CHILE: Chilean Town Withers in Free Market for Water

Pipelines to mines siphon water from some of the driest towns on earth, in northern Chile. 

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

Tomas Munita for The New York Times

Water for Quillagua's residents is trucked in. They say mining companies have polluted their river and bought up water rights.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The New York Times

Quillagua has a record as the driest place on earth.

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

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

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

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

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

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

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

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

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

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

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

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