copy the linklink copied!Chapter 2. Multi-level governance of water management in Argentina

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.

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.

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Figure 2.1. Institutional mapping for water resources management in Argentina

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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).

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.

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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).

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Figure 2.3. Dimensions of water governance

1. 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. 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. 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).

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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. 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. 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. 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.

Efficiency of water governance

Trust and engagement

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).

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).

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).

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.

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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.

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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.

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.