Speech by the Prince of Orange at the OESO Global Forum on Environment

Secretary-General, Excellencies, ladies and gentlemen,

First I would like to thank Mr Gurría for his introduction and kind words.
It is a great pleasure to be with you today at the OECD Global Forum on Environment.

The title of the forum 'Making Water Reform Happen' really goes to the heart of the challenge. Designing and preparing water reform policies is one thing. But putting them into practice and making them work in reality is another. I am grateful to the OECD for bringing the need for Water Reform to the attention of policymakers and practitioners. This is a defining year, with milestone events like the Bonn conference on the Energy, Food, Water Security Nexus, the Sixth World Water Forum and Rio+20.

I am speaking to you as Chair of the UN Secretary-General's Advisory Board on Water and Sanitation (UNSGAB). The Board was established in 2004 to galvanise governments, international organisations, NGOs and development banks to work together to meet the Millennium Development Goal targets for water and sanitation.

UNSGAB and the OECD are closely related. Angel Gurría is a respected member of our Board. UNSGAB and the OECD have worked together on issues related to strategic financial planning, tracking ODA flows for water and sanitation and encouraging donors and developing countries to enhance the catalytic effect of ODA for water and sanitation outcomes.

I would like to take this opportunity to describe the objectives we are promoting through the UN Conference on Sustainable Development, Rio+20.
They are: universal access to drinking water and sanitation, innovation in wastewater management and increased water productivity in agriculture to ensure both water security and food security. We believe in the importance of contributing to the Rio+20 process since the Summit should help frame the development agenda for the foreseeable future.

A central message focuses on basic sanitation. Despite impressive development gains since 2000, we are simply not making enough progress. There are still 2.6 billion people in the world with no access to decent sanitation. We are not keeping pace with demographic growth. If current trends continue, in 2015 more people, not fewer, will lack basic sanitation facilities than in 2002. These are daunting statistics, and behind them, immeasurable human suffering, disheartening global inequity, lost opportunities for economic growth, and growing environmental degradation.

It is becoming increasingly clear that many people lack knowledge about the importance of sanitation to their potential development and health. This underlines the value of education and behaviour change for making progress on sanitation. Investments in hardware are of course essential, but they need to go hand in hand with sanitation and hygiene education. What good is a latrine if people don't use it?

What should be done? People need to be informed about the health benefits of basic sanitation and hygiene to create community demand for toilets. Demand will prompt governments to act. We know that given the choice between a television or a toilet, the television usually wins. This is not surprising, but it points to the urgent need for more effective education about the health benefits derived from basic sanitation and good hygiene.

Recently, the United Nations demonstrated a genuine willingness to push sanitation to the centre of the international development agenda. One month ago, the UN Human Rights Council unanimously adopted a resolution on the human right to safe drinking water and sanitation. And last December, the UN General Assembly unanimously adopted a resolution calling for an end to open defecation, through increased funding and coordinated action.

On 21 June, the Secretary-General launched the Sustainable Sanitation: Five-year Drive to 2015 at the United Nations in New York. The aim of this global effort is to build political will for sanitation. I encourage you to become active partners in this aim. As we all know, water and sanitation are closely linked challenges.

The flip-side of basic sanitation is safe drinking water, and according to UNICEF and the World Health Organization, countries are doing much better in this area. In fact, we are on track to achieve or even exceed the Millennium Development Goal target of halving the number of people with no access to safe drinking water by 2015. So can we be complacent? I wish I could say we could, but in fact this figure masks an alarming reality. It is true that more people are gaining access to water, but all too often this water is unsafe for drinking. It contains harmful pathogens and bacteria that cause chronic illnesses such as diarrhoea. And currently, global water quality statistics are not measured as part of the MDGs or by any other process. Monitoring water quality is expensive and time consuming, but our Board believes it is necessary. Why? Because numbers and statistics are powerful. Numbers and statistics inform policy and investment. And so we need to have a realistic global overview of access to water that is safe for human consumption.
This information will help inform the policy, investments and technical interventions necessary to ensure universal water access AND water quality for all.

Ladies and gentlemen,

UNSGAB's second Rio+20 message is the urgent need to revolutionise the way wastewater is treated. Our Board is making better wastewater collection, treatment and reuse a priority issue.

In most parts of the world, only a fraction of wastewater is treated and even less is reused. We extract massive amounts from rivers, lakes and aquifers and return 90% of the used water untreated into our ecosystems. Better wastewater management protects human health, builds vibrant cities and reduces threats to vulnerable ecosystems. Over the last few years our Board has been emphasising the need to revolutionise wastewater collection, treatment and reuse.

But a wastewater revolution will not happen as a matter of course. It will require dedication and constant engagement with engineers, city and regional planners, mayors, local officials and bankers, with governments taking a proactive role in stimulating structural change and technological progress. This is a water reform issue. It is also an area where developing countries can seize real opportunities for green growth and sustainable jobs. But we have to make the case for and demonstrate the multiple benefits of wastewater treatment!

Now is the time to start working on a common viewpoint on wastewater management. We have no internationally agreed target for wastewater collection and treatment or for water reuse. And we have no system to effectively monitor how much wastewater is being treated by either the global community or individual countries. We believe that Rio+20 presents an opportunity to define a global commitment on wastewater which recognises the links between wastewater, food and energy. At the same time, it is also important to designate an agency in the international system to take the lead and to keep this issue on the political agenda.

Which brings me to the third Rio+20 message: producing more food with the water available.

Ladies and gentlemen,

It is impossible to address management of water resources and growing water scarcity without addressing water use in agriculture. Currently, 70% of all freshwater withdrawals are used by the agricultural sector for irrigation.

Economic progress, notably in emerging countries, translates into increased demand for diversified diets. In combination with population growth, this will lead to a surge in world food demand. Food production will need to increase by 70% globally and by 100% in developing countries by 2050.

Yet both land and water resources, the basis of our food production, are finite and already under pressure. Future agricultural production will need to have higher and more sustainable yields if people are to be fed adequately. Given the growing competition for water from industry, agriculture, power generation and people, new sources of water will have to be identified, especially if ecosystems are to be maintained and restored.

So it is imperative for water systems for agriculture to be more efficient, thus raising the productivity of farmland. Obtaining a greater yield and more value from less water has many benefits: it can reduce the need to draw on fresh water, limiting and even reversing environmental degradation and ultimately curbing competition for water.

It stands to reason that water management and food production are closely linked. And of course there is abundant research and data to support this link. Now, the global community needs to take action to grow more food with less water as a fundamental cornerstone of sustainable development.

Ladies and gentlemen,

While UNSGAB urges decision-makers to prioritise water and sanitation challenges, the OECD provides practical guidance that actually helps countries to design and finance their water management policies and strategies.

The two excellent publications presented here today are further examples of the OECD's valuable work. Let me briefly comment on the two reports.

I fully support the opening statement in Water Governance in OECD Countries that the 'water crisis' is largely a governance crisis. Solutions and policies are at hand. But poor governance structures often hinder the reform that needs to takes place.

The report points out that there is no standard recipe for successful water reform. What works in one country does not work in another. The real challenge is to tailor available solutions to local contexts, overcoming obstacles to reform and bringing together the main actors from different sectors to join forces and share the risks and tasks.

Of particular interest were the surveys showing how many institutions play a part in water management in each country. Lead organisations are needed, with clearly defined powers and responsibilities. We should be able to identify where ultimate responsibility lies for water and sanitation in each and every country.

Water reform is also about politics. Governments must realise that they need to communicate the purpose of the reform agenda and the effects of reform on people's daily lives. Otherwise, they are unlikely to win public support for new policies, or get the public to buy in to them.

The report on Meeting the Challenge of Financing Water and Sanitation clearly explains Strategic Financial Planning and the 3Ts concept. Thanks to the OECD we have now been freed from the dogma that full cost recovery through tariffs is the only way to finance water services. You have successfully introduced sustainable cost recovery using a mix of the 3 Ts - Tariffs, Taxes and Transfers - to effectively finance our water services.

Two years ago UNSGAB and the World Bank looked at the creditworthiness of Peruvian water utilities. We discovered that of the 25 public water utilities only one utility had enough 3T resources to borrow in the long term. The main reason was that many of these utilities were confronted with legal and institutional barriers. They have to be removed. It is not easy, but it can be done if the political will is there. Central government needs to recognise that water and sanitation are managed at local level - and that financing decisions need to be made at the same level.

Ultimately utilities need long-term loans against low interest rates to be able to improve their water services. The financial market may not always be willing to provide these loans to small utilities. Pooling mechanisms are a way of allowing utilities to benefit from lower interest rates thanks to their joint borrowing base.

These pooling mechanisms only work if governments make the effort to build specific financial tools that make repayable finance available at an affordable price to small and medium-size water utilities.

Such pooling mechanisms succeeded in Colombia where small municipalities and utilities were able to access financing. They could borrow against favourable interest rates based on a relatively long 19-year debt period. The key to making such mechanisms work is a strong legal framework. And all stakeholders need to be aware of their obligations and responsibilities. Pooling does not mean joint liability. Every Colombian municipality was accountable for servicing its own debt.

Ladies and gentlemen,

Water is the medium that links the challenges of food security, energy security, climate change, economic growth and human livelihoods.
On the way to Rio+20 our Board is trying to convince leaders of this truth. The deliberations at this Global Forum, at the Bonn Conference and World Water Forum are critical opportunities to define a common viewpoint. I am sure that many of us in this room remember the global commitment to forging a better future that was expressed in 1992. Let's work together to ensure that Rio+20 lives up to and even surpasses the Earth Summit's legacy.

Let me close by thanking the OECD for organising this Global Forum on Water. I sincerely hope that you will succeed in producing concrete recommendations on water reform and water financing that will help ensure that every child, woman and man can look forward to a water-secure future.

Thank you.