Phase 2: Formalization

 

Key Activities and Related Tools

Determine whether and how affected stakeholders (or their proxies) can be appropriately represented in the WSI.

  • The WSI should strive to ensure that participants adequately reflect the range of potentially affected interests. Where affected stakeholders (or their proxies) cannot be represented as WSI participants, establish an appropriate ongoing external engagement mechanism that enables affected stakeholders to provide periodic input to help shape the design of the WSI and its implementation.
  • The effort should involve understanding who the relevant voices are (or their proxies, as appropriate) and provide a process that focuses on understanding the views of affected stakeholders, garnering their input, and sharing relevant project information. Proxies for stakeholders need to have legitimacy and authority to represent those interests.
How? Stakeholder engagement provides insights into the needs and wants of stakeholders who either have the power to influence the implementation of the WSI or are affected by it. A participatory planning process builds legitimacy and credibility for the WSI by ensuring that a range of voices are heard. Such a process brings new ideas and directions that will require the WSI to be flexible and adjust initial ideas, objectives, and intervention strategies. WSIs are iterative learning processes that require dedicated attention to improve participation through subsequent stages of its life-cycle. Use Tool 6: Support Materials for a Participatory Planning Process for insights.

Define among WSI participants the scope, objectives, and public interest benefits of the WSI, as well as the benefits of the WSI for respective participants.

  • It is important that participants specify the change that the WSI seeks to achieve against the current state of water resource management.
  • Once preliminary decisions are taken, WSI participants should communicate and validate with affected stakeholders the justification for the WSI.
How? Use Tool 6: Support Materials for a Participatory Planning Process and Tool 7: Basics for WSI Monitoring and Evaluation to help participants determine how to best hold these discussions. These tools offer pointers on key elements to discuss and how to effectively communicate with stakeholders.

Complete analysis of WSI participants’ track records, incentives, and intentions, as well as their respective capabilities and constraints.

How? A WSI participant due diligence process involves the systematic collection and analysis of information on how a particular organization is managed or how a company does business. The investigation reveals whether a potential WSI participant commits to professional and ethical business practices, and uncovers risks and opportunities involved for the potential initiative. It also reveals conflicts of interests and participants’ intentions. Use Tool 4: WSI Participants Due Diligence Investigation to carry this out. For participants that also act as funders, also use Tool 8: Financing and Audit Protocols to mitigate risks of capture, misleading expectations, or bad perceptions.

Assign among WSI participants suitable roles and responsibilities for all activities, coordination tasks, processes, and procedures.

  • At this time, oversight responsibilities (and potentially third-party controls) should be established to ensure that WSI participant oversight can be fulfilled properly.
How? Effective and successful WSIs typically require that a broad array of functions are fulfilled. At the same time, WSI participants bring with them a broad array of expertise and resources, as well as areas in which they have limited experience and capability. As such, well-defined roles and responsibilities among WSI participants that build on their core competencies or are aligned with their main interests are critical to project success. To effectively assign and manage roles, use Tool 9: Managing Roles and Responsibilities within a WSI. To ensure that the roles and responsibilities are effectively carried out, oversight mechanisms may be needed. The mechanisms can be used to oversee the WSI’s operations or implementation of specific WSI agreements and verify compliance with agreed procedures. Oversight mechanisms should be specified in the written agreements that govern a WSI to ensure transparency and to establish a reference point to hold WSI participants accountable if needed. Use Tool 10: Establishing Written Agreements for a WSI. To understand how to establish oversight mechanisms that go beyond internal measures, refer to Tool 11: Options for Independent Oversight.

Jointly identify and establish equitable decision-making structures and processes within the WSI, ensure that effective communications occur among WSI participants and with affected stakeholders, and clarify how financial issues will be handled.

  • At this time, oversight responsibilities (and potentially third-party controls) should be established to ensure that WSI participant oversight can be fulfilled properly.
  • It is important to consider linking the decision-making processes to the purpose and objectives of the WSI.
  • This includes establishing clear expectations about remuneration and flows of funding at the outset, and informing participants about financial commitments and disbursement procedures.
  • It is important to develop clear communication channels with affected stakeholders about the type of information that will be communicated, and the intervals and mechanisms for communication.
How? The purpose of a memorandum of understanding (MoU) within a WSI is to formally agree on the shared objectives, roles, and ground rules of an initiative, and includes defined decision-making structures. Even where an MoU is not legally binding, it represents an important mutual commitment, should be signed at the senior level within each partner organization, and should have regular performance reviews. See Tool 10a: Developing a WSI Memorandum of Understanding. In addition, financing and auditing protocols for WSIs may also help participants comply with moral or legal duties related to funding arrangements. For relevant guidance, also see Tool 8: WSI Financing and Audit Protocols.

Clarify expectations of behavior to guide participants’ engagement in the WSI.

This includes explicitly valuing honesty and upholding agreed procedures as a reference for behavior.

How? Developing a shared understanding of integrity in a specific WSI is an essential exercise in stakeholder collaboration that serves to build trust among actors, share experiences and good practices, identify shared values, and clarify expectations. As a central reference, a Code of Conduct guides WSI participants when dealing with ethical dilemmas and grey areas in decision-making and engagement processes. Use Tool 10b: Developing a WSI Code of Conduct.

Explore organizational forms that align with the purpose and nature of the WSI.

The right organizational form can provide legal certainty and establish a linkage to existing regulatory frameworks and their subsidiary standards and/or rules relating to aspects of integrity (e.g., financial accounting and contracting). It also enables the use of legal accountability mechanisms in case of dispute.

How? The overarching purpose of the organizational form is to support joint activity in delivering the objectives of the WSI. The organizational form needs to be flexible to allow the exploration of opportunities within the WSI before development and implementation of the WSI goals and objectives. For guidance on options for establishing a form, use Tool 10: Establishing Written Agreements for a WSI.

Assess the likelihood of policy capture and establish adequate safeguards to reduce capture risks.

Such an assessment will inherently increase understanding among WSI participants as to what constitutes capture and will raise awareness of relevant risks for the public agencies involved in the WSI, as well as for the WSI as a whole.

How? “Capture” can be understood to occur when discretionary decision-making or policy processes become systematically distorted or biased in favor of some interests over others due to structured imbalances in power and influence. The undue influence or “capture” of public policy, public funds, or regulatory processes, or of the water resource itself, are perhaps the most significant integrity hazards facing WSIs. Identifying these hazards and marking out with “red flags” where and how capture might happen is a first step toward mitigating capture risks. Use Tool 1c: Red Flags to Assess and Monitor Capture Risks to effectively implement a process for assessing capture risks. .

Establish an exit strategy for the WSI.

How? The “exit strategy” is the plan that clarifies how the WSI will end or transform (e.g., once goals have been achieved; at the end of the project or funding cycle), or that makes provision for the withdrawal of participant organizations. Fostering sustainability and mitigating risks of failure lie at the heart of this strategy. It needs to be designed jointly from the onset and revisited regularly as the initiative evolves. Find additional guidance for developing an exit strategy by using Tool 12: Developing an Exit Strategy.

Establish an M&E mechanism that enables WSI participants to understand both expected and unexpected outcomes, and determine whether the WSI is meeting its stated objectives.

How? Monitoring is a periodic and structured activity where priority information about the WSI is collected to assess performance against the defined objectives. Evaluation involves analyses of the WSI’s activities, characteristics, and outcomes to determine the merit of the initiative and to generate lessons for the future. Tool 7: Basics for WSI Monitoring and Evaluation provides an overview of the importance of developing M&E jointly with WSI participants.

Other Applicable Tools

Tool 1a: WSI Integrity Risk Assessment The purpose of carrying out a risk assessment is to enable the WSI to take the measures necessary to ensure high levels of integrity among its individual participants, for the governance and management of the initiative, and for its relationship with the broader context and environment. Understanding which integrity risks are most likely and most hazardous provides the basis to manage integrity systematically. This is key to avoiding potential policy capture and credibility issues for the WSI partners, and can help maximize value for money, longevity, and positive impact for the environment and society. An integrity risk assessment may be carried out at any stage in a WSI, though it will be most beneficial at the outset.

Tool 1b: Facilitator’s Guide for Participatory Integrity Risk Management Exercises Participatory integrity risk management exercises are meant to initiate a change process with participants to jointly enhance the WSI’s integrity. In existing WSIs that have not yet followed an explicit integrity management approach, these exercises can serve as a starting point to align the WSI with the Integrity Management Guidelines. The sequence of exercises is meant to facilitate a step-wise process to identify the key activities and the supporting tools that enhance the initiative’s integrity most effectively. To use time effectively, exercises should be combined and adapted to include other risks a WSI may be facing, and should be embedded into the overall management approach of the initiative. In WSIs that have integrated systematic risk management from the planning phase, the exercises serve to take stock, refine, and complement the measures put in place, to plan next steps, and to further sensitize participants.

Tool 2: WSI Model — A Template to Describe the Logic of WSIs The WSI model provides a structure through which WSI participants can discuss and agree on key aspects of the WSI in simple terms, establishing a shared understanding among all participants. Doing so helps create transparency and provides key information for an analysis of the most salient integrity risks the WSI may face. Beyond this, the WSI model helps to clarify the theory of change of the initiative. The WSI model can and should be reviewed and updated throughout the project life cycle.

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