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Sustainability standards on right to water bear meaning for finance

The latest report by the UN Special Rapporteur on Right to Water and Sanitation (“the Rapporteur”), Ms. Catarina de Albuquerque, focuses on the theme Sustainability and non-retrogression in the realization of the rights to water and sanitation. The report offers useful and welcome guidance for those seeking to draw meaning from the human right to water on the areas of finance, investment and other related economic ones. Some of its developments will arguably be useful beyond the right to water, charting a path for how to draw such meaning in the case of other rights.

The Special Rapporteur devotes a portion of her report to develop the concept that sustainability is “non-dissociable” from human rights law.

She connects the notion of sustainability to both the obligations of progressive realization and non-retrogression in the realization of human rights. About the former, she cites the Committee on Economic, Social and Cultural Rights on the link between the obligation of progressive realization (meaning that States must achieve rights over the long term), and the way progressive realization of the right to water “must also be sustainable, ensuring that the right can be realized for present and future generations.”

About non-retrogression, the report considers that measures that directly or indirectly lead to backward steps in the enjoyment of human rights are most frequently imposed in times of financial or economic crisis. This is probably why the Committee on Economic, Social and Cultural Rights addressed retrogression mainly in the context of decisions by States to adopt austerity measures that may have a negative impact on the realization of human rights. Those are deliberately retrogressive measures but the report calls attention to measures that, even if not deliberately regressive, may have a retrogressive effect. This is the case, for instance, “where States fail to ensure adequate operation and maintenance, where they fail to implement adequate mechanisms for regulation, monitoring and sector oversight, or where they fail to build and strengthen their capacity in the long term.”

According to the Rapporteur, financing challenges pose a significant threat to sustainability: “Underfunding is a present-day issue and a major restriction on the ability to provide sustainable water and sanitation, one that is exacerbated during times of crisis.”

Where States reduce spending on water and sanitation this can have negative consequences for sustainability, both in growth and crisis periods. The report underscores that the poorest are the ones that suffer the most from cuts in public spending. This is because they are the ones “who tend to receive a higher proportion of their income from social security benefits, rely heavily on public services, and spend a higher proportion of their income on basic services”

Against this backdrop the report mentions that since 2010 cuts in public expenditure have been the most common reaction to the crisis in Europe,  giving the examples of Ireland, Greece, Portugal and Spain, with decreased public expenditure programmes introduced at the request of the European Central Bank, the European Commission, and the International Monetary Fund.

Insufficient budgeting is another area where the sustainability is relevant to apply. The Rapporteur finds that lack  of national budgeting that incorporates a long-term perspective and in particular operation and maintenance costs, jeopardizes sustainable provision.

Crisis might affect sustainability through another channel: official development assistance. She refers to the OECD figures showing that aid in the last year dropped for the first time since 1997. While water and sanitation sectors have not been as affected by decreasing aid commitments as other sectors, commitments to sanitation and water were already lower than those for most social sectors.

In a section discussing non-State service provision models she raises some issues regarding provision by the private sector. One of them is lack of investment by the private sector. As mentioned in a submission by RightingFinance, “growing financialization of the world economy witnessed in the last decades, while accompanied by a lower share of participation of wages in GDP, was also accompanied by a lower share of participation of investment in GDP. This confirms the finding that profit growth does not necessarily translate into increases in investment.”

The Special Rapporteur asserts that “Often profits made by private operators are almost fully distributed among shareholders, rather than being partially reinvested in maintaining and extending service provision, the result being increased prices for consumers, continued need for public investment, and potentially unsustainable services.”

Another issue concerns the lack of participation and accountability. “Once the decision to privatize has been made, and especially in the context of economic crisis, the process of selling the assets often does not include sufficient opportunities for meaningful public participation,” she says. Indeed, participation deficits tend to be exacerbated in times of crisis, where “the State seeks to avoid the financial costs of participation and is under time pressure to adopt austerity-related measures.” The Rapporteur reminds States that they are never exempted from their human rights obligations, including the duty to give people the opportunity to pronounce themselves on issues that concern them. Concrete consequences that the lack of respect for this principle may carry are that the State misunderstands the barriers to access, and fails to pinpoint how these barriers might be overcome, or that resulting policy choices might simply be unacceptable to the people they aim to serve.

In a section on recommendations the Special Rapporteur draws implications of the principle of maximum available resources for both good and bad times. “Human rights standards demand that States invest the “maximum available resources” in the sectors,” she says. “In times of prosperity, spending on water and sanitation has to include planning, independent monitoring, establishment of accountability mechanisms, and operation and maintenance, so as to enable the progressive realization of the rights even during times of crisis, hence preventing slippages and retrogression.”

Incorporating teachings from the Committee on Economic, Social and Cultural Rights’ interpretation of this principle, she also draws the conclusion that “it is important to assess whether maximum available resources are truly being devoted to the sectors by examining the national allocation of funds to areas such as the military, bailouts for banks, and the construction of infrastructure for the hosting of mega-events, as well as the amount of funds lost due to the toleration of corruption.” This is an important aspect also raised by RightingFinance members in their submission, where they called for the assessment of State responsibility for measures taken in times of crisis to not “cease at the point of the crisis response measure(s) in question but [to] extend into an inquire about how the State reached such situation. States may face a budget crisis due to their failure to appropriately set in place mechanisms that could have reasonably been in place to avoid the use of budgetary resources for large bailout of private financial institutions or private creditors. In this regard, the maxim that “no one can be heard to invoke his own turpitude” becomes relevant.“

The report emphasizes also the fiscal policy implications: “[T]imes of crisis per se do not inevitably lead to regressions in implementing the rights to water and sanitation. Fiscal austerity can be achieved not only by cutting government spending, but also by increasing government revenue. From a human rights perspective, a crucial question is how such revenue is raised.”

The Rapporteur adds that mobilizing tax revenue, in an appropriately targeted manner, is the responsibility of governments, and a way of implementing their human rights obligations. This is also a premise of the Special Rapporteur on Human Rights and Extreme Poverty’s decision to focus her report of next year on fiscal and tax policy and human rights.

Ms Albuquerque further proposes methods such as assessing the effective tax rate (or tax to gross domestic product ratio) to provide indicators for reviewing and benchmarking States, identifying failures in their efforts to mobilize resources to meet the need for a water and sanitation sector that is sustainable for all, forever.


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