Session 4

Mapping risks areas for potential corruption in water licensing in

Kazakhstan

Marie Laberge, UNDP Oslo Governance Centre

Why is water licensing at the heart of WRM?

• Licences are required for use of water for agriculture, industry, electricty production, fish breeding, etc.

• Licences determine who has access to water & how much they pay to use or pollute it

• Licences provide a means to manage water fairly, efficiently and sustainably

• Water resource licenses or permits may cover a range of purposes:– Regulation of abstraction of surface or groundwater– Utilising or changing the course of water through damming

or draining– Discharging pollutants into receiving waters

Why mapping corruption risks in water licencing?

Countries are pursuing multiple reforms to improve WRM• New national WRM frameworks, establishment of new WRM

institutions• Yet little understanding of corruption risks in water licencing

processes

Mapping corruption risks in water licencing• Can help form alliances between key WRM institutions (govt &

civil society)• Can serve as a credible input (based on evidence) for a broader

discussion and follow-up action

Mapping corruption risks in water licencing: The case of Kazakhstan

• State-dominated water sector in the midst of reforms, including turning former farm cooperatives (kolkhoz) into individual farm enterprises

• Like Tajikistan, most water is used in agriculture (82% water share)

• Important WRM problems: – Inequitable water distribution: system skwed towards the

powerful – Inefficient water use in agriculture– Inadequate wastewater treatement– Negative effects of massive water diversion from rivers for

cotton production resulting in shrinking of lake Aral

Mapping corruption risks in water licencing: The case of Kazakhstan

• State-managed water licencensing system

• Licences for irrigation given by Ministry of Agriculture (Commission of Water Resources) irrigation departments Water User Associations farmers (time allocations)

Mapping corruption risks in water licencing: Methodology used in Kazakhstan

• Semi-structured & open interviews held with licensors issuing water licences, water licencees & other stakeholders (NGOs, private sector managers, meda)

• First interviewees provided other names

• Field observations

• Literature review Variety of sources allowed for triangulation of

information

What are the main ‘corruption risks’ in the Kazakh water licensing system?

1. License application process: Potential to influence the awarding process

2. Content of the licence: Possibility to influence amount of water, timing, kind and amount of pollutant, etc.

3. Bidding and trading procedures: Opportunities to influence the bidding mechanism

4. Enforcement of licence: Possibilities to avoid consequences of infringements (poor control measurement, paying bribes, etc.)

Risk area no.1: Licence application process

Corruption risks ‘Red flags’ (early warning indicators)

1. Complicated licence application process requires a high number of documents high cost for applicants (time & resources) bribes may be used to speed up the application process (‘speed money’)

2. Lack of awareness about how to get a licence & how does the system work (rules, sanctions) risk of abuses of power, bribes

Risk area no.2: Content of the licence

Corruption risks ‘Red flags’ (early warning indicators)

1. Monopoly of licence allocation process by Ministry of Agriculture bribes may be used to set favorable terms & conditions (i.e. terms that do not reflect actual use)

Risk area no.3: Bidding and trading procedures

Corruption risks ‘Red flags’ (early warning indicators)

1. Monopoly of licence allocation process by Ministry of Agriculture bribes may be used to obtain licence / larger share

2. Upstream water-users can control water flow and deprive tail-end farmers from water without compensation bribes may be give to prevent disruptions 3. No public access to water licences registry

Risk area no.4: Enforcement of licenceCorruption risks ‘Red flags’

(early warning indicators)

1. Insufficient resources for reliable monitoring (e.g. no meters, no means for transportation for controllers, no pollution control device at the source) bribes could be given to turn a blind eye on infringements

2. Licencees do not have access to a formal complaint mechanism when controllers wrongly suspend licences bribes could be given to avoid water cuts (& damage to crops)

3. Controllers are paid poorly bribes could be given to turn a blind eye / to avoid arbitrary suspension of licence

What does this experience show us?

Corruption-mapping studies are useful to help understand local realities when designing new water policies & regulation

Often such policies are developed with the help of international organizations, based on experience of countries with better control mechanisms

These will likely fail in countries with weak controls or lack of data!Instead, creative solutions need to be found for water allocation &

control mechanisms, without increasing bureaucracy & potential corruption!

Extending informal systems may be more effective in some cases than building parallel formal systems

Planning ahead: How to apply this to the Tajik context?

Which actors should be interviewed?Are the ‘risk areas’ identified in the Kazakh context applicable to

the Tajik context? Which other areas should be investigated? What are possible administrative/objective sources of

information we could draw from (beyond interviews)?

But what to do next, after having identified the main corruption

risks areas?

How to monitor those on a regular basis?

Remember the four steps of our assessment approach?

1. Mapping the ‘potential’ corruption risks for each ‘step’ in the provision of water

2. Identify danger signs (‘red flags’) to watch out for: they alert decision-makers, investigators or the public to the possibility of corrupt practices

3. Find empirical evidence (through surveys & analysis of objective data sources) of corruption risks and ‘rank’ them based on incidence & impact

4. Establish a monitoring system to track the most critical ‘red flags’ on a regular basis

2. Identify corruption “hot spots”

3. Identify corresponding anti-corruption mechanisms

4. Design indicators to match

5. Quantify indicators

1. Trace the steps in the delivery of a service

Monitoring integrity indicators: The Macedonian experience

Example – Procurement (Macedonia Integrity Index)

Hot spot:Publication of and invitation for bids done in a way that does not inform

as many bidders as possible

AC mechanism:Public procurements, particularly those of a larger value, should be

published in the daily newspaper with the largest circulation, instead of in newspapers with limited circulation

Indicator (quantitative):Number (as % of total number of procurements) and value (as % of total

value of procurements) of procurements advertised in papers of large circulation

Exercise: Developing integrity indicators

Over to you…

A selection of corruption hot spots for the procurement sector is provided on the worksheet.

Can you create matching anti-corruption mechanisms and indicators?

Small groups

15 mins

How to quantify?

Example :How responsive was Agency X in disclosing the requested information?

Highly responsive (within 1 week)……………………..3 pointsSomewhat responsive (within 2 months)……………...2 pointsSomewhat unresponsive (more than 6 months)……....1 pointVery unresponsive (1 year or no response)……………0 point

Example indicator 2:Existence of a system for informing parties through written notices posted up or obtainable at the window from a clerk.

Information for the parties is visibly posted or easily obtainable………........................................2 points

Information upon request of the party……….....….1 pointNo system of informing the parties………...…...….0 point

How to quantify?

Slightly trickier…

How do you assess simple yes/no questions?

Example: In practice, are major public procurements effectively advertised?

These can also be scaled!

How to quantify?

Developing a scale to quantify qualitative indicators

In practice, are major public procurements effectively advertised?

Score 100: There is a formal process of advertising public procurements. This may include a government website, newspaper advertising, or other official announcements. All major procurements are advertised in this way. Sufficient time is allowed for bidders to respond to advertisements.

Score 50: There is a formal process of advertising but it is flawed. Some major procurements may not be advertised, or the advertising process may not be effective. The time between advertisements and bidding may be too short to allow full participation.

Score 0: There is no formal process of advertising major public procurements or the process is superficial and ineffective.

Developing indicator scales

Over to you…

Using the worksheet provided, work with a partner or two to develop your own indicator scales.

15 minutes