Clean Water Shortage: The Looming Crisis in Vietnam

The incident in Hanoi this time will likely end with some culprits charged for illegal dumping and polluting a water source. In this scenario, the water company is counted as a victim. The big picture of public water safety as a matter of inter-provincial coordination, investment in social welfare, and good governance is likely to be ignored.
It’s déjà vu all over again
As many as a million people in Hanoi, Vietnam’s capital, have had no clean water for drinking, cooking, and cleaning for the last five days. To meet their most basic need of clean water, residents lined up for hours to fill their buckets with water from water supply mobile tanks. The sight reminds people about a Hanoi of 40 years ago during the old socialist days, when households in apartment buildings shared water tanks and toilets. The incident this time was caused by the illegal dumping of oil waste somewhere near the reservoir Dam Bai, as explained by Viwasupco, the water supply company.
Disruption in the supply of clean water or water shortage is no new news to Vietnamese people despite the fact that the country is relatively abundant in fresh water, with a dense network of streams, rivers and fresh water reservoirs. Thousands of households in the southwestern region, spreading from Long An to Soc Trang, Ben Tre, and Kien Giang, face water shortage annually for the last few years due to salinity intrusion. A similar situation is often found in Da Nang, a fast growing city in central Vietnam. Ho Chi Minh City, the largest city with a population of 10 millions, also faces a high risk of water shortage in dry season.
Currently, no water company in Vietnam holds enough clean water in reserve to supply their customers for more than few days. If a similar incident happened to any, their customers would suffer in the same manner.

Water safety plan requires thoughts, visions, responsibilities, and investments. A good practice should demonstrate how fast a water utility company responds to incidents like waste dumping, how long it can continue to supply safe water to customers without having to intake dirty water, or in worst-case scenarios, how many households it can supply using mobile devices. All of these practices increase safety for the population but obviously do not generate direct profits.
But what makes public water company executives care more about public safety if they are not held accountable to their customers? While suppliers can deny providing services if users are late in payment for two months, there is no way for water users to demand a fair response from providers. In addition, because public water utilities are under the authority of provincial people’s committees by default, they inherit features of Vietnamese bureaucracies: collective management with virtually no individual responsibility. In fact, despite numerous public water safety failures in the past, few have been charged so far.
Decentralized power and the tragedy of the commons
Most rivers in Vietnam, whose water is exploited for residential consumption, run through several provinces. Hence, securing a clean water source for residential use is never a task of a single province. Often times, provinces downstream are more populous, enjoying better economic conditions and demanding for more water, in contrast to their poorer upstream counterparts with smaller populations. Surface water, as a common good, is not for sale (or should it be, as some discussions emerged recently in the Ministry of Environment and Natural Resources?), but for coordinated management.
Needless to say, provincial authorities in upstream areas find no incentive to allocate scarce resources to protect the water source for those downstream to enjoy. On the contrary, the upstream areas can discharge waste water into rivers and may still enjoy clean water as they put their intakes for water treatment plants above the discharge points.
The tragedy of the commons is so common that one would expect stakeholders in a centralized state like Vietnam to solve without much trouble. However, the centralized state has been more effective when it comes to political stability. In issues involving economic development and resource management, decision-making power is quite decentralized. Consequently, provinces compete against each other to attract more investment projects, sometimes by lowering environmental standards. Eventually, no province bothers to protect the commons.
There is no coordination scheme that is effective enough to get provinces to work on water resource protection. The downstream provinces find no reason to pay more, while those upstream do not understand why they should invest on protection measures.

Who sells what to whom and why?
Vietnam has been under pressure to privatize more state-owned enterprises (SOEs) to meet the conditions of a “market economy” in order to have better access to US and EU markets. Water supply sector, among others, has been put on the same track. Yet for many reasons, privatization in this sector has caused great chaos all over the country from North to South.
There are three general main phases in public water supply: (1) intaking water from sources to treatment plants, (2) treating the water at the plants, and (3) distributing treated water to networks.
Among those three phases, the private sector has been most interested in building plants to treat water, followed by the distribution of treated water. Intaking water to treatment plants in cities like Hanoi, Ho Chi Minh and coastal provinces in the South is not economically attractive. The predominant business model in most places is: private companies buy raw water from state-owned companies, treat the water using their plants which are often managed efficiently to minimize cost, then sell the treated water to the state company. The treated water is then distributed via existing networks, which may belong to either a public or a private company.
The supply of public water from the source to the ultimate consumers becomes increasingly complicated because of the opaque ownership. The question of “who sells what to whom and why” relates to the question of how much profits flow into private companies whose share-holders may be sitting in the Board of Directors of loss-making state-owned companies.
The calculation gets tangled even more for measures to guarantee safety for public water in the process of building corridors to protect raw water transmission channels, chains of water reservoirs to retain water before intaking into treatment plants, reservoirs for treated water, and much more. All of these activities literally takes land, money, and political will. Large areas of land, especially in cities, are expensive. Capital is hard, especially when it yields low or no clear return. And political will is simply absent.
The incident in Hanoi this time will likely end with some culprits charged for illegal dumping and polluting a water source. In this scenario, the water company is counted as a victim. The big picture of public water safety as a matter of inter-provincial coordination, investment in social welfare, and good governance is likely to be ignored.
As a result, similar future disruptions in the supply of public water, be they in Hanoi, Da Nang, Ho Chi Minh City or southwestern areas, are to be expected without a sustainable solution.
By Thuy Nguyen
Department of Political Science, University of Oregon