Uncertain frontiers: mapping new corporate engagement in water security

Working and discussion papers
January 2013

An increasing number of multinational corporations (MNCs) are recognising water is a central business concern, a vital input for production processes, and potential point of contention in relations with government, investors and society at large. These corporations are utilising new terms to describe their engagement, including ‘water stewardship’ and management of ‘shared water risks’. For the corporations concerned, such terms embrace action not only within their operations, but in the catchments and river basins in which their own operations, and those of suppliers, are located – including in developing countries.

As such, the corporations concerned are beginning to make a transition, from being major users of water resources, to water resources management. Where MNCs perceive the public architecture for water resources management to be inadequate, they may undertake to bring their own convening and analytical power to bear, and enter into an array of partnerships with other companies, non-governmental organisations, and public agencies. The considerable economic and political power wielded by major MNCs means that these analytical, convening and partnership activities can indelibly shape WRM outcomes – especially in developing countries where public capacity may be limited. Key, then, is to ensure that outcomes are not shaped to conform with a narrow set of interests.

This paper surveys a broad range of activities at the frontiers of private sector engagement on water predominantly, though not exclusively, driven by MNCs in the food and beverage sector. In so doing, it endeavours to point out where these activities hold promise, in terms of making a positive contribution to water security, broadly understood, as well as where asymmetries of power and unclear motivations may jeopardise such outcomes. The paper recommends that while the MNCs can contribute to bridging three major gaps in water security – information, institutions and investment – there are necessary conditions which must be fulfilled. Namely, information must be transparent, institutions accountable, and investment geared towards equitable and sustainable outcomes.