Water Rights, Privatization, and the Public Trust

On this page:
-A Petition to Reform the Water Rights System
-Reasons to Oppose the Mad River Water Bags
-Who owns the Gualala?
-Globalization comes to Gualala ... in water bags
-Public Trust Doctrine Principles
-Resources and Links

Introduction

In addition to water quality monitoring, and supporting citizen's groups in advocating for clean water, Community Clean Water Institute has worked with community groups based in the Gualala River watershed to educate citizens about Alaska Water Exports now cancelled plan to ship "excess" water from the Gualala River to San Diego for profit. The application included many dangerous assumptions about "excess" water, and could have had implications on water rights in all watersheds in California. It was a prime example of globalization's impact on water and the public trust, the commodification and export of natural resources through hidden subsidy, and loss of community control over common assets. On December 13, 2002, the application was withdrawn largely due to community opposition (see below), but the larger issues remain. The Water Rights, Privatization and Public Trust Program for Community Clean Water Institute maps out appropriate community responses to out of state speculation on California water resources.

Recent Activities:

Saturday, December 10, 2005 CCWI cosponsored a Dinner to Defend the Commons with Keynote Speaker Jonathan Rowe from the Tomales Bay Institute. At the Sebastopol Community Center. The theme of the evening is “Defending the Commons.” The Commons are the shared wealth of our community including public schools, national parks, public libraries, national forests, Social security, Medicare, clean air and water, and all of the collectively held public properties and social programs that benefit the common good. Author and journalist Jonathan Rowe was the keynote speaker. Jonathan Rowe is the founder of Tomales Bay Institute and the author of “The Common Good: An argument for asserting our rights to quiet, community, a drink of pure water, and a breath of fresh air" a recent article in the Sierra Club Magazine online: http://www.sierraclub.org/sierra/200507/commongood.asp.

A Petition to Reform the Water Rights System

(text taken from State Water Board web announcement)
On October 27, 2004, two California conservation groups, Trout Unlimited and the National
Audubon Society's Peregrine Chapter of Mendocino County (Petitioners), filed a petition with
the State Water Board, California Department of Fish and Game (DFG), State Lands
Commission and Sonoma, Mendocino, Napa, Marin and Humboldt Counties. The petition
proposes the development of guidelines and procedures in order to assure coordinated, timely
and effective regulation of water diversions in coastal streams from Marin County northwards to
the Mattole River, including the Russian River watershed, as well as those streams in Napa
County tributary to San Pablo Bay (central coast streams).

The petition is intended to assist in the implementation of AB 2121 (Stats. 2004, ch. 943) as
signed by Governor Schwarzenegger on September 30, 2004. This law requires the State Water
Board, on or before January 1, 2007, to adopt principles and guidelines for maintaining instream
flows in central coast streams in accordance with State policy for water quality control, for the
purposes of water right administration. AB 2121 also requires the State Water Board to annually
prepare a chart of pending applications to appropriate water in the Counties of Marin, Napa,
Sonoma, Mendocino, and Humboldt, describing the status of each application, the actions taken
in the preceding year, the proposed actions for the upcoming year, and the proposed date for final
action on each application.

The petition asserts that in order to protect steelhead and coho salmon fisheries and other public
trust values, reform of the water rights system is necessary. Further, the petition claims:

1) The State Water Board and the other State agencies named in the petition have not
protected the public trust uses of the central coast streams against unauthorized
diversions;
2) The State Water Board and the other State agencies named in the petition have not
adopted adequate procedures for coordinated environmental review of water right permit
applications and related permit applications;
3) The State Water Board does not have an adequate procedure to assure timely action on
water right permit applications;
4) The State Water Board does not have an adequate procedure for consultation with
responsible agencies in the preparation of environmental documents for its action on
water right permit applications;
5) The State Water Board improperly exempts small domestic water uses and stockponds
from environmental review of cumulative impacts;
6) The State Water Board does not have guidelines adequate to determine the existing
diversions from central coast streams;
7) The State Water Board does not have guidelines adequate to establish water right permit
conditions that protect and restore coho and steelhead fisheries in good condition;
8) The State Water Board does not have guidelines adequate to establish permit conditions
for mitigation monitoring and reporting; and
9) The State Water Board does not take adequate enforcement actions to prevent or correct
unauthorized diversions.

The petition includes additional claims against DFG, the State Lands Commission, and the five
counties named in the petition.

The petition requests the following remedies from all agencies named in the petition:
1) A coordinated response to the petition with the State Water Board acting as lead;
2) Adoption of an interagency Memorandum of Understanding (MOU) for coordination of
the agencies respective proceedings to approve or condition water diversions and related
facilities or activities; and
3) A systematic investigation of central coast streams to identify unauthorized diversions.

The petition requests the following remedies from the State Water Board only:
1) Amendment of the State Water Board's standard MOU for preparation of California
Environmental Quality Act (CEQA) environmental review documents on water right
permit applications consistent with the interagency MOU;
2) Adoption of guidelines for the substantive review of water right permit applications that
use as a starting point the 2002 guidelines for protection of fish prepared jointly by DFG
and the National Marine Fisheries Service;
3) Adoption of a general time limit for the processing of water right permit applications on
central coast streams not to exceed three years;
4) Enforcement actions and the use of enforcement procedures that effectively prevent or
correct unauthorized diversions in the central coast streams; and
5) Adoption of regulations to ensure that small domestic use and livestock stockpond
registrations comply with CEQA.

The petition requests additional remedies from DFG, the State Lands Commission, and the five
counties. The complete text of the petition, including all claims against the agencies named in the
petition and corresponding recommendations may be viewed at:
www.waterrights.ca.gov/coastal_streams/tupetition.

PURPOSE OF WORKSHOP- March 17, 2005
The purpose of this workshop is to: (1) provide the Petitioners an opportunity to describe their
petition; (2) discuss whether the issues raised in the petition merit further consideration by the
State Water Board; and (3) discuss the State Water Board procedures for evaluating the petition
and coordinating a response with the other agencies named in the petition.

PROCEDURAL MATTERS
This is an informal workshop. There will be no sworn testimony or cross-examination of participants.
The State Water Board and its staff may, however, ask clarifying questions. A court reporter will be
present. Comments filed in response to this notice shall be submitted to the persons listed below.

The State Water Board will accept written comments for a period of 30 days following the
workshop.

Send any comments to the following:
Ms. Debbie Irvin, Clerk to the Board
State Water Board
P.O. Box 100
Sacramento, CA 95812-0100
FAX No. (916) 341-5620
E-mail: dirvin@waterboards.ca.gov

Mr. Richard Roos-Collins
Natural Heritage Foundation
2140 Shattuck Avenue, 5th Floor
Berkeley, CA 94704
FAX (510) 644-4428
E-mail: rrcollins@n-h-i.org

Mr. Charlton H. Bonham
Trout Unlimited
828 San Pablo Avenue, Suite 208
Albany, CA 94706
FAX (510) 528-7880
E-mail: cbonham@tu.org

The State Water Board requests that electronic copies of written comments be e-mailed to
dirvin@waterboards.ca.gov with the subject line Trout Unlimited Petition. Participants are
encouraged to summarize their written comments in their oral presentations. At the beginning of
the workshop, the Petitioners will summarize the content of their petition. Oral presentations by
other interested parties will be limited to ten minutes or less. Participants with similar comments
are requested to make joint presentations.

Reasons to oppose the Mad River Water Bags

Philosophical: Water is a public trust and a human right, not a private property. Water should be managed by democratically elected bodies on behalf of all inhabitants, not for the private benefit of special interests. Water rights for use is different than water rights for sale.

Ethical: Corporations such as Enron's subsidiary Azurix worked to privatize water. Their strategy is to sell public resources for private profit, and then leave costs and clean up to the community and taxpayers. California's lesson from the energy crisis is to be careful with corporations with profit motives focusing on public trust resources.

Economic: When the water is shipped down to Southern California, it cannot be used locally. This may inhibit future economic development. The Editorial in the Eureka Times-Standard 11/20/02 said: "Other areas have achieved economic development beyond their means using rivers here as their foundations. But far from sharing the wealth, they have instead taken all they could and squandered the chances for us to develop, or redevelop, a functioning, dependable tourism and resource economy."

Unsustainable Growth in Southern California: Use your opposition to the Water Bags to send a message to Southern California Cities to increase water conservation and efficiency, rather than rely on increased delivery of Northern California water supplies.

International issues: NAFTA and the WTO view water as a commodity instead of a human right. Once the water is taken, local governments lose the right to restrict the taking of the water, regardless of environmental or social consequences, if such a restriction could be deemed to deprive a company of its future profits. When communities tried to reclaim their water, corporations have sued countries and states for billions of dollars in "lost revenue." Many people think Davidge wants to extend the WTO's commodity definition to water resources in California.

The Klamath Salmon kill and "excess" water: Should the "excess" water remain in the river as instream flows to support endangered salmon, steelhead and other wildlife? After the recent Klamath fish kill, are we secure with the science upon which we base water allocations? If the bags break, releasing large amounts of freshwater into a marine environment, they may harm aquatic life. The bags may disrupt whales' migratory route.

It's not jobs versus the environment anymore: The North Coast River's fishing industry has been valued at over $40 billion. Wild and Scenic rivers increase tourism, a fast growing industry in Humboldt County.

Take action: Contact the Humboldt Bay Municipal Water District: Carol Rische (707)443-5018 Send letters to 828 Seventh Street, Eureka, CA 95501, and to your local elected officials.

Below is a SAMPLE LETTER that you can use to voice your support against this proposal. Please feel free to use it, add your comments, and pass it on to others who share your concerns about water privatization and protecting the public trust. You can email comments to: Office@hbmwd.com or write letters to the address below:


Carol Rische
General Manager
Humboldt Bay Municipal Water District
828 Seventh St.
Eureka, CA 95501
Phone: (707) 443-5018

Re: Mad River Water Bag Proposal

I am writing to ask you to oppose the recent proposal by Aqueous Corp. to bag water from the Mad River. I am deeply concerned that by granting export of Mad River water to private companies there will be a number of harmful effects on the River and its surrounding communities. I am particularly concerned about the following issues:

1. Water is a public trust and a human right, not a private property. Therefore, water should be managed by democratically-elected bodies on behalf of all inhabitants, not for the private benefit of special interests. Once the water is placed in private hands, local governments lose the right to restrict the taking of water, regardless of environmental and social consequences. When communities have tried to reclaim their water in the past, corporations have sued countries and states for billions of dollars in “lost revenue.” I am concerned that with Aqueous' affiliation as part of an international consortium of water marketeers, that it may move to take control of California's water by invoking international trade provisions.

2. If Mad River water is shipped down to Southern California, it will detract from what can be used locally; this may consequently inhibit future economic development and opportunities within the community. While Humboldt County residents lose some of their valuable resource economy, Mr. Davidge is making an estimated $46,500 per water bag, paying only $90 per acre/ft., while Humboldt County residents pay $500 per acre/ft. In addition, the North Coast River’s fishing industry has been valued at over $40 billion and is the fastest growing industry in Humboldt County. Aqueous' continuous activities could possibly disrupt the growth of existing fisheries with the increased traffic of tugs carrying large poly-urethane bags and the presence of large safety devices.

3. The presence of water bags could have numerous detrimental effects on the local ecosystem. The “excess” water that could remain in the river as instream flows to support endangered salmon, steelhead, and other wildlife would be removed. After the recent Klamath fish kill, we are no longer secure with the science upon which we base water allocations. Water bags could also break and release freshwater into Marine habitats, harming aquatic life. Nordic Water Supply, a conglomerate to Aqueous Corp., has already had various problems with bags ripping and becoming lost in the Mediterranean. The migratory routes of whales and other marine mammals could also be disrupted.

Please use your authority as General Manager to reject this harmful proposal and ensure the protection of all North Coast Rivers, the California coastline, and public trust resources.

Sincerely,

Your Name

For more information: Community Clean Water Institute (707) 874-3803

"Once the tap is turned on- that is, once any deals are made by any state or municipality in a country to privatize water or water services- the tap cannot be turned back off without violating corporate rights." - International Forum on Globalization

Who owns the Gualala?

Public Assets are resources that the people own and that government manages as a trustee and steward. For example, Americans collectively own
- the electro-magnetic spectrum used by broadcasters
- Millions of acres of public lands containing minerals, timber, oil and grazing areas also belong to the public.
- federally sponsored research, reports and databases which profit drug companies
- Navigable Rivers and Streams

Common Assets are "unowned" resources -- the atmosphere, life forms, genes -- that have not been formally brought under the control of either markets or government. They are resources that all humans own as a moral right, but which have no formal recognition in law and no historic role as a market commodity. The human genome and the genetic structures that make up agricultural crops, for example, are common assets that are now being converted into private property.
Most people would say the Gualala River is somewhere in between a public asset and a common asset. However, some companies are trying to lock up vast quantities of water in order to transport and sell it to "thirsty" regions of the world. Water, which many believe belongs to everyone, is being converted into private property.

Q: Who owns the Gualala?

A. Private interests for private gain. For example, Ric Davidge, CEO of Alaska Water Exports, Inc., or Kenneth Lay, Chairman of Enron Corporation
B. The State of California, (the State Water Resources Control Board), on behalf of whoever applies for the water first.
C. The State of California, on behalf of all of its citizens
D. The salmon
E. The people, and non-human inhabitants of the Gualala Watershed

If there is such as thing as "excess water," (a big "if"), then who should profit off the sale of that water? The Community Clean Water Institute suggests that the people of that watershed should profit, since they are the ones whose resources are being extracted. Two approaches which preserve the public trust are described below: the Oregon Water Trust, and the Sky Trust.


The Oregon Water Trust

The Oregon Water Trust, found online at www.owt.org, is a private non profit group that uses a voluntary, market based approach to enhance stream flows by acquiring consumptive water rights to restore flows in rivers and streams of Oregon.

Like a land trust, a water trust offers tax benefits to donors and embodies a modern incarnation of the commons, protecting natural phenomena that everybody's fish and living rivers depend on.

In 1987 the Oregon legislature amended the state's water laws through the Instream Water Rights Act, and the Conserved Water Program, which laid the legal foundations for the Oregon Water Trust. Prior to passage of the Act any water left instream was not being put to a beneficial use and was available for appropriation (i.e., to be taken out of the stream). Other states have learned from the example of the Oregon Water Trust. In 1997, the Washington Water Trust began operating and the Texas legislature approved a publicly funded Texas Water Trust. In Nevada, the Great Basin Land and Water converts water rights into instream flows, and a water trust is being considered in Montana.

The Sky Trust

"Who owns the sky?" This is the title and theme of a book titled Who Owns the Sky? by author and entrepreneur Peter Barnes. Barnes' answer is the "public trust," based on a legal doctrine that declares that the state holds certain resources in trust for its citizens. With this as a starting point, Barnes suggests that we consider carbon emissions just like any other commodity. Polluters such as power plants would pay to discharge into the sky, similar to the effective system now used to limit U.S. sulfur emissions. The money that's been collected goes into an account that's returned to citizens, the Sky Trust. Though the idea was developed to address global warming, it is easy to imagine a "Water Trust" to deal with watershed issues.

The Sky Trust is based on a program in Alaska, where oil companies have been drilling on state and federal lands -- public lands -- a similar dividend accrues to residents. Last year the Alaska Permanent Fund paid citizens about $2,000 each. Annual sky rent could be enough for each American to receive a $1,000 check every year.

Every year Congress would establish a limit on the amount of allowable greenhouse gas, and the Sky Trust would auction off the rights to pollute. As the allowable emissions were gradually reduced, the price would go up, and so would each American's annual dividend. All Congress must do is pass a law creating the Sky Trust. For more information, check www.skyowners.org.

Sources: www.TomPaine.com
Who Owns the Sky? by Peter Barnes www.skyowners.org
Oregon Water Trust www.owt.org

Public Trust Protest Points for Albion and Gualala River Water Export

Public Trust Doctrine Principles
* According to Public Trust Doctrine principles, certain types of property, such as navigable waterways, are of high public value and private right of ownership of these properties should be limited. By the late 19th century, the Federal Supreme Court confirmed that the Public Trust Doctrine imposes specific obligations on the states.
* The concept of the Public Trust Doctrine can be used to challenge whether Federal and State governments are meeting their public trust obligations regarding vital resources that are the common heritage of all people in the U.S.
* The state of California holds these properties as sovereign for the benefit of all citizens and limits the creation of private rights in public trust properties.
* Historically, the public trust doctrine has been applied to navigable waterways. This has been upheld in California courts. The Albion and Gualala rivers are certified as navigable waterways.
* International trade agreements under the World Trade Organization (WTO) will institutionalize privatization and remove regulation that protects our common resources and our health by means of supra-national laws that are enforceable by secret trade tribunal.

Albion and Gualala Rivers Attempted Water-Grab and International Trade Agreements
* Alaska Water Exports (AWE) has applied to the state for the right to extract large quantities of water from these rivers and pump it into giant water bags which will be towed to San Diego for sale there.
* The public could lose control of its water resources if the state sets a precedent by giving AWE the rights to this water.
* AWE is part of an international consortium called World Water SA, which includes Japanese, Norwegian, and Saudi partners. Ric Davidge, owner and president of AWE is also chairman and president of World Water SA.
* If AWE acquires the right to this water, it would only require an administrative change to transfer title to one of it's partners. If this is done, the water then would fall under WTO provisions. Ric Davidge has argued that he cannot do this because of the provisions of the Jones Act. This, however, is not entirely accurate for two reasons:
- The Jones Act requires that freight shipped within the U.S. be shipped in U.S.-made and owned vessels with domestic crews. However, under this act it is legal for a foreign flag ship to pick up cargo in the U.S., touch in at a foreign port, then go back to the U.S. and deliver its cargo. For example, AWE could transfer title to the water to its partner Nordic Water Supply, whose tugs could then tow the water bags to a port in Mexico, then turn around and deliver it to San Diego.
- There currently is a strong movement by organized groups to have the Jones Act repealed.
* WTO rules that could potentially apply include those under the North American Free Trade Agreement (NAFTA) and General Agreement on Trade and Tariffs (GATT) treaties. Under these rules, once the water is taken, local governments lose the right to restrict the taking of the water, regardless of environmental or social consequences if such a restriction could be deemed to deprive a company of its future profits.
- Currently, water services are included in NAFTA and GATT rules.
- For example, under NAFTA, U.S. based Sun Belt Water Inc. sued Canada for $10 billion because a Canadian province interfered with its plans to export water to California. Sun Belt claimed that the ban on exporting the water expropriated its future profits.
* The General Agreement on Trade in Services (GATS), which was enacted in 1994, could affect this water whether title to it stays with a domestic corporation (AWE) or is transferred to a foreign corporation:
- GATS Article II Most Favored Nation Treatment: Requires that the best treatment given to any foreign service or service provider must be extended to all like foreign services and service providers.
- GATS Article XVII National Treatment Rule: Requires that governments extend the best treatment given to domestic services or service providers to like foreign services or service providers.
- The GATS includes most services and applies very strict rules such as the above to any that WTO member countries have agreed to. Although none has yet agreed to include water services, there currently is a strong push by the U.S. and European Union to include water services in the GATS.
- If bulk water becomes a service under the GATS, then if AWE gains title to the water, the state might be required to allow a corporation from another WTO member country access to an equal amount of water from the state or be fined for expropriating future profits.
* Giving AWE title to Albion and Gualala River water would violate the public trust by allowing the water to potentially fall under these WTO rules. Should this happen the state of California, local governments, and the public could lose control of this and other water sources in California. Once this happens, a precedent would be set and we would not be able to restrict the taking and selling of other waters in our state.

PROTEST POINTS
* The State Water Code designates the Albion and Gualala Rivers as "Protected." Giving control of it to a corporation prevents local governments from protecting the rivers and their ecosystems.
* Giving AWE title to Albion River and Gualala River water would violate the public trust by allowing the water to potentially fall under WTO rules. Should this happen the state of California, local governments, and the public could lose control of this and other water sources in California. Once this happens, a precedent would be set and we would not be able to restrict the taking and selling of other waters in our state.
* If AWE acquires the right to this water, it would only require an administrative change to transfer title to one of it's partners. If this is done, the water then would fall under World Trade Organization (WTO) provisions. Ric Davidge has argued that he cannot do this because of the provisions of the Jones Act. This, however, is not entirely accurate for two reasons:
- The Jones Act requires that freight shipped within the U.S. be shipped in U.S.-made and owned vessels. However, under this act it is legal for a foreign flag ship to pick up cargo in the U.S., touch in at a foreign port, then go back to the U.S. and deliver its cargo. For example, AWE could transfer title to the water to its partner Nordic Water Supply, whose tugs could then tow the water bags to a port in Mexico, then turn around and deliver it to San Diego.
- There currently is a strong movement by organized groups to have the Jones Act repealed.
* If title to the water is transferred to a foreign corporation, it could be subject to the North American Free Trade Agreement (NAFTA) and General Agreement on Trade and Tariffs (GATT) treaties of the WTO. Under these rules, once the water is taken, local governments lose the right to restrict the taking of the water, regardless of environmental or social consequences if such a restriction could be deemed to deprive a company of its future profits.
* The General Agreement on Trade in Services (GATS), which was enacted in 1994, could affect this water whether title to it stays with a domestic corporation (AWE) or is transferred to a foreign corporation:
- GATS Article II Most Favored Nation Treatment: Requires that the best treatment given to any foreign service or service provider must be extended to all like foreign services and service providers.
- GATS Article XVII National Treatment Rule: Requires that governments extend the best treatment given to domestic services or service providers to like foreign services or service providers.
- The GATS includes most services and applies very strict rules such as the above to any that WTO member countries have agreed to. Although none has yet agreed to include water services, there currently is a strong push by the U.S. and European Union to include water services in the GATS.
- If bulk water becomes a service under the GATS, then if AWE gains title to the water, the state might be required to allow a corporation from another WTO member country access to an equal amount of water from the state or be fined for expropriating future profits.

Note: The applications for the Gualala and Albion Rivers were withdrawn by Alaska Water Exports due to community opposition on December 13, 2002.

Resources and Contacts:

Friends of the Gualala River http://www.gualalariver.org
They have a site devoted to the Mad River Waterbags: http://www.madwatergrab.org/ or
http://www.gualalariver.org/export/madriver.html

Public Citizen's Water for All Campaign http://www.citizen.org/california/water/ Important information for the opposition to water privatization.

Town Hall Coalition
Environmental Protection Information Center
Northcoast Environmental Center

SWRCB
Division of Water Rights
P.O. Box 2000
Sacramento, CA 95812-2000
http://www.waterrights.ca.gov/

For information about the Albion River www.albionnation.org.

For detailed information on water and international trade agreements, download the publications "Thirst for Control" at www.canadians.org and "Facing the Facts: A Guide to the GATS Debate" at www.policyalternatives.ca.

For information on the Jones Act and attempts to repeal it: http://www.mctf.com/jonesact.htm and http://www-personal.si.umich.edu/~cejohns/JonesAct.html.

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