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This Section briefly outlines the Government policy on the water supply sector and the most central laws and decisions on organisation and management of the sector.

In the Decree of the President of the Lao PDR No. 126 of 2 November 1996, the Law on Water and Water Resources (Lao PDR 1996) was issued, and became effective. The law sets the principles, regulations and measures for management, exploitation, use, preservation and development of water as a major natural resource in the country. The intention of the law is to preserve water and sustainable water resources to ensure sufficient quantity and quality to meet the people's requirements and to promote agriculture, forestry, industry, and national economic development as well securing environmental protection.

The Law states that the water resources are the property of the national community, as represented by the State.

With regard to the use of water, the Law distinguishes between small scale, medium scale and large-scale use. Small-scale use by individual families does not require approval if there is no particular restrictions on the water source. Other use will require approval, registration, contract, feasibility study or environmental assessments as the case may be. In a Decree issued by the Prime Minister, No. 09/PM of 8 February 1999, the organisation, role and responsibility of a Water Resources Co-ordination Committee (WRCC) were outlined, giving WRCC the overall responsibility for co-ordination of water resources planning, development and management in relation to the Law.

There is a water sector policy statement outlining the Government policies for financing, developing and managing the water supply and wastewater management systems in Lao P.D.R. Under the powers conferred to him by the National Assembly, the Prime Minister has approved the National Water Supply Sector Policy as described in the Decision No 37/PM (Page 1, Page 2, Pages 3-7) on Management and Development of the Water Supply Sector (Lao PDR 1999), which are binding on all stakeholders within the sector. The objectives of the policy statement are set out in terms of sector administration, regulation, financing, cost recovery, utility operation, urban and rural environmental hygiene activities, community awareness and participation, human resources development, sector development, private sector participation and water resources protection (under the WRCC).

The policy states that the role of the central Government is to facilitate and co-ordinate the development process for water supply and wastewater management systems in urban and rural areas throughout the country, including sector investment support. The Department of Housing and Urban Planning (DHUP) shall, according to the 37/PM, assist the Minister of MCTPC in: i) strategy development, planning of staff training on planning and management, and iii) studying regulations, standards, technical specifications and performance indicators (in collaboration with WASA). WASA shall, according to the same 37/PM carry out the functions of: i) assist the Minister of MCTPC on technical issues, including redevelopment of the MCTPC strategic plan on water supply and wastewater management systems, ii) setting norms, regulations, technical standards and technique-economic specifications, and iii) directing on behalf of MCTPC the management, and monitoring of the implementation of the National Water Supply Sector Policy.

The provincial governments are responsible for facilitation and co-ordination of development activities within the province on behalf of the central Government . Provincial Nam Papas (PNP) (including Nam Papa Vientiane) are responsible for implementing and managing all piped water supply systems in their respective provinces.

The PNPs shall operate on commercial principles in line with the Government's policy on working toward full cost recovery for urban water supply and centralised wastewater systems, with progressive block rate tariff structures. Initially all PNPs are obliged to meet all recurrent costs through the tariffs, and when possible, also to generate surplus funds to cover depreciation of capital costs in part or in full. The tariffs shall be set within the constraints of affordability and willingness to pay, adopting a uniform province-wide tariff system with possibilities for cross subsidising. In the short to medium terms where commercial targets cannot be readily achieved, the Government intends to support the PNPs with budgetary provisions. The PNPs are also in principle responsible for all capital investments, but the Government will assist as far as possible with grants from budgetary resources on a case-by-case basis. MCTPC will facilitate and co-ordinate donor funding into the sector. Technical support will be provided through the provincial DCTPCs.

The Prime Minister will, in accordance with the 37/PM, establish a Water Supply Authority's Regulatory Board (WSARB) with 9 members with a Vice-Minister of MCTPC as Chairman, and Director of DHUP as Vice Chairman. The Director of WASA will be the Secretary General of the Secretariat of WSARB, which will consist of a number of staff of WASA. The organization and activites of WASA are set out in the Ministerial Decision No. 1728/MCTPC.