Water wars: a new reality for business and governments

Violent tensions over water are on the rise, from India to Iraq. The solution lies in good governance and business has a key role to play
An abandoned boat on the dry bed of the Indus River Villagers pass by an abandoned boat on the dry bed of the Indus River in Karachi, P During his reign from 2,450-2,400BC, King of Lagash set about building boundary canals around his territory. The result was a gradual reduction in the water flowing to nearby Umma (modern-day Iraq). Fisticuffs followed.

Violent tensions over water are certainly nothing new, but they are on the rise. “We see thousands of years of examples where water has been a source of tension in one form or another … but violence related to water is growing, not shrinking”, says Peter Gleick, president of the Pacific Institute, an independent US research centre that publishes a chronology of water-related conflicts. Clash of interests
Basic demand-supply rules go a long way to explaining the reasons behind this growing friction. Water resources are finite and, according to climate change scientists, could well be dwindling in some existing dry regions. At the same time, the combination of a surging world population and steady industrialisation means the scramble for water is heading ever upward.

The result is a predictable clash of interests, states Paul Reig, a water expert at the World Resources Institute, a US conservation organisation. “Water is likely to cause the most conflict in areas where new demands for energy and food production will compete with the water required for basic domestic needs of a rapidly growing population”, he says.

Water can act as a secondary cause of conflict as well. Take India and Pakistan. Water doesn’t explain the two countries’ fractious relationship, but the fact that they jointly rely heavily on the Indus River for irrigation and hydropower doesn’t help. On occasions, water can emerge as a de facto instrument in conflict too, with warring parties targeting one another’s water resources. Exactly such a scenario is seemingly unfolding in Iraq and Syria today.

So are we going to see a third world war over water, as some alarming predictions maintain? It’s unlikely, say most analysts. More probable are regionalised conflicts between neighbouring states that are heavily dependent on the same water source.

If China decides to continue damming upstream sections of the Mekong River, then the downstream impacts on Burma, Thailand, Laos, Cambodia and Vietnam could be profound. Similarly, Uzbek farmers are unlikely to take kindly to Tajikistan’s desire to dam the Vakhsh River. Nor have moves by Ethiopia to build a hydropower facility on the Nile been well received in Cairo.

Even more likely is an escalation in sub-national conflicts, says Gleick. Expect growing localised tensions around specific watersheds between one ethnic group and another, between farmers and cities, and so forth, he warns: “Rather than India versus Pakistan, it’s Karnataka versus Tamil Nadu over the allocation of a river that is shared between those two states.”


The Water Stress Index, produced by UK risk analysis firm Maplecroft, provides an indication where water-related conflicts might be most likely to occur. Worryingly, the world’s ten most water-stressed nations are all located in the already combustible Middle East. Equally concerning are the number of water-scarce countries where conflict is already underway. The list includes hotspots such as Afghanistan, the Palestinian Occupied Territories, Syria and Iraq.

Companies and conflict
The private sector is far from a silent bystander in these water-related conflagrations. In a number of notable cases, corporate activities have proved the match that lights the wick. Coca-Cola’s allegedly excessive abstraction of groundwater at Mehdiganj bottling plant in the Indian city of Varanasi sparked long-running protests. The 2003 decision of Finnish forestry firm UPM to locate a $1.2bn pulp mill on the banks of the Rio Uruguay, meanwhile, led to a prolonged diplomatic spat between neighbours Argentina and Uruguay over pollution claims.

But companies don’t need to be the protagonists of conflict to find themselves embroiled in water-related tensions. Multinational firms are especially vulnerable, notes James Allan, associate director for environment and climate change at Maplecroft. “Water is a local issue but the end product isn’t being used or enjoyed locally, so there’s a real tension there between international business and local users”, he states.

The consequent risks to business are considerable. Water-related conflicts threaten companies’ profits in the form of reputational damage, legal sanctions and regulatory obstacles. In the worst scenarios, businesses may see their licence to operate revoked (as Coca-Cola recently found with its Mendiganj facility).

Already, companies are feeling the heat when it comes to expanding existing operations, notes Allan. “If you’re going to put a £200m investment in a new bottling facility, do you upgrade a current facility that you know is in an already water stressed area or do you look for an entirely alternative location to do that in?”, he says. “They [businesses] haven’t really come up with the tools and approaches to allow them to make these decisions.”

Clearly, the more efficiently fixed and limited water resources are managed, the higher the chance of averting future conflict. Advances in water footprinting efforts and water efficiency strategies in recent years show that some companies – if not all – are getting on the case.

Yet the multiple demands on local water resources demand that business look beyond its own four walls. Collaborative ‘water stewardship’ frameworks championed by the business-led CEO Water Mandate, among others, demonstrate what a meaningful cross-sector approach might look like.

Ultimately, the solution lies in good water governance. Governments need to provide clear rules for water resource management and effective methods for enforcing them, argues Gleick. “The greatest risks of conflicts over water are not really at the intersection of the corporate sector and the water world”, he concludes. “They are in regions where water is scarce and governments are not addressing how to allocate water fairly and effectively.”

More than three millennia after the Sumerian cities of Lagash and Umma came to blows, it’s time we learned the bellicose lessons of water’s long history.

THE GUARDIAN -  UK - 06 octubre 2014