Despite its location on the Pacific Ocean and its many rivers and lakes, Chile faces serious water shortages due to the climate crisis.
Chile is in the tenth year of a mega-drought covering more than three-fourths of its territory. Citizens are facing shortages and paying ever higher prices for water. The country’s main industry, agriculture, is suffering. Animals are dying in droves and once-fertile regions are turning into deserts.
The main cause of this catastrophe is climate change. Temperatures are rising steadily, and rain- and snowfalls are declining. Glaciers are melting away. Chile has declared agricultural emergency zones in six of its 16 regions.
The natural catastrophe is being aggravated by a policy problem: Chile’s water-allocation system is market driven and only regulated lightly, so private-sector companies are in control. The result is high consumer prices for water. Whether private firms should own this vital resource is the topic of heated debate. Unless Chile addresses both its climate problems and its water-allocation system, the long-running water crisis will continue.
Chile’s Water Code of 1981 was established during the dictatorship of then President Augusto Pinochet. It declares that water rights can be owned and traded as property. Today, Chile’s water utilities are owned by large multinationals, among them Suez Group (French), Aguas de Barcelona (Spanish) and Marubeni (Japanese).
One aim of privatisation was to attract investment and expertise from global companies. This has happened, but at a high cost to the people. The commodification of water has not only led to high tariffs, but it has also undermined the idea that access to water is a basic human right that cannot be traded away.
Under the current system, more than 40 government agencies are involved in managing water resources. This multitude results in weak and fragmented oversight. The General Water Directorate in the Ministry of Public Works is the main regulator. It
maintains an information system known as the water cadastre,
enforces national policy and
awards water rights through an auction system.
This focus is on market supply. It is neither ensured that people have access to water nor that ecosystems are kept healthy around water basins.
The deficiencies in the current system have given rise to water activism. Citizens are fighting high water tariffs and protesting against shortages. For three decades, some political leaders have been trying to reform the Water Code. In 2014, senators tried unsuccessfully to renationalise water resources. Activists are currently campaigning to block mining companies from acquiring further water rights.
The water debate is part of a wider discussion on reforming the country’s market-driven economic model. Chileans are debating a new constitution (see Javier Cisterna Figueroa in Debate section of D+C/E+Z e-Paper 2020/02). The idea is to rewrite the rules that have been in effect since the Pinochet dictatorship ended in 1990. Many advocates of a new constitution favour ending private control of water rights.