Public-private partnerships : an environmental sustainability and social equity assessment for water and sanitation provision in São Paulo, Brazil

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MASTERS PROGRAMME IN HUMAN GEOGRAPHY ENVIRONMENTAL GEOGRAPHY TRACK

PUBLIC-PRIVATE PARTNERSHIPS

An Environmental Sustainability and Social Equity Assessment for Water and Sanitation Provision in São Paulo, Brazil

Flavia Bonolo Dantas 11124083 Amsterdam

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ACKNOWLEDGMENTS

This thesis is the result of an intensive year of learning, questioning, arguing and growing. For that, I would like to immensely thank the close supervision and careful dedication of Eric Chu throughout the course of this programme. I owe my deepest gratitude to his support, encouragement and for the time and the availability he was always able to find to ease any struggles. The course of environmental geography was one of the most enriching learning experiences I have had so far, and I would like to greatly thank my supervisor Joyeeta Gupta for sharing her incredible knowledge and enthusiasm. It has been a great pleasure and honour to learn from her and to be introduced into the field of environment and water governance through her lens.

I would like to thank my parents for always supporting my choices, for making my education their own priority and for believing in my resilience when I doubted by own capacities. I immensely thank my aunt Regina for closely supporting and helping me during hard times despite the distance.

Last but not least I would like to thank the incredible people I met this year in this programme, who became my dearest friends. I also owe my gratitude to the friends I had the chance of seeing again this year and who were with me in good and bad times. And I especially thank the amazing climate babes, with whom I spent the most time during this hectic year and without whom I would not have learned and grown as much.

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I dedicate this thesis to the people who, for reasons beyond human reasoning, cannot advocate for their own rights and necessities.

“If the misery of the poor be caused not by the laws of nature,

but by our institutions, great is our sin.”

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This study assesses the public-private partnership (PPP) model for water governance and management in metropolitan São Paulo, situated in Southeast Brazil. The unit of analysis studies SABESP, the local company responsible for water and sanitation services. The assessment uses two main criteria: environmental sustainability and social equity within the model. Thus, the research question is: Under what circumstances can a mixed capital company (that is the responsible actor for water and sanitation management and governance, and at the same time plays a big role in the financial market) provide sustainable and equitable services that address the complex inequalities and the environmental constraints inherent in the study area. The research question and the establishment of the chosen criteria were based on a gap in knowledge detected in this topic as, to the best of our knowledge, no similar assessment was conducted in São Paulo. Water governance and environmental justice theories were used to guide the criteria and questions used and to shape the investigation and analysis. Some methodological procedures were used in this work with the purpose of acquiring new, unpublished data such as various interviews with professionals and specialists from the water sector, from public policy institutions, legal and administrative advisors, water rights and urban water activists. Results showed a considerably good situation of the services provided by SABESP in the metropolitan region in comparison with the country’s average, but contradictions in the governance and management of the model were detected. Almost all interviewees stated that despite the figures for the region being higher than the country’s overall situation for the WASH sector, much improvement is still needed to achieve an ideal service provision. The existence of a strong and reliable federal legislation for public-private concessions and the presence of autonomous regulatory agencies were considered as positive aspects. Although some aspects for social equality are ensured by their legally-binding guidelines, the PPP-type model lacks many aspects required to be considered successful when addressing equitable, economically viable and safe urban water provision. The environmental sustainability of the model is also indicated as questionable, as many mismanaged occurred decisions during the 2014 water crisis. Based on the variables chosen for this study and according to the conceptual framework adopted, a more elaborated governance structure is needed in order to ensure good governance and efficient management of the water and sanitation services in the chosen case study.

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CHAPTER 1

1.1. INTRODUCTION

The metropolitan region of São Paulo is one of the most densely populated areas in the world, usually ranked among the 10 highest populations in a metropolitan area with some variation between different evaluating entities. The area is home to 21 million r esidents as shown in the last census (2014), according to the Brazilian Institute of Geography and Statistics – IBGE. It is the first region in the Global South to fall into the category of macro metropolis, referred to as the Macro Metropolis Paulista (MMP) occupying an area of 31,5 thousand square kilometres. It is considered by urban geographers as a synthesis of national metropolitan condition, given that this space unit presents an array of elements that are enablers of development and economic growth, but also presents one of the country’s highest rates of socioeconomic disparities (Meyer, 2015). The state of São Paulo was one of the first states in Brazil (and is still one of the few) to open its model of water governance and management to the participation of the private capital by conceding the system operation to an open, mixed capital company: SABESP – Companhia de Saneamento Básico do Estado de São Paulo S. A. (Sanitation Company of the State of São Paulo S. A.). This constitutes a governance model known as Public-Private Partnership. The state of São Paulo holds 50.3% of the company’s shares and, therefore, for all effects SABESP is officially a state company, subordinate to the government of São Paulo, but autonomous when it comes to management of the water and sanitation systems, application, and allocation of resources.

The policies and management decisions taken by SABESP have been criticized in many spheres, especially when dealing with the recent water crisis that affected the region in 2014. Many flaws in the water and sanitation system have been reported by the media, activist groups, the civil society, and by some academics. These specific details, implications, and effects of the water crisis are not to be thoroughly analysed as a case study in this research, as the purpose of this assessment is to generally comprehend the overall dynamics of the public -private partnership model governing the WASH sector. The goal is to assess its positive and negative aspects, the most important problems and challenges faced by the sector in the area, and the actors and mechanisms involved in the public-private partnership model.

In order to provide a concise scope of the current situation of the WASH sector in the metropolitan region of São Paulo (from here on referred as ‘MRSP’), this thesis will address

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the importance and the implications of water and sanitation systems in a densely populated urban agglomeration. This analysis was made based on information gathered by scientific papers and official reports from organizations related to human development and public health. In addition, it addresses the intrinsic relationship between urban water challenges and urbanization processes such as urban pollution and ground occupation. These elements were chosen based on the recurring reference to such aspects in the conducted interviews and in the literature. The term “public-private partnership” was also found to present conceptual inconsistencies, regarding that the term means what it encompasses and what can be referred as a public-private partnership and what cannot be. This difference in understanding the concept and the ways they can be framed will be explained further in this work.

The empirical chapters of this study will approach the findings, in order to answer the previously defined research question, but will also address the contradictions detected in the topic during data gathering and analysis. Many of these contradictions were found in the interpretation of key concepts in this analysis, such as the very definition of public-private partnership previously mentioned, but also conflicting ideas and assessments towards the unit of analysis and the governance decisions carried out by the public-private partnership for managing water and sanitation services in a sustainable and equitable way.

This introductory chapter aims to provide an updated contextualization of the topic in academic, public, and international debate by showing how water management has been approached. It draws on the relevance of the chosen topic for geography as a discipline, and the importance of a geographical approach to this field. The goal of this chapter is to justify the proposed research question, to validate the topic and scope chosen for this research and to explain what are the theoretical and epistemological foundations of the topic of study. The study design is described by the methodological route followed for the production of this work, and the choice of the case study and the used methods are explained. The last par t of the chapter provides an overview of the structure of the present thesis.

1.2. THESIS STRUCTURE

This thesis following the following structure:

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section 1.3.1. Research question and justifying the research question in section 1.3.2. Research Justification. The following section (1.4. GEOGRAPHICAL EPISTEMOLOGY AND ONTOLOGY) aims to provide the theoretical and social contribution of the discipline of geography for this field of research. Section 1.5. CASE STUDY JUSTIFICATION) shows the chosen case study, stating the reasons for this selection and why it is a valid example. Section 1.6. METHODOLOGICAL PROCEDURES) describes the study design and its methodological routes. Section Error! Reference source not found.) states the main elements of this analysis and the limitations predicted and encountered. Section 1.7. RELIABILITY AND VALIDITY OF RESEARCH) defends the scientific value of the study.

CHAPTER 2 is the chapter destined for information gathering through literature review, which was focused on the main concepts and theories that guided this study and provided a conceptual framework for the analysis: They are 2.1. WATER GOVERNANCE THEORIES, 2.2. WATER, SANITATION AND HYGIENE: THE WASH SECTOR and 2.3. PUBLIC-PRIVATE PARTNERSHIPS The last section 2.4. GAP IN KNOWLEDGE concludes the chapter by indicating the gap found in the literature regarding the combination of the topics previously reviewed.

Based on these lines of thought and the conceptual questions underlying the debate, this study aimed to assess the quality of the service and the successfulness of the private sector

participation in the water and sanitation systems in the MRSP, focusing on two main criteria: the system’s environmental sustainability and social/ spatial equity. As mentioned before, the discussion of natural resources seen and managed as commodity or human rights is especially acute when it comes to water, given the overarching nature of this resource not only for the water sector itself, but for other areas and sectors crucial for human life and development.

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CHAPTER 3 addresses the case study, thus providing an analysis of the situation of water and sanitation in metropolitan São Paulo [3.1. BACKGROUND OF WATER AND SANITATION IN SÃO PAULO] and its experiences with PPP in the water sector [3.2. PUBLIC-PRIVATE PARTNERSHIP IN SÃO PAULO: THE CASE OF SABESP] based on empirical information gathered and data collected.

CHAPTER 4 presents the results achieved in order to answer the research question. The results are divided into smaller sections in order to refer to the criteria and the variables defined in earlier stages of the research.

CHAPTER 5 presents the conclusion of the research, the limitations encountered along the study, and the recommendations for future research on the topic.

The references used in this work can be found in the

For future research and further investigation in the topic, the informality problem is recommended for further analysis. Addressing the question: “can PPPs solve/ approach the informality problem?” may result in fruitful analysis, based on the importance and the complexity of the topic. Yet, this is topic for research on its own, and further investigation on this matter could not have been conducted in this study to a full extent, since it was not the proposed theme and would not answer the previously defined research question.

Another recommendation for future research is a more in-depth look into the expected extreme climate events for the region, and the adaptability of the governance model to deal with such climatic influences.

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BIBLIOGRAPHY section and the appendix contains the transcripts of the interviews directly quoted in this thesis and PPP concession contract conducted by SABESP (the unit of analysis).

1.3. RESEARCH QUESTION AND JUSTIFICATION

The purpose of this section if to state the research question and to provide a justification for the chosen research topic based on scientific and social relevance. In addition, it aims to present the theoretical and the practical relevance of this study.

1.3.1. Research question

The research question chosen for this thesis is related with water and sanitation provision governed and managed by a public-private partnership system. After a thorough literature review, the criteria of environmental sustainability1 and social equity2 were selected to guide the assessment. The chosen criteria were selected based on the social relevance of such aspects, and also due to the lack of such a study in the area indicating a gap in knowledge. Thus, the research question for this study is as follows:

 How can a public-private partnership model of water and sanitation governance and management be an environmentally sustainable and socially equitable type of governance?

In order to properly address and respond to the general research question, the

1

Though many definitions for Sustainable Development are found in the literature, the landmark of the concept firstly appeared in 1987, defining it as “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”, from the World Commission on Environment and Development’s report “Our Common Future”, published by the Oxford University Press.

2_{Equity means social justice or fairness; it is an ethical concept, grounded in principles of distributive}

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following sub-questions were elaborated to address specific elements of the assessment.  How is the water governance in São Paulo?

 What is the situation of the water and sanitation sector in São Paulo?

 Does public-private partnership provide benefits for the sector?

1.3.2. Research Justification

Although recognized as a human right and essential for life and despite efforts done from global to local levels, 748 million people today still do not have access to improved water resources and 2.4 billion lack access to improved sanitation, according to the UN.

The International Panel for Climate Change (IPCC) states in its fifth report that many of the impacts of climate change are delivered to the society by water resources. When it comes to the hydrological cycle, the negative impacts of climate change are expected to outweigh the benefits of this phenomenon on freshwater resources. Water is a resource under stress both due to changes in quantity and in quality. About 80% of global population “already suffers serious threats to its water security, as measured by indicators including water availability, water demand and pollution” (Vorosmarty et al., 2010).

The IPCC report (p. 234) shows that:

Anthropogenic climate change is one of the many stressors of water resources. Non-climatic drivers such as population increase, economic development, urbanization and land use or natural geomorphic changes also challenge the sustainability of resources by decreasing water supply or increasing demand.

Such statement makes evident the importance of analysing the water governance and management within the context of an important urban agglomeration. If not properly governed and managed, arguably all sectors in an urban sphere can collapse, leading to conflicts of many natures and deteriorating livelihood of inhabitants. Thus, the IPCC report presents high agreement on the importance of searching for an adaptive approach to managing water in order to address the uncertainties towards this resource in the coming years. It

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indicates that “lack of human and institutional capacity, financial resources, awareness and communication” (IPCC, P. 233) are barriers to progress.

The discussion around water governance is relevant in various sectors and the challenges are important on a local as well as on a global level. As shown in the graph below, water use and extractions are not likely to decrease in the next decade, making the present problems even more acute in the upcoming future.

Image 1: Trends in water use and pollution. Source: UNESCO, 1999

Water resource governance plays an indispensable role regarding energy production, as the world increasingly attempts to move away from fossil fuels and shift into renewables. Public, academic and institutional debate increasingly focus on the importance of water resources for the energy sector and the recent climate talks and agreements lay more responsibility on countries to invest in the shift to clean energy, bringing more attention to the governance of water resources. According to the International Energy Agency (IEA), in 2010, the estimated global water withdrawal for energy production was 583 billion cubic meters, 15% of the world’s total water withdrawals. From that amount, 66 billion cubic meters of water are consumed – a volume that does not return to its source. Information provided by New Policies Scenario (IEA) shows that withdrawals are expected to increase by about 20% between 2010 and 2035, posing significant impact on water resources. Yet, consumption rates are expected to rise by 85%, a dramatic increase driven by the “shift towards higher efficiency

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power plants with more advanced cooling systems (that reduce withdrawals but increase consumption per unit of electricity produced) and by expanding biofuels production”. In addition, the report (Chapter 17, p. 1) states that:

Water is growing in importance as a criterion for assessing the physical, economic and environmental viability of e nergy projects. Among other examples, the availability of and access to water could become an increasingly serious issue for unconventional gas development and power generation in parts of China and the United States, India’s large fleet of water-dependent power plants, Canadian oil sands production and maintaining reservoir pressures to support oil output in Iraq. Such vulnerabilities are manageable, in most cases, but will require deployment of better technology and greater integration of energy and water policies.

Moving into the area of food and agriculture, water governance again occupies an undeniable importance, as farming accounts for around 70% of water used in the world today, according to the Organization for Economic Co-Operation and Development (OECD). Not only it takes water to produce food, but also farming is one of the main contributors of water quality degradation due to excess nutrients, pesticides, fertilizers and other pollutants. The resource is used for agricultural production, forestry, fishery, and the entire food supply chain.

As water scarcity becomes an increasing issue, competition for water as a resource for agricultural production is likely to be augmented in several parts of the world and this can already be seen by the increasing cases of farm land grab (Moreira, Bonolo and Targino, 2013). Therefore, land governance becomes inseparable from water governance and conflicts are likely to be seen ever more often.

Thus, there is an underlying question when it comes to the provision of water and sanitation for all people given the growing scarcity of this resource (both qualitatively and quantitatively) and the increasing demand, which is: how to allocate water in an efficient, equitable sustainable way. The Water Governance Facility (WGF) argues that in order to reach an answer for this, the following issues must be considered: “1) market mechanisms (trading systems and full-cost pricing through valuation) excel in the efficiency arena, but can fall short when the goal is to realize the right to water and sanitation or when externalities that

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impact environmental sustainability are not taken into account; 2) from an efficiency perspective, when markets do not fully capture the total value of water, other mechanisms have to be engaged to allocate water to the highest value uses and users. Yet when constitutes ‘efficiency’ and ‘highest value uses and users’ is often subjective. People living at the margins seldom qualify as high value users, yet good development practice demands that thei r needs be given priority and; 3) conflict resolution mechanisms and rubrics for managing trade -offs are often needed to facilitate water sharing among competing users such as upstream and downstream stakeholders. Ensuring that powerful interests do not do minate or entirely capture the process requires robust safeguards to ensure that poor people can participate meaningfully, hold officials to account and access information” (WGF, 2012). Therefore, those issues were considered as the core of the criteria adopted in this work, providing a basis for the questions developed for the interviews and for guiding bibliographical review. These points will be addressed along this work when approaching the results, the conclusions and recommendations achieved in this analysis.

The present study can then be justified based on the undeniable importance of the previously exposed matters regarding water resources and its governability. This research hopes to contribute to the topic on a theoretical and on a practical level.

1.4. GEOGRAPHICAL EPISTEMOLOGY AND ONTOLOGY

The discipline of Geography has potential to greatly contribute to the area of water management, the WASH sector and consequently public environmental health and environmental epidemiology3 due to the empirical and critical nature of geographical analysis concerning the actors and the dynamics of space. The very nature of geographical research involves spatial, social, and political contradictions that may become social determinants of health and allows for a distinction between physical spaces based not only on natural features, but also on the social and morphological agents that modify the place and, consequently, the society living in that place. As put by Smith (2010, p.24):

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Environmental epidemiology examines the causes and effects of environmentally induced illness in general populations.

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Early social sciences and sociology’s concern for understanding the particularities of place helped to produce conceptual frames such as Frédéric Ratzel’s ‘anthropogeography’ and Paul Vidal de la Blache’s ‘human geography’, along with the Le Playists ‘social geography’. Yet, while Reclus was also employing the term social geography around this time, his application of it questioned these prevailing framings that tended to be descriptions or catalogues of the people and places threatened by the gathering forces of modernization and instead employed the concept to reflect upon a more relevant and politicized social geography that was attentive to ‘class struggle, the search for equilibrium and the sovereign decision of the individual’ (Dunbar, 1977: 17). It was thus with Reclus that the circulating approaches to people and places were deferred from objectivity’s conventional standards of the time and toward social geographic study as a deeply political act.

(Smith, 2010. The SAGE handbook of social geographies. Sage Publications.)

When approaching the epistemological importance and relevance of geography on any subject, be it more physical or human, it is often discussed among the geographic community the need to apply and reinforce the pragmatic facet of this discipline. This means that there has been a call for more praxis from the geographical community, meaning that academics should aim for more than theoretical and methodological advances and focus on the effects of academic production on enacting fundamental changes to the organization and structures of society.

Based on a literature review, for the past four decades there has been a systematic engagement of geographers with developed radical and critical theories of social, economic and environmental issues, and critical praxis being undertaken. This movement towards a more socially active discipline can be seen as a response to the past tendencies of geographical science such as quantitative geography, led by politically sterile guidelines and without notions of social responsibility. Many were the factors that contributed to this shift towards a more radical approach, such as the ‘revolutions’ in Britain which “were set against a context of geographical concern for the impoverished dating from the interwar years and increased concern about the ‘Third World’” (Fuller and Kitchin, 2004), while in North

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America the protests against the Vietnam war, civil rights demonstrations, the impoverishment of urban populations, and race relations had similar effects. Dickinson and Clarke in 1972 indicated that this critical and radical turn in emphasis and ideology of geographical research and production had three main drivers: 1) the aim to highlight socially relevant issues nationally and abroad; 2) the efforts should be on placing greater emphasis on the ends rather than the means of research; 3) and the purpose of influencing policy makers, in addition to the general public. Thus, quoting David Smith (1976, 84):

We are beginning to realize that masses of numerical data and sharp analytical tools are not in themselves enough: basic mechanisms for resource allocation and real-income distribution must be changed if spatial inequality / discrimination / injustice is to be reduced or eliminated. This, in its turn, requires changes in personal and professional values. We cannot retreat into abstract analysis and ethical neutrality. The real world requires involvement in social change, for we are among the ‘actors’ ourselves. As part of the problem, we must participate in the solution.

Therefore, geography can contribute to the comparative comprehension of risks and tendencies between places based on the combination of their physical features as well as their social elements. Regarding the topic of water management and governance, a geographical approach allows for an integrated analysis. The fields of this discipline provide researchers conducting geographical studies the ability to understand the intrinsic relationship between natural opportunities and constraints for appropriate resource governance. At the same time, it allows social consideration of the impacts of mismanaged resources (or the natural conditions of a place). The social implications of such conditions are encouraged to be present in geographic studies. Thus, anthropogenic action and influence on the environment and vice-versa are inherent to the very epistemological core of this discipline.

1.5. CASE STUDY JUSTIFICATION

The case study chosen for this research was the metropolitan region of São Paulo. The metropolitan scale was chosen over the municipal scale because that is the level of

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governance for water and sanitation jurisdiction, as established in the sanitation regulatory framework in Brazil, the federal law number 11.445/2007. São Paulo was chosen as an example based on the following criteria:

- It is an intensely populated area;

- Presents the characteristics of major urban agglomerations; - Belongs to a developing country;

- Has high levels of spatial and socioeconomic inequality;

- Its population has recently started to suffer from water stress due to scarcity and pollution.

The unit of analysis is the water industry responsible for water and sanitation management and governance in the area: SABESP (in Portuguese, ‘Companhia de Saneamento Básico do Estado de São Paulo’), the company for basic sanitation of the state of São Paulo. According to the federal regulation, as of 2007 sanitation services include water supply and treatment, sewage provision and treatment and solid residue services. The company, part public part private, provides a valid example of private participation in the management and governance of a public good. Given the complex reality of megacities, especially in developing countries, this unit of analysis allows for an assessment of challenging aspects for developing and emerging economies: environmental sustainability and social equity.

The chronological framework used in this study, although focusing on the present situation, used data for the past 10 years (2006 – 2016) for the quantitative analysis in order to assess the evolution of service provision.

1.6. METHODOLOGICAL PROCEDURES

The methodological section of this chapter aims to thoroughly describe and explain the methods used in this work. It presents a discussion of the steps used both for the first part of the data collection through a review of the subject in the literature, and the collection of empirical data for the study. A few methodological tools were used in order to evaluate the

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criteria chosen for this work, and contribute to the overview of the topic based on the case study determined for this research.

1.6.1. Literature review: framing and elucidation of key concepts

In the first part of the research process, the approach taken was initially investigatory based on existing information about key concepts in order to define the scope of the analysis. The central concepts that guided this search were public-private partnership (from here on referred as ‘PPP’), WASH sector and water governance. The intention of this review was to understand the definition of the terms in the literature and, afterwards, the research was directed to the situation of those terms in the context of the case study. Thus, the review was done with the purpose of understanding the framework and the history of PPPs, of water governance and the WASH sector in Brazil, particularly in São Paulo. The guiding search terms and key words employed for reviewing the literature were: 1) Public-private partnership; 2) public-private partnership water and sanitation; 3) water governance; 4) water and sanitation management; 5) public-private partnership sustainability; 6) public-private partnership human development.

The review was done using scientific papers searched in platforms such as Scholar Google, PubMed and Web of Science. Media articles were also analysed to follow up the timeline of the water crisis that hit the MRSP in the year of 2014, and to understand the response from the institutions responsible for the sector towards the critical event. In addition, several reports from technical, research and policy institutions (The Netherlands Environment Assessment Agency; the Dutch Ministry of Foreign Affairs; Agence Française de Développement; Instituto Socioambiental; and Organização Intereclesiástica para Cooperação ao Desenvolvimento) were analyzed, as well as reports from international organizations (United Nations Development Programme; Food and Agriculture Organization; UNESCO; World Health Organization; Pan-American Health Organization; World Bank; and Organisation for Economic Co-Operation and Development).

In a second phase, the research moved to a more technical investigation in order to understand the institutional structure of the water governance and the water and sanitation management model in the MRSP. A more general investigation was conducted to find out the

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institutions and agencies involved in the management of the water and sanitation distribution systems. In a subsequent phase, the research proceeded to investigate variables and elements for addressing the research question proposed (see 1.3. RESEARCH QUESTION AND JUSTIFICAT IONThis review was conducted with the purpose of building a conceptual diagram for guiding the assessment by delimiting a theoretical framework for the analysis based on relevant assessment criteria. The combination of the information found through all the described phases of literature review, resulted in the conceptual diagram presented further in this work (see 2.4. GAP IN KNOWLEDGE) with the purpose of addressing the knowledge gap detected.

This analysis was done using reports and articles provided by the websites of SABESP and the Water Resources and Sanitation Department of the state of São Paulo. Subsequently, a more detailed investigation was conducted to comprehend the legal framework and the guidelines for sanitation and public-private performance in the state and in the country. The investigatory analysis continued until after the interviews were finalized, which will be described next.

1.6.2. Interviews

After gathering information and secondary data essential for refining the research question and the most suitable scope for the analysis, some interviews were conducted. In total, seven interviews were done with people with long careers in the WASH sector and with public-private arrangements. The interviews were semi structured and the questions were similar, but based on the occupation of the interviewees and on the nature of the provided answers, they were shaped accordingly. The duration of all interviews was around 1 hour each, and all participants allowed for the interviews to be audio recorded and for their statements to be quoted. The interviews were conducted over Skype calls and all interviewees received a copy of the transcript of their own interview for any event ual remarks, corrections or additions.

The interviewees were, chronologically:

1. Prof. Dr. Maria Tereza Pepe Razzolini (University of São Paulo): Associated professor of the Department of Environmental Health from the School of Public Health of the

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University of São Paulo, PhD in Environmental Sanitation. Currently works with microbiological quality of water supply.

2. Dr. Teófilo Monteiro (WHO-World Health Organization): Regional Coordinator for the WASH sector in Latin America and the Caribbean Region, based on the Pa n American Health Organization headquarters in Lima, Peru. Professional formation in Sanitation Engineering and Public Health.

3. Eng. Marcelo Kenji Miki (SABESP): Sanitation engineer, head of the Department of Research, Development and Scientific Innovation.

4. Eng. Américo Sampaio (Department of Water Resources and Sanitation): Head of the Sanitation Division of the state of São Paulo. He has been working with sanitation systems for 35 years and has a professional formation in Sanitation Engineering and Architecture.

5. Lineu Almeida (SABESP - retired): Sanitation and Public Health specialist. He was responsible for the unit of operational services, project administration and planning in SABESP.

6. Sílvio Leifert (SABESP): Project manager and responsible for PPP concession. Responsible for the PPP São Lourenço in the MRSP.

7. Stef Smits (IRC – WHO collaborating centre): Senior programme officer; Coordinator of the Latin America Regional Programme.

All interviewees were contacted firstly by e-mail. They were found through their institution’s webpages or through recommendation by previously known people from similar work areas. The employees and former employees of SABESP were mostly reached through the recommendation of colleagues based on their field of work and expertise, once the research was explained. Many attempts were made to interview people engaged with activist groups that advocate for urban water rights, and with associations that became known for publishing statements and critiques towards SABESP and the management of the water crisis in São Paulo. Some interviews were scheduled with the spokesperson from the activist group and NGO “Aliança pela Água” (Water alliance). Unfortunately, they were not successful due to various uncontrollable factors. Therefore, the arguments done by this side of the debate and the critiques directed to the water management of São Paulo were gathered through dossiers,

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news articles, papers, reports, and editorials dedicated to the issue.

The structure of the interview changed in different extents for each of the interviewees, based on their area of expertise, their occupation, and the institution they were speaking for. In addition, some new questions came up and some were displaced as the investigation moved on, but the core questions addressed in the interviews were the following:

- How the concessions and contracts work: how to access their success/ failure? What are the differences between PPP and traditional procurement and which is considered more beneficial to service provision?

- How are the contracts and concessions guided and regulated? By what institutions? What is the nature of the contracts (public/ secretive?) and how can they be accessed by the public?

- What are the criteria that must be pre-defined, reinforced and implemented so that PPPs can achieve their potential benefits?

- Dialogue and public participation: who participates, who are benefited? How does this communication happen and is it encouraged by your institution?

- According to most water reports, 30% to 50% of water projects in developing/emergent countries fail after 2 to 5 years of inauguration (UNDP). Is this a challenge in this case; how could it be tackled or improved if undergone a PPP model?

- Access to water is also access to land: this interdependency is often overlooked and handled under separate governance structures. What is the current status of this issue in the metropolitan region of São Paulo?

- Can private sector participation in the management of a public good accentuate disparities or are there mechanisms to prevent experiences such as past events in Latin America?

- What are the tools and mechanisms to ensure that water and sanitation are affordable to all sectors of society?

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identify clusters of arguments and recurring themes. These will be addressed in the empirical chapters presenting the results, conclusion, discussion and recommendations.

1.6.3. Secondary Data Collection and Processing

Apart from the primary information gathered through the interviews previously described, the present study collected secondary data from reports and databases. The aim was to collect sufficient data to assess both qualitative and quantitatively the situation of water and sanitation provision in the area under PPP management. The datasets used in the analysis were not provided by the same institutions. Thus, data concerning different indexes were extracted from different sources, combined and processed to achieve the expected results. During the data collection process an evolutional assessment was conducted, making use of the information available for the last 10 years.

The sources of data used in this stage of the analysis were:

- Institute Trata Brasil: Sanitation Ranking 2016 (Oliveira, Scazufca, and Cintra Pires, 2016);

- “Água e Esgoto na grande São Paulo” (Diniz and Whately, 2009);

- Water and Sanitation: Evidence for public policies focused on human rights and public health results (Pan-American Health Organization, 2011);

- SNIS (National System of Information about Sanitation);

- ANA (National Water Agency);

- IBGE (Brazilian Institute of Geography and Statistics).

1.7. RELIABILITY AND VALIDITY OF RESEARCH

This study used instruments and mixed methods of research [1.5] that provided a reliable array of information. The methodological reliability of the instruments used over the

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course of this study for information gathering and data collection provided consistent results, and can be referred for future or similar research purposes.

As for the validation of this research, the methods applied in this study were successful in order to assess he aspects the research question established. Therefore, the scientific and methodological value of this study is valid due to coherent use of suitable methods.

The reliability and validity of the research design should be carefully reconsidered if intended to be applied in a different case study.

1.8. FOCUS AND LIMITATIONS

This study faces some limitations and constraints acknowledged since the early stages of the process. One of the most important limitations was the timeframe for the conduction of this study. Due to the short period available, some topics and aspects that started to be analysed might not be addressed to the full extend.

Fieldwork was not conducted. This study could potentially benefit from research conducted in loco. However, this option was eliminated due to financial constraints and practical reasons. No immediate advantage was detected, provided that most interviews could be done over Skype or phone calls; the spatial unit of analysis is too large and access to and between locations of interest would be too complicated without local supervision or guidance; the instability of the current political situation in the country posed challenges for the research process and could have affected fieldwork significantly, given that governmental, institutional and structural leaderships were unstable and uncertain.

Some factors were not expected to play such imperative roles in the research process, but had significant impact on the final outcome of the research. As previously stated, the extremely hectic political situation of the country created challenges that were not anticipated to a full extent. One important consequence of this situation was the failure to conduct interviews with activist groups and social movements. These entities were entirely involved with the daily activities, occupations, demonstrations and protests being carried out in the country.

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Recent news coverage about the water and sanitation sector was sometimes either biased or underreported due to the priority given to the political crisis.

Other elements that play important roles in the topic of this study had to be left out of the analysis, or were not comprehensively incorporated into this assessment. Some of these aspects are listed below.

- The informality issue;

- The specific regulatory agencies and their structure;

- Comparative analysis (within Brazilian water companies; between São Paulo and a second or more megacities; between PPP-type management and fully public or fully private).

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CHAPTER 2

This chapter aims to provide an overview of the areas of knowledge approached by this study, based on a literature review.

2.1. WATER GOVERNANCE THEORIES

The concept of governance has been increasingly approached and used in development and resource management literature. “Bad” or unsuitable governance has been addressed as one of the lead causes for structural issues within societies, meanwhile “good” governance has been claimed as key for proper decision-making and implementation of measures in various spheres. It can be used in many levels and contexts (e.g.: corporate governance, international governance, national or local governance). The analysis of governance and governance theory is focused on the formal and informal actors involved in such decision-making and implementation processes, as well as the “formal and informal structures that have been set in place to arrive at and implement the decision” (UNESCAP). As put by the UN:

Government is one of the actors in governance. Other actors involved in governance vary depending on the level of government that is under discussion. In rural areas, for example, other actors may include influential land lords, associations of peasant farmers, cooperatives, NGOs, research institutes, religious leaders, finance, institutions political parties, the military, etc. […] At the national level, in addition to the above actors, media, lobbyists, international donors, multi-national corporations, etc. may play a role in decision-making or in influencing the decision-making process.

The UN states that “good governance” should be marked by eight characteristics. It should be “participatory, consensus oriented, accountable, transparent, responsive, effective and efficient, equitable and inclusive and it should follow the rule of law” (Sheng, 2009).

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the actors and the institutions involved in decision-making processes and how implementations on the water sector should be conducted. As put by Peña (2003, p. 3), water governance “refers of the capacity of a country to coherently organize the sustainable development of water resources. This definition encompasses both the capacity to design socially acceptable public policy that fosters the sustainable development of water resources and to implement them effectively through the relevant institutions”.

It is concerned with boundary issues, with paradigms (market-oriented or from a human right perspective), and the possible approaches to water governance. The discussion of water as common good or commodity is very present in water governance rhetoric, a highly relevant topic within the water sector today [see Chapter 3]. The discourse around water governance is approached through the main perspectives of integrated water resources management (IWRM), community-based water management, adaptive or collaborative water governance, and basin governance. Scholars such as Biswas (2008), Bakker (2007, 2011), Conca (2006), Gupta (2013), Holtz (2010), Huitema (2009), Pahl-Wostl (2008, 2010) among others have produced many studies with the purpose of assessing and analysing water governance approaches.

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Water management comes as the delivering agent of governance framework by referring to tools and instruments used to analyse, monitor and implement decisions and practices in the water sector. Today, it is conducted by tools and policy instruments of many natures with the purpose of providing solutions and trends for governing water. Due to the undeniable increasing scarcity of this resource and the growing potential for tension and conflict over the access and right to water (see 1.3.2. Research Justification), governance trends today are focused in aspects such as sustainability, equity, security and efficiency. Literature shows that tools applied on water governance and management today are categorized by: technological and engineered solutions (such as dams, basin transfers, centralized water treatment); economic, market-led solutions (through privatization, monetizing, subsidies, taxes, tariffs, permits and payments – ensuring the resource’s sustainability by financial and economic regulation); legal and regulatory solutions (such as trade restrictions, decentralization, spatial planning and ownership provisions); organizational and socio-political solutions (river basin committees and collaborative); and informal local collective solutions (Chu, 2015).

Despite the ultimate common goals of successful water management shared by the different governance instruments currently in practice worldwide, the beneficiary actors differ between the governance types and models.

2.2. WATER, SANITATION AND HYGIENE: THE WASH SECTOR

The United Nations regards water and sanitation as a human right. It believes that treating water and sanitation exclusively as an economic good imposes hardship on some communities, depriving them of access to water and sanitation and of other human rights such as life, health, and well-being (WHO, GLAAS Report 2011).

Given the undeniable importance of the WASH sector for society, this chapter aims to provide a background of the water, sanitation and hygiene sector, based on information found in the literature (official reports from international organizations, reports from research institutions and academic papers published in scientific journals) as well as on information taken from the interviews. The review intents to explain what are the implications of wa ter

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and sanitation management on areas that have direct influence on human development. These aspects have been established as targets for the sustainable agenda adopted by the United Nations agencies for the coming years. Their goal is to globally improve the livelihood of all people and to ensure environmental sustainability for the planet. Thus, this chapter is composed by three sections that cover important dimensions of water and sanitation management: the relationship between water, sanitation and hygiene with poverty, with public health and with urbanization. These three dimensions guided the bibliographical research conducted, since they are directly linked to the scope of this work: the sustainability and the social equity of a water and sanitation provision in a major urban agglomeration.

2.2.1. WASH Sector and Poverty

Water and poverty have a very close and strong relationship, and of the most terrible burdens of poverty is the daily struggle for this resource. The lack of access to water is a hardship especially for women and girls, who bear the primary responsibility for water collection, spend endless hours fetching water over long distances (United Nations Development Program (UNDP)/World Water Assessment Program (WWAP)). According to reports published by water related and human development organizations, low income families with limited access to water often have to choose between paying for water or paying for other basic needs such as food, school fees, and medicines. Data from the WHO and UNICEF (2014) indicate that the lack of access to improved drinking water supply is a reality for 748 million people, while billions lack access to actually safe potable water under the minimum parameters established by the World Health Organization, given that sources of water are often unclean or unaffordable. Cases have been registered where groups or populations “are simply cut off from using a particular water source” (Connor et al., 2015).

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Image 3: Percentage of populations without access to sanitation, 2004. Source: Vital Water Graphics, 2009

In light of the argument that water is closely linked to poverty, improving the living standards of impoverished populations through water management has been proved “a useful pro-poor framework for action, allowing for the introduction of inter-related issues of governance, water quality, access, livelihood opportunities, capacity building and empowerment, water-related disaster prevention and management, and ecosystem management” (Connor, 2015). The relation between water and poverty should not be addressed or interpreted as a simple causality case, but more of a two-sided cause and effect dynamic. Poverty can be and has been very often a driver of pollution and unsustainable use of water resources, due to the desperation and limitations of people living under such conditions.

New and existing infrastructural investments in water are often affected by poverty conditions becoming less efficient, provided that both individual households and communities are regularly faced with difficulties to finance, operate, and maintain systems such water pumps: a significant threat to long-term development and poverty reduction. Therefore, proper and reliable water governance and financing are of major importance as a means of

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poverty reduction. Based on data and information from the European Court of Auditors (2012), International Water and Sanitation Centre (2009) and Rural Water Supply Network (2010), “weak governance, in combination with low incomes and cost of services, make it much harder for poor people to acquire sustainable access to water” and even when these investments are obtained and applied, sustainability remains a major challenge. Statistical data show that 30% to 50% of water supply projects, especially in developing countries, go under failure after two to five years (WWAP, 2015) with about 30% of water supply point becoming completely non-functional and 10% to 20% operating only partially.

Brazil is one of the countries that have made great strides to reduce poverty, along with other emerging states such as India and China. According to the 2013 publication of the Human Development Report, it is expected that by 2020 the combined output of these emerging countries will “surpass the aggregate production of Canada, France, Germany, Italy, the United Kingdom and the United States” (UNDP, 2013). Despite the economic efforts, it is important to remark that only economic growth is not a guarantee for wider social progress, and poverty levels in those three countries remain unacceptable by human development targets and standards. Thus, safe and continuous access to water as well as other critical services are still elusive for many fractions of such societies living in rising economies. Most recently, due to the economic recession and political crisis that currently hit Brazil, the targets for social improvement especially in the WASH sector are expected to be delayed, according to recent statements from government offices and interviewees. According to the World Water Assessment Program (WWAP) and to the last International Panel for Climate Change report, climate change is another factor which might potentially undercut social progress and enhance problems related to access to safe water and sanitation worldwide, due to increasing water scarcity and decreasing water quality.

It is important to stress that the two global trends previously mentioned (growing economic development in least developed and emerging countries and climate change), despite their global scopes, have local effects. The convergence of these two phenomena is believed to “intensify the water security of poor and marginalized people in low income countries and add to the urgency of new approaches to the allocation of water resources for development” (OECD, 2012a). According to the United Nations Development Program, development can be defined as improving people’s well-being, giving them a say in the decisions that affect their lives and expanding their freedom, choices and opportunities. Hence, looking from this perspective and considering that access to water is a crucial element

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for development, the way in which this resource is allocated in many countries is problematic in many levels due to its typically inequitable nature (UNDP, 2013). The allocation of water resources for various productive purposes (agriculture, industry, ecosystem purposes, etcetera) is generally more restricted to comparatively powerless groups, “which tend to be shut out of access to water, as well as the processes whereby allocation decisions are made. Although integrated water resources management (IWRM) approaches are guided by a balanced concern for economic efficiency, environmental sustainability and social equity, in practice, the social equity goal is often given less priority when water allocation decisions are made” (WGF, 2012). The combination unsuitable water resource allocation and non-inclusive growth, a feature very common in LDCs, can result in societies more unstable and ultimately more prone to conflicts and tensions.

Thus, proper water management and governance can contribute to poverty reduction in four dimensions (UNDP/SEI, 2006):

- Enhanced livelihoods security:

This aspect related to the incentives provided to individuals under the poverty line as to enable them to develop abilities, with the goal of allowing them to make use of their assets to provide themselves acceptable standards of living. Having safe and secure access to water resources is “key to realizing livelihood opportunities and continuity of water flows determine the status and integrity of ecosystem services on which poor people are directly dependent, such as fishing or grazing or cattle. Reliable water supplies are critical for a range of food production activities including irrigation, rearing of livestock, aquaculture, horticulture and other types of production in rural and certain urban areas. It is therefore critical that water interventions support diversified domestic livelihood opportunities such as vegetable production, pottery or laundering”.

- Reduced health risks:

Vulnerable groups within societies are the focus to this work dimension, especially poor women and children. It is related to the mitigation of social and environmental factors that place groups of people under higher risk from diseases and undernourishment, leading to premature mortality. These vulnerable groups are exposed to high chances of contamination by water-borne diseases, such as diarrhea

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and water-related vector-borne diseases like malaria, dengue fever, chikungunya and zika virus, which are currently some of the largest and more serious epidemics in tropical regions. Those diseases are among the leading causes of death in impoverished populations, according to health and sanitation agencies, and increased access to safe water, basic sanitation and better hygiene is one of the most effective ways to improve health and, consequently, reduce poverty. When it comes to economic and financial aspects, it is seen as a “highly attractive investment, since the rate of return is in excess of those found in many so-called productive uses”. Other effective strategies for poverty alleviation are often mentioned and analysed in reports and studies, in order to enhance the design of water infrastructure and water management. These features must be better designed and monitored to reduce vector -borne disease transmission, and government action must be strong in order to implement mechanisms and instructions led by competent health surveillance agencies as to enable communities to prevent the dissemination of such water-related epidemics.

- Reduced vulnerability:

This dimension speaks for the tools to reduce risks and impacts of hazards either caused or related with unstable politics and economics, “unsustainable environmental trends and shocks from water-related natural disasters. For example, floods and droughts undercut development and can lock people into poverty and desperation. Long-term trends of degrading ecosystems, increased rainfall variability, water pollution and land degradation place additional strains on poor people and long-term development. Investment in improved water storage to ‘even out’ water access in and between rainy seasons and support preparedness for flood management is also an imperative part of any poverty reduction strategy”.

- Economic growth for poverty reduction:

Although this is a critical aspect, it is often misshaped and misinterpreted and this might lead to inaccurate arguments. As it was previously stated in this section, economic growth does not necessarily lead to ultimate social benefit and improvement: the crucial element here is “the quality of growth and how new wealth in a society is distributed”. Thus, elements such water management and services provision are considered catalysts for societal improvement and growth, contributing

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to new livelihood and entrepreneurial opportunities for groups of people who have historically faced more constraints than others. The United Nations World Water Development Report 2015 states that:

the untapped potential of local entrepreneurs needs to be realized since it can generate high returns for local economies in terms of jobs and multiplier effects. Major water infrastructure developments can generate significant national as well as regional economic benefits, and lessen vulnerabilities related to food and energy security. Such investments need to be done with proper impact assessments and in collaboration with other countries whenever relevant. These investments are not a panacea, however, and need to be accompanied by smaller-scale investments in relation to irrigation, power generation, crop diversification, institutional development, better access to markets by farmers and rural artisans, and capacity development. A diversified investment strategy is required to make good progress in reducing poverty.

2.2.2. WASH Sector and Public Health

As previously introduced, safe water supply and basic sanitation provision have crucial impacts on public health, given that many water-borne and water-associated diseases are amongst the leading causes of mortality. In developing countries, as much as 80% of illnesses are linked to poor water and sanitation conditions according to the World Health Organization. Therefore, poverty-oriented water interventions can have direct, immediate and long-term social, economic and environmental results, which are closely associated with improved public health. It is accounted in public health databases that 2.4 billion individuals in the world live under highly unsanitary conditions today, with poor hygienic behaviour and exposed to enormous risks of incidence and spread of infectious diseases. One of the main reasons for this dramatic situation is the fact that water storage at many households worldwide are frequently done in unsuitable ways, allowing water to be contaminated by inadequate water management in the home. As stated on the World Health Organization website, “these issues are receiving increasing attention, but considering the huge backlog within the sector there is still a need for greater mobilization of resources and involvement of decision-makers at all levels”.

Public-private partnerships : an environmental sustainability and social equity assessment for water and sanitation provision in São Paulo, Brazil

Table of Contents

CHAPTER 1

CHAPTER 2