Water Management in Naucalpan: Institutional Framework and Action Situation

Water management in Naucalpan: institutional framework and action situation.

By: Lourdes Amaya

UAM Cuajimalpa

INTRODUCTION

Water properties as a CPR.

One of the most important contributions of Elinor Ostrom to economic theory has been the identification of Common Pool Resources (CPR), a specific kind of goods with two main characteristics:

1. It is difficult to exclude individuals from benefitting from the good. 2. An individual consumption of a unit of the good diminishes the benefit available for others.

For CPR’s “excluding potential appropriators or limiting appropriation rights of existing users is not trivial (but not necessarily impossible) and the yield of the resource system is subtractable” (Ostrom, Gardner and Walker, 1994: 4). In water case, excludability is possible, but it faces both technical and social constraints. From the technical point of view, for example, local management systems in Mexico do not have the capacities to efficiently monitor illegal connections. From the social point of view, the greater sanction of cutting the service to those who are not contributing to preserve water resources is not a socially acceptable decision, even less since United Nations has adopted the right to water.

The use of a CPR links different actors who share the resource in a permanent way, being sometimes able of defining by themselves the rules for this sharing. Ostrom (2000 [1990]) points out the three challenges faced by CPR users: 1) the provision (definition) of a set of institutions; 2) the problem of establishing credible commitments in using the resource; 3) the creation of mechanisms of mutual monitoring.

1) Provision (definition) of a set of institutions.

In the case of water management in Mexico, the set of institutions is already provided there are both a normative framework and an organizational structure created in order to govern water use. Nevertheless, in this case, the set of rules is not the result of a participation process, but it is part of a decentralization policy designed by national government in 1989. What is interesting is that this decentralization policy gave to local water authorities some new attributions and decision making capacities that resulted in the creation of a complex polycentric system for water management. That’s why it becomes important to think about water issues in terms of governance.

The concept of governance implies coordinated efforts of governmental and non-governmental actors in order to achieve a common goal or solving a public affair. It implies “authority and power arrangements inside which actors take decisions and frame policies that oblige individual and collective participants inside different territorial boundaries, such as states, districts and municipalities” (Hanf and Cansen cited by Castro, 2006, 243). Governance implies the necessity of cooperation between a variety of actors, a collective construction of problems, and a context favoring participation of all those actors in the implementation of policy measures. Nevertheless, it is not clear in which measure this participation could be extended to constitutive decisions, including definition of rules shaping action.

In the case of water management in Mexico, the decentralized institutional arrangement was not the result of social participation, but it was claimed that one of the main goals of the policy reform was to encourage users’ participation on water local systems. In any case, allowing the choice for local authorities between private or public management and considering the incorporation of users, decentralization opened the door to institutional diversity on water management. Water management is thus an example of the complex systems analyzed by Ostrom throughout her research work.

2) The problem of establishing credible commitments in using the resource.

In analyzing contracts, Williamson (1989) mentions that a credible commitment promotes exchanges and alliances between actors interested in preserving a relationship. For CPR case, it implies that appropriators assume the responsibility of sharing the resource and using it in a collective way. Ostrom (2000 [1990]) identifies two conditions for achieving this credible commitment: 1) that appropriators be sure the other members of the collectivity will assume it in the same measure; 2) that the cooperation strategy be perceived as the one giving the

2 highest net benefits on the long term. As a result, the short-term strategy of non- cooperation becomes less attractive. Ostrom (2000 [1990]) shows also that the fact of the appropriators being the ones defining this commitments increase their legitimacy, and as a consequence the institutional design would be more robust.

This credibility of commitments poses a real problem at the Mexican context, at least at the national level, being always possible to find differentiated situations at the local level. In an article about the institutional renewal of water sector in some developing countries, Meublat et Le Lourd (2001) outlined how fast Mexican authorities achieved the decentralizing reform, when the former president Salinas (1988-1994) published a new water law. This effectiveness in transforming the institutional design could be explained as a result of the centralized scheme prevailing at that moment, allowing a quick acceptation of new rules. As the control mechanisms of national government were stronger at the time, the commitments were stronger, local actors being interested in keeping budget support from national and state governments.

An important contradiction derived from this situation: the decentralized model was based on the openness and democratization of water systems, but the credibility of the commitments was based on the loyalty toward central or state governments. Thus the new institutional arrangement emerged in tension with the system surrounding it, which explains in a great measure the difficulties for constructing credible commitments between participants in the water sector.

3) The problem of mutual supervision between users and water managers.

The appropriators’ commitment is better enforced and more credible when it is supported by graduated sanctions on behalf of monitoring agents. In the experiences reviewed by Ostrom (2000 [1990]), this was also better achieved when those monitor agents were part of the community of appropriators. The last point is important since the fact of being appropriators themselves made the monitoring agents more interested in detecting and sanctioning the non-respect of the rules.

In the specific case of water use, it is generally recognized that the difficulties of its provision could only be overcome through a vision of shared responsibility. According to the World Bank, Mexican National Water Law “establishes two institutional paths: user vis-à-vis other users (through users’ associations) and users vis-à-vis the water authority” (Banco Mundial, 2006: 50). However, only the National Water Commission (Comisión Nacional del Agua, Conagua) has supervision and sanction attributions concerning water use, users’

3 participation through different associations was limited. Consequently, supervision goes only in one sense: from the authority to the users.

At the local level, municipal authorities are responsible of water provision and hence in charge of supervising its management, particularly in the case of a concessionary contract with a private firm. Control and supervision mechanisms for water use are defined in each local water law. Sanctions are mainly conceived to punish users failing to pay the service which could be applied either by the municipal authority or by the private firm, in case of concession. Once again, monitoring is only considered from the authority towards the civil society, is not a mutual exercise; moreover, sanctions for misuse of the resource are rare.

After this general review of how the three CPR dilemmas manifest in Mexican water sector our hypothesis is that the decentralized reform has not been enough to solve water issues, mainly because the new institutional design has not taken as a point of depart the social context in Mexico. Our main point in this paper will be the reflection about the design principles proposed by Ostrom (2000 [1990]) and the feasibility of their adoption for water management in Mexico, using the case of Naucalpan water utility.

ACTION SITUATION IN WATER MANAGEMENT: THE CASE OF NAUCALPAN, STATE OF MEXICO

For water management, Mexican territory is divided in thirteen hydrological- administrative regions, the municipality of Naucalpan belonging to Region XIII, Valley of Mexico Waters (Aguas del Valle de México). It is the most populated region in the country, since it includes Mexico City, and the states of Hidalgo, México and Tlaxcala.

Although Naucalpan has several water sources (rivers, basins and waterholes), the uncontrolled growth of its population has obliged the authorities to extract great quantities of groundwater in order to satisfy the users’ demand. The urban proportion of Naucalpan territory has increased because an uncontrolled population growth (Graphic 1).

Graphic 1

Population growth in Naucalpan (1950‐2010)

The hydraulic infrastructure in Naucalpan has evolved in response to the urban growth with irregular settlements being the main management problem. In general, the quality of water service is considered good, while at the same time it is recognized that the infrastructure presents lack of maintenance and that the users’ census is incomplete. Naucalpan receives 3,150 liters of water per second (lps), but only 28% (882 lps) are obtained through sources located in its territory; the rest (72%) comes from sources outside Naucalpan. The most important external source is the Lerma-Cutzamala system, providing 66.6% (2,098 lps) followed by the Madin barrage from which 5.4% of Naucalpan’s water is obtained (170 lps). Even if the service has a coverage capacity of 98.5%, the main difficulty for urban water management is the provision of water for new users settled in recently constructed set of housings.

The normative framework for water management in Naucalpan is given by:

1. At the national level, Mexican Political Constitution (articles 27 and 115) and the National Water Law (Ley de Aguas Nacionales).

2. At the state level, Water Law of the State of Mexico (Ley de Agua del Estado de México) and the Organic Municipal Law for the State of Mexico (Ley Orgánica Municipal del Estado de México). 3. At the municipal level, the law creating the water public utility called OAPAS (Organismo de Agua Potable, Alcantarillado y Saneamiento, Drinking water, sewerage and sanitation utility).

Article 27 of the Mexican Constitution establishes rules for extraction and use of national waters, while the article 115 transfers the responsibility of urban water distribution from national to municipal authorities. As for the state law, after a general review of its 153 articles according to the classification of rules proposed by Ostrom (2005) we obtained the following information (Table 1).

Table 1 RULES CONTAINED IN THE LOCAL WATER LAW State of Mexico Type of rule Percentage Boundary rule 4,57 Position rule 9,80 Choice rule 26,79 Information rule 3,26 Aggregation rule 5,88 Scope rule 6,53 Pay-off rule 5,88 Elaborated by: Lourdes Amaya

At the municipal level, the law creating the public water utility (OAPAS) establishes that it is an autonomous agency for water management in the municipality of Naucalpan de Juárez. Inside the organization, decisions are taken by an administration board which includes representation of civil society, industrial and commercial users, and a representative of the municipality. Attributions of OAPAS include:

 Definition of strategies and parameters for water management in Naucalpan.  Proposal capacity for making adjustments to the local regulation of OAPAS’ activities.  Authorization or removal of OAPAS’ Director.  Authorization of the organic structure needed to accomplish the tasks charged to OAPAS.

 Acceptance and revision of the annual reports presented by OAPAS’ Director.

The Director of OAPAS is appointed by the municipal president. The Director is charged of managing and controlling the administrative units composing the public water utility, He is also responsible of proposing OAPAS annual budget and presenting reports to the administration board.

According to the statements of several public servants working in OAPAS, the most important difficulties faced by the local water system are:

1. An uncontrolled growth of population in irregular settlements. 2. Low fares and a deficient charging system. 3. Indebtedness of OAPAS towards the State Water Commission. 4. Lack of financial resources and corruption. 5. Lack of clear strategies in order to manage the increasing water demand. 6. A complicated relationship with the union.

We will discuss the action situation of water management in Naucalpan stressing the weakness of the system concerning information, control, the relationship between costs and benefits and the potential outcomes.

Participants in Naucalpan water system are organized according to the level of government to which they belong, as is represented in Figure 1. At the national level, we have the National Water Commission, which defines the general guidelines for water use policy; at the state level we have the State commission of water, sewerage and sanitation, which has the mission of planning, giving maintenance, operating and managing water services in case of lack of a municipal water utility. The State Commission has also the responsibility of encouraging social participation in water preservation.

Figure 1 Participants in Naucalpan water management system

NATIONAL LEVEL STATE LEVEL MPAL. LEVEL

National Water Commission State Control Bureau

State Commission of water, sewerage and sanitation Municipal president

OAPAS (Water Public utility) Union Users

Even if they could be considered as a very important participant in the water system, urban users are not integrated to it. His position is recognized in the institutional framework as it is clearly stated who should be considered as a water user. However, users’ only role in the water system is to contribute through paying the water fees they do not have any other attribution, there is also a lack of communication channels and mechanisms in order to make feasible the accountability of public water servants toward citizens. Moreover, even if the state law establishes that users must be represented in OAPAS administration board, according to OAPAS’ Director, the weakness of representation mechanisms has resulted in the selection of representatives who have a close relationship with the municipal president.

Concerning information issues, reflecting the lack of rules for transmitting data about the water service, the information about OAPAS’ activities is limited to a bureau of the government of the State of Mexico which was not created in order to regulate water use but to monitor the use of public budget by all the local public agencies. Water public servants are not obliged to inform the citizens in any other, more direct way. According to OAPAS’ Director, the water utility reports directly to Conagua only about the activities included in some of the programs financed by

8 the national water agency, concerning the financing of infrastructure building. As far as the information provided to users, it has to do with general notifications about the service or specific notices about their particular situation on consumption and payment. On the other way around, users provide OAPAS of information in the case of water leaks, but there is not a direct communication channel, the notification is made through representatives located in each neighborhood.

Concerning control issues, the mechanisms of supervision are concentrated in the state government, through different offices. Control measures on behalf of state and national government focus in budgetary issues. Although the state law attributes monitoring functions for both state and municipal authorities, the scope of the monitoring attributions for each government level is not clearly established. This supervision concerns: conditions of facilities, measurement of connections, detection of illegal connections, the capacity of verifying that concessions are working appropriately, the capacity of verifying that the water measurers are working. Coordination between levels of government is conceived only in case of natural disasters, in order to protect or help damaged population.

The definition of costs and benefits represents another weak point of Naucalpan’s water management system. Sanction capacities are not clearly attributed, once again it is mentioned that both state and municipal authorities could apply fines to offenders. In real life, the state government applies a close control of OAPAS, even having charged it with fines in case of unfinished infrastructure or in case of mistakes in charging the users. Gradual sanctions for users are established, but once again, the authority responsible of applying them is not clearly defined. Public servants working at OAPAS recognize a serious problem of measurement of distributed water, which results in a 35% of non- charged water. This situation shows the weak monitoring capacity of the public utility and consequently, the low costs of breaking the rules.

FINAL REFLECTIONS

Even if the case of Naucalpan deserves a deeper analysis of the institutional framework and the vividness of rules, some finals reflections can be proposed in this paper.

• In Naucalpan, there is not a clear match between the formal institutional framework and the rules in action. Even if this situation could be considered as normal, since formal institutions are only a part of the institutional framework that shapes the behavior of a collectivity, the mismatch should be

analyzed in light of the goals of the decentralization model for water services.

• Even if the problem of institutional provision is solved, it is not enough to generate a cooperation strategy. Not only de definition of formal rules is incomplete, but it seems that the delta factors do not favor either a cooperation strategy.

• The strong control on behalf of the state government toward the municipal water utility does not facilitate the construction of credible commitments. OAPAS is perceived by users as a weak figure, with limited capacity to sanction those who break the rules. Consequently, non-cooperation is a valid strategy for users.

• The problem of mutual supervision persists, since control mechanisms work only in one way. Authorities have supervision capacities and mechanisms, but they are not completed by accountability mechanisms to empower citizens. There is no mutual supervision, but a monitoring capacity concentrated in the hands of some actors.

A deeper analysis is needed in order to overcome the difficulties to generate cooperation, an important issue given the features of the hydrological region where Naucalpan is located. Cooperation should be encouraged before a bigger water crisis emerges in this region.

REFERENCES

Castro, José Esteban et al. (2006). Desarrollo institucional y procesos políticos, Documentos y resultados del IV Foro Mundial del Agua, CD Rom, CNA.

Ostrom, Elinor (2005). Understanding institutional diversity, Princeton University Press, Princeton and Oxford.

Ostrom, Elinor (2000). El gobierno de los bienes comunes. FCE, CRIM, UNAM, México.

Ostrom, Gardner and Walker (1994). Rules, games and common-pool resources, The University of Michigan Press, Michigan.

World Bank (2006). Gestión de recursos hídricos en México: el papel del PADUA en la sostenibilidad hídrica y el desarrollo rural. Vol. 1.

Ley de Agua del Estado de México.

Ley de Aguas Nacionales.

Ley Orgánica Municipal del Estado de México.

OAPAS, decreto de creación.