Investment in Water and Wastewater Infrastructure

By Alexandra Dapolito Dunn and Erin Derrington

Water quality and quantity are increasingly threatened by increased resource demands of growing populations. China, India, Brazil, Nigeria, and the United States exemplify trends in drinking water law and policy. This article evaluates the impact of the growing presence of privatized water and wastewater infrastructure projects in some of the world’s most populous countries. It articulates the importance of the rule of law and sound environmental governance in this arena and emphasizes the role of the legal community in addressing these challenges.

Critical state of water and infrastructure response: Focus on populous nations. Internationally, the World Health Organization (WHO) reports significant gains in drinking water and sanitation infrastructure—between 1990 and 2008, 1.8 billion people gained access to potable water in China and India alone. Nevertheless, infrastructure development is barely keeping up with population growth, and supply disparities between rural and urban communities are growing. Access to clean water is a persistent social challenge.

In China, almost 30 percent of the country’s river waters and 90 percent of urban groundwater are contaminated, unsuitable for even agricultural or industrial use. The government has moved to address water quality and infrastructure expansion through water privatization. China has implemented a strategy of supplying water on a commercial basis, imposing water rates, and requiring state-run water companies to operate at a profit. Communities bear the costs of extending and improving water infrastructure, and poor communities are especially burdened by regressive water-consumption taxes. Further complicating water access is a policy that state-supplied water can be cut off when prices go up and low-income residents cannot pay the bills. In some cases, the government has closed industrial facilities responsible for water pollution, but enforcement can be impeded by localities reluctant to risk adverse impacts to tax revenues or local jobs.

China’s 2002 Water Law states that in developing and utilizing water resources, attention shall first be paid to satisfying human consumption, while taking into consideration agricultural, industrial, ecological, and navigational needs. Affirming the principle of unified management of a collective resource, the law regulates pollution, assigns liability to polluting parties who violate pollution management plans, and proscribes private use. Despite this law, China’s current water infrastructure is inadequate to sustainably supply sufficient potable water to its citizens, whose water use has tripled since 1992.

With just over 1.1 billion people, India ranks second in world population. The lack of access to sanitation systems in both urban and rural areas pollutes already deteriorating water bodies and creates significant environmental and human health hazards. Water privatization has been one mechanism used to address water connectivity issues. India’s National Academy of Agricultural Sciences reports a general consensus that (a) the water resource sector needs a holistic view; (b) all stakeholders need to be involved in its management; and (c) there ought to be some defined principle of water allocation. Articulating principles of water allocation will continue to be a significant legal challenge with far-reaching environmental equity implications in the developed and developing world.

The United States reported 100 percent safe water access to the UN Development Programme’s 2007–2008 Human Development Reportand WHO health indicator queries. However, persuasive arguments are made that it has a “complex landscape of low-income water problems” (James L. Wescoat Jr. et al., “Water and Poverty in the United States,” 38 Geoforum 801–802, 2007). Communities of the urban homeless, remote Native American groups, and migrant workers often do not have access to potable water and adequate sanitation systems. Further highlighting the water-quality challenges is the New York Times’ “Toxic Waters” project documenting the impacts of herbicides, industrial pollution, and agricultural runoff. Privatization is not as significant of a trend in the United States; however, privatization still exists. Some cities, in an effort to manage the high cost of providing drinking water to growing populations and to maintain aging water and wastewater infrastructure, privatize water resources either through contracting out operations while retaining municipal ownership of the infrastructure assets or, less frequently, through outright transfer of the assets to the private entity. Of the private arrangements, some have been successful while others have led to problems. A 2009 report documented more than 20 examples of problematic privatized water-system management.

Despite vast water supplies, 21 percent of Brazil’s population lacks in-home water connections, and 70 percent of hospitalizations are the result of water-related illnesses. Contaminated drinking water is associated with about 80 percent of all diseases and one-third of all premature deaths, making it the most serious environmental health problem in the country. The majority of Brazil’s population continues to receive water services from public municipal or state-level utilities. Increased water taxes are regressive, causing people with the lowest incomes to pay the highest percentages of their incomes to consume potable water.

Finally, a reflection on water in one of the world’s most highly populated and generally very poor nations. In 2006, water coverage for the Nigerian population was only at 47 percent, a 3 percent decline since 1996. Many of its water sources are polluted. Some claim Nigeria’s water-pollution problem is exacerbated by ineffective environmental regulations. Additionally, the government has a national water-supply policy that has been criticized for high tariff rates and inefficiency. The lack of quality municipal infrastructure is fueling the privatization of Nigeria’s drinking water while the packaged water that is filling the gap in the public system remains unregulated and potentially unsafe for consumption. Overall, Sub-Saharan Africa faces considerable water infrastructure challenges.

Implications of water and infrastructure ownership on the poor. A significant barrier to clean drinking water and adequate sanitation for the world’s poor is infrastructure. A question in policy and legal circles is which is best for people, particularly the poor—public or private ownership of the infrastructure? Many are hailing infrastructure privatization as a progressive wave of the future. Private water corporations may have more capital for exploitation and distribution investment as well as the potential to be more efficient than local or state government operations.

Although water privatization may be a legitimate response to the challenges of water use and distribution, water-management policies can have significant socioeconomic implications, and many human rights activists advocate public ownership of water resources to ensure sustainable use of this precious, finite resource. Ownership of infrastructure is one key consideration, but ownership of the resource itself is even more important. Private groundwater ownership is increasingly being challenged. Various groups are concerned that water, as a vital resource without which life cannot exist, is a public resource that cannot be privately allocated in a sustainable way.

Rule of law, environmental governance, and the legal community. Given that water is a basic human need, it is imperative for the legal community to work toward protective water-management policies and to promote sustainable funding mechanisms to prevent exploitation of low-income populations via unregulated, private operation of water systems, treatment, and infrastructure. The rule of law plays an important role in fostering governmental stability, accountability, and citizens’ access to justice.

Environmental governance is another important element in the challenging arena of water quality and infrastructure. Currently, policy gaps foster abuse and overuse of a finite resource. Effective local, state, and national policies on the allocation and protection of water resources are needed.


  • Alexandra Dapolito Dunn is assistant dean of environmental law programs and adjunct professor of law at Pace Law School; she may be reached at adunn@law.pace.edu. Erin Derrington is a student in the Pace Law School and Yale School of Forestry & Environmental Studies Joint Degree Program; she may be reached at erin.derrington@yale.edu.

    Copyright 2010

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