Through the IWA initiative “Regulating for Citywide Inclusive Sanitation” and in collaboration with its partners, namely representatives from regulators and organisations across the globe, the International Water Association aims at identifying the needs, opportunities, and tools for action to support and inspire regulators in their contribution to achieving Citywide Inclusive Sanitation in the context of the Sustainable Development Goals.

This document presents the lessons learnt from IWA’s interaction with regulators of different types, both those who are members of the initiative’s Task Force or part of IWA’s wider network. Many of these regulators kindly responded to a questionnaire with follow-up correspondence and online interviews, some also shared their experience through a series of webinars. Task Force members themselves took part in regular meetings and discussions where experiences and insights were shared. This document contains quotations regarding the case studies based on the sources indicated.

Key lessons learnt

The lessons learnt are that regulators, aiming to achieve sanitation for all, need to address ‘the art of regulating’ by:

• Communicating with the government as to the likely extent of necessary subsidies needed from taxes to support the phased development of CWIS.
• Promoting a range of incentives to mobilise service providers in servicing neglected areas in the context of pragmatism, gradualism, and flexibility.
• Engaging with private service providers to understand better what incentives would enable them to cover neglected areas.
• Promote a culture of collaboration, shared learning, and willingness to innovate to achieve the goal, incentivising operators to be open to new technologies and solutions – regulators accepting service providers’ preparedness to experiment, learn from mistakes and work collaboratively with all stakeholders.
• Continually engaging with main service providers, there needing to be a symbiotic relationship with regulators, with mutual respect and acknowledgement of interdependence.
• Commencing development of a joint regulator and service provider transparent ‘tariffs and charges financial model’ (spreadsheet), including sewered (reducing present subsidies) and non-sewered sanitation options, including each component of the non-sewered sanitation service chain. In order to raise awareness, develop an understanding of the ‘true cost of sewerage’ (in parallel to the already known ‘true cost of water’).
• Developing Key Performance Indicators (but not too many!), linked to incentives and efficiency requirements, to ensure service provider plans include incremental service improvement to the poor – with a specific KPI for ongoing service levels (services used) to the lowest-income quartile.
• Begin satisfaction surveying, use of Citizen Report Cards, benchmarking, and comparative performance tables across the range of licensed service providers. Supporting weaker service providers (and consumer representatives) through capacity-building, particularly in supporting the development of risk-based approaches to preparing service and asset management plans.
• Developing proposed tariffs and user charges (within the regulator’s guidelines & financial model), structured to balance affordability to users and sustainability for service provision, particularly across each element of the non-sewered sanitation service chain.
• Overseeing the subsidies, particularly from water tariffs, but also from municipal taxes and national or state investment (plus transfers for the lowest-income countries), directed to the highest outcome areas first to reach needy households – poorer users to be subsidised through the lever of regulation, ensuring that subsidies are used as efficiently as possible.
• Investigate and develop innovative funding and financing options, including any possible benefits of ‘waste to wealth’. Ensuring an adequate mechanism for service provider appeals against regulatory decisions.

The original interviews and responses were gathered in three compilations – ‘Starting the CWIS transition’, ‘Ensuring CWIS works’ and ‘Completing the CWIS journey’ – to facilitate preparation of this report.

For more information and resources, download the full document or visit the CWIS project page.