The water industry provides drinking water and wastewater services (including sewage treatment) to residential, commercial, and industrial sectors of the economy. The water industry includes manufacturers and suppliers of bottled water. Water privatization by companies in the water industry is becoming an issue as water security threatens the global community.
The modern water industry operates sophisticated and costly water and wastewater networks and sewage treatment plants, and typically consumes 1-2% of GDP. It is generally a natural monopoly, and as a result is usually run as a public service by a public utility which is owned by local or national government. In some countries, notably France, the UK and the Czech Republic, the water industry is regulated but services are largely operated by private companies with exclusive rights for a limited period and a well-defined geographical space.
There are a variety of organizational structures for the water industry, with countries usually having one dominant traditional structure, which usually changes only gradually over time.
- local government - the most usual structure worldwide
- national government - in many developing countries, especially smaller ones
- private ownership - relatively few examples outside England and Wales
- co-operative ownership and related NGO structures
- local government operating the system through a municipal department, municipal company, or inter-municipal company - the most usual structure worldwide
- local government outsourcing operations to the private sector - an increasing trend since around 1990; around 10% of the industry (see also water privatization)
- national government operations
- private sector operating a system it owns
- BOTs - private sector building parts of a water system (such as a wastewater treatment plant) and operating it for an agreed period before transferring to public sector ownership and operation.
- cooperation and NGO operators
- water companies are coming under increased pressure to help conserve water. Companies such as WaterlessUK.com are spearheading this commitment to conserve our most valuable resource.
- Integrated water system (water supply, sewerage (sanitation) system, and wastewater treatment) - by far the most common
- Separation by function (e.g. Dutch system where sewerage run by city, water supply by municipal companies, and water treatment by water boards)
- Other separation (e.g. Munich, where separation into three companies for bulk water supply, water and wastewater network operations, and retail)
Whatever the ownership structure, water quality standards and environmental standards relating to wastewater are usually set by national bodies, such as (in the UK) the Drinking Water Inspectorate and the Environment Agency. In the United States drinking water standards are set by the U.S. Environmental Protection Agency (EPA). U.S. pollution control standards are developed jointly by EPA and state environmental agencies pursuant to the Clean Water Act. For countries within the European Union, water-related directives are important for water resource management and environmental and water quality standards. Key directives include the Urban Wastewater Treatment Directive 1992 (requiring most towns and cities to treat their wastewater to specified standards), and the Water Framework Directive 2000, which requires water resource plans based on river basins, including public participation based on Aarhus Convention principles.