Since Chile is projected to experience “extremely high water stress” by 2040,[1] as indicated by the World Resources Institute, seawater desalination stands out as an effective solution to address water scarcity. However, the current absence of a clear legal framework to accommodate this process poses uncertainty for the growth of this industry, which, until now, has mainly been led by the mining sector. This raises many questions and uncertainties when developing and executing desalination projects.
Current situation in Chile
In Chile, the agriculture sector represents around 72% of freshwater consumption and the mining sector around 4%. However, the process of obtaining desalinated water has advanced steadily through projects mainly linked to the mining sector. For example, between 2010 and 2019, the use of seawater increased 17 fold.[2]
Currently, there are 24 desalination plants in Chile producing more than 8,500 litres per second (l/s), with the mining industry operating 75% of such plants.[3] Most of these plants have been established under private initiatives and for entirely private purposes. A significant number of desalination projects are at different stages of completion in terms of permits and authorizations, and it is expected that by the year 2030 Chile will double its current production capacity.
With the exception of the northern part of the country and the mining industry, the desalinated water production industry has not gained sufficient strength, mainly due to the slow processing of the necessary permits (which, on average, takes over six years since initial decision to begin a project) and the high costs of both infrastructure and operating works, mainly linked to the energy required for the reverse osmosis process (costs that would be reflected in the price of the water paid by the customer).
Legal framework
In the absence of specific standards regulating the desalination industry, the regulation of these projects today are centred around three primary issues:
1) Legal regime of desalinated water or desalination product
Under the Chilean civil law regime, seawater is considered a “national good of public use.” However, in Chile, at the regulatory level, it is not clear whether this designation extends to desalinated water, and there are legal interpretations that allow one to reasonably argue that the loss of salinity of seawater causes its denaturation and, therefore, ownership corresponds to the private parties that carry out such process.
In comparison, other jurisdictions have altered this designation by means of legal provisions or jurisprudential precedents. For example, in Spain, public ownership of desalinated water has been maintained by law since 2005. In Australia and Israel, desalination facilities are considered “national infrastructure.”
2) Right to capture seawater for use in the desalination process
In Chile, unlike inland waters (to which the Water Code, which regulates the right to use fresh water supplies), maritime waters and the coastal edge lack a unitary regulation, thus creating uncertainty as to which legal title or authorization is required for its use, extraction, treatment and commercialization.
As Chile’s beaches and the adjacent sea are a “national asset of public use,” adherence to one of the administrative titles regulated by the country’s Law on Maritime Concessions is mandatory. This approach has been the norm for developing desalination projects, posing a challenge due to the time and complexities involved with obtaining these titles.
3) Environmental impact
Desalination plants are not currently categorized as projects or activities susceptible to cause environmental impacts, which consequently must be submitted to the Environmental Impact Assessment System (SEIA) to obtain an Environmental Qualification Resolution (RCA). In general, they are evaluated as the accessory components of larger projects, such as mining projects or drinking water systems, that must be evaluated in the SEIA.
The main environmental impacts of desalination plants are:
- The influence of brine on the physicochemical attributes of the receiving ecosystems (increase in salinity and temperature);
- The potential impact on marine fauna and flora through the suction of seawater; and
- Emission of pollutants, including chlorine and other chemicals used in the process.
Regarding the influence of brine, in comparative terms, Chile has a very important geographical advantage, since it has one of the steepest and most energetic coastlines on the planet. Brine can be dumped on the coast and fall rapidly to the depths without representing a significant environmental impact (the opposite occurs in the Mediterranean Sea, for example).
Bills in process
In recent years, several bills have been presented and discussed in the Chilean Congress which attempt to specifically regulate the previously mentioned topics, proposing, among other things, to establish desalinated water as a “National Good for Public Use” and the creation of a “National Desalination Strategy,” with the purpose of establishing guidelines and priorities for the use of seawater and the installation of desalination plants.
In relation to mining activity, various bills seek to establish the mandatory incorporation of desalinated water in large-scale mining projects with higher water requirements. The bill that has made the most legislative progress proposes a modification in the Mining Code that includes an obligation that all mining companies must incorporate seawater desalination into production processes whose water extraction exceeds 150 l/s (Bulletin 9.185-08).
On the other hand, on November 15, 2023, an important milestone in the process of establishing a regulatory framework for the desalination industry was reached with the Senate processing a bill (Bulletin 16.364-09)[4] which modifies a series of norms that would allow the State (through the Ministry of Public Works) to develop water infrastructure and desalination projects, with the purpose of using the processed water for the fulfilment of the human subsistence and irrigation functions.
Although this public policy signifies a significant advancement in the developing regulatory framework, we believe the policy should not focus authority solely to those specific uses of desalinated water. Instead, applying a broader authority to develop such projects across various economic sectors would be positive for the industry as a whole.
Conclusion
The recent drought has demonstrated Chile’s vulnerability to the water crisis, and desalination is a sustainable, efficient and accessible alternative to address this issue. Chile’s mining sector has been the driving force of the desalination industry and the main developer of these types of projects. Notwithstanding the positive effects of desalination, it is necessary for these initiatives to be expanded to other sectors of the economy.
In particular, it is imperative to define the legal status of desalinated water and to give priority and urgency to the legal modifications required for a solid legal framework, which will allow for the development of the industry through both public infrastructure projects and private investment (or mixed initiatives).
Although there have been advances and legislative initiatives in this direction, Chile lags behind other comparable countries. If Chile capitalizes on its geographical advantages and approves the necessary legal reforms, it is likely that, in the medium term, the use of continental water will significantly decrease with the widespread use of desalinated water in all types of sectors of the economy. This, in turn, will contribute significantly to the sustainable development of the country as whole.
For more information on this topic please contact the author; José Domingo Villanueva.
[1] www.wri.org/insights/ranking-worlds-most-water-stressed-countries-2040
[2] ACADES presentation at Dentons Chile, October 2023.
[3] BHP’s Minera Escondida Desalination Plant produces 4,000 l/s (which represents approximately 50% of Chile’s production).
[4] www.camara.cl/legislacion/ProyectosDeLey/informes.aspx?prmID=16925&prmBOLETIN=16364-09
