Business is stepping in where governments fail to provide clean water in Africa, with Coca-Cola, SABMiller and major platinum miners leading the way. A world running short of water is presenting a new category of risk to businesses that few have begun to appreciate. That was the warning from campaigner WWF and noted research body the Pacific Institute, at the World Water Forum in Istanbul in late March.
Business is stepping in where governments fail to provide clean water in Africa, with Coca-Cola, SABMiller and major platinum miners leading the way.
A world running short of water is presenting a new category of risk to businesses that few have begun to appreciate. That was the warning from campaigner WWF and noted research body the Pacific Institute, at the World Water Forum in Istanbul in late March.
Water experts say leading companies are starting to use water more efficiently in their own operations. But they will need to look deeper into their supply chains and at the performance of water regulators if they are to address the growing challenge of water scarcity.
Water remains so basic a commodity that few businesses realise the extent to which disruptions in supply or increases in price â€“ both predicted with increasing frequency â€“ can affect their operations. â€œIf yours is an efficient business sitting in a poorly managed river basin you are still exposed to extremely high water risk,â€ Stuart Orr, freshwater manager at WWF International, told the water forum.
For businesses operating in Africa, the risk of climate change â€“ which threatens the stability of water supplies â€“ is compounded by the inability or the unwillingness of the public sector to create and sustain the basic water supply infrastructure so critical to a well-functioning society and economy. As a result of this amplified risk, businesses in the developing world are themselves increasingly drawn into providing water supply infrastructure in the public sector's place.
In Africa, the space for companies to do so is created by the state, which although having a duty to extend water services and protect water resources, rarely has a financial incentive to do so. Rural communities and the urban poor usually cannot afford to pay for the extension of water supplies and even where the better-off can pay, local and municipal government often lacks the systems to collect equitably the user fees.
As a result the provision and extension of basic services, such as water, becomes a political issue, something used by politicians to build or reward a particular constituency. This means that the management of water resources tends not to follow long-term plans but lurches from one scheme to another, with scant regard for ecological or economical sustainability. Rural and poor areas get the worst of it because few skilled people wish to live and work there, leaving maintenance or the rehabilitation of run-down systems to non-governmental organisations and foreign donors.
Therefore companies operating in many African countries cannot simply limit their management of water risk to improving efficiency. Often business needs to get involved in the overall management of a regional resource in order to protect the quality of this water and the company's access to it.