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Seminar Sured German Alumni Water Network, Jakarta

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Seminar Sured German Alumni Water Network, Jakarta

  1. 1. Anticipating Water Trade Mohamad Mova Al Afghani [email_address]
  2. 2. <ul><li>Introduction </li></ul>As we speak, millions of liters of water are being transported through inter-state transmission pipes or through water tankers.
  3. 3. <ul><li>Introduction </li></ul>Law No. 7 Year 2004 on “Water Resources” Enacted : March 18, 2004 Enforced : At the date of enactment Number of Articles: 100 Repealed : Law No. 11 Year 1974 on “Irrigation” Judicial Review : 058-059-060-063/PUU-II/2004, 13th of July 2005 (Conditionally Constitutional)
  4. 4. <ul><li>“ Water” covers basically all freshwater in any forms including sea water on land. </li></ul><ul><li>Thus, the Water Law regulates: </li></ul><ul><li>Groundwater (well, underground rivers) </li></ul><ul><li>Surface Water (rivers, lakes, wetlands) </li></ul><ul><li>Clouds (Article 38) </li></ul><ul><li>Water supporting areas: catchments, river basins, beaches </li></ul><ul><li>Object of regulation </li></ul>
  5. 5. <ul><li>Water Rights Systems in the World: </li></ul><ul><li>Agency Based vs Market Based </li></ul><ul><li>Agency based: allocation and reallocation is done through the agency of the state </li></ul><ul><li>Market based: allocation and reallocation is done through market mechanism (supply/demand) </li></ul><ul><li>Water Rights </li></ul>
  6. 6. <ul><li>Water Utilization Rights (Hak Guna Pakai Air): for daily needs and people’s farming. </li></ul><ul><li>Water Commercialization Right (Hak Guna Usaha Air): for hydropower, tourism, industry, etc. Valid for 3 years and extendable </li></ul><ul><li>Both rights cannot be leased or assigned partially or entirely (Art 7.2 of the Water Law). Hence: agency based </li></ul><ul><li>Water Rights </li></ul>
  7. 7. <ul><li>Water Rights </li></ul>*More than 2 litres per second/family for people’s farming and more than 100 m3 per family for Groundwater
  8. 8. <ul><li>The current agency-based system will be reformed to allow market mechanism to work in the water sector. Some pilot projects on has been conducted in Brantas river Basin in East Java. </li></ul><ul><li>Water Market </li></ul>
  9. 9. <ul><li>Public good vs private good </li></ul><ul><li>Mobility </li></ul><ul><li>Variability </li></ul><ul><li>Transport/storage cost </li></ul><ul><li>Not scarcity but physical supply cost </li></ul><ul><li>Essentiality </li></ul><ul><li>Heterogenity, depending on time, location, quality </li></ul><ul><li>Specifities of the water sector </li></ul>
  10. 10. <ul><li>Social Costs </li></ul><ul><li>Environmental Costs </li></ul><ul><li>How can externalities be identified, defined and incorporated into transactions? </li></ul><ul><li>Market and externalities </li></ul>
  11. 11. <ul><li>Existing laws on international trade may not be adequate in protecting water </li></ul><ul><li>Institutional setting in national law still problematic (i.e. enforcement cost expensive, rights not clearly defined) </li></ul><ul><li>Insufficient legal regime </li></ul>
  12. 12. <ul><li>Goals: </li></ul><ul><li>Human rights </li></ul><ul><li>Efficiency </li></ul><ul><li>Environment </li></ul><ul><li>Requires interdisciplinary approach </li></ul><ul><li>Closing the gap </li></ul>
  13. 13. <ul><li>Thank You </li></ul>

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