Africa's largest water transfer effort, the Lesotho Highlands Water Project, plans to supply water to the industrial heartland of South Africa and to generate energy for impoverished Lesotho. The multi-billion dollar investment offers economic growth and greater water security for underserved communities in the region.
The project also presents water officials with countless opportunities to become rich on the side. In 2002, Lesotho courts sentenced the project's chief executive to prison for accepting bribes from 18 multinational companies that were vying for construction contracts.
The Lesotho case is a rare example of justice. Across the globe, the water sector is particularly prone to corruption, and the world's poor are usually the ones who suffer the costs.
The pervasive nature of dirty water politics is blamed for much of the stalled progress in improving access to water resources in this year's Global Corruption Report. It is the first report to assess how corruption affects the water sector worldwide.
The widespread corruption noted in the report reflects the large challenge of solving the world's water problems. As growing populations compete for shrinking water resources, the opportunities for corruption will increase and the damaging effects will become more severe.
"Corruption in water can lead to skewed and inequitable water resources allocation, to uncontrolled and illegal pollution, to groundwater over-extraction, and to degraded ecosystems," said Andrew Hudson, the principal technical advisor to the United Nations Development Programme, at the launch of the report. "In many cases, these impacts in turn result in reduced resilience and adaptability to the impacts of climate change."
Water corruption ranges from petty bribes to corporate manipulation of public water services. When added up, corruption raises the price for water services between 10 and 30 percent worldwide each year, the report said. These additional costs pose grave threats for countries' chances of meeting the U.N. Millennium Development Goal of halving the number of people without access to safe drinking water. Based on the worst-case scenario, corruption could raise the cost of achieving the goal by $48 billion.
The high cost of water engineering leads to the widespread prevalence of corruption. Municipal water infrastructure projects are valued at roughly $210 billion annually in Western Europe, North America, and Japan alone. Large-scale hydropower is considered a "breeding ground for corruption," the report said. An estimated $50-60 billion in annual investments is expected for hydropower worldwide in the coming decades.
A lack of government transparency is often linked to a country's failure to provide clean water. Half of the 20 nations with the worst record in Transparency International's Corruption Perceptions Index are located in sub-Saharan Africa, where 63 percent of the population lacks basic sanitation facilities, according to the U.N. Economic Commission for Africa [PDF].
The Global Corruption Report, produced by Transparency International and other Water Integrity Network organizations, encourages governments to curb water corruption in order to achieve the water access development goal. The report was discussed at last week's World Water Week conference in Stockholm, Sweden.
One-third of the global population lives in areas of water scarcity, according to the International Water Management Institute. The World Water Council predicts that some 3.5 billion people will live in areas without sufficient water supplies by 2025. If global society continues to consume water in a business-as-usual way, there may not be enough water to produce the food needed to feed the world in 2050, according to the Worldwatch Institute's 2008 State of the World report.
In countries where water resources are becoming scarce, water corruption will likely become an increasingly serious problem. The report notes that nine of the 10 countries with growing markets for private water and sanitation investments experience "high risks of corruption."