History of water resources management

In 1855, the Chilean Civil Code began granting licenses to private parties for the exclusive use of water. Almost a hundred years later, Chile passed the Water Code of 1951, creating a system of water rights administration very similar to that implemented in the western United States, under which the government granted provisional water rights that would become protected property rights after use. In 1967, a new water code was enacted to replace the 1951 code, which was part of the agrarian reform. The Water Code of 1967 was intended to empower landowners to receive water and attempted to redistribute water as a component of the governments' strategy to reform agrarian policy.[11] The Water Code of 1967 strengthened government control over water and permitted the redistribution of large states and the expropriation of land and water rights that were to be reallocated, without granting any compensation to the owners. previous holders. The land expropriated before 1974 was divided into small agricultural holdings and land and water rights were granted to the current occupants, including some 48,000 small farmers.[12] Partly because of these reforms, partly because of an unfavorable economic situation, in 1973 there was a military coup that deposed President Allende. The military regime of dictator Augusto Pinochet began to adopt free market economic policies and, in 1980, a new constitution was approved.[11]​ We did not have to wait long for the arrival of the 1981 Water Code.

Water resources management model in Chile and the 1981 Water Code

Backed by the Chilean Constitution of 1980, the Water Code of 1981 established the framework that must be followed to allocate and manage water resources in Chile. Known internationally as the "Chilean model," the Chilean experience in water resource management is characterized by its use of free market forces and water markets to reallocate water to high-value uses. Although private water rights existed in Chile before 1981, previous water codes restricted the creation and operation of an efficient water market. While drafting the Water Code between the late 1970s and early 1980s, the government became concerned about irrigation and agricultural problems. The framers of the 1981 Water Code attempted to be efficient in reallocating water within the agricultural and irrigation markets. As stated by Hernán Buchi, former Minister of Finance of Chile (1985–1989), “the objective of government action in this field was to create solid water use rights to facilitate the correct functioning of the market as an allocation mechanism.”[13]​.

In his book on Chilean water law, "The Siren Song", Carl. J. Bauer offers a balanced critique of the Chilean model with its positive aspects and areas where the model has not worked as well. Among some of the problems are: environmental protection, river basin management, public interest, social equity, coordination of multiple uses and conflict resolution over water.

1. • solid and broadly defined private economic rights.

2. • very limited regulatory authority and.

3. • a powerful but erratic judiciary, without experience in public policy matters and with a narrow and formalistic vision of law."[1]​.

Supported by economists at the World Bank and the Inter-American Development Bank and opposed by advocates of command and control, the Chilean model has been studied and documented extensively for its innovative yet controversial methods. The 1981 Water Code marked the beginning for Chile of a regulatory environment based on the management of water resources based on the free market and away from the command and control methods that failed before 1981 to effectively allocate water resources and obtain economic gains.[14] Bauer proposed that, together with the 1980 Constitution, the 1981 Water Code has successfully achieved many of its priorities. initials, especially those that strengthen private property rights. According to Bauer, the initial priorities of the Chilean model include, among others, the following: ".

1. • security of private property rights to encourage private investment in the use of water and water infrastructure, which would allow new mining operations in northern Chile and the planting of high-value fruits and vegetables for export.

2. • Very limited government regulation regarding the use and management of water.

3. • Freedom to trade water rights to allow the reallocation of water resources from a low-value use to a high-value use where transaction costs are low and water is scarce.

4. • Autonomy of the government of the private associations of channel users. This has encouraged organizations to improve their administrative and technical capacity. These associations operate mainly in the agricultural sector.

5. • Creation of rights over water not intended for consumption to promote the development of hydroelectric energy".[2]​.

As summarized below, the distribution of powers and division of responsibilities are the hallmark of the 1981 Water Code:.

• - The executive branch of the government is responsible for planning, regulating and promoting the proper use of all water.

• - Private parties have greater potential to invest in domestic and agricultural uses of water, as well as in the maintenance of the water supply system, and play an important role in managing water supply and sanitation.

• - In the Ministry of Public Works, the General Directorate of Water carries out all measurements and investigations and is authorized to grant water use rights.

• - The Water Registry under the General Directorate of Water records all rights and transactions related to water.

Source: Article 122 of the Water Code of 1981.

Reform of the Water Code of 2005

In 2005, the 1981 Water Code reform was approved to address issues of social equity and environmental protection. For example, although more efficiency was achieved and investments increased, the unlimited allocation of water rights began to cause problems such as the monopoly of rights to surplus water or speculation and to avoid competition in various markets. The details of the reform involved fifteen years of meetings, negotiations, disputes and concessions. Over the course of the political struggle to reform the Water Code, the government's position on water markets became more favorable and it proposed reforms in response to strong political opposition from conservative parties and private sector commercial interests.[2]​.

The most important aspects of the 2005 reform include:.

1. • Granting authority to the president to exclude water resources from economic competition in cases where it is necessary to protect public interests.

2. • Obligation on the part of the General Directorate of Water (DGA) to take into account environmental aspects in the process of establishing new rights over water, especially when identifying environmentally friendly water flows and protecting the sustainable management of aquifers.

3. • Collection of a license fee for unused water rights and limiting applications for water use rights to original needs, as an impediment to hoarding and speculation.[15]​.

Important dates during the fifteen years that the water code reform process lasted:.

• - 1992. The government introduces the first reform project.

• - 1996. The government makes amendments and introduces the second reform project.

• - 1997. The water reform is approved in the Chamber of Deputies.

• - 1999. The reform is approved in the Senate committees.

• - 2000. The reform is approved (in general) in the Senate.

• - 2004. The reform is approved (in particular) in the Senate committees.

• - 2005. The final project is approved unanimously in both chambers to address social equity and environmental sustainability problems.

Source: Peña, Humberto. Ministry of Public Works: Chile.

Water markets

The new water rights are granted by the General Directorate of Water (DGA). When competition arises for the requested water rights, these are granted through bidding to the best bidder.[13]​ An example of the average annual volumes of water traded between 1993 and 1998 recorded in the Maipo and Mapocho regions is the transfer of 821 L/s and 161 L/s respectively.[16]​.

Water trading is not common practice in most of Chile and people have no expectations of being able to solve their water allocation problems through water market transfers. This is due to a problematic distribution between markets, cultural norms that associate land rights with water rights, urbanization of irrigated area and high transaction costs in many areas, including the costs of titling unregistered rights, information costs, infrastructure modification costs and the opportunity cost of the time invested in the transaction.[13]​

Although not widespread throughout Chile, water markets have been well documented in the areas where they have been implemented. Studies show an active trade in water use rights in the Limarí Valley, where water is scarce and has high economic value, especially for the emerging agricultural sector. Through trade between sectors, water has been transferred to the growing urban areas of Elqui

The Mapocho valley and upper basin, where water companies and real estate developers continually purchase water and account for 76% of water rights traded between 1993 and 1999. In contrast, water markets and trade have been more limited in the Biobío, Aconcagua and Cachapoal valleys.[13]​.

According to current information from the IDB and the World Bank, water markets in Chile have been successful.[1]​ In some regions of Chile, water markets have been successful in meeting the initial objectives of reallocating water to high-value uses and achieving economic efficiency through trade. Humberto Peña, former director of the General Directorate of Water (DGA) of Chile, offers a contrary opinion, asserting that the scarcity of trade implies that water markets do not effectively redistribute water.[13]​.

In water pricing, it is necessary to distinguish between two elements: the price of untreated water at the source and the price of treated water supplied to the end user. In most countries, the use of water at the source is free and the price of water allows us to recover part or all of the costs of treatment and supply. However, Chile is an exception, as the 1981 Water Code has not only confirmed private property rights over water resources, but has also allowed their sale, thus creating a water market and allowing the pricing of water resources. Supply and demand were to determine the water that was allocated and its price at the source. Price increases ranging from 41% to 240% between 1986 and 2000 are only an indicator that market forces are involved in identifying activities that have a high value and those that do not.[17]​.

Surface and groundwater resources

Chile is characterized by the irregular distribution of total rainfall between three well-differentiated climatic regions: the Atacama Desert in the northern zone, the central temperate and Mediterranean region, and the cold and rainy southern zone. The dry zone of the Atacama Desert receives an average of 44.5 mm of annual rainfall while the southern areas receive an average of 3,000 mm of annual rainfall. According to the FAO, the average annual rainfall is 1,522 mm with an annual volume of 1,152 km³. Of the total volume, 884 km³ will be runoff while 268 km³ will evaporate from rivers, lakes and ponds.

Chile's rivers are generally short and flow from the Andes in the east to the Pacific in the west. The most important rivers in Chile are the Loa River north of the Atacama Desert, the longest river in the country with a length of 420 km, which has suffered pollution from copper mines; the Baker River in Patagonia, the country's longest river in terms of discharge, which is the site of Chile's largest hydroelectric power plant with a capacity of 2,400 megawatts; the Biobío River, the second longest river in the country, which became known for the construction of the controversial Pangue dam in 1996; the Maule River in central Chile, which is well known for its agriculture, including its irrigated vineyards, as well as the literature and poetry that has been inspired by it; and the Maipo River, which supplies the capital, Santiago, with drinking water, and is also an important source of irrigation water.

The use made of groundwater from Chile's aquifers is much less than that of surface water. Since 1999, only 1,455 km³ have been extracted from aquifers that are recharged through nine large basins in Chile.[9]​.

The following table differentiates between fifteen administrative regions of Chile and their main hydrological characteristics..

Source of the previous tables: FAO data (2000) updated with the 2002 census figures; ***Global Precipitation Climatology Project (GPCP) (2006).

Storage capacity

Artificial storage. Chile has an artificial storage capacity of 4.66 BCM, of which 4.2 BCM is stored through large dams. About 0.5 BCM is stored in smaller public dams. Most of the water stored in these ponds is found in three of the fifteen regions. Regions IV, VI and VII (from the previous table) represent approximately 80% of Chile's artificial surface water storage.[18]​.

Natural storage Chile has a large number of natural lakes with an approximate capacity of 7 BCM. The southern regions are home to numerous lakes and lagoons, some of which are shared with Argentina. The population density is very low in southern Chile (0.1 to 0.6 people/km²), so the demand for water and the development of water resources is minimal.[19]​.

Droughts and floods

In the central and most populated regions of Chile, rainfall is highly variable, causing occasional floods and droughts. In early 2008, one of the worst droughts to hit Chile in decades forced the government to declare a state of emergency. This affected 50 agricultural districts in central Chile and farmers were forced to irrigate with increasingly scarce groundwater. Some hydroelectric dam ponds were low all the time.[20]​ Although 2008 has been one of the worst years in terms of droughts on record for the central regions, southern regions such as La Araucanía, Biobío and Los Ríos have also received torrential rains for more than three consecutive days in September 2008, which has caused severe flooding and the declaration of another state of emergency.[21]​.

Contenido

En las regiones del norte de Chile, la contaminación de fuentes puntuales de efluentes mineros supone un problema. Debido a que no hay demasiada agua en los ríos, la dilución de contaminantes se ha reducido enormemente. En el centro de Chile, la contaminación industrial resulta un problema. Con frecuencia estas descargas fluyen directamente a las cuencas de los ríos, los lagos y los canales de riego.[8]​ La contaminación de fuentes no puntuales de la escorrentía agrícola, incluidos los nitratos de fertilizantes y aguas residuales sin tratar, está afectando a las aguas subterráneas. La gravedad del problema aún no se ha determinado a fondo.[8]​.

Los proveedores del servicio de agua cumplen con las normas bacteriológicas y de desinfección. En un informe de 2006 sobre el manejo de la calidad del agua en Chile, los autores afirmaron que en 2000, el 99,1 por ciento de la población urbana y el 72,3 por ciento de la población rural tenía acceso al agua potable.[14]​.

La calidad del agua en Chile ha aumentado constantemente después de estipular el derecho a 'vivir en un medio ambiente sin contaminación' mencionado anteriormente en la Constitución de 1980; sin embargo, la contaminación del agua aún es preocupante. Esto se debe mayormente a las descargas en las fuentes puntuales de aguas residuales domésticas e industriales sin tratar.

A principios de los años 90, la descarga de aguas residuales domésticas e industriales sumaron un total de aproximadamente 43 m³ por segundo, en el que la contaminación doméstica representaba el 56% y el efluente industrial, el 44%.[7]​

El problema provenía de la falta de sistemas de cloración entre los proveedores del servicio de agua. Por lo tanto, el 20% de los proveedores del servicio de agua en 1991 no cumplió con las normas bacteriológicas. Desde su inicio en 1990, la Superintendencia de Servicios Sanitarios (SISS) prestó mayor atención y puso mayores esfuerzos para aumentar el número de sistemas de cloración apropiados. En 2006, se realizaron mejoras con respecto a los sistemas de cloración y sólo el 1% de los proveedores del servicio de agua no cumplió los requisitos. Además, el cumplimiento con las normas de desinfección aumentó del 89% a más del 99% en 2006 con esfuerzos similares.[22]​.

También se han conseguido mejoras en el tratamiento de aguas residuales en las últimas décadas, debido a que la Comisión Nacional del Medio Ambiente (CONAMA) implementó una política que ha visto un aumento de los programas de tratamiento de aguas residuales sin tratar hasta el 80% en 2006 y el 95% para 2010. CONAMA también intentó ampliar el tratamiento de aguas residuales industriales hasta el 50% de estas descargas hasta 2006. A partir de 2006, la contaminación de fuentes no puntuales, principalmente de la agricultura, no se ha cuantificado aún.[7]​.

Irrigation

Created in 1975, the National Irrigation Commission (CNR) is responsible for the development, improvement and maintenance of Chile's irrigation and drainage infrastructure. In 1992, the CNR estimated that approximately 1.8 million hectares (4.7 million acres) of land were irrigated while the total potential irrigation capacity of land in Chile was around 2.5 million hectares (6.8 million acres).[19] Chile's irrigated area represents 82% of the total agricultural land while the rest of the agricultural land uses rainwater.[9]

It should be noted that the CNR includes 730,000 hectares of "eventual" irrigated area in its figures of 1.8 million hectares. Only 3% of Chile's surface is arable land and this sector represents only 4.8% of Chile's GDP. Employment in the agricultural sector in 2005 was at 13.2% of the total workforce. Chile's main crops are grapes, apples, peaches, wheat, corn and oats.[23] Most of Chile's crops grow in the central regions, which are considered the agricultural center, due to its temperate climate.

Chile consciously made the decision to produce high-quality products for the international market to increase its annual exports. To achieve this, improvements were implemented in the management of irrigation and water resources to grow grapes, other fruits, cereals and vegetables. Furthermore, after two decades of research and analysis by Humberto Peña, it has been revealed that the use of wells in agriculture has increased six-fold. A law was passed in 1986 to provide subsidies for irrigated area and was later revised to specifically target the poorest farmers. Due to these policies, production increased by US$353 million and water use efficiency also improved dramatically. Surplus water is used for other purposes such as replenishing natural water bodies to support ecosystem services.[15]​.

Hydroelectric power

The 1980 Constitution specifically established the creation of rights over water for uses not intended for consumption (hydroelectric energy) and this led to the development of hydroelectric energy generation plants. Initially, this created a conflict between consumptive use (irrigation) and electricity generators regarding when to schedule water discharge. The Supreme Court ultimately ruled in favor of non-consumer use because it has a higher value and greater potential to generate economic growth.[12]​.

Existing dams. The capacity of Chile's dams is approximately 4.66 km³ while hydroelectric energy represents approximately 40% of total electrical production. This is equivalent to about 4.8 GW of annual hydroelectric production. In 1992, Chile extracted 63 km³ of water throughout the country and, of this total, 67.8% was used to generate hydroelectric energy.

[19]​.

Planned dams. In 2009, hydroelectric projects are being developed by the electrical companies: Endesa and Colbún. The two companies formed a joint venture called Hidroaysén. The HidroAysén project proposes to create five dams on the Baker River and the Pascua River at a cost of US$4 billion with an installed capacity of 2,400-2,750 MW.[24] The HidroAysén project has been opposed by the Natural Resources Defense Council (NRDC), Ecosystems, the Citizen Coalition for Aysén Reserva de Vida and Chilean celebrities. The opposition argues that the project would be devastating for the environment, would lead to more destructive projects, would ruin ecosystems in perfect condition and that alternatives such as conservation policies have yet to be established.

[25]​.

Water use in copper mines

Chile has emerged as the number one copper producer in the world and exports have tripled since the early 1980s. With mining and processing carried out primarily in the Atacama Desert, copper mines historically use large amounts of water. In 2008 and 2009, copper miners have reduced water use due to Chile's worst drought in decades. Although water is a key element in different stages of copper extraction, miners will consume an average of 11.5 m³ of water per second, a figure lower than the 15 m³ per second in 2000.[26]​ The growing competition for water between mining, cities and farmers has caused an increase in the value of water in Chile.[15]​.

Legal framework

The Water Code of 1981 declared water as national property for public use and is exclusively of interest to the establishment of water use rights and the innovative use of market mechanisms to distribute water rights to users.[7] The reform of the Water Code of 1981 began in 1992 and, over fifteen years, politicians organized more than 300 long and laborious meetings, participated in more than 50 technical and legal studies, and They met with stakeholders several hundred times before finalizing and approving the reform in 2005.[27]​.

As an important side note, it is worth noting that US-trained free market economists who played a crucial role in reformulating Chilean laws in the 1970s, known as the “Chicago Boys,” suggested to the Chilean government that market mechanisms could motivate users to save water, sell surplus water, and transfer water rights to higher-value users in other sectors.[11]​

Institutional framework

• - General Directorate of Water (DGA): the DGA is a regulatory entity dependent on the Ministry of Public Works. Their administration tasks include facilitating the operation of the system, maintaining hydrological data and a water registry, enforcing the national water policy, and tracking water rights information.[13]​

• The Water Registry Maintained by the DGA contains information on all water use rights granted by the DGA. In addition, the Water Registry contains hydrological and water quality data, information on civil user associations (ACU), water extractions and other transactions.[13]​ According to Robert R. Hearne and Guillermo Donoso, this registry does not imply any legal title and is usually incomplete.[13]​.

• - Directorate of Hydraulic Works (DOH): dependent on the Ministry of Public Works, the DOH is responsible for directing the rural program for water supply. Additionally, the DOH provides assistance in the construction and maintenance of the main water supply system, including irrigation and drainage infrastructure.[28]​.

• - National Environmental Commission (CONAMA): acts as coordinator of national environmental policy, water quality and environmental conservation. In the case of water quality management, CONAMA has established emission standards for the discharge of wastewater in sewer, surface and groundwater systems and the application of policies, penalties and fines for non-compliance.[29]​.

• - Superintendence of Sanitary Services (SISS): regulatory and auditing body that controls companies and provides drinking water and sanitary services to urban areas. The SISS establishes the rates of health services for authorization by the Ministry of Economy, supervises compliance with standards and regulates the control of environmental waste.[30]​.

• - National Irrigation Commission (CNR): created in 1975, the CNR is a legal entity under public law. The main objective of the CNR is to develop and improve irrigation and drainage infrastructure throughout Chile.[31]​.

Historical snapshot of legal and institutional changes in the water sector (1977-2005):.

Source: Peña, Humberto. Ministry of Public Works: Chile.

International agreements

With Argentina. In 1991, an environmental treaty was signed between Chile and Argentina and included a "Protocol of Agreement" in relation to shared water resources between the two countries.[32]​ The framework agreement attempts to regulate the cancellation of transfer of pollution through waterways (rivers, aquifers, lakes, pipelines) from one country to another. This agreement, although it has not yet been put into force, continues to be considered by FAO as a global framework for negotiating this type of agreement.[19] In May 2009, council representatives from Argentina and leaders of organizations from Chile met to formalize a request to the Ministers of Foreign Affairs of both countries. This request claims compliance with the objectives of the 1991 protocol on shared water resources.[32]​ The objectives of Article 1 of the protocol state the following: "the parties must accept that the actions and programs in relation to the use of shared water resources are met under the concept of integrated wetland management."[32]​.

With Bolivia. Historically, there have been no agreements regarding water resources with Peru or Bolivia. In addition, Bolivia and Chile have been in dispute over the use of the Silala waters for many years. Bolivian authorities allege that, because the waters of the Silala come from 94 springs in Bolivia, Chile must compensate for the use of the water. It has been reported that Chile and Bolivia are close to reaching an initial agreement following a meeting held in Santiago on April 3, 2009.[3]​ To reach an agreement, it would be necessary for Chile to pay 50% of the Silala waters through its state copper company Codelco and Ferrocarril Andino, a Chilean railway investment group. In addition, the Minister of Foreign Affairs of Bolivia David Choquehuanca has proposed a daily extraction fee for a total of about 6 million US$ per year. Negotiations continued in May 2009 to advance the details of the international shared waters agreement.[3]​.

Possible impacts of climate change

According to the British Foreign and Commonwealth, Chile is the ninth most vulnerable country to climate change. The agency adds: "the melting of glaciers, changes in precipitation patterns, the expansion of deserts and the increase in frequency of El Niño will have an impact on water supply."[33]​.

Much of Chile is dominated by the Andes mountain range and high-altitude glaciers. With the increase in temperatures, the Intergovernmental Panel on Climate Change (IPCC) warns of increased melting of many of these glaciers, which will cause some to disappear between 2020 and 2030. The IPCC's third assessment report indicates a critical situation for the glaciers of neighboring countries such as Bolivia and Peru. The IPCC report goes on to state that Chile's glaciers are drastically reducing their volume at an increasing rate and that changes in temperature and humidity are the main reason.[10] In a Science Daily article from March 2008, the news agency states that "if the intertropical glaciers of Chile, Argentina and Colombia disappear, water availability and hydroelectric power generation will be affected." Of the thirty test glaciers monitored in the Andes by the World Glacier Monitoring Service (WGMS), a center based at the University of Zurich in Switzerland and supported by UNEP, only the Echaurren Norte glacier in Chile recovered between 2005 and 2006.[10]​.

Offnews, a sustainable development news forum in Buenos Aires, has added reports and predictions on climate change from the IPCC, the World Economic Forum, the UN Economic Commission for Latin America and the Caribbean, the University of Chile and the Government of Chile. Forecasts from the Offnews report indicate that most of Chile will see a sharp reduction in rainfall. The only exception to the reduction in precipitation occurs in the north of the Atacama Desert, where an increase in precipitation is expected.[34]​.

Aquatic ecosystems

The 1981 Water Code did not address environmental issues such as environmentally friendly river and lake flows and environmental water quality; However, the 2005 reform began to determine minimum flows to protect aquatic species. Reduced river flows have not been shown to negatively affect populations of aquatic species, but the Organization for Economic Cooperation and Development (OECD) has analyzed Chile's species status and reported that 41 of 44 freshwater vertebrate species are experiencing conservation problems. Possible reasons include low environmental flows, the effects of climate change, and mining effluent, but direct connections have not yet been established. There are seven biosphere reserves established by UNESCO, nine Ramsar (wetlands convention) listed sites and three World Heritage Sites in Chile's network of protected areas.

Ramsar listed sites in Chile:.

• - Carlos Anwandter Sanctuary.

• - Surire Salt Flats.

• - Huasco Salt Flats.

• - Salar de Tara and the Soncor Hydrological System in the Los Flamencos National Reserve.

• - Laguna del Negro Francisco and Laguna Santa Rosa in the Nevado Tres Cruces National Park.

• - El Yali Wetlands.

• - Laguna Conchalí Nature Sanctuary.

• - Bahía Lomas.

Actual water exports

In an article by the World Water Partnership, the "real transfer" of water out of Chile by exporting copper and fruit is notable: about 1.9 billion m³ per year. This is equivalent to approximately 1.4 times the amount of drinking water produced per year in the country.[15]​.

In 2004, the World Bank approved a US$50 million loan to support a US$90 million project for rural infrastructure services. Chile's territorial infrastructure development project aims to increase the efficient and productive use of sustainable infrastructure services by disadvantaged rural communities. 30% of the project cost, or about US$27 million, is allocated to projects related to water, sanitation and flood protection. The project is scheduled to end in June 2010.[5]​.

In 2007, the Inter-American Development Bank (IDB) approved a US$100 million loan for a US$200 million project to improve drinking water and sanitation services in rural communities throughout Chile. More specifically, wastewater disposal and treatment will be revamped with new treatment facilities in rural areas and improved drinking water distribution systems will be built. Institutional strengthening is a main component of the program. The Ministry of Planning will determine the technical and economic viability of the eligible project proposals and the program will be carried out through the Undersecretary of Regional and Administrative Development.[6]​.

• - Ministry of Public Works - Ministry of Public Works (MOP).

• - National Irrigation Commission - National Irrigation Commission (CNR).

• - Superintendency of Water and Sanitation Services - Superintendency of Sanitation Services (SISS).

• - General Directorate of Water Resources - General Directorate of Waters (DGA).

History of water resources management

In 1855, the Chilean Civil Code began granting licenses to private parties for the exclusive use of water. Almost a hundred years later, Chile passed the Water Code of 1951, creating a system of water rights administration very similar to that implemented in the western United States, under which the government granted provisional water rights that would become protected property rights after use. In 1967, a new water code was enacted to replace the 1951 code, which was part of the agrarian reform. The Water Code of 1967 was intended to empower landowners to receive water and attempted to redistribute water as a component of the governments' strategy to reform agrarian policy.[11] The Water Code of 1967 strengthened government control over water and permitted the redistribution of large states and the expropriation of land and water rights that were to be reallocated, without granting any compensation to the owners. previous holders. The land expropriated before 1974 was divided into small agricultural holdings and land and water rights were granted to the current occupants, including some 48,000 small farmers.[12] Partly because of these reforms, partly because of an unfavorable economic situation, in 1973 there was a military coup that deposed President Allende. The military regime of dictator Augusto Pinochet began to adopt free market economic policies and, in 1980, a new constitution was approved.[11]​ We did not have to wait long for the arrival of the 1981 Water Code.

Water resources management model in Chile and the 1981 Water Code

Backed by the Chilean Constitution of 1980, the Water Code of 1981 established the framework that must be followed to allocate and manage water resources in Chile. Known internationally as the "Chilean model," the Chilean experience in water resource management is characterized by its use of free market forces and water markets to reallocate water to high-value uses. Although private water rights existed in Chile before 1981, previous water codes restricted the creation and operation of an efficient water market. While drafting the Water Code between the late 1970s and early 1980s, the government became concerned about irrigation and agricultural problems. The framers of the 1981 Water Code attempted to be efficient in reallocating water within the agricultural and irrigation markets. As stated by Hernán Buchi, former Minister of Finance of Chile (1985–1989), “the objective of government action in this field was to create solid water use rights to facilitate the correct functioning of the market as an allocation mechanism.”[13]​.

In his book on Chilean water law, "The Siren Song", Carl. J. Bauer offers a balanced critique of the Chilean model with its positive aspects and areas where the model has not worked as well. Among some of the problems are: environmental protection, river basin management, public interest, social equity, coordination of multiple uses and conflict resolution over water.

1. • solid and broadly defined private economic rights.

2. • very limited regulatory authority and.

3. • a powerful but erratic judiciary, without experience in public policy matters and with a narrow and formalistic vision of law."[1]​.

Supported by economists at the World Bank and the Inter-American Development Bank and opposed by advocates of command and control, the Chilean model has been studied and documented extensively for its innovative yet controversial methods. The 1981 Water Code marked the beginning for Chile of a regulatory environment based on the management of water resources based on the free market and away from the command and control methods that failed before 1981 to effectively allocate water resources and obtain economic gains.[14] Bauer proposed that, together with the 1980 Constitution, the 1981 Water Code has successfully achieved many of its priorities. initials, especially those that strengthen private property rights. According to Bauer, the initial priorities of the Chilean model include, among others, the following: ".

1. • security of private property rights to encourage private investment in the use of water and water infrastructure, which would allow new mining operations in northern Chile and the planting of high-value fruits and vegetables for export.

2. • Very limited government regulation regarding the use and management of water.

3. • Freedom to trade water rights to allow the reallocation of water resources from a low-value use to a high-value use where transaction costs are low and water is scarce.

4. • Autonomy of the government of the private associations of channel users. This has encouraged organizations to improve their administrative and technical capacity. These associations operate mainly in the agricultural sector.

5. • Creation of rights over water not intended for consumption to promote the development of hydroelectric energy".[2]​.

As summarized below, the distribution of powers and division of responsibilities are the hallmark of the 1981 Water Code:.

• - The executive branch of the government is responsible for planning, regulating and promoting the proper use of all water.

• - Private parties have greater potential to invest in domestic and agricultural uses of water, as well as in the maintenance of the water supply system, and play an important role in managing water supply and sanitation.

• - In the Ministry of Public Works, the General Directorate of Water carries out all measurements and investigations and is authorized to grant water use rights.

• - The Water Registry under the General Directorate of Water records all rights and transactions related to water.

Source: Article 122 of the Water Code of 1981.

Reform of the Water Code of 2005

In 2005, the 1981 Water Code reform was approved to address issues of social equity and environmental protection. For example, although more efficiency was achieved and investments increased, the unlimited allocation of water rights began to cause problems such as the monopoly of rights to surplus water or speculation and to avoid competition in various markets. The details of the reform involved fifteen years of meetings, negotiations, disputes and concessions. Over the course of the political struggle to reform the Water Code, the government's position on water markets became more favorable and it proposed reforms in response to strong political opposition from conservative parties and private sector commercial interests.[2]​.

The most important aspects of the 2005 reform include:.

1. • Granting authority to the president to exclude water resources from economic competition in cases where it is necessary to protect public interests.

2. • Obligation on the part of the General Directorate of Water (DGA) to take into account environmental aspects in the process of establishing new rights over water, especially when identifying environmentally friendly water flows and protecting the sustainable management of aquifers.

3. • Collection of a license fee for unused water rights and limiting applications for water use rights to original needs, as an impediment to hoarding and speculation.[15]​.

Important dates during the fifteen years that the water code reform process lasted:.

• - 1992. The government introduces the first reform project.

• - 1996. The government makes amendments and introduces the second reform project.

• - 1997. The water reform is approved in the Chamber of Deputies.

• - 1999. The reform is approved in the Senate committees.

• - 2000. The reform is approved (in general) in the Senate.

• - 2004. The reform is approved (in particular) in the Senate committees.

• - 2005. The final project is approved unanimously in both chambers to address social equity and environmental sustainability problems.

Source: Peña, Humberto. Ministry of Public Works: Chile.

Water markets

The new water rights are granted by the General Directorate of Water (DGA). When competition arises for the requested water rights, these are granted through bidding to the best bidder.[13]​ An example of the average annual volumes of water traded between 1993 and 1998 recorded in the Maipo and Mapocho regions is the transfer of 821 L/s and 161 L/s respectively.[16]​.

Water trading is not common practice in most of Chile and people have no expectations of being able to solve their water allocation problems through water market transfers. This is due to a problematic distribution between markets, cultural norms that associate land rights with water rights, urbanization of irrigated area and high transaction costs in many areas, including the costs of titling unregistered rights, information costs, infrastructure modification costs and the opportunity cost of the time invested in the transaction.[13]​

Although not widespread throughout Chile, water markets have been well documented in the areas where they have been implemented. Studies show an active trade in water use rights in the Limarí Valley, where water is scarce and has high economic value, especially for the emerging agricultural sector. Through trade between sectors, water has been transferred to the growing urban areas of Elqui

The Mapocho valley and upper basin, where water companies and real estate developers continually purchase water and account for 76% of water rights traded between 1993 and 1999. In contrast, water markets and trade have been more limited in the Biobío, Aconcagua and Cachapoal valleys.[13]​.

According to current information from the IDB and the World Bank, water markets in Chile have been successful.[1]​ In some regions of Chile, water markets have been successful in meeting the initial objectives of reallocating water to high-value uses and achieving economic efficiency through trade. Humberto Peña, former director of the General Directorate of Water (DGA) of Chile, offers a contrary opinion, asserting that the scarcity of trade implies that water markets do not effectively redistribute water.[13]​.

In water pricing, it is necessary to distinguish between two elements: the price of untreated water at the source and the price of treated water supplied to the end user. In most countries, the use of water at the source is free and the price of water allows us to recover part or all of the costs of treatment and supply. However, Chile is an exception, as the 1981 Water Code has not only confirmed private property rights over water resources, but has also allowed their sale, thus creating a water market and allowing the pricing of water resources. Supply and demand were to determine the water that was allocated and its price at the source. Price increases ranging from 41% to 240% between 1986 and 2000 are only an indicator that market forces are involved in identifying activities that have a high value and those that do not.[17]​.

Surface and groundwater resources

Chile is characterized by the irregular distribution of total rainfall between three well-differentiated climatic regions: the Atacama Desert in the northern zone, the central temperate and Mediterranean region, and the cold and rainy southern zone. The dry zone of the Atacama Desert receives an average of 44.5 mm of annual rainfall while the southern areas receive an average of 3,000 mm of annual rainfall. According to the FAO, the average annual rainfall is 1,522 mm with an annual volume of 1,152 km³. Of the total volume, 884 km³ will be runoff while 268 km³ will evaporate from rivers, lakes and ponds.

Chile's rivers are generally short and flow from the Andes in the east to the Pacific in the west. The most important rivers in Chile are the Loa River north of the Atacama Desert, the longest river in the country with a length of 420 km, which has suffered pollution from copper mines; the Baker River in Patagonia, the country's longest river in terms of discharge, which is the site of Chile's largest hydroelectric power plant with a capacity of 2,400 megawatts; the Biobío River, the second longest river in the country, which became known for the construction of the controversial Pangue dam in 1996; the Maule River in central Chile, which is well known for its agriculture, including its irrigated vineyards, as well as the literature and poetry that has been inspired by it; and the Maipo River, which supplies the capital, Santiago, with drinking water, and is also an important source of irrigation water.

The use made of groundwater from Chile's aquifers is much less than that of surface water. Since 1999, only 1,455 km³ have been extracted from aquifers that are recharged through nine large basins in Chile.[9]​.

The following table differentiates between fifteen administrative regions of Chile and their main hydrological characteristics..

Source of the previous tables: FAO data (2000) updated with the 2002 census figures; ***Global Precipitation Climatology Project (GPCP) (2006).

Storage capacity

Artificial storage. Chile has an artificial storage capacity of 4.66 BCM, of which 4.2 BCM is stored through large dams. About 0.5 BCM is stored in smaller public dams. Most of the water stored in these ponds is found in three of the fifteen regions. Regions IV, VI and VII (from the previous table) represent approximately 80% of Chile's artificial surface water storage.[18]​.

Natural storage Chile has a large number of natural lakes with an approximate capacity of 7 BCM. The southern regions are home to numerous lakes and lagoons, some of which are shared with Argentina. The population density is very low in southern Chile (0.1 to 0.6 people/km²), so the demand for water and the development of water resources is minimal.[19]​.

Droughts and floods

In the central and most populated regions of Chile, rainfall is highly variable, causing occasional floods and droughts. In early 2008, one of the worst droughts to hit Chile in decades forced the government to declare a state of emergency. This affected 50 agricultural districts in central Chile and farmers were forced to irrigate with increasingly scarce groundwater. Some hydroelectric dam ponds were low all the time.[20]​ Although 2008 has been one of the worst years in terms of droughts on record for the central regions, southern regions such as La Araucanía, Biobío and Los Ríos have also received torrential rains for more than three consecutive days in September 2008, which has caused severe flooding and the declaration of another state of emergency.[21]​.

Contenido

En las regiones del norte de Chile, la contaminación de fuentes puntuales de efluentes mineros supone un problema. Debido a que no hay demasiada agua en los ríos, la dilución de contaminantes se ha reducido enormemente. En el centro de Chile, la contaminación industrial resulta un problema. Con frecuencia estas descargas fluyen directamente a las cuencas de los ríos, los lagos y los canales de riego.[8]​ La contaminación de fuentes no puntuales de la escorrentía agrícola, incluidos los nitratos de fertilizantes y aguas residuales sin tratar, está afectando a las aguas subterráneas. La gravedad del problema aún no se ha determinado a fondo.[8]​.

Los proveedores del servicio de agua cumplen con las normas bacteriológicas y de desinfección. En un informe de 2006 sobre el manejo de la calidad del agua en Chile, los autores afirmaron que en 2000, el 99,1 por ciento de la población urbana y el 72,3 por ciento de la población rural tenía acceso al agua potable.[14]​.

La calidad del agua en Chile ha aumentado constantemente después de estipular el derecho a 'vivir en un medio ambiente sin contaminación' mencionado anteriormente en la Constitución de 1980; sin embargo, la contaminación del agua aún es preocupante. Esto se debe mayormente a las descargas en las fuentes puntuales de aguas residuales domésticas e industriales sin tratar.

A principios de los años 90, la descarga de aguas residuales domésticas e industriales sumaron un total de aproximadamente 43 m³ por segundo, en el que la contaminación doméstica representaba el 56% y el efluente industrial, el 44%.[7]​

El problema provenía de la falta de sistemas de cloración entre los proveedores del servicio de agua. Por lo tanto, el 20% de los proveedores del servicio de agua en 1991 no cumplió con las normas bacteriológicas. Desde su inicio en 1990, la Superintendencia de Servicios Sanitarios (SISS) prestó mayor atención y puso mayores esfuerzos para aumentar el número de sistemas de cloración apropiados. En 2006, se realizaron mejoras con respecto a los sistemas de cloración y sólo el 1% de los proveedores del servicio de agua no cumplió los requisitos. Además, el cumplimiento con las normas de desinfección aumentó del 89% a más del 99% en 2006 con esfuerzos similares.[22]​.

También se han conseguido mejoras en el tratamiento de aguas residuales en las últimas décadas, debido a que la Comisión Nacional del Medio Ambiente (CONAMA) implementó una política que ha visto un aumento de los programas de tratamiento de aguas residuales sin tratar hasta el 80% en 2006 y el 95% para 2010. CONAMA también intentó ampliar el tratamiento de aguas residuales industriales hasta el 50% de estas descargas hasta 2006. A partir de 2006, la contaminación de fuentes no puntuales, principalmente de la agricultura, no se ha cuantificado aún.[7]​.

Irrigation

Created in 1975, the National Irrigation Commission (CNR) is responsible for the development, improvement and maintenance of Chile's irrigation and drainage infrastructure. In 1992, the CNR estimated that approximately 1.8 million hectares (4.7 million acres) of land were irrigated while the total potential irrigation capacity of land in Chile was around 2.5 million hectares (6.8 million acres).[19] Chile's irrigated area represents 82% of the total agricultural land while the rest of the agricultural land uses rainwater.[9]

It should be noted that the CNR includes 730,000 hectares of "eventual" irrigated area in its figures of 1.8 million hectares. Only 3% of Chile's surface is arable land and this sector represents only 4.8% of Chile's GDP. Employment in the agricultural sector in 2005 was at 13.2% of the total workforce. Chile's main crops are grapes, apples, peaches, wheat, corn and oats.[23] Most of Chile's crops grow in the central regions, which are considered the agricultural center, due to its temperate climate.

Chile consciously made the decision to produce high-quality products for the international market to increase its annual exports. To achieve this, improvements were implemented in the management of irrigation and water resources to grow grapes, other fruits, cereals and vegetables. Furthermore, after two decades of research and analysis by Humberto Peña, it has been revealed that the use of wells in agriculture has increased six-fold. A law was passed in 1986 to provide subsidies for irrigated area and was later revised to specifically target the poorest farmers. Due to these policies, production increased by US$353 million and water use efficiency also improved dramatically. Surplus water is used for other purposes such as replenishing natural water bodies to support ecosystem services.[15]​.

Hydroelectric power

The 1980 Constitution specifically established the creation of rights over water for uses not intended for consumption (hydroelectric energy) and this led to the development of hydroelectric energy generation plants. Initially, this created a conflict between consumptive use (irrigation) and electricity generators regarding when to schedule water discharge. The Supreme Court ultimately ruled in favor of non-consumer use because it has a higher value and greater potential to generate economic growth.[12]​.

Existing dams. The capacity of Chile's dams is approximately 4.66 km³ while hydroelectric energy represents approximately 40% of total electrical production. This is equivalent to about 4.8 GW of annual hydroelectric production. In 1992, Chile extracted 63 km³ of water throughout the country and, of this total, 67.8% was used to generate hydroelectric energy.

[19]​.

Planned dams. In 2009, hydroelectric projects are being developed by the electrical companies: Endesa and Colbún. The two companies formed a joint venture called Hidroaysén. The HidroAysén project proposes to create five dams on the Baker River and the Pascua River at a cost of US$4 billion with an installed capacity of 2,400-2,750 MW.[24] The HidroAysén project has been opposed by the Natural Resources Defense Council (NRDC), Ecosystems, the Citizen Coalition for Aysén Reserva de Vida and Chilean celebrities. The opposition argues that the project would be devastating for the environment, would lead to more destructive projects, would ruin ecosystems in perfect condition and that alternatives such as conservation policies have yet to be established.

[25]​.

Water use in copper mines

Chile has emerged as the number one copper producer in the world and exports have tripled since the early 1980s. With mining and processing carried out primarily in the Atacama Desert, copper mines historically use large amounts of water. In 2008 and 2009, copper miners have reduced water use due to Chile's worst drought in decades. Although water is a key element in different stages of copper extraction, miners will consume an average of 11.5 m³ of water per second, a figure lower than the 15 m³ per second in 2000.[26]​ The growing competition for water between mining, cities and farmers has caused an increase in the value of water in Chile.[15]​.

Legal framework

The Water Code of 1981 declared water as national property for public use and is exclusively of interest to the establishment of water use rights and the innovative use of market mechanisms to distribute water rights to users.[7] The reform of the Water Code of 1981 began in 1992 and, over fifteen years, politicians organized more than 300 long and laborious meetings, participated in more than 50 technical and legal studies, and They met with stakeholders several hundred times before finalizing and approving the reform in 2005.[27]​.

As an important side note, it is worth noting that US-trained free market economists who played a crucial role in reformulating Chilean laws in the 1970s, known as the “Chicago Boys,” suggested to the Chilean government that market mechanisms could motivate users to save water, sell surplus water, and transfer water rights to higher-value users in other sectors.[11]​

Institutional framework

• - General Directorate of Water (DGA): the DGA is a regulatory entity dependent on the Ministry of Public Works. Their administration tasks include facilitating the operation of the system, maintaining hydrological data and a water registry, enforcing the national water policy, and tracking water rights information.[13]​

• The Water Registry Maintained by the DGA contains information on all water use rights granted by the DGA. In addition, the Water Registry contains hydrological and water quality data, information on civil user associations (ACU), water extractions and other transactions.[13]​ According to Robert R. Hearne and Guillermo Donoso, this registry does not imply any legal title and is usually incomplete.[13]​.

• - Directorate of Hydraulic Works (DOH): dependent on the Ministry of Public Works, the DOH is responsible for directing the rural program for water supply. Additionally, the DOH provides assistance in the construction and maintenance of the main water supply system, including irrigation and drainage infrastructure.[28]​.

• - National Environmental Commission (CONAMA): acts as coordinator of national environmental policy, water quality and environmental conservation. In the case of water quality management, CONAMA has established emission standards for the discharge of wastewater in sewer, surface and groundwater systems and the application of policies, penalties and fines for non-compliance.[29]​.

• - Superintendence of Sanitary Services (SISS): regulatory and auditing body that controls companies and provides drinking water and sanitary services to urban areas. The SISS establishes the rates of health services for authorization by the Ministry of Economy, supervises compliance with standards and regulates the control of environmental waste.[30]​.

• - National Irrigation Commission (CNR): created in 1975, the CNR is a legal entity under public law. The main objective of the CNR is to develop and improve irrigation and drainage infrastructure throughout Chile.[31]​.

Historical snapshot of legal and institutional changes in the water sector (1977-2005):.

Source: Peña, Humberto. Ministry of Public Works: Chile.

International agreements

With Argentina. In 1991, an environmental treaty was signed between Chile and Argentina and included a "Protocol of Agreement" in relation to shared water resources between the two countries.[32]​ The framework agreement attempts to regulate the cancellation of transfer of pollution through waterways (rivers, aquifers, lakes, pipelines) from one country to another. This agreement, although it has not yet been put into force, continues to be considered by FAO as a global framework for negotiating this type of agreement.[19] In May 2009, council representatives from Argentina and leaders of organizations from Chile met to formalize a request to the Ministers of Foreign Affairs of both countries. This request claims compliance with the objectives of the 1991 protocol on shared water resources.[32]​ The objectives of Article 1 of the protocol state the following: "the parties must accept that the actions and programs in relation to the use of shared water resources are met under the concept of integrated wetland management."[32]​.

With Bolivia. Historically, there have been no agreements regarding water resources with Peru or Bolivia. In addition, Bolivia and Chile have been in dispute over the use of the Silala waters for many years. Bolivian authorities allege that, because the waters of the Silala come from 94 springs in Bolivia, Chile must compensate for the use of the water. It has been reported that Chile and Bolivia are close to reaching an initial agreement following a meeting held in Santiago on April 3, 2009.[3]​ To reach an agreement, it would be necessary for Chile to pay 50% of the Silala waters through its state copper company Codelco and Ferrocarril Andino, a Chilean railway investment group. In addition, the Minister of Foreign Affairs of Bolivia David Choquehuanca has proposed a daily extraction fee for a total of about 6 million US$ per year. Negotiations continued in May 2009 to advance the details of the international shared waters agreement.[3]​.

Possible impacts of climate change

According to the British Foreign and Commonwealth, Chile is the ninth most vulnerable country to climate change. The agency adds: "the melting of glaciers, changes in precipitation patterns, the expansion of deserts and the increase in frequency of El Niño will have an impact on water supply."[33]​.

Much of Chile is dominated by the Andes mountain range and high-altitude glaciers. With the increase in temperatures, the Intergovernmental Panel on Climate Change (IPCC) warns of increased melting of many of these glaciers, which will cause some to disappear between 2020 and 2030. The IPCC's third assessment report indicates a critical situation for the glaciers of neighboring countries such as Bolivia and Peru. The IPCC report goes on to state that Chile's glaciers are drastically reducing their volume at an increasing rate and that changes in temperature and humidity are the main reason.[10] In a Science Daily article from March 2008, the news agency states that "if the intertropical glaciers of Chile, Argentina and Colombia disappear, water availability and hydroelectric power generation will be affected." Of the thirty test glaciers monitored in the Andes by the World Glacier Monitoring Service (WGMS), a center based at the University of Zurich in Switzerland and supported by UNEP, only the Echaurren Norte glacier in Chile recovered between 2005 and 2006.[10]​.

Offnews, a sustainable development news forum in Buenos Aires, has added reports and predictions on climate change from the IPCC, the World Economic Forum, the UN Economic Commission for Latin America and the Caribbean, the University of Chile and the Government of Chile. Forecasts from the Offnews report indicate that most of Chile will see a sharp reduction in rainfall. The only exception to the reduction in precipitation occurs in the north of the Atacama Desert, where an increase in precipitation is expected.[34]​.

Aquatic ecosystems

The 1981 Water Code did not address environmental issues such as environmentally friendly river and lake flows and environmental water quality; However, the 2005 reform began to determine minimum flows to protect aquatic species. Reduced river flows have not been shown to negatively affect populations of aquatic species, but the Organization for Economic Cooperation and Development (OECD) has analyzed Chile's species status and reported that 41 of 44 freshwater vertebrate species are experiencing conservation problems. Possible reasons include low environmental flows, the effects of climate change, and mining effluent, but direct connections have not yet been established. There are seven biosphere reserves established by UNESCO, nine Ramsar (wetlands convention) listed sites and three World Heritage Sites in Chile's network of protected areas.

Ramsar listed sites in Chile:.

• - Carlos Anwandter Sanctuary.

• - Surire Salt Flats.

• - Huasco Salt Flats.

• - Salar de Tara and the Soncor Hydrological System in the Los Flamencos National Reserve.

• - Laguna del Negro Francisco and Laguna Santa Rosa in the Nevado Tres Cruces National Park.

• - El Yali Wetlands.

• - Laguna Conchalí Nature Sanctuary.

• - Bahía Lomas.

Actual water exports

In an article by the World Water Partnership, the "real transfer" of water out of Chile by exporting copper and fruit is notable: about 1.9 billion m³ per year. This is equivalent to approximately 1.4 times the amount of drinking water produced per year in the country.[15]​.

In 2004, the World Bank approved a US$50 million loan to support a US$90 million project for rural infrastructure services. Chile's territorial infrastructure development project aims to increase the efficient and productive use of sustainable infrastructure services by disadvantaged rural communities. 30% of the project cost, or about US$27 million, is allocated to projects related to water, sanitation and flood protection. The project is scheduled to end in June 2010.[5]​.

In 2007, the Inter-American Development Bank (IDB) approved a US$100 million loan for a US$200 million project to improve drinking water and sanitation services in rural communities throughout Chile. More specifically, wastewater disposal and treatment will be revamped with new treatment facilities in rural areas and improved drinking water distribution systems will be built. Institutional strengthening is a main component of the program. The Ministry of Planning will determine the technical and economic viability of the eligible project proposals and the program will be carried out through the Undersecretary of Regional and Administrative Development.[6]​.

• - Ministry of Public Works - Ministry of Public Works (MOP).

• - National Irrigation Commission - National Irrigation Commission (CNR).

• - Superintendency of Water and Sanitation Services - Superintendency of Sanitation Services (SISS).

• - General Directorate of Water Resources - General Directorate of Waters (DGA).