"Our monthly oil analysis reports have shown that a few of our systems have between 400 and 500 ppm of water consistently. The OEM has told us that water levels less than 500 ppm are OK for this system and that we shouldn't worry about it. What level of water is acceptable for hydraulic systems and hydraulic fluid?"
The short answer to this question is that there is no acceptable level of water in a hydraulic system or hydraulic fluid. Any amount of water will have an effect on the chemical properties of the lubricant and the metal surfaces of the components and reservoir. Simply stated, the degree of damage to the oil and to the machine depends upon how much water is present and for how long.
The long answer is more complex. Additives used in some hydraulic fluids, in particular anti-wear (AW) additives, can interfere with the instrument most commonly employed to test for water contamination, making the results appear higher than they actually are.
So, you need to trend the lab data that you have received to first determine if the moisture concentration has been increasing, decreasing or has remained stable over a given period of time.
If you find that the levels on your lab reports have either decreased or remained stable over a significant period of time, you should remove the water using a vacuum dehydrator, centrifuge, water-absorbing filters or some other form of dehydrating separator.
You also should perform root cause analysis (RCA) to determine the nature of the water ingress and make any changes necessary to prevent recurrence. Common sources of water include lubricant top-ups, faulty or ineffective breathers, poorly sealed hatch covers, leaky oil coolers, aggressive wash-down practices, etc.