Experimenting with Institutional Adaptations

Once unified and mobilized, indigenous groups greatly increased their influence in the Water Parliament and other participatory institutions in Tungurahua’s New Governance Model. By 2006, indigenous peoples comprised 65% of participants in the three parliaments and held 50% of the parliaments’ leadership positions.[1] They used this influence to negotiate with traditionally powerful stakeholder groups, including irrigation and water councils and hydroelectric companies. As early as 2006, the Water Parliament became a forum for channeling mutual pressure from beside, allowing community members to debate ideas for getting different water users to contribute to a common fund to finance local economic initiatives. This provided an opening for IWM advocates to renew their efforts to create a local financing mechanism for watershed management.

In 2006 GTZ worked with The Nature Conservancy-Ecuador to develop a proposal modeled on FONAG, Quito’s pioneering water trust fund (described in chapter 4). Indigenous groups refused to sign this proposal, again citing concerns about the commodification and privatization of nature. GTZ responded by asking the indigenous movements to develop their own proposal and offered technical support. The first indigenous proposal called for NGOs to provide all the funding, which was rejected by CESA and IEDECA, among other organizations. For two years, GTZ, CESA, and IEDECA negotiated with indigenous movements and other watershed stakeholder groups, including water councils, Ambato’s municipal water company, and hydroelectric companies. In 2008, this contestation produced a highly innovative watershed financing mechanism— Tungurahua’s Fund for Paramo Management and Fight Against Poverty.

The fund’s unique institutional features reflect how contestation and experimentation led local stakeholders to combine global IWM principles with elements of local norms and practices. Tungurahua’s indigenous movements proposed the fund’s final design, which was structured to fit with indigenous norms for living in harmony with nature (sumak kawsay in Kichwa or buen vivir in Spanish) and their concerns about the commodification and privatization of natural resources. Two institutional adaptations were crucial to overcoming indigenous concerns: voluntary contributions and no individual compensation. Tungurahua’s fund is capitalized with annual voluntary contributions from its eight partners (identified later), who serve on the board of directors. This differentiates it from most other watershed financing mechanisms, in which payments are made obligatory by market contracts, government ordinances, or fees levied on water use. Unlike a strict payment for ecosystem services scheme, Tungurahua’s fund does not directly compensate individual landowners. Rather, it finances a range of activities at the watershed or community level designed to benefit the whole ecosystem, including the communities living within.[2]

According to indigenous leaders, these two institutional adaptations were crucial for overcoming concerns about the commodification and privatization of natural resources. Since financial contributions are voluntary and individuals do not receive compensation, the financing mechanism lacks the characteristics of a market transaction. By designing projects at the watershed or community level, Tungurahua’s trust fund reinforces the notion ofwatershed resources being public goods and promotes a sense of community responsibility. According to indigenous leaders and farmers, this distinction is crucial because it emphasizes the public nature of natural resources and the focus on human well-being in harmony with nature.

Because the fund’s institutional structure facilitates voluntary, multistakeholder collaboration to implement community-l evel projects, it has cultural resonance. It is consistent with the indigenous tradition of mingas. Minga means “collective work” in Kichwa, and refers to the centuries-old indigenous tradition of family labor exchange. It is an important concept throughout Ecuador, particularly among popular and poor sectors, both indigenous and mestizo. Mingas use norms of exchange and reciprocity to motivate community members to participate in voluntary, unpaid projects that benefit community members. Traditionally, mingas are used mostly in farming and building houses. But Tungurahua’s IWM institutions organize community mingas to implement watershed management projects financed by the fund.

Importantly, Tungurahua’s paramo management fund includes representatives from all major stakeholder groups: local politicians (i.e., Tungurahua’s provincial government), water user groups (the municipal water company for Ambato and two hydroelectric companies), and the province’s three indigenous movements, which represent landowners living in the watershed. In October 2011, the Ambato regional electric company also joined.

Since 2008, these organizations’ voluntary contributions have totaled $460,000 annually. Sixty percent is invested to grow the fiduciary fund, while 40% goes toward financing projects defined in annual operating plans (Rojas 2012). Projects are also financed by interest from the trust’s investments and special donations from external organizations. Working groups in the Water Parliament submit project proposals to the fund’s technical secretariat, which approves and prioritizes the projects. Priority is given to financing paramo management plans created at the community level and coordinated by the province’s three indigenous movements. By 2012, roughly 85% of expenses went toward financing 10 such plans, addressing portions of the paramo controlled by 10 different communities (Rojas 2012).

As a result, 17,635 hectares of paramo were being conserved and restored for the first time through community agreements. Anecdotal evidence suggests some improvement in vegetation and water quality. In the paramos of Yanahurco, for example, natural vegetation is returning in roughly 80% of the territory. Tests also showed improved water quality.[3] In terms of socioeconomic effects, by 2012 more than 2,000 community members were trained in conservation, sustainable agriculture and irrigation, and water and paramo management. Nearly 2,200 families benefited from economic and production assistance (Rojas 2012). Perhaps the biggest changes were the improved social capacity and commitment to sustainable watershed management, demonstrated by the community development and implementation of paramo management plans, water users’ continued contribution to the paramo management fund, and stakeholder participation in the Water Parliament. For all these reasons, Tungurahua is often characterized in Ecuadorian development circles as a highly innovative, successful example of IWM reform.

  • [1] Coordinator, Tungurahua’s Water Parliament, interview by author, Ambato, Ecuador, October20, 2009.
  • [2] Kauffman (2014) provides a detailed description of Tungurahua’s paramo management fundand the projects it funds.
  • [3] The Tungurahua fund’s technical secretariat performed tests using the Water Quality Index(WQI), which showed an increase in water quality from 0.60 to 0.71. The fund’s technical secretaryprovided the results to the author.
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