23.04.2012 Seite 1 Page 1

Lessons from public-private-civil

society partnerships to address

shared water risk

Water Security, Risk and Society,

Oxford 18th April 2012

Robin Farrington

Deutsche Gesellschaft für

Internationale Zusammenarbeit (GIZ)

23.04.2012 Seite 2 Page 2

Contents

1. What is corporate water risk?

2. How can water risk be addressed?

3. What are some of the key lessons learnt?

4. What next?

23.04.2012 Seite 3 Page 3

Contents

1. What is corporate water risk?

2. How can water risk be addressed?

3. What are some of the key lessons learnt?

4. What next?

23.04.2012 Seite 4 Page 4

• Treatment costs

• Supply chain costs

• Cost of compliance

• Cost of disruption

• Loss in revenues

• Cost of raising capital

• Poor investment decisions

• Brand damage

Water risks to business are shared risks

Primary risks

Supply chains

Direct operations Investments

Shared risks

Other business Ecosystems Communities Governments

Secondary risks political regulatory ecological litigational reputational market

quantity quality wastewater

Economic impact

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Example risks… Tanzania

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Causes of water risks

• Lack of public sector capacity

• Lack of political will & corruption

• Lack of public education and incentives

• Weak governance – lack of empowerment of water users & accountability of public sector to deliver services

• Lack of regulation & compliance

• Poor water use by others

• Lack of infrastructure cost recovery & investment

• Unsustainable land/water use & ecosystem degradation

• Lack of policy coherence and understanding of water

Primary causes

Root causes

• Risky investment climate

• Unemployment

• Reduced tax revenues

• Reduced economic growth

Primary and secondary risks to business

Conse-quences for

society

Drivers

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German Development Cooperation

in the Water Sector in Africa

Brewery

Example risks…. Zambia

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Contents

1. What is corporate water risk?

2. How can water risk be addressed?

3. What are some of the key lessons learnt?

4. What next?

23.04.2012 Seite 9 Page 9

Sustainable water management

Complexity

Reducing vulnerability of operations & supply chains

Investing in green or grey infrastructure

Influencing water use of

others

Strengthening governance

Leve

l of

risk

mit

igat

ion

Collective action

Fomalised structure

Institutional

anchoring

Investment Advocacy

A water stewardship response

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.gov

.org

.com

Strengthening governance

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Partnership example 1

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Mining companies

Tailing Ponds

Non mining companies

Dumping areas

Domestic drainage

Upstream

Monitoring station (MINSA

& SEDAPAL)

POLLUTION AGENT RIMAC RIVER

Brewery

RIMAC RIVER

EMERGING

Ticticocha

Lake

Peru

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COMPONENT I Infrastructure improvement for

the aquifer recharge

MODULE 1

Infrastructure improvement for

aquifer natural recharge

Project 1.A

Rimac river right canals

Project 1.B Rimac river left canals

MODULE 2

Infrastructure construction for

aquifer induced recharge

Project 2.A Recharge walls (phases)

MODULE 3

Protection of riverbeds and banks in the lower part of the watershed

Project 3.A Rimac Riverbed

Project 3.B Huaycoloro Stream

COMPONENT II Groundwater exploitation

reduction

MODULE 4

Re-use of treated waters for public

green areas irrigation

Project 4.A EMMSA market and Santa Anita

Project 4.B Green areas in Ate

Project 4.C Green areas in the Cahuide park

COMPONENT III Aquifer monitoring and

assessment system

MODULE 5

Rimac River Water Observatory

(Technical Committee)

Project 5.A – 5.C Aquifer monitoring and

assessment Specialized technical assistance

Expert panel

Aquifer sustainability program

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Partnership example 2

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Slid

e 15

Water savings: private vs public infrastructure

case 1 - cooling tower

blowdown recovery plant

case 2 - pressure

management on main

water header to township

case 1 case 2

$ 50 mill capital $ 0.5 mill

18 Mℓ/day saving 28 Mℓ/day

$ 2.00/m3 o & m $ 0.02/m3

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Partnership Structure

Emfuleni

water

conservation

project

Emfuleni

Municipality Sasol

GIZ

Community

Savings from

reduced

losses

Funding from

ringfenced

savings Seed funding

Reduced risk

Off-setting

Seed funding,

governance,

auditing role

Improved

water security

Emfuleni & GIZ/Sasol

partnership agreement

GIZ/Sasol

Development

partnership

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Municipality

‘10/11 water

demand

(mil.m3/a)

15%

targeted

savings

(mil.m3/a)

Value

(R mil./a)

Emfuleni 82 12 62

Funding model

Sasol

R 5 mil

Seed funds and

skills to initiate a

project to help

achieve

target by end

2014

GIZ / AusAid/

UKAid

R 5 mil

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Contents

1. What is corporate water risk?

2. How can water risk be addressed?

3. What are some of the key lessons learnt?

4. What next?

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Partnerships for risk mitigation –

some lessons learnt

1. Water risks are highly localised and difficult to determine

with global tools

2. A business case is emerging for companies to invest

resources in mitigating risk. They can play a role in

investing in concrete projects and in advocating for

improved governance

3. Real impact on risk will require local collective action,

with collaboration between businesses

4. Success hangs on the interest and capacity of the local

business to engage

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Water risks well

managed

Ris

k m

itig

ati

on

Time

The

Pioneers

The reality…..

The

Pioneers

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Contents

1. What is corporate water risk?

2. How can water risk be addressed?

3. What are some of the key lessons learnt?

4. What next?

23.04.2012 Seite 22 Page 22

From Germany…

1. BMZ launched an International Water Stewardship

Initiative at Bonn2011 Nexus Conference as a concrete

action to address Water-Energy-Food Security Nexus

2. In design process, but will build on Water Futures

Partnership

3. Purpose:

To develop, support and mainstream multi-stakeholder

collective action initiatives at the watershed level to

address shared water-related risks, in order to support

sustainable economic growth.

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Thank you!

robin.farrington@giz.de