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Water shortage and governance – what role for the public policy dialogue

Herbert OberhänsliEconomics & International Relations Nestlé SA

The CEO Water Mandate at the Fifth World Water ForumIstanbul 16 March 2009

Nestlé SAUN GC CEO Water Mandate Istanbul 16 March 2009 #2

From water shortage to food shortage

“If present trends continue the livelihoods of one third of the world’s population will be affected by water scarcity by 2025.

We could be facing annual losses equivalent to the entire grain crops of India and the US combined.”

Frank Rijsberman, Director General International Water Management Institute, 2003

http://dlc.dlib.indiana.edu/DLCImage/images/Mali2006-303-full.jpg


Proliferation of political targets for biofuels

Only 6 % of total energy used worldwide supplied as biofuels:

the equivalent of all food grown globally (both in calories and water withdrawn in agriculture)

United States30% (2030)

Brazil10% (2020)

Australia10%

India10% (2012)

Argentina5% (2010)

Canada5% (2010)

China5% (2020)

Colombia25% (2025)

Indonesia10% (2010)

New Zealand3.4% (2012)

Japan10% (2010)

South Africa10% (2010)

South Korea5% (2010)

Thailand10% (2012)

European UnionUp to10% (2020)

Source http://www.greenfuels.org/news/March-28-2006.pdf and national publications

http://www.greenfuels.org/news/March-28-2006.pdf


Water withdrawals exceeding natural supply: „Tragedy of the Commons“

Source: UN, Water a shared

responsibility,New York 2006


Nestlé no heavyweight, neither in water withdrawals, but concerned and commited

Water withdrawals (per USD sales)Nestlé (including for bottled water) 1.8 litres of water

Major competitors food 1.5 – 2.8 litres of water

Chemical, mining, oil, pulp/paper 120 – 370 litres of water

Savings (water per USD sales):

withdrawals down 64% over the last 10 years

Sources: JP Morgan Watching Water; company annual reports, US Academy of Science http://books.nap.edu/openbook.php?record_id=10994&page=67


Food: a fragmented and competitive market

in bn US$ (2007)in % of world food total

100%

84

350

1’120

800

3’170

4’875All food & non-alcoholic drink,at consumer prices

of which:Processed food and drink

of which:Food manufact. value-added

20 top grocery retailers,turnover

20 top food manufacturers,turnover

Nestlé (food & bev. only, in US$)

65%

16%

7%

1.7%

23%

Sources: UNIDO; UN WIDER; var., analyses EIR


Water – contradictions

“Floods swamp Iowa town; drinking water near gone”

Water: a complex substance, needed• at the right time,• at the right place,• in the right form,• ready for the rightuser


Water for agriculture: full cost recovery, private property rights and tradability of water in Oman

Aflaj systems in Oman, since 2,500 B.C.

Source: http://whc.unesco.org/archive/advisory_body_evaluation/1207.pdf


Necessary exemptions from tradability and private property rights: the poor, nature

The environment: quotas/caps to make sure enough water remains for rivers, lakes and wetlands.

The poor: e.g., in South Africa 6,000 litres of water per family and month, if necessary free of charge.


Available land for rain-fed cultivation and land used

0

200

400

600

800

1000

Asia

Africa

Latin

Ameri

ca

Europe

North A

merica

Forests

Available agric.land (rain-fed)Rain-fed used

Irrigated used

Sources: IIASA and FAO, 2001

million ha

Avg. yield (cereals)in t/hectare (2004)

3.3

1.3 3.1

3.75.9


The need for a comprehensive view, with clear responsibilities

“The problem is that we have no coordinated global [water] management authority in the UN system or the world at large. There is no overall responsibility, accountability or vision for how to address the related problems of agricultural stress and water technology.”

UN Secretary-General Ban Ki-moon, Davos 29 January 2009


Thank you!


Water for the poor: the realities

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