Latin America's water woes blamed on politics and poor infrastructure

Latin America’s efforts to manage its fresh water supplies are being frustrated by poor infrastructure, a lack of sewerage systems and inconsistent regulation, according to the head of one of the world’s largest beverage and brewing companies.

Karl Lippert, president of the Latin American division of SABMiller, said that although governments in the region were beginning to appreciate the need to improve their stewardship of water resources amid growing demand, political will had yet to translate into concrete action.

“The way that the public and the politicians think about water is too simplistic,” he said. “The reason why water doesn’t loom large in people’s minds in Latin America is because they think there’s a lot of it – and that’s not untrue. You have a lot of rainfall: South America has 28% of the world’s fresh water and about 28 cubic km of rainfall a year. That’s a lot.”

But, he said, the management of that water was complicated by four factors. “The first is that water is typically in the wrong place; in other words, the water is typically where people don’t live,” said Lippert. “And politicians aren’t too keen to do things because their term of office expires long before there’s a payback.

“The second is that, perversely, it’s often when it rains that you have water scarcity. With the deterioration of the river basins, the amount of sediment inflow that happens when there’s a storm is something the water treatment companies can’t cope with. So you end up with water scarcities during rain.”

The third problem, said Lippert, is that only 20% of Latin Americans are connected to a sewerage system, which means that open rivers and canals in populated areas are often turned into sewers. Such usage soon contaminates the water basin.

The final issue is the disjointed nature of water regulation across the region, which tends to focus on a minority of big companies while turning a blind eye to informal businesses, he said.

“But most businesses are informal – 70% of all companies operating in Colombia are not registered,” said Lippert. “ There’s one set of rules for the formal sector but many of the informal companies are not inspected and they look at the regulations and say, ‘maybe there’s a fine coming if I do something, but I’ll take the risk because they probably won’t come and if they do, the fine is quite small’. The low probability of a small fine versus the cost of putting in water treatment centres means it doesn’t make sense.”

Lippert, who is in London to attend Thursday’s Economist World Water Summit , said national and local governments, community groups, NGOs and large corporations needed to work together on tackling water scarcity and improving sustainability.

“There is some formal recognition now of the need to do stuff, but progress has been slow,” he said. “My message to business is: stop thinking about sustainability as a compliance issue; think about it as a business opportunity.”

Lippert said SABMiller had reduced its global water consumption by 25% over the past six years, and was aiming to cut it by a further 15% by 2020. The company is also working on water projects in Bogotá, Cali, Quito, Lima and Guayaquil to combat the effects of over-farming and deforestation.

“We don’t have any philosophical issues with the idea that business has to be part of the solution and make a contribution because, at the end of the day, everybody benefits from this, including us because we consume water too,” he said. “It’s in our interests because we still pay water treatment costs.”

Despite the commitment to collaboration and sustainability, however, SABMiller’s operations in El Salvador’s water-rich Nejapa municipality have come under scrutiny recently.

Local people say the presence of big beverage companies – including SABMiller, which bottles Coca-Cola in the country – is putting such a strain on water resources that they face a daily struggle to find enough clean water to drink. Some have gone as far as to liken the corporate incomers to 21st-century conquistadors.

“People will say things but, to be honest, that doesn’t flap us because we understand that they’re frustrated and while their anger’s misplaced, we know there’s a problem and the problem needs to be solved,” said Lippert, adding that SABMiller takes its water in Nejapa from the ground, whereas its inhabitants rely on the river.

He said Nejapa’s problems were a microcosm of the challenges facing the whole of Latin America.

“Nejapa used to be a village in a coffee-growing area with a wonderful stream and a wonderful water basin,” he said. “As more and more other agriculture and industry arrived – and as the population grew – the infrastructure didn’t come with it. You’ve got exactly the same features there that you’ve got elsewhere, which is that in populated areas, guess where the sewage ends up? Without infrastructure and with more and more people coming in, there’s no access to water.”

The solution, said Lippert, was co-operation on building proper infrastructure. “Somebody has to put in a pipe. We can’t go and reticulate water across a city; we’re not legally entitled to. But somebody has to do it; there has to be the will and the project and the execution. There isn’t really a problem with the availability of water in Nejapa.”