(Img credit: The Jakarta Globe)

Mohamad Mova Al’Afghani

The Jakarta Post, Paper Edition | Page: 7 Opinion | Sat, October 20 2012

During the recent Jakarta gubernatorial election, observers and opponents argued that the scale and complexities of the capital city’s urban problems were in no way equivalent to small cities such as Surakarta, where newly installed Governor Joko “Jokowi” Widodo used to serve as a mayor. When Jokowi later has to deal with Jakarta’s drinking water situation, he will realize that there is a grain of truth in this argument.

While his predecessor Fauzi Bowo seemed to be focused more on technocratic “grand strategies” to solve the overall water problem, to my knowledge, Jokowi does not have any sophisticated plan. From media interviews we can tell that Jokowi’s emphasis on Jakarta’s drinking water problem will be on quality and affordability i.e. a pro-poor approach. One of Jokowi’s promises during his campaign was to provide access to water for low-income citizens of North Jakarta, either at an affordable rate, or even for free.

But, how can he deliver on such a promise? I shall explain the complexities below.
First, water provision is a natural-legal-monopoly. What this means is that people cannot just extend pipes to a community outside the existing network because the cost of duplicating networks is high. As a result, there are usually only one or two companies serving a particular region. The monopoly is not only in terms of economics, but also a legal one. Every new entrant or operation may have to gain permission from incumbent companies.

Second, there is a trade-off between service levels and network expansion. Suppose that the companies agree to expand the network, with constraints on bulkwater sources, pressure and continuity of supply other areas might be affected. Thus, a part of Jakarta that is currently well-served might become compromised unless the government finds a new bulkwater source.

Third, there are significant costs associated with network expansion to the poor. In addition to capital expenditure on long-term assets, collection rates will become a major issue. Expanding services to low-income citizens means risking either non-payment or increased debt for suppliers. Various researches indicate that the poor have both the willingness and capacity to pay for water services. However, low-income consumers require flexibility in the form of payment-in-arrears or in installments.

Aside from the above points, unless appropriately addressed, the current governance structure of Jakarta’s water services could impede Jokowi’s pro-poor water plan. As we are aware, there are at least three main regulatory actors in Jakarta’s drinking water services: the city-owned waterworks company PAM Jaya, the concessionaires (Palyja and Aetra) and the governor.

The concession works in such a way that PAM Jaya must purchase the volume of water sold by the concessionaire to the consumer. Thus, from the concessionaire’s point of view, aside from constraints on bulkwater sources, they have no objection at all to serving the poor since they will be paid no matter what.
However, PAM Jaya may have objections to expanding the network to the poor, because if the revenue from tariff collection is not enough to cover the cost, then PAM Jaya will have to borrow money to pay the concessionaire. This means that if the poor cannot pay or can only pay in arrears, PAM Jaya will be in debt to the private sector. It is worth noting that at the moment, PAM Jaya already has huge debts with the private sector.

Another consequence of the above system is that PAM Jaya’s debt would reflect upon the concessionaire’s balance sheet and affect its overall financial health. Put simply: connecting to the poor may affect the collection rates, low collection rates means that PAM Jaya would be in debt to the concessionaire and in turn PAM Jaya’s debt to the concessionaire means higher account receivables in the concessionaire balance sheet. If the concessionaires only have high account receivables but lack cash, how can they have enough funds to invest in further network expansion and finance the existing operations and maintenance?

What the above shows is that there are structural disincentives in connecting to the poor. The concessionaire might be able to resort to outside financing for cash that would support a pro-poor program but for PAM Jaya this could be perceived as a liability that put strains on its balance sheet. A direct interventionist approach will also not work in Jakarta because it is legally impossible. Jokowi will soon find out that the governance of Jakarta water services is a complex web of various actors and interests, not only local and national, but also international. The nature of private sector participation with foreign investment means that the corporations investing in water services are backed by international treaties.

Any disputes could provoke intervention not only from the central government, but could also take place through diplomatic channels. This has already occurred in the past.

All of these challenges should not discourage Jokowi from his initial plan to provide services to the poor. There are several things that Jokowi could do to advance his water-for-the-poor program.

He should first address the lack of incentives from regulatory actors in connecting to the poor. Next, he should consult the poor on how they want to be connected to the network. The poor, together with companies and other actors should sit together to discuss the issue. Finally, Jokowi should try to reform the existing legislation which penalizes the poor for late payments.

As I have said, low-income citizens require flexibility in payments but the current legislation restricts this. In order to achieve all this, of course, he needs sufficient support from the Jakarta City Council.

Reiterating my previous post that international human rights law is basically agnostic with respect to the choice of ownership, you will now find an interesting press release from Aquafed, the federation of 300 strong private water providers.

In a July 29 Press Release, Aquafed conveyed that private water operators “…celebrate the recognition of the Human Right to water and sanitation by the United Nations General Assembly.” Furthermore, they call that the resolution “…must be used to turn the Right into a Reality for the billions of people who do not enjoy proper water services”.

Certainly, Aquafed are suggesting implicitly (and explicitly in its other submissions to the HRC) that the private sector are among those who can turn the right to water into reality.

Read Aquafed’s Press Release, along with its involvement in the right to water process here.

Anti-privatization movement must now stop advocating alternative service provision using the language of human rights. As I argued previously:

Just to note, literature provide explanation as to the genealogy of the right to water movement (see paper by Bakker here – you may need an access). On the one hand, there is the anti-privatization movement which utilizes the language of human right to water in their campaign against privatization and on the other hand, there is the ‘alter-globalization’ movement which also seeks to foreclose the neoliberalization of waterresources and services but does not utilize the language of human rights. They use the language of the ‘commons’ instead.

Bakker noted in her paper that the campaign against privatization by utilizing the human right to water language are prone to fallacies. Indeed, right to water activists tend to conflate human rights with property rights. If water is a human right, then it should not be a commodity – they think. This is inherently wrong. The right to life does not entitle you not to pay the emergency room service fee, or your medication. The same works for the right to food or education and other rights. Water is by no means different from them.

Quick blogging. Finally the long awaited report from the Independent Expert (IE) is out.

The report emphasize the importance of transparency, participation and accountability in water projects involving the private sector. On the transparency side, the IE even suggests that "Commercial confidentiality must not jeopardize the transparency requirements provided for under the human rights framework". Finally, she conclude and recommends that "The process of decision-making and implementation, any instruments that delegate service provision including contracts, and instruments that outline roles and responsibilities must be transparent, which requires the disclosure of adequate and sufficient information and actual access to information".

I hope this report ends the long speculation that the human right to water means outlawing “privatisation”. It does not and is never meant to be as such. The discourse on water has been cluttered with the privatisation debate. This report outline that the word “privatisation” itself is dilemmatic and the problem does not end there. Privatization has its problem and so does non-delegated or state-owned services. The real problem is governance, whether the service is public or private or hybrid.

More discussions follows.

Read the full report here.

Relevant posts:

Transparency in Water Services
Indonesian Water Services Suffering from a Lack of Governance
14 Disturbing Facts about Jakarta's Water
Where to complain for bad water services – a comparison
Jakarta’s water crisis, whose fault?
Human Right  Aspects of Private Sector Participation in the Water Sector
Is water a commodity or human rights?
The human right to water is not a property right
Why busy with the right to water instead of governance
Consultation on the Human Right  Aspects of Private Sector Participation in the Water Sector: more responses from the private sector
The Economist and the human right to water
Transparency Agenda in Water Utilities Regulation
Hukum Air (Water Law) is not really a topic in Indonesia
Papers:
Safeguarding water contracts in Indonesia
Constitutional Court review and the future of water law in Indonesia
Presentation:
Anticipating water trade

Reminder: An audio conference with the topic "Protection of water consumer's rights in Indonesia" will be held on this page today, June 2, 19.00-20.30 (GMT+0) -- that's around 1.a.m. Jakarta Time (GMT+6)! The discussion will be in Bahasa Indonesia. Materials are available below. Read here for previous announcement.

I tried googling “water law” in Google.com (the Indonesian term is “hukum air”) and on the first google page, I found no reference to any site relevant to my search. If you click on the link, you will find that everything on the page is related to the religious law pertaining water for prayers or religious activities. None of them refers to water law.

I then googled “privatisasi air” (water privatization). Voila, everything in the first page is relevant. I scrolled down unto the 6th page, and everything reflects the true meaning of my google query.

From my queries, I can infer that water law is simply not (yet) a substantial part of the public discourse. But conversely, privatization is. So talks about water in Indonesia is dominated with the privatization discourse. What is interesting, the discourse of water privatization is much focused in the privatization of ‘water utilities’. If you speak bahasa Indonesia and google “privatisasi air”, you will find that most of the pages are critical towards the privatization of water utilities. Only one or two discusses water privatization in another context. Another thing: almost none (at least in google’s 1-3rd page) discusses sanitation.

On the one hand, it is a positive thing that privatisation is becoming a part of public discourse, but on the other hand, it is a pity that the debate is dominated only with privatisation of water utilities. What we need now is a better governance of our water (both resources and services) and law, is an important tool of governance. Privatization of utilities is only a small – albeit important and vital – part where law comes into play. But that’s not everything. We also need to think on how our resources is managed and how our services (both when they are public and private) are run.

It is not adequate for us to speak “against privatization”. We must also say what should be done when privatization is already the fact of life and what should be done when public ownership becomes the mode of delivery. Irrespective of the model (privatization or public ownership), in the end of the day, it is the consumer that needs to be defended. They need water to flow to their tap and they need the law to be on their side.  

Hence, water law should be in the discourse.

ps: if your google search (for hukum air) returns this post on the first page, then we might have contributed the “hukum air” meme into the discourse

The company refused to be blamed:

“The massive silting that broke the pump in Pulogadung was caused by the declining quality of water. We fixed the pump and parts of the pipeline network,” Yosua said. “This  shortage is not entirely our fault.”
He said it would take more time for water to reach areas located farther from the main pipelines, which had been empty for days.
“And there are people in several neighborhoods in North Jakarta who collect water from hydrants too, and this makes [the distribution of water] even worse,” Yosua added.
Aetra Air Jakarta said it was becoming increasingly difficult to provide millions of Jakartans with potable water.
“The city has become overpopulated, and the levels of pollution have increased exponentially,” Yosua said. “These two factors greatly contribute to water  shortages in the city.”

Consumers are entitled to water services based on the service level as determined by law (if there are components of the service levels which are based on contracts, then they will not apply, as the law automatically derogates them). In Indonesia, water quality level is determined by the decree of the ministry of health  907/MENKES/SK/VII/2002 and Government Regulation 16/2005 (GR 16/2005) Article 6.2. In Jakarta, the continuity of water services is guaranteed by Regional by Law 13/92 and 11/93.

If any of these service levels are violated, based on GR 16/2005, consumer shall have the right to compensation. Article  67.1.a and 68.2.e of GR 16/2005 stipulates (in Bahasa):

(1) Setiap pelanggan air minum berhak:
a. memperoleh pelayanan air minum yang memenuhi syarat kualitas, kuantitas, dan
kontinuitas sesuai dengan standar yang ditetapkan;
b. mendapatkan informasi tentang struktur dan besaran tarif serta tagihan;
c. mengajukan gugatan atas pelayanan yang merugikan dirinya ke pengadilan;
d. mendapatkan ganti rugi yang layak sebagai akibat kelalaian pelayanan; dan
e. memperoleh pelayanan pembuangan air limbah atau penyedotan lumpur tinja.

Hak dan Kewajiban Penyelenggara
Pasal 68
(1) Setiap penyelenggara berhak:
a. memperoleh lahan untuk membangun sarana sesuai dengan peraturan perundangundangan;
b. menerima pembayaran jasa pelayanan sesuai dengan tarif/retribusi jasa pelayanan;
c. menetapkan dan mengenakan denda terhadap keterlambatan pembayaran tagihan;
d. memperoleh kuantitas air baku secara kontinu sesuai dengan izin yang telah
didapat;
e. memutus sambungan langganan kepada para pemakai/pelanggan yang tidak
memenuhi kewajibannya; dan
f. menggugat masyarakat atau organisasi lainnya yang melakukan kegiatan dan
mengakibatkan kerusakan prasarana dan sarana pelayanan.

(2) Setiap penyelenggara berkewajiban untuk:
a. menjamin pelayanan yang memenuhi standar yang ditetapkan;
b. memberikan informasi yang diperlukan kepada semua pihak yang berkepentingan
atas kejadian atau keadaan yang bersifat khusus dan berpotensi akan
menyebabkan perubahan atas kualitas dan kuantitas pelayanan;
c. mengoperasikan sarana dan memberikan pelayanan kepada semua
pemakai/pelanggan yang telah memenuhi syarat, kecuali dalam keadaan memaksa
(force majeure);
d. memberikan informasi mengenai pelaksanaan pelayanan;
e. memberikan ganti rugi yang layak kepada pelanggan atas kerugian yang
dideritanya;
f. mengikuti dan mematuhi upaya penyelesaian secara hukum apabila terjadi
perselisihan; dan
g. berperanserta pada upaya perlindungan dan pelestarian sumber daya air dalam
rangka konservasi lingkungan.
(3) Pemberian ganti rugi sebagaiman dimaksud pada ayat (2) huruf e diupayakan
berdasarkan penyelesaian di luar pengadilan atau melalui pengadilan.
(4) Upaya penyelesaian di luar pengadilan sebagaimana dimaksud pada ayat (3)
dilakukan dengan arbitrase atau alternatif penyelesaian sengketa sesuai dengan
peraturan perundang-undangan.

From the legal point of view, consumer has the right to receive the continuity, quality and quantity of water as prescribed by law. They should be compensated if these rights are interrupted or not fulfilled due to the negligence committed by water undertakers. GR 16/2005 above also prescribes that water undertaker must pay a decent compensation to consumer for the loss they sustained. Although GR 16 is not particularly clear on what it means by ‘loss’ but this is likely to be a term for ‘violation of service levels’. 

Hence, under the law, ‘whose fault’ is not really the question for consumer. GR 16 does not differentiate whether the fault lies on the part of the bulk water supplier (in this case, PT Jasa Tirta) or the treatment and distribution facility (in this case, Palyja or Aetra). What the law require is for the consumer to be compensated, irrespective of whose fault it is.

'Whose fault’ is more a question for the government. The government is the one responsible to provide accountability mechanism in response to the complicated structural arrangement in the water sector. The government should determine where the liability lies and direct the compensation fund from the liable party to consumer.

More in this issue: my interview with Kompas (in Bahasa). 

Related Posts:
14 Disturbing Facts about Jakarta's Water
Supreme Court Decision on Water Monopoly in Batam
Water companies duty to satisfy reasonable demands

If you are in England, UK:

Consumer Council for Water : Consumer Council for Water via kwout

If you are in Victoria, Australia:

Energy and Water Ombudsman (Victoria) via kwout

If you are in Indonesia:

Homepage ’ Website OMBUDSMAN RI via kwout

With one caveat however. The Indonesian Ombudsman does not deal particularly with water (or utilities issues). So I have no idea how they can help, especially when the service is privatized. Read my article here.

Related Posts:

Hat Tip to Mulia.

Oxfam/Routledge published a special issue on water in Gender and Development Journal. The articles can be downloaded for free.

Gender and community mobilisation for urban water infrastructure investment in southern Nigeria
Charisma Acey

'Good' water governance and gender equity: a troubled relationship
Frances Cleaver and Kristin Harmada

Sustainable development, water resources management and women's empowerment: the Wanaraniya Water Project in Sri Lanka
Seela Aladuwaka and Janet Momsen

Unequal burden: water privatisation and women's human rights in Tanzania
Rebecca Brown

After the summit: women's access to water and policymaking in Brazil
Marianna Leite

Oxfam experience of providing screened toilet, bathing and menstruation units in its earthquake response in Pakistan
Jamila Nawaz, Shamma Lal, Saira Raza and Sarah House

Menstrual hygiene in South Asia: a neglected issue for WASH (water, sanitation and hygiene) programmes
Thérèse Mahon and Maria Fernandes

I cannot drink water on an empty stomach: a gender perspective on living with drought
Frank S. Arku and Cynthia Arku

The summary of the UN expert consultation on the human right aspect of PSP is available in the FES website. The questions discussed can be seen here. Meanwhile, the number of feedback to the Independent Expert on the consultation continues to grow. This is the list of feedback.

Among the new feedback, Germany's view is particularly interesting.

There is an interesting op-ed in today's Jakarta Post about Water Resources. The author argues:

There are three main reasons for the emergence of shadow users and the disappearance of water from the water table.

1. First, on face value, unlike countries that face water scarcity, Indonesia has abundant and easily accessible water resources.
2. Second, a small handful of non-state actors and activist organizations are not pluralistic by definition. These actors are politically driven, weak and sparse. Promoting a consensus based pluralistic dialogue and discourse is not their main agenda.
3. Third, both at the national and local levels, there are gaps in linking public policy-making with regulatory frameworks.

Following is my latest op-ed at the JP:

I took this picture at the Edinburgh Train Station Yesterday (Aug 16, 2009)

I wrote an op ed-piece for the JP a few days ago: