management but building on a sound national
       base; (ii) adopting co-operative strategies; (iii) facilitating
       information exchange between riparians; and (iv) promoting river
       basin organisations and basin level planning and development.


       V.    IMPLEMENTING THE MANAGEMENT STRATEGIES

56.  Suggested actions to be taken within countries for implementing
management strategies include:

(a)    In considering the management strategies and implementation
       measures to be adopted, countries need to develop profiles of
       current freshwater management identifying the factors that impede
       progress toward integrated water resources management;

(b)    Starting from the local level, there is a need to; analyse and
       identify capacity building requirements through research and
       analysis; design appropriate water resource and environmental
       management strategies; integrate local level initiatives in
       overall basin planning framework, and strengthen the capacity of
       communities in the management of their water resources;

(c)    Develop consensus among all stakeholders through broad based
       consultations with a view to developing political will;

(d)    Develop estimates of national water expenditures and benefits in
       order to demonstrate the significance of the water sector for the
       national economy and to assist in setting priorities;

(e)    Adopt technologies combining indigenous and modern techniques,
       especially for water conservation, re-use and improved efficiency
       in irrigation and other sectors;

(f)    Co-ordination and monitoring of water withdrawal at national or
       basin/aquifer level to ensure the sustainability of the resource
       base;

(g)    Support water monitoring and undertake and publicise studies of
       the economic value of water data.

57.  Recommendations at the international level include the following:

(a)    The Expert Group Meeting recommended to the CSD the completion of
       the development of water sector indicators in the context of its
       programme of work on indicators of sustainable development,
       taking into account on-going work in this area;

(b)    That international co-operation on water related natural
       disasters be continued after the end of IDNDR (1999), in
       particular through the maintenance of early warning systems and
       the exchanges of information on disaster loss reduction methods;

(c)    Promotion by the international community of information exchange
       with special efforts to link all countries electronically;

(d)    International organisations should mobilise and co-ordinate
       assistance for education, training and capacity building;

(e)    Development of a consolidated United Nations Guidebook on
       integrated water resources management to replace existing
       sectoral guidelines;

(f)    Support by Governments and the international community for the
       maintenance of international information and monitoring networks;

(g)    Harmonisation by Governments of data collection at the
       basin/aquifer level;
       
(h)    Multi and bi-lateral partners should emphasise integrated water
       resources management, taking into account the needs of the
       poorest communities.


       VI.   TRANSBOUNDARY WATER SYSTEMS

58.  Riparian States are encouraged to co-operate among each other on
matters related to transboundary water resources, building on existing
agreements principles, arrangements, instruments and programmes of
action, taking into account the interests of all riparian States
concerned. Such efforts, upon common requests of concerned States, may
need to be supported through international co-operation.


                             ANNEX II

              Freshwater Ecosystems and Water Quality

                    Report of Working Group 2


       I.     INTRODUCTION

59.  The report provides a brief consideration of the role of
freshwater ecosystems and water quality in integrated water resources
management and sets out a range of specific actions which can be taken
up by national Governments, as appropriate, to accelerate the
implementation of chapter 18 and other water related chapters of Agenda
21. These actions are guided by policy choices (the stated objectives
of governments) and strategic management options (how to put the policy
into place within national social and economic frameworks). Finally,
suggested objectives are recommended for the Commission on Sustainable
Development .


       II.    THE ROLE OF FRESHWATER ECOSYSTEMS AND PROTECTION OF WATER
              QUALITY IN INTEGRATED WATER RESOURCES MANAGEMENT

60.  Chapter 18 of Agenda 21 states that one of the objectives of
integrated water resources management is the -maintenance of ecosystem
integrity, according to a management principle of preserving aquatic
ecosystems, including living resources, and of effectively protecting
them from any form of degradation on a drainage basin basis■. It also
recommends the adoption of an integrated approach to environmentally
sustainable management of water resources, including the protection of
aquatic ecosystems and freshwater living resources, and the integration
of water quality elements into water resources management.

61.  However, current integrated water resources management practices
often consider ecosystems primarily as water users, with little
attention given to their vital role as providers and regulators of
water resources. Little consideration has been given to the other
services and goods that ecosystems provide, such as flood regulation,
Biodiversity conservation, fish and firewood. It is of fundamental
importance to the long term availability and sustainable management of
water resources that the maintenance of ecosystems and the
strengthening of their role as providers of services and goods be
recognised.

62.  Similarly, in spite of high-level of commitments to action made at
both the International Conference on Water and the Environment and the
Earth Summit, water quality has invariably been subordinated to water
quantity and sanitation has been neglected. The result of that neglect
is an emerging crisis of water quality, damaging public health and
restricting economic development. In order to deal effectively with
this neglect of both freshwater ecosystems and water quality
protection, and thus accelerate the implementation of the activities in
the area of freshwater ecosystems and water quality proposed in Chapter
18 of Agenda 21, a number of specific actions in both areas are
recommended primarily to national governments.


       A.     Proposed actions in the area of freshwater ecosystem
              management

63.  The proposed actions in the area of freshwater ecosystems are
aimed to achieve three major goals: (a) ensure the integration of the
ecosystem approach into integrated water resources management,
recognising the role of ecosystems as users, providers and regulators
of freshwater and freshwater-based resources (including fisheries); (b)
ensure the effectiveness of local or national systems for controlling
interactions between human activities and functioning of ecosystems;
(c) ensure participatory approaches to ecosystem management based on
recognition of the economic and social value of freshwater ecosystems.
The overall goal is to maintain the functioning of ecosystems and to
protect water quality as a base for sustainable development. Most of
the above-mentioned actions are for national or local levels but many
will require appropriate international action and support.


                    1.     Ensure the integration of the ecosystem approach
                           into integrated water resources management,
                           recognising the role of ecosystems as users,
                           providers and regulators of freshwater and
                           freshwater-based resources (including fisheries)

64.   The following specific actions were identified to address these
goals:

(a)    Strengthen national programmes for gathering, analysing,
       monitoring and disseminating physical, economic and social data
       necessary for ecosystem management, build institutional capacity
       to understand and assess ecosystem functions and values, and
       incorporate them into the decision-making process;

(b)    Carry out comprehensive assessments of functions and values of
       ecosystems in terms of their social, economic and environmental
       benefits and costs, in order to manage change;

(c)    Promote research at both national and international levels to
       determine the economic value (in monetary terms) of both the
       benefits provided by ecosystems and the costs of their
       degradation;

(d)    Raise awareness of ecosystem functions and values at all levels,
       from school children (local) to national policy-makers through
       both national and international campaigns.


                    2.     Ensure effective local or national systems to
                           control interaction between human activities and
                           functioning of ecosystems

65.   The following specific actions were identified to address this
goal:

(a)    Use environmental impact assessments to measure and monitor
       impact of human activities on ecosystems;

(b)    Launch co-ordinated international programmes to identify and
       control plant and animal pest species, such as water hyacinths,
       that threaten ecosystem integrity;

(c)    Establish a legal framework for allocating adequate amounts of
       water to ecosystems, including for the restoration of degraded
       ecosystems;

(d)    Incorporate protection of human health dimension in the
       management of freshwater ecosystems;

(e)    Ensure coverage of the major human impacts on freshwater
       ecosystems, such as in river structure management, impoundment,
       abstraction, point discharges, diffuse inputs and
       fisheries/aquaculture;

(f)    courage countries to reduce or eliminate subsidies to activities
       that damage ecosystems;

(g)    Apply basin-wide approaches to freshwater ecosystem management
       for both surface and ground water;

(h)    Establish measurements and research programs for understanding
       the quantity and quality of the resource base and its variability
       in time and space.


                    3.     Ensure participatory approaches to ecosystem
                           management based on realisation of the economic
                           and social value of freshwater ecosystems

66.   The following specific actions were identified to address this
goal:

(a)    Promote and disseminate best practices and traditional knowledge
       in ecosystem management;

(b)    Introduce measures to decentralise decision-making and empower
       local communities to participate in efforts to protect freshwater
       ecosystems;

(c)    Launch information campaigns and information networks at both
       national and local levels to raise public awareness and foster
       social mobilisation to the need for protecting freshwater
       ecosystems;

(d)    Improve local institutional capacity and promote human resources
       development to strengthen community participation, taking into
       particular account the role of women in rural communities as
       protectors of the environment.


             B.     Proposed actions to protect water quality and human
                    health

67.  The proposed actions in the area of water quality are aimed to
achieve four major goals: (a) establish objectives necessary to
safeguard water quality as regards human health, productive uses of
water and the protection of freshwater (b) implement measures in
support of the objectives for safeguard water quality (c) establish
effective data collection programmes to provide a sound basis for
establishing goals and monitoring progress towards them (d)
significantly accelerate access to environmental sanitation (including
solid and liquid waste management) in order to reduce the threats to
human health and freshwater ecosystems. Most of these actions are for
national or local levels but many will require appropriate
international action and support. It should be recognised that poor
environmental sanitation results in serious degradation of ecosystems
and is the leading cause of human diseases.


                    1.     Establish objectives necessary to safeguard water
                           quality as regards human health, productive uses
                           of water and the protection of freshwater
                           ecosystems

68. The following specific actions were identified to address these
goals:

(a)    Set requirements for drinking-water quality;

(b)    Set targets for ambient water quality in relation to intended
       uses and the protection of the freshwater ecosystem;

(c)    Set requirements for effluent discharges and the control of
       pollution from non-point sources.


                    2.     Implement measures in support of the objectives
                           for safeguarding water quality

69.  The following specific actions were identified to address this
goal:

(a)    Raise political awareness of the cost of pollution and build up
       support for relevant reform, for example, through studies of the
       economic and health costs of water pollution;

(b)    Document or initiate successful examples of complex programmes to
       remedy water quality problems as a basis for sharing know-how;

(c)    Strengthen capacities to plan and implement programmes for
       capital investment, delivery of services, maintenance of systems,
       and for monitoring and regulating water quality requirements;

(d)    At national and international levels, prioritise key knowledge
       gaps that inhibit effective water quality management and develop
       research programmes to fill the gaps.


                    3.     Establish effective data collection programmes to
                           provide a sound basis for establishing goals and
                           monitoring progress towards them

70.  The following specific actions were identified to address this
goal:

(a)    Establish standards for water quality data which ensure their
       reliability and consistency;

(b)    Evaluate and modernise, as appropriate, data programmes so that
       they are cost-effective and focused on data needs for water
       policy and management decision-making;

(c)    By 2002, carry out a national water quality inventories for
surface and ground waters, and identify gaps in information.


                    4.     Accelerate significantly access to environmental
                           sanitation (including solid and liquid waste
                           management) in order to alleviate poverty,
                           improve human health and protect freshwater
                           ecosystems

71.  The following specific actions were identified to address these
goals:

(a)    Redress the imbalance in the resources devoted to sanitation,
       including capital investments, untapped community efforts, and
       innovative financing and credit mechanisms to expand sanitation
       coverage;

(b)    Ensure that new water programmes are accompanied by safety
       disposal measures for the resulting waste water;

(c)    In addition to actions by national and local authorities,
       introduce measures to empower local communities to participate in
       efforts to extend access to sanitation, taking into particular
       account the role of women;

(d)    Improve sanitation services through hygiene education, innovative
       low-cost systems, such as dry- and low-water-use systems, and
       targeting projects on health objectives;

(e)    Support recent national and international initiatives to expand
       sanitation coverage through information sharing among
       governments, communities NGOs and the international community.


             C.     Overall goal for protecting freshwater ecosystems and
                    water quality

72.  Maintain the functioning of ecosystems and protect water quality
as a base for sustainable development, and establish or strengthen
systems to monitor progress on drinking-water supply and sanitation, as
well as water quality and management generally, at local, national and
international levels, and to identify emerging issues and needs. 


             D.     Support, in financial and operational terms, the
                    integration of ecosystem approaches and water quality
                    into integrated water resources management

73.  The following specific actions were identified to address these
goals:

(a)    Donors should consider ensuring that an adequate share of their
       ODA is allocated to the protection of freshwater ecosystems;

(b)    International financial organizations and donor Governments need
       to take steps towards the co-ordination of international
       financial flows in the form of direct grants and loans in
       concessional terms to recipient countries for the protection of
       freshwater ecosystems;

(c)    Establish appropriate budgetary mechanisms specifically designed
       to finance measures to protect or reverse the degradation of
       freshwater ecosystems


       III.  SUGGESTED OBJECTIVES FOR THE COMMISSION ON SUSTAINABLE
             DEVELOPMENT

74.  The CSD is invited to recommend that each country adopt a national
or local water policy, including measures to protect freshwater
ecosystems, or where this exists, to review and revise as necessary.
CSD may consider calling upon countries to report on their policy and
the progress in the year 2002. Policies should be developed in an open
and transparent process with public and stakeholder participation. It
is recommended that such policies should be based on the recognition of
water as a national and international heritage - with the protection of
freshwater ecosystem as an integral part of this effort -- and should
address inter alia:

(a)    The principle that water resources allocation decisions should
       take into account that access to safe drinking water and
       sanitation is essential for satisfying basic human needs and that
       the allocation to other users must be based on economic
       efficiency and sustainability criteria; 

(b)    The need for demand management as a key element of integrated
       water resources management policy, focusing on water conservation
       through re-cycling and re-use, and where appropriate to be driven
       by pricing policies and by adopting best practices and
       appropriate technologies;

(c)    The need to provide appropriate mechanisms for management of land
       and water resources on an integrated basis with national
       hydrological and hydrogeological units and to provide for the
       necessary interaction with administrative organisations across
       municipal and district boundaries;

(d)    The need to formulate measures for coping with extreme climatic
       and meteorological events, droughts and floods, through
       implementation of programmes of drought preparedness and flood
       protection and mitigation including adequate monitoring and
       warning systems;

(e)    The need to protect the aquatic environment, including wetlands,
       from local and diffuse pollution sources and from threats posed
       by exotic influences to maintain physical, chemical and
       biological balances;

(f)    The need to develop and support appropriate institutions
       including cross-sectoral water councils and to recognise the
       importance of capacity building, public information and
       education;

(g)    The need to take into account actions required to implement the
       Conventions on Biodiversity, Desertification, Climate Change,
       Wetlands (RAMSAR) and International Trade in Endangered Species
       (CITES) as well as close linkages with the implementation of the
       Global Programme of Action for the Protection for the Marine
       Environment from Land-Based Sources of Pollution.


                             ANNEX III

                    Economic and Financial Issues

                      Report of working group 3


       I.    INTRODUCTION

75.  This annex provides a brief review of economic and financial
issues that were discussed on the basis of recommendations of chapter
18 of Agenda 21 and recommendations by the Commission on Sustainable
Development. The discussion aimed to elucidate a range of policy
options aimed at enhancing the financing of water resources and the
economic performance of water resources development and utilisation.

76.  It was recalled that as stated in the Programme For The Further
Implementation of Agenda 21, the inter-governmental process under the
aegis of CSD on Freshwater will be fully fruitful only if there is a
proved commitment by the international community to the provision of
new and additional financial resources for the goals of this
initiative.


       II.    ECONOMIC AND FINANCIAL CONCERNS IN THE DEVELOPMENT AND
              UTILISATION OF WATER RESOURCES 

77.  Water is a finite and vulnerable environmental resource and a
social and economic good. The allocation of scarce water resources
among competing uses has fundamental effects on ecosystems and the
national economic development in terms of employment and the generation
and distribution of income and poverty alleviation. Such policies can
also have significant impacts on land use planning and the movement of
population from rural to urban areas. The access of suitable amounts of
water for basic human needs should be incorporated in the formulation
and implementation of economic policies for resource development and
allocation.

78.  The use of pricing policies and other economic instruments are
essential for the effective and equitable allocation of the resource
taking into account social and economic criteria as well as basic human
needs. Economic evaluations need to consider positive and negative
impacts on health, human and ecosystems. Inadequate economic policies
have often contributed to the poor performance of water utilities thus
decreasing their ability to attract financial resources from the public
and private sector as well as from the international community. To the
extent that subsidies are required for social reasons, they should be
well targeted to the intended beneficiaries and managed in a fully
transparent way. Subsidies should be seen in the context of poverty
alleviation as measures which, in time, could be phased out. Additional
funding, targeted mainly to peri-urban and rural areas, is required. 

79.  While the public sector has traditionally played a major role in
financing water resources development, there is an increasing
recognition of the need for the involvement of other stakeholders
(local private sector and community based organisations) and financial
sustainability. 

80.  Financial support for the collection, processing and dissemination
of timely, reliable and demand-oriented information is essential to the
effective management of water resources.

81.  In addition, the number of water related natural disasters (flood,
drought) have been rising rapidly over the past decades. Therefore, the
economic evaluation for the losses due to these phenomena and financial
provision for their prevention and mitigation should be of priority.


       III    REASONS FOR ANALYZING ECONOMIC AND FINANCIAL ISSUES IN THE
              WATER SECTOR

82.  Several reasons justify the interest in analysing issues related
to economic and financing considerations in the water sector. Among
those are:

(a)    The importance of water as a natural resource with a social as
       well as an economic good ;

(b)  Given that the sector requires new and additional financial
     resources, the need to understand how and by whom the water
     resources sector is financed, particularly in the case of the
     service component of resource management;

(c)  The importance of defining the role of the government and the
     private sector and their financial obligations;

(d)  The need to take into account differences between rural and urban
     areas and the different users (agricultural, industrial, energy,
     etc■) in view of the wide range of water users in the economic
     spectrum;

(e)  The need to ensure the security and provision of water through
     incentives provided by government for the purpose of satisfying
     basic human needs, taking into account that the provision of water
     supply to some areas of the sector is economically justified at
     the macro level despite the non profitability in terms of internal
     cost recovery, particularly in under privileged areas;

(f)  The need to understand and use economic tools and apply them into
     the water sector to achieve greater efficiency;

(g)    Decision makers need to know the cost of provision of water,
       establish long term economic perspective of water in the overall
       economy, and take into account the social implication of water
       resources, and determine appropriate development scenarios;

(h)    The necessity to link performance and financing to cost recovery
       and to show users the benefits of using sustainable management
       solutions and the impact of such actions on the economy; 

(i)    Social and environmental cost/benefit analysis needed in water
       related projects;

(j)    Deficient practices exist in budgeting development, operation and
       maintenance;

(k)    Integration of water into national, sub-national, and river basin
       planning as the resource is needed in all sector activity;

(l)    The fact that lack of water in an area will result in migration
       to areas where the resource is available, shows the need for
       integration of water resources development and management with
       land use planning which will result in stabilising rural
       populations through added employment opportunities and poverty
       alleviation.

(m)    Reforms of the water sector will result in economic benefit,
       specially at local level;

(n)    The need to finance capacity building to improve management;

(o)    Funding basic water data collection and management must be
       sufficient to understand the nature and variations of the
       resource;

(p)    Needed efforts to prevent and mitigate disaster losses;

(q)    The fact that foreign and national private investments are
       increasing notably in urban areas does not minimise the need for
       significant increases in national and international financing in
       view of the very large investment requirements.


       IV    STRATEGIC PRINCIPLES AND RELATED PROPOSED ACTIONS AND THEIR
             IMPLEMENTATION


             A.     Goal 1: Ensure the integration of water into the
                    national economy, recognising it as a social and
                    economic good, vital for the satisfaction of basic
                    human needs, food security, poverty alleviation, and
                    the protection of ecosystem functioning, and applying
                    economic instruments in its management


83.  In order to achieve this goal, the following strategic issues were
identified:

(a)    Recognise water as a social good, for the satisfaction of basic
       human needs, to be provided to all, with due attention given to
       gender dimensions;

(b)    Recognise water as a finite and vulnerable resource with a value
       in alternative uses, environment and ecosystem maintenance, and
       consider this value in the intersectoral allocation of water for
       different uses taking into account water quality;

(c)    Estimate and consider «intangibles», such as social and
       environmental values of water in dealing with intersectoral
       allocations;
       
(d)    Consider that special conditions apply in rural non/monetary
       sectors of the economy in which economic instruments may be
       difficult to apply.

84.  The following specific actions were identified to address these
issues.

(a)    Apply demand management approaches based. on assessment of
       demands and users■ willingness and ability to pay;
       
(b)    Ensure that a proper regulatory environment exists for cross-
       sectoral consideration of user charges for different sub-sectors;
       
(c)    Collect and disseminate internationally experiences, good
       practices and instruments for evaluation of water for different
       uses, including environmental and ecosystem maintenance.
       Establish mechanisms for applying these practices and instruments
       at the appropriate management levels;
       
(d)    Develop and grant legal concessions for water abstractions and
       infrastructure management at the local level;
       
(e)    Consider conditions in poor rural communities by focusing on low
       cost solutions, and factoring in contributions in kind by local
       users through labour and other inputs;
       
(f)    Include environmental parameters in the evaluation of water
       related projects in all sub-sectors.


             B.     Goal 2: Ensure efficiency, transparency and
                    accountability in water resources management as a
                    precondition for sustainable financial management

85.  The following strategic issues were identified as being pertinent
to achieving this goal:

(a)    An efficient and transparent financial management is a
       precondition for effective cost recovery;
       
(b)    The provision of high-quality services to users is a precondition
       for effective cost recovery;
       
(c)    The allocation and use of revenues from water within the water
       sector itself, and within local communities, must be transparent;
       
(d)    The application and acceptance of the principle of water as an
       economic good requires full transparency and accountability in
       charges, subsidies, cross-subsidies and taxes applied to
       different user groups;

(e)    Investments in the water sector should be made with the objective
       of maximising the output and productivity of water resources.

86.  The following specific actions were identified to address these
issues.

(a)    Ensure transparency in charges, subsidies, cross-subsidies and
       taxes;
       
(b)    Ensure transparency in the management of water service providers
       (water utilities), and avoid monopolies whenever possible;
       
(c)    Develop and apply criteria and standards for performance of
       utilities, and link these to user charges;
       
(d)    Ensure regular public, independent audits of service providers;

(e)    Monitor the performance of equipment, and ensure that procurement
       takes place in a transparent manner, and through international
       tender. Avoid to the extent possible procurement through tied
       aid;

(f)    Develop and apply instruments for charges in the irrigation
       sector through studies and collection and dissemination of
       international experience;

(g)    Develop and apply instruments for pollution charges through
       studies and collection and dissemination of international
       experience;
       
(h)    Pay particular attention to avoiding cost and time overruns.


             C.     Goal 3: Ensure the establishment of public/private
                    partnerships

87.  The following issues were identified as being pertinent to
achieving this goal:

(a)    The existence of a clear definition of and distinction between
       the role of government, the private sector and other
       stakeholders, where appropriate to local situations;
       
(b)    The establishment of an environment conducive to private sector
       investment;

88.  The following specific actions were identified to address these
issues.

(a)    Require environment reviews for export guarantee (credits) to
       attract private funds and services;
  
(b)    Institute clarification and awareness building measures with
       respect to defining and understanding the role of private sector;
  
(c)    Define the roles and responsibilities of the partners in public /
       private partnerships (PPP), including NGO■s, local authorities
       and community based organisations. Promote organisational changes
       in Government accordingly;
  
(d)    Define and take into consideration elements of risks in water
       resources management and specify risk responsibilities of the
       various partners;
  
(e)    The resources to be provided by both the service provider and the
       Government have to be clearly defined, controlled and clearly
       spelled out


             D.     Goal 4: Ensure financial sustainability

89.  The following issues were identified as being pertinent to
achieving this goal:

(a)    The need for determining means and methods to be put in place to
       facilitate gradual transition towards full cost recovery, whereby
       all costs are recovered from users or otherwise funded on a
       sustainable basis;
       
(b)    The need for considering different criteria to determine
       financial burden of the different users; 
       
(c)    The need to ensure that the sector should be financially self
       sustainable.

90.  The following specific actions were identified to address these
issues.

(a)    Identify criteria for levels of cost recovery for different
       categories of users, through economic analyses and consultations
       with users groups;

(b)    Develop financial and regulatory instruments to facilitate
       private investments;

(c)    Implement adapted financial policies for poorest and rural areas;

(d)    Develop adapted financial solutions for sanitation;

(e)    Redirect public savings to «sustainable development» actions;

(f)    Allocate resources from water charges for Research and
       Development purposes;

(g)    Link financial self sustainability of local services with
       decentralisation through the participation of users and
       mobilisation of local entrepreneurs;

(h)    Diversify sources of funding.


             E.     Goal 5: Ensure adequate financing of the water sector

91.  The following issues were identified as being pertinent to
achieving this goal:

(a)    The adequacy of absorptive capacity and availability of financial
       resources within the sector;

(b)    The lack of political awareness and will to implement strategies
       aimed at recovering costs;

(c)    The requirements of external finances limit the flows of
       resources to the sector.

92.  The following specific actions were identified to address these
issues:

(a)    Improve donor - recipient dialogue on financing; 

(b)    Ensure to include in the estimation of costs, all operational,
       maintenance and other costs;

(c)    Put in place a national fund for financial resources mobilisation
       and allocation;

(d)    Urge the international community and Governments (in both
       recipient and donor countries) to maintain and consider
       increasing their financial support to freshwater resources
       development. The impact of such a support would be far more
       significant if it were well targeted and predictable;

(e)    Improve communication and co-operation among sources of financing
       of the sector;

(f)    Mobilise largely untapped community financing resources and
       provide credit mechanisms which foster self help efforts by
       individuals;

(g)    Identify and mobilise innovative source of funding;

(h)    Increase water sector finances where absorptive capacity exists.
       Where it does not, improve or upgrade the adsorptive capacity;

(i)    Particular attention must be made to include operational,
       maintenance and depreciation costs in all water related projects.


             F.     Goal 6: Ensure financing of water resources data
                    knowledge base as a basis for analysis and research
                    for better understanding and decision making

93.  The following specific actions were identified to address these
issues:

(a)    Foster links between environmental impact assessment with data
       base development;

(b)    Create national water funds for the development of the water
       resource knowledge base, including contributions from users;

(c)    Support integrated water resource information systems and their
       management, particularly early warning systems;

(d)    Support for awareness program for understanding the need for data
       collection, decision making, policy impact assessment and public
       information as well as education.


             G.     Goal 7: Ensure that provision is made for economic
                    costs analysis of extreme events or chronically prone
                    areas to flooding and drought

94.  The following specific actions were identified to address these
issues:

(a)    Create mechanisms of regional consultation including meetings,
       creation of regional solidarity funds with the assistance of the
       international community;

(b)    Put in place drought and flood preparedness programs and early
       warning systems;

(c)    Put in place mitigation plans at local and national levels;

(d)    Put in place regional emergency funds and insurance programs for
       extreme events;

(e)    Prepare drought as well as flood preparedness mitigation
       programs.


       IV.   PRIORITY AREAS IN NEED OF FINANCING

95.  Areas in need of financing were grouped into institutional and
capacity building, integrated water resources planing and management,
support to underprivileged area and investment initiatives:

(a)    Institutional capacity building/support to policy including
       support to policy and legislation;

(b)    Integrated Water Resources Management;

(c)    Data collection, monitoring and integrated information management
       systems;

(d)    Knowledge of hydro-ecosystems functioning;

(e)    Demand and supply assessment;

(f)    Feasibility and thematic studies;

(g)    National, sub national and river basin action plans;

(h)    Local support for sustainable solutions to communities,
       associations, local authorities and emerging local private
       sector;
             
(i)    Investment for those without access to basic needs.


       V.    STRATEGIES/ACTIONS FOR COST REDUCTION 

96.  Several strategies and actions could be recommended in addressing
economic and financial issues related to integrated water resources
management. Among the measures of particular interest are cost
reduction means including: 

(a)    Restructuring of existing institutions to reduce cost;

(b)    Improving existing management such as demand management/leak
       reduction;

(c)    Promoting competition in service provision;

(d)    Improving existing data collection network;

(e)    Provision of financial incentives, including tax exemption for
       equipment and for private sector; 

(f)    Investing in under privileged areas;

(g)    Reliance on low cost systems and appropriate technologies
       including indigenous technologies;

(h)    Increasing accountability in system management.
       

       VI.   SUMMARY OF KEY ISSUES AND RECOMMENDED ACTIONS

97.  Water must be integrated into the national economy, recognising it
as a social and economic good, vital for ecosystem functioning and
applying economic instruments in its management.  As such, economic
policies must consider «intangibles» such as social and environmental
values of water as well as the special conditions in non monetary
sector economies.  

98.  Actions should be oriented towards applying demand based
management approach taking into account the notion of users■
willingness and ability to pay. Resources must help in the collection,
dissemination and transfer of international experiences in economic
evaluation and financial management of water resource. Where possible,
support should be provided to strengthen private sector, community
based participation as well as the development of appropriate and low
cost technologies. Also, assistance should continue in favour of public
institution in improving their role.

99.  Efficiency, transparency and accountability are keys to
sustainable financial management of water resources. For these, several
actions are required. Information should be made public for performance
indicators, procurement procedures, pricing policies and components,
cost estimates and revenues. Determination and allocation of subsidies,
cross-subsidies, charges should be transparent in order to maintain
confidence and improve investment revenues in the sector. Instruments
such as auditing could help achieve this goal.

100.  Integrated water resource management required closed partnership
between public and private sectors. As such, a clear definition and
distinction should be made of the role of government, the private
sector and other stakeholders, where appropriate to local situations.
In doing so, it is important that the institutional and legal
environments be conducive for private sector investment and the
emergence of local water service providers. Particular attention has to
be given to financial and economic risk assessment.

101.  Regardless of policies, financial sustainability is a
prerequisite for sustainable integrated water resource management.
Therefore, it is a necessity to facilitate a gradual transition towards
full cost recovery, criteria for financial burden sharing and the
development of financial and regulatory instruments. Also, measures
needed include adapted financial policies for the poorest and rural
areas and the allocation of resources from water charges to research
and development purposes. Emphasis should be placed on participation of
users, training of local entrepreneurs and the diversification of
sources of funding. Furthermore, a strong link should be made with the
decentralisation process.

102.  At the same time, it is important to ensure adequate financing of
the water sector. Related issues in this case concern the adequacy of
absorptive capacity and availability of financial resources within the
sector, the lack of political awareness and will to implement
strategies aimed at recovering costs as well as the requirements of
external funding sources which limit the flows of resources to the
sector. Thus, actions should be aimed at improving donor - recipient
dialogue on financing , the creation of national fund for financial
resources mobilisation and allocation in the water resources sector.
The international community and Governments (donors and recipients
alike) should be urged to maintain and encourage to increase their
assistance to the water resources sector in a predictable manner and
targeted to solve specific problems. Value can be added by improving
communication and co-operation among sources of financing as well as
the mobilisation of largely untapped community financing resources and
through the provision of credit mechanisms which foster self help
efforts by individuals. This includes, the mobilisation of innovative
source of funding.

103.  Financing of water resources data knowledge base is a basis for
analysis and research for better understanding and decision making.
Decision making rely, to a large extent, on the existence and the
availability of data and their analysis. Thus is essential that
adequate financial resource be provided for better understanding of
water resource knowledge base. This implies, among others, the
fostering of links between physical, socio economic and environmental
impact assessment with data base development, the creation of national
water funds. Support should similarly be mobilised for integrated water
resource information systems and their management, particularly early
warning systems Also, awareness for understanding the need for data
collection, decision making, policy impact assessment and public
information as well as education deserve an attention.

104.  The frequency of extreme events have increased in recent decades.
Therefore, provision should be made for economic costs analysis of
these events and for the management measures for chronically prone
areas to flooding and drought. Several main actions may concurred to
achieving this goal. The creation of mechanisms of regional
consultation, regional solidarity funds, drought and flood preparedness
programs and early warning systems, mitigation plans at local and
national levels, regional emergency funds and insurance programs for
extreme events could be considered.

105.  In a broader perspective, several priority activities should be
financed including institutional and capacity building, integrated
water resources planning and management. Particularly, local support
should be provided for sustainable solutions to communities,
associations, local authorities and emerging local private sector. 

106.  Finally, financial resources can be best attracted to the sector
when efforts are made to increase financial accountability and to
reduce cost in particular. For this, specific actions could include
restructuring of existing institutions, improving existing management
through demand management/leak reduction, promoting competition in
service provision, data collection and creating financial incentives,
participation as well as the use of low cost technologies.


                            ANNEX IV

  Participation and Institutions for Integrated Water Resources Management

                   Report of working group 4


       I.    INTRODUCTION

107.  Water is not only a social and economic good but also an
environmental resource. To consider water resources as a -common
heritage■ carries for some countries a too restrictive connotation. In
its broad meaning, the water sector encompasses all activities related
to integrated water resources management (IWRM) and to the development,
distribution and utilisation of the resource (water supply and
sanitation, agriculture, environment and ecosystems, hydropower,
industry and other uses). The main difficulties faced in the
formulation and implementation of IWRM policies and programmes are not
due to lack of technical solutions but rather to the deficiency of
institutional organisation and to insufficient legislation and/or
enforcement of water acts and regulations. Institutional and legal
frameworks are key elements of IWRM. Equally, the involvement of users
and stakeholders is required if empowerment and ownership of the
process is to ensure sustainability of IWRM and water resources
development.

108.  In most developing countries, institutions are viewed as too weak
or too young to adequately carry out IWRM and need therefore to be
strengthened. IWRM has a cost that needs to be carefully evaluated and
covered. External Support Agencies (ESA) are urged to consider parallel
financing of the creation/strengthening of IWRM institutions, as an
integral part of water resources development projects. 

109.  In the following, all recommended actions are meant to complement
or extend the recommendations of Chapter 18 of Agenda 21.


       II.   ENHANCED PARTICIPATION FOR IMPROVED INTEGRATED WATER
             RESOURCES MANAGEMENT

110.  The objective is to best manage the resource in an integrated
fashion for the benefit of the users. Water policy and programmes
should be co-ordinated with the overall economic planning of the
country, particularly in the areas of agriculture and food security. 

111. The focus areas for IWRM are as follows :

(a)    Water resources assessments including monitoring, quality control
       and water-related environmental concerns, with special attention
       to the over-exploitation of aquifers;

(b)    Socio-economic assessments including census data, patterns of
       water use and consumption, future needs, traditional customs,
       willingness to participate;
   
(c)    Water resources planning within natural management units and at
       national and regional levels, reconciling the supply and the
       demand as they emerge from the assessments and effectively
       involving the key actors in preparing, revising and adopting
       documents which need be updated on a regular basis ; particular
       attention should be given to large infrastructure developments
       (such as dams and inter basin transfers);

(d)    Implementation of the action plans with full involvement of the
       key actors;

(e)    Day-to-day water resources management : adjustments of the plans
       with regard to the changing conditions of the water availability
       and needs. Specific attention should be given to extreme events
       (floods and droughts, including their long-term aspects) which
       need full engagement of the users and of the community at large
       to implement contingency plans and to the operation and
       maintenance of infrastructure;

(f)    Water resources protection and conservation, with specific
       emphasis on improving water quality, environmental health
       conditions and sanitation (urban and rural areas), institutional
       and legal linkages within an ecosystem approach. Particular
       attention should be devoted to the spread of water-related
       diseases and of aquatic weeds in large water bodies;

(g)    Mechanisms for prevention and resolution of water-related
       conflicts at local and national levels.


       III.  KEY ACTORS AND FULFILMENT OF THEIR ROLE 

112.  An institutional framework includes a system of laws and
regulations, economic and financial instruments and a clear definition
of mandates and responsibilities among the various actors. This
institutional framework must guarantee the involvement of all partners
in the definition and in the implementation of national policies and
strategies for IWRM at different levels (local, regional and national).

113.  In keeping with Chapter 18 of Agenda 21, the following actors
need to play a key role in the formulation and implementation of IWRM
policies, strategies and action plans:

(a)    Decision-makers;

(b)    International organisations and External Support Agencies; 

(c)    Industrial water users;

(d)    Scientific and research institutes;

(e)    Water services providers, including private entrepreneurs, for
       drinking water supply and sanitation , irrigation and drainage,
       hydropower and other water uses;

(f)    Water and water-related departments of the state;

(g)    Municipalities and local authorities (elected and representing
       the states);

(h)    Users and user groups;

(i)    Professional organisations;

(k)    National and international NGOs.

114.  Specific recommendations for the involvement of key actors
include:

(a)    IWRM should integrate the interests of all users and stakeholders
       on a local, regional, national and international level in
       relation to water quality and quantity;

(b)    National plans for IWRM should be developed in a constructive
       dialogue with users and stakeholders at the level of the
       management unit. They should make clear their interests and their
       role in the short, medium and long terms. This dialogue should
       include an assessment of the consequences of priority setting;
        
(c)    There should be a clear distinction between the various stages of
       policy development and execution and the level of planning
       (local, sub-national, national and regional). The role and
       responsibility of the various actors should be clearly defined to
       avoid misunderstanding, but could change over time. The decision-
       making process should be at the appropriate lowest level taking
       into account these interests;
       
(d)    Women should have an equal role in all management with regard to
       water resources, at the local, national and international level.


       IV.   IMPROVEMENT OF THE INSTITUTIONAL AND PARTICIPATORY FRAMEWORK
             FOR INTAGRATED WATER RESOURCES MANAGEMENT

115.  IWRM should integrate and reconcile interests regarding water
quantity, quality and aquatic ecosystems of all actors. Community
involvement is a key element in this process. The planning and
implementation budgets must include all costs, infrastructure,
management and operation and maintenance.

116.  The following specific actions were identified to address these
goals:

(a)    Establish or update national policy and strategies for the entire
       water sector that are integrated with overall socio-economic
       development (including the co-ordinating mechanisms). The
       elaboration of policy, strategies and legal instruments should be
       a concerted process. A clear distinction has to be made for the
       implementation of IWRM between policy and standard settings,
       regulatory control/enforcement and the provision of services. An
       iterative planning process as a « bottom-up and top-down »
       dialogue is to be encouraged; 
       
(b)    Prepare, validate and adopt legislative and regulatory measures
       (including water administration, provision of services, standards
       for equipment, water quality and uses);
        
(c)    Encourage countries to promote the use of economic and financial
       instruments, including appropriate incentives to improve water
       demand management;

(d)    Promote the effective application of the -polluter-pays
       principle■ and of the users-pay approach to generate revenues and
       regulate resource use with a view to an equitable allocation and
       redistribution of water benefits and charges, with special
       attention for low-income population groups;
        
(e)    Ensure a clear operational framework at local, national and
       regional for the implementation of the action plans which should
       be well understood and accepted and include:
       -     the role of the state and public/private operators,
             including basin organisations and sectoral operators;
       -     the level and role of stakeholders in the management of
             basin institutions in a multidisciplinary mode;
       -     the partnership mechanisms that ensure smooth financing,
             implementation and maintenance of all water supply systems.
 
(f)    Involve users and operators in the choice of the technological
       options and in the determination of services to be provided,
       taking into account existing local technologies and economic
       considerations.
        
(g)    Promote the development of comprehensive water information
       systems that include water resources and socio-economic data
       bases;

(h)    As part of capacity-building efforts, provide support to general
       education focusing on youth, as important advocates for
       information dissemination and attitude changes, and exchange of
       information, using as much as possible modern media and Internet;
       

(i)    Strengthen the capacity building of decentralised agencies and
       community-based organisations for IWRM, particularly for water
       conservation and resource protection and promote the creation of
       an enabling environment for the participation of the providers of
       commercially-based services, taking into account national
       conditions and the type of services needed; 

(j)    Prepare water codes and other regulatory measures together with
       enforcement mechanisms;

(k)    Formulation and implementation of specific educational,
       participatory, regulatory, economic and financial measures for
       the control of non-point sources of pollution;

(l)    Consider the impacts of upstream decisions on downstream
       environments, especially on estuaries and coastal zones, taking
       into account other water-related intergovernmental conventions.
        
(m)    The international community, including donor organizations, need
       to play an important catalytic role in support of national
       efforts towards the formulation and implementation of national
       plans, capacity building, technology transfer, and in the
       provision of technical cooperation, taking into consideration
       local and regional experiences.


       V.    SUMMARY OF KEY RECOMMENDATIONS

117.  IWRM should integrate the interests of all users and stakeholders
on a local, regional, national and international level in relation to
water quality and quantity and ensure effective community involvement
at all levels and at all stages of the process. A clear operational
framework at local, national and regional levels for the implementation
of the action plans which should be well understood and accepted and
should include:
 
(a)    The role of the state and public/private operators, including
       basin organisations and sectoral operators;

(b)    The level and role of stakeholders in the management of basin
       institutions in a multidisciplinary mode;

(c)    The partnership mechanisms that ensure smooth financing,
       implementation and maintenance of all water supply systems;

(d)    National plans for IWRM should be developed in a constructive
       dialogue with users and stakeholders at the level of the
       management unit. They should make clear their interests and their
       role in the short, medium and long terms. IWRM must consider
       specifically non-point source pollution and the impacts of
       upstream decisions on downstream environments, especially on
       estuaries and coastal zones, and should take into account other
       water-related intergovernmental conventions;

(e)    A clear distinction between the various stages of policy
       development and execution and the level of planning (local, sub-
       national, national and regional). Establishment/update of
       national policy and strategies for the entire water sector that
       are integrated with overall socio-economic development (including
       essential co-ordinating mechanisms);

(f)    The elaboration of policy, strategies and legal instruments
       should be a concerted process but a clear distinction has to be
       made for the implementation of IWRM between policy and standard
       settings, regulatory control/enforcement and the provision of
       services; encourage an iterative planning process as a « bottom-
       up and top-down » dialogue;

(g)    The preparation, validation and adoption of legislative,
       regulatory and enforcement measures (including water
       administration, provision of service, standards for equipment,
       water quality and uses);

(h)    The promotion the use of economic and financial instruments,
       including appropriate incentives to improve water demand
       management; effective application of the « polluter-pays »
       principle and users-pay systems to generate revenues and regulate
       resource use; equitable allocation and redistribution of water
       benefits and charges, with special attention for low-income
       population groups;

(i)    The necessary capacity-building and information management sensu
       lato ; general education focusing on youth, as important
       advocates for information dissemination and attitude changes;

(j)    The exchange of information using as much as possible modern
       media and Internet;

(k)    The promotion of comprehensive water information systems that
       include water resources and socio-economic data bases;

(l)    The capacity building of decentralised agencies and community-
       based organisations for IWRM, particularly for water conservation
       and resource protection; 

(m)    The role of women that should be equal in all management with
       regard to water resources, at local, national and international
       levels;

(n)    The international support to the overall and efficient financing
       of IWRM costs. External Support Agencies and United Nations
       agencies could play a catalytic role in national plan preparation
       and implementation, capacity building, technology transfer and
       technical assistance, capitalising on local and regional
       experiences;

(o)    The development of mechanisms to encourage riparian states to co-
       operate among each other on matters related to the management of
       transboundary water resources (including groundwater), building
       on existing agreement principles, arrangements, instruments and
       programmes of action, taking into account interests of the
       concerned states.

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Date last posted: 8 December 1999 15:15:30
Comments and suggestions: DESA/DSD