Integrated Water Resources Management
Global Water Partnership
Technical Advisory Committee (TAC)
GWP Secretariat, Sida, SE -105 25 Stockholm, Sweden. Office: Sveavägen 24-26, Stockholm
Telephone +46 (0)8 698 50 00 Telefax +46 (0)8 698 56 27
E-mail gwp@sida.se www.gwpforum.org
Global Water Partnership
ISBN: 91-630-9229-8
TAC BACKGROUND PAPERS NO. 4

Global Water Partnership (GWP), established in 1996, is an international network open to all
organisations involved in water resources management: developed and developing country
government institutions, agencies of the United Nations, bi- and multilateral development banks,
professional associations, research institutions, non-governmental organisations, and the private
sector. GWP was created to foster Integrated Water Resources Management (IWRM), which aims
to ensure the co-ordinated development and management of water, land, and related resources
by maximising economic and social welfare without compromising the sustainability of vital
environmental systems.
GWP promotes IWRM by creating fora at global, regional, and national levels, designed
to support stakeholders in the practical implementation of IWRM. The Partnership’s governance
includes the Technical Advisory Committee (TAC), a group of 12 internationally recognised
professionals and scientists skilled in the different aspects of water management. This committee,
whose members come from different regions of the world, provides technical support and
advice to the other governance arms and to the Partnership as a whole. The TAC has been
charged with developing an analytical framework of the water sector and proposing actions that
will promote sustainable water resources management. The TAC maintains an open channel with
its mirror bodies, the GWP Regional Technical Advisory Committees (RTACs) around the world
to facilitate application of IWRM regionally and nationally. The Chairs of the RTACs participate
in the work of TAC.
Worldwide adoption and application of IWRM requires changing the way business is
conducted by the international water resources community, particularly the way investments are
made. To effect changes of this nature and scope, new ways to address the global, regional,
and conceptual aspects and agendas of implementing actions are required.
This series, published by the GWP Secretariat in Stockholm has been created to disseminate the
papers written and commissioned by the TAC to address the conceptual agenda. Issues and
sub-issues with them, such as the understanding and definition of IWRM, water for food security,
public-private partnerships, and water as an economic good have been addressed in these
papers.
This paper is printed on swan-marked paper.
The Nordic swan mark guides consumers to the most
environmentally sound products. To acquire the swan
symbol, producers must adhere to strict guidelines which
are revised on an ongoing basis. This paper was produced
according to these guidelines.
Previously published papers in the TAC Background Papers Series:
• No 1: “Regulation and Private participation in the Water and Sanitation
Sector” by Judith A. Rees (1998)
• No 2: “Water as a Social and Economic Good: how to Put the Principle into
Practice” by Peter Rogers, Ramesh Bhatia and Annette Huber (1998)
• No 3: “The Dublin Principles for Water as Reflected in a Comparative
Assessment of Institutional and Legal Arrangements for Integrated Water
Resources Management” by Miguel Solanes and Fernando Gonzales-
Villarreal (1999)

Integrated Water Resources Management

©Global Water Partnership
SE -105 25 Stockholm, Sweden
All rights reserved.
Printed in Denmark.
First printing, March 2000.
No use of this publication may be made for resale or
other commercial purposes without prior written
permission of the Global Water Partnership/Sida.
Portions of this text may be reproduced with the
permission of and proper attribution to Global Water
Partnership/Sida. The findings, interpretations, and
conclusions expressed within this publication are
entirely those of the author and should not be attributed
in any manner to GWP/Sida, nor as official expressions
of the Global Water Partnership Technical Advisory
Committee.
ISSN: 1403-5324
ISBN: 91-630-9229-8

Integrated Water Resources Management
The following members of TAC since its inception in 1996
are authors of this paper:
Anil Agarwal, India
Marian S. delos Angeles, Philippines
Ramesh Bhatia, India
Ivan Chéret, France
Sonia Davila-Poblete, Bolivia
Malin Falkenmark, Sweden
Fernando Gonzalez Villarreal, Mexico
Torkil Jønch-Clausen, Denmark (TAC Chair)
Mohammed Aït Kadi, Morocco
Janusz Kindler, Poland
Judith Rees, United Kingdom
Paul Roberts, South Africa
Peter Rogers, USA
Miguel Solanes, Argentina
Albert Wright, Ghana
Published by the Global Water Partnership
TAC BACKGROUND PAPERS NO. 4

Preface and acknowledgement
After three years of operation beginning in 1996 the Technical
Advisory Committee (TAC) of Global Water Partnership (GWP) felt
there was a need for a clarification and formulation of certain prin-
ciples and recommendations within integrated water resources
management – serving a general purpose of contributing to the imple-
mentation of IWRM, but also an internal purpose of establishing a
common understanding within GWP and TAC. The present paper
represents the “corporate view” of TAC on integrated water resources
management and has been authored by all members of TAC in the
period 1996 through 1999.
The paper is the sole responsibility of TAC, but it has been developed
in a joint process involving TAC members, Regional TAC Chairs,
professional TAC-support staff at DHI Water and Environment and
GWP Secretariat staff. Based on TAC’s deliberations on the subject over
its course of time, Mr. Henrik Larsen, DHI Water and Environment,
provided a first draft and has functioned as the chief editor of the
paper. The contribution of all who participated in this process is grate-
fully acknowledged.

1. Introduction 6
Part I: WHAT IS IWRM? 8
2. The overall problem 9
3. The main challenges 10
4. IWRM principles 13
Principle I: Water as a finite and vulnerable resource 14
Principle II: Participatory approach 15
Principle III: The important role of women 17
Principle IV: Water as an economic good 18
5. Definition of IWRM 22
“Integration” in IWRM 23
Natural system integration 24
Human system integration 26
Part II: HOW TO IMPLEMENT IWRM 32
6. The enabling environment 33
The role of government 33
Water legislation 36
The cross-sectoral and upstream-downstream dialogue 38
Financing structures and investment allocations
for water resources infrastructure 39
Co-operation within international river basins 42
7. The institutional roles 44
Roles and functions of organizations at different levels 45
Institutional capacity building 50
8. Management instruments 51
Water resources assessment: availability and demand 51
Communication and information systems 54
Water allocation and conflict resolution 56
Regulatory instruments 58
Direct controls 58
Economic instruments 61
Encouraged self-regulation 65
Technology 66
List of abbreviations 67
CONTENTS

hallenges require IWRM; Challenges faced by more and
more countries in their struggle for economic and social
development are increasingly related to water. Water short-
ages, quality deterioration and flood impacts are among the problems
which require greater attention and action. Integrated Water Resources
Management (IWRM) is a process which can assist countries in their
endeavour to deal with water issues in a cost-effective and sustainable
way. The concept of IWRM has attracted particular attention following
the international conferences on water and environmental issues in
Dublin and Rio de Janeiro held during 1992; however IWRM has
neither been unambiguously defined nor has the question of how it is
to be implemented been fully addressed. What has to be integrated
and how is it best done? Can the agreed broad principles for IWRM be
operationalized in practice – and, if so, how?
Common understanding of IWRM; Global Water Partnership (GWP)
has committed itself to strive to facilitate the sustainable management
of water resources by fostering information exchange and helping to
match needs for solutions to water problems with available tools,
assistance and resources. In order to be able to work together towards
a common objective, there is a clear need for a common understanding
among those involved of what is meant by IWRM. Hence, the purpose
of this paper is to clarify internally within GWP, and among our
partners, how the GWP Technical Advisory Committee (TAC) inter-
prets the IWRM concept and process. In so doing, TAC is building on
the principles to which all governments have agreed at the Dublin and
Rio conferences and which have subsequently been elaborated in the
UN Commission on Sustainable Development process and other fora.
No universal blueprint; Whereas certain basic principles underlying
IWRM may be commonly applicable, independent of context and stage
of economic or social development, there is no universal blueprint as
to how such principles can be put into practice. The nature, character
and intensity of water problems, human resources, institutional
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Integrated Water Resources Management6
1. INTRODUCTION
C

capacities, the relative strengths and characteristics of the public and
private sectors, the cultural setting, natural conditions and many other
factors differ greatly between countries and regions. Practical imple-
mentation of approaches derived from common principles must reflect
such variations in local conditions and thus will necessarily take a
variety of forms.
Target group; The intended audiences for this paper are professionals
and decision-makers, who are already acquainted with water resources
management. Therefore, the paper assumes some familiarity with
fundamental concepts and issues within water resources management.
There is no intention to provide a textbook or an all-comprehensive
document but rather a focused statement giving the “corporate view” of
GWP TAC and placing an emphasis on those issues most fundamental
to IWRM implementation.
Content; The paper has been divided into two main parts. The first
part puts forward a strong case for applying IWRM globally and
defines the IWRM concept and process. The second part provides
additional advice and guidance on how IWRM could be implemented
in different conditions. Readers with limited time may decide to con-
centrate on the first part and use the second part for reference when
needed. The paper is structured in such a way that an executive sum-
mary is not required. However, as a separate publication providing a
short and popular summary the folder “IWRM at a glance” is available.
Integrated Water Resources Management
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GLOBAL WATER PARTNERSHIP
Integrated Water Resources Management8
PART I: WHAT IS IWRM?

3. The main challenges
ecuring water for people; Although most countries give first
priority to satisfaction of basic human needs for water, one
fifth of the world’s population is without access to safe drinking
water and half of the population is without access to adequate sanita-
tion. These service deficiencies primarily affect the poorest segments of
the population in developing countries. In these countries, water
supply and sanitation for urban and rural areas represents one of the
most serious challenges in the years ahead.
Securing water for food production; Population projections indicate
that over the next 25 years food will be required for another 2-3 billion
people. Water is increasingly seen as a key constraint on food produc-
tion, on a par with, if not more crucial than, land scarcity. Irrigated
agriculture is already responsible for more than 70% of all water
withdrawals (more than 90% of all consumptive use of water). Even
with an estimated need for an additional 15-20% of irrigation water
over the next 25 years - which is probably on the low side - serious
conflicts are likely to arise between water for irrigated agriculture and
water for other human and ecosystem uses. Difficulties will be
exacerbated if individual water-short countries strive for food self-
sufficiency rather than achieving food security through trade; by
importing food countries can in effect import water from more gene-
rously endowed areas (the concept of “virtual water”).
Developing other job creating activities; All human activities need
water and produce waste, but some of them need more water or pro-
duce more waste per job than others. This consideration has to be
taken into account in economic development strategies, especially in
regions with scarce water resources.
Protecting vital ecosystems; Terrestrial ecosystems in the upstream
areas of a basin are important for rainwater infiltration, groundwater
recharge and river flow regimes. Aquatic ecosystems produce a range
of economic benefits, including such products as timber, fuelwood and
medicinal plants, and they also provide wildlife habitats and spawning
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Integrated Water Resources Management10
S

rhetoric is replaced by operational mechanisms and actions to ensure
an equitable participation of women in IWRM. Therefore special efforts
must be made to ensure women’s participation at all organizational
levels.
Women as water users; It is widely acknowledged that women play a
key role in the collection and safeguarding of water for domestic and –
in many cases – agricultural use, but that they have a much less
influential role than men in management, problem analysis and in the
decision-making process related to water resources. The fact that social
and cultural circumstances vary between societies suggests that the
need exists to explore different mechanisms for increasing women’s
access to decision-making and widening the spectrum of activities
through which women can participate in IWRM.
IWRM requires gender awareness; In developing the full and effect-
ive participation of women at all levels of decision-making, considera-
tion has to be given to the way different societies assign particular
social, economic and cultural roles to men and women. There is a need
to ensure that the water sector as a whole is gender aware, a process
which should begin by the implementation of training programmes for
water professionals and community or grass root mobilizers.
Principle IV: Water as an economic good
Water has a value as an economic good; Many past failures in water
resources management are attributable to the fact that water has been –
and is still – viewed as a free good, or at least that the full value of
water has not been recognized. In a situation of competition for scarce
water resources such a notion may lead to water being allocated to
low-value uses and provides no incentives to treat water as a limited
asset. In order to extract the maximum benefits from the available
water resources there is a need to change perceptions about water
values and to recognize the opportunity costs involved in current
allocative patterns.
Value and charges are two different things; Concern has been voiced
GLOBAL WATER PARTNERSHIP
Integrated Water Resources Management18

over the social consequences of “the economic good” concept: How
would this affect poor people’s access to water? (While the Dublin
principles refer to water as an economic good, water is referred to as
an economic and social good in Chapter 18 of Agenda 21). To avoid
confusion over this concept there is a need to distinguish clearly
between valuing and charging for water. The value of water in alterna-
tive uses is important for the rational allocation of water as a scarce
resource (using the “opportunity cost” concept), whether by regulatory
or economic means. Charging for water is applying an economic
instrument to affect behaviour towards conservation and efficient water
usage, to provide incentives for demand management, ensure cost
recovery and to signal consumers’ willingness to pay for additional
investments in water services.
Useful water value concepts; The following concepts of water value
have been found useful within IWRM. The full value of water consists
of its use value – or economic value – and the intrinsic value. The
economic value which depends on the user and the way it is used,
include: value to (direct) users of water, net benefits from water that is
lost through evapotranspiration or other sinks (e.g. return flows), and
the contribution of water towards the attainment of social objectives.
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GLOBAL WATER PARTNERSHIP
19
Intrinsic value
Adjustment for
societal objectives
Net benefits from
indirect uses
Net benefits from
return flows
Value to users
of water
ECONOMIC
VALUE
FULL
VALUE
Fig. 2a: General principles for valuing water

attempts should be made to at least estimate the full economic cost as
the basis for allocation.
Managing demand through economic instruments; Treating water as
an economic good may help balance the supply and demand of water,
thereby sustaining the flow of goods and services from this important
natural asset. When water becomes increasingly scarce, continuing the
traditional policy of extending supply is no longer a feasible option.
There is a clear need for operational economic concepts and instru-
ments that can contribute to management by limiting the demand for
water. Importantly, if charges for water goods and services reflect the
full cost involved, managers will be in a better position to judge when
the demand for different water products justifies the expenditure of
scarce capital resources to expand supply.
Financial self-sufficiency versus water as a social good; In order for
water resources management agencies and water utilities to be effective
there is a need to ensure that they have adequate resources to be
financially independent of general revenues. Thus, as a minimum, full
supply costs should generally be recovered in order to ensure sustain-
ability of investments. But high supply costs and social concerns may
require direct subsidies to specific disadvantaged groups. While sub-
sidies “across the board” generally distort water markets and should be
discouraged, direct subsidies for targeted groups may be relevant, but
they need to be transparent. There are, however, several institutional
prerequisites for the successful implementation of targeted subsidies;
these include adequate taxation or general revenue collection systems,
mechanisms to identify the target groups and the capacity to monitor
and follow up on fund utilization. Transparent financial linkages
among different organizations and between users and management
agencies are fundamental to successful implementation of water po-
licies. The principle “subsidize the good, tax the bad” has considerable
merit when exercised in a transparent manner, although it has to be
recognized that all subsidies have to be paid for by someone. In
general, subsidies paid for from taxation will be less distorting than
systems which rely on cross-subsidies between different groups of
consumers; however, it is acknowledged that in many administrations
cross-subsidies are easier to implement.
Integrated Water Resources Management
GLOBAL WATER PARTNERSHIP
21

5. Definition of IWRM
WRM practices depend on context; At the operational level the
challenge is to translate the agreed principles into concrete
action. The response to this is often referred to as Integrated Water
Resources Management (IWRM), with the “M” referring to both “develop-
ment and management”. However, the concept of IWRM is widely
debated and an unambiguous definition of IWRM does not currently
exist. Hence, the regional and national institutions must develop their
own IWRM practices using the collaborative framework emerging
globally and regionally. To guide further work a number of elements,
which have been highlighted in conceptual discussions within and
outside GWP, are given below.
IWRM definition; For the purposes of providing a common frame-
work the following definition of IWRM is used:
GLOBAL WATER PARTNERSHIP
Integrated Water Resources Management22
BOX 2
Definition of IWRM
IWRM is a process which promotes the co-ordinated development and management of water, land
and related resources, in order to maximize the resultant economic and social welfare in an equitable
manner without compromising the sustainability of vital ecosystems.
I

Natural system integration
Integration of freshwater management and coastal zone manage-
ment; Freshwater management and coastal zone management should
be integrated, reflecting the “continuum” of freshwater and coastal
waters. Freshwater systems are important determinants of conditions in
the coastal zone and hence freshwater managers should consider the
requirements of the coastal zone when managing water resources. This
is a special case of the upstream-downstream issue, which is receiving
increased attention in all countries, notably through the recent UN
declaration on land-based sources of pollution, which has led to the
Global Programme of Action – GPA and the Global International
Waters Assessment – GIWA.
Integration of land and water management; An integrated approach
to the management of land and water takes as its departure the hydro-
logical cycle transporting water between the compartments air, soil,
vegetation, surface and groundwater sources. As a result, land use
developments and vegetation cover (including crop selection) influence
the physical distribution and quality of water and must be considered
in the overall planning and management of the water resources.
Another aspect is the fact that water is a key determinant of the
character and health of all ecosystems (terrestrial as well as aquatic),
and their water quantity and quality requirements therefore have to be
taken into account in the overall allocation of available water resources.
The promotion of catchment and river basin management is an
acknowledgement that these are logical planning units for IWRM from
a natural system perspective. Catchment and basin level management
is not only important as a means of integrating land use and water
issues, but is also critical in managing the relationships between
quantity and quality and between upstream and downstream water
interests.
“Green water” and “blue water”; A conceptual distinction can be
made between water that is used directly for biomass production and
“lost” in evapotranspiration (“green water”) and water flowing in rivers
and aquifers (“blue water”). Terrestrial ecosystems are “green water”
dependent, whereas aquatic ecosystems are “blue water” dependent.
GLOBAL WATER PARTNERSHIP
Integrated Water Resources Management24

Most water management, including the literature on IWRM, tends to
focus on the “blue water”, thus neglecting rain and soil water manage-
ment. Management of “green water” flows holds significant potential
for water savings (crop per evaporated drop in rainfed and irrigated
agriculture), increasing water use efficiency and the protection of vital
ecosystems.
Integration of surface water and groundwater management; The
hydrological cycle also calls for integration between surface and
groundwater management. The drop of water retained at the surface of
a catchment may appear alternately as surface- and groundwater on its
way downstream through the catchment. Large proportions of the
world’s population depend on groundwater for water supply. The wide-
spread use of agro-chemicals and pollution from other non-point
sources already pose significant threats to groundwater quality and
force managers to consider the linkages between surface- and ground-
water. Groundwater pollution is frequently, for all practical purposes,
irreversible over a human timescale given present technologies and the
remedy costs involved.
Integration of quantity and quality in water resources manage-
ment; Water resources management entails the development of appro-
priate quantities of water with an adequate quality. Water quality
management is thus an essential component of IWRM. The deteriora-
tion of water quality reduces the usability of the resource for down-
stream stakeholders. Clearly, institutions capable of integrating the
quantity and quality aspects have to be promoted to influence the way
human systems operate in generating, abating and disposing of waste
products.
Integration of upstream and downstream water-related interests;
An integrated approach to water resources management entails
identification of conflicts of interest between upstream and down-
stream stakeholders. The consumptive “losses” upstream will reduce
river flows. The pollution loads discharged upstream will degrade river
water quality. Land use changes upstream may alter groundwater
recharge and river flow seasonality. Flood control measures upstream
may threaten flood-dependent livelihoods downstream. Such conflicts
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GLOBAL WATER PARTNERSHIP
25

of interest must be considered in IWRM with full acknowledgement of
the range of physical and social linkages that exist in complex systems.
Recognition of downstream vulnerability to upstream activities is
imperative. Once again management involves both natural and human
systems.
Human system integration
Mainstreaming of water resources; When it comes to analysing
human activities or service systems, virtually all aspects of integration
involve an understanding of the natural system, its capacity, vulner-
ability and limits. Such integration is inevitably a complex task and
perfect integration is unrealistic. It involves:
• attempting to ensure that governmental policies, financial
priorities and planning (physical, economic and social) take
account of the implications for water resources development,
water related risks and water use;
• influencing private sector decision-makers to make technologi-
cal, production and consumption choices based on the real value
of water and the need to sustain the natural resource assets over
time; and
• providing fora and mechanisms to ensure that all stakeholders
can participate in water resource allocation decisions, conflict
resolution and trade-off choices.
Integrative measures are needed at all levels from the individual house-
hold to international product markets.
Cross-sectoral integration in national policy development; The
IWRM approach implies that water- related developments within all
economic and social sectors should be taken into account in the overall
management of the water resources. Thus, water resources policy must
be integrated with national economic policy, as well as with national
sectoral policies. Conversely, economic and social policies need to take
account of the water resource implications, for instance, national
GLOBAL WATER PARTNERSHIP
Integrated Water Resources Management26

energy and food policies may have a profound impact on water
resources – and vice versa. Hence, developments must be evaluated for
possible impacts on – or requirements for – the water resource, and
such evaluations should be considered when designing and prioritizing
development projects. The development and management of water
resources has an impact on the economy and society through various
pathways, such as migration, settlement growth, and changes in the
composition of industries. Consequently, the water resources manage-
ment system must include cross-sectoral information exchange and
co-ordination procedures, as well as techniques for the evaluation of
individual projects with respect to their implications for the water
resources in particular and society in general.
Macro-economic effects of water developments; In situations where
large amounts of capital are mobilized for water sector investments the
macro-economic impacts are often quite large and deleterious to over-
all economic development. The increased demand for goods and
services in the non-water sectors caused by the capital inflows raises
their prices and thus leads to inflation. This has often induced long-
term macro-economic effects that are far from desirable.
Basic principles for integrated policy-making; Cross-sectoral and
“integrated” policy-making is extremely hard to achieve in practice but
there are basic principles, such as:
• economic planners must carefully assess the inflation, balance of
payments, and macro-economic growth impacts before embark-
ing on any large-scale capital investment program in the water
sector;
• land use policy-makers must be informed about the water
consequences downstream and the external costs and benefits
imposed on the natural water system (e.g. deforestation or
urbanization of catchments could alter water flow regimes and
exacerbate risks such as floods). This does not mean that these
external costs should not be incurred but that the relevant
policy-makers weigh these costs against the expected benefits
arising from their policy or plan;
Integrated Water Resources Management
GLOBAL WATER PARTNERSHIP
27

Overriding criteria; In pursuing IWRM there is a need to recognize
some overriding criteria that take account of social, economic and
natural conditions:
• Economic efficiency in water use: Because of the increasing scarcity
of water and financial resources, the finite and vulnerable nature
of water as a resource, and the increasing demands upon it,
water must be used with maximum possible efficiency;
• Equity: The basic right for all people to have access to water of
adequate quantity and quality for the sustenance of human well-
being must be universally recognized;
• Environmental and ecological sustainability: The present use of the
resource should be managed in a way that does not undermine
the life-support system thereby compromising use by future
generations of the same resource.
Important elements; The IWRM framework and approach recognize
that complementary elements of an effective water resources manage-
ment system must be developed and strengthened concurrently. These
complementary elements include (see Fig. 4):
• the enabling environment – the general framework of national
policies, legislation and regulations and information for water
resources management stakeholders;
• the institutional roles and functions of the various administrative
levels and stakeholders; and
• the management instruments, including operational instruments
for effective regulation, monitoring and enforcement that enable
the decision-makers to make informed choices between
alternative actions. These choices need to be based on agreed
policies, available resources, environmental impacts and the
social and economic consequences.
These three basic elements are described in the following Part II.
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Integrated Water Resources Management
GLOBAL WATER PARTNERSHIP
31
Fig. 4: General framework for IWRM
• Allocation
• Regulations
• Economic tools
• …
• Policies
• Legislation
• Fora and
mechanisms
for participation
• International
cooperation
• …
Enabling
environment
Ma
na
ge
me
nt
ins
tru
me
nts Institutional roles
• Level
of action
• Management
boundaries
• Capacity building
• …
Ecological sustainability
Economic efficiency Social equity

GLOBAL WATER PARTNERSHIP
Integrated Water Resources Management32
PART II: HOW TO IMPLEMENT IWRM

6. The enabling environment
nabling environment; A proper enabling environment is essen-
tial to both ensure the rights and assets of all stakeholders
(individuals as well as public and private sector organizations
and companies), and also to protect public assets such as intrinsic
environmental values. The enabling environment is basically national,
provincial or local policies and the legislation that constitutes the “rules
of the game” and enable all stakeholders to play their respective roles
in the development and management of water resources; and the fora
and mechanisms, including information and capacity building, created
to establish these “rules of the game” and to facilitate and exercise
stakeholder participation.
From top to bottom; In order to achieve efficient, equitable and
sustainable water management within the IWRM approach, a major
institutional change will be needed. Both top-down and bottom-up
participation of all stakeholders will have to be promoted – from the
level of the nation down to the level of a village or a municipality or
from the level of a catchment or watershed up to the level of a river
basin. The principle of subsidiarity, which drives down action to the
lowest appropriate level, will need to be observed.
From companies to communities; Apart from government agencies,
private companies, community based organizations which have full
participation of women and disadvantaged groups, NGOs and other
sections of civil society should be involved. All these organizations and
agencies have an important role to play in enhancing access to water,
in bringing about a balance between conservation and development,
and making water an economic and social good.
The role of government
Government as an enabler; The participatory approach involves
raising awareness of the importance of IWRM among policy-makers
and the general public. The enabling role of government implies that
Integrated Water Resources Management
GLOBAL WATER PARTNERSHIP
33
E

prescriptive, central approaches to developments within the water
sector should be replaced by the creation of a framework within which
participatory, demand-driven sustainable development can take place.
If governments adopt a facilitating and arbitrating role, the burdens on
the state can be alleviated and the performance of public functions
enhanced. governments need to create the conditions under which all
the actors having a stake in a particular issue can become involved and
can negotiate amongst themselves to achieve acceptable solutions to
water problems. However, participation does not mean that govern-
ments can abdicate their responsibilities.
Government as regulator and controller; Policy-making, planning,
water allocation, monitoring, enforcement and final conflict resolution
still need to be the responsibility of government. It is now generally
recognized that government – where possible – should play a
decreasing role as service provider and concentrate more on being the
regulator and controller of specialist service providers. Others, such as
the private sector or independent parastatals, may then provide water
services subject to monitoring and control by some regulatory entity.
The trend away from government provision has been fuelled not only
by concerns over inefficiencies, conflicting interests and the lack of
management transparency but also by the increasing difficulties faced
by many governments in financing the necessary investments in water
resources.
Government as service provider; While all governments should
make a whole-hearted attempt to transfer service provision tasks to
non-governmental stakeholders, this may take many years to achieve in
some countries. Moreover, given that water services contain clear
public good elements (e.g. flood protection and the bulk disposal and
treatment of waste products) continued public investment will be
necessary. Where governments retain provision functions it is an
important principle that provision agencies should not regulate them-
selves; separation of regulatory and implementation functions helps
ensure transparency and accountability.
Improvement of public sector performance; The fact that a fifth of
the world’s population (in general the poorest people) is without access
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tional arrangements. Mechanisms will also be needed to ensure that
trading does not impose external costs on other water users (including
the environment), or allow powerful interest groups to monopolize
supplies and exclude disadvantaged groups from access to essential
services. When governments choose to give a greater role to market
mechanisms, both in the allocation of raw water and in the supply of
services to end users, it is essential that legal and regulatory systems
are in place to cope with market failures.
Water legislation
Legislation is part of a framework for action; Legislation provides
the basis for government intervention and action and establishes the
context and framework for action by non-governmental entities; hence
it is an important element within the enabling environment. Specific
water laws have been enacted in a considerable number of countries,
but some still lack a water resources law per se. Although references to
water resources may be found in the national legislation, these are
often dispersed in a multitude of sectorally oriented laws and may be
contradictory or inconsistent on some aspects of water resource usage.
Legislation and the political will to enforce it; The more scarce
water or capital is, and the more conflicts arise over water, the more
important it is to have in place a coherent and comprehensive water
law. It requires considerable time to establish coherent and com-
prehensive water legislation from a fragmented and outdated legislative
patchwork. Such a comprehensive revision process should not, how-
ever, serve to hold back sound initiatives which address pressing short-
term issues. In many cases the biggest problem is not lack of adequate
legislation but lack of the political will, resources and means to enforce
the existing legislation.
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BOX 3
An IWRM case from Tamil Nadu, India
Although it is too early to review its success, several components of IWRM are being used in the
Vaigai basin of Tamil Nadu in South India, including:
• participation of stakeholders ranging from government agencies to washerwomen;
• a decision support system to quantify implications and trade-offs of alternative water allocation and
policy decisions; and
• political and administrative support from the government and other agencies.
Problems in the Vaigai river basin, a very water-short basin, include:
• conflicts between stakeholders because of multiple uses of water;
• involvement of multiple institutions in various, often overlapping, aspects of basin planning and
management;
• upstream/downstream conflicts; and
• cross-sectoral conflicts resulting from rapidly increasing urbanization even as traditional water
demands remain.
The future poses major challenges for allocation of water and the development of a co-operative frame-
work to make decisions based on full stakeholder participation. This is not possible without holistic
river basin management. A stakeholder group has been set up by the Government of Tamil Nadu to
evaluate various water allocation options.
In order to analyse alternative future scenarios, areas with significant trade-offs and impact changes in
policies, agricultural cropping patterns, a Decision Support System called THANNI ("water" in Tamil
Language) has been developed. THANNI includes an information system and an optimization model to
maximize the benefits from water use subject to a variety of hydrological, economic, legal and policy
constraints. The interface has also been converted into local Tamil language for greater communication
capability. The system provides decision-makers a tool for policy and scenario analysis and stakehol-
ders a focal point for discussions. Next steps include stakeholder groups further developing THANNI to
provide a new interactive paradigm for co-ordinated and co-operative decision-making.

Requirements of legislation; Water legislation should:
• be based on a stated national water resources policy that cuts
across sectoral and stakeholder divisions, addresses water as a
resource and stresses the societal priority for basic human needs
and ecosystem protection;
• secure water (use) rights to allow private and community invest-
ment and participation in water management;
• regulate monopolized access to raw water and water services,
and prevent harm to third parties;
• present a balanced approach between resource development for
economic purposes and the protection of water quality, eco-
systems and other public welfare benefits;
• ensure that developmental decisions are based on sound
economic, environmental, and social assessment;
• ensure the possibility of employing modern participatory and
economic tools where, when and to the extent needed.
Legislation, regulations and by-laws; Amendment of water legislation
is usually a tedious and time-consuming process, and therefore
legislation should be kept at a sufficiently general level, establishing the
rights and obligations of all stakeholders in water management, the
powers and functions of regulatory bodies and the penalties for infrac-
tions of the law. Detailed guidelines and provisions for enforcement
and implementation should be incorporated in the more dynamic parts
of the legislative system, for example the framework of regulations and
by-laws that may be amended in a continuous process as circum-
stances change.
The cross-sectoral and upstream-downstream dialogue
Allocation following dialogue; A critically important element of
IWRM is the integration of various sectoral views and interests in the
decision-making process, with due attention given to upstream-down-
stream relationships. The idea is to incorporate consultation and to
seek consensus with all relevant line ministries at all tiers of govern-
ment, as well as with other stakeholders located in different parts of a
river basin. Only in this way is it possible to plan water allocation
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economic cost recovery or at the very minimum on full supply costs.
Implied or explicit subsidies need to be identified, targeted and imple-
mented in a transparent manner.
Sources of public investment; There are important characteristics of
water that warrant a role for public investment in water-related infra-
structure. For instance, control of floods and waterborne diseases are
public goods, which cannot easily be charged for on the basis of indivi-
dual benefit and use. In addition, the large size and extremely long
time horizons of some investments, combined with the inherent risk of
political interference, may reduce the incentives for private investment.
To ensure adequate financing of the water sector, actions need to be
taken to improve donor-recipient dialogue over financial resource
mobilization and its allocation to water resource development. The
international community and governments (donors and recipients
alike) should be urged to maintain and increase their assistance to the
water resources sector, targeted to solving specific problems. Value can
be added by improving communication and co-operation between
financiers (public, private, national, bilateral and international), by
introducing enabling measures to mobilize the largely untapped com-
munity financing resources and by the provision of credit mechanisms
which foster self-reliance efforts by individuals.
Co-operation within international river basins
Vulnerability of downstream riparians; Roughly half of all land in
the world lies within river basins covering parts of the territory of two
or more countries. Downstream riparians are especially vulnerable
since the origin of the water on which they depend is not within their
national territory. This issue has created and still creates substantial
political tensions and conflicts at the regional level around the world.
Sovereignty requires special conflict resolution mechanisms; The
issue is similar in nature to the classical upstream-downstream issue
often encountered at the national or local level but exacerbated here by
the mixture of national sovereignty. The conflict resolution or priority-
setting mechanisms implemented at national or local level do not
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automatically translate into validity at the international level because of
the well established overriding international principle of national
sovereignty.
Constraints on and potential for sharing transboundary waters;
The enabling environment equivalent to national or local legislation is
international agreement on the principles for managing and sharing
transboundary waters. Although there are substantive principles in
international water law such as equitable utilization and prohibition of
significant harm, there are formal constraints on their application
because countries are not obliged to resort to any third party unless
they agree on a specific conflict resolution procedure. The Helsinki
Rules, the International Law Commission and the UN Convention on
the Use and Protection of Non-navigational Waters are international
instruments designed to facilitate collaboration. At the regional level
Protocols have been developed, as for example the Protocol on Shared
Watercourse Systems in the Southern Africa Development Community
(SADC) Region. At the river basin level (including shared lakes and
groundwater aquifers) a large number of commissions and agreements
have been established. Common to most of these agreements is the lar-
ge gap between rhetoric and action, not only at the political level in
terms of willingness to cooperate, but also at the practical level of
establishing the proper data and information base and the analytical
tools needed for meaningful collaboration.
The need for negotiated agreements for water use; While there are
extreme positions in the law of international watercourses, such as
absolute sovereignty and absolute territorial integrity, international
courts have favoured the concept of community of interests among
riparian countries. Riparian States should co-operate on transboundary
water resources, searching for negotiated agreements respecting all
riparian countries’ interests and based on equitable and reasonable use
of water. The international community and water-related organizations
could act as catalysts and brokers for reaching such negotiated agree-
ments. Such agreements are often part of more global agreements
where it may be easier to reach a satisfactory balance between the
interests of the parties.
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Joint committees as a mechanism for management; Often, a useful
step towards the joint management of shared waters is the setting up of
a joint committee or commission with the objective of sorting out and
agreeing on facts about the present status and use of the shared water
resources.
7. The institutional roles
lawed demarcation as a constraint on IWRM; When discus-
sing the roles and functions of organizations at different levels,
it is important to stress that there can be no blueprints valid for
all cases. This is an area where stage of development, financial and
human resources, traditional norms and other specific circumstances
will play an important part in determining what is most appropriate in
a given context. Nevertheless, institutional development is critical to
the formulation and implementation of IWRM policies and program-
mes. Flawed demarcation of responsibilities between actors, inadequate
co-ordination mechanisms, jurisdictional gaps or overlaps, and the
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BOX 4
International co-operation
Ten countries share the Nile basin. Building on earlier cooperative efforts, nine of these countries have
agreed to form a regional partnership known as the Nile Basin Initiative (NBI). Launched in February
1999, the NBI seeks to harness the tremendous potential of the Nile through sustainable development
and management of its waters for mutual benefits.
The shared vision of the NBI is "to achieve sustainable socio-economic development through the equit-
able utilization of, and benefit from, the common Nile Basin water resources."
The NBI is governed by a council of ministers responsible for water affairs in the Nile Basin countries.
The council is supported by a Nile Technical Advisory Committee and it maintains a secretariat in Ente-
bbe, Uganda.
F

failure to match responsibilities, authority and capacities for action are
all major sources of difficulty with implementing IWRM. The agencies
involved in water resources management have to be considered in their
various geographic settings, taking into account the political structure
of the country, the unity of the resource in a basin or aquifer and the
existence and capacities of community organizations. Institutional
development is not simply about the creation of formally constituted
organizations (e.g. service agencies, authorities or consultative commit-
tees). It also involves consideration of a whole range of formal rules
and regulations, customs and practices, ideas and information, and
interest or community group networks, which together provide the
institutional framework or context within which water management
actors and other decision-makers operate.
The importance of effective co-ordination mechanisms; A key issue
is the creation of effective co-ordination mechanisms between different
agencies. It should not be assumed that integration in the sense of
organizational consolidation automatically leads to co-operation and
co-ordination which in turn leads to the improved effectiveness of
water resources management. Fragmented and shared responsibilities
are a reality and are always likely to exist. There are many examples
where agencies or responsibilities have been merged without significant
performance improvements; conversely, there are several examples
where the existence of effective co-ordination mechanisms has allowed
problems to be handled well despite the need to involve several
agencies. It is clear that the simple act of putting all water functions
within one agency will not necessarily remove conflicts of interest;
decisions about priorities are then made within the agency with the
danger of loss of transparency.
Roles and functions of organizations at different levels
National level bodies; In many cases the establishment of an “Apex”
body at the national level may be desirable for the accomplishment of
IWRM. It should at least be responsible for developing policies and
strategies, and for co-ordination and national planning regarding water
resources. Preferably, it should be independent of major users of water
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and should report to government at a high level. National organiza-
tions may also have an information gathering and dissemination role
and under some conditions may act to regulate and monitor the per-
formance of lower tier organizations.
Bottom-up and top-down strategies; In developing policy-making,
implementation mechanisms, consultative, co-ordinating and regula-
tory bodies, attention has to be paid to the appropriate scale at which
they operate. A key tenet of IWRM is that traditional top-down
approaches to management have to be supplemented by, and indeed
partly replaced by, bottom-up strategies to ensure that the water sector
is demand-driven and can deliver welfare gains to the whole range of
end users. For bottom-up strategies to be effective new institutions are
likely to be needed. In many situations it will be essential to create
community based organizations, which can actively participate in the
development and management of water supply systems. In other situa-
tions democratically elected and representative consultative committees
and market mechanisms may be the appropriate means by which users
can convey their demands for water goods and services to providers.
Bottom-up strategies do not mean that the complete devolution of
decision-making to the local or community level is desirable or feas-
ible; an appropriate balance has to be struck between community-level
organizations and governmental bodies.
State/provincial/regional level management; In many countries water
is managed at the State/provincial/regional level rather than at the
national level. Being normally closer to both the resource and service
users, this level of government would typically need to consider such
issues as the allocation of water and wastewater discharge permits,
charging for water, enforcement of standard or permit conditions,
monitoring and assessment of water resources, adjudication of conflicts
and broad landuse planning issues. Some countries have grouped
municipalities, industries and other water users into special-purpose
organizations in order to implement water management measures.
Sub-national level organizations may also have regulatory functions to
ensure that local level service providers are fulfilling their duties
effectively.
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River basin/aquifer/catchment management structures; Water flows
according to natural characteristics and does not respect administrative
boundaries – therefore the question arises: should water be managed
and management structures defined according to existing administra-
tive boundaries or according to natural boundaries, usually taken to be
river basins? From a pure water resource point of view there might be
much logic in adopting a river basin approach, or at least considering
the river basin as the logical planning unit. However, in accordance
with the principle of demand-driven development, a river basin
organization should only be established in response to a perceived and
expressed demand, typically expressed by multiple users. Existing
administrative divisions and regulatory conditions might discourage
the management of water according to river basin boundaries. It
should also be noted that river basin agencies cannot in themselves
ensure the sustainable development of the resource. They will need to
be supported by a range of institutions that help determine the
demands placed on the resource by economic, social and political
change.
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BOX 5
River basin management in France
A law in December 1964 divided the whole territory of France among six Water Agencies, their spatial
limits following hydrological divisions. Each Agency is organized as follows:
• the staff prepares the program, and implements it after approval (the conscience);
• a committee of about 60 representatives of all stakeholders involved approves the program, the fees,
the grants and loans (the forum).
Each Agency has the following duties:
• establish five years’ water management investment programs;
• collect fees for each m3 of water abstracted from the natural water resource and for each ton of
waste discharged into the natural water resource;
• issue grants or low-interest loans to all actors (cities, industries, etc.) who contribute to the imple-
mentation of the five-year program. Expenses and revenues have to be in balance over this five-year
program (the budget).

Elements for the success of a basin organization; Depending on the
actual conditions and priorities, river basin (or lake basin or aquifer)
organizations may range from being executive bodies with mandates
for the allocation of water rights and fee collection to purely advisory
bodies advising existing administrative and executive bodies. As an
example, the French experience with this system suggests that three
elements are essential for the success of an active organization:
• A conscience, embodied in the staff and responsible for the
collection and assessment of water resources information in the
basin, facilitation of co-ordination and negotiation between
stakeholders, preparation of plans and proposals for investment
and collection of fees for water use and wastewater discharge.
• A forum for all stakeholders to discuss and make actual decisions
on water resources issues, acting as a kind of a “water parlia-
ment” for the river basin. Its responsibility is to supervise the
“conscience”, to discuss, modify and approve its proposals. The
forum should also approve the budget of the river basin orga-
nization. Central government should participate in the forum
and the national parliament be informed of the river basin orga-
nization activities, in order to ensure the necessary links with
national policies.
• A budget to sustain the organization, and to finance the necessary
operations and investments in water-related infrastructure. The
budget might be based on charges for water use and wastewater
disposal. The river basin organization may encourage sustainable
water use by allocating loans and grants to cities, industries or
individuals willing to invest in facilities that contribute to the
overall goals of IWRM in the basin. Hence, there is a direct link
between what is charged for water and what is invested in water.
An international role for basin organizations; River basin organiza-
tions may also provide a useful mechanism for management of inter-
national water resources. There are numerous examples of such bodies,
with varying objectives and functions from around the world, which
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suggests that they may contribute to the peaceful, equitable and
negotiated management of shared waters. The mere existence of such
bodies, providing a forum for the articulation of views and negotiation,
encourages states to discuss and solve their mutual problems before
disagreements escalate to a crisis level.
The role of local government; In a number of countries the provision
of water supply and sanitation services is devolved to local govern-
ments. While this should help ensure that service delivery is more
attuned to consumer priorities, and that providers are more account-
able for their actions, several important issues are raised by devolution:
• To achieve efficiency it is important to distance the provider
from short-term political interference;
• The finances of the provider need to be clearly differentiated
from the general accounts of the local government unit;
• To minimize the danger of capture, performance monitoring,
benchmarking and some aspects of regulation may be more
appropriately entrusted to a higher tier of government or some
independent agency;
• Institutions are needed to ensure that local providers cannot
ignore the effects of their actions on downstream water users or
other stakeholders in the catchment;
• Provision of co-ordination mechanisms may be necessary if the
boundaries of local governments fail to cover all customers or if
more than one local authority exists in an area;
• Small municipalities may need to consolidate their water service
facilities and/or activities in order to fully realize economies of
scale and scope; and
• It is important that local government recognizes that land use
planning, economic development and social policies can all have
a profound effect on water demand and the production of water-
borne waste.
Civil society and community participation; These groups should be
encouraged to participate in operational water resources management.
For instance, irrigation schemes may be transferred, with appropriate
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regulations, from the government to farmer associations, and com-
munity based organizations may be made responsible for the operation
and maintenance of local water supply systems. In this way, there is a
better chance of establishing a sense of ownership, which is often a
precondition for improved and more sustainable management of assets
and resources. As mentioned earlier there is also considerable scope for
public-private partnerships and private operators, including commu-
nities and NGOs, to play a role in water resources management. The
exact role played by each of these actors needs to be assessed in the
light of local economic, social and political circumstances.
Institutional capacity building
Capacity building for problem solution; Institutional capacity build-
ing is a means of enhancing performance. In the context of IWRM,
capacity building is the sum of efforts to nurture, enhance and utilize
the skills and capabilities of people and institutions at all levels –
locally, nationally, regionally and internationally – so that they can
make better progress towards a broader goal. At the basic conceptual
level, building capacity involves empowering and equipping people
and organizations with appropriate tools and sustainable resources to
solve their problems, rather than attempting to fix such problems
directly. When capacity building is successful, the result is more
effective individuals and institutions that are better able to provide
products and services on a sustainable basis.
Training accompanied by incentives; Human resources development
through training, education and provision of information is a key
dimension of capacity building. Training is not, however, enough. If
new skills or ideas are actually to be used, institutions and individuals
need incentives to change practices and approaches; such incentives
will need to be consistent with the broader goals of the institutions
concerned. Improved human resources are a key factor in bringing
about institutional capacity building. The ability of an institution to
adapt to changing demands depends to a large extent upon its ability
to adapt its human potential – the knowledge, perspectives and skills
of its staff.
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Conditions for fulfilment of institutional mandates; Equally
important for an institution’s capacity to fulfil its mandate is the proper
devolution of institutional responsibilities, functions and jurisdictions.
This is likely to involve solving problems of jurisdictional overlaps and
competition between institutions, in addition to the creation of proper
and sustainable financing mechanisms.
8. Management instruments
he importance of a “tool box”; The management instruments
for IWRM are the tools and methods that enable and help
decision-makers to make rational and informed choices
between alternative actions. These choices should be based on agreed
policies, available resources, environmental impacts and the social and
economic consequences. A wide range of quantitative and qualitative
methods is being offered by systems analysis, operations research and
management theory. These methods, combined with a knowledge of
economics, hydrology, hydraulics, environmental sciences, sociology
and other disciplines pertinent to the problem in question, are used for
defining and evaluating alternative water management plans and
implementation schemes. The art of IWRM is about knowing the
available elements of the “tool box” and selecting, adjusting and
applying the mix of tools appropriate to the given circumstances.
Water resources assessment: availability and demand
The importance of water resources assessments; Management of
water resources requires an understanding of the nature and scope of
the problem to be managed. How are all relevant water resources
problems identified? How can we make sure that we acquire useful
information which enables us to identify and assess existing and
potential future water resources problems and solutions? Carrying out
water resources assessments is a useful way of acquiring such informa-
tion as a basis for management.
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T

The need for a water resources knowledge base; In many countries
available information about the water resources situation is scarce, frag-
mented, outdated or otherwise unsuitable for management purposes.
Without adequate access to scientific information concerning the
hydrological cycle and the associated ecosystems it is not possible to
evaluate the resource or to balance its availability and quality against
demands. Hence, the development of a water resources knowledge
base is a precondition for effective water management. It takes stock of
the resource and establishes the natural limits for management.
Objective of water resources assessments; The concept of water
resources assessments is here interpreted to imply a holistic view of the
water resources situation and its interaction with societal use in a
country or region. The assessment should address the occurrence in
space and time of both surface- and groundwater quantities and asso-
ciated qualities, and give a tentative assessment of the water require-
ments for the assumed development. In this respect there is a distinct
need for comparative measures of water use efficiency and intensity in
use (i.e. product per drop). At the initial stage the assessment would
preferably be based – to the largest extent possible – on existing data
and knowledge in order to avoid any unnecessary delay in the process
of implementing management improvements. The objective of the
assessment is not to solve the problems but to identify and list the
problems and identify priority areas within which more detailed invest-
igations may be carried out.
Demand as a function of user behaviour and preferences; It is
important to stress that the water knowledge base must include data
on the variables which influence demand; only with such data can a
flexible and realistic approach to assessing water demands be taken. If
not considered in a context of water scarcity and competition, sectoral
planners may be overly optimistic about possible development and
associated water requirements. Effective demand management may
influence demand figures significantly. The use of scenario building for
water demand projections may be advantageous and serve to identify
possible ranges for various categories of future water demands. In
addition, assessing effective demand by analysing the behaviour of
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users as they react to water scarce situations provides key information
that is vital to determining appropriate pricing policies.
The importance of monitoring and gauging systems; The assess-
ment of water resources availability and quality, and their possible
long-term changes through consumptive water use, climate or land use
change, are highly dependent on reliable data from monitoring and
gauging systems; this indicates the need for resources to be allocated
for the investment, operation and maintenance of this aspect of water
infrastructure. This is sometimes neglected in favour of allocation of
financial resources to the construction of more tangible assets such as
water supply systems or dams. However, considering the potential
economic implications of, for example, deciding to build a hydropower
plant based on unreliable river flow data, it turns out that money spent
on the collection of water resources data may entail considerable
savings in investment costs.
Environmental Impact Assessments (EIA); EIA plays a central role
in acquiring information on the social and environmental implications
– including water resources implications – of development program-
mes and projects, identifying the measures necessary to protect the
resource and related ecosystems and then ensuring that such measures
are implemented. The IWRM approach implies that sectoral develop-
ments are evaluated for possible impacts on the water resource and
that such evaluations are considered when designing as well as giving
priority to development projects. EIAs are concerned not only with
impacts on the natural environment but also with effects on the social
environment. Hence, the EIA touches the heart of the need for cross-
sectoral integration involving project developers, water managers,
decision-makers and the public, and provides a mechanism or tool to
achieve this.
Risk assessment tools; Risks associated with IWRM come in different
shapes – usually related to extreme climatic events, public health and
environmental damage (in addition to business related risks). It is
never possible to eliminate risk. Well-established techniques are
available to undertake hazard (frequency and magnitude of events) and
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alternative water uses and projects on the one hand, and other social
investments on the other.
Information needs for stakeholder involvement; In order to en-
courage stakeholder participation in water resources management, and
in order for the participatory process to be effective, the availability of
timely and relevant information to all concerned is an essential precon-
dition. Therefore, adequate official surveys and inventories of water
sources and supplies, up-to-date registers and records of water uses
and dischargers, water rights, and the beneficiaries of such rights, with
their respective water allocations, should be made available to the
public. In addition the results of benchmarkings and performance
evaluations of service providers should be made publicly available as
this contributes to the competitive and transparent provision of water
services.
Stakeholder communication strategies; Concrete strategies for
communication with all actors and stakeholders need to be devised. In
the area of EIA there have been attempts to institutionalize public
participation through, for instance, public information sessions, expert
panel hearings, citizen juries and similar methods. The “water sector”
might take advantage of the experiences gained in this area. However,
the most appropriate method in each case needs to take account of
local social, political, cultural and other factors.
Openness and transparency; Some countries have little experience of
conducting water resources management in an open and transparent
manner with full public access to information. Decision-making has
often been left to professionals and scientific experts, thus excluding
other stakeholders from the process. A continuation of this approach
will be counterproductive to assuring broad participation and private
sector investment in water management.
International exchange of information; Especially when dealing with
international water courses, openness and sharing of information are
key to the achievement of IWRM since all involved riparian countries
have “natural monopolies” in data collection and dissemination within
their national territories.
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Water allocation and conflict resolution
Issues in allocation; To allocate water efficiently and effectively to
competing users, the following issues have to be addressed:
• When markets do not fully capture the total value of water
other mechanisms have to be used to allocate water to the
highest value uses and users;
• Market mechanisms (trading systems and/or full cost pricing
through valuation) could be improved in conjunction with the
formulation of appropriate regulatory systems; and
• Conflict resolution mechanisms may be used to facilitate water
sharing among competing users such as upstream and down-
stream stakeholders
Allocation by market-based instruments; Normal goods and services
that are exchanged through perfectly functioning markets get allocated
to their highest valued use. In the water case, because of the intrinsic
attributes of the resource and because of the way it has been managed
historically, not all water values (including social and environmental
values) are or indeed can be reflected in market prices. Thus, full cost
pricing tools through valuation and enhanced water trading are needed
to complement and correct the faulty market valuation processes.
Using valuation to resolve conflicts; The process of determining the
value of water to various stakeholders could enhance their participa-
tion in decision-making and contribute to resolving conflict. These
tools would not only ensure that existing water supplies are allocated
in a sustainable fashion to the highest-value uses but would also enable
water managers to determine when the users are willing to pay the
costs of investing in additional water-dependent services.
Resolution of upstream-downstream conflicts; Conflicts among
upstream users and downstream users within a country tend to be
pervasive and usually result in undue delays in the implementation of
water resources development projects. Currently, such conflicts may be
resolved through political negotiations or the involvement of the
judiciary. However, experience shows that the involved parties often
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use such negotiations to postpone agreements on water sharing. It is
important to note that resolving upstream-downstream conflicts
requires acceptable estimates of water resource availability over time,
taking into account return flows and the effects of catchment develop-
ment on evaporation losses and run-off. One way to resolve such
conflicts is to involve water users and other stakeholders who will be
affected by the water resources development project. As a safeguard for
parties negatively affected by the status quo, governments should also
always have a default compulsory jurisdiction function for conflict
adjudication. Unless governments have such powers the parties bene-
fiting from the status quo have no incentives to enter negotiations or
accept mediation to solve the allocative conflicts from which they
derive a benefit.
Conflict management techniques; A wide range of conflict manage-
ment techniques, involving both consensus building or conflict preven-
tion and conflict resolution, is available to assist stakeholders in their
negotiations. Decision-makers could integrate this expertise and
experience more widely in the water sector. Empirical research is
required to evaluate and learn from the experience so far gained (e.g.
in USA, Australia) in attempts to resolve conflicts between upstream
and downstream users and between different sectoral interests.
Valuation by conflict resolution methods; The fact that not all
services provided by water and water- related ecosystems can be valued
in an objective and quantitative manner, independent of the value
systems of those involved, also links valuation directly to conflict
resolution techniques. In the presence of a market, the agreed price is
an indicator of the value of the good or service and serves to prevent
conflicts. In the absence of a market, values can be approximated
through explicit valuation techniques that transform attributes into
their monetary units, or they can be determined implicitly through
conflict resolution methods (i.e. every agreement reached also implies
an agreed value of the goods and services provided in the uses con-
sidered in the conflict).
Valuation research on environmental benefits; There is a special
need to develop further methodologies for valuing the benefits of
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categories of users – to obtain permits for abstraction or discharge of
water. The regulations would describe the procedures to be followed in
applying for permits and the criteria for granting permits. As a general
rule it should be ensured that only executive regulations which are
enforceable be implemented. If the existing enforcement capacity is
deemed insufficient, regulations should be simplified or abandoned.
Water right systems; While in most countries water is considered a
national asset under public ownership, there are some countries which
implicitly treat water as an unlimited resource, where it is de facto a
“common resource” without clearly defined property rights. In other
countries water rights are linked to land tenure, with inadequacies and
conflicts occurring because of the non-stationary nature of water and
inter-connections within the hydrological cycle (who owns the water
flowing in the river, and how can the necessary multiple use of water
be accounted for?). Stable and secure water rights should be pursued
because they are an important incentive for private investment. In
granting water rights it is, however, equally important to prevent the
waste of water, monopolization, harm to third parties and environ-
mental degradation. Thus, water rights are rights to use certain
amounts of water rather than the right to the ownership of the
resource itself. Many systems also include provisions for penalizing the
non-use of allocated resources.
Standards and guidelines; These instruments have been widely
applied to:
• control the quantity of water withdrawn by users from the
natural water system within set time periods;
• control the discharge of waste products into water courses
(controls can be placed on the quantity, quality, timing and loca-
tion of discharges);
• require specific technologies to be employed (technology
standards) to either reduce water use or waste loads; and
• specify product standards, both for water provided for specific
users and for goods which are potentially polluting (e.g. water
efficiency standards).
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59

be taken into account at the same time? At a minimum, full supply
costs should be recovered in order to ensure sustainability of invest-
ment and the viability of service providers. However, in many situa-
tions, even the achievement of this objective may require direct
subsidies for years to come. Poverty alleviation policies might be in-
compatible with abrupt implementation of full supply cost recovery in,
for instance, some surface irrigation systems. In the provision of
municipal and rural water supply there are well-established practices of
cross-subsidization from better-off water users to the poor. The use of
cross-subsidies does not necessarily compromise the financial sustain-
ability of utilities but they distort prices and patterns of demand. For
management purposes such subsidies should be made in a transparent
manner and, where possible, direct subsidies are the preferred option
to reduce distortions in the system. Under normal circumstances
industries should meet at least the full economic cost of the supplied
water.
Tariffs as incentives; In the domestic sector the scope for reducing
water consumption may be relatively small because of the need to
provide enough water to meet basic health and hygiene requirements.
GLOBAL WATER PARTNERSHIP
Integrated Water Resources Management62
BOX 6
Focal subsidies – Chilean experience
Chile has been able to implement a well-working system of focal subsidies in the water and sanitation
sector. The success of the system depends on the concerted effort and institutional capabilities of the
national government, the municipalities and the water companies.
Other countries in Latin America have attempted to replicate the very successful Chilean experience.
However, the funds available did not match the needs of the users, neither did the institutional
capability of governments match the monitoring requirements of system implementation and enforce-
ment. For this reason some countries, such as Argentina, have resorted to traditional cross-subsidies,
despite the obvious drawbacks of the system.
The lesson is that before suggesting either focal or cross- subsidies, countries and financing institutions
should ensure not only financial and economic viability, but also that institutional structures do allow
efficacious implementation.

Nevertheless, reductions are possible and overall, tariff or fee setting
that sends the right price signals to water users is an important
element of much-needed demand management. In irrigation, pricing
may be used to encourage a shift from water-intensive crops to other
crops.
Fee structures; Water tariffs provide little incentives for the sustain-
able use of water if charged at a flat rate independent of the amount
used. In such cases, setting the right fee structure, imposing progres-
sively higher unit cost prices on high-volume users, may induce the
more judicious use of the resource, although the level of demand
reduction will depend upon the nature of the high-volume users. Such
a structure also contributes to the financial sustainability of water
authorities and to covering the cost of administering water resources
management.
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GLOBAL WATER PARTNERSHIP
63
BOX 7
Tariffs and fees
There is scattered but compelling evidence that improved policies can have major impacts and at least
20-30% of water used by households and industries can be saved by applying appropriate policy
instruments. Experience shows that higher water prices and pollution charges result in a "win-win"
situation of water conservation and reduced water pollution. Two examples are reported below:
In Bogor, Indonesia, as a result of a tariff increase of 200-300% for different consumer groups in 1990,
a household with a monthly consumption of more than 30m3 had to pay $0.42 for a cubic meter of
water (exceeding consumption of 20m3 ) instead of $0.15. This produced significant reductions -
around 30% - in water use for the affected groups.
In Sao Paulo, Brazil, in 1980, three industrial plants were requested to pay effluent charges to the
central effluent treatment facility. The companies decided to economize production through changes in
processes, substitution of inputs, use of more efficient equipment, and use of mechanical washing
instead of manual washing. In the pharmaceutical industry, the volume of effluent (and of water
consumption) per unit of output in 1982 was 49% less than in 1980. In the food processing industry,
effluent and water consumption were lower by 42% per unit of output compared with 1980. The steps
taken to achieve these reductions were changes in washing processes and effluent recycling, and
modifications in cleaning processes. In the dairy industry, the effluents and water use were lowered by
62% through improvements in the washing process and expansion of the on-site treatment plant.

Fees for wastewater discharges; In accordance with the ‘polluter-
pays-principle’, effluent fees may be levied on waste water discharges;
these should be set to reflect both the cost of environmental extern-
alities and those associated with treating polluted wastewater or the
recipient waters. The fees can be related to both the quantity and
quality of individual discharges and then adjusted carefully to create
optimum incentives for polluters to introduce improved treatment
technology, reuse water and minimize the pollution of water resources.
This tool needs to be combined with regulatory measures to control
and monitor the contaminants discharged and is especially suited for
industrial polluters. A judicious mix of progressive water tariffs and
pollution charges will provide adequate incentives for water conserva-
tion, recycling and reuse within industries.
Water markets; Under the right circumstances water markets can
improve the efficiency of water resources allocation and help ensure
that water is used for higher-value purposes. This, however, requires
an appropriate regulatory and institutional framework in order to ac-
count for market imperfections and other external effects, as described
in the section “The role of government”.
Taxes; Product charges or taxes on environmentally damaging pro-
ducts may be a powerful tool in affecting behaviour and are especially
suitable where the users have alternative production or waste disposal
choices which are less environmentally harmful. This tool could be
applied for both products involving high water consumption and pro-
ducts which contribute to water pollution. For non-point pollution
problems, especially those related to the use of agrochemicals, this
option has proved to be the most useful tool, since direct discharge
control or treatment options are not feasible here. Hence, the reduction
of pollution is achieved through decreased use of agrochemicals as a
response to higher product prices. However, any adverse effects on
food production of higher prices for fertilizers and pesticides would
have to be considered.
GLOBAL WATER PARTNERSHIP
Integrated Water Resources Management64

Encouraged self-regulation
Guidelines and information; Controlling information can be a low-
intervention mode of regulation. Two common versions exist:
mandatory disclosure of performance data or labelling of products and
controls over false or misleading information. Transparency of informa-
tion can not only provide water service providers with incentives to
improve their performance (e.g. benchmarking league tables) but also
allows civil society and governmental bodies to judge and push for
performance improvements. In recent years the high costs of command
and control regulation has encouraged the development of ”self-
regulatory” mechanisms, supported by appropriate procedures for
performance monitoring. For example, professional organizations may
produce best practice guidelines or governments may introduce
”quality” hallmarking schemes; such schemes are now quite common
in the environmental and product safety areas and may be a useful
addition to the water sector tool box.
Integrated Water Resources Management
GLOBAL WATER PARTNERSHIP
65
BOX 8
Water markets
Water markets are widely utilized in the American West. Available water supplies and water rights are
quantified and recorded. Water rights are granted under conditions of effective and beneficial use.
Transfers are supervised and monitored by regulatory institutions. These markets have been active.
Other countries have implemented water markets without requirements of effective and beneficial use.
Government supervision is minimal. These markets have not been active.
The lesson learnt is that markets that operate under close government regulation, under the principles
of effective and beneficial use, and prevention of harm to third parties and the environment, have
promoted efficient and equitable water reallocations.

wider application of desalinization as a cost effective method for fresh-
water provision. Water managers must keep abreast of developments
and be willing to experiment and co-operate with other sectors.
Technology choices; In addition to the above-mentioned promising
prospects, a word of caution is warranted on the issue of technology.
Many projects in the water sector have failed due to the uncritical
application in developing countries of technologies that have worked
in industrialized nations but in totally different physical, social and
economic settings. It has to be realized that technological choices must
take account of specific conditions prevailing at the location of use.
This means that the most advanced and modern technology is not
necessarily the optimal choice in all cases. If the system cannot be
sustained because of lack of spare parts, skilled manpower or
economic resources for operation, it is not the most appropriate solu-
tion. Moreover, high-cost technologies can prevent community and
household involvement in water management.
List of abbreviations
BAT Best Available Technology
GPA Global Programme of Action
CSD Commission of Sustainable Development
EIA Environmental Impact Assessment
GWP Global Water Partnership
GIWA Global International Waters Assessment
IWRM Integrated Water Resources Management
NGO Non-Governmental Organization
O&M Operation and Maintenance
SADC Southern Africa Development Community
TAC Technical Advisory Committee
UNCED United Nations Conference on Environment and
Development
Integrated Water Resources Management
GLOBAL WATER PARTNERSHIP
67

Global Water Partnership (GWP), established in 1996, is an international network open to all
organisations involved in water resources management: developed and developing country
government institutions, agencies of the United Nations, bi- and multilateral development banks,
professional associations, research institutions, non-governmental organisations, and the private
sector. GWP was created to foster Integrated Water Resources Management (IWRM), which aims
to ensure the co-ordinated development and management of water, land, and related resources
by maximising economic and social welfare without compromising the sustainability of vital
environmental systems.
GWP promotes IWRM by creating fora at global, regional, and national levels, designed
to support stakeholders in the practical implementation of IWRM. The Partnership’s governance
includes the Technical Advisory Committee (TAC), a group of 12 internationally recognised
professionals and scientists skilled in the different aspects of water management. This committee,
whose members come from different regions of the world, provides technical support and
advice to the other governance arms and to the Partnership as a whole. The TAC has been
charged with developing an analytical framework of the water sector and proposing actions that
will promote sustainable water resources management. The TAC maintains an open channel with
its mirror bodies, the GWP Regional Technical Advisory Committees (RTACs) around the world
to facilitate application of IWRM regionally and nationally. The Chairs of the RTACs participate
in the work of TAC.
Worldwide adoption and application of IWRM requires changing the way business is
conducted by the international water resources community, particularly the way investments are
made. To effect changes of this nature and scope, new ways to address the global, regional,
and conceptual aspects and agendas of implementing actions are required.
This series, published by the GWP Secretariat in Stockholm has been created to disseminate the
papers written and commissioned by the TAC to address the conceptual agenda. Issues and
sub-issues with them, such as the understanding and definition of IWRM, water for food security,
public-private partnerships, and water as an economic good have been addressed in these
papers.
This paper is printed on swan-marked paper.
The Nordic swan mark guides consumers to the most
environmentally sound products. To acquire the swan
symbol, producers must adhere to strict guidelines which
are revised on an ongoing basis. This paper was produced
according to these guidelines.
Previously published papers in the TAC Background Papers Series:
• No 1: “Regulation and Private participation in the Water and Sanitation
Sector” by Judith A. Rees (1998)
• No 2: “Water as a Social and Economic Good: how to Put the Principle into
Practice” by Peter Rogers, Ramesh Bhatia and Annette Huber (1998)
• No 3: “The Dublin Principles for Water as Reflected in a Comparative
Assessment of Institutional and Legal Arrangements for Integrated Water
Resources Management” by Miguel Solanes and Fernando Gonzales-
Villarreal (1999)

Integrated Water Resources Management
Global Water Partnership
Technical Advisory Committee (TAC)
GWP Secretariat, Sida, SE -105 25 Stockholm, Sweden. Office: Sveavägen 24-26, Stockholm
Telephone +46 (0)8 698 50 00 Telefax +46 (0)8 698 56 27
E-mail gwp@sida.se www.gwpforum.org
Global Water Partnership
ISBN: 91-630-9229-8
TAC BACKGROUND PAPERS NO. 4