BioConomy

Exclusion from Water Finance

Properties3
descriptionHow water funds, watershed payments and catchment bonds keep rural land stewards off their boards and out of their payments, what the record shows about poverty effects, and how far the literature on the violence of conservation supports calling this violence.
tagsconcept, water, finance, exclusion, conservation-violence, catchments
aliaseswater finance exclusion, exclusion from catchment finance, conservation violence and water finance

18 min read

Exclusion from water finance is the pattern in which facilities that pay for catchment outcomes keep the rural people who live in those catchments off their governing bodies, outside their eligibility rules or confined to paid labor; the record documents the pattern in governance, shows that design changes alter it, and has not yet measured whether it keeps communities poor.

Overview

Water and catchment finance moves money from downstream water users (cities, utilities, bottlers, investors) to the upstream land where water is produced. The instruments include water funds, payment for ecosystem services programs, outcome-linked bonds such as the performance-based bond, utility catchment schemes and nutrient markets. Each instrument settles three questions in its design: who sits on the governing body, who can be paid, and which outcome triggers payment. The answers decide whether the people who hold and work the land take part in the money that flows through it.

A body of scholarship on the violence of conservation in Africa treats evictions, fences and armed enforcement as violence built into conservation. Michael Haupt’s proposition extends that argument: exclusion of rural communities from water and catchment financing is itself a form of conservation violence, because it keeps those communities poor while the water their land yields is financed and used elsewhere. This page sets out what the published record can support on each part of that proposition, and marks where the record stops and the proposition begins.

The record divides cleanly. Removal of residents to protect water sources is documented by a continental court, a World Bank inspection panel and peer-reviewed studies, and it fits the field’s core meaning of violence. Exclusion from the governance of water funds is documented by the one systematic count available. The effect of exclusion from payment on household poverty has not been measured in any water finance facility, and systematic reviews find that payment programs which do include poor households have small or undetectable effects on poverty.

Three forms of exclusion and one confounder

The evidence only makes sense if four situations are kept apart.

  • Coercive exclusion: removal from land or water by force or law to protect a catchment. Evictions from Kenyan water towers and resettlement for the Lesotho Highlands Water Project belong here.
  • Exclusion from benefit: residents keep their land, but the finance flowing through their catchment pays them nothing, gives them no seat, or sets eligibility rules they cannot meet. This is the extension the proposition makes.
  • Adverse inclusion: participation as low-paid labor, or on contract terms set elsewhere. Clearing employment and conditional contracts the community did not shape belong here, and this form of inclusion can itself do harm.
  • Prior poverty: poverty that predates the facility. A facility that finds a poor community and leaves it poor differs from one that makes it poorer, and the evidence must separate the two.

Mexico’s federal hydrological payments program shows why the fourth item matters. It reached many poor communities because ejidos and comunidades hold most of Mexico’s forest and most of that forest lies in areas of high or very high marginality; the program’s own evaluators describe the overlap between payments and poverty as “purely coincidental” (Alix-Garcia, de Janvry, Sadoulet and Torres) [IC].

Mechanisms

Eleven mechanisms of exclusion appear in the cases reviewed. The table lists only those with a verified example. Codes X10 and X11 were added by the research behind this page because the evidence showed them.

CodeMechanismVerified example
X1Coercive removal to protect a water sourceOgiek in the Mau Forest; Sengwer in Embobut Forest, Kenya; Lesotho Highlands resettlement
X2Eligibility tied to registered titleCosta Rica’s PSA program before 2003
X3Geographic design that pays only for chosen sub-catchmentsMexico’s eligible zones; priority catchments in the Cape Water bond
X4A paid-for metric suited to large or state holdingsHectares of invasive plants cleared (Cape Water bond); modeled nitrogen (Poole Harbour auctions)
X5No seat for rural land stewards on the governing body12 of 16 Latin American water funds in 2013 to 2014
X6Transaction costs: bidding, plans, maps, verificationCompetitive bidding in the Poole Harbour auctions; management plans in Costa Rica
X7Inclusion as labor onlyWorking for Water, South Africa
X8Payments captured by intermediaries or large holdersNo verified water finance case; retained as a test
X9Water secured at source and allocated downstreamLesotho Highlands transfers to Gauteng
X10Misrecognition in contract termsFONAG’s first contract with the Quinchucajas community, Ecuador
X11Remedy granted and not implementedOgiek removals reported after the 2017 judgment

What the record shows

Governance seats

The only systematic count is Bremer and colleagues’ study of 16 funds in the Latin American Water Funds Partnership: rural land stewards were “represented on governance boards in just 4 of 16 funds” (Bremer et al. 2016) [IC]. The same study reports that “all water funds worked extensively with local land stewards.” Exclusion from the board and exclusion from the work are separate findings, and the study supports the first.

Design choices change participation

Where a facility changed a rule, participation changed.

  • Costa Rica’s PSA program opened eligibility in 2003 to holders without registered title who could show clear possession, after title was identified as a main constraint on small landholders (World Bank 2008) [IC]. Indigenous territories contract through their development associations [IC].
  • Mexico added a poverty objective to its hydrological payments program in 2006, and the poverty index of enrolled land rose (Sims et al. 2014) [IC]. The program also shows a trade-off between land cover and poverty goals (Alix-Garcia, Sims and Yañez-Pagans 2015) [IC].
  • In the nitrogen auctions run by EnTrade for Wessex Water around Poole Harbour, England, a uniform-price payment replaced competitive bidding in a February 2019 trial with the University of Exeter, after farmers reported the burden of bidding. Participation went from 19 farmers in the first auction to 63 by mid-2019 and more than 100 by 2020 [MS: scheme and funder figures]. The record does not separate the effect of the price rule from the scheme’s growth.
  • FONAG, the Quito water fund, revised the wording of a community contract after the Quinchucajas community contested its framing of community labor (Joslin 2023) [IC].

Law and land records still bound what design can do. Costa Rica’s untitled holders needed management plans that themselves depended on land documents (World Bank 2008) [IC].

Coercive catchment protection

  • Mau Forest, Kenya. The African Court on Human and Peoples’ Rights found in 2017 that Kenya’s evictions of the Ogiek violated seven articles of the African Charter, and in 2022 ordered reparations of more than US$1.3 million, titling of ancestral land and consultation on projects affecting it [IC]. About 100 Ogiek families were reported removed in July 2020, between the two judgments [IC].
  • Embobut Forest, Kenya. The World Bank Inspection Panel found in 2014 that the Bank’s Natural Resource Management Project failed to comply with its safeguard policies in relation to the Sengwer. Bank management stated that the Bank was not involved in the evictions (Inspection Panel 2014) [IC]. Amnesty International, an advocacy organization, documented continuing forced evictions in 2018.
  • Lesotho Highlands Water Project. The project transfers water from the Lesotho highlands to Gauteng, South Africa, under a treaty that requires affected people to be left no worse off. Hitchcock (2015) reports that some resettled households ended with “lower incomes and higher rates of poverty,” and Braun reports that women were excluded from receiving compensation [IC]. The Phase II compensation policy of the Lesotho Highlands Development Authority adds livelihood monitoring [IC].

Poverty effects

  • The Campbell Collaboration review of eleven quantitative and nine qualitative studies found “little reason for optimism about the potential for current PES approaches to achieve both conservation and poverty reduction benefits jointly” (Samii et al. 2014) [IC].
  • A randomized trial of forest payments in western Uganda reduced deforestation; 32 percent of eligible forest owners enrolled, and the payments “offset this income loss but did not, on net, enrich them” (Jayachandran et al. 2016, 2017) [IC]. The trial is a forest program and serves here as a comparator.
  • South Africa’s Working for Water program has cleared invasive plants since 1995 and is funded mainly as poverty relief (Turpie, Marais and Blignaut 2008) [IC]. In three projects in the Luvuvhu catchment, Limpopo, its employment reached 0.5 percent of catchment households (Hope 2006) [IC]; the figure covers those projects only. Workers depend on short-term contracts and seek permanent work (Hough and Prozesky 2012) [IC].

No study found compares excluded and included households within a water finance facility. If inclusion barely moves household poverty, the record cannot yet show that exclusion holds poverty in place.

Worked example: the Cape Water bond

The Cape Water Performance-Based Bond, issued by FirstRand Bank and arranged by Rand Merchant Bank, raised R2.5 billion and listed on the Johannesburg Stock Exchange in April 2026. Its performance payment depends on independently verified hectares of invasive alien plants cleared in priority catchments of the Western Cape [IC]. The Western Cape Government’s statement on the issue describes employment targeting women and youth [IC]. The public documents reviewed for this page contain no landholder payment terms and no seat for landholders or communities in the bond’s structure. In the codes above, the bond shows X3, X4 and X7, and X5 on the documents reviewed. The full treatment of the instrument is on Performance-Based Water Bonds, and its working in one valley is on the W2DF register at How the Cape Water Bond Works.

Is exclusion violence?

The definitions

  • The violence of conservation. The edited volume The Violence of Conservation in Africa (Ramutsindela, Matose and Mushonga 2022) is described by its publisher as focusing on “how the dehumanization of black people and indigenous groups, the insertion of global green agendas onto the continent, a lack of resource sovereignty, and neoliberal conservation account for why violence is a permanent feature of conservation in Africa.” Its center of gravity is state force, militarization and removal.
  • Structural violence. Johan Galtung (1969, p. 168): “violence is present when human beings are being influenced so that their actual somatic and mental realizations are below their potential realizations.” He adds that “when the actual is unavoidable, then violence is not present.” Structural violence has no single actor and shows up “as unequal power and consequently as unequal life chances” (p. 171).
  • Slow violence. Rob Nixon (2011, p. 2): “a violence that occurs gradually and out of sight, a violence of delayed destruction that is dispersed across time and space, an attritional violence that is typically not viewed as violence at all.” His cases are environmental harms that accumulate in bodies and places.
  • Green grabbing. Fairhead, Leach and Scoones (2012, p. 237): “the appropriation of land and resources for environmental ends,” including “the restructuring of rules and authority in the access, use and management of resources that may have profoundly alienating effects.” That clause reaches governance exclusion without land loss.

Has anyone made the argument?

One author has, for carbon finance. Howson (2018) describes “violent exclusions from REDD+ forests” that are “of an implicit kind,” and writes that a market-enabling push “was also a cause of structural violence, excluding already marginalised farmers and labourers from project benefits.” The study draws on Galtung and Paul Farmer and covers one project in Central Kalimantan, Indonesia. No published author was found who calls exclusion from water funds, watershed payments or other water finance a form of violence. The payment-for-ecosystem-services literature treats the same exclusion as a problem of equity and justice.

How far the definitions carry the proposition

Galtung’s definition carries the extension on two conditions. The gap between potential and actual well-being must be shown, and it must be avoidable. The design changes in Costa Rica, Mexico and Poole Harbour show that exclusion is often avoidable. The poverty record does not yet show the gap. Nixon’s definition fits poorly, because a withheld payment is a different kind of harm from an accumulating toxin. Green grabbing fits governance exclusion more closely than either.

The strongest objection comes from C.A.J. Coady, who argues that “the similarities between personal violence and structural violence seem to be far too few and too general to offset the striking differences between them” (Coady 2008, p. 29, as quoted by Vorobej 2008). Vorobej argues that Coady misreads Galtung. The proposition answers Coady only where it can point to a measurable, avoidable harm. For exclusion from benefit, the objection stands until that measurement exists.

A second objection comes from inside the field. In a 2022 interview the three editors of the violence-of-conservation volume warned that community conservationists “could be tricked into enabling land grabbing and mushrooming of foreign and elite business interests in communal lands.” No passage was found in which they, or the convivial conservation scholars, endorse inclusion in conservation finance as a remedy. A demand for inclusion in water finance departs from them at that point.

Where the proposition begins

The violence-of-conservation literature supports calling coercive exclusion from water sources violence. Galtung and Howson give a scholarly route to calling exclusion from benefit structural violence. Applying that route to water finance, and claiming that such exclusion keeps communities poor, is Michael Haupt’s own extension. On the present record it is a working-hypothesis, and the accurate name for what the record documents is exclusion from governance, eligibility and payment, which the wiki calls finance exclusion.

Design features found in the counter-cases

These features appear in cases where rural land stewards hold seats, receive payment or shaped the metric. They are findings from the record.

  • Eligibility based on clear possession for holders without registered title (Costa Rica, from 2003) [IC].
  • Contracts with collective bodies on communal land: Indigenous development associations in Costa Rica, ejidos and comunidades in Mexico [IC].
  • A uniform price per unit of outcome replacing competitive bidding, after farmers reported the burden of bidding (Poole Harbour, 2019) [MS].
  • Contract wording revised after community contestation (FONAG) [IC].
  • A court order requiring titling and consultation (Ogiek, 2022) [IC].

No case was found in which a source community owns the data gathered about its catchment. That absence matters for any BioConomy design that pays communities on verified outcomes, because whoever holds the verification record holds the terms of payment.

What the evidence does not yet show

  • Whether exclusion from benefit causes or locks in poverty. No within-facility comparison exists.
  • Whether governance exclusion is a global norm. The one systematic count covers Latin America.
  • Whether source communities lack water services while their water goes downstream. No paired figures were found.
  • Which way causation runs. Households without title or capital are barred from title-based and bid-based schemes, and the record does not separate exclusion caused by poverty from poverty caused by exclusion. The Costa Rican and Mexican rule changes could do so with household data.

Right of reply

This page describes the recorded actions of FirstRand Bank, Rand Merchant Bank, the Western Cape Government, The Nature Conservancy, the Kenyan state and Kenya Forest Service, the World Bank and its Inspection Panel, the Lesotho Highlands Development Authority, FONAG, Mexico’s CONAFOR, Costa Rica’s FONAFIFO, Wessex Water and EnTrade, and South Africa’s Working for Water program. None has yet been invited to reply.

Sources

Wiki source pages:

Works without a wiki source page yet:

Provenance

Written 25 October 2026 from the evidence brief “Exclusion from Water and Catchment Finance” produced by a deep research run against Michael Haupt’s instructions water-finance-exclusion-deep-research.md. Claim grades follow that brief. The page keeps only claims the brief graded [IC] and published institutional figures it graded [MS]. It leaves out the brief’s fourteen unverified leads (among them Usangu, Mount Elgon, Chile’s Water Code, South African Water User Associations, the Colombian and Pedro Moncayo funds, Vittel and Tarun Bharat Sangh) and three claims from Michael’s working files that the run could not confirm: the tenure split of the Cape bond’s clearing, the absence of community seats on the Greater Cape Town Water Fund steering committee, and the Upper Tana-Nairobi Water Fund trustee list and drip-kit uptake figure.

Household counts for the Lesotho resettlement are omitted because the source gives figures that do not reconcile. Coady’s words are quoted through Vorobej (2008), and Coady’s page numbers have not been checked against the book. The volume’s own typology of violence, set out in its introduction, was not accessible; the page quotes the publisher’s description and does not attribute a typology to the editors. The proposition that exclusion from water finance is conservation violence is Michael Haupt’s, and the page attributes it to no other author. The page status is academic-inference for the documented core; the proposition’s extension to exclusion from benefit is marked within the page as a working-hypothesis. Place-specific material on the Cape bond’s catchments belongs on the W2DF register and the BioHubs directory.

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