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IRC Summer Debate #1
A sustainability clause in contracts for    the WASH sector?    Chair – Patrick Moriarty    Rational and Pro position – Ca...
A sustainability clause in contracts for    the WASH sector?    Rational and Pro position – Catarina Fonseca3             ...
In the sector, sustainability is a nice to    have...    • Very limited concrete changes in the sector to address      the...
National/local governments are responsible    for providing WASH services but…    • Services can be delegated: urban utili...
What if….…. we have a 10 year “sustainability clause” incontracts between donors and implementers?   Programme/project dur...
The “clause” should include three things:• Enforce 10 years sustainable services – the stick• Invest in sector „capacity‟ ...
Anticipated impact of introducing a    „sustainability clause‟ into contractsCurrent contracting                          ...
Contractual accountability is not the same    as ownership…    • Mutual accountability is compatible with ownership    • A...
A sustainability clause in contracts for     the WASH sector?     Against position – Jean de la Harpe10                   ...
Sustainable services provision• A common goal … for donors, for country governments, for service  authorities, service pro...
A sustainability clause is likely (MAY) to create a knock-on effect or‘chain’ of sustainability clauses in all sub-grantee...
A sustainability clause should motivate implementing agencies and theirpartners to develop plans (capacities, systems, ins...
What are the assumptions underlying the „chain of clauses‟ (chain of contracts)?             Guarantee   DGIS             ...
•   The implementer is still liable for infrastructure and for putting in place    mechanisms for service delivery•   This...
• International agencies cannot provide services, unless they are  properly contracted by government to do so – for exampl...
Sustainability is a challenge• What is the incentive for the parties down the line to sign such a clause?• Sustainability ...
Not all countries have equal financial capacity to sustain the infrastructure – therefore a guarantee from Ghana will mean...
To sum up•   We all feel strongly about achieving the goal of sustainability – the challenge is HOW•   The problem with th...
Debate: pro or against?20             IRC debate – sustainability clause – Aug 2012
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IRC Summer debate 1 - Sustainability clause

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On the 20th of August 2012 the IRC International Water and Sanitation Centre organised an in-house debate on the pros and cons of adding a sustainability clause in contracts between donors and implementers in Water Sanitation and Hygiene (WASH) programmes.

The background to this is that IRC had been asked by the Netherlands Directorate-General for International Cooperation (DGIS) to prepare a thought piece on this topic, to help them move forward on the development of a clause for their grants to the WASH sector globally. This thought piece included a ‘straw-man’* sustainability clause, together with an assessment of the likely impacts - positive and negative - of its application. The idea of a sustainability clause has caused heated debate within IRC and in the broader sector.

During the debate, IRC staff members Catarina Fonseca and Jean de la Harpe took opposing sides of the argument on the utility and ethics of a sustainability clause. Their presentations are included here.

For a summary of the discussion go to http://www.source.irc.nl/page/73871. Follow-up discussions have taken place on the Water services that last blog .- http://waterservicesthatlast.wordpress.com/?s=sustainability+clause&submit=Search

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IRC Summer debate 1 - Sustainability clause

  1. 1. IRC Summer Debate #1
  2. 2. A sustainability clause in contracts for the WASH sector? Chair – Patrick Moriarty Rational and Pro position – Catarina Fonseca Against position – Jean de la Harpe2 IRC debate – sustainability clause – Aug 2012
  3. 3. A sustainability clause in contracts for the WASH sector? Rational and Pro position – Catarina Fonseca3 IRC debate – sustainability clause – Aug 2012
  4. 4. In the sector, sustainability is a nice to have... • Very limited concrete changes in the sector to address the issue • Consistent evidence in the sector for lack of sustainability • Evidence of lack of monitoring data • Evidence of lack of cost data • Evidence of lack of aid effectiveness, fragmentation, etc.4 IRC debate – sustainability clause – Aug 2012
  5. 5. National/local governments are responsible for providing WASH services but… • Services can be delegated: urban utilities, cooperatives, user associations, decentralised authorities, etc • Service agreements take shape between government, provider and implementer • The implementer is still liable for infrastructure and for putting in place mechanisms for service delivery • This is the standard in most financial transactions - there are liabilities, guarantees…5 IRC debate – sustainability clause – Aug 2012
  6. 6. What if….…. we have a 10 year “sustainability clause” incontracts between donors and implementers? Programme/project duration under contract with donor WASH services delivered 10 year contractual sustainability clause Y1 Y10 IRC debate – sustainability clause – Aug 2012
  7. 7. The “clause” should include three things:• Enforce 10 years sustainable services – the stick• Invest in sector „capacity‟ to deliver sustainable services – the plan• Learn about the weak parts of the delivery chain and correct them – the monitoring. IRC debate – sustainability clause – Aug 2012
  8. 8. Anticipated impact of introducing a „sustainability clause‟ into contractsCurrent contracting Introduction of Medium-long termarrangements with inadequate ‘sustainability with improvedsustainability requirements clause’ sustainability • Monitoring focuses on • Monitoring focuses on long- • Reduced non-functionality outputs (e.g. number of term outcomes (e.g. quality • Better services to systems constructed and and reliability of services) consumers persons served) and • Monitoring post- processes (community • More water and sanitation participation, availability of implementation is supported ‘person years’ per each spare parts) for minimum of 10 years Euro invested (increase • Monitoring carried out for • Long-term monitoring efforts value for money) limited time after ‘post- integrated/ aligned with • Better cooperation with implementation’ national systems partners and national • Limited anticipation of life- • Contracts for service delivery government cycle costs are custom-made to reflect • Increased economies of • Institutional mandates for who is responsible for which scale with increase ensuring services not fully activities and life-cycle costs geographical focus considered • Promotion of closer • Better spread of • Limited or no external coordination with other investments across the full incentive for implementing implementing agencies and life-cycle agency for coordination to government ensure sustained impacts • Greater clarity for institutional mandates across the service life cycle IRC debate – sustainability clause – Aug 2012
  9. 9. Contractual accountability is not the same as ownership… • Mutual accountability is compatible with ownership • A donor agency has the right to demand from its fund recipients that its investments result in sustainable outcomes • The challenge for WASH is how to make sure that accountability is where it should be (service provider) and making sure there are sufficient “incentives” in contracts for ensuring implementers will provide sustained service delivery.9 IRC debate – sustainability clause – Aug 2012
  10. 10. A sustainability clause in contracts for the WASH sector? Against position – Jean de la Harpe10 IRC debate – sustainability clause – Aug 2012
  11. 11. Sustainable services provision• A common goal … for donors, for country governments, for service authorities, service providers, implementing agents, development partners – and citizens• Great to put sustainability on top of the agenda• Sustainability is complex– anything in a complex environment carries risk – where the consequences are often unforeseen• If sustainability was not a complex issue then this debate would not be happening – and perhaps DGIS would be entering into direct contracts with governments IRC debate – sustainability clause – Aug 2012
  12. 12. A sustainability clause is likely (MAY) to create a knock-on effect or‘chain’ of sustainability clauses in all sub-grantees, sub-implementersand partnership contracts making it in everyone’s interest, to addresspost-construction accountability.The clause is not simply about post construction accountability – it is about guaranteeing a serviceA service is about capacity and resources - staff, skills, systems, revenue, hydrological conditionsIt is governed by national and local policies and political prioritiesThere is only one grantee – e.g. UNICEF (will be used as an example throughout the presentation)But that grantee has no authority when it comes to service provision – and the sustainability of thatservice – this is the prerogative of local government (within a decentralised framework)National government is not a grantee in the chain of contracts …. it is not receiving anything – it islocal government that is receiving a „project‟ or infrastructure. IRC debate – sustainability clause – Aug 2012
  13. 13. A sustainability clause should motivate implementing agencies and theirpartners to develop plans (capacities, systems, institutions) forsustainability of services, but it should also include clear incentives andproper methods for enforcementIsn‟t UNICEF already developing plans to support service providers?This assumes that the capacity, systems, and institutions will result in sustainabilityIf UNICEF is required to give a guarantee for a service – it effectively is guaranteeing that all the capacities, systems andinstitutions will be in place – it can‟t just plan it or play the role of capacity builder …There is only one way to properly guarantee a sustainable service and that is to put the necessary staff and operational capacity inplace – i.e. to itself fulfil the role of service provider (it can‟t guarantee the performance of someone else over a 10 year period)BUT, of course this is not the intention of the sustainability clause and alsoa) flies completely in the face of AE, country ownership and building country capacityb) Is not the role of international institution such as UNICEFc) Would be extremely costly – where the risk would be covered in terms of budget (as has been experience of BOTTs)HOWEVERLocal governments that lack capacity and resources may be very happy with this option – let UNICEF take responsibility andensure the necessary financing IRC debate – sustainability clause – Aug 2012
  14. 14. What are the assumptions underlying the „chain of clauses‟ (chain of contracts)? Guarantee DGIS UNICEF $ Guarantee National Government Guarantee Local governmen Project t Guarantee Service provider Payment Citizens
  15. 15. • The implementer is still liable for infrastructure and for putting in place mechanisms for service delivery• This is the standard in most financial transactions - there are liabilities, guarantees…• Not the case when taking about provision of a basic service that is a human right – government is responsible for putting service provision arrangements in place• A donor agency has the right to demand from its fund recipients that its investments result in sustainable outcomes• This needs to be from government – not international agencies IRC debate – sustainability clause – Aug 2012
  16. 16. • International agencies cannot provide services, unless they are properly contracted by government to do so – for example in the case of Suez IRC debate – sustainability clause – Aug 2012
  17. 17. Sustainability is a challenge• What is the incentive for the parties down the line to sign such a clause?• Sustainability is a challenge – we can‟t guarantee it• there are too many factors involved – politics, local contexts and priorities, institutional arrangements, local economies, etc• Governments themselves can‟t give such guarantees – (court action from citizens) … policy does not talk about „guaranteeing‟ a service – it talks about ensuring access, progressively rolling out services, etc• What is UNICEF‟s role down the chain … and how does it ensure that it‟s guarantee is followed through to the ground level where the service is provided• How do we know that the countries can afford the operation and maintenance of the infrastructure in the first place? IRC debate – sustainability clause – Aug 2012
  18. 18. Not all countries have equal financial capacity to sustain the infrastructure – therefore a guarantee from Ghana will means something different from Uganda … Ghana‟s tax revenue is less than US$ 300 per person per annum – to spend on everything Uganda is US$ 63 one size does not fit all Ghana RSA Uganda BRAZIL USAGDP(current 408,236,752,3 15,094,000,000,0US$) 39,199,656,051 38 16,809,623,489 2476652189880 00Population, total 24,965,816 50,586,757 34,509,205 196,655,014 311,591,917GDP/cap 1,570 8,070 487 12,594 48,442Tax as %of GDP 0.17 0.27 0.13 0.344 0.269Tax 110,223,923,13 851,968,353,31 4,060,286,000,00Revenue 6,663,941,529 1 2,185,251,054 9 0TaxRevenueper cap 267 2,179 63 4,332 13,031 IRC debate – sustainability clause – Aug 2012
  19. 19. To sum up• We all feel strongly about achieving the goal of sustainability – the challenge is HOW• The problem with the process and content of the sustainability clause is the issue of unforseen consequences• there is a significant body of work on this issue in the fields of governance and indeed complexity theory• There have been (no doubt) solutions found to complex problems• the problem with such BIG solutions is that we remember (and talk about) the successes• the failures are relegated to the dustbin of history• Can we as IRC take this risk, in light of the possibility of a multitude of UNINTENDED CONSEQUENCES?• remember we are dealing with the Lives of People, Governments of Countries and Multi-National Organisations here.• Are we prepared to accept the possibility (risk) of unintended consequences? IRC debate – sustainability clause – Aug 2012
  20. 20. Debate: pro or against?20 IRC debate – sustainability clause – Aug 2012

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