The role of organisational nesting in risk-sharing – a case study of water security in the South African Sugar Industry

One of human society’s priorities is to achieve water security. However, this securement will require farsighted collective action. For many organisations, the dynamic process of maintaining an effective alignment with the environment while managing internal interdependencies is complex, encompassing decisions and actions at several organisation levels. Alignment of stakeholder behaviour towards common goals is important in the governance of common-pool resources such as water. This thesis is based on the premise that organisational nesting and polycentric governance enable stakeholders in the South African sugar industry to align their behaviours and manage risk collectively based on their perception of the rules and expected benefits from the outcomes. It is also based on how they affect interpretation and management of risk in the industry, with particular reference to water scarcity. The objective of this research was to gain insight into how the sugar industry achieves the farsighted collective action required for progress toward water security. Because water security is a reflection of exposure to risk, I postulated that organisational structure and governance would be consciously adapted to manage risk. One approach to promoting learning and adaptation in complex systems, such as the sugar industry, is to implement polycentric governance. The design of the study was qualitative in nature. In this research, I used a case study approach to investigate the role of organisational nesting in risk-sharing among sugar industry members within the uMngeni River Basin in KwaZulu-Natal, South Africa. I used semi-structured interviews with industry stakeholders to gain insight into their perceptions of water security and how it was affected by institutional design. The interviews were conducted with twenty two respondents from the sugar industry. These respondents included sugarcane growers and their representatives, millers, extension services, and natural resources management representatives of the sugar industry. Respondents based their perceptions of water security on issues such as quality, quantity, and broader sustainability, including the nature of resource development and its social and economic consequences. I use these responses to interpret how perceptions of risk have influenced the evolution of governance, particularly polycentric governance, in the industry. Findings from this research suggest that in its response to risk to water security, the South African sugar industry is using polycentric governance. In addition, these findings show that organisational nesting and polycentric governance have facilitated the development and implementation of programmes that contribute to attaining a sense of water security within the industry. These results provide an insight into the wider relevance of risk-sharing and organisational nesting among actors in social-ecological systems regarding water security.