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The Global Water Crisis

We have been witnessing the water crisis plaguing the country for various reasons, primarily due to extended periods of drought. Concerns regarding water scarcity are growing, and several municipalities are adopting restrictive measures in an attempt to curb its misuse.

The state of São Paulo, for instance, is experiencing its worst water crisis in eighty years. According to recent data [1], water scarcity affects 13.7 million people across sixty-eight municipalities in São Paulo State, excluding the capital city, with most of these municipalities already implementing water rationing to combat resource depletion.

In several countries, water scarcity has long been a subject of debate and territorial disputes. Water is a major global concern because it is an essential natural resource for life, irreplaceable and renewable. As highlighted by Peter Gleick, founder of the Pacific Institute in California, in a recent interview with journalist Marcelo Leite during the World Water Week in Stockholm, while water is renewable, there are limits that must be respected, making proper resource management vital.

Misuse of water and the lack of regulation aiming at its proper management have been global concerns. In Chile, for instance, there is a strong movement to reform the Water Code, aiming to return water management to the hands of the state. It is noteworthy that during the dictatorship period, water management was privatized.

The Chilean Constitution recognizes private ownership of water use concessions, limiting state regulatory power over this resource. The Water Code, in turn, enabled and strengthened the so-called water market. According to this regulation, water is a public good, but the state can grant private use rights, allowing individuals to exercise all rights derived from ownership, whether by use, transfer, or disposal, such as through sale or lease.

Critics argue that this model prioritizes economic benefits derived from water, placing its use for human needs in a secondary role.

Given the current situation, a proposal for reforming the Chilean Water Code was recently introduced by the Executive Branch. However, there has been significant criticism of the new proposed model, causing repercussions in the country.

Key points for amendment in the proposal include: (i) existing rights before the new law's publication will be subject to limitations for public interest, meaning usage rights not registered within six months in the "Conservador de Bienes Raices" will expire, regardless of their age; (ii) usage rights acquired after 2006, with a different intended use than originally stipulated, may face expiration; (iii) rights will have a maximum duration of thirty years, renewable upon evaluation. New water rights may expire if not used or if their use diverges from the granted purpose within four years for consumable resources and eight years for non-consumable ones; (iv) granting of rights in national parks and virgin forest reserves will be prohibited.

Primary criticisms of the proposal relate to the stipulated thirty-year limit for newly granted water rights and the potential extinguishment of existing perpetual usage rights that are not registered in the "Conservador de Bienes Raices" and thus not being utilized.

Opponents argue that these measures bring legal uncertainty to investors, as they do not respect acquired rights, particularly since many perpetual usage rights were granted to mining and energy projects (hydroelectric plants).

Furthermore, there is a call for a more thorough evaluation and discussion regarding the thirty-year limit, as while some may use rights for speculative purposes, others develop serious projects that contribute to the country's development.

Moreover, the intended use of water must also be considered, as different uses require varying timeframes. Water rights for a hydroelectric plant, for example, differ from those granted for agricultural use. We believe there should be flexibility in the proposal to balance expectations and address situations with the diversity they entail, aiming not to deter investments while combating speculation.

On the other hand, supporters of the Executive's proposed changes argue that the state needs the power to regulate and restrict water use to prevent speculation and ensure optimal utilization of water resources.

Chile's example clearly demonstrates that water is a matter of global concern and that countries are increasingly seeking ways to optimize water use and invest in alternative technologies to supply necessary inputs for human life and the social and economic development of nations.

Alexandre Sion