Rebuilding water rights system from the perspective of usufruct

Ecological Economy (2010)6:422-428Empirical StudyRebuilding water rights system from the perspective of usufructWANG LeiSchool of Law, Southwestern University of Finance and Economics, Chengdu 610074, P: R. ChinaAbstract: As the source of life, water is indispensable to human beings. Being aware of the water stress imposed bypopulation growth, climate change, rapid urbanization, pollution, many scholars and decision makers argue that theestablishment of water rights cand their system is the primary measure to tackle the water crisis problem. However;no consensus has been reached regarding the definition, nature and content of water rights both practically anaacademically. By examining the existing theories regarding water rights, this article tries to redefine the entitlementsfrom the aspect of civil law. Meanwhile, it provides a system which classifies various rights by the four fiunctions ofusufruct.Keywords: Water rights; Water rights system; Water resources; Usufruct1 Introductiontransfer has been recognized by the governmentand non-government advocates as both an efficientThe recent drought ravaging southwest China and conflict-reducing means to achieve environ-for months, had led millions of residents in Gui- mental and ecological ends such as maintainingzhou, Yunnan, Sichuan, Chongqing, and Guangxi instream flow, conservation of soil and water 2.faced up with drinking water shortages. Although On the contrary, the academic field fails to makeit seems that the disaster resulted from the impact a strong response to the practical needs of waterof greenhouse gases on the hydrologic cycle, the market and water trading, which actually involvesdestabilized climate should not take all the at- the definition of water rights and the identificationtribution. A lack of effective water rights systemsof their system.creates major problems for the management ofSince a clear definition of property rights is aincreasingly scarce water supplies.requisite for market economy, this article tries toAs the source of life, water is indispensable to redefine water rights from the aspects of subject,human beings. However, the distribution of this object and content, by examining the existingnatural resource in China varies largely from place theories regarding water rights. In the meanwhile,to place and the imbalance between supply and it provides a system which classifies various rightsdemand exacerbates, especially under the context by the functions of usufructuary right.of the unexpected natural calamity. It has beenargued that the best way to meet the challenge is 2 An overview and analysis of existing theoriesthe introduction of market mechanism into water concerning water rightssupply. The construction of the market-based in-stitutional and regulatory systems is the primaryThere are various theories about water rights,measure to tackle the water crisis problem. The especially relating to the definition of water rights.transfer of water required by market can offer sub- In sum, those explanations can be classified intostantial economic efficiencies in distributing water two schools in accordance with whether ownershipto those who value it most "I. What's more, water of water resources is included.2.1 A system of rights including ownership of wa-Received June 16, 2010; Accepted Aug. 10, 2010* E-mail address: leiwangl 140@hotmail.comter resources中国煤化工Author: WANG Lei (1979- ), female, lecturer, PhD, specializedin water law.Professor,MYHC N M H Gargument422◎2010 Ecological Economy (ttp://xb.suse .edu.cn/)Wang L. / Ecological Economy (2010)6:422-428about water rights by saying that the system con- paid on utilization instead of ascription of prop-sisting of the ownership, the usufructuary right,erty. Hence, it is unnecessary to put ownership intothe right for public using, the administrative right,the category of water rights. Moreover, the ideathe management right of water resources, the envi- of land determining water was established underronmental right to water, and the property right ofthe historical background that water was privatelyaquatic product [3]. The same opinion was sharedowned as land, but with water being realized as .by other scholars, by holding that water rights arenon-renewable resources, it is isolated from landa group of rights containing the ownership, the and ascribed to the state or public (91 and accord-usufructuary right and the management right 4, oringly there is no need to follow the rights regimea bunch of rights covering the ownership, the usu- relating to land.fructuary right, the right for water allocation, thComprehensiveness seems to feature in thealienation right, the trading right, etc 5I. Besides,opinions regarding a group or a bunch of rights.some views narrowed the scope of the water rights However, they have caused contradiction andsystem, which only comprises the ownership andconfusion to the water rights system since thosethe usufructuary right 0. Encyclopedia of China specific rights are overlapped and some of them. Water points out that water rights mean individu-are not labeled from legal perspective. Besides, theals' or organizations' ownership and the usufruc- hybrid conception of property rights and drawingtuary right of surface and underground water”right regarding water fails to make a clear distinc-Furthermore, the right of drawing water is increas- tion between water resources and water products,ingly recognized as the key element for waterto explain the nature of water rights and, more im-resources being transformed into water products,portantly, to categorize water- drawing right in civiland reflects the distribution of water resources and rights system. Anyway, in light of the designinga means of its exhaustible consumption. Under theintention and the trading essence of the system,context, water rights are identified as a hybrid of water right means the usufructury right of waterproperty rights and drawing right regarding water,resources, originating but independent from thewhich are enjoyed by the state, units and individu- ownership.als. Property rights are ilustrated as ownership andthe right over the property of another in both water 2.2 A system of rights based on usufructury rightresources and water products. And by obtainingof water resourceswater-drawing right, people are entitled to drawwater directly from subterranean streams, rivers orDifferent from the ownership-oriented concept,lakes 8].the use-based nature is the common stand adoptedThe above-mentioned views take the similar by the scholars in the school. It is articulated thatline that ownership is an inseparable part of waterwater rights enable people to utilize and seekrights and somehow convey the traditional civil profits from surface water and groundwater andlaw opinion of continental legal system, namely,involve the rights of pumping, storing, discharg-land determining water. Although the broad no- ing water, the rights for navigation, bamboo andtion tackled the ownership issue of water resources log rafting, etc. From the aspect of civil law, waterand specifies the dominating position of the staterights do not encompass ownership of water re-and its ultimate exclusive control of the natural sources and are identified as usufruct, namely theresources, it ignores the fact that water trading isrights of utilizing and seeking profits from water,the essence of water rights system. According to which is derived from the former 10. On the basisArticle 46 of Property Law and Article 3 of Waterof the use nature, the theory of water allocationLaw, water resources shall be owned by the state right was11幢imic academia,and therefore the ownership is forbidden for trans-which m中国煤化工of a certinaction. And nowadays, more attention has been amount 0YHCNMHGinperiod.It23Wang L. / Ecological Economy (2010)6: 422-428advocates that water rights can only be exclusive to set up a water market and a starting point forand divisible through allocation, which will fur- further research on trading in water rights. Thus, athermore enable those rights to be tradable . By definitive meaning of those rights is a primary is-following Australian experience in water markets，sue which needs to be solved.tradable water rights are introduced, which also re-The mobile and reusable nature of water re-fer to the use of certain amount of water. Under the sources poses much more challenges on waterframework, the set of rights are constituted with rights than other forms of property law. Neverthe-the rights of proportion, allocation and actual utili- less, it can be concluded that legal rights to waterzation. Proportional water right relates to portions do not carry ownership of molecules of water. Theof a particular source of water; by enjoying water irreconcilable conflict between privatization ancallocation right, people can acquire specified quan- multiple values and objectives of water resourcestities of water in accordance with those proportions decides that only state can be entitled to the own-during certain period; the right of actual utilization ership of the resources, which could help to avoidmeans the entitlements of actual drawing, using, imbalance of distribution induced by private pos-discharging, storing water and constructing, man- session and achieve the ends of promoting publicaging water projects [121.welfare and protecting ecological environment.The notions distinctly demonstrate the essential Even in Common Law countries, with the devel-aspect of water rights, namely the use-based nature. opment of public trust doctrine, governments areNotwithstanding, by emphasizing the rights of uti- vested with the ownership of rivers, lakes, wet-lizing and seeking profits from water, the usufruct lands, etc., in order to address problems arousedview fails to pinpoint the possessory function in by the tragedy of the commons and absent subjectwater rights and neglects the purpose and value in water resources ownership [141. Meanwhile,of water drawing right, pumping right and storing as trustees, governments are obliged to take allright. At the same time, it does not differentiate measures to ensure that the public interests on thewater resources, water products, water projects and resources are accomplished for beneficiaries. Nowater services. Under the theory of water allocation matter assigned to state or government, the owner-right, the trading time, place, use and quantity of ship is not available for transaction and trading canwater are confined, which thereupon leads the mar- only occur to right over the property of another, anket mechanism fail to make a full play in allocating inferior right to ownership. Water rights fall intoresources. And it confounds the trading of water this category, which focus on using specifed quan-rights with the transfer of water ownership. Though tities of water in particular ways on an annual orthe idea concerning the set of rights of propor- other regular basis while respecting the ascriptiontion, allocation and actual utilization displays the of property. Consequently, legal rights to wateracademic development and practical experience in shall be identified as usufruct, which is consistentAustralia, it is proposed from angle of economies with the purpose clarified in Some Opinions ofand is unconcerned with civil law issues, especially the Ministry of Water Resources on the Transferwhen contracts are involved in it.of Water Rights. A usufructuary right holder is en-titled to possess, use and seek proceeds from water3 Redefinition of water rightsresources owned by the state as stipulated by Ar-ticle 118 of Property Law.As discussed above, there is no consensus re-garding the definition of water rights in theoretical 3.1 Subjectfield. Efforts to develop and use water have notproduced a stable, predictable, well-administeredThe subjerichte rafore tr any unitssystem of water entitlements [131. On the other or individuals中国煤化Isufructu-hand, a precisely-defined concept is a requisite ary rights eit:THCNMHGonsorby424Wang L. / Ecological Economy (2010)6:422-428means of license or contract. People who want to resources determine that the natural resourcesdraw water directly from subterranean streams,continuously move in the hydrologic cycle, whichrivers or lakes need to make an application formakes themselves differ from water products.licenses "51. However, under the following cir- Water products are water of sufficiently high qual-cumstances, the party concerned does not have toity that it can be consumed or used without riskapply for a license certificate for water drawing: a of immediate or long term harm, and convey a lotrural collective economic organization or any ofof capital, technology and labor which producersits members uses the water in the pond or reservoir have invested [19. Because potable water or bottledof the said organization; a small amount of waterwater requires some type of treatment and certainis drawn as drinking water for family life, or live- chemical or physical measures are entailed, theystock or poultry under sporadic or enclosed breed-are removed from hydrologic cycle and cannot being, etc.; the water must be drawn (discharged) forconsidered as water resources. And for the sameresponding to temporary emergencies in order to reason, water in water projects is identified asguarantee the engineering production safety of un-water resources since the projects only serve asderground structures such as mines, etc.; the water diverting, storing and delivering water to speci-is drawn for responding to temporary emergen-fied areas and no chemical or physical features arecies in order to eliminate the harms endangering changed even though a great amount of humanpublic safety or public interests; or the water mustlabor is attached to them. By holding that, the statebe drawn for the use of temporary emergencies in can exert its function of ecological protection notorder to fight an agricultural drought or maintainonly in rivers, streams, lakes, wetlands, but also inecology or environment 16. Pursuant to Fisheriesvarious reservoirs and dams.Law, any entities or individuals, who wish to uti-lize state-owned water surfaces and tidal flats that3.3 Contenthave been designated for aquaculture, shall applyfor aquatic breeding certificates. Under some situ-The content of water rights directs to four func-ations, aquatic breeding can also be conducted tions of usufructuary right, namely, possession,through contracts [171. Under Regulations for theuse, seeking profits and disposition which comeAdministration of Water Transport, profit-making from ownership in accordance with owner's will.transport has to apply for transport licenses orFirstly, possession is the basic function of usufructtransport service licenses while non-profit-makingand the foundation for the other three. Occupationtransport does not [18]is required, no matter whether it is for exhaustibleor inexhaustible use of water. The procession is3.2 Objectestablished on specified quantities of water whichare decided from legal standpoint, instead of fromAs usufruct originating from state's ownership,physical appearance. Regarding inexhaustiblethe object of water rights points to water resources.consumption of water, water rights are much moreSuch arrangements reflect both the state's dominant correlative than rights to conventional commodi-role in water systems via its ownership and freeties and many interests may have legal rights to themarket's involvement in water utilization. As de-same source, which implies that such water rightsfined by the United Nations Educational, Scientific does not have the quality to be absolute againstand Cultural Organization in 1977, water resourcesall the world (20. For example, navigation andare sources of water that are useful or potentially fishery can co-exist peacefully by occupying theuseful to humans. And in terms of human use, theysame water area. Secondly, using and seeking pro-mean unfrozen fresh water and saline, glaciers and ceeds fr(s相ste key functionspolar ice caps are not included. The mobile, large-of water中国煤化工re generallyly fungible, and reusable characteristics of water transferatMYHCNMHGshwatercan25Wang L. / Ecological Economy (2010)6: 422-428be categorized as exhaustible and inexhaustible resources no matter they are occupying water(consumptive and non-consumptive) according to normally or specially. A use of water is exhaust-consumption degree, or classified as agricultural, ible if that water is not immediately available forindustrial, household, recreational and environ- another use, such as irrigation, industrial use inmental according to their usage. Thirdly, there are steam turbine, heat exchanger, chemical solvent,factual disposition and legal disposition. Factual water supply for drinking, bathing, cooking, sani-disposition means consumption of water resources tation, and gardening. Consumptive use can onlyand physical form of water will be changed, such happen to special possession, which requires wateras water used in manufacturing plants as a solvent. withdrawals from watersheds, whereas inexhaust-Such disposition usually accompanies with water ible use can be fulfilled on either normal or specialusing and works for utilization, and thereupon can occupation. For example, on-water amusementbe attributed to the latter (21]. Legal disposition en- could be tied to reservoirs or natural lakes. Fish-ables an usufruct holder to transfer his water right ery, navigation, hydroelectric power generation,or give a mortgage over that entitlement, like what recreational usage, bamboo or log rafting, environ-have been applied to usufructuary right of State- mental water usage and water discharging belongowned land.to non-consumption, for that water can be put toadditional use.4 Reconstruction of water rights systemDisposition relates to transferring water rightsor placing a mortgage on them since the use natureBoth ownership and water rights are created on covers factual disposition. Trading in water rightswater resources, and water rights are designated as does not simply concern water-drawing right, butusufruct stemming from ownership. By following should be understood to encompass one or somethe content of usufructuary right, various water or all of the usages analyzed above. Using purposerights will be organized in the light of four func- should be described in water right transfer con-tions as stated above.tract in order to identify appropriate rights' holdersPossession is divided into normal and special, and their legal interests and obligations. Howbeit,depending on whether spatial position of water water rights under the following situations cannotresources will be changed or not. Water-drawing apply to assignment: if the drawing amount ex-right falls under the group of special possession by ceeds available water of the concerned river basinaltering quantities, directions or flow velocity of or administrative area, the water rights cannot bewater. Storing water via water bodies is the next transferred to water users outside the river basinstep for drawing and also reflects a holder's entitle- or administrative area, except otherwise provided;ment of occupying certain amount of water. Nei- the water users in confined underground waterther law nor academia clarifes the nature of water- area cannot submit their rights to transactions; thedrawing right and categorizes it in civil rights rights allocated for eco-environmental protectionsystem, even if a lot of legal documents name the cannot be traded; the transfer could have signifi-right [2 and put it in the catalogue of Usufructcant impact on public interest, ecological environ-In addition, they are silent on water-storing right ment or the interests of third party; or the rightsas well. Actually, both rights are aiming at water cannot be alienated to users in restricted industriesutilization and thus should be treated as an expres- (24. Additionally, trading cannot occur to water-sion of possessory function of usufruct. Water drawing right which does not require a license cer-diverting and pumping refer to different means to tificate, in that the right is designed to guaranteecollect water from rivers, lakes or underground basic human needs, safeguard public interests andstreams and are just manifestations of water draw- social securitying.In short,'中国煤化工picturedPeople may use or seek profits from water as Fig.1, whic.MYHC N M H Gangement426Wang L. / Ecological Economy (2010)6:422-428Object: Water resourcesOwnershipWater rights (Usufruct)PossessionUse andLegal Dispositionseek(Transferring andprofitsmortgaging water rights)Normal possessionInexhaustible use: fishery,(spatial position ofowerpeneraton rereation a1water resources isusage, bamboo or log rafting,environmental water usage,not changed)water dischargingSpecial pssession (spatial4 + Exhaustible use:Irrigation, i ndustrial(pumping and d iversion)use, water supplyand water storingFig.1. Water rights systemof the state's ownership.status, while use-based water rights could offer anessential mechanism in matching supply and de-5 Conclusionsmand.With the significant damage and harm causedAcknowledgementsto the local economy, climate change arousesour attention on the problems in the current legalThis paper is supported by the Projects offramework of water resources distribution. Tradi-Southwestern University of Finance and Econom-tional political control of water exacerbates con-ics (Grant No. 2010XG026), and the Innovativeflict, generates time-consuming decision-makingTalents Training Fund of Southwestern Universityprocess and encourages waste in water use. Prop- of Finance and Economics.erty rights and free market are consequently advo-cated to be introduced in water resources. Trading Referencesin water rights, which is built on private initiative,is endorsed as a low-cost, environmentally sound[1] Robert G. 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