The structural roots of Chile’s water crisis

August 24, 2022
Water use for mining in Chile’s driest regions has inflicted heavy damage on the environment. Photo: Thomas Fuhrmann/Wikimedia Commons

Chile is experiencing a severe water crisis. The country has suffered its worst drought for the past decade, with rainfall dropping by 20–40%. About 1.4 million Chileans — 8% of the population — do not have access to drinking water.

The situation is particularly bad for rural communities. Almost half of them lack a potable water supply, affecting about one million people, according to a Pontifical Catholic University of Chile study. Of the rural communities without a water supply, 15% rely on trucked water.

More than half of Chile’s 19 million people were living in an area suffering from “severe water scarcity” by the end of last year — the fourth driest year on record. An unprecedented water rationing plan was announced for the capital, Santiago, in April last year.

The water problems Chile faces are historically embedded in a socio-structural framework that has remained tilted in favour of the ruling class.

Water ecologist Jessica Budds wrote in the Singapore Journal of Tropical Geography that, in Chile, “private water rights, in the form of concessions allowing exclusive use, have existed since the colonial era”.

The 1855 Civil Code declared that “rivers and all waters that run through natural channels are national goods of public use” and stated that access to water is gained through water use rights “granted by the competent authority”. Ideological notions like “water use right” were consolidated in the 1930 and 1951 water codes. The latter established that “the right to use water may only be acquired by virtue of a merced or Water Right granted by the President of the Republic”.

The code said that water rights apply to publicly owned water. In this way, the Chilean state legally introduced the concept of private water use rights.

President Eduardo Frei Montalva’s social democratic government (1964–70) carried out agrarian reform and made changes to the water law in 1967 to reestablish state control over water. The consolidation of the Chilean government’s regulatory power over private properties granted by the 1951 Water Code was operationalised through the declaration of water as a public good and the expropriation of all private rights.

Insofar that water rights were subjected to the socially planned rationality of the state, they became administrative concessions and were regulated under public law. These could not be bought, sold or exchanged on the market or separated from the land.

According to the authors of “Water Policy and Management in Chile”, compared to the anarchic operation of private actors, “state water management was based on scientific and technical criteria linked to the objectives of centralized economic and planned economic activities at a country and basin levels”.

The Augusto Pinochet military dictatorship (1973–90) — which overthrew Salvador Allende’s socialist government — worked to reverse the government-led reforms by adopting neoliberalism.

Under the ideological guidance of the Chicago Boys, the military government passed Decree Law 2,603 in 1979, which later served as the legal base for the 1981 Water Code. This Water Code was in symphony with the free market framework institutionalised in the rewritten 1980 Constitution. The 1981 Water Code reduced the role and power of the government water agency Dirección General de Aguas (General Water Directorate).

In the technocratic imagination of the Chicago Boys, water could not be allowed to exist as a public good and had to be converted into private property. This pushed water management into the “invisible hand” of the free market, and separated it from land, so that it could be priced and exchanged without government intervention.

The privatisation of water was based on the promise that it would increase water security and efficiency. In reality, it established corporate control over water for the development of Chile’s major natural resource industries.

The supposedly neutral system of private tradeable water rights allowed for the allocation of water to higher-value uses, namely mining, hydroelectric, forestry and agribusiness.

The material inequality in the country’s water laws is concealed through the mechanisms of the market, where the industrial, agricultural and public sector supposedly compete on “equal” terms. However, this has led to unfair water distribution because big businesses are always better organised than other agents in the market. Chile’s neoliberal water laws have enabled capitalists to acquire permanent water rights that are given for nothing, legally secure, considered as capital assets and therefore untaxed.

The continuous growth of extractive industries is fundamental to the Chilean ruling class. Neoliberalism installed export-oriented extractivism, which precluded any form of domestically driven industrialisation and entrenched dependency on the world market.

Chile’s main economic activities are copper and lithium mining, forestry and agriculture. The government helped the growth of these economic sectors.

Decree Law 701 subsidised big forestry companies to encourage the growth of pine and eucalyptus forest plantations. This led to an increase in forestry in the southern regions, native forest clearing and depletion of water resources.

The government advanced agricultural economic incentives, such as the irrigation incentives law and the degraded soil recovery program. Here, too, water exploitation has been intense. The agricultural sector is Chile’s main water user (72% of the total available). High water use is linked to the ratification of international commercial treaties, which have expanded intensive agriculture and fruit production. The area used to grow fruit increased by 113,038 hectares (48%) between 2003 and 2018.  

Mining is a major contributor to the neoliberal accumulation regime, making up 10% of gross domestic product (GDP). Like the agribusinesses involved in forestry and agriculture, mining companies negatively impact water resources, particularly in Chile’s north.

The case of Copiapó Valley, north of Santiago in the Atacama region, shows the heavy damage that mining has inflicted on the environment. Copiapó is one of the driest and most important mining areas of the country. It has the planet’s driest desert, with extremely low rainfall: water use depends on exploiting underground aquifers.

Under Pinochet’s dictatorship, mining — copper, silver and iron — and export agriculture, mainly grapes, were developed as the main contributors to the region’s GDP. The growth of fruit production in the 1980s, followed by a mining boom in the next two decades, took a heavy toll on the Copiapó river, major parts have been dry since 1997. By the end of the 2000s, all available water rights had been allocated to users.

Water use for mining is expected to rise in Chile due to more mining projects and a decline in ore concentration, causing greater processing needs. Copper mining used 14.8 cubic metres (cu m) per second in 2014, which is predicted to increase to about 24.6 cu m/s by 2025.

Human-induced climate change is likely to aggravate the situation and is to blame for at least 25% of Chile’s drought severity. Chile ranked 16th in the climate risk index for 2017 — a big increase from 94th between 1998 and 2017.

It also ranked 24th in predicted water-stressed countries by 2040, based on analysis of climate models and socioeconomic scenarios.

The United Nations Office for Coordination of Humanitarian Affairs said Chile experienced the worst increase in drought severity between 2010 and 2019 of all Latin American countries. 

Rising temperatures and lower rainfall have caused glaciers to disappear. Andean glaciers, which feed water bodies and sustain communities living in or near the mountain range, have shrunk by 98% this century.

The increasing unsustainability of the extractive economic model is ensconced in the powerful interests of technocratic politicians, military officials and business conglomerates. For this predatory class, the free market Water Code serves to safeguard the water-reliant natural resource industries that are the central components of the neoliberal agenda.

The World Bank praised the conservativeness of Chile’s Water Code and considers it to be a model of water resources management that should be replicated in other Latin American countries. However, this hides the vast inequalities that characterise the country’s water infrastructure, with 79% of the total water available in the system owned by 1% of water users.

The neoliberal paradigm is starting to change with the election of leftist President Gabriel Boric, whose government helped the writing of a new constitution to replace the Pinochetist constitution of 1980.

Driven by the idea of Chile as an “ecological” state, the draft constitution guarantees a human right to water. The Water Statute — made up of five articles — said that water is “essential for life and the exercise of human rights and those of nature”, and that “the State has the duty to protect water”.

The proposed constitution would establish the National Water Agency, an “autonomous entity to assure water sustainability”. A plebiscite will be held on September 4 for the adoption of the draft constitution. If the plebiscite succeeds in building a new constitution, then the Chilean people can embark on an anti-neoliberal path of ecological rejuvenation.

You need Green Left, and we need you!

Green Left is funded by contributions from readers and supporters. Help us reach our funding target.

Make a One-off Donation or choose from one of our Monthly Donation options.

Become a supporter to get the digital edition for $5 per month or the print edition for $10 per month. One-time payment options are available.

You can also call 1800 634 206 to make a donation or to become a supporter. Thank you.