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INTEGRITY ASSESSMENT OF THE WATER SECTOR IN THE OCCUPIED PALESTINIAN TERRITORIES (oPt)

Water Governance Programme for Arab States (WGP – AS)

Integrity Assessment of the Water Sector in the oPt

Final Report

July, 2012

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Acknowledgements

The United Nations Development Programme/Programme of Assistance to the Palestinian People (UNDP/PAPP) express their deep appreciation to the Palestinian Water Authority (PWA), line ministries, donors and their implementing agencies, stakeholders in the local governance sector, and the consulting firms Partners in Creative Solutions (PCS) and Pioneers in their part in developing the Water Integrity Assessment of the oPt. In addition, we extend our gratitude to the UNDP Water Governance Facility (WGF) at the Stockholm International Water Institute (SIWI) and the Regional bureau for Arab States (RBAS) Water Governance Programme for the Arab States (WGP-AS) for the funding of the Water Integrity Assessment.

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TABLE OF CONTENTS

LIST OF TABLES ....................................................................................... 4

LIST OF FIGURES ..................................................................................... 4

LIST OF ANNEXES ................................................................................... 4

LIST OF ABBREVIATIONS ....................................................................... 5

EXECUTIVE SUMMARY ........................................................................... 6

1. BACKGROUND .............................................................................. 8

2. INTRODUCTION ............................................................................ 8

3. OBJECTIVE ..................................................................................... 9

3.1 Integrity Assessment Objective and Methodology 9 3.2 Indicators 10 3.3 Data Collection-Source of Information 11 3.4 Data Analysis-The Integrity Assessment Index 12 3.5 Report Writing 13

4. WATER SECTOR PROCESSES 13

4.1 Introduction 13 4.2 Water Governance Level 13

4.2.1 Main Processes and Stakeholders ................................................................ 14 4.2.2 Integrity Assessment ................................................................................. 18

4.2.3 General Conclusions - Integrity Assessment at the Governance Level 27 4.3 Water Sector Management Level 27

4.3.1 Main Processes and Stakeholders Water Sector Management - National Level ... 30 4.3.2 Integrity Assessment of Water Sector Management - National Level ................. 33 4.3.3 General Conclusion - Water Sector Management - National Level ..................... 35 4.3.4 Processes and Stakeholders of Water Sector Management - Local Level ............ 36 4.3.5 Integrity Assessment of Water Sector Management - Local Level ..................... 37 4.3.6 General Conclusion - Water Sector Management - Local Level ......................... 38

4.4 Water Supply, Provision, Operation, and Maintenance 39 4.4.1 Main Processes and Stakeholders ................................................................ 39 4.4.2 Integrity Assessment of Water Sector Management - Local Level ..................... 41 4.4.3 General Conclusion ................................................................................... 43

5. CONCLUSIONS AND RECOMMENDATIONS 43

5.1 Conclusion and Recommendations for the Stakeholders' Mapping 43 5.1.1 Governance Level ..................................................................................... 44 5.1.2 Water Sector Management ........................................................................ 45 5.1.3 Water Supply, Service Provision, Operation, and Maintenance ......................... 45

5.2 Conclusion and Recommendations for the Integrity Assessment 46 5.2.1 Standards ............................................................................................... 49

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5.2.2 Oversight ................................................................................................ 50 5.2.3 Transparency ........................................................................................... 51 5.2.4 Participation ............................................................................................ 52 5.2.5 Ethics Infrastructure .................................................................................. 52

List of Tables

Table (1): Processes and area of Focus in the Water Sector

Table (2): Integrity Index of the Governance Level

Table (3): Integrity Index for the Management Level of the Water Sector

Table (4): Water Supply, Provision, Operation, and Maintenance Integrity Assessment

List of Figures

Figure (1): Governance Level's Processes versus Stakeholders

Figure (2): Integrity Index of the Governance Level

Figure (3): Water Sector Management Level's Processes versus Stakeholders

Figure (4): Integrity Index for the Management Level of the Water Sector

Figure (5): Water Supply, Provision, Operations and Maintenance Level's Processes versus Stakeholders

Figure (6): Water Supply, Provision, Operation, and Maintenance Integrity Assessment

List of Annexes

ANNEX 1- Summary Table of Findings and Conclusions on the Stakeholders Mapping

ANNEX 2 - Stakeholders Mapping Report

ANNEX 3 – Integrity Report Tables and Figures

ANNEX 4- Summary Table of Conclusions of Integrity Assessment and Recommendations to

Strengthen the Institutional System

List of Abbreviations CSOs Civil Society Organisations

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CMWU Coastal Municipality Water Utility

CWC National Water Council

E Ethics Infrastructure

EQA Environmental Quality Authority

GPC General Personnel Council

INGOs International Non-Governmental Organisations

JWC Joint Water Committee

JWU Jerusalem Water Undertaking

LGU Local Government Unit

MC Ministerial Cabinet

MoA Ministry of Agriculture

MoF Ministry of Finance

MoH Ministry of Health

MoI Ministry of Industry

MoLG Ministry of Local Government

MoPaD

MoPWH

Ministry of Planning and Development

Ministry of Public Work and Housing

NTC Central Tendering Committee- Ministry of Public Work

O Oversight

P Participation

PLC

PMU (PWA)

PWL

Palestinian Legislative Council

Project Management Unit

Palestinian Water Law

PSI Palestinian Standards Institution

PWA Palestinian Water Authority

S Standards

SAACB

T

State Audit and Administration Control Bureau

Transparency

WW Waste Water

WBWD West Bank Water Department

WB and GS West Bank and Gaza Strip

WS Water Sector

WSSA Water Supply and Sanitation Authority

WUSP Water Union of Service Providers

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Executive Summary

Good governance policies are a prerequisite for functioning governmental structures the world over. Without this vital component, any governmental body could either collapse, creating a catastrophic situation for the population who are reliant on the government for services, or become dangerously inefficient, opening opportunities for corruption. Water is of vital and strategic importance in the occupied Palestinian territories (oPt) as in any other arid climates making good governance in the water sector an imperative. Water, in addition to being a necessity for everyday life, is required for true economic development. This, an examination of the water sector is appropriate and needed in order to diagnose the shortcomings of the Palestinian water sector. The following, encompassing report has found numerous fallacies and incoherent policies that are having a debilitating effect on the Palestinian water sector. This report thoroughly details these shortcomings and offers constructive recommendations to reverse this disturbing trend. Although the Israeli occupation, which began in June 1967, is an ever present factor in the shortcomings of the Palestinian water sector, the faults do not stop there. The responsibilities of the various stakeholders, including both governmental and non-governmental bodies in the water sector, greatly overlap, causing confusion and often a gap in services, ultimately creating a disastrous impact on the Palestinian population at large. However, independent of the flaws in Palestinian governance, the Israeli occupation has impacted the water sector in other, detrimental ways. The ability of Israeli authorities, for example, to veto any water project in the oPt results in grossly discriminatory policies, meant to benefit the illegal Israeli settlers in the West Bank. Currently, the Palestinian National Authority (PNA), in addition to being restricted in their work due to the geographical and structural limitations of the Oslo Accords, has not competently carried out their functions in the water sector in a transparent manner. The inadequacies of the PNA in the water sector will be detailed in this report, along with advice on how to increase integrity, transparency, oversight, and efficiency within the current framework of the Israeli occupation. The PNA, if it wishes to assume the role of an effective government after the collapse of the occupation, will need to adjust its policies to ensure that all Palestinians in the oPt are receiving clean and adequate water at a reasonable price. This is just one of the current problems facing the PNA as they are a transitional authority working within a system that is meant to minimize their ability to effectively perform necessary functions. Even where the PNA is able to exert actual sovereignty, there are still a number of deficiencies that will be examined in this report. The Palestinian government, in the water sector, has continuously failed to receive satisfactory marks in our integrity assessment. This includes important aspects such as standards, legislation, oversight, ethics infrastructure, and overall integrity. As will be made clear in the conclusion of this report, there is great potential for creating good governance in the Palestinian water sector, but certain fundamental changes are required to achieve such success. While a complete removal of the Israeli occupation is necessary to allow real Palestinian sovereignty in the water sector, there are several steps that can and must be taken to improve the Palestinian performance in this important sector. Palestinian governmental structures must be held responsible to the Palestinian population through various methods to ensure transparency, full participation, and oversight functions. NGOs, donors, and other stakeholders must play an active role in the formulation and implementation of functions throughout the water sector. By incorporating these important agencies, the PNA will be in a better position to conduct beneficial projects for the Palestinian population. Lastly, corruption and its risks must be thoroughly identified and eliminated in a legal way. Only by initiating these required steps will the Palestinian water sector be able to perform in a coherent and efficient manner.

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1. BACKGROUND The purpose of the report is to quantify the integrity system of the water sector, as well as do a stakeholders’ mapping of the sector. The Palestinian water sector is being targeted for examination upon the request of the Palestinian Prime Minister Dr. Fayyad and the head of the Palestinian Water Authority (PWA), Dr Shaddad, NGOs, and many other parties that there is an issue of inadequate governance in the water sector and that by documenting these inadequacies, proper reform can take place. One of the most apparent perceptions is that there is limited transparency and accountability in the implementation of water projects. It is believed that improving these two aspects of the water sector is essential for good governance and is directly linked to development and poverty reduction. Only by taking a proactive stand against inefficiencies and corruption will Palestine be able to benefit from the water sector and contribute to achieving the Millennium Development Goals by improving service delivery and accountability to citizens, and especially those who are most needy. Also, by enacting reform in the water sector, new international donors will be attracted to invest in the water sector. If there is a government in Palestine who is openly committed to reducing the risk of corruption will also build trust in the eyes of the public. The over-arching aim of this report is to contribute towards improving water services delivery and water resource management in the oPt through the strengthening of integrity and accountability systems in the sector. Based on consultations with the Palestinian Water Authority (PWA) and others, the water integrity assessment will be done for the West Bank and Gaza Strip. The scope of the assessment is to measure water integrity in the oPt. This is done in order to “unbundle” corruption risks in the water sector, especially in the relationships between different actors and to identify particular areas that are high corruption risks and their associated costs. Also this study aims to influence the ongoing water governance reform that is taking place and lay the ground for developing a long term programme to promote water integrity. It is strongly believed that the water sector does have the potential to be an efficient and transparent sector, but reforms must be made in order to achieve this.

2. INTRODUCTION Access to water is a major obstacle in the occupied Palestinian territories. Longstanding restrictions on the right to water by the Israeli regime are compounded by perceived corruption, inefficient policies, and poor national planning. At the national and local levels, the Palestinian water sector suffers from a lack of transparency, oversight, participation as well as guarantors of standards and ethical norms. Consequently, access to water across Palestine is inconsistent, leading to an unsustainable situation, in which the poorest and most marginalized Palestinians are unable to meet the daily recommended water intake, as stipulated by the WHO. In recent years, the government of Palestinian Prime Minister Salaam Fayyad has taken major steps to reduce the amount of corruption and to increase efficiency; however, access to water remains a critical issue for many Palestinians.

The management of water resources by the Palestinian government must by improved to increase the efficacy and to allow proper and transparent delivery of water. Overall, the integrity analysis in the Palestinian water sector revealed an index that was below the acceptable level. On all levels, there were shortcomings but at the same time a potential to reverse the trend. Many of the problems that were discovered in our reports can be attributed to the restrictions on the PWA by Israel. Without actual control of water sources, free passage between the West Bank and Gaza, and other fundamental rights, the PWA will have a difficult time raising each integrity criteria score. However, there are feasible and important changes that must be made by the PWA in order to improve the Palestinian water sector.

Integrity of the water governance system in Palestine is essential for truly achieving good governance in this important sector. Unfortunately, the integrity levels in all aspects of this sector are unacceptably low. A general weakness in standards, transparency, oversight, participation, and

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ethics at the national governance level has contributed to corresponding weaknesses at the management and local levels. Without, for example, a strong national plan for water or improved and adopted procedures, systems, and bylaws, the national governance of the Palestinian water sector will continue to score poorly on governance, management, and local distribution. As improved integrity in management and on the local level depends on improved integrity at the governance level, the PWA should be pushing for a revised national strategic plan for water that clearly establishes a comprehensive oversight body, provides unquestionable regulations for monitoring, while concurrently reducing the organisational overlap of the PWA. Likewise, the PWA should keep pushing to finalise the drafting of a new, comprehensive water law that has clear lines of authority, roles and responsibilities so as to eliminate wasteful overlap with other ministries. Such a law must be used to enforce a participatory and transparent approach at each level within the Palestinian water sector. The Israeli occupation and the inefficiencies of the Palestinian National Authority greatly contribute to the breakdown of the Palestinian water sector. This situation poses an opportunity for other organisations or bodies involved in the water sector to possibly fill important roles and potentially raise the quality of the water sector for Palestinians. These actors include semi-governmental organisations such as municipalities, utility and service providers, NGOs, donors, and civil society organisations. It is more than possible for these organisations and the PNA to work in cooperation, instead of competition, to increase Palestinian access to quality water and to allow beneficial development of the sector. As was detailed stakeholders’ mapping analysis, many of these organisations are well established and have the capacity to play an important role in the sector. Regrettably, many of these organisations have encountered numerous obstacles, ranging from varying forms of corruption and nepotism to indifference, from both the Israeli and Palestinian authorities in the carrying out of projects that would benefit the Palestinian population.

With an absence of a final agreement with Israel, it will be difficult to fill gaps in the integrity system for regulations; without effective control over water resources or the ability to supply water to all parts of the oPt, the PWA will not be able to eliminate many of the obstacles that have prevented efficient water delivery to the Palestinian people. Yet, even without a final agreement with Israel, there must be steps taken by the PWA to increase the integrity at various levels, including its governance, management, local planning, and implementation levels. Improving oversight, increasing transparency, ensuring standards, promoting local participation, and encouraging ethical standards throughout the PWA will greatly increase the integrity, and through this, the good governance of the Palestinian water sector. If the current situation persists, it is likely that overall quality of services will continue to stagnate or potentially decrease to unbearable levels. Considering that water is a necessity for economic development of the oPt, in addition to a bare necessity for daily life, developing this sector should be a main priority in all plans that involve the sector. Until various stakeholders in the sector are able to cooperate for the benefit of the Palestinian people, inefficiency and substandard service provision will be the norm, and Palestinians will continue to suffer.

3. OBJECTIVE

3.1 Integrity Assessment Objective and Methodology Stakeholders in the Palestinian water sector were targeted for examination. It was accepted that stakeholder mapping is a prerequisite step to carry out an integrity assessment of the water sector. Numerous stakeholders were identified through a review of relevant documents, studies, and laws of the sector. Following this, a participatory approach and methodology was established to analyse their role in the water sector. After identifying the key stakeholders in the sector, structured interviews were conducted with representatives of different stakeholders’ groups who work the West

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Bank and Gaza Strip (WBGS). They completed questionnaires which were developed, and data was extracted from these organisations about their work and obstacles they have faced in the carrying out of their work. The analysis involved five methods used to determine the role and functions of each stakeholder. First, identification was established to properly place each stakeholder in relation to their work in the WBGS. Secondly, the stakeholders were listed in a comprehensively according to their ability and follow through to combat corruption in the sector. Third, different structures were detailed regarding which stakeholders in fact have a role and what that role specifically is. Fourth, the importance and influence of water sector stakeholders was carefully detailed and analysed. Fifth and lastly, gaps in the performance of stakeholders in the sector, and the sector in general, were described in order to give proper context to the general reader. Following the completion of this process, the integrity assessment was able to determine how and where stakeholders should intervene or act in the water sector. It is assumed that a eventual future integrity system would be built upon the identified processes already established with the stakeholders and their current intervention, if any, in each of the processes they undertake. Each stakeholder’s functions were cross-analysed with the Water Law in order to give a framework for the assessment. The overall purpose of the mapping was to encourage the PWA and other stakeholders to participate more effectively and actively in the water sector for the benefit of the Palestinian population. The integrity assessment was the main framework in which it was analysed. It aimed at diagnosing the status of integrity in the water sector by examining the different stakeholders’ interrelationships, activities, and procedures. Also, it strove to identify gaps and corruption risk in the processes of the water sector. For this, four main methods were utilised. First, a participatory approach was used and encouraged through the setting up of a working group

1 in order to best develop the tools to be used

to examine the sector. Secondly, data was collected from various sources of information including line ministries, studies, and NGO field work. As mentioned, a tool was used to conduct data collection and interpretation. The tool was developed in cooperation with the working group who all endorsed the tool. It aimed to gather primary qualitative data from the main stakeholders and key players in the sector. Ratings of integrity status and identification of gaps in sector were extracted using the tool. Key areas of investigations, such as management and service provision, were cross-analysed using the tool. From this process, a rating of system of one to five, where five is considered the best rating

2, was used to quantify the results of the

findings.

3.2 Indicators

1 The working group consisting of the PWA, the Ministry of Planning and Development (MoPAD), the Ministry of Local

Government (MoLG), representatives of Water Service providers, the Coalition for Accountability and Integrity, Transparency Palestine-(AMAN); the reform Technical Planning and Advisory Team (TPAT), UNDP/PAPP, Water Governance Facility (WGF), the Stockholm International Water Institute (SIWI), and concerned Civil Society Organisations (CSO)

2 5 Very Good

4 Good

3 Satisfactory

2 Unsatisfactory

1 Nonexistent/Not Applicable

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Standards (S) Rate of availability of integrity systems and regulations including the presence of benchmarks (such as service integrity charter) for the delivery of, access to, or quality of essential public services which enhances the responsiveness and over time motivates improvements in the capabilities of local governments.

Transparency (T) Possibility of reasonable public access to information concerning the local government policies, budgets, and activities which will strengthen accountability and responsiveness.

Oversight (O) Monitoring to guarantee the accountability which includes the existence of internal and external monitoring and checks on local state institutions to ensure accountability and probity.

Participation (P) Existence of participatory processes used by local governments to consult with and seek the views of the community that they serve.

Ethics Infrastructure (E)

Presence of an ethical framework such as a code of ethics or a mission statement which acts as a guide regarding the behaviour of members, official policies and decisions. For the purpose of this study, issues like equity, respects to social norms as well as pro-poor behaviours are considered as part of ethics infrastructure.

Table 1: Processes and area of Focus in the Water Sector Processes Areas of Focus

Governance Legislation, Policy, Regulations, National Planning, and Budgeting

Ma

na

ge

me

nt

Na

tio

na

l

Protection of resources

Resource exploitation plans and strategies

Water sector development

Procurement

Human resources management

Financial management

Project/program development

Lo

cal

Allocation and re-allocation of bulk water

Human resources management

Local level planning and budgeting

Price and tariff setting mechanism

Procurement and construction

Financial management

Service Provision

Operation and maintenance of water/wastewater projects

Billing and fees collection

Service provision

Service delivery

Vendor water regulation

The tool, detailed above, aims to be as comprehensive as possible and was developed in order to encompass all integrity criteria in the various levels of the water sector. Each level was presented as a different process that must be analyzed thoroughly. Indicators and questionnaires, developed through the tool, were used for each process in order to identify the integrity criteria and methods of identification of stakeholders were done using the tool.

3.3 Data Collection-Source of Information

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For each process, a list of information sources was identified, which included identifying the related processes of stakeholders in their respective sectors. According to the sources of information acquired through this assessment, a separate tool (questionnaire) was extracted from the general tool in order to appropriately match each targeted stakeholder with the most appropriate questionnaire. The indicators used in the tool were repeated in many questionnaires. This was done to target different sources of information in an attempt to obtain various points of view from a number of stakeholders for the same specific indicators. This was necessary to ensure that the integrity rate was formulated using different actors’ point of views and experiences. The following questionnaires were developed:

1- PWA Questionnaire: For each targeted department and unit at the PWA, a specific questionnaire was extracted from the general tool. The PWA questionnaires targeted the following department/units; Quality Control, Technical, Planning, Legal, Regulatory, Training, Resources, Development, Project Management Unit (PMU), and West Bank Water Department (WBWD), which resulted in nine different sub-questionnaires targeting the different sources of information within the PWA. Considering that the PWA is not acting in the Gaza Strip, except for the PMU and the resources development department, the questionnaire of these two units of the PWA were filled out twice, one for the WB and the other for the GS. The head of the department was interviewed to collect the information. 2- Line Ministries’ Questionnaire (MoA, MoLG, EQA, MoPW, MoP): This section included the aspects of the tool in relation to line ministries’ work and various processes that intervene in the water sector. The line ministries’ questionnaire was completed through interviewing people from the department(s) that are involved in the processes identified in the tool. The head of the department which was most relevant to the work of this assessment was interviewed at each of the line ministries. For example at the MoA, the head of the water department was interviewed, at the MoPWaH, the head of the National Tendering and Procumbent Unit was interviewed, at the MoP, the head of the unit working in the water sector, which is also the member of the reform group supporting the PWA, was interviewed. 3- Service Provider Questionnaire: This part included the sections of the tool in relation to the work carried out by service providers in the water sector. The questionnaire was completed through interviewing people from department(s) that are involved in the processes identified in the tool, with a focus on water management and service provision at the local level. The service providers selected were: the CMWU in the GS, the Qalqilya LGU, the Nour Shams Refugee camp, the Jericho Municipality, the Jalameh area, the Joint Service, the Salfeet Joint Service, the Hebron Municipality, the WSSA, the Al-Thahirya LGU, the Tubas LGU, and the Nablus Municipality. 4- NGOs’ Questionnaire: This included the sections of the tool in relation to their work with the PWA, line ministries, and service providers. The questionnaire was completed through interviewing the heads of NGOs who are involved in the processes identified in the tool. Two major NGOs were targeted, the Applied Research Institute Jerusalem (ARIJ) and the Palestinian Hydrology Group (PHG). ARIJ was met, while PHG and AMAN were interviewed, and major issues were discussed in a qualitative manner and the tool was not used. 5- Private Sector Questionnaire: Semi-structured interviews were conducted with two representatives of this sector to discuss and get perspectives over the raised issues.

3.4 Data Analysis-The Integrity Assessment Index

For the purpose of rating integrity of the water sector, it was agreed that the Integrity Assessment Index was to be used as a method to assess the integrity status. The index was calculated by multi-level calculations which are described as follows:

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Five indices were calculated, one per each standard including oversight, transparency, and participation of ethics infrastructure. Each index was calculated formulating an average from the following;

- Per each indicator/question used in the tool, an average of the rates taken from different sources was estimated

- For each sub-process under various water sector levels, the average of all indicators under each integrity criterion was estimated. The Standards Index for the law processes under the governance level was estimated from the rates given to all indicators under standards. Resulting in having five indices; S, O, T, P, and E under each process in the water sector

- Such estimation of the indices was done for each single sub-process under the three levels of the water sector

- Information about the rationale behind the rating was done by the team based on the answers from respondents and where appropriate references were given

- Lastly, for each level a similar estimation of the five indices of integrity criterion was established; (SL, OL, TL, PL, EL) and a general Integrity Index (IL) for the whole level was also estimated

3.5 Report Writing The report was structured into two parts:

- Part One covered the background, objectives, and methodology used in conducting the tasks

- Part Two covered the findings of the integrity assessment of the water sector. The findings of the assessment were presented to reflect the integrity system in each level of the water sector. In addition, there is a detailed analysis of the inner workings of each level and the integrity system status for processes was presented in detail for all parts of this assessment

4. WATER SECTOR PROCESSES

4.1 Introduction This report is broken down into three separate levels: the 'Water Governance Level, the 'Water Management Level,' and the 'Water Supply, Provision, and Operation Level.' These three levels correspond to and incorporate each part of the water supply chain in Palestine. This report will analyse the stakeholders and the integrity of the water supply chain at each level. A summary of findings and conclusion of the processes an correlated stakeholders are presented in Annex (1). As will be explored and analysed below, there are various stakeholders that are active on different levels throughout the water sector in Palestine, creating a complex web of interaction of stakeholders at each level. Throughout the different levels, the roles of stakeholders overlap and often are ill-defined, creating important and debilitating weaknesses in the entire sector. As will be discussed below, the complexity of the Palestinian water sector and the many stakeholders throughout the system has resulted in several gaps, inefficiencies, and weaknesses that disrupt the Palestinian water sector.

4.2 Water Governance Level

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4.2.1 Main Processes and Stakeholders The stakeholders at the Water Governance Level are responsible for the legislations, policies, and regulations regarding water in addition to all national planning and budgeting relating to the water sector. Predictably, the responsibilities, duties, and actions in this level are shared by a variety of stakeholders, often causing overlap and inefficiency in the water distribution cycle. At the Water Governance Level, stakeholders can be classified into two broad categories; Primary and secondary stakeholders:

Primary stakeholders are made up of both formal and informal institutions, and groups and associations who are involved in developing and implementing policies and regulations for the effective provision of basic services to the general public. They include government institutions such as the Palestinian Legislative Council, the Presidency, the Ministerial Cabinet (MC), NWC, PWA and line ministries (MoF. MoPaD, MoA, MoH, EQA), the public sector, and the private sector.

Secondary stakeholders are made up of people or groups who have a role in the decision making process but are not necessarily directly affected by the outcome. Secondary stakeholders, otherwise referred to as intermediates, are comprised of civil society organizations including water associations, NGOs, INGOs implementing agencies and donors. The general public, the intended beneficiaries for the provision of basic water services are also included in this category of stakeholders.

On a national level, these stakeholders work through the following processes:

- Legislation: Drafting and adopting laws, Presidential decrees, and explanatory notes. - Policies: Setting policies and regulations through developing instructional materials,

procedures and systems. - Regulations: Regulating water resources utilisation through licensing, monitoring of

performance, controlling water production, water supply, and quality. Also, conducting inspection and oversight over water resources.

- Planning and Budgeting: Based on a national master plan for the sector this includes strategic planning, national operational planning, and managing revenues (including fees from licensing and registration, operational fees, surplus/deficit from bulk water, fees from service providers, and external donor financing, loans, grants, and expenditures (administration, operational cost and investment cost).

Figure (1) illustrates the processes under the governance level with the associated stakeholders.

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Figure (1): Governance Level's Processes versus Stakeholders

Legislation: The Palestinian water sector is governed by the Palestinian Water Law Number 3 that was issued in 2002. The Law is restricted by Article 40 of the Oslo Accords which limits Palestinian access to water resources and gives Israel control and authority over the management and development of water resources.

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Findings:

- The NWC is not active which results in the functions of the NWC (endorsement and monitoring) not being activated at the water governance level.

- The MC has yet to endorse the regulations submitted by the PWA. - The PLC has not been active recently, and when it was active, the role they were supposed

to do as the monitoring body of legislation was not carried out in an efficient way.

3 For a complete table covering the drafting, endorsement, application, and monitoring of the various

legislative processes, please refer to Table (1) of Annex (2).

Legislation: PLC

NWC

MC

President

Policies:

NWC

MC

PWA

MoA, MoPD, MoF, EQA

Regulations:

Regulating the Water Resources Exploitation and Use Processes:

PWA-WBWD, MoA, EQA, LGUs, Water Utilitie Providers, JWU, CMWU, WSSA, INGOs, Individuals, and Cooperatives

Regulating Water Service Provision:

PWA-WBWD, MoLG, MoA, EQA, MoH, PSI, LGUs, JWU, CMWU, WSSA, Well Owners, and the Israeli Commissioner

National Planning and Budgeting Processes:

PWA, NWC, MoPaD, MC, and

MoF

Governance Level

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Conclusion:

- There is a clear gap in the endorsement and supervision (monitoring) roles the PLC and NWC are supposed to have over PWA legislative functions. This negatively affects the legislation process and hinders the formulation and adaptations of new laws. In addition, there is a lack of monitoring bodies and accountability which greatly contributes to an increased corruption risk within the water governance system and can greatly affect its integrity.

Policies: Policy making is an integral element of the governance system and can greatly affect the outcome of other elements of the water governance system and the efficient use of resources.

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Findings:

- Based on Palestinian Water Law No. 3 of 2002, the PWA is responsible for drafting and enforcing laws, policies, internal regulations and systems, and explanatory notes. Based on Chapter 2 Article 7 Clause 2 of the Water Law, the NWC endorses these policies, procedures, and explanatory notes.

- Analysis of the articles of the law in this regard reveals that there are some contradictory notes regarding the PWA reference body; the law states that the PWA is under the direct supervision of the president,

5 but in other articles it is mentioned that the PWA should refer

to the Ministerial Cabinet.6

- There is no clear, regular, and systematic role of the line ministries in the application of the water policies and water development policies. This is because the level of cooperation between the PWA and the line ministries does not always exceed the coordination level. The degree of coordination between the various PNA ministries is inadequate and the flow of information, including data between ministries in general, is limited.

Conclusions:

- As previously mentioned, the NWC is not functioning, consequently the endorsement and monitoring body at the policy making level is not active.

- The PWA falls under the supervision of the President, MC, and NWC. The NWC is supposed to endorse its work at the level of policy making which creates a potential gap in the processes of endorsing and monitoring of policy implementation. A clear and functioning line of authority is essential in order to have a properly functioning water governance system with efficient use of resources and responsible use of power.

- There are many efforts and initiatives supported technically and financially by donors (GTZ, USAID, and the World Bank) to develop and draft policies but as yet there are no endorsed policies for the water sector (pricing policies, development policies, etc). It is imperative to activate the proper channels and responsible parties, as per the Palestinian Water Law, for developing, endorsing, and enforcing policies. This is to ensure that the policies formulated contribute to the integrity of the system and that they are enforced to reduce the corruption risks within the governance system.

- The absence of a clear description of the roles played by both the PWA and line ministries, combined with inadequate communication and flow of information between the PNA institutions, negatively impacts the water governance system as a whole.

Regulations: Regulations have been tackled through different sub-processes, these are:

4 For a complete table on the drafting, endorsement, application, and monitoring of various policies,

please see Table (2) of Annex (2) 5 Chapter 2, Article 6 Clause 2 of the Water Law

6 Chapter 2, Article 7 Clause 7 and Chapter 4 of Article 15, Clause 7 of the Water Law

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Regulation of Water Licensing: Regulations on different water faculties (groundwater wells, water supply and wastewater collection system, wastewater treatments,...etc) requires a license and licensing was analysed and the following was found: Findings:

- The regulation of water resource utilisation is done through the provision of licensing and the licensing process is the responsibility of the PWA. The recommendation of the MoA is required when the ground water well is for agricultural use.

- The licensing process considers the groundwater wells and the wastewater treatment plants for different purposes (domestic or agricultural). The wastewater collection systems are given less consideration. The licensing system ignores the use of other water resources, such as springs and surface water, as they are mainly publicly used or used by the land owners when utilised for irrigation purposes.

- The PWA is the legally responsible body for regulating and monitoring the water resources. - It is clear that the PWA is acting at different levels simultaneously either directly or through

its different departments, such as the WBWD. It manages the resources, checks the technical specifications of the water projects, and provides the licenses. At the same time, it monitors the processes of the licensing and the utilisation of these licenses.

- The role of line ministries is not systemised which results in gaps in the processes of regulating the water resources.

Conclusions:

- The PWA is carrying out many overlapping functions at the same time: it is the manager of the resources, the licensing body, the regulator, and the monitoring authority without regular coordination with other official bodies such as the EQA, MOA, and MoLG. One of the tasks of the reform process that is currently taking place at the PWA is working to resolve this issue.

- There is a need to separate the political, strategic (ministerial), and regulatory aspects from the operational and water management activities within the structure of governance.

- Although the PWA is legally responsible for the licensing process, in accordance with Article 40 of the Oslo Accords, Israeli authorities have an effective veto over all PNA water extraction and infrastructure projects, through the JWC. The JWC does not function in a joint capacity due to fundamental asymmetries of power, capacity, information and interests which prevent a mutually consensual approach to resolving water management conflicts.

7 The lack of control over water resources creates a high potential for corruption

risk and it compromises the integrity of the system. This can negatively impact the effectiveness and sustainability of the water service provision which is a key result of a good governance system.

Regulation of Water Provision: The regulation of water provision includes a variety of different processes and actors. The various key actors involved in the regulation of water provision include those responsible for drafting, endorsing, approving, and monitoring different processes.

8

Findings:

- Regulating the provision of water services is a multi-stakeholders process. The PWA’s main role at this level is to endorse and monitor the quantities utilised by the licensed resources while other stakeholders, such as the MoH and EQA, provide inspection over water quality at service provision areas.

- Donors’, INGOs’, and NGOs’ interventions at this level include the provision of technical and financial support.

7 World Bank 2009 Assessment of restrictions on Palestinian Water Sector Development 8 For a complete table describing the different actors and processes in the regulation of water provision please see Table (4) of

Annex (2).

17

Conclusion:

- By law there are many stakeholders acting in regulating the water resources supply processes, but not all the process are monitored and regulated in the most efficient way possible. There is a need to have an independent regulatory body to oversee and be responsible for the regulatory functions. This will better ensure customer satisfaction regarding service delivery In addition, it is necessary to improve the channels of communication between the involved ministries and to enact the proper monitoring tools and bodies to reduce corruption risks.

National Planning and Budgeting: There are two processes for National Planning and Budgeting: the National Water Development Plan and National Water and Wastewater Budgeting. Various actors, including the PWA, NWC, MC, MoF, and SAACB are meant to be involved in the drafting, endorsement, application, and monitoring of these processes.

9

Findings:

- The planning of the sector is supposed to include a number of stakeholders who are actively involved, there have been many attempts to endorse developed planning processes.

- The PWA budget is endorsed by the MC. The budget mainly covers the administrative and running costs. There is an allocated section to be used as a contingency budget for emergencies.

- The law gives the NWC the authority to endorse sector plans, but since the NWC is not active, there is a gap in performing this role.

- There is no endorsed or enforced national master plan for the water sector, which results in confusion between the parties in identifying the clear priorities of the sector.

Conclusion:

- In terms of planning and budgeting, the PWA is governed by the Palestinian MC, but according to the law, it is clear that the planning process should be governed by the NWC. Having a specialized body of concerned parties, such as an active NWC involved in the planning and budgeting process, would improve the effectiveness of the plans produced. In addition, a master plan for the sector would be beneficial to guide the planning processes and would produce coherent and responsive development plans at all levels.

- A planning and budgeting assessment must be based on a national master plan for the sector; including strategic planning and national operational plans. Budgeting must include revenues (fees from licensing and registration, operational fees, surplus/deficit from bulk water, fees from service providers, and external donor financing, loans, grants, and expenditures, including administration, operational cost and investment cost.)

4.2.2 Integrity Assessment The integrity of the system is a prerequisite for achieving a good governance system within the Palestinian water sector. Good governance includes the rule of law, accountability, transparency, and participation. The integrity assessment of the current governance system is a needed first step towards building an integrity-based system which in itself can lead to strengthen the governance structure and minimise the risk of corruption and the mismanagement of water resources.

9 For a complete table describing the actors and processes in National planning and budgeting, please see Table (5) of Annex

(2).

18

The analysis of the governance levels revealed that the general Integrity Index (2.11) is unsatisfactory. The reasons for such a low rate resulted from the unsatisfactory performance of the sub-process of the governance level. Table (2) and Figure (2) present the details. Table (2): Integrity Index of the Governance Level

Process

Integrity Criterion

Standards (S) Index

Oversight (O) Index

Transparency (T) Index

Participatory Processes (P)

Ethics Infrastructure (E) Index

General Integrity Index (IL)

1. Water Sector Governance Level 2.28 1.92 2.10 2.14 2.13

2.11

1.1 Legislation 2.09 1.75 2.32 2.06 2.08

2.06

1.2 Policies 2.81 1.67 2.00 2.33 2.28 2.22

1.3 Regulations 2.11 2.28 2.36 2.08 2.13 2.19

1.4. National Planning and Budgeting

2.10 1.99 1.74 2.08 2.03 1.99

Figure 2: Integrity Index of the Governance Level

Legislation: The general Integrity Index for legislation is (IL= 2.06), the rate is far below the ideal value (5), and such a low value for the integrity system is considered unsatisfactory as it hardly exceeded (2). The low rate was generated from low averages of the legislation components that formulate the Integrity Index; namely the Palestinian Water Law (PWL), Presidential decrees (PD), explanatory notes (EN), and working procedures (WP).

10

10

For a complete table highlighting the results of the Integrity assessment regarding Legislation, please

see Table (1) and Figure (1) in Annex (3).

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Standards (S) index

Oversight (O Index

Transparency (T) Index

Participatory Processes (P)

Ethic Infrastructure

(E) Index

General Integrity index

(IL)

1 .Water Sector Governance Level 1.1 Legislations

1.2 Policies 1.3 Regulation

1.4 .National Planning and Budgeting

19

Standards: Standards at the legislation level received an average of (2.09) which is considered an unsatisfactory average (see Table 2). Specific points of lacklustre performance are as follows: Laws: The standards’ rate of the PWL falls under a unsatisfactory level (S=2.66) and it is due to the fact that the law’s components that are in the integrity components (transparency accountability and participation) are not detailed in a coherent way. Also, at the same time, the law provides no strict definition of roles, responsibilities, and lines of authority. Presidential Decrees: The standards’ rate of PD is the lowest, as it received a value of (1.6). This result was due to the limited PD announced that support the law. Also, there are even a few cases in which the PD was not necessarily in harmony with the law (the PD re-delegates the PWA’s custody to the Ministerial Cabinet (MC), which was originally conducted by the Palestinian President (PWL: Article 6, Clause 2). Also, the common PD do not mention or tackle directly or indirectly the integrity components. The interviews revealed that interviewees are familiar with only two presidential degrees; the appointment of the head of the PWA, and the delegation of the responsibility of the PWA to the Ministerial Cabinet. Explanatory Notes and Working Procedures: The standards’ rate of EN and WP received a value of (2) due to the fact that there is no endorsement of EN and WP, and those which are used without endorsement do not clarify the integrity components in a clear way. The unsatisfactory rate of standards in legislation of the water sector has numerous components for its failure. After analysing the sector using the tool, reviewing many studies, and receiving confirmation in many interviews, it was established that the problem is systematic and includes many reasons for its failure. The main concerns are as follows:

The law is malfunctioning due to Article 40 of Oslo Accords, which grants Israel veto power over the Palestinian water sector

The law delegates the power over the water sector to the NWC (PWL, Article 8), which is not efficient or effective. Due to this misuse of power, the accountability over the water sector institutions is grossly undermined

There are no articles in the law that provide citizens with outlets in which to exercise their freedom to information, which greatly hinders transparency

The participation of stakeholders is mentioned in only a few articles (i.e, PWL Article 7), and only in terms of coordination and cooperation with no identification or definition of the "concerned bodies,” which means the roles and responsibilities of different actors are not coherently articulated

The PWA and other water institutions are acting with an absence of endorsed EN, WP and internal bylaws. The NWC is currently not functioning for the purpose of endorsing the WP (PWL Article 9, Clause 7) and the MC, who has the actual authority (PWL Article 42), is negating its responsibilities, citing a lack of a political solution with Israel as its root cause

Oversight: Oversight at the legislation level received an average of (1.75) which is lower than the necessary standards rate and is also is a very poor rate in general (see Table 2). In addition, there are numerous other shortcomings in ratings. For example, the PWL received a (1.86), PD received a (1.60), and EN and WP received a (1.8), which means that they all fall under a value of (2), resulting in a very poor level of oversight. It is logical for these aspects to get such a rating due to the low rate of standards at the legislation level, but it is still unacceptable. This is explained in the following manner:

- The Palestinian Water Law put the monitoring function under the authority of the NWC, and the MC at certain levels. The NWC, as previously mentioned, does not perform such functions due to the fact that it is not acting and the MC has a limited willingness to carry out such monitoring

- There are no PD that regulate such factions and it resorts to dealing with more active bodies

20

- The malfunction of the NWC is a main concern. As stipulated in Article 40 of Oslo Accords, the Palestinian Water Law is prohibited from carrying out duties that are detailed in it. This lack of an enforcement mechanism heavily impacts issues of oversight as it consolidates the fact that the Israelis have absolute control over Palestinian water resources

Transparency: Transparency at the legislation level received a rate of (2.32), which does not reach a satisfactory level, namely the minimum value of (3) which is necessary for a decently functioning body, (see Table 2). To further detail the shortcomings: - The Access to Information Act does not exist in any of the law articles or any PD pronounced

so far - Considering there are no endorsed EN or WP, they are not accessible or published for public

consumption. However, in practice, any interested body can get copies of the WP and EN, if requested from the PWA.

Participation: Participation at the legislation level received a rate of 2.06 which does not reach a satisfactory level, which is registered at a value of (3) (see Table 2). The participation of different stakeholders was low in formulating the laws, PD, EN, and WP. However, recently there is an adopted approach to enhance participation in drafting the new Water Law, other working procedures, and systems. Ethics Infrastructure: Ethics infrastructure at the legislation level received an average of (2.08) which does not reach a satisfactory level as well (see Table 2). Specifically there were issues in the following sectors: - The low rate resulted from the limited political will to apply the law, which is partly generated from

the restrictions imposed by Article 40 of Oslo Accords which hinders Palestinian sovereignty over the water sector. Also, it is due to the frustration on the Palestinian side created from the frozen peace process and the continuous delays of negotiations over the water issue with the Israelis. Finally, it is due to the internal conflict that is taking place between various Palestinian political parties which harms Palestinian life, including in the legislation process

- The ethics infrastructure in legislation has an unsatisfactory rating considering that the PWL articles do not contain any ethics encouragement articles and have not been implemented in to satisfactory level. Consequently, there have no chances for these to become a norm regarding the sector

General Conclusion: The Palestinian water sector is governed by the PWL No. 3 for the year 2002. One must analyse the law’s articles in relation to the integrity assessment criteria. This is the only way to properly reveal various aspects of the law in a critical way. The law in question stipulates: - “This Law aims to develop and manage water resources, increasing their capacity, improving

their quality, and preserving and protecting them from pollution and depletion (PWL: Article 2)” - “All water resources available in Palestine are considered public property (PWL: Article 3.1)” - “Every person shall have the right to obtain his needs of water of a suitable quality (PWL: Article

3.3)” - "Work on just and fair distribution of resources and optimal use of water resources to ensure

their sustainability (PLW: Article 7.11) According to the Oslo Accords, “Israel recognizes Palestinian water rights in the West Bank.” Crucially, these rights were not defined and the result has been an inequitable distribution of the shared groundwater resources. The Israeli authorities contend that “Water matters, like other civil powers, have been for some time under the full responsibility of the PNA. Jurisdiction over water was transferred [to the PNA] completely and on time.” In reality however, the PNA did not acquire control of water resources in the oPt under the Oslo Accords. The PNA only acquired the responsibility for managing the supply of the insufficient quantity of water allocated for use by the

21

Palestinian population and for maintaining and repairing a long-neglected water infrastructure that was already in dire need of major repairs

11.

Furthermore, the Oslo Accords stipulate in Article 40 that "A Joint Water Committee (JWC) will be established to deal with all water and sewage related issues in the West Bank, to coordinate management of water resources, monitor the resource, oversee the joint supervision and enforcement mechanism, license wells and approve water resource systems. Joint Supervision and Enforcement Teams (JSETs) were established to supervise and enforce decisions of the JWC. The law missed a few very basic elements for the integrity system that was developed, such as: - The guarantee of the right of the public in exercising the Information Act, and clear principles of

participation of different stakeholders and key actors - The PWL fails to clarify the relationship between the PWA and other parties directly or indirectly

related to the management of the water sector - The PWL provides many overlapping between roles and responsibilities of the reference bodies,

such as the NWC and MC. In practice, the PNA and PWA have been unable or unwilling to enforce the Water Law. The PWA is hindered by its lack of control over many of the areas where abuses occur, such as in Areas B and C, which are under Israeli security control and outside the PNA’s jurisdiction. Even in Area A, where the PNA in theory has the authority for law enforcement, the PWA is ill-placed to enforce the Water Law due to its inability to provide adequate water and sanitation services for the population.

12

The loose application of the law articles brings up several gaps in the integrity system at the legislation level, such as a weak oversight of the authorised and delegated bodies (NWC, MC) over the implementation of the law and over the performance of the PWA in implementing the law. This loose implementation of the law leads the PWA to act in different areas than those it is entitled to do so by the PWL as a regulator and policy maker. In reality, the PWA acts as project manager and implementer, bulk water distributer, and owners of the groundwater wells, among many other tasks. Consequently, there is an urgent need to redraft the PWL in a transparent and participatory manner with consideration of filling the gaps in the following areas of concerns: - Access to information, participation mechanisms and principles, and identification of the

concerned bodies and their roles and responsibilities - The need to eliminate the overlap in the different referral bodies of the PWA (such as the NWC

and MC) - Reformulate the various functions of the PWA, in addition to setting up clear lines of authority - Replace the NWC by a superiorly efficient and effective body within an effective institutional

setup. One must consider that the NWC has many important tasks within the recent setup, and it has only met once since 2005

- Ensure the endorsement of all working procedures and explanatory notes to verify and help the enforcement of the rule of law

Policies: The general Integrity Index for the Policies is (IP= 2.22), and such a low value is considered unsatisfactory. The low value was generated from low rates of the policy components that form the Integrity Index, such as water development, protection, exploitations, pricing policies, development,

11 " TROUBLED WATERS – PALESTINIANS DENIED FAIR ACCESS TO WATER ISRAEL-OCCUPIED PALESTINIAN TERRITORIES WATER IS A HUMAN RIGHT- AMNESTY INTERNATIONAL). 12 " TROUBLED WATERS – PALESTINIANS DENIED FAIR ACCESS TO WATER ISRAEL-OCCUPIED PALESTINIAN TERRITORIES WATER IS A HUMAN RIGHT- AMENSTY INTERNATIONAL).

22

management systems, tariff creation, supply and distribution systems, as well as wastewater collection, treatment, and re-use systems.

13

Standards: The standards at the policy level received a rate of (2.81) which does not reach a satisfactory level (see Table 2). More specifically: - There are no endorsed water policies or systems (management and development systems) to guide

the water sector. - No more than one-third of the interviewed stakeholders of the water sector mentioned that there

are policies or systems that reflect any of the integrity components which are done in harmony with the PWL. Their opinion was explained as stating that the common approaches should be accepted as policies. In fact, many actors, including the PWA, operated with an absence of endorsed policies or policy frameworks, and are directed by common approaches and objectives.

Oversight: The oversight at the policy level received a rate of (1.86) which does not reach a satisfactory level (see Table 2). The absence of endorsed policies will naturally lead to the absence of monitoring processes during the application process of these policies, in addition to the enforcement reports about them to the authorised bodies. Transparency: The transparency at the policy level received a rate of (2.13) which does not reach a satisfactory level (see Table 2). The guiding policies in the sector are absent, but the common approaches are coherent, adopted, and commonly agreed upon between the PWA and other stakeholders. Participation: The participation at the policy level received a rate of (2.85) which is close to a satisfactory level (out of a rate of 3), but still lacking (see Table 2). Stakeholders are getting more involved in formulating the drafting of newly formulated frameworks and systems, which in turn enhanced the participation rate and reflects a positive and new trend used in the PWA. Ethics Infrastructure: The ethics at the policy level received an average of (2.64) which does not reach a satisfactory level (see Table 2). More specifically, the fact that there are no endorsed polices that cover conflict of interests and a code of ethics is a major contributor to this low result. General Conclusion – Policies: Based on the PWL, and as stated in Article 7.2, the PWA is responsible for drafting and implementing the general water policy and as per Article 7.16 of the PWL. The PWA is also responsible for preparing and implementing the bylaws systems and regulations that are related to water resources. According to the PWL: Article 9: the NWC is responsible for the following: - The endorsement of the general water policy - The endorsement of policies related to the use and development of the water resources - The endorsement of the tariff systems policy In the PWL Article 42: the MC, upon the NWC recommendation, has the authority to issue the bylaws systems that are considered suitable to implement within the PWL. Neither the NWC nor MC (the authorised bodies) use the power delegated to them by law and in turn there is a huge gap in the endorsed policies and systems needed to guide the work in the water sector. The absence of endorsed policies and systems leads to chaos within all aspects of the water sector. A November 2008 water sector audit observed that “policy and strategy formulation have been exceptionally poorly represented in the work of the PWA during the past decade,” and “it is of little exaggeration to state that total chaos reigns in the water sector.”

14

13 For a complete table highlighting the results of the Integrity assessment regarding Policy, please see Table (2) and Figure (2) of Annex (3).

23

Recently the PWA, as part of the reform program, developed a framework for policy developments. The framework includes principles and guidance for policy development. Based on this framework, the PWA will be able to draft general policy for the water sector and specialised policies, such as pricing policy and water sector development policies. Regulations: The general Integrity Index for the Regulation is (IR=2.19). Such a low rate is considered poor as it hardly exceeded the value (2). The low value was generated from low rates of regulation components that form the Integrity Index.

15

Standards: The standards’ rate is (2.11) which indicates poor levels of integrity at the standards’ level. More specifically: - Many stakeholders declared that there are no endorsed regulations or systems to support the

regulatory processes. The PMU, the regulatory department at the PWA and MoA, stated that they have endorsed licensing regulations for groundwater wells. It is clear that stakeholders are not informed about the licensing regulations. At the same time it is clear that constraints set by Article 40 of the Oslo Accords negatively affect the use and application of such regulations by making the last decision made in the licensing process, which is done by the Israelis.

- It is clear that the regulation for licensing wastewater collection and treatment systems exist and those who were met during the interviews are familiar with the regulations’ existence.

- The existence of water quality standards received the best rate so far as it reached a value of (3), which reflects the use of the existing standards for water and wastewater qualities.

Oversight: The oversight rate is (2.28) which indicates a poor level of integrity as the PWA does not, as a regulatory body, have the mechanism or tools for regular monitoring over the application of the regulations and systems. There are no measures taken to enforce stakeholders (Line ministries, LGUs, WSSA, JWU, NGOs, etc) to report regularly to the PWA on their application of the regulations, systems, or standards. Transparency: The transparency for regulation was measured through four indicators covering the different processes under regulation. The transparency rate is (2.36), which indicates a poor level of integrity. More specifically: - The procedures for licensing groundwater wells and wastewater systems are not well known to

all stakeholders. - Currently, the water and wastewater quality standards for various purposes are better accessible

to the stakeholders, but the information about the monitoring of water and wastewater quality is not published or accessible to them.

Participation: The participation rate is (2.08) which indicates a poor level of integrity, as the stakeholders (line ministries, NGOs, etc) were not actively involved in formulating the licensing procedures and systems, as well as water and wastewater standards. Ethics Infrastructure:. The ethics infrastructure rate is (2.13) which indicates a poor level of integrity at the ethics infrastructure level. The stakeholders (line ministries, NGOs, etc) indicated that the ethical norms guiding the licensing procedures are not high and the level of commitment to apply the standards is very low. Also there is no will to inform and provide accurate information about the water and wastewater quality information, as well as their implication on the public health.

14 TROUBLED WATERS – PALESTINIANS DENIED FAIR ACCESS TO WATER ISRAEL-OCCUPIED PALESTINIAN TERRITORIES WATER IS A HUMAN

RIGHT AMNESTY INTERNATIONAL

15 For a complete table highlighting the results of the Integrity assessment regarding Regulations, please see Table (3) and

Figure (3) in Annex (3).

24

General Conclusion: In reflection of the poor legislation in place, the regulation process has a poor integrity rate. The low rate of the regulation index is explained by the absence of an endorsed system and regulations, the weak participation in developing systems, the limited capacities within the PWA to oversee the application of the systems and procedures, and the absence of enforcement measures for reporting against the application of regulations and systems. In addition to those factors, the required approval from the Israeli side for water projects greatly hinders the PWA’s regulatory power and it paves the ground for corruption. The Israeli control over water resources and the regulation of the sector will continue to be the main cause for the gaps in the integrity system. It is obvious that without reaching a final agreement over the water issue or a renegotiation of Article 40 of the Oslo Accords, it is hard to fill the gap in the integrity system at the regulations’ process. Consequently, since part of the regulations is not under Israeli control, it is essential to: - Develop required systems and regulations in participatory manners and endorse them. This must be

done to ensure that all of the regulations are accessible to the stakeholders through publishing them, at least on the PWA’s website.

- Activate or re-delegate the responsibilities and duties of the NWC to an active body that can oversee the application of the regulations and procedures, and to provide the PWA with feedback on their regulatory report.

- Develop the capacities of the PWA (staff and means) and enhance the commitment of different PWA departments (Regulatory, resources development, and technical departments) to report regularly about the application of the regulations and systems use, in addition to violation of these aspects.

- Develop practical mechanisms in partnership with the MoLG to enforce water providers (LGUS and utilities) to report to the PWA about the applications for the regulations and procedures.

National Planning and Budgeting: The general Integrity Index rating for the national planning and budgeting is (IN= 2.19), such a low value is considered poor as it hardly exceeded the value (2). The low value resulted from low rates of components within the national planning and budgeting that are measured in the Integrity Index.

16

Standards: The standards received a value of (2.10) which is considered a poor value and it is explained by the following: - There are no endorsed national, master, or strategic plans for the water and wastewater sectors

which was mentioned by numerous PWA officials from different departments in the WB, although such plans do exist in the PWA’s department in the Gaza Strip. Also, some of the service providers mentioned that there is a national plan that they are using in their work. Extra investigation revealed that the talks are about the "Palestinian Water Strategic Planning Study 2001," which was developed by the PWA and was been done with the support of PECDAR. The study has not been turned into a strategic plan or even endorsed by any parties.

- The low rate reflects the fact that the non-endorsed plans cannot reflect the needs and priorities in the water and wastewater sector, nor do they reflect the integrity components such as transparency, accountability, and participation.

- There are no endorsed development plans (Master Plan), although there are many donors and stakeholders who were involved in developing a master plan, but none were ever endorsed.

- There is no national allocated budget for water and wastewater, which was reflected in the very low rate of the standard index (1.5). The sector relies mainly on donations and funding from various donors.

Oversight: The oversight received a value of (1.99) which is considered a very poor value and it is explained by the following:

16

For a complete table highlighting the results of the Integrity assessment regarding National Planning and Budgeting,

please see Table (4) and Figure (4) of Annex (3).

25

- The absence of any endorsed national plan for the water sector means that monitoring over the implementation does not exist.

- Since there is no national budget allocation for water and wastewater (limited budget for emergency cases), there is no monitoring over the expenditures of such a budget.

Transparency: Transparency in the sector received a value of (1.74) which is considered as a very poor value. It is explained by the fact that there is no endorsed national plan, the accessibility of the stakeholders to the developed plans are limited, and they have almost no access to the information about the allocated budgets, both for water and wastewater. Participation: Participation received a value of (2.08), which is a very poor level. It is due to the fact that the stakeholders were not involved to a satisfactory level in the developing or the drafting of national water and wastewater plans, in conducting the evaluation for implementation of such plans, or to provide budgets allocated to such draft plans. Ethics Infrastructure: The ethics infrastructure received a value of (3.05), which is relatively better in comparison to other sectors of this study. This rate reflects that the stakeholders believe that the drafted plans consider equity and fair distribution among different social and economical groups. Also it is perceived to guarantee equal access to water and wastewater resources. Also, when budgets are provided, this allocation of budgets is considered to meet the needs of the most vulnerable and needy communities. General Conclusion: Since Oslo, many developmental plans have been produced for the Palestinian water sector, including eight variants of a “master plan.” These plans set ambitious goals, many of them based on the assumption that the PNA will develop all the resources agreed at Oslo, in addition to achieving increased access to the shared aquifer water. The most ambitious and comprehensive is the Water Strategy of 2000, summarised in the Palestinian Water Strategic Planning Study (PECDAR 2001), which consists of a 10 volume study. The eight “master plans” have all been based on the assumption that Palestinians will get the water allocations agreed to at Oslo II – but actual outcomes have fallen far short of expectations.

17 Gaza has a well designed Master Plan for water and sanitation.

The Plan provided for an integrated production and conveyance system, and a major expansion of wastewater treatment capacity, including three new plants, but it has been realized that it is impossible to implement the plan under the emergency closure conditions employed by the Israelis. In 2011, a cross sector national plan was developed for three years. Water and sanitation were included as part of the infrastructure plan with a budget that exceeds $200 million, but in reality, only $68 million was planned to be allocated by the plan, and the rest would need to be covered by donors. With the expectation of this plan, it is hard to say that the Palestinian water sector’s stakeholders, such as the PWA, will endorse these plans in the WB. To build the integrity system in national planning and budgeting it is essential to: - Develop a comprehensive national plan for water, wastewater, and sanitation with tangible

participation of all stakeholders. - Overcome the problems of the absence of the water sector's reference (governing bodies; NWC),

either by activating the council or delegate their responsibilities to another body that is authorised to endorse the developed plans and oversee the PWA’s performance and implementation of the plan.

- Build the capacities of the PWA in accountability and reporting. - Develop a strategy that supports the PWA in optimising the resources within the framework of

Israeli control over water resources. This strategy should not neglect the negotiation capacities of the Palestinian members in the Joint Water Committee.

17 Report No. 47657-GZ, WEST BANK AND GAZA, ASSESSMENT OF RESTRICTIONS ON PALESTINIAN, WATER SECTOR DEVELOPMENT, Sector Note, April 2009, Middle East and North Africa Region, Sustainable Development, The World Bank.

26

4.2.3 General Conclusions - Integrity Assessment at the Governance Level The integrity system at the governance level is poor. The direct cause of this situation is the weak implementation of the PWL, which is hindered by two factors. The first is the absence of political will and the second are constrains imposed by Article 40 of the Oslo Accords. The weak implementation of the law has generated deficiencies and gaps in the integrity system at the governance level. This includes the absence of endorsed policies, national plans, allocated budgets, and systems that regulate the performance of the stakeholders of the sector. Lastly, the overlap of the PWA’s functions as a regulator, implementer, and legislator are a constant source of frustration. A weak integrity system at the governance level will affect the Integrity Indices at other levels of the water sector. "The governance system established by Article 40 requires decisions by consensus between the two parties with unequal power. In effect, because of the way it has been implemented, the agreement gives Israel predominance in the allocation and management of West Bank water resources. The Civil Administration exerts absolute control over Area C (61% of the West Bank) and consolidates Israel’s predominance.”

18

4.3 Water Sector Management Level The Water Management Level is broken down into management on the national and local levels. The analysis of the water sector management will be associated to the processes taking place under the before mentioned two levels; national and local levels as these two levels have their different processes listed under these levels. Under each level, main processes of stakeholders were analysed and an integrity assessment was carried out.

Main processes under the national and local levels have been identified. Figure (3) illustrates the processes under the water sector management level and its associated stakeholders.

18 Report No. 47657-GZ, WEST BANK AND GAZA, ASSESSMENT OF RESTRICTIONS ON PALESTINIAN, WATER SECTOR DEVELOPMENT, Sector Note, April 2009, Middle East and North Africa Region, Sustainable Development, The World Bank

27

Figure (3): Water Sector Management Level's Processes versus Stakeholders

28

The general Integrity Index value for the management level of the water sector is (2.65) which is unsatisfactory, see Table (3) and Figure (4). Table (3): Integrity Index for the Management Level of the Water Sector Process Integrity Criterion

Standards (S) Index

Oversight (O) Index

Transparency (T) Index Participatory

Processes (P)

Ethics Infrastructure (E) Index

General Integrity Index (IL)

Water Sector Management Level

National Level

Protection of Water

Resources:

Public, PWA, WBWD, MoA, EQA, LGUs,

farmers' groups, and the JSC

Procurement and

Construction: PMU, Procurement,

Financial, and technical department

technical department of the PWA, MoF , SAACB,

and the

Private sector

Use of Water

Resources: NWC, PWA: WBWD

JWU, WSSA, Private sector,

Public,

Individuals, EQA

MoA, MoH, cooperatives,

farmers, and Israelis

Financial Management:

MC, MoF, PWA,

Donors, and the

SAACB

Water Sector Projects and Programs:

Donors, PWA- PMU, and private sector

engineering consulting firms

Human Resources:

PWA ,donors, and the GPC

Local Level

Program/Project Development and

Management:

Donors, LGUs/ JWU/WSSA/CMWU, NGOs/

private sector,

MoLG-PWA, MoLG, MoF, and

SAACB

Procurement and

Construction: LGUs, private sector, JWU,WSSA, CMWU,

NGOs, INGOs, and the MoLG

Pricing and Tariff

System: LGUs, MoLG, SAACB, and

the PWA

Financial Management: LGUs, private sector,

JWU,WSSA,CMWU, individuals, MoLG, SAACB, and donors

Human Resources Management:

LGUs, private sector, JWU, WSSA, CMWU, MoLG, and

the SAACB

29

2. Water Sector Management Level

2.80 2.60 2.61 2.59 2.63 2.65

2.1 Water Sector Management at the National Level 2.35 2.30 2.27 2.42 2.42 2.35

2.2 Water Sector Management at the Local Level 3.25 2.90 2.95 2.75 2.84 2.94

Figure (4): Integrity Index for the Management Level of the Water Sector

4.3.1 Main Processes and Stakeholders Water Sector Management - National Level

At the national level (West Bank and Gaza Strip), water resource management includes the following processes: Protection of Water Resources: Water resources in Palestine include recharge zone water, surface water, groundwater wells, springs, wastewater collection, and treatment plant water. The water from these various resources are managed by a variety of actors, including the PWA, Israel, LGUs, and the JSC. The EQA and the PWA are responsible for the inspection and enforcement of regulation of these resources. The PWA, by law, is responsible for the enforcement of regulation of recharge zone water (though the EQA, with limited capacities, actually enforces these regulations.) Regulations on surface water, groundwater, and springs are, by law, enforced by the PWA while the PWA and EQA share enforcement duties on wastewater collection. The MoA joins the PWA and the EQA for enforcement of regulations on treatment plant water.

19

19 For a complete table describing the actors involved in the protection of water resources, please see Table (6) of Annex (2).

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Standards (S) Index

Oversight (O Index

Transparency (T) Index

Participatory Processes (P)

Ethic Infrastructure (E)

Index

Integrity Criterion

2 .Water Sector Management Level 2.1 Water Sector Management at the National Level

2.2 Water Sector Management at the Local Level

30

Use of Water Resources: Likewise, the use of water resources is managed inspected, and regulations are enforced by a variety of actors. The PWA, LGUs, the WBWD, in addition to individuals manage the use of these resources. For rainwater harvesting for domestic and agricultural consumption there is no clear article in the law stipulating the actor responsible for inspection, though the MoH carries out inspection if this water is used for consumption. There is no enforcement of regulations for rainwater harvesting. The PWA shares inspection responsibilities with WBWD, Israel, EQA, and the MoA for the other resources. The PWA is also responsible for enforcing regulations of groundwater sources, streams, and springs. Israel, through the WBWD is responsible for enforcing regulations of groundwater, the NWC is responsible for enforcing regulations for water distribution and reallocation, and the EQA is in charge of enforcing regulations on treated wastewater.

20

Water Sector Projects and Programs: Water sector projects and programs, including the design of projects and programs and the implantation of programs are monitored by the PWA and financed by external donors, including the GTZ, KFW, JICA, USAID, and the World Bank. The PWA, PMU, and private sector engineering consultants are generally responsible for the implementation of these projects and programs.

21

Findings:

- The process of water resource protection is not well practiced, due to a number of limitations, including the limited capacities of human and physical resources and restriction over access imposed by Israel.

- Water resources, such as springs and wadis, are utilised and exploited by different stakeholders, including the general public with limited regulation of their usage. Other resources, such as groundwater wells, bulk water pipes, and storage tanks, are managed by governmental bodies; mainly the PWA through the WBWD.

- LGUs and utilities (JWU, WSSA, CMWU) are responsible for the management and usage of their own underground water wells, springs, and wastewater treatment plants.

- Private groundwater wells are managed by their owners; private individuals, cooperatives and private companies, as is the case with agricultural groundwater wells and springs. In some cases, like Ein Sultan, Ein Auja, and many others, the exploitation of the water spring is a historical right of the farmers who own the land that surround the spring area.

- The oversight of protection and usage of the water resources is the role of the PWA and at certain times this role is shared with EQA and MoA.

- By law, the PWA holds full responsibility of the management of water resources and sanitation in Palestine. Since this is the case, the PWA should guarantee that water resources are protected, and its usage is managed within national policies and regulations.

- The lack of enforcement and monitoring generates very clear gaps in the above mentioned processes due to political reasons and limited capacities. The PWA, for example, cannot take any measures against the illegal groundwater wells that are being dug in Al-Faria area, the Gaza Strip, and the Jenin area. Such illegal groundwater wells result in the deterioration of the groundwater aquifers, both quantitatively and qualitatively. These practices have resulted in the Al-Faria spring drying up and the Gaza groundwater well producing brackish and saline water.

Other than donor-driven standards, there are currently no Palestinian standards for many aspects of Solid Waste Management (SWM) in terms of site selection, design, or operation of sanitary landfills, hazardous and medical waste removal, transfer stations or recycling operations. Institutional overlap and conflict mean that key roles of the SWM at the national level are divided among three main institutions, namely the MoLG, MoH, and EQA, and typically include other institutions such as the PWA, MoA, and the Ministry of Economy (MoE).

22 These institutional framework ambiguities have

20 For a complete table describing the actors involved in the use of water resources, please see Table (7) of Annex (2). 21 For a complete table describing the actors involved in water sector programs and projects, please see Table (8) of Annex (2). 22

National Strategy for solid waste management in the Palestinian Territories

31

resulted in the proliferation of random solid waste dumping sites that spread all over sensitive recharge areas as the leaching of solid waste leachate in such sites pollute the ground water aquifer.

Conclusions:

- There is no clear endorsed system to apply regulation for the protection of resources. This makes it difficult to regulate water resources and ensure an effective and fair use of these resources. This causes a potential gap for corruption and mismanagement of these valuable resources.

- Although the usage of the resources is managed by the PWA, the overall control is in the hands of Israel. The PWA’s inability to have full control over water resources creates a high potential for corruption risk and it compromises the integrity system of the water sector and will hinder development and effective utilisation and management of these resources to fulfil Palestinian needs. This is due to the fact that decisions made by Israel are typically in conflict with Palestinian interests.

- In addition to the above mentioned gaps and risks, the water sector project and program is subject to a clear conflict of interest of the PWA’s roles. It is a problem that the PWA designs, implements, supervises the implementation, and conducts the monitoring process. This provides fertile ground for the risk of corruption as the PWA acts with no external oversight.

Procurement and Construction: The procurement and bidding processes for amounts greater than $150,000 (USD), are carried out by the Central Tendering Committee at the Ministry of Public Works. The PWA participates in the process but the process itself is the responsibility of the NTC. For procurement and tenders of less than $150,000 (USD), the PMU and the private sector are responsible for preparation while the PMU or the PWA is responsible for endorsing and approving the process. The PMU, various departments of the PWA, the MoF, and the SAACB are responsible for auditing.

23

Financial Management: For administrative finance and project finance, the MC and the MoF allocates funds while the PWA is responsible for spending allocated funds. Individual donors and the SAACB are responsible for auditing.

24

Human Resources: Within human resources level, the PWA and individual donors announce recruitment, promotion, and capacity building. The General Personnel Council’s (GPC), the PWA, and individual donors are responsible for approving and auditing.

25

Findings:

- The procurement processes and the financial management inside the PWA follow the PWA’s procedures and it’s subjected to an audit by the MoF and SAACB.

- As for the projects, the procurement is also subjected to the donors’ technical requirements, if they exist, but the project financial issues follow the MoF’s procedures and requirements.

- The recruitment and promotion of the human resources at the PWA are done based on the GPC’s recruitment and promotional procedures. Those who are recruited on a project basis are subjected to different recruitment and promotional procedures upon the conditions of the project’s contract.

- The PWA provides its staff with capacity building activities, and the majority of such activities are covered by donors or partners' organisations. The training unit at the PWA is responsible for managing the capacity building processes. The approval of the chairman of the PWA is requested for those who should participate in activities conducted abroad.

Conclusions:

23

For a complete table describing the actors involved in procurement and construction, please see Table (9) of Annex (2). 24

For a complete table describing the actors involved in financial management, please see Table (10) of Annex (2). 25

For a complete table describing the actors involved in human resources, please see Table (11) of Annex (2).

32

- The procurement procedures related to financial and human resources management adhere

to the official PNA endorsed mechanisms. Consequently, the risk for potential corruption is minimal as there is a system, the only risk that exists is if the system is violated.

- There are no clear plans for human resources development. The capacity building activities are based on available opportunities through donors and partner organisations, which presents a potential risk area for corruption.

4.3.2 Integrity Assessment of Water Sector Management - National Level The general Integrity Index for water sector management at the national level is (IM= 2.35). Such a low value is considered unsatisfactory as it is hardly approaching the value (2.5). The low value of (IM) was generated from the very low rates within the integrity assessment criteria rates. Specifically, none of the sub-processes, including resources’ protection, exploitation plans, project design and implementation, procurement, human resources, and financial management, received acceptable scores.

26

Standards: The standards received a rate of (2.35) within the integrity criteria which is considered as a poor value and it is explained by the following: - No endorsed plans or strategies for the protection and exploitation of water resources exist.

Currently there are no endorsed plans, even by the PWA, or even a potential for them to do so in the near future, although there are a number of these plans developed by a few of the service providers.

- The level of enforcement measures to provide protection of the water resources is very low. Also, measures against illegally dug groundwater wells or illegal wastewater dump sites do not exist.

- The way programs and projects are developed does not fit well with the drafted national development plans and weakly reflect the integrity components. At the same time, when implemented, there is not enough commitment from the implementer to follow the procedures and systems developed by the PWA, as these systems are not endorsed.

- The procurement and bidding processes for bids less than $150,000 received a satisfactory rate of standards as it is done using clear and fixed procedures of announcement and re-announcement, receiving offers, opening of offers, and awarding processes

27. Also the bidding committee

members, to a certain level, registered at a decent level of technical and financial experience in bidding issues.

- Written regulations to carry out workshops do not exist in a satisfactory level, although such regulations do exist in the WB and GS, which are carried out by the PMU.

- Procedures for dealing with complaints do not exist to a satisfactory level, although the PMU has regulations in both the WB and GS.

- The accounts of external funded projects are not managed in separate branch accounts all the time. The account for collecting fees for bulk water is managed by the PWA as part of the PWA’s accounting system, which hardens the cost recovery analysis.

- The recruitment and promotions processes of human resources, as well as the setting of salaries at the PWA, are based on the adopted HR systems and clear salary scale. Also, there are equal opportunities available to all staff to receive capacity building activities. On the other hand, there is no incentives’ system used at the PWA HR level.

Oversight: The oversight received a value of (2.3), which is considered low by our integrity criteria, and is explained by the following:

26 For a complete table describing integrity scores for water management at the national level, please see Table (5) and figure (5)

of Annex (3). 27 These procedures were developed and endorsed by the MC for the use of all official governmental bodies including the PWA.

33

- There is a limited application of monitoring and reporting systems for implementing the projects against the water resources’ protection strategies. The absence of the strategies can be the main reason behind the low rate of oversight

- The design of the program and project receive limited monitoring and reporting from the authorised bodies. This is due to the fact that the PWA is doing the design and is monitoring the processes at the same time

- The program and project implementation is not well monitored and reporting to the PWA does not meet the integrity requirements, especially for projects that are implemented by the LGUs and other water providers

- The procurement processes have a satisfactory level. There is an appropriate monitoring mechanism when dealing with complaints received from bidders, and there is regular reporting about the bidding processes. Unfortunately, overall, there is not enough monitoring in general or of the conflict of interest issues at the procurements’ level

- There is a very weak performance level in regards to the financial issues as there is no regular request for financial reports to compare them to the actual expenses with the planned budgets, or even regarding bank transactions done at the financial level. Also, project/programs’ budgets are not adhering to the process endorsed by the authorised body

- The cost recovery of bulk water is not monitored or tracked well by the PWA - There is no monitoring of the promotion processes carried out by PWA staff, although it is worth

mentioning that when there is complaint, such complaints are considered Transparency: Transparency received a value of (2.27), which is considered a poor value and it is explained by the following:

- The water resources’ protection plans are not endorsed, as such, they are not accessible to stakeholders. At the same time, there is not enough regular publication on violations against resources. This leads to there being no measures being taken to prohibit the violation of these plans

- Limited information is accessible or publicised about the programs, projects, and the project design in general, and does not meet the transparency requirements established in this assessment

- The procurement and bidding at the PWA is announced to a satisfactory level. They are carried out in a clear and accessible way for stakeholders and information is equally provided to all bidders

- The information regarding the project and the financial status of the cost recovery of bulk water are not shared, publicised, or accessible to a satisfactory level

Participation: The participation received a value of (2.42), which is considered a poor value and it is explained by the following:

- The participation of the stakeholders in drafting plans regarding the protection and exploitation of water resources is very limited

- The participation of key stakeholders in monitoring the implementation process of programs and projects is very limited

- There is a low level of commitment at the PWA to invite the financial manager to attend meeting when budgets are being discussed

- Currently, relevant PWA staff members participate in the development of plans and provide suggestions to enhance the work to a very good level. The call for regular meetings with PWA staff members is at a good level, but the recruitment, promotion, and capacity building nominations are done at a poor level

- The participation of different departments and specialised personnel in the procurement process is well identified and reaches a sufficient level

Ethics Infrastructure: Ethics infrastructure received a value of (2.42), which is considered as a poor value and it is explained by the following:

34

Typically, the procurement processes are at a high risk area for corruption. This is due to the fact that it

has been given special attention from the PNA. The MC has endorsed a supply and procurements

manual and is supposed to be enforced by all official governmental bodies. At the same time, the

SAACB gives special attention to oversight of all procurement processes at all governmental and non-

governmental bodies. Considering this context, and with the absence of appropriate integrity systems at

the governance level, the procurement component received a satisfactory rate of integrity.

- There is almost no code of ethics commonly used in the acts conducted towards the protection and exploitation of resources among stakeholders. Also, at the PWA, there are no tangible encouragement measures to prevent violation of resource exploitation

- Evaluation of the program and project methods weakly rely on a participatory method - The staff involved in the procurement processes are at a good level of familiarity with the integrity

code of ethics - The PWA is ethically considered to be within a good level regarding the potential conflict of

interest in their acts toward the protection and exploitation of resources

4.3.3 General Conclusion - Water Sector Management - National Level

As a result of the low rate of the integrity assessment at the governance level, the integrity system rate of the management level is unsatisfactory. The unsatisfactory level of the integrity system of the management of water resources at the national level is common of all management processes, with the possible exception of the procurement processes, which follow strict systems and procedures, including the integrity components and criteria.

The unsatisfactory integrity system at this level is expected as it is the direct result of the confusion and misleading governance of the sector. Currently, the PWL commands the leading role in the sector and corresponds to the PWA’s methods for managing the water resources’ exploitation, to protect the resources, and to allocate the resources upon needs and demands. Also, one cannot forget that the WB is under Israeli military occupation. Considering Israel is the occupying power, it maintains effective control of Area C and areas such as borders, water resources, recharge areas, and bulk water facilities. It is the Israeli army that decides if and where Palestinians are permitted to drill groundwater wells, lay out bulk water lines, construct wastewater collection systems, or wastewater treatment plants.

The JWC, which was created within the framework of the Oslo Accords, has not fulfilled its role of providing an effective collaborative governance framework for joint resources management and investment.

In addition to that, the limited capacities of the PWA and the absent role of the NWC are extra reasons for the low rating of their integrity system. The recent status of the PWA and NWC hinders policy making and planning processes that are needed to guide the management processes of the water sector effectively and efficiently. Also, their ability to allocate water in an equitable way is greatly hindered due to this framework.

The management of the water sector requires, in addition to good governance, an effective systems, working procedures, and bylaws that provide standards and references for management processes. These tools are currently on hold, waiting for approval and endorsement by the authorised body, namely the NWC.

Efficient management requires control over financial resources. Considering the recent context of relying on external donations as the main source of financing the sector, it is hard to manage the water sector at the national level operating in an efficient and effective way. The unsatisfactory integrity system of the water sector management at the national level causes the following deficiencies:

35

Palestinians do not get their share of water and are not managing their water resources effectively

28

There is no equity in water distribution among different Palestinian communities. Some communities receive 120 litres per capita per day, while other communities do not have sustainable access to even 30 litres per capita per day

There is poor water distribution among different sectors; such as domestic, agricultural, and industrial sectors

There are no enforcement measures that are taken to protect the water resources, the recharge areas, or measures against illegal groundwater wells, sewage and wastewater dumping sites, or illegal connection from bulk water pipes, although they are detailed in the PWL, Articles, 29, 30, 31, 33.2., 33.3, and 34.2

There is poor monitoring of the water service providers’ performance in managing their water resources or their allocation of bulk water, which results in a high rate of losses of unpaid water, which is considered by AMAN as a form of corruption (loss of public money)

4.3.4 Processes and Stakeholders of Water Sector Management - Local Level At the local level, the water sector is subjected to the involvement of different stakeholders in addition to the PWA. The water management issue at the local level is done by the local government units (LGUs) or by semi private non-governmental bodies like the JWU, WSSA and CMWU. The reference body for the LGUs is the MoLG and the relation with the PWA is only at the coordination level. Program/Project Development and Management: Program and project development and management at the local level includes project design, implementation, and management. Donors finance the design and implementation while LGUs finance the project management. LGUs, NGOs, and the private sector implement the various stages of the project while the MoLG, PWA, MoF, and SAACB audit the activities.

29

Procurement and Construction: Procurement and design at the local level includes design, bidding, awarding, procurement, construction, and project management. Donors finance each activity, except for project management, which is financed by the LGUs, JWU, and WSSA. The LGUs, JWU, WSSA, and CMWU are also responsible for drafting, endorsing, and approving these activities. Donors, the PWA, and the MoLG audit the various procurement and construction activities.

30

Pricing and Tariff System: The pricing and tariff system, including the pricing system and the collection of fees, is implemented by the LGUs and audited by the MoLG and SAACB. By law, the PWA enforces these activities.

31

Financial Management: At the local level, administrative and project funds are allocated by the LGUs, the private sector, the JWU, and the WSSA. These stakeholders, in addition to the CMWU, spend the allocated funds. The MoLG is responsible for auditing the administrative funds while the donors and the SAACB audit the project.

32

28 Report No. 47657-GZ, WEST BANK AND GAZA, ASSESSMENT OF RESTRICTIONS ON PALESTINIAN, WATER SECTOR DEVELOPMENT, Sector Note, April 2009, Middle East and North Africa Region, Sustainable Development, The

World Bank 29 For a complete table describing the actors involved in program and project development and management at the local level, please see Table (12) of Annex (2). 30 For a complete table describing the actors involved in procurement and construction at the local level, please see Table (13) of

Annex (2). 31 For a complete table describing the actors involved in pricing and tariff system at the local level, please see Table (14) of

Annex (2). 32 For a complete table describing the actors involved in financial management at the local level, please see Table (15) of Annex (2).

36

Human Resources Management: Human resource management at the local level includes recruitment, promotion, and capacity building. These activities are announced by the LGUs, the private sector, the JWU, the WSSA, or the CMWU. Each activity is approved by the LGUs and are audited by the MoLG and SAACB.

33

Findings:

- The management of the water related resources (human, financial and developmental project) at the local level falls under the mandate of the LGUs and other service providers such as the JWU, WSSA and CMWU. Currently, the MoLG is supervising and monitoring the processes at this level. The implementation of the processes is guided by the MoLG endorsed systems in human resources management, financial systems, procurement, and tendering systems.

Conclusions:

- Within the clear mandate of the MoLG to supervise and monitor the performance of the LGUs and service provider at local level, the role of the PWA is limited to licensing of water projects/programs and for approval of the pricing and fees collection system.

There is a certain degree of overlap between the roles of the PWA and MoLG in a few processes. This is a source of conflict between them and provides a narrow margin for the PWA to operate. This area needs to be clarified and identified.

4.3.5 Integrity Assessment of Water Sector Management - Local Level The integrity assessment of water sector management at the local level, which is considered as the role of service providers (LGUs and utilities), was tackled in this report only at a limited level, and against specific criteria of integrity. The selection of the processes at this level was done upon its relation to the PWA’s functions and roles. More specifically, at this level, oversight of the program and project development as well as transparency, participation, and ethics infrastructure are carried out in regards to the implementation of the different systems, bylaws, working procedures, pricing, and tariff systems. The other process of management, namely program management, procurement and construction, financial management, and human resources are done at the local level and are the sole responsibility of the service providers and under the supervision of LGUs. Like at the national level, water sector management at the local level received a low score (IL=2.94) in the general integrity index. Not coincidentally, each sub-process also scored low.

34

Integrity Criteria for water sector management at the local level will be discussed in a separate report about the service providers. Supervision of the management of water resources by service providers at the local level is the sole responsibility of the MoLG. This report presents the findings of the integrity criteria in processes of relation to PWA. Standards: The standards of local management received a rating of (3.25), which is considered to be a satisfactory level.

33

For a complete table describing the actors involved in human resource management at the local level, please see Table (16) of Annex (2). 34

For a complete table describing integrity scores for water management at the local level, please see Table (6) and figure (6) in Annex (3).

37

Since at the local level there is a high level of experience, it is of no surprise that the integrity system is at a satisfactory level when the processes are guided by coherently endorsed manual and working

procedures. In addition, when there are proper oversight functions, they are carried out in a professional manner by the authorised bodies using appropriate mandates and tools.

Oversight: The monitoring provided by the PWA for implementation of water related programs and projects is very weak and there are almost no reports submitted about progress to the PWA. LGUs are reporting to the MoLG, but the PWL provides the authorisation to the PWA to monitor and oversee the service providers at the local level. The service providers are using individual pricing and tariff systems that are hardly based on a cost recovery approach and the monitoring of the PWA to such systems is very weak. Transparency: Knowledge of the pricing and tariff system is non-existent among different stakeholders, including the PWA. Transparency of water related projects and programs at the implementation level is extremely weak and in many cases non-existent. Participation; The level of participation of different stakeholders, including the PWA, in developing the pricing and tariff system is very poor. Ethics Infrastructure: There is a good level of service provision in the pricing and tariff system sector to both poor households and public service centres.

4.3.6 General Conclusion - Water Sector Management - Local Level It is fair to say that the integrity system in water sector management at the local level is either satisfactory or close to satisfactory, which can be explained as follows: - The MoLG worked and continues to work in developing systems and working procedures that

guide the performance of the local authorities. - The MoLG is supervising the performance of the LGUs and overseeing the implementation of the

systems and working procedures.

- There are many initiatives that are taking place with the MoLG and LGUs that consider good governance as a bedrock to projects. The initiatives include the assessment of the integrity system at the LGUs. The UNDP, TIRI, and USAID are the lead stakeholders and donors who support such initiatives.

- Israel is not imposing its direct control over service provision at the local level, which leaves more space for the Palestinian National Authority to act. On the other hand, in relation to the role of PWA at this level, it is crystal clear that the PWA is not acting up to the level expected and this is negatively affecting the integrity system. For example, PWL Article 20 gives the PWA the authorisation to impose unified tariff systems for water, and service providers (PWL Article 26) are supposed to do their own system upon the PWA’s endorsed system. In reality, each service provider has its own pricing system, with huge differences in their water price. AMAN reports: “Palestinians pay less than 3NIS for one cubic meter of water in the Qalqilya district, while others in the south of Hebron, pay around 30NIS for the same one cubic meter of water.”

- Under the PWL Article 28, the PWA is authorised to monitor and supervise the work of service providers, including the implementation of water related projects and programs. This includes acquiring approval on the specifications. In reality, the PWA and service providers are not committed to these articles and the connection involved between them is limited to just the coordination level. PWL Article 33.2 obliges service providers to report to the PWA about water related issues in their service areas and it also authorises the PWA to conduct inspection of these service areas. PWL Articles 33.3 and 35 give the authority to protect resources, even those within the management level or utilised by service providers to the PWA.

38

4.4 Water Supply, Provision, Operation, and Maintenance

4.4.1 Main Processes and Stakeholders

Water supply and services provision at the local level includes the following:

Water supply, provision, operation, and maintenance of the water facilities are done at the local level and it mainly includes:

- Local level planning and budgeting - Allocation and re-allocation of bulk water - Regulations of consumption - Operation and maintenance - Regulation for connection, including illegal connection - Customers' services - Vendor water regulation

The water supply, provision, operation, and maintenance were tackled in this report at only limited processes against specific criteria of integrity. The selection of the processes at this level was done upon its relation to the PWA and where the PWA is supposed to have a role. More specifically, at this level the process of allocation of received bulk water (Water quantity and quality) is investigated against the integrity criteria, as these two processes are directly related to part of the PWA’s role as the regulator of this water. Local Planning and Budgeting: The LGUs, JWU, WSSA, and CMWU are responsible for the local water development plan and the local water budgeting. While the MoLG and the PWA approve the plans and budget, the MoLG, General Assembly, and PWA are the monitoring bodies.

35

Allocation of Received Bulk Water: The PWA supplies bulk water, either from groundwater wells or from Mekerot. This water is distributed by the LGU's, JWU, WSSA, and CMWU and is inspected by the PWA.

36

Regulation on Consumption: Regulation on water consumption is broken down into regulations on water used for domestic and agricultural use and regulations on water quality. Water, both for domestic and agricultural use is distributed by the LGUs, JWU, WSSA, CMWU, or the private sector. Water for domestic or agricultural use is inspected by the PWA through the WBWD, while water quality in inspected by the MoH.

37

Operation and Maintenance: Operation and maintenance of the water distribution systems is the responsibility of the LGUs, JWU, WSSA, or CMWU and is monitored by the PWA. Groundwater wells' and water reservoir operation and maintenance is the responsibility of the well's or reservoir's owner (PWA, LGUs, JWU, WSSA, and CMWU) and is monitored by the PWA through the WBWD. While the owner of an irrigation water distribution system is responsible for its operation and maintenance, there is no monitoring body. Finally, wastewater collection systems fall under the responsibility of the LGUs and the WSSA while the PWA is responsible for monitoring these systems.

38

Regulation for Connection and Illegal Connection: The regulation of water connections and illegal connections is the responsibility of the service providers and, in a few cases, the judicial system

35

For a complete table describing the actors involved in local budgeting and planning, please see Table (17) of Annex (2). 36

For a complete table describing the actors involved in the allocation of bulk water, please see Table (18) of Annex (2). 37

For a complete table describing the actors involved in the regulation of consumption, please see Table (19) of Annex (2). 38

For a complete table describing the actors involved in the operation and maintenance, please see Table (20) of Annex (2).

39

(regarding illegal connections). Other than the direct supervision of the service providers, there is no external supervision.

39

Consumers' Services: All customer service, including fee collection, handling customer complaints, and information provision is the responsibility of the service providers.

40

Vendor Water Regulation: The water vendors have responsibility for all activities, including water extraction, distribution and water quality control. The vendors are supervised by the LGU's and in the case of water quality control, by the MoH.

41

Findings:

- The Water Supply, Provision, Operation, and Maintenance processes are the sole responsibility of the service water providers, such as the LGUs, WSSA, JWU, CMWU, private vendors, and groundwater well owners.

- The service providers are supervised and are monitored by the MoLG based on its mandate. The water provision is considered part of the functions of the LGUs and other service providers. The service provision is treated by the LGUs’ Law 42 just as any other services that fall under the LGUs’ mandates.

- The role of the PWA at this level is restricted to providing licences for networks, groundwater wells, water reservoirs, wastewater (WW) collection systems and treatments plants, and bulk water to communities through its own bulk water pipes and groundwater wells.

- Service providers such as the LGUs might utilise the bulk water received for servicing its own communities. In addition, a few of them sell part of the bulk water to other communities as in the Nablus and Hebron municipalities. Some LGUs use the available water sources for both domestic and agricultural use, such as in the Jericho municipality.

- Customers' complaints are handled by the service providers based on bylaws and internal systems. As for the collection of fees, service providers face problems due to a lack of an enforcement measure against those who do not pay.

- Many communities are not completely or partially served by the service providers or they face a deficit in water provision. This results in the creation of a tangible role of service provision for vended water. The process is currently being monitored by the LGUs. Such practices of water distribution increase the overall cost of water for consumers.

General Conclusion: The PWA’s involvement in water service provision on the local level is limited by the current endorsed system and its regulatory and monitoring role is not well defined. This may result in gaps in the water governance system and result in a corruption risk. Any or all of this can result in a conflict of interest situation since an authorised monitoring body is not able to enforce regulations on the local level. Figure (5) illustrates the processes under the water supply, provision, operations, and maintenance levels and its associates’ stakeholders.

39 For a complete table describing the actors involved in the regulation of connections and illegal connections please see Table (21) of Annex (2). 40 For a complete table describing the actors involved in the regulation of consumer services, please see Table (22) of Annex (2). 41 For a complete table describing the actors involved in the regulation of water vendors, please see Table (23) of Annex (2). 42 Law No. 1 for the year 1997, Local Governance Units Law.

40

Figure (5): Water Supply, Provision, Operations, and Maintenance Levels versus Stakeholders

4.4.2 Integrity Assessment of Water Sector Management - Local Level

Water Supply,

Provision, Operation,

and Maintenance

Level

Operation and

Maintenance:

LGUs, JWU, WSSA, CMWU, PWA, Well's

owner, and the WBWD

Regulation for

Connection and Illegal

Connection: LGUs, JWU, WSSA,

and the CMWU

Regulation on

Consumption:

LGUs, JWU, WSSA, CMWU, private

sector, WBWD, and the MoH

Allocation of Received

Bulk Water: LGUs, JWU, WSSA, CMWU, WBWD, and

the PWA

Local Planning and Budgeting:

LGUs, JWU, WSSA, CMWU, MoLG, and

the PWA

Vender Water

Regulation: Water vendors and

LGUs

Consumers Services:

LGUs, JWU, WSSA, and the CMWU

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Table (4): Water Supply, Provision, Operation, and Maintenance Integrity Assessment

Process

# of Participants Interviewed

Integrity Criterion

Standards (S) Index

Oversight (O) Index

Transparency (T) Index Participatory

Processes (P)

Ethics Infrastructure (E) Index

General Integrity Index (IL)

3. Water Provision, Operation, and Maintenance 2.93 2.92

2.44 2.28 3.29 2.77

3.1 Local Level Planning and Budgeting 13 2.62 2.62

2.23 2.46 2.48

3.2 Allocation of Received Bulk Water (Water quantity and quality) 6 2.61 2.83

2.42 2.67 2.63

3.3 Regulation on Consumption

14 4.19 4.00 2.86 2.07 3.43 3.31

3.4 Operation and Maintenance

14 2.14 2.79 2.14 2.14 3.93 2.63

3.5 Regulation for Connection and Illegal Connection

14 3.45 3.14 2.86 2.71 4.07 3.25

3.6 Consumers' Services

14 3.29 3.00 2.93 2.14 3.43 2.96

3.7 Vendor Water Regulation

12 2.25 2.08 1.67 1.75 1.58 1.87

Figure (6): Water Supply, Provision, Operation, and Maintenance Integrity Assessment

Standards: When service providers consider planning and budgeting for the water sector in their service areas, there is not enough consideration to the national plans of budgeting. With this in mind,

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

Standards (S) index

Oversight (O Index

Transparency (T) Index

Participatory Processes (P)

Ethic Infrastructure

(E) Index

General Integrity index

(IL)

3 .Water Provision, Operation and Maintenance 3.1 Local level planning and budgeting

3.2 Allocation of Received Bulk Water ( Water quantity and quality) 3.3 Regulation on Consumption 3.4 Operation and maintenance

3.5 Regulation for Connection and Illegal Connection 3.6 Consumers' Services

3.7 Vendor Water Regulation

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plans are not endorsed, on the contrary, service providers are working within individual infrastructure plans or their strategic plans are developed individually. Also, the way the bulk water supply is distributed, which is based on endorsed plans for service providers, received a unsatisfactory rating as the allocation process does not follow the drafted policies and/or the communities’ supply-demand balance, or policies set by the PWA. On the other hand, the quality of the bulk water distributed utilises the water quality standards set by the PWA and EQA. Oversight: The monitoring of bulk water supply received a unsatisfactory rating as the allocation process is not monitored to a satisfactory manner by the PWA or other stakeholders. On the other hand, the quality of the bulk water is of good level, as the water quality is being closely monitored by the PWA and other stakeholders, including the EQA. Also, the local planning and budgeting for water issues is not overseen by the PWA, but on a better note, the MoLG provides its own system of monitoring for the services provided by the LGUs. Transparency: Transparency of bulk water supply received a poor rating as the allocation process is not published or announced to a satisfactory level. It is also due to the fact that information about water quality is not shared with the public or other stakeholders. The low commitment to publish such information is because the PWA does not enforce this act on service providers. Participation: The participation of stakeholders in deciding and planning for the distribution of bulk water supply received a poor rating as the representatives of the different communities and sectors barely participate in decision making processes about the allocation of bulk water. The PWA on the other hand has a limited role in the decision making process. Ethics Infrastructure: The ethics infrastructure among service providers in distributing bulk water received a good rating. This is due to their process of decision making, which is viewed as creating a fair balance based off the needs of the different geographical areas.

4.4.3 General Conclusion The integrity system for the role of the PWA in regards to the water supply, provision, and maintenance is of an unsatisfactory rating. Although the PWA, as dictated by the PWL, has a limited role in this level of water sector processes, the PWL obliges the stakeholders to coordinate with the PWA in protecting the resources in an efficient and equitable way. This covers the distribution of bulk water, but even within this limited role, the PWA is not performing well and consequently the integrity system is of an unsatisfactory level.

5. CONCLUSIONS AND RECOMMENDATIONS

5.1 Conclusion and Recommendations for the Stakeholders' Mapping For it to be possible for good governance to be achieved in the oPt, there must be constructive cooperation between the different sectors’ stakeholders where the result should be the efficient use of resources, a responsible use of power, and an effective and sustainable provision of services. Palestinian good governance will only occur once all stakeholders engage and participate with each other in an inclusive, transparent, and accountable manner to accomplish better service provision that is free of corruption and abuse, including those which might be performed within the rule of law. If corruption and a lack of transparency and accountability are persistent in the management of water resources, the Palestinian people will be the ultimate losers in the situation as their availability to water and efficient service delivery are greatly hindered. In addition, the Palestinian people will

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suffer due to higher costs because of the inefficiencies, which will impact their economic

development and potential to be self-sufficient. If the cost of water service provision

increases, this obviously weakens the quality of services. Also, fewer infrastructures are built

because of over-pricing, leaving the poorest families without water services. On a different

level, some of the water providers’ bodies suffer from obvious institutional weaknesses,

including the lack of a capacity to realize cost recovery. The result of this lack is the

increasing debt of water providers to the PWA in covering the cost of bulk water, which

amounted to approximately $800 million in 2010.43

5.1.1 Governance Level The main findings of the stakeholder mapping report identify the areas which require particular attention in order to strengthen integrity, improve accountability, address the lack of policy endorsement, properly monitor implementation, introduce appropriate legislation, and identify corruption risks. These findings address the areas that can facilitate corruption risks and can hinder the existence of a system of good governance for the water sector in Palestine. In regards to the governance level of the water sector there are a number of issues that need to be addressed. As stated in the Palestinian Water Law No. 3 of 2002, the PWA is responsible for drafting and enforcing laws, policies, procedures, and explanatory notes. Although, the NWC, which is currently not active, should normally endorse these policies, procedures, and explanatory notes, as required under Chapter 2, Article 7, Clause 2 of the water law, they have not. This dual level endorsement system is failing which opens the door for corruption since there is no oversight function of the legislation section on the governance level. It is important to have a clear and workable line of authority within the water governance system in order to produce the needed results of an efficient use of resources and a responsible use of power. The MC has yet to endorse the regulations submitted by the PWA and it should be an imperative to do so. Endorsing these regulations will allow the proper channels and responsible parties to develop and endorse policies. For there to be a beneficial level of integrity in the system with proper enforcement of regulations and reforms, the MC must endorse the official regulations submitted by the PWA. There is a lack of integrity in monitoring at the governance level. Currently, the PWA is responsible for carrying out several overlapping functions at the same time which can cause a conflict of interests. They are the owner, licensing body, regulator, and the monitoring body without proper and regular coordination with other official bodies such as the EQA, MoA, and MoLG. There must be a separation between the political, strategic, and regulatory aspects of activities performed in the water management level at the governance level in order to enhance integrity and reduce corruption risk. It is recommended to establish an independent Regulatory Authority for water and wastewater. The organic and financially independent regulatory body should report directly to the Prime Minister and their role should ensure that service delivery is carried out effectively and for the benefit of the Palestinian population. Since the WBWD has not obtained financial autonomy it is recommended that it be restricted to become a semi-governmental agency and be required to provide financial and operational performance details to an independent regulator and the PWA. Civil Society Organisations could potentially facilitate a more fluid performing of functions in the water sector in monitoring performance levels at the governance level in order to lower the risk of corruption. The NWC and PLC are currently not active which poses many problems. For the NWC, their functions of policy formulation and endorsement, national planning, and coordination are not being performed which results in delays and could easily be reversed into a beneficial body. With regards to the PLC, their absence as a monitoring body delays legislative procedures, thereby potentially exposing the process to risks of corruption. The absence of both of these bodies in the legislation process hinders

43 AMAN, Corruption Report, Palestine. 2010

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the formulation and adaptation of new laws. It is necessary to improve communication between these two bodies and other ministries involved in the water sector in order to improve integrity.

5.1.2 Water Sector Management Currently, there is no endorsed system to apply protection regulation over water resources although the exploitation of resources is managed by the PWA. Even with this system in place, the Israeli authorities are in control of these resources through the military and civil administration. In addition to its management role of the exploitation of resources, the PWA is in charge of the licensing processes in water management. Unfortunately, due to Article 40 of the Oslo Accords, the JWC must approve any applied for license, which makes the process under complete Israeli control, and makes the licensing process much more time consuming due to the extra layers of bureaucracy and inefficiencies of the JWC. This lack on control over water resources creates the potential for corruption and it compromises the integrity of the system. Decisions taken by the joint Israeli-Palestinian committees are disproportionally in favour of Israeli interests and do not serve the interests of most Palestinians because of the fundamental asymmetries of power and capacity of the Israeli side. This negatively affects the provision of effective and sustainable water services, which is a key component of good governance. The WBWD is greatly hindered in this system due to the ambiguous nature of the prolonged political situation, which in turn does not allow for the department to be streamlined by the PWA. Although the Palestinian Water Law gives the NWC the authority to endorse the sector’s development plans, since the NWC is not active, there is a gap in performing this role. Having a specialized body of concerned parties involved in the planning and budgeting process will improve the effectiveness of the plans produced. Still to this day, there is no endorsed or enforced national master plan for the water sector. This creates confusion in identifying clear priorities for the sector. A master plan for the water sector will guide the planning processes to produce coherent and responsive development plans at all levels. This stagnation is further exasperated by the Israeli occupation and the extra layers of bureaucracy which hinder and further complicate development in the Palestinian water sector. For example, the Israeli veto power through the JWC limits the ability for many beneficial projects to be approved and carried out. This system is further entrenched by the complacency of donors who decide to work within this framework. There are a number of secondary stakeholders who suffer within this framework because there is such a lack of coordination that there is a significant amount of duplication of work, as well as a high level of competitiveness for various projects. Water development policies in the sector suffer from a lack of a clear, regular, and systematic role by the line ministries. Since the level of work between the PWA and the line ministries does not always exceed the coordination level, this is more apparent. The current level of coordination between the various PNA ministries is inadequate and the flow of information, including data between ministries in general, is extremely limited.

5.1.3 Water Supply, Service Provision, Operation, and Maintenance Service delivery in the water sector is not a regulated function and it is a responsibility shared between the MoA, MoLG, PWA, and WBWD. None of these parties perform their responsibilities within a master plan framework, which especially impacts relations with service providers. Water management at the local level is done by the LGUs or by semi-private non-governmental bodies, such as the JWU, WSSA, and CMWU. Unfortunately, the PWA only has minimum input in service provision with the MoLG, LGUs, JWU, and WSSA. PWU involvement at the local level for service delivery is limited and the MoLG is the de-facto responsible organisation, which contradicts the Water Law which states the PWA should be monitoring processes in the sector. This whole system is

45

further worsened since there is no tariff setting system for agriculture water usage. These results in a variation of fees collected for agriculture water use and make it difficult to monitor and regulate the cost. This situation creates a gap in the water governance structure and may result in a risk of corruption as most of the agricultural wells in the oPt are privately owned.

5.2 Conclusions and Recommendations for the Integrity Assessment The integrity system in the Palestinian water sector is heavily influenced by Israeli control over the water sector‘s resources and processes. Israel, as the Occupying Power, rules the area and maintains effective control of the West Bank, including its water resources, land, and borders. The Oslo Accords did not bring sovereignty over the water sector to the Palestinians. In fact, Israeli control has been modified and enhanced under the guise of the JWC. Israeli control over the water sector’s resources and processes has heavily restricted Palestinian governance of the sector, which has resulted in restrictions on access to these resources and noticeably harmed the effective management of the sector.

44 In Gaza, several constraints have

hindered the PWA’s ability to rule the sector. First, the Palestinian political conflict has resulted in a complete separation of governance structures between the West Bank and Gaza for more than five years. The PWA’s functions in Gaza are limited to the projects’ unit activities only. At the same time, the Israeli blockade prevents the importation of construction materials and movement between the West Bank and Gaza Strip, which has reduced the PWA’s ability to carry out water and sewage projects. Considering this political situation, building a comprehensive and effective integrity system in the Palestinian water sector will face the absence of Palestinian sovereignty and a limited control over resources and processes. The final status of the water sector is part of the final status of the Palestinian state and it is out of the hands of the PWA. Unfortunately, for now it is essential for it to work within the available space and to build an appropriate integrity system as much as possible while working on increasing the space available for action. The assessment of the integrity system in the Palestinian water sector revealed that the integrity systems’ index was below the satisfactory level (3) in all integrity criteria (standards, oversights, transparency, participation and ethics infrastructure). It seems that the overall components within the structure of the sector are poor, which caused a plethora of low scores across the board. Essentially, the sector is flawed, which has impacted all the various components of said structure. Compiled conclusions and recommendations of the integrity system in the water sector are presented in Annex 4. Governance Level Conclusions

There is a weak implementation of the PWL, which is hindered by two factors. The first is the absence of political will and the second are constrains imposed by Article 40 of the Oslo Accords. The weak implementation of the law has generated deficiencies and gaps in the integrity system at the governance level that includes the absence of endorsed policies, national plans, allocated budgets, and systems that regulate the performance of the stakeholders of the sector. Lastly, the overlap of the PWA’s functions as a regulator, implementer, and legislator are a constant source of frustration.

44 The governance system established by Article 40 requires the approval by Israeli authorities for any proposed PNA management measure or infrastructure project within the West Bank. This arrangement, together with the way it has been

implemented, gives the Israeli authorities control over the allocation and management of West Bank water resources.

46

A weak integrity system at the governance level will affect the Integrity Indices at other levels of the water sector. The governance system established by Article 40 requires decisions by consensus between the two parties with unequal power. In effect, because of the way it has been implemented, the agreement gives Israel predominance in the allocation and management of West Bank water resources. The Civil Administration exerts absolute control over Area C (61% of the West Bank) and consolidates Israel’s predominance.

Recommendations:

There is an urgent need to redraft the PWL in a transparent and participatory manner with consideration of filling the gaps in the following areas of concerns: - Access to information, participation mechanisms and principles, and identification of the

concerned bodies and their roles and responsibilities - The need to eliminate the overlap in the different referral bodies of the PWA (such as the

NWC and MC) - Reformulate the various functions of the PWA, in addition to setting up clear lines of authority - Replace the NWC by a superiorly efficient and effective body within an effective institutional

setup. One must consider that the NWC has many important tasks within the recent setup, and it has only met once since 2005

- Ensure the endorsement of all working procedures and explanatory notes to verify and help the enforcement of the rule of law

A clear and functioning line of authority is essential in order to have a properly functioning water governance system with efficient use of resources and responsible use of power

It is imperative to activate the proper channels and responsible parties, as per the Palestinian Water Law, for developing, endorsing, and enforcing policies. This is to ensure that the policies formulated contribute to the integrity of the system and that they are enforced to reduce the corruption risks within the governance system

There is a need to separate the political, strategic (ministerial), and regulatory aspects from the operational and water management activities within the structure of governance

There is a need to have an independent regulatory body to oversee and be responsible for the regulatory functions. This will better ensure customer satisfaction regarding service delivery. In addition, it is necessary to improve the channels of communication between the involved ministries and to enact the proper monitoring tools and bodies to reduce corruption risks

Having a specialized body of concerned parties, such as an active NWC involved in the planning and budgeting process, would improve the effectiveness of the plans produced. In addition, a master plan for the sector would be beneficial to guide the planning processes and would produce coherent and responsive development plans at all levels

Water Management Level Conclusions The unsatisfactory level of the integrity system of the management of water resources at the national level is common of all management processes, with the possible exception of the procurement processes, which follow strict systems and procedures, including the integrity components and criteria.

The unsatisfactory integrity system at this level is expected as it is the direct result of the confusion and misleading governance of the sector. Currently, the PWL commands the leading role in the sector and corresponds to the PWA’s methods for managing the water resources’ exploitation, to protect the resources, and to allocate the resources upon needs and demands. Also, one cannot forget that the WB is under Israeli military occupation. Considering Israel is the occupying power, it maintains effective control of Area C and areas such as borders, water resources, recharge areas, and bulk water facilities. It is the Israeli army that decides if and where Palestinians are permitted to drill groundwater wells, lay out bulk water lines, construct wastewater collection systems, or wastewater treatment plants

47

The JWC, which was created within the framework of the Oslo Accords, has not fulfilled its role of providing an effective collaborative governance framework for joint resources management and investment

The limited capacities of the PWA and the absent role of the NWC are extra reasons for the low rating of their integrity system. The recent status of the PWA and NWC hinders policy making and planning processes that are needed to guide the management processes of the water sector effectively and efficiently. Also, their ability to allocate water in an equitable way is greatly hindered due to this framework

The unsatisfactory integrity system of the water sector management at the national level causes the following deficiencies:

Palestinians do not get their share of water and are not managing their water resources effectively

There is no equity in water distribution among different Palestinian communities. Some communities receive 120 litres per capita per day, while other communities do not have sustainable access to even 30 litres per capita per day

There is poor water distribution among different sectors; such as domestic, agricultural, and industrial sectors

There are no enforcement measures that are taken to protect the water resources, the recharge areas, or measures against illegal groundwater wells, sewage and wastewater dumping sites, or illegal connection from bulk water pipes, although they are detailed in the PWL, Articles, 29, 30, 31, 33.2., 33.3, and 34.2

There is poor monitoring of the water service providers’ performance in managing their water resources or their allocation of bulk water, which results in a high rate of losses of unpaid water, which is considered by AMAN as a form of corruption (loss of public money)

At the local level, the MoLG worked and continues to work in developing systems and working procedures that guide the performance of the local authorities.

The MoLG is supervising the performance of the LGUs and overseeing the implementation of the systems and working procedures

There are many initiatives that are taking place with the MoLG and LGUs that consider good governance as bedrock to projects. The initiatives include the assessment of the integrity system at the LGUs. The UNDP, TIRI, and USAID are the lead stakeholders and donors who support such initiatives

Israel is not imposing its direct control over service provision at the local level, which leaves more space for the Palestinian National Authority to act. On the other hand, in relation to the role of PWA at this level, it is crystal clear that the PWA is not acting up to the level expected and this is negatively affecting the integrity system. For example, PWL Article 20 gives the PWA the authorisation to impose unified tariff systems for water, and service providers (PWL Article 26) are supposed to do their own system upon the PWA’s endorsed system. In reality, each service provider has its own pricing system, with huge differences in their water price. AMAN reports: “Palestinians pay less than 3NIS for one cubic meter of water in the Qalqilya district, while others in the south of Hebron, pay around 30NIS for the same one cubic meter of water.”

PWL Article 28 authorises the PWA to monitor and supervise the work of service providers, including the implementation of water related projects and programs. This includes acquiring approval on the specifications. In reality, the PWA and service providers are not committed to these articles and the connection involved between them is limited to just the coordination level. PWL Article 33.2 obliges service providers to report to the PWA about water related issues in their service areas and it also authorises the PWA to conduct inspection of these service areas. PWL Articles 33.3 and 35 give the authority to protect resources, even those within the management level or utilised by service providers to the PWA.

Recommendations

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The management of the water sector requires, in addition to good governance, an effective systems, working procedures, and bylaws that provide standards and references for management processes. These tools are currently on hold, waiting for approval and endorsement by the authorised body, namely the NWC. Within this context it is recommended that the Palestinian President delegates the endorsement authority of NWC to MC, unless the NWC is activated and hold its responsibilities.

Efficient management requires control over financial resources. Considering the recent context of relying on external donations as the main source of financing the sector, it is hard to manage the water sector at the national level operating in an efficient and effective way without having a national development plan that guide the fund channelling and fund allocation.

To overcome the limited capacities of the PWA, it is recommended to increase the staff based on the required functions and operations of PWA, especially as a regulatory body. It is necessary to equip the staff with the required tools and equipments to handle efficiently and effectively their duties. Enhance the PWA staff technical and managerial capacities, additional to the development of the working procedures, systems, and bylaws that reinforce the implementation of the law. This strategy should not neglect the negotiation capacities of the Palestinian members in the Joint Water Committee.

Formulate a working group (unit in the new structure of PWA) with a mandate to bridge the gap in the integrity system based the integrity assessment results. The unit is to be authorised to recruit specialists to train the PWA staff on integrity system and to work separately with different PWA department to fill the gaps in integrity system. The unit also is to act as a internal audit/monitor of the integrity system inside the PWA.

Clear plans for human resources development should be developed and endorsed to guide the capacity building processes in order to avoid the approach that based on available opportunities through donors and partner organisations, which present a potential risk area for corruption.

Many service providers have weak capacities and limited experience, due to that it is recommended that the PWA develops and implements a capacity building program for service providers that includes transferring and adopting best practices in management with a special focus on promoting an efficient integrity system at the service providers’ level.

Water Supply, Provision, Operation, and Maintenance Level The integrity system for the role of the PWA in regards to the water supply, provision, and maintenance is of an unsatisfactory rating. Although the PWA, as dictated by the PWL, has a limited role in this level of water sector processes, the PWL obliges the stakeholders to coordinate with the PWA in protecting the resources in an efficient and equitable way. This covers the distribution of bulk water, but even within this limited role, the PWA is not performing well and consequently the integrity system is of an unsatisfactory level. Recommendations

The PWA is authorised to monitor and supervise the work of service providers, including the implementation of water related projects and programs. PWA has to carry out its mandated role in monitoring and supervising the service providers through:

- Developing, endorsing, and implementing the related systems and bylaws (pricing, connection to water/wastewater system,…etc)

- Increasing the number of field work staff to carry out the monitoring processes, especially of water resources protection, water quality control, vended water, standards, and specification of water related programs and projects

- Disseminating the information related to integrity system among the service providers and other stakeholders

5.2.1 Standards

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The overall integrity rate of Standards at the water sector is estimated to be (2.67) which is an unsatisfactory level. Standards received a low rate at the governance level as a result of the gaps within the PWL, and weak enforcement and implementation of the Water Law. This is further worsened by a low rate of standards in the policies, regulations, planning, and budgeting sectors. The NWC, which is technically the governing and supervising body, is absent from the scene due to the prohibition of its work by the PWA. The PWA has in fact prohibited the NWC from executing endorsed plans, including issues such as budgets, which are based on working bylaws, procedures, and systems. At the management level, the integrity rate of the standards also is poor. This is due to the low rating received at the governance level, which is due to the absence of set standards in water sector management at the national level. Endorsed plans or strategies for the protection and exploitation of the water resources, and the use of enforcement measures to provide protection of the resources is very low. Measures against the illegal digging of groundwater wells or illegal wastewater dump sites do not exist. In addition to that, there is not enough commitment from the implementer to follow the procedures and systems developed by the PWA as these systems are not endorsed by the parties involved. The management of the water sector requires efficient working procedures and bylaws that provide standards and references for management processes, in addition to effective systems carried out through good governance measures. These tools are currently on hold, waiting approval and endorsement by the authorised body, namely the NWC. For management at the local level, supervision of the management of the water services at the local level is the sole responsibility of the MoLG, which supervises the work of the LGUs who act as service providers. It is recommended to:

Draft a new Palestinian water law in order to develop the integrity system and fill gaps that exist in the current Water Law of 2002

Adjust the existing laws in place to clarify the functions of the PWA

Define the roles, authority lines, and responsibilities of all actors in the water sector

Eliminate overlap within line ministries and enforce a participatory approach

Set clear standards for ethics infrastructure to raise the level of transparency and accountability

Set a clear system for tariff setting and pricing which considers region and necessity in their standards

Revise the current systems, bylaws, and working procedures with full cooperation of all stakeholders in the sector

Figure out methods to better cope with the difficulties and deficiencies of water

Develop and endorse a national strategic plan for water and sanitation projects with the support of donors and other agencies.

5.2.2 Oversight The overall integrity rate of Oversight at the water sector is estimated to be (2.48) which is an unsatisfactory level.

The low rating received in the oversight index at the governance level resulted from the absence of an oversight body that monitors the performance of the PWA. This lack of a body essentially allows the limited capacities of the PWA to monitor the implementation of the systems to go unhindered. Without a monitoring body, the working regulations and the lack of systems that are currently being used to monitor the performance of the PWA departments and units, are being run in an inefficient

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method. In addition, since the PWA is carrying out several functions that overlap, there must be an external oversight (regulator, implementer, and in some cases ownership of these water projects) of these functions. At the management level, the oversight rating of water sector management at the national level was unsatisfactory. This is a result of the low rating of the governance level. Also, there is a limited application of monitoring and reporting applied on the implementation level of projects involving water resources, their protection, and exploitation. The absence of these measures can be a big reason behind the low rating of oversight in the water sector. The design of the programs and projects receives limited monitoring and reporting from the authorised bodies. It is due to the fact that the PWA is doing the design and monitoring process of projects at the same time. The water programs’ implementation is not well monitored by the PWA and does not meet the integrity requirements, especially for those projects that are implemented by the LGUs and other water providers. At the local level, the monitoring provided by the PWA regarding the implementation of water related programs and projects, is very weak and there are almost no reports submitted about the progress to the PWA. For service provision, the service providers are using individual pricing and tariff systems that are hardly based on the cost recovery approach developed by the PWA, and as such, the systems are very weak. It’s recommended to:

Restructure the PWA to ensure that there is no overlap between different divisions and the monitoring functions are carried out effectively

Endorse and put in place regulations that allow the PWA to monitor the implementation of different water systems and regulations

Develop the capacities and resources of the technical department to facilitate its monitoring role of the Palestinian Water Law

Install a monitoring function under the NWC and MC at certain levels

Delegate the role of the NWC to another active body such as the MC since the NWC does not currently provide such functions due to the fact that it is not performing its function and the MC has not taken concrete steps to enable it to do so

Develop mechanisms and provide the means to guarantee that the PWA is handling the monitoring of the implementation of water related system at the service providers’ level

5.2.3 Transparency The overall integrity rate of Transparency at the water sector is estimated to be (2.33) which is an unsatisfactory level. As for standards and oversight, the transparency has a low integrity rate. First of all, this is due to the absence of an information act in the law articles or PD announced so far. As there are no endorsed EN or WP, they are not accessible or published. However, in practice, any interested body can get copies of the WP and EN if requested from the PWA. The accessibility of the stakeholders to the developed plans is limited and they have almost no access to information about the allocated budgets for both the water and wastewater sector in general, and for water projects specifically. The transparency rating of water sector management at the national level is low due to the limited accessible information about programs and projects. The improvement of the integrity system in the form of a standards and oversight system will positively affect the transparency rating. It’s recommended to:

Include an article in the PWL that guarantees access to information as a basic right in the new drafting of the water law

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Develop the regulation system in order to enforce the information sharing and publishing, as to facilitate the acquisition of information to all stakeholders

Build the capacities of the PWA in transparency and reporting systems

5.2.4 Participation

The overall integrity rate of Participation at the water sector is estimated to be (2.67) which is an unsatisfactory level.

Participation at the legislation level does not reach a satisfactory level. The participation of different stakeholders was low in formulating the Water Law, PD, EN, and WP. In water sector management at the national level the participation was also low and was due to the fact that the participation of stakeholders in drafting the protection and exploitation of the water resources’ plans was very limited. The same is to be said about monitoring and evaluating the implementation processes of programs and projects. At the local management level, participation is better but it needs more attention to become effective in the decision making process.

However, recently there is an adopted approach to enhance participation in drafting the new water law, other working procedures, and systems. It is recommended to strengthen the stakeholders’ participation in various water-related issues by including clear articles in the new drafted water law and in the working procedures, that encourage the participation of the stakeholders.

5.2.5 Ethics Infrastructure

The overall integrity rate of Ethics Infrastructure at the water sector is estimated to be (2.51) which is an unsatisfactory level.

The poor ethics infrastructure at all levels resulted mainly from the limited political will to apply the law, which is partly generated from the restrictions imposed by Article 40 of Oslo Accords, which hinders Palestinian sovereignty over the water sector. Also, it due to the frustration on the Palestinian side created from the frozen peace process and the continuous delays for negotiations over water issues with the Israelis. Finally, it is due to the internal Palestinian political conflict that is taking place between different Palestinian political parties. This drastically harms Palestinian life, including within the legislation process. The ethics infrastructure in legislation has an unsatisfactory rating because the PWL’s articles have not been implemented in a satisfactory level. Consequently, there is no chance to have these become norms in the sector. At the management sector of the national level, the staff involved in the procurement processes is of a good level of familiarity with the integrity code of ethics. The PWA is considered to be at a good level regarding ethics, and does not have a conflict of interests in their acts towards the protection and exploitation of resources. Improving the political will can drive the ethics infrastructure to achieve better conditions. It is recommended to develop and distribute a code of ethics for water sector stakeholders to encourage the positive attitudes and behaviours that build up the integrity system.