Private-Public Partnerships Reduce Water Risk in South Africa

With its high reliance on manufacturing, mining, and agriculture, South Africa’s economy runs on fresh water. Recent projections estimate a startling 17 percent gap between water demand and supply in the country by 2030. Even more concerning, the areas most affected, the Gauteng and Vaal River regions, are also the most economically significant: According to the Department of Water Affairs and Forestry, these two areas produce more than 50 percent of South Africa's wealth and supply more than 80 percent of the country's electricity requirements (more than 50 percent of all the electricity generated in Africa).

Reducing Water Risks Requires Collective Action

As part of the effort to address this growing water crisis, representatives from the private and public sector converged this May at the Water Institute of Southern Africa (WISA) 2012 conference. A one-day session on Corporate Water Stewardship, sponsored by consumer goods giant Unilever, with representatives from the South Africa Department of Water Affairs (DWA), Sasol, Eskom, Nestle, SABMiller, and Coca-Cola, highlighted the fact that water risks are inherently shared by governments, communities, and companies. Therefore, mitigating those risks requires collective action. For example, investing solely in water-efficiency improvements within a company’s fence line will only reduce overall water stress if this action is coupled with policies to ensure that the water saved is not reallocated to inefficient users. Conference panelists agreed that to ultimately reduce water-related risks, private sector actors must improve water efficiency and engage in water policy and stewardship through partnerships with government and civil society groups.

South Africa’s public sector has reached similar conclusions: During the 6th World Water Forum in Marseille in March 2012, officials from the Southern African Development Community (SADC) water sector described plans to increase private sector participation in water management. And during the opening session to the WISA 2012 conference, the South African Minister of Water and Environmental Affairs underlined the need for increased public-private collaboration around water management and set broadening partnerships as a priority goal for the South African DWA.

Examples of Public-Private Partnerships in South Africa

A number of public-private partnerships are already forming in an effort to reduce water risks:

• In a recent article in South Africa’s Times LIVE, water managers from Eskom and Sasol, two of the largest industrial water users in the Gauteng and Vaal River supply region, emphasized that improving the companies’ water-use efficiency alone would not be enough to significantly reduce water risks. Sasol recently launched a pioneering partnership with the Emfuleni Local Municipality and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the primary German development agency. The effort aims to improve municipal infrastructure and cut back on leakages in order to reduce urban water demand and shared water risks. If proven successful, it will serve as a model to inform similar partnership projects.

• In the beverage sector, SABMiller has been working with the South African Department for Science and Technology through the South African Water Futures partnership with the World Wildlife Fund and GIZ. The collaboration aims to identify and respond to water risks faced by hops growers in the Gouritz watershed.

Obstacles to Reducing Water Risk in South Africa

The companies present at the WISA session on Corporate Water Stewardship have been leading by example, but represent only a small fraction of the private sector. The critical roadblock to reducing South Africa’s water risk is low participation from the private sector in the discussion around corporate water stewardship and collective action. More companies need to engage in this discussion and start taking action to reduce water-related risks.

Maps and other tools such as the ones provided by WRI’s Aqueduct Water Risk Atlas can help facilitate this process. Aqueduct’s maps highlight the major issue-areas around water and provide a unique depiction of how water-related risk varies spatially across basins, regions, and countries. Understanding the geographic context of water risk is the first step towards developing a water strategy and engaging in corporate water stewardship.

South Africa’s thirsty economy and reliance on foreign water to meet its increasing demands have already begun to trigger water-related financial impacts to businesses. This environment is indeed ripe for the development of private-public partnerships to reduce shared water risks. Companies in other countries should not wait for risks to materialize. Instead, collective action must be taken in advance through active engagement in corporate water stewardship.