Many little streams make a mighty river – the 1 per cent solidarity levy

Water Justice report from World Water Week Day 2
23 August 2011
Article

How an innovative financial scheme could help to finance international public-public water projects in the global south.

Presumably few Europeans would oppose one percent of their water bill going to international solidarity projects to help people who don’t yet have accesses to safe water and adequate sanitation. And as the Swedish proverb says, many little streams make a mighty river: the combined sums can make a real difference. In some countries a 1% solidarity levy is already common practice. It is implemented in municipalities in France, Switzerland, Italy and Spain; also in the Netherlands, a national law allows public water companies to use one percent of user’s fee for solidarity projects in the global South.

The huge potential of this approach became clear during the Stockholm Water Week seminar on ‘Implementing the Right to Water: through the 1% Solidarity Levy’. The seminar was organized by UNDP and the UN capital development fund (UNCDF), who actively promote this policy globally. The 1% solidarity levy is an innovative financial scheme that enables public water companies to implement international cooperation projects. This overcomes the hurdle that it is otherwise often difficult for public water companies to legitimize spending revenue outside of their service area. Amsterdam’s public water company Waternet, for example, uses this funding mechanism to implement public-public partnerships in Egypt, Indonesia and elsewhere.

Citizens in 80 municipalities and communities in Switzerland proudly contribute to development objectives through the 1% policy, Manfred Kaufmann of the Swiss Agency for Development and Cooperation told the seminar participants. Also NGOs working with partners in the global south play a big role in the Swiss model, which involves a national coordination body, Solidarit'eau Suisse. Projects proposed by NGOs are assessed by an independent experts committee and money collected by municipal water companies made available for those projects that are approved. Solidarit'eau Suisse raises 2 million euro annually, based on the voluntary commitment by the 80 municipalities involved, and 20 projects are implemented. The sums raised in countries like The Netherlands and France are substantially higher. Imagine if all OECD countries introduced similar financial schemes: very significant funds could be raised. This would allow public water company to play an active role in helping other utilities, on a solidarity basis. Currently, not-for-profit partnerships among water operators are depending on aid money from donor agencies. The 1% solidarity levy is the one of the ways to raise additional and more autonomous finance for not-for-profit partnership projects.

Photo by Ted van Pelt