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Water, which might appear as a gift from nature, actually needs huge human investment in order to serve the varied and growing global demand on this resource. Creating the investment structures and securing the funding to meet water needs is a key enabling factor to achieving good water governance.

Legal frameworks play an important role in the management of water resources at a range of scales – from local and national legislation covering domestic use, to international treaties that govern waters shared by sovereign nations.

Water is a core developmental issue; it affects almost every activity within the wider economy and society, including migration, land use and settlement growth and changes in industrial activity. Consequently, the developments that do not necessarily relate to the water sector per se – for example national energy and food policies – are yet always closely connected to water. Setting goals on water use, protection and conservation, must be based on policies that take into account these various interconnections.

Management instruments are specific methods that enable decision makers to make rational and informed choices when it comes to water management and to tailor their actions to specific situations. Good water governance, according to IWRM principles brings together perspectives and knowledge from different domains. Consequently, the instruments presented here are based on a variety of disciplines such as hydrology, hydraulics, environmental sciences, system engineering, legal sciences, sociology, and economics.

It is often said that the current water crisis is mainly a crisis of governance, much more than a crisis of water shortage or water pollution per se. In the context of IWRM, governance is defined as the range of political, social, economic and administrative institutions that are in place (or need to be in place) to develop and manage water resources in sustainable manners. This section identifies four institutional roles that must be fulfilled for water governance systems to achieve sound IWRM practices: B1 – Regulation and Enforcement; B2 – Water Supply and Sanitation Services; B3 – Coordination and Facilitation; and B4 – Capacity Building.

A proper enabling environment establishes the rights and assets of all stakeholders (individuals as well as public and private sector organizations and companies, women as well as men, the poor as well as the better off), while ensuring for environmental quality. The enabling environment essentially consists of “rules of the game” that are laid out as to achieve a sustainable balance between the social, economic and environmental needs for water. These rules can be defined by the use of: (1) Policies; (2) Legislative Frameworks; and (3) Financing and Investment Structures.

Over 100 participants from 22 countries across the Mediterranean attended the recent launch of a joint GWP/OECD project on water governance and financing in the Mediterranean.

Wathersheds of Tacana originate on the volcano, with both shared by Guatemala and Mexico. This region is of great strategic importance for both countries since they supply water to a large number of residents in the cities located downstream and are the main source of irrigation water for agriculture. In the lower reaches, fishing is an important source of income.

The Lempa River is shared by Guatemala, El Salvador and Honduras, making its management a good example of transboundary cooperation. To reach consensus, action was taken to develop a treaty as part of a regional process.  However, since the treaty was not accompanied by strategies designed by local actors, it is somewhat weak. Nonetheless, this case illustrates that political willingness is crucial for advancing towards IWRM in transboundary watersheds. 

To protect the Panama Canal Watershed, which was created when the Panama Canal was constructed, formal limits to its utilisation was set up, including the Panama Canal Treaty and the creation of a Panama Canal Authority.  This case study predominantly illustrates the peculiar problems that arise when a highly artificial watershed is managed by a modern, internationally oriented public corporation with a country that is still copping with the hydraulic culture and a national water policy.