CRITIQUES OF THE WATER CODE 1981

Again, the critiques point to problems in the exclusive focus on path 0G, as a neoliberal with a libertarian economics theory and framework suggests.

Neoliberal, market-driven regime

The 1981 Water Code had shifted the focus in Chile from path 0M reflecting “… a reformist and interventionist approach to a system based on private, perpetual rights and free exchange… (p. 397)” with the latter represented on path 0G. Also, increases in inequality were assured as larger land owners and electric utilities that had also been privatized were better positioned to obtain the private property in water. So, the privatization tended to reinforce existing power regimes.  Claims about the Water Forum moving water to higher-valued  uses really did not carry much fact-content. The Water Forum has been found to be lacking in dealing with increasing scarcity and social conflict, both having dimensions in the domain of the sacred.

            The conclusion is:  “… neoliberal water markets are increasingly viewed as a contested model rather than a settled success. Growing scarcity and socio-environmental conflict reveal the tensions of a regime that relies on private ordering and limited state intervention precisely in contexts where coordination, regulation, and redistribution may be most needed (p. 398).” Through the DIT lens, the Water Forum is operating too close to the vertical axis of Figure 5, too focused on the profane, with not enough attention to the sacred.

Weak, centralized and fragmented state water governance

Celume et al note how the 1981 Water Code greatly reduced the role --- in DIT terms --- of the Other Forum, thus leaving the Market Forum more or less adrift, a market lacking in institutional context. As a DIT analyst would expect, problems would arise in  “… procedures for transfers and registration …  slow, costly, and difficult to navigate; social and economic inequalities are reinforced; and the framework lacks flexibility to respond to climate driven scarcity and hydrological variability (p. 399).” It is the Other Forum, if designed using something akin to the Ostrom IAD principles, and funded such as to make it possible to actually operate, that gives the context to the Market Forum.

It is only with said fully functional Other Forum that the Market Forum can actually work toward bringing about economic&social efficiency.  Researchers are finding the current Other Forums operating in Chile as being in “…a fragmented and centralized institutional landscape, in which agencies … operate with poor coordination, limited resources, and significant gaps in groundwater protection and aquifer protection zones (p. 399).”

Even the reforms in the 2022 Law also did not adequately address how current Other Forums operating at the national level are “… limiting local participation, and offering few mechanisms for citizen involvement, which creates democratic deficits and territorial blind spots (p. 399).”

As DIT makes clear, drawing on the Ostrom IAD system, many overlapping --- Ostrom called them polycentric --- Forums in a kind of layering between the individual water user in the local area and the framing at the national level must be in play.  Celume et al. point out the need to develop river basin wide, an Other Forum in each, type institution.  Through a DIT lens, the structure of the Florida Water Management Districts, one for each of the 5-hydrologic regions in Florida, could be a model to consider.

Knowledge, expertise, and information

Celume et al point to huge shortfalls in information needed to make a Market Forum functional, as represented in “… scarce and inconsistent long-term hydrological data, weak monitoring infrastructure, and discrepancies between regional and central datasets that delay validation… A fragmented and outdated water rights registry, split across multiple Real Estate Registries … incomplete … registry generate legal uncertainty, poorly documented and ungeoreferenced rights, and frequent disputes … lack of integrated systems to track ecological flows, infrastructure, and river conditions hampers environmental enforcement  (p. 399).”

The lack of said information contributes to high transaction costs in any kind of water transfer in a sale.  Again, the Florida Water Management Districts could be a model here, with hundreds of professional and support staff employed in said Districts. The neoliberal, libertarian economics claims about the efficacy of Water Forum always leave out the key role the Other Forum plays in informing the Water Forum; not all the relevant information, especially about the hydrology and ecological needs, will be available to individual water use right owners.

Weak protection of human water rights

As DIT would predict, the focus on the profane on path 0G will leave out the sacred concerns represented on path 0M, as in “… water for human consumption is not legally prioritized over other uses, making Chile a paradigmatic neoliberal case where allocation and reallocation are driven mainly by market transactions rather than public interest or human rights considerations … relegates domestic needs to a secondary position, embeds private control over water, and lacks institutional safeguards to protect basic human and sanitation needs from competing commercial demands (p. 400).”  Yes.  All such matters are in the realm of the shared with the other-interest, which a Market Forum is not best suited to represent. Such things are about the public and common good --- while the Market Forum can at best represent the private and individual good.

Hoarding and non-use of water rights

Celume et al point out the 1981 “… legal framework allows water rights to be held indefinitely without use, enabling rights holders to maintain control over water allocations regardless of whether the resource is actively employed in productive or consumptive activities (p. 400).” So, it makes it difficult for any Other Forum to reallocate said water, as it can only be  put to use through sale in the Market Forum.  Non use fees were introduced to perhaps encourage the water to be sold.

Lack of environmental and ecosystem protection (including environmental flows)

Celume et al point to how the 1981 law has “… weak safeguards for groundwater protection areas and drinking water deposits compared with other jurisdictions, and …  lacking provisions for ecological flows or instruments to protect freshwater ecosystems (p. 400).”  Again, DIT would point out that such uses would not be provided by the Market Forum unless some buyer wanted to purchase water rights for said purposes, which is not likely to happen.  Such purpose is the realm of the sacred, often with value O, and not easily translated into price P.  An Other Forum is needed to address such non-money valued common goods in play in the domain of the sacred.

            It is noted that some local people have stepped up to the task, as in “…local institutional innovations, such as the groundwater users’ community in the Copiapó aquifer, which has introduced self-imposed rules to protect aquifers and wetlands and reduce over depletion in the face of weak statutory safeguard (p. 401).” Again, DIT makes clear that such things are the subject of an Other Forum, in this case a local Forum is addressing the sacred with self-imposed rules on profane use.

Sectoral and territorial conflicts

Celume et al point to conflicts “… driven by access and allocation struggles intensified by prolonged drought, over allocation, and the long megadrought since 2010… (p. 401).”  The only recourse under the 1981 law is the civil courts, used to litigate conflicts over private ownership rights.  In DIT terms, said reality points to massive failure in not having an adequate Other Forum in place. Some effort has been put into rectifying the problem with “,,, pilot Basin Councils as participatory, basin scale bodies to articulate strategic visions, reduce conflicts, and support planning, although their implementation… (p. 401).”  Again, river basin wide Other Forums are needed.

Climate change, drought, mal-adaptation

Celume et al point to the fact the “…system relies mainly on short term, reactive coping strategies… (with)  barriers such as low levels of trust and cooperation, weak regional authority, and limited access to hydrological information, all of which constrain proactive climate adaptation at the basin level. … to internal social and institutional weaknesses, including fragmentation, poor coordination, and a strong emphasis on productive water uses, which hinder the transition toward integrated basin management under climate change (p. 401).”  DIT makes clear a Market Forum is plagued by short-term decision making, with not attention paid the long-term, thermodynamic described reality that the water economy is embedded in the Spaceship Earth system. Said water economy cannot be functional with the typical short-run considerations in a neoliberal, laissez faire styled Water Forum. 

It can only lead to the Tragedy of Private Ownership, as in private owners not paying enough attention to sustaining the hydrologic system. Using only a Market Forum leads to “… the absence of strategic land use and water management planning, combined with sustained over extraction, amplified drought impacts and led to severe socio ecological degradation…  public strategies failed to anticipate the combined effects of climate variability and increasing demand, highlighting the need for integrated basin scale planning and stronger environmental safeguards (p. 402).  As DIT makes clear, public strategies must evolve in the talk, talk, and more talk within the Other Forum.