Strengthening financial integrity in water and sanitation utilities in Latin America
- cgrandadam
- 7 days ago
- 7 min read
Updated: 2 days ago
The Water Integrity Global Outlook 2024 (WIGO 2024) and its implications for utilities - a conversation with utility managers and experts from Latin America.
Integrity is essential to ensure that water and sanitation services are accessible, equitable and sustainable. Corruption and integrity failures remain significant challenges for water and sanitation utilities. In response, innovative tools to assess and improve the integrity of the sector are key.
In 2024, the Water Integrity Network (WIN) launched the Water Integrity Global Outlook with a focus on finance. The report provides an overview of the risks of corruption and poor integrity in financing, and proposes solutions to reduce the financing gap and improve financial management in the water and sanitation sectors. Here, utilities have an important role to play.
Several Latin American utility leaders, as well as sector stakeholders and funders came together on March 26, 2025 for a discussion hosted by WIN in collaboration with Red de Agua, UNAM and Centro Regional de Seguridad HÃdrica under the auspices of UNESCO. This is an edited summary of the discussion, focusing on the importance of financial integrity in water and sanitation utilities in Latin America. With special guests:
Marcello Basani, Water and Sanitation Lead Specialist, Inter-American Development Bank (IDB)
Patricia Hernández, Executive Director, National Association of Water and Sewerage Entities (ANEAS)
Marcelo Rogora, Director of Integrity and Best Practices, Agua y Saneamientos Argentinos (AySA)
Rolando Taquichiri Kussy, Head of Planning Unit (SeLA Oruro)
Eduardo Bohórquez, Executive Director, Transparencia Mexicana
Moderator: Jorge Alberto Arriaga Medina, Executive Coordinator, Water Network, UNAM and Regional Center for Water Security under the Auspices of UNESCO.
"The promotion of transparency and accountability should not be perceived as a threat, but as an opportunity to optimise management and improve services."Â -Marcello Basani, Banco Interamericano de Desarrollo (IDB)
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Integrity challenges and opportunities for water and sanitation utilities in Latin America
Water and sanitation utilities in Latin America operate in complex environments facing persistent integrity challenges, but they also have a strong basis and potential for action.
Strengths
Commitment to integrity: Several companies have dedicated integrity units, a fact which demonstrates a growing institutional willingness to fight corruption.
Relatively high water access / coverage: The region has higher rates of access to water and sanitation compared to Asia and Africa.
Strong legal framework: There are strong legislative measures that guarantee access to water and sanitation as human rights.
Active civil society: Civil society organisations play a key role in monitoring and promoting transparency in the sector.
Persistent challenges
Social inequalities: there is a major gap between access and service levels of water and sanitation between groups, with rural communities and marginalised areas far behind.
Institutional instability: High staff turnover and political appointments affect the continuity and efficiency of utilities.
Abuse of emergency declarations: Situations such as droughts, floods or health crises (COVID-19) have been used to evade transparent contracting processes.
Weaknesses in the judicial system: Impunity and a lack of independence in the judiciary make it difficult to sanction acts of corruption in the sector.
Impact of climate change: Extreme events such as prolonged droughts and floods aggravate the water crisis and test the resilience of the system and the capacity of utilities to respond.
Risks for environmental defenders: Threats against activists and communities defending water and the environment efforts for fairer and more sustainable management are high and increasing.
Opportunities
The talk focused on the need to understand integrity not only as a control and sanction mechanism, but also as a key tool to strengthen the water and sanitation sector.
Integrity goes much further than control or punishment of corruption. Integrity is also a pillar of continuous improvement and credibility, ensuring that resources are managed efficiently and for the benefit of the company and society. Providers can foster a culture of integrity through incentives and tools that promote good practices. This implies, for example:
Awareness raising and training in integrity for all actors in the sector.
Use of digital technologies to facilitate monitoring and improve transparency and publication of quality data.
Citizen participation spaces that strengthen accountability.
"Providers must understand integrity as a tool for improvement, not as a punishment mechanism. Although in some cases it is necessary to resort to sanctions, it is not a matter of punishing for the sake of punishing, but of demonstrating that this is not the right way to go." - Marcelo Rogora, Agua y Saneamientos Argentinos (AySA)Â Â
a) Integrity for public trust in utilities, through transparency and accountability
Citizens depend on water and sanitation services being managed fairly and efficiently. Lack of transparency erodes credibility and trust in utilities and makes it difficult for citizens to participate in monitoring services. This can occur with greater intensity during emergency periods such as droughts or floods.
Marcello Basani (IDB):Â Standard rules and procedures, such as procurement practices, tend to become more flexible in order to respond more quickly. A clear example is direct contracting, which, if not properly managed, can open the door to corruption risks. For this reason, having transparent and quality data on what is being done is fundamental. But this brings us to a key question: who verifies the quality of this data? Is it the responsibility of the citizenry or of the regulator? And what happens in those contexts where there is no independent or effective regulator? These questions are important pertinent, and can bring valuable insights to the financial integrity debate.
Eduardo Bohórquez (Transparencia Mexicana) : Without access to public information, it is difficult to detect and prevent acts of corruption that affect the management of water resources. Furthermore, accountability should not only be a formal exercise, but an effective practice that allows citizens and other stakeholders to monitor how decisions are made and how funds are managed. Open data and real-time monitoring systems can be key allies for more efficient and transparent water management.
b) Integrity for utility efficiency, through citizen participation
Citizen participation in decision-making, verification data, and monitoring of services is key to improving financial integrity in water management. Users should be more involved in decisions related to tariffs, budgets, planning, and monitoring. This ensures a more efficient use of resources.
Patricia Hernández (ANEAS): Involving society in decision-making not only allows utilities to better respond to the real needs of communities, but also builds trust in the institutions in charge of water and sanitation management.
c) Integrity for sustainability of the sector, through better data and strong regulation
To attract investment and ensure the sustainability of the sector, it is essential that water and sanitation funds are managed with integrity and efficiency. This requires good quality data, clear indicators, good regulation and the support of the regulator.
Marcello Basani (IDB): Without reliable and updated information, it is difficult to make strategic decisions that truly respond to the needs of the population and the challenges of the sector. The collection, systematisation and adequate verification of data make it possible to identify corruption risks, improve investment planning and evaluate the impact of projects. Transparency in information management not only strengthens public confidence, but also attracts investment, since financial institutions and donors require guarantees that resources will be used efficiently.
La integridad debe entenderse no como una medida draconiana, o que sea únicamente para castigar, sino que sea una oportunidad para mejorar. - Rolando Taquichiri Kussy, SeLA Oruro
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Best practices of integrity in water and sanitation management in Latin America
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Marcello Basani (IDB): Integrity is a fundamental pillar at the Inter-American Development Bank (IDB), so we have integrated it as a transversal axis in all infrastructure projects. In collaboration with the Office of Institutional Integrity, we have observed that infrastructure investment must be accompanied by strong integrity policies because without them corruption risks can undermine the benefits of water and sanitation projects. As a mitigation measure, we conduct a risk analysis and trigger monitoring and response actions, ensuring that resources are used efficiently and transparently.
Marcelo Rogora (AySA): In Argentina, a joint initiative has been launched between the public and private sectors to enhance integrity within organisations. It is the Integrity and Transparency Register for Companies and Entities (RITE), created by the Anti-corruption office of Argentina.
RITE promotes the adoption of integrity programmes that are adequate and accessible to the general public, thus fostering an organisational culture based on ethics and transparency. In this context, AySA has adhered to RITE as part of its commitment to strengthen its integrity work and reinforce trust in water management. This model allows utilities to adhere to ethical standards and be evaluated based on their commitment to transparency, with a positive impact on both their internal operations and their relationship with the public.
Rolando Taquichiri Kussy (SeLA Oruro): In Bolivia, SeLA Oruro has been developing strategies to improve its financial integrity and promote more transparent and efficient management.
Some of the most important actions include the implementation of the integrity toolbox, the performance of periodic audits and the promotion of citizen participation in decision-making. Likewise, SeLA Oruro has worked on updating, approving and disseminating its code of ethics, with a particular focus on operational and administrative personnel. In addition, the entity has invested in training its employees and in strengthening whistleblowing mechanisms, ensuring that any irregularities can be detected and addressed in a timely and effective manner.
"An integrity approach is important for water and wastewater utilities, although it is a time-consuming, day-to-day job whose effects are seen in the medium and long term." - Rolando Taquichiri Kussy, SeLA Oruro
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Conclusion: priority measures to strengthen financial integrity in water and sanitation utilities
Water and sanitation utilities play a key role in leading integrity efforts to reduce the negative impact of corruption. They can do this with a number of tools and strategies:
Transparency in the use of resources: Publish everything that is done and implement clear processes to track the allocation of funds. This includes the adoption of open contracting and the development of corporate governance standards to prevent conflicts of interest.
Promote accountability:Â Clearly and effectively explain where resources are going.
Increased citizen participation: Encourage dialogue with civil society and involve citizens in decision-making on tariffs, budgets, planning and monitoring of services.
Effective integrity risk monitoring: Identify and assess risks in the budget cycle, especially in emergency situations, where direct contracting can generate vulnerabilities to corruption.
Collaboration with anti-corruption bodies: Work together with anti-corruption offices and regulatory agencies to strengthen oversight mechanisms and ensure compliance with integrity standards.Â
Culture of integrity within companies: Promote a leadership committed to transparency and implement integrity training programmes at all levels of the organisation, including senior management, unions, suppliers and operators.