It is no secret that the South African water sector is poorly regulated in most areas, nor that water scarcity and increasingly polluted water are significant problems. The water situation in the country has the potential to lead to water induced capital constraints and economic decline and to threaten food security.

The Department of Water and Sanitation’s (DWS) failure to effectively regulate the water sector requires serious intervention and, according to the Organisation Undoing Tax Abuse (OUTA) and Water Shortage South Africa (WSSA), establishing a regulator independent of the government department presents a solution.

OUTA and WSSA have announced that they will collaborate in a campaign to establish an independent water regulator in South Africa.

Following extensive discussions on issues confronting South Africa’s water sector, both organisations have agreed that the establishment of a regulator, independent of DWS, will be a positive step towards addressing regulatory issues. It will also ensure that there is no political interference and provide the necessary certainty to unlock investment in the sector. These are steps that will support sustainable economic and socio-economic development. Some of the symptoms of failed performance in water regulation identified by OUTA and WSSA that highlight the need for a regulator are:

  • Blue and Green Drop reports not published since 2014;
  • Vaal river seriously polluted by untreated sewage;
  • Failure, or non-compliance, of more than 40 sanitation schemes to meet minimum standards;
  • Unregulated water pricing in municipalities resulting in under-recoveries and compromised services;
  • Agriculture not able to access required volumes and quality of irrigation water during normal seasons and during drought;
  • Municipalities leaking an average of 37% of their water (War on Leaks Programme);
  • Municipalities unable to address ongoing serious droughts due to confusion about responsibilities for bulk water provision;
  • Emerging farmers who are unable to secure adequate water rights; and
  • Government reports stating about R870 billion is required to bring South Africa’s water and sanitation sector up to speed with the required water resilience, and assured quality supply to all water users, in place. Government has also stated that that the fiscus cannot support this funding which is key to alleviating poverty, attracting investment and growing the economy.

Summary of some shortcomings in the regulatory setup and performance

Regulatory function or activity DWS performance Comments
Too many diverse functions are vested in one national department. DWS is policymaker, owner, operator and regulator of national infrastructure. Lack of focus and objectivity with consequent lack of regulation of inhouse entities such as water trading entity. Preference to act as shareholder of water boards while failing to regulate them. Concentration of many complex functions in one department. Difficult to balance as some of these functions are conflicting. Most common problem is neglect of the regulatory role.
Municipalities are supported and regulated by DWS Regulatory role neglected with regional officials often tasked to execute. The public interest (regulation) is ignored in favour of political support to municipal management. A different approach and skills are needed for such diverse functions. The public interest must always remain the top priority rather than short term political favours prioritised.
The monitoring of municipalities and water boards to comply with national standards such as SANS 241 for drinking water quality. DWS has a regulatory unit, but it is understaffed and insufficiently funded. The acclaimed Blue Drop programme has not released a report since 2014. Progress on 2015 and 2016 reports is unknown. The public is entitled to safe drinking water but is currently unaware of the status of its drinking water supplies. This poses a huge health risk.
Prevention of pollution by controlling discharges from Waste Water Treatment Works (WWTW). Only an Executive Summary available for Green Drop (GD) 2013 and no details on individual performances of WWTWs. Green Drop programme seems to have lost track and quality of discharges from WWTWs unknown.
Regulation of raw and bulk water tariffs. Water Board tariffs are controlled. Raw water tariffs imposed by DWS as the water service provider not regulated at all. The Water Trading Account at DWS is running at huge deficits due to outstanding accounts and inefficiencies. Raw water tariffs are unilaterally increased instead of improving efficiencies and controlling debt.
CMAs legislated as catchment-based water regulators. DWS seems reluctant to devolve responsibilities to the functioning CMAs. Regional water resource management entities can do more of DWS centralised functions currently left unattended- such as pollution of rivers.
Follow up actions on non- compliance – eg those WWTWs with Purple Drops. This has been lacking – eg  the 2013 Green Drop report mentions several systems that were issued Purple Drops in 2013. These 248 systems received scores of less than 30% during 2013, earning the status of systems in crisis. Systems in crisis therefore represent a significant slice of all WWTWs regulated. It is doubtful if any action has been taken against any of these municipalities

 

OUTA and WSSA believe that these significant, and critical, problems in our water system can be resolved by an independent regulator as a start to addressing regulatory issues that will instill the required governance in the sector. The journey towards this objective must consider three competing schools of thought and part of the work of OUTA and WSSA will be navigating this terrain.

We have had an independent energy regulator for some time and, If anything, the presence of the National Energy Regulator of South Africa (NERSA) strengthens the case for a water regulator. This is especially true for such a valuable resource.

OUTA and WSSA have put together a steering committee (SC) with representatives from each organisation. There are five representatives on the SC which is co-chaired by Yamkela Ntola, OUTA’s Water and Environment portfolio manager and Benoit Le Roy, CEO of WSSA. During the next two years the steering committee aims to engage all interested and affected stakeholders in the country, to gather and consolidate their inputs to present before the appropriate state institutions. This will include, but will not be limited to the agricultural, mining, manufacturing and the food and beverage industries. The SC’s current work focuses on devising the appropriate methods and strategies for such engagements. – Press release

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