[Marxism] Commodifying water in Chile

[Louis Proyect <lnp3@xxxxxxxxx>]

NY Times, March 15, 2009
Chilean Town Withers in Free Market for Water
By ALEXEI BARRIONUEVO

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.

“Everything, it seems, is against us,” said Bartolomé Vicentelo, 79, who 
once grew crops and fished for shrimp in the Loa River that fed Quillagua.

The population is about a fifth what it was less than two decades ago; 
so many people have left that he is one of only 120 people still here.

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.

“The Chilean model has gone too far in the direction of unfettered 
regulation,” said Carl J. Bauer, an expert on Chile’s water markets at 
the University of Arizona. “It hasn’t thought through the public interest.”

Australia and the western United States have somewhat comparable 
systems, but they contain stronger environmental regulation and conflict 
resolution than Chile’s, Dr. Bauer said.

Chile is a stark example of the debate over water crises across the 
globe. Concerns about shortages plague Chile’s economic expansion 
through natural resources like copper, fruits and fish — all of which 
require loads of water in a country with limited supplies of it.

“The dilemma we are facing is whether we can permit ourselves to 
continue to develop with the same amount of water we have now,” said 
Rodrigo Weisner, Chile’s water director in the Public Works Ministry.

“There is no political consensus about how to deal with the challenge of 
producing the resources we have — including the biggest reserves of 
copper in the world — in a country that has the most arid desert in the 
world,” Mr. Weisner said.

Fernando Dougnac, an environmental lawyer in Santiago, said that balance 
was particularly difficult because the “market can regulate for more 
economic efficiency, but not for more social-economic efficiency.”

Lately, the country’s approach to water has been showing some cracks. In 
the Atacama desert city of Copiapó, unbridled water trading and a 
two-year drought mean that “there are many more water rights for the 
river than water that arrives from the river,” Mr. Dougnac said.

Quillagua is in Guinness World Records as the “driest place” for 37 
years, yet it prospered off the Loa River, reaching a population of 800 
by the 1940s. A long-haul train stopped here — today the station is 
abandoned — and the town’s school was near its 120-student capacity. 
(Today there are 16 students.)

That prosperity first began to ebb in 1987, when the military government 
reduced the water to the town by more than two-thirds, said Raul Molina, 
a geographer at the University of Chile. But the big blows came in 1997 
and 2000, when two episodes of contamination ruined the river for crop 
irrigation or livestock during the critical summer months.

An initial study by a professor concluded that the 1997 contamination 
had probably come from a copper mine run by Codelco, the state mining 
giant. The Chilean government then hired German experts, who said the 
contamination had a natural origin.

Chile’s regional Agriculture and Livestock Service, part of the Ministry 
of Agriculture, refuted those findings in 2000, saying in a report that 
people, not nature, were responsible. Heavy metals and other substances 
associated with mineral processing were found that killed off the 
river’s shrimp and made the water undrinkable for livestock. (Drinking 
water for residents had been transported in for decades.)

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.

Quillagua’s residents remain determined. Mr. Palape, who owns the town’s 
main restaurant, still dreams of attracting tourists to the 108 meteor 
crater sites in and around Quillagua.

His sister Gloria is equally proud of Quillagua’s place in history.

“To be able to live in the driest place in the world, with everything 
that has happened, the people have to be resilient, to be stubborn,” she 
said. “We are not giving up.”

Pascale Bonnefoy contributed reporting from Santiago, Chile.

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