Chile's national sanitation service authority SISS has decided it lacks the jurisdiction to determine whether utilities become owners of the wastewater they treat.
The decision is a turnabout for the authority, which had previously been challenged on its decision to allow utility Aguas Andinas to sell treated wastewater.
SISS's position was backed by the supreme court, which in May ruled in favor of SISS in a suit that alleged the authority had erroneously interpreted Chilean laws by allowing utilities to sell the water.
Article 61 of Chile's general sanitation services law states water companies must discharge wastewater in the natural or artificial water table under the terms specified in the concession, according to a SISS release.
The issue has ignited a debate over water rights, with irrigation groups and national agriculture association SNA finding political support for its position that utilities do not own treated water.
National water utility association Andess is considering its next steps, association president Guillermo Pickering told paper Diario Financiero.