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04 April 2019 | Story Leonie Bolleurs | Photo JohanRoux
Prof Chapagain  Inaugural
Prof Ashok Chapagain, Senior Professor in the Department of Agricultural Economics, recently delivered his inaugural lecture on the university’s Bloemfontein Campus. The title of his lecture was Counting Water: Simple yet Complex. From the left are: Dr Engela van Staden, Vice-Rector: Academic; Prof Ashok, Dr Frikkie Maré, Head of the Department of Agricultural Economics; and Prof Danie Vermeulen, Dean of the Faculty of Natural and Agricultural Sciences.

Virtually every economic sector, from agriculture, power generation, manufacturing, beverage, and apparel to tourism, relies on fresh water to sustain its business. Yet, water scarcity and water-pollution levels in river basins around the world are increasing due to growing populations, changing consumption patterns, and poor water governance.

These are the words of Prof Ashok Chapagain, Senior Professor in the Department of Agricultural Economics at the University of the Free State (UFS), who recently delivered his inaugural lecture on the university’s Bloemfontein Campus. The title of his lecture was Counting Water: Simple yet Complex.

He believes that in a world of increasing interconnectedness, equitable and sustainable resource management has become not only a local phenomenon, but also a global one. “The critical factors in managing these resources lie at both ends of the production and consumption chains. The interlinkages between agriculture, trade, economic, and energy policy and water-resources management must be understood,” he said.

Water footprint from farm to cup

The water footprint of a product is the volume of fresh water used to produce the product, measured over the various steps of the production chain. Water use is measured in terms of water volumes consumed or polluted, e.g. a cup of black coffee would take 140 litres of water as a result of water used in various processes, from the farm to the cup! 

Prof Chapagain said: “With the emergence of the water footprint concept, the public could for the first time see that the issue is not only related to direct water use in their houses, but also to their consumption of goods and services, such as food, fibre, and electricity. For example, a developed nation would typically state their water consumption data as around 100-200 litres per capita per day. This information is misleading, as it does not capture the massive amount of water needed to produce food, goods, and services consumed by the nation, which makes the daily water consumption a whopping 3 000-8 000 litres in these developed nations. Consumers, governments, and businesses are beginning to understand how their interests could be sustained in the long run, using this new approach to water-resource management.”

He also spoke about water as an economic enabler. According to him, harnessing the full benefit of water is constrained by three limits: hydrological limits, limits in production efficiency, limits and risks in externalising water footprints. He further elaborated, “Each river basin is unique with respect to amount of rainfall and pattern, rainfall-runoff relation, total available runoff, environmental flow requirements, groundwater recharge, etc. The actual available quantity of water is determined by all these parameters. Hence, there is a hydrological limit to water use in a river basin/aquifers”. He said: “On the other hand, making a process more efficient comes at a price, marking a limit on local efficiency gains. Similarly, importing virtual water to relieve pressure on local water resources would require second-order resources such as foreign currency, and a political will to move from a ‘water and food self-sufficiency’ policy towards a ‘water and food security’ policy. Enhancing the global water-use efficiency by means of trade has socio-economic limitations.” His current research focuses on unravelling these limits to growth, and on developing a generic analytical framework to find optimal solutions to growth under these water limits.

Trade can relieve the strain

Regarding the latter, he said trade in water-intensive goods and services could help relieve the strain on local/national water resources. For example, Switzerland covers merely 18% of its water demand from its internal water resources, i.e. 82% of it is external! South Africa’s external water footprint is only 22% of the total water footprint of national consumption. Hence, the scope of international trade to help alleviate local scarcity is limited by the availability of second-order resources such as foreign exchange, institutional capacity, socio-political context, etc. 

However, globalisation of fresh water brings both risks and opportunities. “Although national water resources could be saved for best alternative uses, the risks of a growing external dependency and the associated risks related to events elsewhere, are often not visible. These water-intensive production processes are vulnerable to the availability of water at the various locations where the production processes take place. The vulnerabilities may result from a range of factors – from reduced river flows, lowered lake levels, and declined ground-water tables to increased salt intrusion in coastal areas, pollution of freshwater bodies, droughts, and a changing climate,” he said.

Water footprint assessment

Prof Chapagain also touched on the Water Footprint Assessment; he believes it has provided a sound method to analyse the water footprint in the relevant context and formulate appropriate response strategies. “The water-footprint assessment breaks down the different water-footprint components and checks the sustainability of these components against three sets of criteria: environmental, economic, and social. The application of the Water Footprint Assessment has evolved from basic quantitative studies to a powerful advocacy tool that can support decision-making and policy processes and help mitigate water-related business risk.

“Counting water drops is simple, yet unravelling the underlying complexities is the key! I count on you to start by counting water drops in counting for sustainable growth,” he concluded.

News Archive

The failure of the law
2004-06-04

 

Written by Lacea Loader

- Call for the protection of consumers’ and tax payers rights against corporate companies

An expert in commercial law has called for reforms to the Companies Act to protect the rights of consumers and investors.

“Consumers and tax payers are lulled into thinking the law protects them when it definitely does not,” said Prof Dines Gihwala this week during his inaugural lecture at the University of the Free State’s (UFS).

Prof Gihwala, vice-chairperson of the UFS Council, was inaugurated as extraordinary professor in commercial law at the UFS’s Faculty of Law.

He said that consumers, tax payers and shareholders think they can look to the law for an effective curb on the enormous power for ill that big business wields.

“Once the public is involved, the activities of big business must be controlled and regulated. It is the responsibility of the law to oversee and supervise such control and regulation,” said Prof Gihwala.

He said that, when undesirable consequences occur despite laws enacted specifically to prevent such results, it must be fair to suggest that the law has failed.

“The actual perpetrators of the undesirable behaviour seldom pay for it in any sense, not even when criminal conduct is involved. If directors of companies are criminally charged and convicted, the penalty is invariably a fine imposed on the company. So, ironically, it is the money of tax payers that is spent on investigating criminal conduct, formulating charges and ultimately prosecuting the culprits involved in corporate malpractice,” said Prof Gihwala.

According to Prof Gihwala the law continuously fails to hold companies meaningfully accountable to good and honest business values.

“Insider trading is a crime and, although legislation was introduced in 1998 to curb it, not a single successful criminal prosecution has taken place. While the law appears to be offering the public protection against unacceptable business behaviour, it does no such thing – the law cannot act as a deterrent if it is inadequate or not being enforced,” he said.

The government believed it was important to facilitate access to the country’s economic resources by those who had been denied it in the past. The Broad Based Economic Empowerment Act of 2003 (BBEE), is legislation to do just that. “We should be asking ourselves whether it is really possible for an individual, handicapped by the inequities of the past, to compete in the real business world even though the BBEE Act is now part of the law?,” said Prof Gihwala.

Prof Gihwala said that judges prefer to follow precedent instead of taking bold initiative. “Following precedent is safe at a personal level. To do so will elicit no outcry of disapproval and one’s professional reputation is protected. The law needs to evolve and it is the responsibility of the judiciary to see that it happens in an orderly fashion. Courts often take the easy way out, and when the opportunity to be bold and creative presents itself, it is ignored,” he said.

“Perhaps we are expecting too much from the courts. If changes are to be made to the level of protection to the investing public by the law, Parliament must play its proper role. It is desirable for Parliament to be proactive. Those tasked with the responsibility of rewriting our Companies Act should be bold and imaginative. They should remove once and for all those parts of our common law which frustrate the ideals of our Constitution, and in particular those which conflict with the principles of the BBEE Act,” said Prof Gihwala.

According to Prof Gihwala, the following reforms are necessary:

• establishing a unit that is part of the office of the Registrar of Companies to bolster a whole inspectorate in regard to companies’ affairs;
• companies who are liable to pay a fine or fines, should have the right to take action to recover that fine from those responsible for the conduct;
• and serious transgression of the law should allow for imprisonment only – there should be no room for the payment of fines.
 

Prof Gihwala ended the lecture by saying: “If the opportunity to re-work the Companies Act is not grabbed with both hands, we will witness yet another failure in the law. Even more people will come to believe that the law is stupid and that it has made fools of them. And that would be the worst possible news in our developing democracy, where we are struggling to ensure that the Rule of Law prevails and that every one of us has respect for the law”.

 

 

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