Theme 3: Irrigation Management Transfer: 
Legal Issues

Launching date: 17 September

Theme Moderators: Stefano Burchi, Ilja Betlem (FAO, Development Law Service)

This note introduces Theme 3 of the International Email Conference on Irrigation Management Transfer. Theme 3 is about legal issues associated with irrigation management transfer (IMT). The paper presents an outline of some of the main legal questions, with a view to stimulate further contributions from the participants. The theme is divided into three main topics. Topic 1 addresses the legal framework for transfer of irrigation management, Topic 2 discusses institutional issues about Water Users’ Associations (WUAs). Topic 3 discusses water rights.

To view concise information about the legislative framework for WUAs in a large number of countries, participants are invited to view the WUA Legislation Country Profiles that are posted at the following web address: www.fao.org./landandwater/aglw/waterinstitutions/legcase.stm

KEY QUESTIONS

Topic 1 Legal Framework for Irrigation Management Transfer

• Should the establishment of WUAs be based on public law or private law?
• Should full ownership of irrigation infrastructure be handed over to WUAs?
• Under what kind of legal instrument (contract, agreement, act of parliament, regulation) should management transfer be effected?
• What kind of legal underpinning is needed to guarantee reliable supply of water to the WUA by the government (or entity providing bulk water supply)?
• How can legally based contracts be enforced effectively?

Topic 2 Water User Associations

• Should WUAs have full legal status? Should they be private or public sector entities?
• What should be the eligibility criteria for membership in WUAs?
• How would accountability and transparency be best incorporated into the internal structure and functioning of WUAs? What rights and duties should exist for members?
• How can the WUA effectively enforce its rules on members?

Topic 3 Water Rights

• Should water rights be granted to a collective entity, such as a WUA?
• What should be the procedures to apply for a water right?
• What criteria should the government be required to use in granting water rights?
• Do water rights create an obligation on the government to ensure water supply to the WUA in agreed quantities? What criteria for adjusting allocations should apply at times of reduced water supply (e.g., drought)?
• What kinds of obligations should be attached to which water right holders? (e.g. types and timing of water use, infrastructure improvements, etc.)?
• Should water rights holders be given compensation in case water is not available other than through force majeure?
• Are rules and procedures for dispute resolution available and what are they?
• Do WUAs have access to the water allocation process above the irrigation system level (e.g. at river basin or other appropriate level)? Should they? How so?

Introduction

1. The intent of IMT is to create a framework of accountability and transparency for irrigation management, in which the irrigation administration and the farmers have clear rights and obligations. In such a framework, it is hoped that the farmers, organised in WUAs, will have clear and enforceable entitlements to water, irrigated land and irrigation infrastructure. On the other hand, the irrigation agency would probably have a clearly defined role as a provider of support services, possibly a provider of bulk water supplies and as the entity responsible for regulating the water sector.

2. A legal framework is normally based on an overall policy of the government. A policy is a statement of government goals, objectives and basic strategy. Policy per se is never binding in a legal sense - it may be so in a political sense or other, but it does not become the source of legal obligations and rights until it translates into "legislation". It is normally only binding on the government apparatus, not society at large. The legal framework is constructed from a combination of different kinds of legal issuances, such as ministerial or presidential decrees, cabinet regulations, acts of parliament, basic law, etc. These differ within a country-specific hierarchy of legal status. They differ in how binding they are on the specific ministries, the national government as a whole, regional and local governments and society at large. In developing a legal framework for IMT, policy makers and involved stakeholders need to determine what are the appropriate kinds of legal issuances for different aspects of the reform programme. The main criteria for specifying appropriate issuances are how fundamental and broad is the scope of change to be adopted, to what extent it cuts across agencies and levels of government and to what extent it imposes new obligations on, or grants new rights to, civil society.

Topic 1: Legal Framework for Irrigation Management Transfer

3. Two of the main questions to be answered about IMT are, What management responsibilities should be transferred?, and How should this be effected through legal instruments? An important future role for the government will be to define rules regarding dispute resolution between WUAs, other water use sectors and the irrigation administration. This regulatory role of government is essential to ensure that there is accountability and transparency among all parties after IMT.

4. What should the relationship be between the government and WUAs after IMT? Since governments are responsible to ensure food security and resource conservation, they will normally want to promote productive, efficient and equitable management of irrigation systems, including effective irrigation water distribution. This would imply that governments will need to provide support services to WUAs and perform certain regulatory functions. In cases where the government has invested a large amount of resources in constructing irrigation infrastructure, or where sensitive and important public interests are at stake, it may even need to retain the right to take back management of irrigation schemes where WUAs fail to perform their essential and agreed responsibilities. We may ask, What degree of continued support and control on the part of government is necessary to guarantee sustainable productivity of irrigation systems? This question has a number of legal connotations, some of the main ones are mentioned as follows.

1) Should a WUA be established under private law or public law?

5. One of the supposed benefits of establishing WUAs under private law is that existing private legal entities (co-operatives, private law associations (NGOs), or even companies) can be used without the need for new legislation. This may seem appealing when introducing a new IMT programme, because it may be seen to reduce the legal complexity of the reform process. Another claimed advantage might be that, as private law bodies, WUAs can be more clearly distinguished from the state and water users will have a greater sense of autonomy and ownership. It has been argued that private law WUAs should be able to diversify into other areas such as marketing and the supply of inputs, effectively becoming rural development co-operatives. This is probably more likely to be the case for very small schemes developed and owned by single families or larger ones developed and owned by private companies.

6. Problems begin to arise for WUAs established under private law, when WUAs perform roles that are in the public interest, such as supplying irrigation water to farmers who have no choice of who their supplier is and who depend for their livelihoods on the reliable delivery of irrigation water. A public law framework specifically designed for WUAs and IMT could contain elements that are geared towards the specific circumstances of irrigation, including measures for aspects considered so to be in the public interest. WUAs may need to have specific legal rights and privileges normally given only to public entities, such as the right to tax exemptions, the right to require compulsory membership, rights to obtain compulsory access to land of non-members for O&M or even the right to impose a lien on land in case of unpaid dues and fees.

2) Ownership of irrigation infrastructure

7. Should the ownership of irrigation infrastructure be handed over to farmers? One of the reasons in support of IMT is the presumption that empowerment of farmers in irrigation management will trigger improved performance of irrigation schemes. In some cases (USA, Colombia) it has been the right to use the irrigation infrastructure, not the full ownership, which was transferred. This arrangement may take the form of a long-term lease over the infrastructure, which may be secure enough to provide incentives for farmers to invest in the long-term integrity of the infrastructure. One related question is, What are the future responsibilities of the irrigation agency in the capacity of being ‘landlords’ of the infrastructure? One reason for farmers to shy away from full ownership transfer is concern about the potential future cost of investments that would have to be borne by farmers, as the new owners. However, given the objectives of IMT, are farmers truly empowered unless full ownership of the infrastructure is transferred?

3) Role of the Irrigation Agency

8. After IMT, the roles and responsibilities of the government will need to be revised. IMT should be accompanied by a full strategic planning process to redefine the functions and powers of the government organizations involved in irrigation. At the national level, legislation should make clear the new roles and responsibilities of the irrigation agency (such as providing technical, financial and organizational support services, regulating the water sector, policy and legislation). A frequent weakness of IMT policies is the lack of a clear policy about the future responsibility of governments and farmers to finance rehabilitation and improvement of irrigation schemes. At the scheme level, the new role of the irrigation agency should be spelled out in an irrigation transfer agreement, which is the legal document that specifies the terms and conditions of management transfer and the new relationship between the government and WUAs.

4) Supply of water

9. After IMT, in the case where the irrigation agency remains responsible for delivering bulk water supplies to the irrigation system, terms and conditions for water abstraction and water delivery need to be clearly defined and agreed to by all parties. The allocation of water supplies should be governed by long-term water rights. Short-term water rights would probably have to be re-negotiated regularly, and this would carry the risk of the government retaining excessive control over WUAs (For further discussion about water rights, see Topic 3 below).

5) Enforcement of legal contracts and agreements

10. The government should back up the legal enforcement of contracts entered into by WUAs with the irrigation agency or third parties. Such contracts can be for various things, such as for irrigation services, sale of water, etc. WUAs may also be obligated through transfer agreements to maintain irrigation infrastructure at a certain standard. However, it may be difficult for the government to impose severe sanctions (such as cutting off water supplies) if WUAs fail to comply with some agreements (because of political sensitivities, etc.). A delicate balance between regulation and devolution will have to be found.

Topic 2: WUAs

11. Water User Associations play a pivotal role in IMT. WUAs are the normal organization through which farmers manage their irrigation system. WUAs are the institution to which water rights and infrastructure use rights and obligations are transferred. It is the responsibility of the WUA to further manage and develop these assets in order to maximize the irrigation benefits for its members. The underlying legal framework for WUAs is thus a critical element in the success of IMT.

12. Similar to water rights legislation, legislation for WUAs should contain a number of minimum elements in order to be successful. These should include at least the following:

1) Legal status of the WUA

13. A WUA should have full legal standing, be recognised by the government, have access to courts and have the authority to enter into contracts, own assets, have a bank account, have rights of way, define what the irrigation service should be, have the authority to determine the O&M plan and budget and be able to hire and fire staff. If any of these elements is missing, a WUA will not be able to function properly.

2) Membership

14. Eligibility criteria for membership in a WUA should be as clear and locally acceptable as possible. Potentially, members could include all beneficiaries of the water supply, perhaps both owners and tenants of land served by the irrigation scheme. An advantage of being inclusive would be to reach as many people as possible that have an interest in the functions of the WUA, in order to increase its effectiveness. However, there may be local reasons for restricting membership to a subset of water users, such as restricting membership to those who invested in construction and accept the statute and rules of the association. In case both owners and tenants are members with voting rights, the question arises, What should be the relationship between the owner and tenant? Both persons would have legitimate, but possibly divergent, interests in the operation of the irrigation system. Membership or voting rights could even be open to every inhabitant of the irrigation and drainage area. Other arrangements are possible, with different types of membership that would reflect different levels of de-facto interests and/or legal relations to the land, the infrastructure, the water, etc. In such cases, membership criteria would be developed based on local conceptions of fairness, peoples’ relations to costs and benefits of irrigation and their differing rights to land, water and irrigation infrastructure.

3) Internal structure of a WUA

15. Normally, a WUA is formally established with adoption of a statute (or constitution or articles of association) and by-laws. The statute describes the basis of authority for the WUA and its purpose and internal structure. The statute should define the criteria for membership in the WUA and the basic rights and obligations of members of the WUA. The by-laws go into more detail about specific rules, procedures and sanctions.

4) Financing WUAs

16. WUAs should be able to levy charges on its members. Accounting is a common weakness in WUAs after IMT and it might be advisable that legislation specifies accounting procedures and audits in a fair amount of detail. Audits might even be considered as a future role for the government. The general legal framework should empower WUAs to charge members and other water users for water services. Some countries have constitutions that contain provisions that water is a free public good and is a divine gift. In such cases, governments may avoid contradicting basic law by charging for the water service, not the water itself.

5) Enforcement

17. WUAs should have the powers to sanction its members in case of non-payment, or non-performance of required tasks or breaking of rules.

Topic 3: Water Rights

18. A secure supply of water is essential for the success of new WUAs and to provide the assurance farmers need in order for them to make investments in irrigation infrastructure. In some countries, there are no explicit water rights for irrigation systems and water allocation is based on administrative procedures rather than on a formal legal framework. Such "informal" water rights run the risk of being undermined in a situation where competition over the resource increases as a result of new water uses (industry, tourism, urban uses).

19. It would therefore seem essential that IMT is accompanied by a legal framework for water allocation that establishes a transparent and accountable system for water allocation, through which farmers and WUAs can obtain clear and predictable water rights. Elements of such a system of water rights would normally include:

1. procedures to apply for a water right, and, the possibility for appeal of adverse decisions;
2. clear criteria that the government is required to apply in granting water rights;
3. water rights that define the obligation of the government to ensure water supply to the WUA in agreed quantities, and in case of scarce water supply, procedures and criteria for adjusting water allocation;
4. obligations for which water right holders may be held accountable (e.g. types and timing of water use, infrastructure improvements to be carried out, etc.);
5. a credible entitlement to compensation in case water is re-allocated or is not available other than through force majeure;
6. the possibility to grant a water right to collective water users, such as a WUA;
7. rules and procedures for dispute resolution.

20. Finally, WUAs operate in a larger context of water allocation within river basins or aquifers. WUAs should be integrated into river basin organisations, national water councils, water allocation plans, etc. so that they can defend their interests in relation to competing users of water and can have a voice in setting river basin level policies and integrated basin development and management plans.

Contact: imt-moderator@fao.org