Reciprocal Water Agreements

Wilson Maldonado watched his cattle die one by one. The 2010 Bolivian dry season was the worst in Wilson’s memory, killing 200 cows in Villamontes and countless others across the Chaco. But it was not the first long drought. In 2004 more than 50,000 people were affected in Gutierrez, where more than 90 percent of the corn crop failed. In Yumao, on the southern bank of the Rio Grande—Bolivia’s largest river—women had to walk 4 km to collect water. In Gutierrez 20 communities had no drinking water, and even Villamontes town ran out. Wilson looked at the clouds gathering on the Sierra del Aguarague and wondered, with mountains so close, how the Chaco could be so dry. Across Latin America, the watersheds that could provide users with clean water often have to support additional and sometimes conflicting functions, such as agriculture and forestry. In many places, existing regulatory frameworks have proved unable to reconcile these conflicting needs.

Upper watershed farmers often have no economic alternative other than to deforest their land for agriculture. Upstream Water Factories are thus destroyed—often for a pittance—and cows enter streambeds to drink, forage, urinate and defecate. The subsistence agriculture of upper watershed farmers is unproductive and susceptible to climate change. Downstream municipal water sources are contaminated, children miss school with diarrhea, sedimentation blocks pipes and dams, and waterholes supporting farmers like Wilson Maldonado dry up. In 2003 in Los Negros, Bolivia, Natura Foundation helped initiate a new incentive based water conservation model: Reciprocal Water Agreements (RWA). RWA are based on the twin pillars that 1) protecting upstream forests will help maintain water supplies in quantity and quality, and 2) downstream water users need to contribute to such forest protection. Unlike the conceptually similar but classical economics based “payments for environmental services” (PES), the key attributes of RWA are the precautionary principle and local institution building and alignment.

In Bolivia, around 200,000 water-users have signed agreements with 3,200 upstream landowners to conserve 180,000 ha of water-producing forests. These reciprocity-based conservation agreements are in return for alternative development projects such drip irrigation, fruit and honey production and improved cattle management.

In a RWA in Bolivia’s El Torno Municipality, Carlos and Teodisia Calani are conserving 38 ha of their forest in the buffer zone of the Amboro National Park. In return, downstream water users have helped them build a two-room brick house. After years of living in a shack with adobe walls and a motacú palm roof, their new home is nearly ready. “We are grateful for this new house that we have earned for being a part of watershared” says Teodisia.

Bolivia’s Department of Tarija, covers an area about the size of Switzerland. The Governor, Adrian Oliva, is working to protect Tarija city’s water supply to include a series of Protected Areas linking conservation targets with development goals, though new water sanctuaries and reciprocal watershed agreements.

Five steps to successfully implement a RWA

Step 1: Verify the presence of the basic conditions for RWA

Implementing a RWA requires certain pre-existing conditions. These conditions are biophysical, economic, social and institutional. For example, within the watershed there must be upstream and downstream stakeholders connected within the same hydrological system, a minimally supportive social environment, and the economic possibility of transfers of resources from downstream to upstream that at least begin to cover the opportunity costs of conservation. For instance, in areas where the advance of the agricultural frontier is rapid or land values are very high, a RWA may not be appropriate. Similarly, there must be credible pre-existing institutions in the area: otherwise it will take a long time to build an appropriate institutional structure. Potential RWA implementers must verify that these preconditions exist, and although the situation will not be exactly the same in all cases, a basic analysis of the existing conditions will help assess if there is a potential for implementing a RWA or not.

Step 2: Create the local institutional architecture: a three way fund between the facilitator (usually an NGO) the municipal government and the local water provider

Once verified that implementing a RWA may be feasible, the next step is to build the institutional architecture that will implement the RWA. While the institutional possibilities are large, it is important to target not only the local stakeholders that are mandated to conserve the natural resources, such as municipal governments, but also those institutions that are close to the citizens and have the possibility of frequently reach them. For example because water cooperatives or water companies reach the citizens every month and have a mechanism to enforce payments, these institutions are ideal RWA leaders. It is also critical to work with institutions that are locally credible and reliable. Indeed, it is the locally led institutions that must take the ultimate responsibility for watershed protection. Such requirements are important preconditions to consolidate a RWA, both institutionally and financially, but may be hard to find. Starting to implement an RWA with the few stakeholders that are ready and have an existing institutional structure is far preferable to waiting for all the stakeholders to be ready. Once the RWA is functioning other institutions can be invited to join.

Step 3: Ensure financial and institutional sustainability

Local water providers usually play the key role in the implementation of the municipal watershed conservation funds: they manage the funds on a day-to-day basis, often in conjunction with irrigators’ associations. It is the water cooperative technicians who, along with a facilitator from Natura lead the fieldwork, and eventually become the local project leaders. Following the RWA model that developed in Bolivia, water cooperatives and irrigator associations will both make initial contributions to the funds, but also, once water volumes are more stable, will continue to contribute over the long term. Such local investments from environmental service users will provide the financial engine for long-term conservation and development in each municipality. Across the current portfolio of RWA-based water funds, almost 80% of the water funds are financed from municipal governments and water users associations.

Step 4: Present and sign contracts with upstream water service providers

Once there are resources in the local fund RWA implementers can go to the upstream communities to offer the program. RWA are usually offered to all community members, and for those landowners who volunteer to join the scheme, their properties are mapped, and their conservation areas described. With the information of how many hectares of forest each family is interested in conserving, an incentive package is agreed. In many cases, it is feasible for the upstream landowners to receive their incentive based-package in seven days, after signing an individual agreement where the conservation commitment is formalized. The incentive packages that are almost always development initiatives, such as beehives to produce honey, barbed wire, fruit seedlings, water tanks, drip irrigation systems, etc. These reciprocity agreements simultaneously mitigate and adapt to climate change, provide watershed protection and help with the economic development of the upstream communities.

Step 5: Monitor and evaluate results

A RWA doesn’t end with the delivery of incentives: the next step is to evaluate the compliance of the signed agreement. Every year, the upstream RWA beneficiary is monitored to assess if she or he complied with the terms of the agreement. The evaluation can be a visit to the conservation area or through geographic information system (GIS). The support from downstream water users to upstream landowners is conditional to the agreement’s compliance. Therefore, if the landowner has fulfilled their conservation responsibilities, a new compensation package will be delivered. To the extent that the beneficiary meets the terms of the agreement, he will continue to receive the incentives for the duration of the agreement. Failure to comply requires that the conservation incentive package (or its value in cash) must be returned to the community. This step is very important to: 1) show the upstream landowners who conserve land that their effort is rewarded, 2) give a strong signals that the fulfillment of the agreements are been evaluated, 3) build trust between downstream and upstream stakeholders. Nevertheless, all the rules of evaluation and sanctions for non-compliance must be designed for and with local stakeholders. Severity of sanctions should be imposed according to the level of incompliance and must be fair.

The history of RWA in the Valleys of Bolivia