Network Activation around Quito’s Watershed Trust Fund

Ecuador’s second pioneering local IWM program—Quito’s Water Protection Fund (FONAG)—developed from the merging of three trends in the late 1990s: (l) the rise of ecosystem services as part of the global IWM agenda; (2) the transnational movement to promote national parks; and (3) the rise of Ecuador’s environmental movement around the conservation of national

Global Grassroots Connections in Six Local IWM Campaigns

Figure 4.1 Global Grassroots Connections in Six Local IWM Campaigns.

parks.[1] The idea to create FONAG originated with Juan Black, an Ecuadorian conservationist who in 1992 became The Nature Conservancy’s Latin America director. At the time, Ecuadorian conservationists and their foreign allies were concerned with how to fund Ecuador’s parks system. Like many developing countries, Ecuador’s government devoted few resources to conserving protected areas. It was Black who first proposed that the Cayambe-Coca and Antisana ecological reserves should be compensated for the water they funnel to Quito.

When Black died in 1996, the director of Fundacion Natura (Ecuador’s first environmental NGO), Roberto Troya, replaced him as head of The Nature Conservancy’s Latin American office. Troya worked with Maria Helena Jervis of the local NGO Fundacion Antisana to promote Black’s idea. They hired Marta Echavarria, a Colombian woman with experience setting up water associations in Colombia, to explore options for how to design such a financing mechanism. Echavarria analyzed experimental financing mechanisms for protecting watersheds in Colombia, Costa Rica, Brazil, and New York. In this way, concepts related to IWM and ecosystem services coalesced with Ecuador’s emerging movement to fund national parks.

Troya, Jervis, and Echavarria designed the proposal for FONAG drawing on ideas from national-l evel programs in other countries as well as publications by ecosystem services scholars like Robert Costanza (e.g., Costanza et al. 1997; Costanza and Folke 1997). The innovation was adapting these ideas to fit Ecuador’s need for a voluntary, decentralized program (given the country’s political instability and weak national government institutions). The proposal received strong political support in Quito, largely because the transnational conservation network reached far into the municipal government. Then-mayor Roque Sevilla was an environmental activist who had served as director of the World Wildlife Fund (WWF) and president of Fundacion Natura. With Sevilla providing the political will, FONAG was created in 2000, with the municipal water company taking a strong leadership role.

FONAG’s water trust fund model has several features that make it different from Pimampiro-style payment for environmental services programs.[2] First, money collected from water consumers is used to capitalize the trust fund, which is invested in financial markets to provide a sustainable revenue stream through interest income. Rather than direct compensation to individual farmers, income generated by the trust is used to finance a variety of watershed management and conservation activities specified in the trust’s contract. The two models also differ on the role of local governments. The FONAG model calls for the trust fund to be managed by financial institutions that are independent of local governments and other watershed stakeholders. Decisions on how to use the interest income generated by the trust are made by a board of directors with representatives from local government and various private stakeholder groups. Thus, local governments do not have unilateral control over the funds. This is meant to depoliticize the watershed management process and prevent the diversion of funds for other purposes. This contrasts with the strong local government control in Pimampiro. Those advocating the Pimampiro model argue that local governments, as the legitimate local authority, should control the funds, which are usually held in one of the municipality’s bank accounts.

F ONAG quickly gained international attention for pioneering the use of trust funds in a voluntary, decentralized mechanism for financing watershed conservation. As with Pimampiro, FONAG’s perceived early success prompted transnational efforts to replicate the model through a series of campaigns. At least 15 similar local water trust funds have since been created or are under development across Latin America, 7 of which are in Ecuador. The story of FONAG’s replication illustrates how Ecuadorian and international conservation organizations connected with the GWP-ECLAC-GTZ network and used network activation strategies to expand their conservation-oriented IWM network to local communities across Ecuador.

The intention to replicate FONAG throughout Ecuador was present from the beginning, and The Nature Conservancy began organizing campaigns almost immediately (Troya and Curtis 1998). Advocates first promoted FONAG through a series of publications and conferences, including through CAMAREN and Ecuador’s national Water Resources Forum. With funding from USAID, experts from The Nature Conservancy, FONAG, and Ecuadorian technical universities began identifying important watersheds and working with local governments, NGOs, and communities to establish FONAG-style water funds. Many of these experts, including Pablo Lloret, were members of the GWP-ECLAC-GTZ network.

Based on his pioneering role advocating IWM in Ecuador, Lloret was hired as FONAG’s first technical secretary. He immediately implemented a series of national programs to train local stakeholders in IWM policies and practices and to replicate FONAG in other Ecuadorian watersheds. FONAG has since become a national linking institution that connects and mobilizes resources from IGOs, donor agencies, NGOs, private companies, and community organizations to promote local IWM reforms throughout Ecuador. Importantly, individual brokers like Pablo Lloret, as well as common organizational nodes, like FONAG, CAMAREN, and the Water Resources Forum, produced strong ties between The Nature Conservancy and the GWP-ECLAC-GTZ network. This increased the networks’ ability to mobilize resources and exert influence.

By 2009 this combined network helped create water trust funds and related governance institutions in five other localities, including Zamora and Tungurahua.25

  • [1] I am indebted to Marta Echavarria for providing this insight.
  • [2] For details of FONAG and the differences between water trust funds and payment for environmental services programs, see Goldman-Benner et al. (2012); Kauffman (2014).
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