This chapter analyses water governance achievements and challenges in Argentina, in the light of major reforms carried out since the early 80s. It provides an institutional mapping of who does what across ministries and levels of government, and assesses how interdependencies across multiple stakeholders, public authorities and policy areas are managed. The chapter uses the 12 OECD Principles on Water Governance to identify water governance gaps in the country, and suggests policy recommendations to bridge them, building on international experience.
Water Governance in Argentina
OECD Studies on Water
Chapter 2. Multi-level governance of water management in Argentina
Abstract
Water management in Argentina: A multi-level governance approach
The multi-level institutional setting for water services provision and water resources management in Argentina is rooted in policy choices and reforms dating back to the 1980s and 1990s. In 1980, the provision of drinking water and sanitation services was transferred to the provinces, with the decentralisation of the state-owned Obras Sanitarias de la Nacion (ONS). In 1994, Argentina underwent a constitutional reform that introduced an environmental provision (Article 124) acknowledging the historical right, whereby the 23 provinces and the Autonomous City of Buenos Aires own the water resources and have jurisdiction over them, including for interjurisdictional rivers. They are also responsible for the provision of water services within their own boundaries.
Water services provision
Between 1991 and 2002, in a broader context of liberalisation, fixed parity between the US dollar and the Argentinian Peso, and opening to international markets, a total of 13 provinces privatised the management of water services (Akhmouch, 2009), which required developing provincial regulatory frameworks as well as establishing dedicated economic regulators (or dedicated regulating agencies1). In particular,
In 1991, Aguas de Corrientes is granted a concession to provide water and sanitation services in the city of Corrientes and 9 municipalities (Bella Vista, Curuzú Cuatiá, Esquina, Goya, Mercedes, Monte Casero, Paso de los Libres, Saladas y Santo Tomé).
In 1993 Aguas Argentinas, a consortium led by the French company Lyonnaise des Eaux (SUEZ) was granted a 30 years concession to provide water and sanitation services in the City of Buenos Aires and 13 municipalities of the province of Buenos Aires.
In 1995, the province of Santa Fe granted a concession contract for 30 years of drinking water and sanitation services of 15 cities, including Rosario (with over 1.2 million inhabitants), to Aguas Provinciales of Santa Fe owned by SUEZ.
In the same year, the province of Tucuman also transferred for 30 years water services of a dozen cities, including San Miguel de Tucuman (with over 527 000 inhabitants), to the consortium Aguas del Aconquija (Vivendi Group).
In 1997, the province of Córdoba awarded a concession contract for 30 years of the drinking water supply of the city of Córdoba to the private international consortium Aguas Cordobesas (ACSA) also led by SUEZ (while sewage services remained under the responsibility of the city of Córdoba).
In 1998, the province of Mendoza awarded the French group Saur International a concession contract for 95 years (negotiable every 25 years) for both drinking water and sanitation services over the perimeter of the province.
The 2001-02 economic crisis led to the termination of most concession contracts on water services managed by multinational companies. One example is Aguas Argentinas (Metropolitan Area of Buenos Aires), which was transferred to the public sector in 2006 with the creation of Agua y Saneamientos Argentinos S.A (a public limited company owned by the state [90%] and its employees through their union [10%]). Several other provinces underwent similar processes, such as Santa Fe where the management of water services in the 15 municipalities was transferred back to Aguas Santafesinas S.A., publicly owned by the provincial government (51%), municipalities in the concession area (39%) and employees (10%). In 2011, water services in the province of Mendoza were transferred to Aguas Mendocinas S.A. (90% owned by the provincial government and 10% by employees). In the province of Córdoba, Aguas Cordobesas S.A. was purchased by the local private sector (Group Roggio) through a concession contract that will expire in 2027. Currently, the drinking water and sanitation services of the largest urban areas in Argentina are all managed by public provincial providers with the exception of four cases: Córdoba, Corrientes, Misiones and Santiago del Estero.
Water resources management
In 2002, Law 25.688 “Regime of Environmental Management of Waters” was passed, with important implications for water resources management. It established nationwide minimum requirements for the environmental protection of water resources and also stated the need to establish interjurisdictional river basin committees to promote sustainable environmental management of interjurisdictional river basins. The law was subject to numerous criticisms by most provincial water authorities, notably claiming that it interfered with provincial legal powers, such as management of natural resources, development of local or basin institutions, planning, and water use and management (Pochat, 2005). Provincial authorities unsuccessfully sought to have the law declared unconstitutional.
In 2003, the 23 provinces, the city of Buenos Aires and the national government signed a Federal Water Agreement, which laid down the foundations of a national water policy with a strong focus on resources (rather than services) management. A total of 49 Guiding Principles for Water Policy acknowledged the value of water as a social and environmental resource, while respecting the historical importance of each jurisdiction and seeking to reconcile local, provincial and national interests. The Principles cover items related to the water cycle, environment, society, management, institutions, law, economics, amongst others. They define the basin as the appropriate scale for planning and managing water resources and call for long-term planning. In the aftermath of the Federal Water Agreement, all provinces without water laws gradually passed their own legislation.
The latest milestone in water policy in Argentina was the approval of the National Water Plan (NWP) by the national government in 2016. The NWP set ambitious objectives to face some of the country’s most pressing water risks and place water at the core of economic and social development. By 2023, the national government aims to increase coverage to 100% for drinking water supply and 75% for sewage connections. The NWP also aims to increase protection against floods and droughts through strategic actions that combine both hard infrastructures, such as building flood protection infrastructure in cities or increasing the number of dams, along with better early warning and information systems. Finally, the NWP seeks to support the irrigation needs of the agricultural sector by expanding the cultivated area by 300 000 ha by 2022 (a total increase of 17%), with significant implications in terms of projected fertiliser use.
Institutional mapping of water roles and responsibilities
Water policy design and implementation in Argentina is, as often, highly fragmented and involves a wide range of stakeholders and authorities across levels of government and policy areas. From the point of view of water use abstraction (for households, agriculture, industry, energy conversion, etc.), up to the limits of the river basin (and beyond), there is a full span of administrative and political boundaries that correspond to institutions with management responsibilities and accountabilities. In that context, mapping the responsible authorities, their duties and their interactions is essential (Figures 2.1 and 2.2).
Who does what at the national level
This section provides a mapping of the allocation of roles and responsibilities for water policy design, financing, regulation and implementation at the national and provincial level, both for water resources management and water services provision.
Figure 2.1. Institutional mapping for water resources management in Argentina
Figure 2.2. Institutional mapping for water and sanitation services in Argentina
The Secretariat of Infrastructure and Water Policy (Secretaría de Infraestructura y Política Hídrica, SIPH) (Ministry of Interior, Public Works and Housing) is the lead national entity for water policy. The SIPH’s main responsibilities include strategy and planning for water resources management and water services provision and providing essential sector funding for infrastructure through a range of instruments, including national transfers and co-financing of projects. The provinces can voluntarily implement national goals set by the SIPH, as legal powers for water resources management and the provision of water services are decentralised. The SIPH is also one of the responsible authorities, together with the Autonomous City of Buenos Aires and the province of Buenos Aires, for policy design and implementation of water services provision in the Metropolitan Area of Buenos Aires. Under the umbrella of the SIPH are the following entities:
National Entity of Water Works of Sanitation (Ente Nacional de Obras Hídricas de Saneamiento, ENHOSA) is a decentralised body with legal status and administrative autonomy. It acts as a financial agency channelling national and external resources to provinces and service providers for the construction of sanitary works. Since 2004, it is entitled to tender and execute works, projects and acquisitions for the construction, maintenance and replacement of sanitation infrastructure.
Dam Security Regulator (Organismo Regulador de Seguridad de Presas, ORSEP) controls that dams comply with international safety standards, both structurally and operationally. It supervises compliance with standards for dam safety established under hydropower concession contracts.
National Institute for Water (Instituto Nacional del Agua, INA) is a decentralised scientific and technological body whose objective is to develop research and deliver specialised advisory services in the field of water use and preservation.
The Ministry of Interior, Public Works and Housing (line ministry) manages the relationships with the provinces and has responsibilities in relation to public works, housing and habitat policies. The line ministry houses the SIPH, as well as the following other secretariats with specific competences on water:
The Secretariat of Urban Infrastructure designs and executes programmes to improve water services infrastructure in formal and informal settlements in urban areas.
The Secretariat of Territorial Planning designs the projects executed by the ministry, including water infrastructure projects, such as sewerage and drainage networks, flood defence, etc.
The Secretariat of Housing designs and executes programmes to improve intra-housing connections to water services, both drinking water supply and sewerage.
The Secretariat of the Environment and Sustainable Development (Secretaría de Ambiente y Desarrollo Sustentable, SAyDS) (within the General Secretariat of the Presidency) is the national authority on environmental policy. The SAyDS’s main responsibilities include strategic planning to ensure environmental preservation and protection, promote sustainable development through a rational use of natural resources, and climate change adaptation and mitigation.
Administration of National Parks (ANP) has jurisdiction over water resources in the territory of Argentina’s national parks
The Secretariat of Agriculture, Livestock and Fisheries (Secretaría de Agricultura, Ganadería y Pesca, SAG) (Ministry of Agriculture, Livestock and Fisheries) is responsible for promoting more efficient and productive water use in agriculture. The SAG funds programmes in support of sustainable use of soil and water resources in agriculture and co‑ordinates key actions and resources available at different levels of government (national and provincial) to achieve these goals. The National Irrigation Plan was developed by SAG.
The Chief Cabinet Office defines policy priorities, manages trade-offs across policy areas and co‑ordinates with line ministries public action. The Chief Cabinet Office hosts the National Directorate for Public Investment (Dirección Nacional de Inversión Pública, DNIP), which updates the inventory of projects that are candidates to be funded through national public investment and elaborates the national investment plan. The inventory of projects is updated through the National Bank for Public Investment Projects (BAPIN). Each line ministry has to inform the DNIP of projected investments and register them in the BAPIN as a prior step to access financing through the national budget.
The Ministry of Finance, following policy priorities defined by the Chief Cabinet Office and after evaluating the pre-investment project of each line ministry, elaborates the draft budget law (to be discussed in the National Congress). Thus, it co-ordinates with institutions in the water sector on the corresponding investment programmes intended to improve water supply and sanitation services. The Ministry of Finance houses the National Budget Office, which intervenes in the formulation, execution programming, modification and evaluation of the public budget, including those allocated to the water sector.
The Secretariat of Mining Policy (SMP) (Ministry of Production and Labour) is responsible for promoting more productive mining activities. The SMP also funds programmes in support of mining developments.
The Secretariat of Energy (Ministry of Finance) is responsible for policy design and implementation on energy production (including hydropower), and in particular, for managing subsidies on gas and electricity, setting tariffs, enforcing regulations and managing the state oil company YPF.
The Secretariat of Health (Ministry of Health and Social Development) is responsible for enforcing the rules of the National Alimentation Code that set domestic water supply quality standards.
The Secretariat Socio-Urban Integration (Ministry of Health and Social Development) is responsible of the co-ordination of the National Registry of Disfavoured Neighbourhoods (Registro Nacional de Barrios Populares, RENABAP).
The Secretariat of Civil Protection (Ministry of Security) is responsible for the design and implementation of disaster management policies aiming at preventing, avoiding, diminishing or mitigating the effects of natural or man-made disasters, as well as for co-ordinating national and international support within the framework of international directives for risk reduction. The system used for co-ordinating effort is the SINAGIR.
The Ministry of Foreign Affairs is responsible for representing Argentina’s interests in the negotiation of bilateral, multilateral and other international agreements regarding natural resources, and co-ordinating Argentina’s participation in international efforts aimed at the conservation and environmental protection of species and natural resources.
The National Institute of Statistics and Census (Instituto Nacional de Estadística y Censos, INDEC) is a decentralised public agency within the scope of the Ministry of Finance that produces all official statistics in Argentina, including data on access to water supply and sanitation services as part of the National Census.
The National Technological Institute for Agriculture (Instituto Nacional de Tecnología Agropecuaria, INTA) (Ministry of Agriculture, Livestock and Fishing) is a decentralised public body with operational and financial self-sufficiency that contributes to the sustainable development of the agricultural, agrifood and agroindustrial sector through research.
Federal councils seek to promote active participation of the provinces for the coordination, implementation and monitoring of federal policies. These bodies generally focus on a specific policy area and are made up of representatives from provincial sectoral ministries/authorities and the corresponding national ministry/authority. Water-related federal councils include: Federal Water Resources Council (Consejo Hidrico Federal, COHIFE), Federal Environmental Council (COFEMA), Federal Mining Council (COFEMIN), Federal Energy Council (CFE), Federal Agricultural Council (CFA) and Federal Health Council (COFESA). A particular body with water-related competences is the National Food Commission (CONAL), which provides advice and supports the National Food Control System where the quality parameters for drinking water are set (dictated by Chapter XII of the National Food Code).
The Association of Regulatory Authorities for Water and Sanitation (Asociación Federal de Entes Reguladores de Agua y Saneamiento, AFERAS) is a non-profit civil organisation, which gathers all regulatory entities of water and sanitation services from the different jurisdictions of Argentina. This association promotes research, knowledge brokerage and experience sharing in the field of water and sanitation services, and provides assistance, training and technical advice to its members and proposes training.
The Federal Council of Sanitation Services Entities (Consejo Federal de Entidades de Servicios Sanitarios, COFES) represents the interests of water supply and sanitation services providers throughout Argentina. This organisation acts as a spokesperson for its members for the establishment of sectoral strategies and consensus.
Who does what at the subnational level
The Regulatory Authority for Water and Sanitation (Ente Regulador de Agua y Saneamiento, ERAS) is a self-governing public body, created in 2006 by a tripartite agreement between the Ministry of Federal Planning, Public Investment and Services; the province of Buenos Aires; and the government of the Autonomous City of Buenos Aires. It is in charge of controlling Agua y Saneamientos Argentinos SA (AySA)’s compliance with its legal obligations as a service provider, including water pollution control. AySA is the water and sanitation service provider in the Metropolitan Area of Buenos Aires (Autonomous City of Buenos Aires and 26 municipalities in the province of Buenos Aires).
The Planning Agency (APLA) is a self-governing public body in charge of reviewing and co‑ordinating the expansion and improvement works made by the concessionaire, AySA. It has legal powers on evaluating, planning, executing and controlling investments in the area of the concessionaire. Moreover, it liaises regularly with the municipalities and the concessionaire itself.
Provincial water authorities are also responsible for water resources management and the provision of water services within their boundaries. The latter includes strategy, planning, regulation, monitoring and evaluation, and operational competences over water. In the case of the Metropolitan Area of Buenos Aires, AySA provides water services as established by the Tripartite Agreement (approved by Law 26.221). In this agreement, the representatives of the Autonomous City of Buenos Aires, the province of Buenos Aires and the national government have delegated to ERAS and APLA its regulating and control powers.
Provincial line ministries and secretaries are responsible for their respective policy area competence as provided by the national and provincial constitutions.
Provincial regulators have full competence over the regulation of water services in their jurisdiction. This includes evaluation, planning, execution and control of investments as well as controlling compliance with legal obligations as a service provider, including water pollution control.
Municipalities are the responsible authorities for water services in their jurisdiction. This typically excludes large urban areas where the service provider is usually under the purview of the provincial government.
Municipal water operators provide water services in their jurisdiction. Generally, there are two types of service providers at municipal level: municipal public companies owned by the municipality, and cooperatives, which provide services under a concession contract awarded by the municipalities.
The 16 inter-jurisdictional river basins committees provide a space to negotiate agreements between provinces on inter-provincial river basins.
International co-operation
Development banks (the Inter-American Development Bank [IDB], the Development Bank of Latin America [CAF], the World Bank) finance water-related programmes under framework agreements with the national government.
Other international co-operation activities are carried out with CEPAL (Comisión Económica para América Latina y el Caribe), CeReGAS (Centro Regional para la Gestión de Aguas Subterráneas para América Latina y el Caribe), CODIA (Conferencia de Directores Iberoamericanos del Agua), FAO (Food and Agriculture Organisation), Delta Coalition, Fonplata (Fondo Financiero para el Desarrollo de la Cuenca de la Plata), FMAM / GEF (Fondo para el Medio Ambiente Mundial), GWP (Global Water Partnership), IHP UNESCO (International Hydrological Programme), IWA (International Water Association), MAWAC (Megacities Alliance for Water and Climate), OEA (Organización de los Estados Americanos), OECD Water Governance Initiative, PAHO (Pan American Health Organization), TNC (The Nature Convervancy), UNEP (United Nations Environment Programme), WHO (World Health Organisation) and the co‑operation agencies of France (AFD), of Denmark, Germany (GIZ), the Netherlands and Spain (AECID).
Key governance challenges to water security
The following sections analyse how the institutional framework for water management is performing in Argentina against the OECD Principles on Water Governance (Box 2.1).
Effectiveness of water governance
Fragmentation
The water governance system in Argentina is highly decentralised. The 23 provinces and the city of Buenos Aires have jurisdiction over water resources, including for interjurisdictional rivers, and are responsible for the provision of water services within their boundaries. Their powers include policy making, policy implementation, operational management, financing and regulation of both subsectors. For the specific case of the Metropolitan Area of Buenos Aires, the national government together with the city of Buenos Aires and the province of Buenos Aires are responsible for the provision of water services. In practice, the national government can establish a national water policy, strategy, programme or plan, but needs the acceptance and support of the provinces to implement it, even within the Metropolitan Area of Buenos Aires.
Box 2.1. OECD Principles on Water Governance
Coping with current and future challenges requires robust public policies, targeting measurable objectives in pre-determined time schedules at the appropriate scale, relying on a clear assignment of duties across responsible authorities and subject to regular monitoring and evaluation. Water governance can greatly contribute to the design and implementation of such policies, in a shared responsibility across levels of government, civil society, business and the broader range of stakeholders who have an important role to play alongside policy makers to reap the economic, social and environmental benefits of good water governance.
The OECD Principles on Water Governance aim to enhance water governance systems that help manage “too much”, “too little” and “too polluted” water and foster universal access to drinking water and sanitation, in a sustainable, integrated and inclusive way, at an acceptable cost, and in a reasonable time frame. The principles acknowledge that good governance is a means to an end to master complexity and managing trade-offs in a policy domain that is highly sensitive to fragmentation, silos, scale mismatch, negative externalities, monopolies and large capital-intensive investment. The principles consider that governance is good if it can help to solve key water challenges, using a combination of bottom-up and top-down processes while fostering constructive state-society relations. It is bad if it generates undue transaction costs and does not respond to place-based needs.
The OECD Principles on Water Governance intend to contribute to tangible and outcome-oriented public policies, based on three mutually reinforcing and complementary dimensions of water governance (Figure 2.3).
Figure 2.3. Dimensions of water governance
1. Effectiveness relates to the contribution of governance to define clear sustainable water policy goals and targets at all levels of government, to implement those policy goals, and to meet expected targets.
2. Efficiency relates to the contribution of governance to maximise the benefits of sustainable water management and welfare at the least cost to society.
3. Trust and engagement relate to the contribution of governance to building public confidence and ensuring inclusiveness of stakeholders through democratic legitimacy and fairness for society at large.
Enhancing the effectiveness of water governance
Principle 1. Clearly allocate and distinguish roles and responsibilities for water policy making, policy implementation, operational management and regulation, and foster co-ordination across these responsible authorities.
Principle 2. Manage water at the appropriate scale(s) within integrated basin governance systems to reflect local conditions, and foster co-ordination between the different scales.
Principle 3. Encourage policy coherence through effective cross-sectoral co‑ordination, especially between policies for water and the environment, health, energy, agriculture, industry, spatial planning and land use.
Principle 4. Adapt the level of capacity of responsible authorities to the complexity of water challenges to be met, and to the set of competencies required to carry out their duties.
Enhancing the efficiency of water governance
Principle 5. Produce, update and share timely, consistent, comparable and policy-relevant water and water-related data and information, and use it to guide, assess and improve water policy.
Principle 6. Ensure that governance arrangements help mobilise water finance and allocate financial resources in an efficient, transparent and timely manner.
Principle 7. Ensure that sound water management regulatory frameworks are effectively implemented and enforced in pursuit of the public interest.
Principle 8. Promote the adoption and implementation of innovative water governance practices across responsible authorities, levels of government and relevant stakeholders.
Principle 9. Mainstream integrity and transparency practices across water policies, water institutions and water governance frameworks for greater accountability and trust in decision making.
Pillar 3: Enhancing trust and engagement in water governance
Principle 10. Promote stakeholder engagement for informed and outcome-oriented contributions to water policy design and implementation.
Principle 11. Encourage water governance frameworks that help manage trade-offs across water users, rural and urban areas, and generations.
Principle 12. Promote regular monitoring and evaluation of water policy and governance where appropriate, share the results with the public and make adjustments when needed.
Source: OECD (2015a), OECD Water Governance Principles, https://www.oecd.org/gov/regional-policy/OECD-Principles-on-Water-Governance-brochure.pdf.
While the 2003 Federal Water Agreement sets a vision for water policy in Argentina, it did not provide an enduring mechanism for incentivising inter-governmental co-operation for its implementation, nor an accountability mechanism for the national government and the provinces to work together on achieving the agreement’s vision. Other federal agreements, such as the Federal Energy Agreement and the Fiscal Pact, could serve as inspiration to drive more effective implementation of national, provincial and local policies (Box 2.2).
Box 2.2. Examples of recent multi-level agreements in Argentina: Fiscal Pact and Federal Energy Agreement
Fiscal Pact
The Fiscal Pact signed in November 2017 between the national government, the provinces and the city of Buenos Aires aimed at reforming the national fiscal system. It is structured around three pillars:
1. Common commitments: Includes specific measures such as modifying existing fiscal laws (i.e. the Fiscal Responsibility Law and the Income Tax Law), approving changes in the 2018 national budget, passing a new law on property fiscal evaluation, or reforming the fossil fuel tax system. It also includes other softer commitments. In particular, the pact lays down the political willingness from the signatory parties to pass a new co-participation law (a long‑standing issue in the Argentinian fiscal policy agenda) as well as a state modernisation law.
2. National commitments: The national government commits to provide the provinces and the Autonomous City of Buenos Aires (CABA) with the fiscal resources needed to compensate the decrease in revenues. It does so through several channels, such as inter-governmental fiscal transfers, bond emissions, the Social National Fund, transferring funds to provincial social security mechanisms, or retirement programmes.
3. Provincial and CABA commitments: Align provincial tax policy with national tax policy. National tax policy implies reducing the provincial base of taxes such as the income, property or stamp tax. It also committed the provinces to eliminate any taxes applicable according to workers’ attributes (place of birth, residence, etc.) and to establish a similar fiscal responsibility regime with municipalities.
Federal Energy Agreement
The Federal Energy Agreement signed in April 2017 between the national government, 20 provinces and CABA seeks to support the implementation of reliable, competitive and environmentally sustainable national policies on energy. Parties thereby committed to co‑ordinate energy policies respecting the allocation of competencies foreseen in the national Constitution, the provincial constitutions and other competing laws. The agreement also created the Federal Energy Council (Consejo Federal de Energía, CFE), whose mission is to act as an advisory and co-ordination body on issues related to energy policies in the country (e.g. programmes to promote renewable energies and energy efficiency, tariff setting, investment projects, and functioning and compliance of energy regulators). The CFE also has an important role to prevent the overlapping of the competences of national, provincial or public service companies and to support common criteria on the application and/or setting of energy-related taxes at national, provincial and municipal levels. The harmonisation of taxes can affect services, contracts and/or energy works, and aims to encourage investment and achieve an adequate balance of jurisdictional revenue. The council is chaired by the Minister of Finance (which houses the Secretary of Energy) and composed of a representative of each of the jurisdictions and the presidents and vice-presidents of the energy commissions of both the parliament and the senate.
Sources: Ministry of Finance (2017), “Pacto Fiscal”, https://www.minhacienda.gob.ar/wp-content/uploads/2017/11/consenso_fiscal.pdf; Federal Energy Council (2017), “Federal Energy Agreement”, https://www.argentina.gob.ar/energia/consejo-federal-de-energia.
The 2016 National Water Plan (NWP) sets an ambitious agenda to address pressing and emerging water risks. Although other measures have been carried out, such as establishing new interjurisdictional river basin committees (in shared river basins across provinces) and generating more and better hydro-meteorological information, the greatest efforts have been placed on delivering infrastructure. For instance, the national government has set the pre-condition that large-scale infrastructure projects will only be financed in interjurisdictional river basins if there is an agreement between all provinces within the corresponding basin. Beyond this conditionality, there are limited horizontal and vertical co-ordination mechanisms for the implementation of the NWP.
With a view to fostering co-ordination across water-related institutions and levels of government, several federal councils have been created, but their mandate is rather limited and they have overall low enforcement powers. One example is the Federal Water Resources Council (COHIFE) created in 2003 to promote a coherent implementation of the vision set by the Federal Water Agreement across sectoral ministries related to water at national and provincial level. However, COHIFE’s current role is merely that of providing a platform to exchange ideas and experiences as is the case of other councils (e.g. environment or agriculture). Moving forward, there is a significant room for upscaling the potential of federal councils in Argentina to drive policy coherence more effectively and strategically, and to align incentives and better manage trade-offs across water uses for instance.
Scale
While the Federal Water Agreement acknowledges basins as the appropriate scale for water management, sound basin governance is the exception rather than the rule in Argentina. The role of the existing 16 interjurisdictional river basin committees is essentially to provide a neutral space to negotiate agreements across provinces on shared rivers and reach consensus on identifying problematics and possible ways forward. However, their creation has overall not contained conflicts over water uses between provinces. Such conflicts arise for reasons such as a lack of effective inter-provincial co‑ordination, communication and exchange of information. Moreover, there are cases where for the provincial authorities co-ordinating actions with other provinces is not optimal from an economic standpoint. For instance, the province of Tucumán has historically avoided meaningful action to reduce water pollution in the Salí-Dulce River produced by citrus and sugar cane farmers, who contribute strongly to the provincial economy. The river runs through Tucumán and then enters the provinces of Santiago del Estero and Córdoba, which have complained for decades about high pollution levels generated upstream (Berardo, Olivier and Meyer, 2013).
In practice, water management in Argentina often does not respond to long-term economic, social and environmental objectives. Policy objectives are not always co-ordinated across the various national plans. Overall Argentina’s approach to water management is mostly project-based rather strategic and at basin scale, although there are efforts from the national government to promote planning at basin scale. Interjurisdictional plans identify, define and prioritise projects to solve challenges in the basin. However, they are limited in scope, since they focus on individual projects to solve specific issues rather than seeking to align national and provincial policy priorities and objectives with a long-term, sustainable perspective. A good practice for instance lies in the Secretariat of Infrastructure and Water Policy (SIPH) financing infrastructure under the condition that the project is the result of a decision taken and based through a basin planning process.
The potential of water management instruments to drive demand management and water use efficiency is not fully exploited. The use of economic instruments varies across jurisdictions, and is too low to drive behavioural change, collect sufficient revenues or promote efficient water use. Some provinces do not charge for bulk water withdrawal or the discharge of untreated polluting effluents; others charge according to the water use or the category of users; and some apply, to a limited extent, the polluter-pays principle. In many cases, the level of tariffs or fees does not reflect the economic value of water, and the current system does not offer incentives to be more efficient (Andino, 2015).
Policy coherence
There is no formal national inter-ministerial co-ordination mechanism to align water, agriculture, energy, environment, urban and mining policies. Federal councils provide for a bridge across national and provincial levels for each sector, but do not drive horizontal policy coherence overall nor manage trade-offs related to siloed decisions. A clear example is the National Food Commission (CONAL), which is responsible for designing the National Food Code with the 23 provinces, the Autonomous City of Buenos Aires and the national government, including water quality standards for human consumption. However, in doing so, CONAL does not systematically consult with the ministries that have a stake in such standards, such as the SIPH or the Secretary of Environment and Sustainable Development (SAyDS). Overall, horizontal co-ordination for water-related policies rather relies on ad hoc initiatives or exchanges between peers.
There is also limited co-ordination between sectoral policy objectives across the various national plans. For instance, the NWP strives to ensure through environmental impact assessments that projects do not have a negative impact on the environment. However, there is much room for its greater coordination with national environmental objectives. Similarly, the National Irrigation Plan aims at developing new irrigation systems and improving the technical efficiency of the irrigation sector, but it also has limited connections to broader national (or even basin level) environmental or water objectives.
There is also a lack of horizontal co-ordination at metropolitan scale, in particular across health, land use, environment and service provision, which has ultimately resulted in water pollution, floods and poor service provision in large metropolitan areas. Overall, both water resources management at the basin level and land-use management remain fragmented. Provincial jurisdictions are in charge of regulating natural resources (water, mining, etc.), while land regulation is under the responsibility of local governments exclusively. In the Matanza-Riachuelo River Basin (Metropolitan Area of Buenos Aires) industrial activity, uncontrolled settlements in the urban area and lack of water and sanitation services have caused serious contamination with consequences on human health. Another example is the Suquia River (city of Córdoba), where economic and urban development together with the lack of sanitation infrastructure have also caused environmental damage to the river (Novello, 2015).
Capacity at the subnational level
The capacity of provinces to design and implement water-related policies, as well as to plan, operate, maintain and finance water infrastructure varies across the country. Capacity gaps relate to diverse issues such as infrastructure and investment planning, water resources and basin management, enforcement of regulatory frameworks, or data and information. From an infrastructure standpoint, on the one hand, provinces such as Santa Fe have shown abilities to plan, deliver and operate large infrastructure in an effective way through, for instance, a 30-year strategic plan (in 2008) foreseeing 12 large pipelines to secure high-quality drinking water supply in the western part of the province. On the other hand, the ten provinces featured in the Belgrano Plan lack the capacity to deliver, operate and maintain infrastructure projects, as is the case of La Rioja where the World Bank has been supporting provincial authorities in several planning, budgeting, co-ordination and management areas (World Bank, 2019). International cooperation efforts have also documented subnational capacity challenges for water management (Box 2.3).
Box 2.3. Water management capacity challenges in the Tandil–Lavalle basin, province of Buenos Aires
The Tandil-Lavalle river basin in the rural area of the province of Buenos Aires suffers from severe floods and droughts, salt intrusion during high tides as well as polluted groundwater sources due to inadequate wastewater treatment. Climate change, and is predicted to exacerbate current water challenges. All these factors are already having an impact on agricultural productivity and can jeopardise drinking water supply sources.
The Dutch Water Authorities (DWA), together with the Water Authority of the province of Buenos Aires (ADA), have conducted an assessment of core water management capacity challenges in the basin:
Lack of capacity for the design and delivery of water infrastructure (dams, dikes, channels)
Absence of infrastructure investments on O&M
No daily management of water levels, and uncontrolled water releases during floods and droughts
Within the Blue Deal cooperation scheme, DWA and ADA have signed an agreement to improve flood protection, water availability and water quality in the Tandil-Lavalle river basin. DWA and ADA have co-designed an action plan, including financial estimations, to implement hard and soft measures that help tackle water challenges and enhance water management capacities at basin level. During Phase 1 (2019-2022), the project efforts will focus specifically on the Tandil-Lavalle basin, and in Phase 2 and 3 (2023-2031), the province aims to upscale lessons-learned to other rural basins (such as the Rio Salado basin) covering more than 80% of the surface of the province.
Fuente: Contribution by Dutch Water Authority (DWA) and Water Authority of the province of Buenos Aires (Autoridad del Agua de la provincia de Buenos Aires, ADA).
Municipalities also face capacity gaps, for example, in enforcing land-use regulations, which is a key challenge for water management in a highly urbanised country such as Argentina. Because of the division of competences for water management and land use across provincial and municipal levels, there is a considerable spatial heterogeneity in terms of how urban development is featuring in water constraints or not. However, there is a moderate application of local land-use regulations. For example, in 2018, only 34% of local governments had adopted territorial plans. (National Presidency Report, 2017).
Efficiency of water governance
Data and information
Water-related data are scattered across levels of government, and among a wide range of sources, which include the public sector (at national, provincial and municipal level), regulators, water operators (public, private and co-operatives), users’ associations and others. Each province produces its own data for assessing water resources management and access to water services, which is of varying quality. However, there is neither a formal requirement to share such data with the national government, nor a unified collection or monitoring system. Beyond the SIPH, several ministries and secretaries also produce water-related data at national level, for instance, the Environmental Monitoring Federal Network or the Water Quality GIS tool hosted by the SAyDS, or the Evaluation and Monitoring Network of Aquatic Ecosystems (REM.AQUA) developed by the National Council of Technology and Science (Consejo Nacional de Investigaciones Científicas y Técnicas, CONICET) and the SAyDS.
Dispersion of data gives rise to a lack of basic information at national level, including on basic indicators such as abstraction rate by water use at basin level and household drinking water consumption rate in urban areas. Further, there is no integrated national or provincial information system relating to infrastructure maintenance data for water services and water resources or on availability and use of groundwater sources.
Relevant efforts are underway to harmonise data across levels of government (both for water resources and water services), although there remains room for improvement. The Integrated National Hydrological Database is a nationwide database that incorporates data from the SIPH’s gauging stations as well as from other institutions that have adhered voluntarily to the database. Such institutions include national research institutes and the provinces of Chaco, Corrientes, Entre Rios, Mendoza and Rio Negro (see Chapter 3). Each of these feeds the database by incorporating data from the respective networks for which they are responsible. Moreover, the National Directorate for Drinking Water and Sanitation (Dirección Nacional de Agua Potable y Saneamiento, DNAPyS) is leading an initiative, National Information System for Drinking Water and Sanitation Services, to gather relevant information from large water service providers (see Chapter 4).
Better data and information could underpin an ambitious monitoring and evaluation of water policies and their outcomes, which currently does not exist. With the exception of the registry that tracks public budget execution, there is no regular monitoring and reporting mechanism to assess, for instance, progress made in the implementation of the National Water Plan. Monitoring progress is crucial to enhance transparency, hold the public administration accountable and, most importantly, to inform and guide future policy reforms and enhancements of the NWP.
Investment framework
The current investment framework does not enable the mobilisation of the finance required to achieve Argentina’s water policy objectives. Several factors contribute to this situation. First, the macroeconomic downturn, and related fiscal consolidation policies, have an impact on the ability of the national government to execute international financing due to limited fiscal space. Second, the absence of comprehensive investment strategies lowers the impact of public investment because there is no sustainability of projects over time (many projects are not bankable) and limited synergies with investments in other policy areas. Third, the lack of capacity of some provinces to plan, operate, maintain and finance water infrastructure poses challenges to make the most of public investment. Fourth, favouring capital investment does not promote investments in water-use efficiency measures or other less-costly solutions such as green infrastructure. And lastly, the absence of a system to prioritise projects according to objective and measurable criteria implies that project selection may not always be the most adequate nor free from political interference. The combination of these factors has made it difficult to catalyse, amongst others, the funding required for meeting the NWP’s objectives (Box 2.4).
Box 2.4. Sources of financing for the National Water Plan
The national government planned to achieve the objectives of the National Water Plan (NWP) through a mix of public, private and multilateral funding sources. For 2018, it aimed to increase infrastructure investment by 50% in real terms, with a target of 3.5% of gross domestic product (GDP) (2.6% in 2017). Half of this increase would derive from the National Treasury, where there would be a considerable increase in water infrastructure investment (from 0.2% of GDP in 2017 to 0.4%). The remaining part is intended to come in the form of public-private financing schemes. For that purpose, Congress passed a law (No. 27328) on Public-Private Partnerships in 2017, together with an article of the Budget Law allowing public service providers to seek external financing without increasing the fiscal deficit of the national or provincial budget.
As a consequence, starting January 2018, the publicly owned water and sanitation service provider in the Metropolitan Area of Buenos Aires (Agua y Saneamientos Argentinos S.A., AySA), raised USD 500 million in private sector bonds to support the foreseen large-scale infrastructure programmes. This experience in accessing debt financing on international capital markets is interesting because it required a process of strengthening the company’s financial processes (audit and credit rating).
Sources: Chief of Cabinet (2017), “En 2018 la inversión en infraestructura va a aumentar un 50 por ciento en términos reales”, https://www.argentina.gob.ar/noticias/en-2018-la-inversion-en-infraestructura-va-aumentar-un-50-por-ciento-en-terminos-reales; Ministry of Interior, Public Works and Housing (2018), “AySA obtuvo 500 millones de dólares de inversores internacionales para obras de agua potable y saneamiento”, https://www.argentina.gob.ar/noticias/aysa-obtuvo-500-millones-de-dolares-de-inversores-internacionales-para-obras-de-agua.
Argentina’s macroeconomic situation has brought tight fiscal constraints to the public budget as well as reluctance from private investors to engage in water-related projects due to uncertainty and high-risk perception levels (see Chapter 1). However, beyond the macroeconomic situation, the overall current weak enabling environment does not promote effective investments. This is due to poor strategic investment planning, a lack of incentives to move focus from new capital investment (new infrastructure for example) to promoting efficiency in the operation of existing capital assets, and a weakness in the economic assessment processes which underpin any necessary capital investment decisions. For instance, construction of new water treatment plants has been seen to be prioritised over measures to reduce non-revenue-water (where physical and commercial losses are huge) that are equally important to drive water efficiency (World Bank, 2018).
The absence of comprehensive investment strategies to steer water infrastructure delivery and promote sustainability of projects over time is a challenge, which is partly due to the lack of both horizontal and vertical co-ordination in investment planning. The national government has established a financial incentive (around 70% of funding comes from national sources) to deliver projects foreseen in the NWP. However, these incentives do not entail commitments as to how the financial feasibility of the projects will be sustainable over time.
Budgetary capacity to fund public investment and ensure the financial sustainability of projects can be extremely uneven between provinces. Revenue-generating capacity is crucial when facing economic instability, in particular where the economy relies on international commodity prices such as in the provinces of Buenos Aires, Córdoba and Santa Fe, which present self-generating revenue rates around or above national average (around 35%). While southern provinces such as Chubut, Santa Cruz and Tierra del Fuego generally show much higher rates of this kind of revenue (45-60% of subnational GDP), northern provinces (Formosa, Jujuy, La Rioja, Santiago del Estero) are below 10% of subnational GDP (OECD, 2016). In Argentina, the current (dis)incentive scheme drives large-scale infrastructure investment rather than promoting investments in efficiency measures. As a result, operational efficiency opportunities may be foregone. In the framework of the NWP, funds are allocated to large infrastructure targeting to close gaps in access to water services in the Metropolitan Area of Buenos Aires, while the average consumption in the main water services providers of the country remains at 299 litres per capita (with a minimum of 148 litres per capita and a maximum of 422 litres per capita) and water losses in the network range from 30% to 60% (except for Aguas de Córdoba that registers 19%).
It is claimed that the delay in raising tariff levels has posed difficulties in funding operation and maintenance expenditures. Starting in 2015, general subsidies to the water tariff have been progressively removed, increasing the cost recovery of operation and maintenance costs from 42% to 81% in 2018 (AySA S.A., 2018). However, tariffs are just one way of promoting financial operational cost recovery, and technical efficiency gains can also lower the cost per unit of the service.
There is no system in place to prioritise projects according to objective and measurable criteria (World Bank, 2019). The Ministry of Finance together with the Chief Cabinet Office establish the budget cap and prioritise investments, but it is unclear which criteria are used or how selection is made. There is overall limited assessment of how water investments are resulting in competitive advantages, growth, innovation or job creation in the provinces, or how the infrastructure supports equity and environmental sustainability. All this results in ad hoc delivery of infrastructure based on the availability of funding and the willingness of different levels of government to finance.
Economic regulation
The absence of a nationwide legal framework or regulatory principles for drinking water and sanitation management has led to over-regulation at the provincial level. Any benefits that might arise from economic regulation are diluted or unavailable, as key regulatory functions – such as service standards and tariff regulation, setting incentives for efficient investment, and information and data gathering – cannot be effectively enforced in the absence of an overarching framework. Regulation at provincial level has not fostered effective and efficient investments to close gaps of access to services and to promote efficiency in service delivery. Additionally, there are no standardised and integrated processes to issue and evaluate water-related regulatory frameworks through an evidence-based method, such as ex ante or ex post regulatory impact assessment.
The prevailing tariff system for drinking water and sanitation is disconnected from production costs and local conditions of service delivery, preventing regulators from assessing efficiency and setting tariffs accordingly to drive behavioural change. The predominant tariff system is the “canilla libre”, whereby users pay a flat rate regardless of the volume consumed. This fixed rate is based on an assumed consumption criterion depending on the size, location and age of the estate property. According to the Argentinian Federal Association of Water and Sanitation Regulators, the most common price-setting methodology across the country is a price cap. However, in practice, hybrid methods do exist since in all jurisdictions, periodic price reviews are carried out following different methodologies, mainly addressing cost increases. Periodic or ordinary tariff reviews are the exception rather than the rule, especially in state-owned companies. In general, rates have been increased by so-called revisions due to cost (closely linked to the inflation rate) or extraordinary amendments.
There are no requirements for water operators to develop (or deliver) medium or long-term investment plans. Nevertheless, since the end of 2016, results-based plans have started to be put into place, setting out information on the prioritisation of actions and projects based on objective criteria assessment. An ongoing initiative by the SIPH together with the World Bank and the Inter-American Development Bank, seeks to make these plans compulsory if water service providers are to access finance from them. The results-based plans are developed by water services providers and have to be approved by the application authority of each province as well as by the relevant economic regulator.
There are limited efficiency incentives for operators overall. The regulatory system only promotes financial operating cost recovery through tariff increases, not through efficiency gains (as noted earlier, capital is generally provided by grant funding and operators therefore do not require, and should not earn, a return on that capital). Current financial and institutional incentives focus on closing evident gaps in access to services. These gaps limit investments in other areas that could help improve technical or financial efficiency, therefore making more resources available to invest in closing services gaps. An illustration of this missed opportunity can be seen in the levels of water losses, which are high (45% leakage rate on average).
The fragmentation of regulation responsibilities on regulation across levels of government together with the lack of coherence and enforcement power of provincial regulators make it difficult for the national government to compile information (coverage, quality and tariffs) from operators. In this sense, the SIPH has been working towards a National Information System on Drinking Water and Sanitation Services, which will process, analyse and publish performance management indicators of large water services providers. This initiative will be a milestone since there is no such information system regarding water services providers in Argentina. At the same time, the main source of statistical data at the national level, the National Institute of Statistics and Censuses (INDEC), which is in charge of preparing the National Household Expenditure Survey (ENGhO), does not have updated information to measure the share of the water bill over household expenditure for instance, which is a critical element for assessing affordability of water services and their distributional impacts. The current reference are data produced in 2004, since INDEC recommended not using the 2016 survey due to a methodological issue. However, INDEC is working to update this information in some jurisdictions, such as CABA, where it produces statistics on the percentage of family spending on water and sanitation services.
Innovation
The NWP identifies innovation as a key driver to overcome water challenges in Argentina. In particular, more and better production of knowledge, embracing technology, and driving organisational innovations are seen as priority areas within the NWP. Some of these innovations are already present in Argentina:
The National Registry of Disfavoured Neighbourhoods (RENABAP) provides an unprecedented mapping of existing informal settlements in Argentina. RENABAP not only identifies buildings within these disfavoured neighbourhoods, but registers building characteristics and the socio-economic status of households. Together with RENABAP, the Family Housing Certificate is a new ID for households living in disfavoured neighbourhoods and provides the right to request connection to public services (water, electricity, gas and sewers).
The province of Santa Fe shows promising perspectives in terms of non-technical innovation. The provincial regulator, unlike other provincial peers, goes beyond simply enforcing norms to also build capacities amongst small water services providers (co-operatives and small municipalities) on how to calculate costs or set tariffs.
However, there might be room for a stronger role for evidence-based decision making in Argentina. Universities can be a powerful tool to guide the decision-making process and to inform the public with objective data, information and analysis. For instance, in the last two years, there has been a noticeable increase of water services tariffs. However, it does not appear that universities have provided an independent assessment to document, for instance, the underpinning economic rationale nor the affordability consequences of those increases.
Trust and engagement
Integrity and transparency
Argentina has, on the paper, the overarching institutional and legal architecture to hold decision makers accountable (Box 2.5), such as the right to information and independent authorities to investigate water-related issues and law enforcement; but implementation has been uneven throughout the provinces. For instance, provincial regulators and operators disclose information and data to the public through annual reports freely accessible on their website. However, some regulators have difficulties accessing information produced by water operators within their own jurisdiction (even if the operator is owned by the public sector), which results in a lack of information for basic indicators.
Box 2.5. Legal frameworks and key institutions to promote integrity and transparency in Argentina at the national level
Legal framework
The National Constitution (Article 42) establishes that consumers and users of goods and services have the right to adequate and truthful information.
The Law on the Right to Access Public Information (Law 27.275) was passed in 2016 and established the possibility to search, access, request, receive, copy, analyse, reprocess, reuse and redistribute freely information.
The Law on Free Access to Environmental Public Information (Law 25.831) is applicable at national, provincial and municipal levels, and guarantees the right to access environmental public information produced by any level of government as well as public enterprises and public service providers (water or others).
Institutions
The Nation’s General Audit is a constitutional entity with functional autonomy that technically assists the National Congress to control the efficient, economic and effective use of public resources in pursuit of public interest (National Constitution, Article 85). Its key functions are to: oversee the use of public resources; conduct assessments of financial statements by national administrative agencies, the central bank, and state-owned companies and corporations; monitor the use of resources from public credit operations.
The General Syndicature of the Nation (Law 24.156) is the internal control body of the national executive power. It ensures that the public sector achieves the government’s objectives through the appropriate use of resources. Its key functions are: supervising the enforcement of internal auditing standards; co‑ordinating independent financial audits and special investigations; monitoring enforcement of accounting regulations issued by the General Accounting Office of the Nation; informing the president of activities that have caused or may cause significant damage to the public good.
The National Ombudsman’s Office is an independent body under the umbrella of the Congress that acts with full functional autonomy (National Constitution, Article 86). The ombudsman is appointed and dismissed by the Congress through the vote of two-thirds of the members present in the parliament and senate. The ombudsman holds office for five years and may be reappointed only once. It has procedural legitimacy, i.e. authorised to appear in court, and is the only Argentinian institution recognised by the United Nations as a national human rights institution. The recognition includes A-class status, the highest possible, since the ombudsman complies with the Paris Principles. However, it should be noted that the Ombusman Office has been vacant since 2009. This situation was considered by the Supreme Court of Argentina as an “unconstitutional omission” that has to be solved by the Congress.
The current institutional and legal framework for water integrity and transparency promotes a reactive approach (investigation and supervision) rather than a preventive (managing integrity risks) one. There is currently no mechanism to diagnose and map out existing or potential drivers of corruption and risks in water-related institutions at different levels (national, provincial, municipal), including for public procurement. For instance, the NWP implies a large amount of investment, mostly by provincial governments or provincial water services providers. However, it is difficult to identify whether integrity risks are analysed before transferring funds to subnational authorities or operators.
Stakeholder engagement
In general, water users are poorly engaged in the planning, management and control of water resources. Formal or informal mechanisms to engage stakeholders are not well known and in many instances, there has been little political will to engage non-governmental actors in strategic policy and infrastructure choices. For instance, the Federal Water Resources Council (COHIFE) is mostly restricted to governmental authorities (national and provincial) and does not convene non-governmental actors. Finally, there is a persistent lack of awareness and insufficient technical knowledge in non-governmental organisations with regards to rational and sustainable use of water resources (FADA-IARH, 2015), which could be addressed through greater investment in capacity building and communication campaigns with and for stakeholder groups.
Policy recommendations
There is a window of opportunity for decision makers to propose an ambitious water policy agenda for Argentina and raise its profile as a driver for inclusive and sustainable development. The macroeconomic downturn makes the search for efficiency gains an essential goal and the political context calls for strengthening the multi-level governance system. The creation within the national government of a dedicated Secretariat of Infrastructure and Water Policy somewhat testifies to the higher rank of water in the political agenda.
As that window is now open, Argentina must take critical decisions regarding its current and future water policy direction. This will require adjusting the existing model of governance to make the most of interdependencies across levels of government and sectors and set up incentives to better cope with pressing and emerging water risks. The alternative, preservation of the status quo, would be an acknowledgment that Argentina is not “ready” for a truly integrated and multi-level governance model, and the significant social, economic and environmental benefits available from water reform would be lost.
Securing inter‑governmental agreements towards water security
The 2003 Federal Water Agreement was a significant step towards strengthening multi‑level governance of water policy in Argentina. It acknowledged the need for flexibility and context-specific solutions in a diverse federal country, and introduced topics often overlooked in the country’s policy context, such as basin management, economic value of water, interdependence of water and the environment, and long-term planning.
Sixteen years later, there has been progress in making the principles operational, but important challenges remain to foster water security. They include, among others, interjurisdictional conflicts over waters; long-term planning is the exception rather than the rule as planning is often ad hoc or short term; lack of a solid investment framework to close the infrastructure gaps in both water resources management and the provision of water services; or discretional investments carried out with no evidence-based decision support system.
Many of these challenges relate to the mistaken idea that Argentina is in a deadlock with respect to water policies due to its federal system. Indeed, many stakeholders concur that the fragmentation of rights, roles, powers, functions and accountability lines in relation to water are a major challenge to effective, efficient and inclusive water policy. However, federalism also offers strong potential for multi-level partnership, and dealing with water challenges at the best level of government.
Argentina should establish a common political, economic, environmental and social narrative about the need to capture the potential benefits of effective water policy. A rejuvenated agreement or pact across national and provincial levels is needed to adjust institutional frameworks, where necessary. The new water narrative should stress the risk and costs of inaction, and provide a compelling and holistic vision for both water resources management and water services provision, since many of the governance challenges are cross-cutting rather than specific to a sub-sector.
A way forward to build such a strategic vision and commitment could be through convening a national summit gathering national, provincial, and local governments and policy makers where nationwide agreements could be prepared, debated and executed, delineating clear legal and outcomes roles, responsibilities and accountabilities for all levels of government. It would be important to involve prominently national and provincial sectoral ministries on environment, energy, agriculture, food, urban and rural development, or mining.
Argentina should use the rejuvenation of the federal agreement as an opportunity to set up an enduring mechanism for incentivising inter-governmental co-operation to improve planning and strategic investment, basin management, or regulation of water services, among others. It could be inspired by other federal countries such as Australia, Brazil or Canada, where such intergovernmental co-ordination mechanisms have proven successful:
The Australian National Water Initiative (NWI) is an explicit commitment by the Commonwealth Government, and state and territory (provincial) governments to implement a common water policy with clear objectives. Under the relevant NWI, each state and territory developed implementation plans to apply the objectives of the NWI to their particular jurisdictional requirements and circumstances.
The Canada Water Act provides an enabling framework for collaboration among the federal and provincial/territorial governments in matters relating to water resources.
In Brazil, the Water Management Pact is a multi-level governance contract aiming to strengthen states’ capacity to implement integrated water resources management approaches in close co-operation with the National Water Agency (Box 2.6).
Box 2.6. International experience on inter-governmental agreements
Australian National Water Initiative
In response to the deteriorating health of the nation’s waterways in the 1980s and a growing awareness that traditional approaches to providing water infrastructure was costly and inefficient, Australian governments began reforming aspects of water policy. In 1994 the Council of Australian Governments’ (CoAG) Water Reform Framework was agreed to, which set an ambitious agenda covering: water pricing; institutional reform (including corporatisation); the clarification of property rights; allocation of water to the environment; and the development of water trading.
An Intergovernmental Agreement on a National Water Initiative (NWI) was given effect in 2004 by CoAG to maintain the momentum of national water reforms that commenced a decade earlier. The NWI sought to address the over allocation of water resources, and provided a collaborative mechanism to address water scarcity issues arising from the early years of what was later to become known as the Millennium Drought. The NWI provides a platform of government commitments relating to the efficient and sustainable use of water, and continue to underpin governments’ water planning activities, including: the preparation of statutory water plans; dealing with over-allocated or stressed water systems; securing water rights and implementing standards for water accounting; and, improving pricing arrangements for water storage and delivery.
The NWI aims to create a nationally compatible water market, and a regulatory and planning based system of managing surface and groundwater resources for rural and urban use that optimises economic, social and environmental outcomes by achieving the following objectives:
clear and nationally compatible characteristics for secure water access entitlements
transparent, statutory based water planning
statutory provision for environmental and other public benefit outcomes, and improved environmental management practices
complete the return of all currently overallocated or overused systems to environmentally sustainable levels of extraction
progressive removal of barriers to trade in water and meeting other requirements to facilitate the broadening and deepening of the water market, with an open trading market to be in place
clarity around the assignment of risk arising from future changes in the availability of water for the consumptive pool
water accounting which is able to meet the information needs of different water systems in respect to planning, monitoring, trading, environmental management and on farm management
policy settings that facilitate water use efficiency and innovation in urban and rural areas
addressing future adjustment issues that may impact on water users and communities
recognition of the connectivity between surface and groundwater resources and connected systems managed as a single resource.
To fulfil these objectives, the NWI included eight key elements for which there were agreed outcomes and actions:
Water access entitlements and planning frameworks
Water markets and trading
Best practice water pricing and institutional arrangements
Integrated management of water for environmental and other public benefit outcomes
Water resource accounting
Urban water reform
Knowledge and capacity building
Community partnerships and adjustment.
In 2007, the Australian Government introduced the National Plan for Water Security, which led to a range of further reforms, principally focused on the management of the Murray-Darling Basin. The Commonwealth Water Act 2007, was also passed, which included statutory requirements for the establishment of the Murray-Darling Basin Authority, and the development of a (Murray-Darling) Basin Plan (2012) and accredited sub-basin water resource plans.
CoAG also agreed to a range of specific measures in 2008, 2009 and 2013 to clarify and provide more detailed policy guidance on several aspects of the NWI, including urban water, water markets, and knowledge and capacity building. In 2017, NWI modules were published for ‘Considering climate change and extreme events in water planning and management’ and ‘Engaging Indigenous peoples in water planning and management’.
The Water Act 2007 requires three-yearly reviews of the NWI aimed at assessing progress against NWI objectives and commitments. The most recent review, undertaken in 2017 found that the NWI has generally served Australia well and is widely regarded as a successful reform initiative, both within Australia and internationally. It also acknowledged the importance of maintaining the momentum of water reform, particularly in areas of urban water, Indigenous water interests, and management of environmental water. Australian governments are now working together on a strategy to action the key findings of the 2017 review.
Canada Water Act
The Canada Water Act proclaimed on 30 September 1970 provides the framework for co‑operation with the provinces and territories in the conservation, development and use of Canada’s water resources. Each level of government has different roles related to the management of water resources. Joint projects involve the regulation, apportionment, monitoring or surveying of water resources, and the planning and implementation of programmes relating to water resources. As well, there are many areas of shared responsibility.
Canadian provinces, Yukon and Northwest Territories have responsibility over most areas of water management and protection. Most of these governments delegate some authority to municipalities, in particular drinking water treatment and distribution, and wastewater treatment operations in urban areas. In certain cases, local authorities responsible for a particular area or river basin take on some water resource management functions when requested by government. The federal government has responsibility for managing water on federal lands (e.g. national parks), federal facilities (e.g. office buildings, laboratories, penitentiaries, military bases), First Nations reserves and in Nunavut. The federal government also has jurisdiction to make laws in relation to fisheries and navigation, both of which play a role in water management.
Agreements for specific water programmes require participating governments to specify the amount of funding each will pay and the information and expertise they will provide, in agreed ratios. For ongoing activities such as the hydrometric monitoring agreements with each provincial and territorial government, cost-sharing is in accordance with each party’s need for the data. For study and planning agreements, generally the federal government and the specific provincial or territorial government each assume half of the costs. The planning studies encompass interprovincial, international or other water basins where federal interests are important. Implementation of planning recommendations also occurs on a federal, provincial/territorial and federal provincial/territorial basis. Cost‑sharing for infrastructure often includes a contribution from local governments.
Brazil’s National Water Management Pact
In 2013, the Ministry of the Environment and the National Water Agency (ANA) launched a national programme, known as the National Pact for Water Management (Progestão). It was designed as a multi-level governance contract aiming to strengthen states’ capacity to implement integrated water resources management approaches. The pact is an incentive-based programme following three principles: integrated, decentralised and participative. It has the following objectives:
establishing commitments among federative units to overcome common challenges and lack of harmonisation
encouraging multiple and sustainable use of water resources, especially in shared river basins
promoting effective co-ordination between water resources management and regulation processes at national and state levels
empowering states towards greater capacity and awareness in dealing with water risks.
In 2015, the 27 states signed the National Water Management Pact with the ANA. The contracts support the implementation of federative targets (defined by the ANA, common to all states, and to be completed each year) and state targets (defined by the states, with the ANA’s technical support). Targets aim to improve water resources management in the state, in terms of planning, information sharing and policy implementation, all responsibilities of the states, but not yet fully addressed in some cases.
In 2017, the second cycle of the Progestão started and 18 federative units (out of 19) that had completed the first cycle of the programme signed the contract for the second cycle. At this stage, each federative unit can receive up to EUR 1.2 million at the end of five years, through compliance with the agreed targets as well as conducting investments with their own annual budget ranging from EUR 5 840 to EUR 58 400. Until 2018, a total of EUR 21.6 million were transferred to the federative units. In 2018, the ANA launched the “Improvement of state tools for the management of water resources in the scope of Progestao” project together with the Institute of Applied Economic Research. The project aims to support water resources managers in the development or improvement of management tools to improve water resources management.
Source: Contribution by Adam Wilson, peer reviewer, Essential Services Commission of South Australia; OECD (2015b), Water Resources Governance in Brazil, https://doi.org/10.1787/9789264238121-en; Government of Canada (2019), Canada Water Act, https://laws-lois.justice.gc.ca/eng/acts/c-11/index.html (accessed in June 2019).
Strengthening the planning framework to ensure water is managed at the right scale
Water-related tasks in Argentina are fragmented across ministries and public agencies at the national level, and across provincial and municipal authorities. These silo approaches result in significant inconsistencies between subnational policy needs and national policy initiatives, and suboptimal outcomes across water-related policy domains. In the absence of effective co-ordination mechanisms, the opportunity for a whole-of-government approache is minimised. Moreover, the generalised sense of water abundance in some basins in Argentina does not help to fully engage all ministries and levels of government in the shift from crisis management to risk management.
Planning can be a powerful co-ordinating vehicle across ministries and levels of government, but its potential has not been fully exploited. Argentina should establish a comprehensive, effective and efficient long-term planning framework at all levels to address issues of federative management, and factor in both short-term considerations (economic, social and environmental performance) and long-term projected impacts (e.g. climate change).
Plans should have a different focus depending on the level:
National planning should be the link between water policy and the country’s broader development strategy and provide strategic and targeted guidance to provinces on allocation regimes, water entitlements, infrastructure development, etc.
Interjurisdictional basin planning should standardise certain water management criteria to allow for increased co-operation between provinces sharing the river, for example, allocation regimes and environmental flows, level of the tariff of economic instruments, etc.
Provincial planning should tailor national priorities to the territorial specificities, link water planning to the broader regional development strategy and put in place policy tools to achieve the objectives set: deciding on allocation regimes (water uses), developing a project portfolio, setting the level of tariffs, etc.
These national, provincial and interjurisdictional plans should essentially promote integrated water resources management approaches at basin scale, which then are translated into sectoral policies and specific investment planning. They should consider the entire water cycle and the basin or watershed as the unit of analysis and planning.
It is important that such plans be developed in a bottom-up fashion, engaging relevant stakeholders (subnational authorities, service providers, water users, property developers, academics, non-governmental organisations, etc.), and co-ordinated with relevant ministries at national level. National planning should be co-designed together with provinces to account for territorial differences and create ownership on the goals set, in consultation with the relevant stakeholders. One of the issues of the NWP is the lack of ownership by the provinces (they currently set their own portfolio of projects without aligning with national priorities) and by relevant ministries at national level (given, for instance, the focus on economic and social development without explicit references to environmental objectives).
Plans should also be realistic and translate into budgetary priorities, with the required technical and financial capacity to implement them. There must be a clear link between water planning and public investment decisions. For instance, if interjurisdictional river basin committees are to become planning agencies, they should have the financial capacity (either through collecting their own revenues or receiving fiscal transfers) to implement the plans and be accountable for the programme of measures included in the plan. Currently, infrastructure financing, such as financial transfers and/or co-financing, are examples of incentives being used by the SIPH to enhance these bodies’ role as planning agencies. The national government has set a pre-condition that large-scale infrastructure projects will only be financed in interjurisdictional river basins if there is an agreement between all provinces within the corresponding basin. Agreements should be further pursued to transition from a mere pipeline of projects to actual integrated planning at basin level.
Last but not least, plans have to be based on updated, timely, consistent, comparable and policy-relevant data and information, and should be regularly monitored and evaluated. The intrinsic relationship between water and other public policies requires a good understanding of scientific and technical terms, and awareness at a high political level that water is not a sectoral domain, but a vehicle to sustainable growth. While water experts often seek an integrated approach, decision makers (with more political weight) tend to be driven by crisis management rather than risk management. Objective data and evidence can help manage trade-offs across water-related policy areas and move the discussions to technical terms rather than political priorities.
Enhancing cross-sector co-ordination through existing federal councils for greater policy coherence and consistency
Argentina could build on existing federal committees or councils in sectoral domains such as water, environment, food, health, mining, energy or agriculture (COHIFE, COFEMA, CONAL, COFESA, COFEMIN, CFE or CFA), to favour exchanges and dialogues across policy areas that have a stake in water policy. For instance, COFEMA and COHIFE could organise joint sessions on water resources and environmental policies when convening to stimulate policy coherence and trade-off management. Similarly, CONAL could invite water services authorities to the discussions on drinking water quality. The Cabinet of Climate Change (see Chapter 1) could be a good platform to discuss how all types of infrastructure contribute to climate change adaptation, as well as what the needs are for the future. In addition, a variety of complementary co-ordination mechanisms used by OECD countries can be inspiring (Box 2.7).
Box 2.7. Examples for co-ordinating water policies across ministries and public agencies
In Australia, the Council of Australian Governments (CoAG) is the peak intergovernmental forum. The members of CoAG are the prime minister, state and territory premiers and chief ministers, and the president of the Australian Local Government Association (ALGA). It is chaired by the prime minister. CoAG’s role is to promote policy reforms that are of national significance, or which need co-ordinated action by all Australian governments. CoAG is supported by interjurisdictional, inter-ministerial councils that facilitate consultation and co-operation between the Commonwealth and the states and territories in specific policy areas such as health, education, indigenous rights and the economy. Together, these councils constitute the CoAG Council System. CoAG councils pursue and monitor priority issues of national significance and take joint action to resolve issues that arise between governments. Councils also develop policy reforms for consideration by CoAG, and oversee the implementation of policy reforms agreed by CoAG. CoAG has been the co-ordinating and driving force behind the water reforms undertaken across Australian jurisdictions for more than 20 years.
In Mexico, there has been notable progress in addressing institutional fragmentation of water policy at the federal level. Some of these efforts were undertaken through the National Water Commission (CONAGUA)’s Technical Council. The council is an inter-ministerial body in charge of approving and evaluating the commission’s programmes, projects, budget and operations, as well as co-ordinating water policies and defining common strategies across multiple ministries and agencies (SEMARNAT; SEDESOL; Secretary of Agriculture, Livestock, Rural Development, Fisheries and Food; Treasury; Energy; CONAFOR; and IMTA).
The National Water Council in Spain is a high-level consultative agency created in 2009, which includes autonomous communities, local entities, river basin authorities, and professional and economic unions related to water. Horizontal co-ordination of water policies is ensured by the participation of the main directors-general of the Ministry of Environment, Rural and Maritime Affairs (water, quality and environmental protection, sustainable development, and rural affairs).
Sources: OECD (2015b), Water Resources Governance in Brazil, http://dx.doi.org/10.1787/9789264238121-en; OECD (2011), Water Governance in OECD Countries: A Multi-level Approach, http://dx.doi.org/10.1787/9789264119284-en.
Building capacity of responsible authorities at subnational level to adapt their level of expertise to the complexity of the water challenges to be met
Strengthening the capacity of provincial governments to deal with water challenges is critical since most responsibilities in Argentina are held at the subnational level. A place-based approach is very relevant for Argentina, where the diversity of situations in terms of legal, institutional and policy frameworks are noticeable. Some provinces may face understaffing and underfunding, while others may be searching for technical and scientific trained professionals. Training and capacity development tailored to the needs of each province could help to link plans and budgets, and monitor and enforce water services and environmental regulations. The Brazilian National Water Management Pact can provide inspiration in designing a capacity-building programme tailored to subnational governments’ needs (Box 2.8).
Box 2.8. Brazil’s National Water Management Pact: An instrument to build tailored capacity across levels of government
Through a sophisticated and ambitious multi-level process to foster the convergence of federal and state water resources management systems in Brazil, the 27 states that adhered to the National Water Management Pact located themselves across four categories, according to their respective degree of complexity in water management and the corresponding institutional model. The categories, from A to D, identified several degrees of complexity, from low to very high, according to the scope, intensity, number and dispersion of conflicts in the water regions analysed. They also identified increasingly complex institutional frameworks and management actions, from basic to advanced, which envisaged the implementation of water charges in the most advanced class (D).
After signing the pact, the states and the Brazilian National Agency (ANA) gathered in a workshop to identify water management gaps according to a set of criteria, including legal, institutional and social planning, information and operational variables. The diagnosis for each state determined the degree of complexity of water management and helped to define the goal and level of ambition towards water security. In some cases the states will be not able to implement the targets on their own and co-operation with the federal government and the neighbouring states was be needed. Among the existing options, there are instruments for federal co-operation, such as technical co-operation agreements, public and private funds, and public consortia. The ANA made available to each contributing state a financial implementation mechanism, the Progestão (see Box 2.7), based on a pay-for-result approach. In practice, financial resources were allocated for each contract, and calculated proportionally to the accomplishment of agreed targets.
Source: OECD (2015b), Water Resources Governance in Brazil, http://dx.doi.org/10.1787/9789264238121-en
In practice, tailored capacity-building programmes for provincial authorities should aim to:
Ensure the technical capacity of provincial authorities, namely their ability to collect and use data, plan and execute projects, evaluate risks, and ensure water management duties are effectively delivered. Recruitment should be based on professional capacity. Ensuring a thick layer of competent public officials is crucial for public policy continuity. National research institutes can play a key role (such as INA or INTA) by providing technical assistance to provinces.
Secure sustainable funding through implementing water charges as a policy instrument, where relevant and needed. Not only could economic instruments generate resources in quite impoverished provincial authorities, they can also trigger greater engagement of water users (interest-pay-say principle) and foster rational use of water resources. On the other hand, relevant tariffs for water services and sanitation can help better operate and maintain the ageing water services infrastructure, and contribute to demand management. The willingness to pay of the various sectors and affordability of water bills should be analysed thoroughly, based on sound economic analysis that can effectively guide policy choices and decisions.
Developing an integrated water information system through sound incentives across levels of government
Argentina should reinforce existing information systems for better decision making both in the water resources and services sectors. Options include:
Leverage the National Hydrological Network (RHN) to transition to a full-fledged integrated water resources information system. First, the RHN should produce more socio‑economic data and information related to: economic instruments, water pricing, agricultural production and water use, and investments on water infrastructure. Second, data should be up-to-date and disaggregated by level of government (interjurisdictional basins, provinces, provincial basins and municipalities).
Foster continuous, consistent and standardised collection of data on water services performance across the country to design relevant water services policy targets, produce mid-term reviews and monitor achievements. It can also be used to implement result-based funding allocations for investment projects and be a central element for incentive mechanisms. The set of indicators defined by the DNAPyS could be supplemented with additional indicators to better reflect overall quality and performance of utilities. Additions could include: continuity of service, collection period, collection ratio, metering level, sewer blockages or overflows, pipe breaks, average revenue per cubic metre produced and sold (see Chapter 4).
Strengthening the enabling environment for water-related investment
While the macroeconomic downturn in Argentina poses significant challenges, it also provides the opportunity to reach federal agreements on fiscal discipline and to decouple water investment policy from the macroeconomic outlook. On the one hand, the national government and the provinces have reached a Fiscal Pact that has been effective for the fiscal year 2019 and has contributed to healthier provincial public finances. This agreement strengthens federal relations and allows the provinces to undertake investments with national and international financing. On the other hand, it is a good time to increase efficiency gains within the country and, specifically, within the water sector – to do more and better with less. Notably, making best use of existing financing and assets should be a priority; including robust financial systems to cover OPEX costs of existing infrastructure once CAPEX investments are made.
Building a robust environment that can improve the efficiency and effectiveness of investment, minimise investment needs, and harness additional finance (from both public and private sources), is all much needed. The response to the limitation of funds could consist in implementing sound approaches to planning, prioritising and delivering investments, with a focus on increasing water security. An example of such an approach could be deferral of capital expenditure in favour of finding operating innovations and efficiencies, or setting up demand-side measures.
Argentina should maximise the value of water security investments. First, by improving the efficiency of existing infrastructure, for example through:
Better operation and maintenance of infrastructure, demand management measures, engagement with stakeholders to reduce water-related risks.
Seeking opportunities for capturing economies of scale (e.g. designing water services agglomerations at the relevant scale; inter-municipal cooperation agreements, etc.), and shaping investments to build resilience to climate change (i.e. planning investments that are flexible to deliver under the uncertainty of future conditions).
Ensuring synergies and complementarities with investments in other sectors. A better alignment of policies and investments across the urban development, environment, food and energy sectors will enhance water security.
Promoting investments in nature-based solutions, for example, conservation or expansion of floodplains. This can increase water infiltration and reduce flood risks to cities, while simultaneously supporting agricultural production and wildlife, and providing recreational and tourism benefits.
Building on recent reforms to improve cost recovery of water services operations to ensure that infrastructure built will be operational over its designed lifetime.
Second, by selecting investment pathways that reduce water risks at the least cost over time. Effectively co-ordinating infrastructure investments across levels of government can help maximise the value of investments. The OECD Recommendation of the Council on Effective Public Investment across Levels of Government could provide a reading template for Argentina on how to improve its federal arrangements for public investment (Box 2.9). The Netherlands’ long-standing Delta Programme is an example of how to maximise investment in infrastructure to reduce water risks related to climate change (Box 2.10). Fostering the enabling environment for investment will also require strengthening information systems to better evaluate the impacts of projects and the consequences on economic, social and environmental systems in the territory. Institutions should set up criteria and a methodology to conduct cost-benefit analysis, and ultimately a system that helps prioritise projects according to the benefit for the society. An example of an effective and efficient public investment system can be found in Chile where the National Investment System (SNI) rules and governs the country’s public investment process. It gathers the methodologies, norms and procedures that guide the formulation, execution and evaluation of the investment initiatives that postulate public funds (Box 2.11).
Third, by scaling up financing through better risk allocation across parties. Mobilising additional sources of capital (including private capital) requires better, more strategic use of public funds as well as adequate de-risking instruments to help share the remainder with the public sector (or commercial co-investors), or even take a certain level of risk on the financier’s own book. However, for such instruments to work risks associated with an investment should be transparent and quantifiable (OECD, 2019b). The existing 70% financing scheme to encourage provinces to develop projects within the NWP or the recent Fiscal Pact are good practices to build on. It could be a trigger to introduce obligations in relation to long-term, risk-based asset management, planning, operational and financing strategies at national and provincial level.
Box 2.9. OECD Recommendation of the Council on Effective Public Investment across Levels of Government
When done well, public investment can be a powerful tool to boost growth and provide a solid infrastructure for economic and social development as well as to leverage private investment. In contrast, poor investment choices or poor management of investments is a waste of resources. It erodes public trust and may hamper growth opportunities.
OECD member countries have acknowledged the importance of better governance for public investment by adopting the Recommendation of the Council on Effective Public Investment across Levels of Government in March 2014. The Recommendation groups 12 principles into 3 pillars which represent 3 systematic challenges for efficiently managing public investment: co-ordination challenges, subnational capacity challenges and challenges in framework conditions.
Figure 2.4. OECD Recommendation of the Council on Effective Public Investment across Levels of Government
The Recommendation’s implementation toolkit, which provides basic guidance, helps policy makers at all levels of government implement this principle in practice, providing concrete examples and best practices for countries at any stage of decentralisation.
Five years after its adoption, the OECD conducted a monitoring exercise to assess the implementation of the Recommendation by member and non-member countries that have adhered to it. The monitoring exercise shows that the practices of many adherents align with the Recommendation, in particular by developing integrated investment strategies and implemented mechanisms to co-ordinate public investments across levels of governments. However, there remains room for improvement in key areas of public investment, notably on the implementation of mechanisms to assess the long-term impact of public investment and on the mobilisation of private actors to finance investments at the subnational level
Source: OECD (2014), Recommendation of the Council on Effective Public Investment across Levels of Government, www.oecd.org/regional/regional-policy/Principles-Public-Investment.pdf; OECD (2019), Implementation Toolkit of the Recommendation of the Council on Effective Public Investment across Levels of Government, www.oecd.org/effective-public-investment-toolkit.
Box 2.10. The Netherlands’ Delta Plan: Water security strategic investment planning
The Delta Programme is a national programme to ensure water security in the Netherlands in the long term (horizon 100 years). The core objective is to protect the Netherlands from flooding while securing sufficient supply of freshwater. The programme is a nationwide effort that brings together central government, provincial and municipal authorities, and water authorities. It also involves civil society organisations, the business community and organisations with specialised water expertise. The Delta Programme is designed through an integrated policy analysis, called the Delta Model, that aims to manage key trade-offs between water resources management and the economy. The Delta model is a set of climate change scenarios and physical models that supports long-term analyses of the various decisions incorporated in the Delta Programme. The Delta Programme is one of the five elements of this long-term investment plan, which also includes the Delta Decisions, Delta Commissioner, Delta Fund and Delta Act.
A top-down and bottom-up process to shared responsibility in implementation
The success of the programme is grounded on an effective combination of bottom-up and top-down processes in its design, which ensures ownership and long-term commitment for implementation. At the regional level there is a bottom-up process to feed creative and innovative ideas. Regional steering committees involve local stakeholders to ensure that programme investments are consistent with local development plans. At the same time, at the top of the programme is the Delta Commissioner, who strategically guides the design and implementation of the programme (to ensure consistency with wider national development objectives), keeps tracks of progress and reports annually to parliament.
Adaptive Delta Management
The 2015 Delta Programme adopted an adaptive delta management approach. This innovation was triggered by two key facts. First, the Dutch society and economy could no longer afford to manage floods and droughts in a reactive manner. Second, existing planning approaches were insufficient due to growing uncertainties of climate change and socio-economic developments. The need to invest in expensive water-related infrastructure required an approach that supported decision making under uncertainty scenarios. Adaptive delta management seeks to ensure long-term development of coastal areas, while dealing with uncertainty. The 2015 programme also incorporated “Delta Decisions”, strategic actions related to flood risk management, freshwater supply and spatial adaptation, and sand replenishment along the coast. These actions were formalised through legislative and administrative agreements, and the commissioner must report yearly on progress made (as specified in the Delta Act).
Funding
In the 2019 Delta Programme “Adapting the Netherlands to Climate Change”, approximately EUR 7 billion are annually invested across levels of government. The Ministry of Infrastructure and Water, municipalities, and drinking water companies invest around EUR 1.4 billion each, while waterboards invest in the order of EUR 2.8 billion. The programme is also supported by the Delta Fund, which has a dedicated annual budget of more than EUR 1 billion until the end of 2028.
Source: Contribution by Monica A. Altamirano, peer reviewer, Deltares, the Netherlands’ institute for applied research in the field of water.
Box 2.11. Chile’s National Investment System
Chile’s National Investment System (SNI) is composed of four subsystems that define the investment process:
1. Ex ante evaluation subsystem: Set of rules, guidelines and procedures that defines a portfolio of socially profitable investment initiatives. This process is managed at the central level by the Social Evaluation Division, and at the regional level by the regional secretariats of social development.
2. Ex post evaluation subsystem: Analysis of the results achieved once the project starts operating. It focuses on measuring effective and efficient use of public resources. These analyses also feedback to the system in order to improve the ex ante evaluation methodologies
3. Budgetary formulation subsystem: Allocation of financial resources to sectoral, regional and state enterprises’ projects. It harmonises, regulates and co-ordinates information on the process of allocating funds. This is the responsibility of the Ministry of Finance.
4. Budget execution subsystem: Supervision of public expenditure and financing (regulated by the Public Sector Budgeting Law)
In parallel, the Ministry of Social Development provides investment information via the Integrated Project Bank on all SNI projects. This platform allows users to monitor the status of each project during the investment cycle (from pre-investment to execution). The Integrated Project Bank breaks down the information by region and municipality and by sector and thematic area. It also allows users to access information on the SNI process itself, for instance, the percentage of projects that obtain approval (investment initiatives), average number days that an initiative takes to be approved, etc.
Source: Ministry of Social Development in Chile (2019), “Sistema Nacional de Inversiones”, http://sni.ministeriodesarrollosocial.gob.cl/quienes-somos/descripcion-del-sni (consulted in May 2019).
Strengthening economic regulation
While acknowledging the subsidiary principle and current decentralised setting for water services management in Argentina, a national law for water supply and sanitation (or at least a set of guidelines) could support consistency of regulation across the country and foster good regulatory principles for drinking water and sanitation. Such an overarching legal framework or guidance could provide “national guidelines or principles for water and sanitation services”, such as universality of access, efficiency and economic sustainability, transparency, and social control. Each province, municipality or service provider could then tailor implementation to specific places under their purview.
A co-ordination platform convening the National Directorate on Drinking Water and Sanitation and the provincial departments in charge of water services policies could also foster vertical co-ordination and dialogue on best practices. This convening platform, which could be similar to the Federal Water Resources Council (COHIFE) for water services (or be a special commission within COHIFE itself) would offer a much needed venue for the definition and co-design of water supply and sanitation policy priorities, thus fostering consensus-sharing financial instruments and diffusing potential conflicts.
Routinely conducting sound and standardised investment assessments would help prioritise projects according to their cost-effectiveness and cost-beneficial contribution to the economy and society. This would also allow effectively channelling national funds to ensure the best use of fiscal resources and external funding. As such, the allocation of national funds based on ex ante assessment will help align local investment projects with national objectives, thus increasing the enforcement capacity of the national law.
Argentina should make the preparation of business plans (e.g. the existing planes de gestión y resultados) compulsory to obtain national funding. As business plans include planning and financial projections over a five-year period, they are essential tools to prioritise investment requiring national and provincial budget resources. They also establish control and conditional mechanisms for granting the aforementioned transfers considering the compliance with performance and efficiency indicators.
Corporate governance of utilities should ensure a clear separation of functions and responsibilities between utilities and local governments. This would help promote transparency and accountability, and avoid political capture. Good corporate culture of public water utilities is shaped by the chief executive and top management and involves moral, social and behavioural norms that inspire staff and managers to excel.
Current difficulties to progress on cost recovery should not only be approached through increases in tariff levels. Financial sustainability of water services crucially depends on revenues raised through tariffs (in addition to subsidies) to cover operation and maintenance costs. The politicisation of tariff setting is an important barrier to a more effective use of tariffs to promote financial sustainability. Making tariff regulation transparent and disclosing information and technical reports on the use of revenues would help build a more consensual understanding on the link between tariffs and sustainability of service provision. However, several other actions could be taken:
operators should seek efficiency gains to improve financial sustainability
developing a sound accounting system to enable an optimal accounting management and a documented tariff calculation
changes in the tariff structure (towards more progressive schemes) could also be explored in areas where metering level is high; the “canilla libre” system should be gradually phased out.
improve and strengthen the subsidies scheme to ensure vulnerable families have access to water services
Leveraging innovation and technology to manage water risks
Leveraging the potential of technology to drive efficiency, effectiveness and inclusiveness of water policy is also key to better manage water risks:
ICT systems and other cartographic applications can help better predict water risks and disasters, consequently helping water authorities to design and implement improved safety protocols. The Digital Cartography and Georeferenced Systems provide state-of-the-art computer tools in order to structure and manage national water information and to provide technical assistance to other levels of government in emergency water-environmental situations. The availability of more information, especially concerning water consumption, coincides with a growing demand for more information by the population. ICTs can help reduce consumption and pollution of water through more efficient control, measurement and irrigation systems, use of pesticides, and river basin and water disaster management.
Cutting-edge meteorological radars can help manage flood risks. “Double polarisation” radars can distinguish between hail and rain, the volume and state of water in suspension, and are able to estimate the amount of precipitation that will take place. They also report the speed and direction of the wind. Overall, these radars allow monitoring hydro-meteorological events from various angles, understanding their dynamic and provide more knowledge about the number of meteorological events taking place.
Nanotechnology offers cheaper, more effective, efficient and long-lasting alternatives to clean water resources and eliminates contaminating substances such as bacteria, virus, arsenic, mercury, pesticides and salt. It can save intensive labour, capital, land and energy in comparison to traditional treatment methods. More research is required in order to better determine the real impact of the use of nanotechnology for the treatment of water on the environment and on human health.
To benefit from all these technologies, Argentina should strengthen the public-private-academic knowledge triangle to make adequate use of the high-level expertise of the country to accelerate change.
References
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Note
← 1. Some regulatory agencies created in the 1990s include the Tripartite Entity of Sanitation Services Works (ETOSS) (1992), the Regulatory Entity of Sanitation Services of Santa Fe (1995), Regulatory Entity of Water and Sanitation Services of Tucuman (1995), Regulatory Entity of Public Services of Córdoba (2001), and Provincial Entity of Water and Sanitation Services of Mendoza (1995) (Akhmouch, 2009).