Reducing Non-Revenue Water by Improving Integrity Practices

Why we need strong NRW managers and a new approach

A blog post originally posted by the Water Integrity Network at https://www.waterintegritynetwork.net/post/reducing-non-revenue-water-by-improving-integrity-practices

By Barbara Schreiner, Executive Director (WIN)

346 million cubic metres of water lost each day.

$39 billion lost annually.

Non-Revenue Water (NRW) is a challenge globally in the provision of safe drinking water, leading to massive water and financial losses. It significantly undermines progress towards achieving universal access in both developed and developing nations. Reducing NRW results in financial savings and improved service reliability. It can also alleviate the pressure on water resources in rapidly growing cities, contributing to climate resilience.

A number of utility managers are making progress in tackling NRW, for example with dedicated programmes, teams, and data monitoring. However many efforts are not entirely successful.

Poor governance, corruption, and malfeasance exacerbate both physical and commercial losses that make up NRW. Yet NRW reduction efforts rarely address these factors. For NRW programmes to be more effective and sustainable, it is critical that we understand root issues and the links with poor integrity.

Corruption has an intricate relationship with non-revenue water

Utilities operating in countries with higher levels of corruption tend to experience greater water losses. Corruption affects various aspects of water management, from the quality of infrastructure to billing practices and operational efficiency.

Procurement, construction, and maintenance projects tainted by corruption often result in substandard infrastructure prone to leaks and breakages, contributing to increased NRW. Illegal connections and meter tampering (particularly by large water users or when facilitated by staff) further exacerbate commercial losses for utilities.

Nepotism and cronyism within water utilities can lead to the appointment of unqualified personnel or contractors, compromising the effectiveness of NRW reduction intiatives.

Corruption diverts funds intended to essential projects, impeding efforts to upgrade infrastructure and implement leak detection technologies. Furthermore, corrupt practices erode trust between water service providers and customers, reducing the willingness to pay for services.

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Comprehensive non-revenue water and integrity strategies are needed, across utility departments

Addressing corruption in the water sector is essential for successful NRW reduction. A comprehensive approach involving legal, technological, and governance solutions is necessary to mitigate the risk of corruption and improve water management practices. Improving financial management, strengthening procurement processes, enforcing anti-corruption laws, and promoting transparency and accountability are crucial steps in combating corruption within water utilities.

Embracing advanced technologies such as smart meters and automated leak detection systems can enhance the efficiency of water distribution systems and minimise opportunities for corruption.

Professionalising water utilities through merit-based hiring and training programs can help mitigate the influence of nepotism and cronyism, fostering a culture of competence and integrity within the sector. Moreover, encouraging public participation and awareness can empower citizens to hold authorities accountable and act as a check on corrupt practices. Reliable data is also essential for informed decision-making, highlighting the importance of accurate meter readings, billing, and data management systems.

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Emerging questions for best practice non-revenue water management

This far-reaching impact of corruption has direct impacts on how best to manage NRW programmes. Having a dedicated NRW team, as a number of utilities already have, seems like a good approach. Is it the best one? What are the key elements to consider to make these teams most effective? What skills do staff need to have?

• Are NRW proffessionals sufficiently independent? Do they have the power to tackle management issues in different departments? Can they access the data they need from across the organisation?
• Do they have sufficient support from higher management to ask tough questions, including around corruption and integrity challenges or company culture and norms?
• Do they have the knowledge and skills to deal with corruption and integrity risks?
• Are they able to collaborate effectively with auditing or compliance colleagues, and to engage with external oversight mechanisms and civil society to strengthen monitoring of leaks and issues?
• Can external contractors, even with performance-based contracts, sufficiently address the internal governance mechanisms that affect NRW?
• Are staff across the organisation aware of the standards of conduct they are meant to work by? Do they know what to do when faced with a tricky situation? Will they be safe if they say something about it?

In addition, a focus on corruption and integrity issues brings up questions about the definition of NRW.

• Is it time to broaden our categorisation of NRW components to explicitly recognise acts of malfeasance? Many tables defining NRW highlight only water theft as a component. What about bribery for a favourable meter reading? What happens when we don't have just errors in readings and billings but active data manipulation?
• What is behind unbilled, authorised consumption and how much results from undue interference?

Strong, accurate asset management and billing systems are critical to effective NRW reduction strategies, also with an integrity focus. Data analysis can be very revealing. What should we measure and look at more closely to identify red flags for corruption or poor integrity?

• What data are teams already using to support their decisions on NRW?
• Which indicators (like repeated identical billing amounts) should we definitely keep track of?

Reducing non-revenue water must be a continuous process and a strategic priority

By addressing the root causes of corruption, implementing robust legal frameworks, embracing technology, and promoting transparency, we can support NRW reduction and contribute to the equitable and efficient use of water resources for current and future generations.

The fight against corruption in the water sector is not only a moral imperative but also a strategic necessity for securing access to clean water for all.

This article is part of our series of posts on integrity for water and sanitation finance, published alongside the development and launch of the Water Integrity Global Outlook 3 report: https://www.waterintegritynetwork.net/water-integrity-global-outlook-finance