Consolidated Draft

THE LISBON CHARTER

FOR PUBLIC POLICY AND EFFECTIVE REGULATION
OF DRINKING WATER SUPPLY, SANITATION
AND WASTEWATER MANAGEMENT SERVICES
Table of Contents
Preamble ................................................................................................................................................. 2
Part One - Nature and Purpose ............................................................................................................... 3
Article One ........................................................................................................................................... 3
Article Two........................................................................................................................................... 3
Article Three - How to Use the Charter ............................................................................................... 3
Article Four - Definitions ..................................................................................................................... 3
Part Two - Principles ................................................................................................................................ 4
Article Five - Principles for good public policy and effective regulation ............................................. 4
Part Three Roles and Responsibilities .................................................................................................. 5
Article Six - Common responsibilities .................................................................................................. 5
Article Seven - Responsibilities of the public administration .............................................................. 5
Article Eight - Responsibilities of regulatory authorities ..................................................................... 6
Article Nine - Responsibilities of the service providers ....................................................................... 7
Article Ten - Responsibilities of the users ........................................................................................... 8
Part Four Regulatory Frameworks........................................................................................................ 8
Article Eleven - Principles of Effective Regulatory Frameworks.......................................................... 8
Final Part.................................................................................................................................................. 9
Article Twelve - Interpretation of the Charter .................................................................................... 9

NOTE:
The charter will be accompanied of a paper or background information that will describe its
drafting process and the rationale behind this initiative. The paper can have the following
outline:
1)
2)
3)
4)
5)

LETTER OF INTRODUCTION [to be prepared for signature by the President of IWA]

Background and rationale
Drafting Process
The way forward
The Charter

Preamble
1) Over the past ten years the importance of creating an enabling environment for the
performance of essential drinking water and sanitation functions, through the formulation of
public policy and the establishment of effective regulation, has become increasingly
recognized. The number of countries with a regulatory framework for drinking water supply
and wastewater water management services is on the rise, and so is the contingent of
regulators.
2) IWA is an international association of professionals and companies covering all facets of the
water cycle, whose vision is a world in which water is wisely managed to satisfy the needs of
human activities and ecosystems in an equitable and sustainable way; and whose mission is
to inspire change and service IWA members, the community of professionals concerned with
water, external organisations and opinion leaders in being the international reference and
global source of knowledge, experience and leadership for sustainable urban and basinrelated water solutions.
3) The IWA Bonn Charter for Safe Drinking Water established a framework for the collective
implementation of integrated risk assessment and management systems aimed at ensuring
the safe management of drinking water. It has contributed substantially to the introduction,
expansion and further development of the concept of Water Safety Planning, as proposed by
the WHO Global Drinking Water Quality Guidelines.
4) The satisfactory delivery of water supply and sanitation services depends critically on
contribution from all stakeholders, playing their role effectively and efficiently. International
documents like the UN International guidelines on access to basic services for all and the
International Standards ISO 27510, 27511, 27512 define the respective roles of different
stakeholders.
5) In September 2014, the First International Regulators Forum, jointly organized by IWA and
The Portuguese Water and Waste Services Regulation Authority (ERSAR), brought together
water services regulators (economic and quality of service) and their counterparts in public
health and environmental regulation to discuss the role of regulation, its current status and
future trends on water services provision, as well as the different interactions between
regulatory bodies, contributing to the dissemination of good practices and allowing for a
harmonization of regulatory practices.
6) [In the same month, the General Assembly of the United Nations unanimously adopted a
Resolution in which they agreed on a set of Sustainable Development Goals, which include a
dedicated Water Goal with targets for universal access to drinking water, sanitation and
hygiene for individual households and for health care centres and schools, and for the safe
management of wastewater, including its treatment, re-use and recycling].
It is therefore timely for the IWA together with the community of water and sanitation
professionals, external organisations and opinion leaders, to strengthen, improve and update the
international policy with reference to good regulation and the rights and responsibilities of
various stakeholders and users of drinking water supply and wastewater management services.

Part One - Nature and Purpose

Article One
Drinking water, sanitation and wastewater professionals and practitioners, policy and decision
makers with responsibilities for drinking water supply, sanitation and wastewater management
services, managers of public or private utilities, and the community of practice working in water
management at large gathered at the First International Regulators Forum in Lisbon in September
2014 and commended the IWA initiative to develop, formulate and establish this Charter to
strengthen the basic principles supporting the rights, duties and responsibilities for effective
regulation of drinking water supply, sanitation and wastewater management services, and the
related rights, duties and responsibilities of the recipients of drinking water supply, sanitation and
wastewater management services.

Article Two
To put into practice these principles which reflect the human rights to access to safe drinking water
and sanitation, this Charter proclaims the following essential purposes:
1) The Lisbon Charter provides a policy framework for the formulation and enforcement of
public policies and regulatory frameworks for drinking water supply, sanitation and
wastewater management services at national and local levels. The Charters policy
framework includes guidance on options, selection criteria and modes of implementation,
monitoring and evaluation.
2) The reliable supply of safe and affordable drinking water and sanitation, and the sustainable
and safe management of wastewater are fundamental to the health status of communities,
and for their sound socioeconomic development. Access to safe drinking water and
sanitation have been acknowledged, furthermore, as human rights under the Covenant for
Economic, Social and Cultural rights, derived from the right of all people to a basic standard
of living and linked to every individuals right to health.
3) Governments must ensure to meet their peoples basic needs and, by 2030, the water,
sanitation, hygiene and wastewater management targets of the Sustainable Development
Goals, They also have the obligation to respect, protect and fulfil the human rights to safe
drinking water and sanitation in a process of progressive realization towards universal
coverage.
4) Governments cannot be directly responsible, however, for carrying out all actions required to
attain universal access to safe drinking water and sanitation, and to achieve an acceptable
level of wastewater management. As human rights duty bearers, governments should create
an enabling environment of public policy and effective regulation with a view to
guaranteeing that their international commitments as well as the commitments to their own
people are met.

Article Three - How to Use the Charter

The Lisbon Charter presents a framework for the issues related to good public policy and effective
regulation for drinking water supply, sanitation and wastewater management services. It details
responsibilities and good practice for those stakeholders with related responsibilities and for the
community of water and sanitation practitioners at large. For each stakeholder group guidance is
provided to optimize its role in public policy and regulation formulation and implementation.

Article Four - Definitions

For the purpose of this Charter, the following definitions shall apply:

1. The Charter: the Lisbon Charter for Public Policy and Effective Regulation of Drinking Water
Supply and Wastewater Management Services.
2. Regulation: Standards, criteria, rules or requirements that have been legally adopted and are
enforceable by government agencies.
3. Stakeholders: Drinking water supply and wastewater management services have numerous
and diverse types of stakeholders. Several groups can be distinguished: the public
administration, service providers, the utilities, other service providers and civil society.
4. Public administration: A states whole class of public functionaries or those in charge of the
management of the executive department, or of the operations of the various organs of the
sovereign.
5. Regulator or regulatory authorities: the person or authority that applies and enforces
standards, criteria, rules or requirements, which have been legally adopted.
6. Utilities or service providers: Service providers, whether public or private, are key
stakeholders who supply drinking water or wastewater management services to the
population.
7. Users: Users are the key stakeholders and final beneficiaries of the drinking water supply and
wastewater management services.

Part Two - Principles

Article Five - Principles for good public policy and effective regulation
The Charter reaffirms the following fundamental principles for good public policy and effective
regulation for drinking water supply, sanitation and wastewater management services:
1. Effective Water Supply, Sanitation and Wastewater Management Make a Positive
Contribution to Sustainable Development Drinking water supply, sanitation and wastewater
management services are a global public good and as such are essential to general welfare, a
decent standard of living and public health. They provide a collective safeguard of the
population, economic activities and the environment. In other words: they address the three
pillars of sustainability. Because of their critical importance to the fabric of modern societies,
they are generally classified as services of basic social and economic interest.
2. The Provision of Services Should Enshrine Accountability and Transparency Drinking water
supply, sanitation and wastewater management services must, therefore, fulfil a set of public
service obligations, which include: a) ensuring universal access to the services, b) having clear
standards and norms of the services in terms of quantity, quality, reliability and continuity, c)
establishing structural and operational efficiency, d) maintaining a fair balance between the
affordability of the service provided and the level of cost recovery that ensures sustainability
and e) adopting rules of good practice.
3. The Economics of Service Provision should be framed by Long-term Infrastructure
Investments and Cost Recovery Instruments Drinking water supply, sanitation and
wastewater management services have specific characteristics. They are essential services
that deal with a set of heterogeneous products within the context of the water cycle. They
have the potential to achieve economies of scale, of scope and of process, yet their assets
are designed to be able to cope with peak situations, as well. This implies unitary costs that
are typically high and have a rigid structure because of the significant fixed capital cost
component. Typically, this results in long periods for the recovery of invested capital and a
low elasticity between price and demand.

4. Service Provision Should Take into Account the Financial, Social and Environmental Aspects
of all Water Resources Drinking water supply, sanitation and wastewater management
services are inextricably linked to water resources, which constitute the raw material base
for the production of drinking water and are also the final destination for wastewater,
whether treated or not. Water resources are literally the beginning and the end of the urban
water cycle.
5. Effective Service Provision Relies upon the Collective Actions of Interdependent
Stakeholders considering the diversity of actors and stakeholders, the Lisbon Charter spells
out the responsibilities of the main actors in relation to public policy and regulation. These
responsibilities should, collectively, ensure that the aforementioned obligations towards the
delivery of the global public good of drinking water supply, sanitation and wastewater
management services are met in an equitable and non-discriminatory way.

Part Three Roles and Responsibilities

Article Six - Common responsibilities
All the stakeholders in drinking water supply, sanitation and wastewater management services, such
as governments, public administrations, regulatory authorities, service providers and utilities, the
entities providing services and civil society, particularly users, should have an ongoing and open
dialogue and share information on the sustainable and continuous provision of suitable drinking
water supply, sanitation and wastewater management services to the population.

Article Seven - Responsibilities of the public administration

At the political level, the central, regional and local levels of public administration are key
stakeholders in drinking water supply, sanitation and wastewater management services. They must
ensure the design and implementation of appropriate public policies for the provision of the drinking
these services to the population. Public policies are expected in particular to contribute to
international development objectives, such as the Sustainable Development Goals, and respect the
internationally-recognized human right to safe drinking water and sanitation.
The responsibility of ensuring the design and implementation of appropriate public policies for the
provision of the drinking water supply and wastewater management services to the population
comprises:
a) Establish legislation that provides a legal and regulatory framework for the provision of
drinking water supply and wastewater management services, as well as legislation on
water resources, environment, consumer protection and competition;
b) Create an effective institutional framework with a set of institutional arrangements
conducive to the clear allocation of responsibilities amongst the various entities involved
in drinking water supply and wastewater management services, as an essential basis for
optimal sector performance.
c) Define goals and realistic, measurable targets to improve the availability, access, quality,
reliability and affordability of the services. Ensure provision of mechanisms to access
reliable information on services, both to support the definition of public policies and
business strategies and to ensure greater transparency in the provision of water supply
and wastewater services provided to society.
d) Establish a fiscal policy for services that promote economic incentives to the adequate
use of the water and quantify the long-term infrastructure investment requirements.

e) Establish a tariff policy for services that promotes a gradual cost recovery, compatible
with and periodically adapted to the economic capacity of the population and which
guarantees service delivery including to the most economically disadvantaged, which
may include subsidies.
f) Promote research and development in areas related to the services, creating indigenous
knowledge and thus ensuring increased national technical autonomy. This includes
supporting the development of the human resource capacity in terms of numbers and
professional technical training, to ensure the general quality of the service.
g) Ensure the availability of the necessary information to all stakeholders that need it
h) Identify the missions and the means of action of the various bodies having regulatory
functions at national, regional or local levels in the fields of health protection,
environmental protection, economic regulation, implementation of the human rights,
etc. These bodies can be internal to the relevant public authorities or external dedicated
regulators.
i) Ensure that all regulations are applied even-handedly to all the organisations in the value
chain, whether they are public, private, mixed or associative.
j) Provide the means to the resolution of any conflicts of interest between parties that may
arise from any of the above.

Article Eight - Responsibilities of regulatory authorities

The actions of regulatory authorities must be based on the principles of competence,
professionalism, impartiality, accountability and transparency.
Organized in whatever way meets local and national needs, they should ensure the implementation
of models which foster an integrated approach, i.e. for public and private drinking water supply and
wastewater management services regulating both the sector as a whole and each utility individually,
with a view to identifying the optimal conditions for all segments of the population.
An integrated regulatory approach for these services must be defined for each specific context but, in
general, should follow the principles described below. Regulatory authorities should:
a) Address legal and contractual areas, with the aim of ensuring that all of the stages of its
life-cycle, from the design stages, possible tendering processes, contracting, service
management, contract amendment and termination, are carried out in strict compliance
with legislation and with any existing contract, as is the case in situations involving
delegation and concession of services to third parties.
b) Impose sanctions in case of proven, deliberate non-compliance with established
regulations for drinking water supply, sanitation and wastewater management services.
c) Ensure the application of a tariff scheme that is fair, sustainable and fit for purpose,
promoting a combination of efficiency and the affordability of prices charged to users
together with the a level of cost recovery that meets the requirements for economic and
financial sustainability of the operator.
d) Assure quality of service, so that utilities provide a suitable quality of service to users
under the terms of its goals and objectives and in accordance with the laws that apply;
and, quality of drinking water for human consumption, so that the utilities are checked to
supply water with an appropriate level of quality, in accordance with standards and
norms prescribed by law for the benefit of public health.

e) Address the interface between utilities and users, in order to ensure the protection of
users' rights through compliance with legislation for consumer protection, safeguard the
right to submit complaints and improve the quality of the relationship between the
utilities and the users.
f) Contribute to increased competition between service providers, foster innovation and
technical progress and thus help increase the efficiency and the quality of the services
while minimising the effect of their monopolistic nature, which includes the risk of abuse
of their dominant position and other anti-competitive practices that are not in the
interest of users.
g) Collect, analyse and disseminate accurate information to entities responsible for services
and other stakeholders. It should be the responsibility of the regulatory authority to
consolidate a culture of making available concise, credible information which can be
easily interpreted by all, extendable to all operators, regardless of the forms of
management adopted for the provision of services.
h) Create a supportive enabling environment that includes the promotion of research and
development, create innovation and indigenous knowledge and the development of
human resources with suitable technical and professional training, fit to carry out
essential functions, thus ensuring increased autonomy for the country's drinking water
supply and waste water management services.

Article Nine - Responsibilities of the service providers

Service providers, whether public or private, as key stakeholders in this sector, should effectively and
efficiently ensure the equitable, universal supply of drinking water and wastewater management
services to the population, as a contribution to society.
Regardless of their management model, whether direct, by delegation, by concession, or other,
service providers should:
a) Operate in accordance with the policies set out by the legitimate political authority or
organising agency and act in strict compliance with legal and contractual framework,
particularly for service delivery, tariff structure, quality of service and quality of drinking
water, consumer protection and competition, and environmental legislation.
b) Contribute to improve the structural efficiency of the services using economies of scale
through the physical interconnection of systems on a technically and economically
appropriate scale, with proven benefits in terms of reduced unitary costs.
c) Encourage improvements in the operational efficiency of utilities, which should seek to adopt
an optimal type of organisation in their local context, particularly in relation to staff
management, the functional content of information circuits, administrative routines,
financial resources, planning, accounts, budget, and quality assurance.
d) Implement a pricing policy under the principle of user-payer principle, with the purpose of
promoting efficient cost recovery practices that are compatible with the economic capacity
of the population, particularly the most disadvantaged.
e) Contribute to human resources capacity development and innovation of service delivery, in
cooperation with other bodies, as essential factors to ensure overall quality of service
provision, including creating indigenous knowledge and thus ensuring increased national
autonomy.
f) Promote the development of the national, regional and local business, particularly through
partnerships and sub-contracting, thus creating better conditions for the development of

national knowledge and, hence, strengthening the capacity of the national and possibly
international business, and creating jobs and wealth.
g) Keep track of information and conduct suitable and auditable accounting, in accordance with
the requirements of the regulatory authority in particular, and provide reliable information
both to support the specification of public policies and business strategies as well as to
evaluate the service that is actually provided to society.
h) Aspire to operating beyond compliance through the development of activities that
contribute to the conservation of resources by minimizing waste and recovering by-products,
including energy and nutrient recovery from wastewater and sludge.

Article Ten - Responsibilities of the users

Users are the key stakeholders and final beneficiaries of the drinking water supply and wastewater
management services, with the following obligations:
a) Effectively exercise their rights, particularly regarding physical and economic access to
services, their quality, the quality of drinking water, and information about the services, the
option of submitting a complaint about the services and participating in decisions, and also
assuming their corresponding duties.
b) Be aware of and concerned with the water supply and wastewater services, preventing
inappropriate behaviours in order to minimise any adverse impact on public health and the
environment, such as avoiding the potential contamination of water sources and the
reduction in quality and/or reliability of the water being distributed.
c) Maintain individual systems for water supply and wastewater management, through
appropriate procedures for the use and adoption of appropriate materials and equipment.

Part Four Regulatory Frameworks

Article Eleven - Principles of Effective Regulatory Frameworks
Draft, review and update of regulatory frameworks should consider international guidance, best
available science and local circumstances to ensure a robust and appropriate means to regulate
water, sanitation and wastewater services. Key considerations for regulatory framework
development include:
a) Regulation should be seen as an integral part of public policies on drinking water supply
and wastewater management services. Although it is only one component among many,
it does play a crucial role, in so far as it is responsible to control and promote most of the
other components.
b) Such services are one of the pillars of citizenship, particularly when they function in
natural or legal monopoly markets, where there is no natural incentive to seek out
greater efficiency and effectiveness by the utilities and where the prevalence of these
risks to the users are higher.
c) Ensure that all contributors to the service delivery chain have clear objectives and means
of action, deliver achievements that satisfy these objectives and act in an efficient
manner.
d) Ensure an integrated regulatory approach for the public water supply and wastewater
services including both a regulation of the sector as a whole and a regulation of each
utility individually.

e) Ensure an adequate level of institutional, functional and financial independence of the

regulatory authorities, and to guarantee the stability and autonomy of their bodies and
freedom of decision within their legally defined remit, subject to judicial review.
f) Establish the necessary mechanisms to ensure accountability and public scrutiny of
regulatory authorities, particularly with regard to transparency of their actions.
g) Acknowledge that Regulators constitute an essential element of good governance,
reflecting the needs of our times, and providing a clear separation between technical and
operational dimensions on one hand and political decision making on the other.
h) Recognizing that Regulation is a key instrument in the very constitution of a competitive
market for drinking water supply and wastewater management services.
i) Recognizing that Regulation fosters a new culture of adhering to standards, norms and
good practice that is less dependent on governments and more rational, objective and
evidence-based.
j) Optimizing the contribution of regulation to the modernisation of public administration
and to the economy can be achieved by greater coherence in service provision, by
further harmonization, by the elimination of bottlenecks and by increasing the
confidence of economic agents and users in the objectives and practice of regulation.

Final Part
Article Twelve - Interpretation of the Charter
The Charter presents a set of general recommendations addressed to the regulatory authorities,
policy and decision makers and the utilities, users and members of society at large with regard to
drinking water supply, sanitation and wastewater management services to local populations.
The provisions of the Charter shall be interpreted in good faith in accordance with the ordinary
meaning to be given to the terms of the Charter in their context and in the light of its object and
purpose, unless otherwise defined in Article Four of this Charter.
The context for the purpose of the interpretation of this Charter comprises, in addition to the text, its
preamble and annexes.