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'Private ownership is so concentrated in some areas that a single electricity company from Spain, Endesa, has bought up 80 percent of the water rights...'

   Sun, March 15, 2009 - 9:39 AM
From the New York Times -

QUILLAGUA, Chile — During the past four decades here in Quillagua, a town in the record books as the driest place on earth, residents have sometimes seen glimpses of raindrops above the foothills in the distance. They never reach the ground, evaporating like a mirage while still in the air.

What the town did have was a river, feeding an oasis in the Atacama desert. But mining companies have polluted and bought up so much of the water, residents say, that for months each year the river is little more than a trickle — and an unusable one at that.

Quillagua is among many small towns that are being swallowed up in the country’s intensifying water wars. Nowhere is the system for buying and selling water more permissive than here in Chile, experts say, where water rights are private property, not a public resource, and can be traded like commodities with little government oversight or safeguards for the environment.

Private ownership is so concentrated in some areas that a single electricity company from Spain, Endesa, has bought up 80 percent of the water rights in a huge region in the south, causing an uproar. In the north, agricultural producers are competing with mining companies to siphon off rivers and tap scarce water supplies, leaving towns like this one bone dry and withering.

Some economists have hailed Chile’s water rights trading system, which was established in 1981 during the military dictatorship, as a model of free-market efficiency that allocates water to its highest economic use.

But other academics and environmentalists argue that Chile’s system is unsustainable because it promotes speculation, endangers the environment and allows smaller interests to be muscled out by powerful forces, like Chile’s mining industry.

Codelco, the world’s largest copper miner, rejects any responsibility. Pablo Orozco, a company spokesman, said that the river water had been bad for years, and that heavy rains around the time of the contamination episodes had briefly swelled it, sweeping sediments and other substances into the water.

But the debate is largely academic, because without suitable water to raise crops, many residents saw no reason to continue resisting outside offers to buy the water rights in their town. One mining company, Soquimich, or S.Q.M., ended up buying about 75 percent of the rights in Quillagua. Most residents moved away; those who remain average around 50 years old.

“Quillagua cannot resist much longer,” said Alejandro Sanchez, 77, pointing a cane at a parched, grassless field where he once grew corn and alfalfa.

In 2007, the national water agency started investigating claims that Soquimich was extracting even more water from the Loa River than it was due. The inquiry is still pending, officials said, though the company says it has never taken more water than it owns rights to.

But early last year, the regional water authority started satellite monitoring along the Loa. After recording no water at all in the summer of 2007, Quillagua suddenly received small amounts last year, and again this January.

That has made water authorities suspicious that companies had been draining more water than permitted, according to Claudio Lam, a regional director for the Chilean water agency.

Even so, the water arriving in the summer is still not enough to produce crops, said Victor Palape, the chief of the Aymara Indians in Quillagua.

In a cruel twist, the town survives only because of daily water trucks that are partly financed by Codelco and Soquimich, the two companies that residents blame most for their troubles.

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