“Aid,trade and investment”: Water operator partnerships and the Dutch water sector

Abstract

The concept of water operator partnerships (WOPs) was first proposed by a United Nations (UN) advisory board in 2006. Since then, several hundred WOPs have been implemented within and across different world regions. In contrast to public-private partnerships, WOPs are aimed at facilitating peer-to-peer learning between water and sanitation operators on a not-for-profit basis. According to official UN discourse, “mentor” operators share their expertise out of solidarity and a commitment to enhancing the performance of their peers. However, in light of the controversial history of privatization in the water sector, critics have raised doubts about the role of solidarity as a mentor motivation. Why would water operators assist other providers free-of-charge? Is solidarity indeed the main motivation behind knowledge sharing and capacity building in WOPs, or are more self-interested, profit-oriented incentives driving these activities? This article engages with these questions by analyzing the case of Vitens Evides International (VEI), a public company from the Netherlands that has emerged as the most active “mentor” in North-South WOPs to date. Drawing on interviews with VEI managers, water company representatives, and other experts, I show that VEI’s mentoring activities are driven by a complex array of motivations, including staff development and recruitment, customer relations, sustainable development, and the advancement of opportunities for trade and investment. Some of these motivations are closely intertwined with Dutch development policy and the promotion of Dutch water expertise. More research is needed to understand how these interests and motivations affect social equity, learning, and capacity development in WOPs.

Keywords

water services water operator partnerships (WOPs)development assistance aid and trade Netherlands

Introduction

In the 1980s, many water utilities in the Global South were in a difficult situation. They were reportedly plagued by “inadequacies of operation, maintenance and monitoring” (Ayibotele, 1988: 358) and burdened with “rigid civil service regulations, inflexible bureaucratic requirements, high costs and lack of incentive to ensure efficiency” (Lewis and Miller, 1987: 71). For international financial institutions (IFIs) such as the World Bank, there was, at the time, a clear solution for the water-related challenges in the Global South: The private sector needed to come to the rescue of under-performing public utilities. To make room for private companies – and the operational efficiencies and financial investments they would supposedly bring – public authorities were expected to step back from direct service provision and instead assume a narrow regulatory role. Beginning in the late 1980s and early 1990s, private companies from the Global North became increasingly involved in the water sectors of low- and middle-income countries on the basis of various public-private partnership (PPP) arrangements (e.g. service contracts, management contracts, concessions; for an overview, see Budds and McGranahan, 2003: 89).

However, over the course of the 1990s and 2000s, it increasingly grew apparent that PPPs might not be the magic solution that the World Bank and other donor agencies had expected them to be. Rather, the high hopes placed on the private sector began to dissolve as one privatization experiment after another derailed in cities of the Global South, including in Cochabamba (Baer, 2008), Buenos Aires (Loftus and McDonald, 2001; Schiffler, 2015: 31–44), Belize City (Mustafa and Reeder, 2009), and Dar es Salaam (Bayliss, 2008). In the face of tariff disputes, weak regulation, economic instability, and social unrest, private water multinationals started to pull out of projects in the Global South (Prasad, 2006: 683; Swyngedouw, 2005: 98) and even the World Bank adopted a more moderate stance on water services privatization (see Marin, 2009).

With the World Bank softening its position and private water companies on the retreat, spaces opened up for exploring “alternative” or “postneoliberal” approaches to water management, utility reform, and service provision in the Global South (e.g. Bakker, 2013; Harris and Roa-García, 2013; Marston, 2015; McDonald and Ruiters, 2012). One such approach involved water operator partnerships (WOPs), which “surfaced as a possible alternative for improving service provision in developing countries” at a time when “the ‘privatization decade’ [1993–2003] lost momentum” (Blokland and Schwartz, 2013: 154). The concept of WOPs was first proposed by a United Nations (UN) advisory board in 2006.¹ Today, the implementation of WOPs is facilitated by a global multi-stakeholder alliance – the Global WOPs Alliance (GWOPA) – which was established in 2009 as a program of UN-Habitat. Instead of replacing the staff of public utilities with private-sector managers or consultants, the idea of WOPs is to bring water and sanitation operators together in

a peer-support exchange … carried out on a not-for-profit basis with the objective of strengthening capacity, enhancing performance and enabling the water operator to provide a better service to more people, especially the poor. (GWOPA, 2013: 10)

With support from GWOPA and a number of regional and national platforms, several hundred WOPs have now been undertaken within and across different world regions, involving water and sanitation operators from both the Global North and South (Beck, 2019; Pascual-Sanz et al., 2018; Tutusaus and Schwartz, 2016; Wright-Contreras et al., 2020: 2).² At the same time, the WOP approach has been subject to criticism, voiced by a network of academics and activists affiliated with the Transnational Institute (TNI) in the Netherlands, the Municipal Services Project (MSP) at Queen’s University in Canada, and the Public Services International Research Unit (PSIRU) at the University of Greenwich in the UK. These critics support the WOP approach in principle due to its focus on the public sector and not-for-profit exchange. However, believing that water is a public good, they are skeptical of the inclusion of private and heavily commercialized operators in the initiative (e.g. Boag and McDonald, 2010: 9–10; Hall et al., 2009: 10–11; RPWN, 2010; Terhorst, 2012).

In view of the long-standing privatization debate in the water sector, some of their concerns have specifically targeted the motivations that lead water operators to participate in WOPs as “mentors.”³ According to official UN discourse, “solidarity”⁴ plays a key role as a motivating factor and guiding principle in WOPs (GWOPA, 2012; UN-Water, 2016: 95). However, scholars such as Boag and McDonald (2010: 9) have raised doubts about the role of solidarity as a mentor motivation, especially when it comes to private operators: “Are they participating for altruistic reasons? Will they share their expertise freely?” Or would they rather try to misuse WOPs for commercial purposes, for example to collect information for successive privatization ventures (see also RPWN, 2010: 2)?

In this article, I engage with these questions through an empirical investigation of mentor motivations in WOPs. Why would water operators assist other providers free-of-charge? Is solidarity indeed the main motivation behind knowledge sharing and capacity building in WOPs, or are more self-interested, profit-oriented incentives driving these activities? To situate the issue of mentor motivations in larger debates, I begin with a brief theoretical reflection on the motivations behind development assistance. I then offer a detailed case study of the Dutch public company Vitens Evides International (VEI), which is, at present, “the most active organization promoting North-South development cooperation” through WOPs (Wright-Contreras et al., 2020: 5; see also Beck, 2019). Following an overview of VEI and its approach to WOPs, I draw on 15 interviews, conducted between June 2018 and January 2020,⁵ to unpack the motivations and interests behind VEI’s mentoring activities. What emerges from the interviews is that solidarity is not a predominant motive for VEI to participate in WOPs. Neither is the company motivated by the prospect of winning PPP contracts for itself. Rather, WOPs serve as strategic instruments for purposes such as staff development and recruitment and the promotion of the Dutch water sector abroad. In the concluding section, I provide some critical reflections on these motivations and highlight the contributions that this article makes to wider debates in the water sector and beyond.

Motivations behind development assistance: Theoretical perspectives

In the early days of development assistance, donor countries such as the US provided an “ethical justification for foreign aid,” portraying their aid giving as “a moral action that embodied a vision of international peace and prosperity” (Hattori, 2003: 229). In a study on the “purposes of foreign aid,” Lancaster (2007: 3) identifies two main schools of thought – realism and Marxist perspectives – that are critical of such morality-based framings of development assistance: While realists see foreign aid as an instrument to advance the national interests of the donor country, Marxist scholars (e.g. dependency theorists) perceive it as a way to keep poorer countries locked in a capitalist system that leads to their exploitation and impoverishment.

The rationales behind foreign aid have not been static over time. For instance, the 2000s saw donor countries from the Global North adopt “ostensibly more altruistic, poverty-driven agendas” (Mawdsley et al., 2018: O30). At present, foreign aid seems to be moving away from this paradigm and towards a “retroliberal” aid regime in which “tied aid,” private-sector involvement, and economic growth are at the center of development policy (Mawdsley et al., 2018; Murray and Overton, 2016). Pressured by the impacts of the 2008 financial crisis, the rise of nationalist voices, and the (re-)emergence of donors from the Global South, governments in countries such as the UK, New Zealand, Australia, Canada, and the Netherlands are increasingly pursuing an agenda where “aid is once again being explicitly harnessed to ‘national’ self-interest” (Mawdsley et al., 2018: O40), for example to promote international trade and investment opportunities for privileged domestic actors. Besides the advancement of economic interests, donors currently emphasize gains in “soft power” and national security, as well as reduced risks thanks to “global public goods,” as justifications for their foreign aid spending (Mawdsley, 2017).

As the context for aid giving in the Global North keeps changing, broader changes in the landscape of development cooperation are unfolding simultaneously. As noted by Develtere and De Bruyn (2009), national governments, international organizations, and development-focused non-governmental organizations (NGOs) are no longer the only players in international development. New actors have started to engage in various forms of development assistance as well. In contrast to bilateral and multilateral donors and NGOs, these “newcomers” often “are not aid specialists”: “They did not come into being in order to provide development aid; they have other starting points and different dynamics” (Develtere and De Bruyn, 2009: 916, 919). Among them are regional and local government authorities (whose development-related activities have been conceptualized as “decentralized development cooperation”) and private companies acting under the heading of “corporate social responsibility” (Develtere and De Bruyn, 2009: 915–916, 918).

While the concept of “decentralized development cooperation” (DDC) has not been extensively discussed in academic research so far (exceptions include: Bontenbal and van Lindert, 2006; Hafteck, 2003; Kania, 2021), it has been applied in a recent policy report to describe the legal conditions (“1% mechanism”) that make it possible for water and sanitation providers and water agencies in France to engage in development projects (OECD, 2018: 137–164). As stated in the report, DDC not only helps improve water services in the Global South but also promises a “return on investment” for the French staff involved in these projects, for example in the form of “increased capacities,” “awareness on the needed solidarity with partner countries,” and “awareness that current levels of water security and service delivery should not be taken for granted” (OECD, 2018: 155).

In contrast to DDC, the concept of “corporate social responsibility” (CSR) and the role of the private sector in international development have been more thoroughly and controversially debated (see e.g. Black and O’Bright, 2016; Blowfield, 2005; Blowfield and Dolan, 2014; Drebes, 2016; Evans, 2007; Haslam, 2012). Haslam (2012: 209) defines CSR as “the idea that corporations have a responsibility beyond their shareholders to a broader set of ‘stakeholders’.... CSR is a voluntary commitment of firms to improve the quality of their relationship with stakeholders.” It can be framed “both as a moral argument that companies should behave ethically and as good business because it reduces operational risk, improves worker commitment, increases efficiency, and promotes profitability.” The latter framing of CSR as a “business case” and “commercial argument” (Blowfield, 2005: 521) may be an important motivator for private companies to become involved in sustainable development initiatives. With respect to water and development, the concept of CSR has been applied to the bottled water industry (Brei and Böhm, 2014) and to mining conflicts (Velásquez, 2012), but it has not yet been used to understand the activities of water operators as development actors themselves.

Understanding these activities is complicated by the fact that water operators do not always neatly fit into one category of development actor. As will become clear in the empirical sections below, VEI (and the water companies it is composed of) can be described as “hybrid organizations” (Savelli et al., 2019). They are public in some ways (ownership by provinces and municipalities, provision of drinking water as an essential public service) but private in others (legal status). They are also entangled with official Dutch development aid through a major WOP program, facing the fundamental tension of preserving autonomy versus acting as government “appendages” or “surrogates for implementing sensitive foreign-policy agendas” (Smith, 1990: 180, 216). The case study that follows provides a detailed analysis of VEI and its motivations and challenges as a “hybrid” development actor.

Vitens Evides International

Company overview

VEI is not a water operator itself but a subsidiary of the Dutch drinking water companies Vitens and Evides Waterbedrijf. Established around 2005, VEI is organized as a not-for-profit public limited company and has its headquarters in the city of Utrecht. In addition to the parent companies and shareholders Vitens and Evides Waterbedrijf, three Dutch drinking water companies are presently affiliated with VEI: Brabant Water, WML, and Waterbedrijf Groningen.⁶ The remaining five drinking water companies of the Netherlands – PWN, Dunea, Waternet, Oasen, and WMD – have chosen to stay independent, although they are part of the joint WaterWorX program (described below).

With half of the 10 Dutch water companies participating, VEI considers itself “firmly rooted in the Dutch water sector” (VEI, 2018b). According to VEI, “Dutch water operators have established themselves as the best in-class water providers,” and VEI is proud to be sharing their “competence and expertise” with other operators abroad (VEI, 2018a: 6). In its 2018 annual report, VEI describes itself as “the largest organization involved in Water Operator Partnerships worldwide” and as “the world’s leading promotor and implementor of WOPs” (VEI, 2019a: 6, 8).

Approach to WOPs

In contrast to looser and more open-ended arrangements, VEI expresses a clear preference for structured, long-lasting partnerships (5 years or more) that are oriented towards delivering results – and results not just in terms of individual learning but also in terms of organizational capacity building and performance improvement, to be measured by key performance indicators (KPIs).⁷

Apart from being highly structured and results-oriented, VEI’s partnerships are characterized by a combination of short-, medium-, and long-term staff. VEI’s “core business,” according to the company’s publicity materials, “is to provide operational expert support via short, medium and long term assignments to its partners” (VEI, 2018b). In line with this model, VEI posts so-called resident project managers (RPMs) directly within partner utilities abroad. As long-term experts residing in the host countries and working in the respective “mentee” utilities, the RPMs have regular interaction with local counterparts. For example, they take part in management meetings and monitor progress on capacity-building activities. Another part of their job is to coordinate and evaluate the visits of short-term experts from the participating water companies in the Netherlands. In 2016 alone, 359 short-term missions took place, with the “top 5 destinations” being Kenya, Malawi, Vietnam, Ethiopia, and Mozambique (VEI, 2017: 8). Vitens, the largest of the Dutch water companies, sent 49 short-term experts on 97 missions in 2017 and 73 short-term experts on 116 missions in 2018 (VEI, 2019b: 3). In 2018, Dutch experts spent over 3,000 days on short-term missions abroad (VEI, 2019a: 6, 13).

The RPM model is one of the reasons why Brabant Water, WML, and Waterbedrijf Groningen decided to collaborate with VEI. The presence of long-term resident managers is highly appreciated by these water companies, as the RPMs provide a level of continuity and can offer personal and professional guidance to the short-term experts, making sure that the missions run smoothly. VEI also takes care of briefing short-term experts on safety issues before they depart and arranges itineraries with a professional travel agency. Such services and standardized procedures make VEI very attractive, especially for the smaller Dutch water companies that would otherwise have to spend limited time and resources on partnership administration and logistics. For example, Waterbedrijf Groningen decided to join VEI in 2014, hoping to “professionalize” its international activities:

Because we are such a small company, we are not going to do everything ourselves. It’s a bit next to your normal work, you are doing something somewhere, and we can better professionalize it and also make use of all the experiences of other people who went to other countries and work together. So we decided to participate in VEI because we are small and we wanted to professionalize our international [activities].... [People from VEI] plan everything with the RPMs. They make the programs, really tight and efficient. It’s really professional. They do the reporting. They have the contacts. It’s really a professional organization. (interview, Waterbedrijf Groningen CEO, August 2019)

As this statement suggests, WOPs are not side projects or a form of “hobbyism” for VEI (interview, VEI CEO, August 2019). Rather, the partnerships are approached as professional activities that constitute the company’s sole reason for existence.

Motivations behind WOPs

Territorial expansion

As indicated above, the Dutch water supply sector today consists of a small number of drinking water companies, but this has not always been the case. In the Netherlands, centralized water provision began to emerge in Amsterdam in 1853 (Loen, 2020: 93). By 1938, there were 232 water companies operating in the country (Blokland and Schwartz, 2013: 150). Due to multiple pressures (service expansion, and later a drive for efficiency and competitiveness), the number of water companies has gradually been reduced since then by means of mergers, with only 10 companies remaining at present (Blokland and Schwartz, 2013; Schwartz, 2011; VEWIN, 2017: 10–11). Most of these are legally organized as public limited companies (Schwartz and Blokland, 2002; VEWIN, 2017: 10). They operate under private company law but are fully owned by public shareholders (provinces and municipalities), as water services privatization is not allowed in the Netherlands (Blokland and Schwartz, 2013: 151–152; Hall et al., 2004).

With only 10 drinking water companies left and universal service coverage achieved, the opportunities for additional efficiency gains via mergers are few. Consequently, the water companies have begun to explore opportunities abroad: “With a limited potential of increasing their scale of operations in the Netherlands, water utilities are increasingly trying to internationalize their activities in order to grow” (Blokland and Schwartz, 2013: 153). Furlong (2015) terms this phenomenon “territorial expansion” and illustrates it with a case study of WMD, one of the smaller water companies serving the northeastern province of Drenthe. In the 1990s, WMD began buying shares of water utilities in Indonesia. One reason for WMD’s outward expansion was the perception that “the water supply markets of the Netherlands and surrounding countries … are ‘saturated’” and offer no more possibilities to grow (Furlong, 2015: 202). The joint ventures entered into by WMD in Indonesia originally had a longer time span but were terminated early. When it became clear that WMD would not recoup the millions of (public) euros invested in Indonesian water utilities, the company was forced to withdraw from its international activities and is now facing legal proceedings in the Netherlands (Ophof, 2019).

Because of the WMD incident, the Dutch water companies have become very reluctant when it comes to investing abroad, and most seem to adhere to the credo “don’t take risks with the money from the customers” (interview, former Brabant Water international projects manager, August 2019). The exception is PWN, which still holds shares in water companies in Rwanda and Senegal through its subsidiary Aquanet. As far as VEI is concerned, it seeks to minimize financial risk by “[n]ot participating or taking any financial position in local water operating partners” (VEI, 2019a: 21).

Staff development and recruitment

Based on my interviews with VEI’s management team and representatives of the affiliated water companies, the most important motivation for the Dutch water companies to engage in WOPs is thus not international expansion but rather, it is staff development (see also Blokland and Schwartz, 2013: 154; Furlong, 2015: 203; Martins De Andrade, 2010: 67–73):

The goal why we are doing it, the water operator partnerships, international development, is of course helping the water companies abroad, but also developing our own personnel and giving them a challenge and [opportunities for] out-of-the-box thinking. (interview, former Brabant Water international projects manager, August 2019)

Due to differences in operational procedures and technical equipment used, experts from the Netherlands tend to gain little technical knowledge at the partner utilities that could be applied in their companies back home. What they do bring back, however, are so-called “soft skills,” including “competencies like coaching, or being creative, or improvising, and also getting a bigger picture of utilities” (interview, VEI regional manager A, June 2018). Other skills employees can develop abroad are related to problem solving:

[When we go abroad] we also learn how to make a good analysis, to look at different perspectives to solve a problem, to see what perspective is the most helpful or fits best to the problem that there is, and then we start solving the problem. (interview, former WML CEO, August 2019)

Apart from developing new skills (e.g. leadership, analysis, problem solving), employees who travel on missions abroad often return refreshed and with heightened levels of satisfaction, dedication, and appreciation for their jobs. Giving advice and solving problems with others can be a highly rewarding experience. When confronted with the daily realities of water provisioning in developing countries, Dutch experts may recall once more the fundamental importance of water for life and the remarkable service standards reached in the Netherlands, an achievement that is easily forgotten within the confines of Western Europe. After spending time abroad, “they come back and they see everything far more realistic and they don’t stick at minor issues. They see the [big picture]. Really, it’s helpful” (interview, Waterbedrijf Groningen CEO, August 2019). Providing opportunities for international exposure outside the Netherlands is considered especially important for more experienced staff members, many of whom have stayed at the same water company for much of their professional working lives:

Our interest is that WOPs are a HR [human resources] instrument for experienced professionals as well as for new recruits. Employees feel excited and proud once being asked to share their working experience with their peers abroad. They return highly inspired – they shine! So for us, it is a valuable HR instrument to make people strong, flexible, and eager to learn. (interview, VEI regional manager B, November 2018)

What do you do when you are an engineer at a Dutch water utility? You look at your screen, everything goes well. So for them, to work for 2 weeks or 3 weeks in Papua New Guinea or Malawi, and going back to the fundamentals, it’s a very motivating thing for staff. (interview, former UN-Habitat official, August 2019)

Besides staff development, WOPs can help attract new talent into the water sector. VEI explicitly includes this in its mission statement, one aspect of which is to enhance “the reputation … of the Dutch water operators … as an attractive employer” (VEI, 2018c: 4). In 2014, the average age of the workforce in the Dutch water supply sector stood at 47.9 years (Honcoop and Tom, 2015). The future of the water companies in the Netherlands depends on recruiting qualified young professionals who will take up the positions of those soon going into retirement. Conscious of the aging problem, the water companies strategically market WOPs towards young people, to increase the odds that they will opt for a career in the water sector:

WOPs are a convincing sales argument to recruit and engage young people for the water sector. Working in a water company is not extremely sexy. There are more fancy organizations to work for. Our pitch to new recruits is that they are to be ready to share knowledge and expertise abroad. This proposition is appealing to the new generation of young professionals. (interview, VEI regional manager B, November 2018)

Finally, Martins de Andrade (2010) reflects on an additional HR-related function of WOPs: WOPs might take up surplus staff that could exist because of past mergers. Deploying excess staff members abroad might offer the opportunity to keep them usefully employed and have their salaries covered through external funding schemes. Staff reductions can be difficult from both a legal and an interpersonal standpoint, and “waiting for retirement age [e.g. as an RPM overseas] is sometimes less costly than … layoff, for the companies” (Martins De Andrade, 2010: 73). Indeed, the fact that the five water companies of VEI were able to spare employees for more than 3,000 mission days in 2018 (see above) raises the question of whether WOPs act as an absorption mechanism for some staff-related inefficiencies.

Customer relations and CSR

VEI reports that customers are generally highly supportive of partnership activities in poorer countries. The WOPs with water operators in the Global South add to the corporate image of the Dutch water companies, which, in turn, can help communicate with customers, reach corporate targets on customer satisfaction, and attract new staff (see also Martins de Andrade, 2010: 87–89). On the other hand, the water companies are modest in advertising their partnerships as CSR, for fear that customers, shareholders, or the political tide might turn against international activities (which might be perceived by some as diverting resources away from the water companies’ core responsibilities in the Netherlands). Towards domestic constituencies, the water companies tend to keep a low profile and try not to “rock the boat too much” (interview, VEI CEO, August 2019). VEI’s international activities have not been challenged by customers or the general public so far. But with WMD’s failure in Indonesia in the news (see above) and right-wing parties on the rise in several European countries, including the Netherlands, the water companies are thinking about possible strategies to justify and defend their international involvement.

Sustainable development

Just like water providers in France (see above), the Dutch water companies are permitted by a law from 2011⁸ to spend up to 1% of their estimated annual turnover on drinking water projects abroad. Thanks to this possibility, and additional support through the Water for Life Foundation (which collects voluntary customer donations), the water companies are in the comfortable position to be able to cover much of the costs of WOPs themselves, without having to comply with donor requirements.⁹ As long as the Dutch parliament does not revoke this law, the water companies do not need to engage in donor fundraising for WOPs, as they can fund the partnerships out of their own revenues.

VEI nevertheless tries to win external funds in order to increase the scale and impact of its international activities. One example of donor funding is a major program called WaterWorX. WaterWorX is a joint undertaking of the Dutch water companies and the Ministry of Foreign Affairs of the Netherlands. The program, which was launched in 2017 and is to last until 2030, originates in a policy target set in 2015 by Lilianne Ploumen, then Minister for Foreign Trade and Development Cooperation. Her target for the Netherlands, oriented around Sustainable Development Goal (SDG) 6, was to “ensure that in 2030, 30 million people will have sustainable access to drinking water and 50 million people will have access to proper sanitation” (VEI, 2018a: 8).

To put the Minister’s water and sanitation target into action, the Dutch government formulated a water, sanitation, and hygiene (WASH) strategy for 2016–2030 (Ministry of Foreign Affairs of the Netherlands, 2017). WaterWorX is intended to contribute to this strategy by implementing 25 WOPs between the water companies of the Netherlands and partner operators in Africa, Asia, and Latin America. The first phase of WaterWorX (2017–2021) had a budget of EUR 55 million. EUR 30 million (55%) of this budget was granted by the Ministry of Foreign Affairs. The rest of the funding was to be contributed by the Dutch water companies (35%) and their partner utilities (10%) in a co-financing arrangement. According to GWOPA (2019: 36), WaterWorX presents “the most ambitious global WOP initiative led by a single country to date.” As the 2015 water and sanitation target and the subsequent launch of WaterWorX suggest, contributing to sustainable development is an important motivation of the Dutch government and the Dutch water companies implementing the WaterWorX partnerships.

Aid, trade, and investment

Development is only one side of the coin, however. Reflecting the “retroliberal” turn in development assistance (discussed above), the Netherlands adopted a new development policy in 2013. Known as “aid and trade,” this policy is spelled out in the document A World to Gain: A New Agenda for Aid, Trade and Investment (Ministry of Foreign Affairs of the Netherlands, 2013). In essence, the policy foresees reductions in aid spending and envisions a stronger role for “reciprocity” and the private sector in international development, thereby following through on “the intent of the … Dutch government to employ … development aid for the promotion of Dutch products and services abroad” (Breman, 2011: 844). This applies especially to water as one of the policy’s “priority areas” (Ministry of Foreign Affairs of the Netherlands, 2013: 54). The water sector is also among the so-called “top-sectors” of the Netherlands, which the government has designated as those “economic sectors in which Dutch companies and research institutes excel and are considered to be globally competitive” (Savelli et al., 2019: 1129).¹⁰

VEI is a “hybrid organization” (Savelli et al., 2019) in the sense that it is publicly owned but legally private. This mixed status allows VEI to foreground its public or private side as needed. In other words, VEI wears, quite skillfully, “different hats” in order to tap into various funding streams and conform to donors’ respective conditions (Savelli et al., 2019: 1138). Thanks to its private facet and its efforts to cultivate a “professional” and “‘business-like’” image, VEI is well-positioned “to respond effectively to the aid and trade logic” (Savelli et al., 2019: 1137–1138). WaterWorX, for instance, is officially declared a PPP, with VEI acting as the main (private) contractor. VEI takes a pragmatic – or “chameleonic” (Smith, 1990: 192) – approach to its organizational identity:

we can play a little bit with it, because we are a hybrid. We are a bit public, we are a bit private, so if it’s convenient, we can be public or private. So in this case, for the aid and trade agenda, it was very good to be private. (interview, VEI CEO, August 2019)

In exchange for the government’s financial support, VEI is expected to play an active role in the promotion – or “imagineering” (Büscher, 2019) – of the Dutch water sector abroad, “to help [the sector] build and maintain a competitive edge in the world market for water-related products and services” (Büscher, 2019: 827). WOPs are one way to “convince other nations and regions that their water development challenges … can best be tackled using Dutch knowledge, products and services” (Büscher, 2019: 828). Noting that the government seeks to promote the use of knowledge from the whole Dutch water sector, both public and private, one RPM explained that “part of the WaterWorX program is also, we need to support Dutch development, private development, if we can. This is part of the partnerships” (interview, VEI RPM in Africa, March 2019). For VEI, reconciling its own objectives with the interests and priorities of the Ministry of Foreign Affairs and the Dutch business community can be a balancing act:

By VEI, we see that we promote the Dutch water sector as well, and that’s a little bit the interest that the Ministry has and some of our business partners have, to position themselves in certain countries, which I think is quite legitimate. We try to balance that by not being too biased about certain providers and avoid to say, ‘If we work with you, you always have to take your stuff from that certain provider.’ But at least we sometimes try to showcase some of the innovations that are taking place in the Dutch water sector. (interview, VEI regional manager A, June 2018)

The main goal is Sustainable Development Goal 6, but we are Dutch.... we can do the aid, and have the partnerships and the trust of the local water companies. But sometimes, [they] need to have a broader study done by an engineering company, or they need some new pumps, for example. Then we are not going to push them, but what we can do is introduce the [Dutch] companies we know. (interview, former Brabant Water international projects manager, August 2019)

Asked whether there are any linkages between international trade and WOPs, one WASH expert at the Ministry of Foreign Affairs explained that WOPs may occasionally entail business opportunities for Dutch private firms. However, according to the expert, such private contracts represent more of a “spin-off” of the partnerships, rather than their primary purpose:

in the wake of water operator partnerships, you also sometimes see work unfolding for consulting firms, technical consulting firms, for example. And that’s where, in some instances – I’m not saying every instance, because we don’t prescribe anything – but in some instances, there is work granted to Dutch consulting firms to do technical specifications for network extensions and things like that. So in that sense, when it comes to a foreign trade perspective, it does have some kind of a spin-off. It’s not the main objective [sustainable development], but it is providing some kind of a spin-off for the utilities themselves [becoming interesting employers] and also for some other water- and sanitation-related businesses in the Netherlands. (interview, Dutch Ministry of Foreign Affairs senior policy officer WASH, September 2018)

Another component of “aid and trade” relates to finance and investment. The first phase of WaterWorX was intended to build up the financial viability – or “bankability” – of certain partner utilities to a point where they become eligible for loans by IFIs, and eventually attractive to private investors on the commercial market. WOPs can help “[pave] the road for transnational investment opportunities” (Wright-Contreras et al., 2020: 21) and can be used to develop “solid business cases,” so that “multilateral and bilateral financiers will be attracted to invest in hardware and corresponding technical assistance of water operators” (VEI, 2019a: 8). Furthermore, VEI envisions that “WaterWorX will mobilize up to USD 500 million in investments from the private sector for infrastructure expansion, rehabilitation, and improvements in the sector” (quoted in Wright-Contreras et al., 2020: 3). Arguably, such private-sector investments are urgently needed to help close the much-invoked “financing gap” in the water sector: “Water projects are disproportionally financed with public money and future worldwide water challenges will never be met by the public sector alone, and certainly not in emerging markets” (Netherlands Water Partnership and FMO NL Business, 2019: 5).¹¹

The overall picture that emerges from my interviews is that VEI is under some pressure to leverage its WOP-based reputation and networks to help private businesses and investors gain a foothold in local markets of partner countries. To stimulate the Dutch economy, VEI managers may, from time to time, share contacts or information about upcoming tenders with consulting firms and water technology companies back home. They also increase the international visibility of the Dutch water sector through their in-country presence and interaction with partners at different political levels.

At the same time, interviewees from VEI were of two minds about “aid and trade,” not least because excessive soliciting might compromise their working relationship with utility partners. A report suggests that the water companies “could play a ‘neutral’ advisory role as an ambassador for the Dutch water sector as long [as] it does not damage their impartial credibility” (Netherlands Water Partnership and FMO NL Business, 2019: 11). In order to “keep the [WOP] brand clean” and protect relationships, some RPMs insist on drawing a line in the partnerships they are managing:

I discussed with the firms, ‘I’m not going to sell your products, because that undermines my credibility in a WOP.’… I always indicated [to the Dutch embassy], ‘I’m happy to introduce them [private firms], but they have to do the work. They have to do the sales. They have to discuss why they would be interesting for the partners.’ I emphasized, ‘I’m happy to introduce them, and if the utility will ask me if they are any good or not, I’ll tell them honestly. If I think they are not any good, I’m going to tell the utility since I’m there in the interest of the utility.’ (interview, former VEI RPM in Asia, April 2019)

The aid and trade policy has thus met with some resistance and appears to be rather loosely implemented in practice. Formally, however, VEI has accepted the bargain in return for more partnerships and long-term government funding.

Conclusion

This article has examined the reasons why water operators would share their knowledge and expertise with other utilities on a not-for-profit basis. Moving beyond the debates on public versus private and solidarity versus profit making that have been prominent in the water sector for a long time, the case study of VEI contributes a more nuanced understanding of the organizational motivations behind mentoring activities in WOPs. What emerges from the analysis is a complex array of motivations, including staff development and recruitment, customer relations, sustainable development, and the advancement of business and export opportunities for private firms from the Netherlands. While solidarity may be a motivation of individual experts going abroad (an area for future research), it is not a predominant motivating factor at the organizational level of VEI. Instead, the case supports the view that WOPs “often serve secondary purposes, such as making the company attractive for new staff, improving the corporate image of the utility and so on. Achieving these benefits, which normally would cost money, is now essentially subsidized” (Rusca and Schwartz, 2013: 118). WOPs are thus not fully “postneoliberal” approaches to improve the provision of water and sanitation services – but neither are they instruments to simply promote privatization in disguise.

Much of the criticism surrounding WOPs remains fixated on privatization, while the emerging links between WOPs and investment financing are largely overlooked. In WaterWorX, and in international water policy circles more broadly, WOPs are increasingly framed as a vehicle to prepare water utilities for infrastructure finance, including from private sources. Increased investment in the water sector is undoubtedly needed if SDG 6 is to be attained by 2030. Yet the emerging alignment of WOPs with the needs of donors and private capital is problematic if this were to steer partnerships away from progressive (social equity) issues such as access, affordability, and participation (see also Beck, 2021).

What also becomes clear from this research is that managers within VEI and the affiliated water companies have well understood the advantages that WOPs can bring to their organizations. They are willing to send staff abroad to help other utilities, knowing that their staff, and their organizations, will also benefit in return. How do the “mentee” partners – for whose benefit WOPs are supposedly done – accommodate or contest the motivations pursued by their “mentors”? Whose learning and capacity development takes precedence in a WOP? And what interests and powers are invested in still maintaining the (problematic) mentor-mentee terminology (see also Carolini et al., 2018; Moodley, 2019)? With the WaterWorX program now being implemented and advancing into its second phase (GWOPA, 2021), more research is needed to understand how different interests and motivations are playing out in practice – and whom these partnerships actually serve.

On a more theoretical level, this article has examined water operators as “hybrid” development actors. As the case study of VEI and the Dutch water sector has shown, water companies wanting to undertake development projects must navigate a difficult terrain of competing internal and external logics, responsibilities, and interests. In contrast to government donors and international NGOs, water operators tend to be largely inexperienced in development assistance, since most of them have been created for the decidedly local purpose of providing water and sanitation services to a designated (regional or municipal) service area in their home countries. While this article has focused on the case study of the Netherlands, the involvement of water operators in international development is a more widespread phenomenon that is also becoming evident in other countries such as France (OECD, 2018: 137–164) and Germany (Wendland et al., 2020). More research on why and how water operators – and service providers from other sectors such as energy and waste management (see e.g. OECD, 2018: 156–158) – engage in development activities in the Global South will be important to better understand these latest “newcomers” to today’s increasingly variegated development landscape.

Footnotes

Acknowledgements

This article is based on a chapter of my dissertation (Water operator partnerships: Utility reform and the struggle for alternatives to privatization, MIT Department of Urban Studies and Planning, May 2020). Many thanks to Klaas Schwartz, Gabriella Carolini, James Wescoat, Lawrence Susskind, Isadora Cruxên, Silvia Danielak, and two anonymous reviewers for helpful suggestions on earlier drafts. I gratefully acknowledge fieldwork and fellowship funding from the MIT Abdul Latif Jameel Water and Food Systems Lab (J-WAFS), the MIT Center for International Studies, the MIT International Science and Technology Initiatives (MISTI), and the AAG Olen Paul Matthews and Kathleen A. Dwyer Fund for Water Resources.

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Andrea Beck

Notes

Appendix

Author biography

Andrea Beck received her PhD in sustainable development from the Department of Urban Studies and Planning, Massachusetts Institute of Technology (MIT). Her dissertation project examined water operator partnerships (WOPs) as an alternative approach for reforming public water utilities in the Global South. She now works at the German Institute for Development Evaluation (DEval). The findings reported in this article are unrelated to evaluation activities at DEval.

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