ADB’s Water Policy: FAQs | Asian Development Bank

ADB’s Water Policy: FAQs

What has ADB learned from its water sector operations before this policy?

We spent considerable time reviewing the experience from our earlier water sector projects. We found that they were very responsive to evolving policies, as in the case of environment and social dimensions. However, we also found that

  • many projects suffered from a fragmented approach to water sector planning
  • cost recovery should be pursued together with investments in public awareness and better regulatory systems
  • there is a clear need for investments in water resources management, not only in water services
  • each country needs its own water policy to respond to challenges within its cultural context.

What is the role of governments in the implementation of this policy?

Governments should take a leading role in water sector reform. Strengthening water resource management is essentially a public sector responsibility. Policies, laws, and institutions need reform to meet today's challenges in the sector.

Governments need to bring stakeholders together to ensure a more integrated approach to water issues at all levels.

For the delivery of water services, this policy recommends that governments should change their role from service provider to regulator. Autonomous and accountable providers can best provide water services.

How does the policy address the role of NGOs and civil society?

Promoting the participation of public, private, community, and NGO stakeholders is a key element of this policy. ADB promotes stakeholders participation in the management of water resources at all levels, and collaborate in fashioning partnerships between governments, private agencies, NGOs, and communities. NGOs should play a key role in catalyzing critical water sector reforms and the necessary public awareness.

How does ADB see the role of the private sector?

The policy supports the creation of enabling environment for private participation in the water sector, and helps to develop the safeguards that ensure equitable access for the poor. The policy encourages participation of private sector where it can facilitate improved efficiency in service delivery. The policy does not promote private sector participation per se. What it promotes is increased efficiency in water service delivery. If such efficiency can be achieved by involving the private sector or through public-private partnerships, then such modalities should be encouraged.

What is an apex body and why does the policy promote it?

In any country, there are typically many ministries that deal with water. There are also numerous nongovernment interests in the sector. To adopt water policies, laws, and carry out institutional reforms, countries need to set up a national apex body to coordinate such reform and formulate a national water action agenda. Water is a critical issue to sustainable economic development, and it is important that the water sector apex body represents all stakeholders.

How does this policy address transboundary water issues?

Support for transboundary water management is an important part of ADB's regional cooperation agenda in the water sector. Based on joint requests from riparian countries, ADB will continue to support joint projects for transboundary water management. With our ability, neutrality, and comparative advantage in providing assistance of this nature, we can assist governments to develop collaborative frameworks with riparian stakeholders. These may include an assessment of the possible downstream impact of any ADB-financed water project, in a river basin context.

What is IWRM and how will ADB promote an integrated approach to water management?

Integrated water resources management (IWRM) is a process to improve the planning, conservation, development, and management of water, forest, land, and aquatic resources in a river basin context. It

  • aims to maximize economic benefits and social welfare in an equitable manner without compromising the sustainability of vital environmental systems
  • addresses quantity and quality concerns for surface and groundwater, and opportunities for their joint use
  • is undertaken in a river basin context because river basins—or in some cases, groundwater basins—form the natural unit to manage water resources

We assist our developing member countries to introduce IWRM and undertake comprehensive water resource assessments in river basins as a basis for water investment projects. These assessments allow better understanding of the links between water and land use, the environment, and sustainable development.

Why is there a need for river basin organizations?

The policy supports the establishment of river basin organizations (RBOs), which are necessary to implement integrated water resources management. RBOs can be either formal or informal and can help to facilitate stakeholder consultation and participation in the planning, management, and conservation of water resources. As a multi-stakeholder platform, RBOs can prepare and maintain basin profiles with information on water demand and uses, and approved planning directions and standards. Community involvement in resource monitoring and management can then be organized on a river basin basis.

How does this policy address the issue of water allocation?

Our water policy promotes the formulation of national water policies and river basin management to improve water allocation. We recognize that water is a socially vital economic good. Over time, systems need to be introduced to value water in all its uses as a basis for allocation among competing uses. This is particularly crucial during water stress and severe scarcity.

How does this policy address the water requirements for the maintenance of watersheds, wetlands, and ecosystems?

The policy emphasizes the importance of watersheds, wetlands, and ecosystems. Their protection is an integral part of water resource management in a river basin context. We pursue the protection and rehabilitation of degraded forestlands. To rehabilitate watersheds, we encourage the involvement of local communities and NGOs. Wetlands have important functions in the river basin, including flood alleviation, groundwater recharge, water quality improvement, ecosystem maintenance, and biodiversity conservation. We promote wetland conservation and improvement in a river basin context.

How does the policy address groundwater overexploitation and pollution?

Groundwater management has often been neglected. However, because of scarcity and pollution, many countries have to depend on groundwater to a large extent. Arsenic contamination of groundwater is a serious issue in some parts of the region. Groundwater pollution from urban and industrial waste is rapidly becoming a serious problem, and remedial measures are difficult and costly. The policy therefore promotes sustainable groundwater management as an integral element of water resources management.

How does this policy address cost recovery in agriculture and water supply?

Water is a vulnerable and scarce economic good. Our policy therefore promotes water's conservation and sustainable use. We advise countries to include cost recovery principles in national water policies and strategies.

In water supply

We promote tariff reforms to reward conservation and penalize waste. Capital costs for water services should be funded mainly from within the sector, by accessing debt markets and developing appropriate tariff structures. Consumers should expect to meet the full operating and maintenance costs of water facilities and service provision in urban and rural water supply and sanitation schemes.

In irrigated agriculture

We promote cost recovery of irrigation services, starting with the operation and maintenance costs. The evidence shows that farmers, including poor farmers, are willing to pay for irrigation services that are efficient and reliable.

We also promote the inclusion of environmental externalities and the recovery of resource management costs in tariff and service fee systems adopted by the developing member countries.

How does this policy address the issue of subsidies?

Subsidies are a controversial issue in the water sector. We support subsidies for water services in the following circumstances

  • where treated water uses have beneficial external effects in preventing health problems
  • where the transaction costs of measuring usage are very high
  • where a limited quantity of treated water for the poor is regarded as a basic human need

Taken together, these circumstances may justify a limited lifeline element in tariff policy. Other forms of subsidies, such as cross-subsidization between systems, need period review to ensure that targeting is efficient and transparent. However, in the long term, governments and regulatory agencies are persuaded to phase out subsidies as economic conditions improve.