Brazil's overall policy and philosophy on water resources is defined throughout its 1997 National Policy on Water Resources.

The NPWR's principles are as follows:
- Water is a common good of public domain;
- Water is a scarce natural resource endowed with economic value;
- In situations of critical scarcity priority will be given to human supply and animal consumption;
- Water management must always make provision for the multiple uses of water;
- The river basin is the basic territorial unit for the planning and implementation of the NPWR as well as for the Water National Management System;
- Water management must be decentralized. Decision making is required to be a participative process that includes government representatives as well as legitimate private sector and community representatives.

The NPWR aims at ensuring actual and future generations with water supply that meets both the quality and quantity required for the different uses. It aims at promoting a rational and integrated use of the water resources, including water transportation, so as to ensure sustainable development. Lastly, it aims at prevention and defense from water related critical events, both natural and the ones originated from inadequate human interventions.

Brazil's NPWR promotes a systematic water management system which integrates quality and quantity aspects as inseparable aspects of the water resources. It takes into account the country's regional diversity in relation to its physical, demographic, biotic, economic, social and cultural specificities. As far as coordination is concerned, it promotes the integration of water management with the country's overall environmental management system; it makes provision for the integration of the water management system at the regional, state and national planning levels as well as with the private sector; it promotes coordination with land use planning as well as the integration of basin management with river and coastal systems. Finally, it establishes a decentralized integrated management system at the river basin level, based in partnerships between legitimate representatives of all stakeholders: government, private sector and civil society.

Highlights

During its first years of existence the Agency's actions focused in addressing two major problems: i) the prolonged droughts, which affect very especially the North-East Region; and ii) river pollution.

Prolonged Droughts: Water Market Demand Management

ANA's decisions are based on the assumption that dealing with permanent or cyclic drought situations could not be addressed through increasing water offer only. Drought situations should be addressed mainly through demand management, which includes prevention and saving water measures such as the establishment of use quotas and the payment of compensation to affected users.

Water Market Creation in the Jaguaribe River

ANA's first experience in the creation of water market took place in the semi-arid North East Region. By early 2001 the National Water Agency realized that the amount of water stored in the Jaguaribe river basin (*) would only be enough to attend approximately half the agricultural annual demand. In order to address this issue the farmers were required to pay R$ 0,01 for every 1,000 liters of water used by them. The funds raised through the water charges were used to compensate for the farmers that were left without enough water to irrigate their crops, provided that they would shift water intensive crops, such as rice, for less water intensive ones with higher value added. The farmers that joined the program could also access credits for buying new agricultural equipments as well as training programs.

The development objective behind water charges was in fact to prepare this semi-arid region so that it would focus on higher value added agricultural crops that are less water intensive. Experiences such as the Jaguaribe's river case places Brazil in a world leading position as far as water resources is concerned. Countries such as France, The Netherlands and Germany had their farmers paying for the water use very recently only.

(*) Located in the state of Ceara, semi-arid region.

River Basin Pollution Abatement: the PRODES Experience

During march 2001, and after being in place for only three months, the Agency launched its most innovative program, PRODES, which consists in providing economic incentives for the construction of new sewerage treatment plants, aiming at the environmental recovery of the country's most polluted river basins. The Program avoids the most common, historical error, which is financing inefficient public works that would not respond to the expected pollution abatement results. The PRODES program pays for results: it pays for treated sewerage. Payments are made available only after the achievement of the agreed goals on water quality indexes are demonstrated. Implementation of this program requires that the River Basin Committee is established and operative. It requires also that a social agreement is carried out between legitimate representatives of all stakeholders: the Federal Government through ANA; the State Governments; the Private Sector and Civil Society legitimate representatives.

The Agency, in partnership with the River Basin Committees, has already started to apply two key mechanisms aiming at improving the efficiency in river's use: i) the licensing for use and/or effluent disposal and, ii) the application of charges on effluent discharges for those polluting the rivers.

It is ANA's attribution to enforce the laws on water use so as to ensure a farmer, for instance, the appropriate water supply, provided that he has obtained the required water use license. This mechanism ensures the farmer that his crops would not be affected by over-consumption nor by unexpected pollution from up stream users. This trusting environment is an effective incentive for farmers to carry out activities that require bigger investments, such as more sophisticated irrigated crops with higher value added.

The creation of ANA brought up important benefits. Through the establishment of secure and clear rules and regulations it contributes to the creation and consolidation of a trusting environment, thus providing an important incentive to attract economic investments which must rely on significant water inputs.