In Chile, the excesses of the "water markets

As in many other countries, water in Chile is a public good. But, as in Australia and some American states, its management is in the hands of the owners of "water rights", and public authorities limit their interference to the strict minimum.

Elisabeth Lictevout, University of ConcepcionHervé Jourde, University of Montpellier and Véronique Leonardi, University of Montpellier

The Terre de convergence eco-meeting held from August 13 to 18 in Attuech, (30) provided an opportunity to try out new tools to facilitate debate between citizens. Sébastien Pichot/Terre de convergence, Author provided

The legal and institutional framework remains regulated by the 1981 Water Code, one of the neoliberal reforms introduced by the military regime of General Pinochet - in power between 1973 and 1990. This legislation is based on free-market principles, with the role of the State reduced to a minimum. Government action - through the General Water Directorate (DGA) - is limited to granting "water rights": these are always associated with a maximum volume of water pumped per year (m3/year) and a maximum instantaneous flow rate (l/s orm3/s). Once acquired, they can be sold or transferred without informing the DGA. The DGA also assesses the level of resources and may decide to temporarily or permanently close overexploited watersheds and aquifers.

Water rights" are managed like real estate, and protected by the Constitution: acquired in perpetuity by the purchasers, they are transferable and free to use. This is because the Water Code does not define any priority use in allocation: drinking or washing does not take precedence over an income-generating economic activity, since the market, and not the state, is supposed to regulate the efficient - economic - allocation of water.

Indeed, some authors praise the economic success of this approach: water rights confer a legal certainty that has encouraged private investment. From a social and environmental point of view, however, it appears inequitable.

An unfair and inefficient system

Water rights are granted to anyone who applies, whether an individual or a company. First come, first served, which favors large companies with the means to put together the application file.

Conversely, smaller users are often excluded from this access. Sometimes, it's because they simply haven't asked for it: this is the case for indigenous populations. For them, this resource is ancestrally associated with the land, while Chilean legislation separates ownership from that of water. The administrative process is complicated and costly. It is also common for small users to sell their water rights to large companies, particularly in watersheds and aquifers closed to new water rights - under a declaration of restriction.

When an aquifer is declared restricted, users must in theory form an aquifer management committee. However, as the committee's board of directors is formed on a pro rata basis of water rights, those with the most rights have the most votes. In the case of the Pampa del Tamarugal, in the north of the country, farmers were thus excluded from the board of directors, which was dominated by the major mining company and the drinking water company.

Poorly assessed water resources

The system is therefore particularly detrimental to the population, especially in the arid areas of northern Chile, where mining consumes large quantities of water in certain basins.

Its operation relies on knowledge and assessment of the variability of water resources, which are estimated by the DGA via a hydrometric and piezometric network - a set of stations that continuously measure various variables such as precipitation, river flow and groundwater levels. However, this network has major shortcomings, both in terms of geographical coverage - it does not take account of all water reserves - and in terms of the representativeness and quality of the data.

However, the studies financed by the DGA to estimate resource availability are all based on these data, and sometimes draw contradictory conclusions. When this is the case, players use the study that suits them best. Including the State, which has no hesitation in supporting large-scale mining projects... under the guise of stimulating economic growth.

In addition, the allocation of water rights in units of flow (volume per unit of time), the lack of knowledge of transactions between owners of water rights, and the limited capacity to monitor extractions mean that the true demand for water, and the actual use made of it, are not known.

The case of the Pampa del Tamarugal

The Water Code provides the DGA with a number of crisis "management" tools, in particular the declaration of shortage (for surface water) or restriction-interdiction (in the case of groundwater), which correspond to a definitive or temporary halt to the granting of new water rights. However, as assessments are open to criticism, these decisions are often based on erroneous information.

In the far north of Chile, a case study of the Pampa del Tamarugal showed that the aquifer restriction declared in 2009 was unjustified. Recent studies show that groundwater levels have not fallen across the board, and have only moderated in relation to the thickness of the aquifer.

In addition, the calculations presented by the DGA to justify the declaration of restriction contain numerous biases: among others, the failure to take account of recharge when estimating availability, and errors and uncertainties in the terms of the groundwater balance, in particular extractions. Decision-making was therefore based on highly uncertain data.

Conflicts and the water rights market

As a result, the number of water conflicts has steadily increased in recent years. The granting of rights to those who request them, without precise knowledge of water resources, has led to the overexploitation of certain aquifers, and to the declaration of restrictions in over a hundred of them.

These are concentrated in the arid and semi-arid north of Chile. Mining activity (copper in the Andes, nitrate and lithium in the Atacama desert), which requires a lot of water to process the ore, exerts permanent pressure on rights owners, particularly farmers.

A market is then created around these titles, which are sold at an exorbitant cost - one liter per second costs between 80 and 100,000 US dollars. In the case of the La Ligua Valley, Copiapo and the Pampa del Tamarugal, highly questionable calculations have been used to justify the declaration of an aquifer restriction for the benefit of large economic players, who use it to eliminate their competitors.

Although official estimates of available throughput showed that no new additional rights could be issued, they did not call into question existing rights and enabled new applications to be validated.

The need for a participatory process

Analysis of the actions taken by the various players (mines, drinking water supply companies, farmers, indigenous peoples) revealed that each pursued its own strategy, in particular by using the issue of water management and available (or unavailable) information to its own ends.

However, the generation of scientific information a posteriori has not been able to break this status quo. As a result, many small-scale users remain excluded from water access and management.

Setting up a participatory aquifer management process - currently requested by farmers and indigenous peoples - based on validated scientific information, would make it possible to address the question of how much water to extract from the aquifer.

In this way, it would be possible to define a "desirable" extraction volume, based on different development scenarios. To achieve this objective, it will be necessary to restore trust between the State and major companies, on the one hand, and between the State and indigenous peoples, on the other, as well as to change Chilean legislation.The Conversation

Elisabeth Lictevout, Researcher, University of Concepcion; Hervé Jourde, Researcher, University of Montpellier and Véronique Leonardi, Researcher, University of Montpellier

This article is republished from The Conversation under a Creative Commons license. Read theoriginal article.