Identifier
Created
Classification
Origin
06SANSALVADOR1887
2006-07-28 16:45:00
UNCLASSIFIED
Embassy San Salvador
Cable title:  

THE GOES PUSHES FOR A CHANGE IN WATER LEGISLATION

Tags:  ECON ENRG EAGR SENV ES 
pdf how-to read a cable
VZCZCXYZ0058
RR RUEHWEB

DE RUEHSN #1887/01 2091645
ZNR UUUUU ZZH
R 281645Z JUL 06
FM AMEMBASSY SAN SALVADOR
TO SECSTATE WASHDC 3245
UNCLAS SAN SALVADOR 001887 

SIPDIS

INFO DEPT EPA WASHDC

SIPDIS

E.O. 12958: N/A
TAGS: ECON ENRG EAGR SENV ES
SUBJECT: THE GOES PUSHES FOR A CHANGE IN WATER LEGISLATION

UNCLAS SAN SALVADOR 001887

SIPDIS

INFO DEPT EPA WASHDC

SIPDIS

E.O. 12958: N/A
TAGS: ECON ENRG EAGR SENV ES
SUBJECT: THE GOES PUSHES FOR A CHANGE IN WATER LEGISLATION


1. SUMMARY: The Salvadoran Ministry of Environment presented to
Embassy officials a review of a draft Water Law to be submitted to
the Assembly later this year. This new law would represent an
important change in the management of water in El Salvador. The
government-owned water utility (ANDA) is currently responsible for
regulating and distributing water in the entire country. The new
legislation will create an independent water regulator (CONAGUA),
and ANDA will remain only as a distributor for certain areas. The
law will include charges for the extraction of raw water and allows
for concessions and permits for water use. The Salvadoran
Ecological Unit (UNES),an environmental NGO also presented a Water
Law proposal to the Assembly. The spirit of their proposal focuses
on the conservation of water resources and limits any kind of
privatization. END SUMMARY.

--------------
GOES WATER LAW PROPOSAL
--------------


2. The GOES through the Ministry of the Environment (MARN) has been
working for several months on a draft Water Law that would
significantly change the current water management model for El
Salvador. MARN Executive Director Roberto Bara told Econ Officer
that the Water Law would be the most progressive and modern in Latin
America, establishing institutions for better and more integrated
management of water resources. The Water Law will establish
guidance for the quantity and quality of water use between the
central government, industry, and the public. It is important to
note that the Water Law will not regulate water services such as
drinking water, agricultural irrigation, electricity generation, or
industrial and tourism use; a separate legal framework must be
developed to complement the new law. Currently there are several
water laws serving different institutions (CEL, MAG, ANDA) which
cause confusion and contradiction. ANDA currently acts as a
distributor rather than a regulator.


3. The Law envisions the creation of several institutions to manage
water on a country-wide basis. The GOES will create an autonomous
body, the National Water Commission (CONAGUA),to enforce the new
Water Law. CONAGUA will be responsible for the planning, control,

facilitation and supervision of water management. CONAGUA will
charge fees for the use of water, depending on the type of water and
end use. These fees will be paid into a water fund, FOAGUA, and be
used for administrative purposes, as well as to pay local and
national, public and private entities to carry out water management,
conservation, and treatment. A system of sanctions, fines, and
incentives will also be used to promote conservation. The law will
favor incentives over sanctions and these will be financed through
FOAGUA and/or through the concession process. CONAGUA will have the
ultimate responsibility to investigate, resolve, and sanction/reward
all water use in the country.


4. CONAGUA will have a presence country-wide through decentralized
operations in three Watershed Zonal Organizations, each comprised of
a Technical Committee and Watershed Committees. The Watershed
Committees will supervise the water usage and compliance with
regulations (to be drafted) for water service. The law also
envisions inclusion of End User Organizations in the Watershed
Committees, composed of private organizations such as NGOs that will
scrutinize the control and supervision of water distribution within
their area of influence. Issues relating to water resources from
rivers and water tables shared with other countries will be defined
through regulations to this law. Comment. An issue here is the
centralized water fund FOAGUA. Businesses may be reluctant to pay
into a fund that may or may not address specific conservation needs
related to the water source they are using. End Comment.


5. The President of CONAGUA will be appointed by the President of El
Salvador. CONAGUA will have representation from the Ministries of
Governance, Finance, Economy, Agriculture and Livestock, Public
Health, Public Works, Environment, the Superintendent of
Telecommunications and Electricity, the office of the Technical
Secretary to the President and a representative for each of the

SIPDIS
three watershed zones in the country.


6. The proposed law includes a series of instruments that will
enable CONAGUA to plan at a national and regional level, create
water inventories, and establish information systems. Through the
Law, the GOES commits to public participation and to respond to
civil society through the End User Organizations. The GOES has not
yet presented their proposal to the Legislative Assembly and it is
very likely they will not do so until late in the year; first they
have to finish the discussions with state owned power generation
company, CEL, regarding the pricing policy for the water used in
electricity generation. Comment. It is very unlikely CEL is going
to allow a charge for the water used in electricity generation,
saying it could lead to an increase in the end user electricity
tariffs. End Comment.


7. Government at the national and local level will be granted rights
to use water resources through assignments, subject to periodic
review by CONAGUA. The duration of these assignments is still under

review. Private use of water resources to organizations and
companies will be granted through concession contracts of a maximum
duration of 30 years. These contracts will clearly define use and
conservation responsibilities and will require the posting of
performance bonds and be subject to audits. Water use permits will
be granted to individuals for uses of no more than five years.
Block titling will be carried out for existing users who will be
placed under one of the three water grant mechanisms. All
assignments, concessions, and permits will be granted, managed, and
controlled by CONAGUA.


--------------
SALVADORAN ECOLOGICAL UNIT PROPOSAL
--------------


8. The Salvadoran Ecological Unit (UNES),a left wing NGO, presented
an alternative Water Law proposal to the Legislative Assembly for
discussion and approval. The spirit of their proposal is to limit
any kind of privatization of water services, and focuses on the
conservation of water. Contrary to the GOES proposal, their
proposal includes regulation of water services.


9. UNES proposes the creation of a Water Commission similar to the
GOES proposal, but the election of the members would be made by the
Legislative Assembly from a list of experts proposed by local
environmental NGOs. Among the responsibilities of this Commission
would be water planning, regulation, supervision, conservation and
protection. The UNES proposal delves further into environmental
protection of water sources, and limits the use of water for
industrial, tourism, and electrical generation purposes.


10. The proposal presented by UNES mandates the creation of a
National Water Policy that will provide general guidance for
sustainable and equitable usage of water, sufficient water supply,
and prioritize water used to satisfy basic human needs. The UNES
proposal regulates water services such as household consumption,
supply for settlements, ecosystem maintenance, agricultural use,
electrical generation, industrial usage and tourism. The proposal
states that the Government will be the only provider of potable
water in the country and explicitly states the service will not be
privatized under any circumstances. The proposal also says the
government-owned electric utility (CEL) will only be responsible for
electricity generation with water resources, prohibiting any type of
concession or privatization of the facilities. The proposal also
places a 10-year moratorium on further dam building on the Lempa
River to avoid further ecological damage.


11. Comment. When the MARN proposal is presented to the Assembly
there will likely be vigorous public debate over the issues of
concessions and permitting, which are seen as privatization by the
left. MARN officials do not think this will be a deal breaker, as
the UNES proposal has not generated any strong discussion about
privatization, and MARN believes their draft will be approved, even
though there may be some hue and cry from the left. More critical
to the passage of the bill will be the acceptance by the business
community that they may be charged by CONAGUA for water that is
currently free, such as drinking water pumped from wells by ANDA.
Said charges will begin to place a value on water, which should lead
to more responsible use. It is very unlikely that the proposal
presented by UNES will be approved by the Legislative Assembly.
Even though they have the support of the main opposition party, the
FMLN, they will not get support from the moderate or center right
parties. End Comment.

Barclay