On Monday, September 29 and October 1, the Federal Executive Power presented their reform proposals to National Water Law and issue the new General Water Law. This proposal is yet another attempt to respond to the water crisis facing the Mexican country and to clarify a legal framework that prioritizes water as a human right and a good of public interest, rather than as a resource or commodity.
As the Federal Government has mentioned, one of the most important factors of this reform will be the prohibition of transferring water concessions between private parties, limiting the possibility of carrying out operations through legal instruments such as a purchase agreement or the assignment of rights. The focus of the reform is that, from its implementation, the allocation of concessions will be under stricter control of the State, forcing companies to plan their water supply needs more in advance.
The reform also provides for the creation of a National Registry of Water for Wellbeing, which will allow for a more transparent and updated list of concession holders. This implies that all concessions must be fully regularized and documented, which could open up processes of revision and eventual adjustment of the titles currently in force.
The initiative also proposes the installation of a One-Stop Shop for administrative procedures, which in principle seeks to simplify the relationship with the National Water Commission (CONAGUA). However, this administrative modernization implies that the sanctions regime will also be strengthened: with the possibility for the authority to impose severe fines and sanctions for water diversion, use other than that authorized or non-compliance in the operation of the titles.
Below, by way of exemplification, we show a series of key points to be taken into account regarding the reform project:
FIRST.- The rights of concessions and assignments may not be transferred.
SECOND.- The reallocation of volumes will be carried out only after analysis and prior authorization by the Water Authority, which will proceed to issue a new concession or allocation title.
THIRD: The total or partial use of concessioned waters may no longer be provided to third parties (provisionally).
FOURTH.- The deadline for requesting an extension of concessions and assignments is now within the last year of its term, at least 6 months before expiration (Previously: within the last 5 years at the end of its term, at least 6 months before expiration).
SIXTH.- It will no longer be allowed to totally or partially change the use of water granted in concession, this now constituting an infraction, with a fine of up to 50,000,000 UMA’s, as well as the temporary or definitive closing of the wells and the works or intakes for the extraction or use of national waters.
SEVENTH.- The guarantee fee of non-expiration in the exception of expiration of water rights may be made only in 2 cases, provided that it is duly justified before CONAGUA.
EIGHTH: Dilution of wastewater will be allowed in the case of water from desalination processes.
NINTH: Providing third parties with the use of concessioned waters shall be grounds for revocation of the concession.
TENTH: The REPDA (Public Registry of Water Rights) will be replaced by the National Water Registry.
Eleventh.- The National Water Reserve Fund is established (replacing the Water Banks), which shall be made up of volumes recovered from titles for the exploitation, use or exploitation of national waters, not being considered as available.
TWELFTH.- The volumes of water coming from the rights of exploitation, use or exploitation of water for agricultural, livestock or forestry use shall be reallocated (instead of being able to be transferred).
THIRTEENTH.- The reuse of wastewater (treated and untreated) will be encouraged.
FOURTEENTH: It is proposed that the reports containing the analyses and indicators of the quality of the water discharged be annual.
FIFTEENTH.- Increase in fines for administrative infractions, going up to 50,000 UMA’s and establishing a catalog of water crimes, which will be prosecuted ex officio.
This reform must also be understood within the framework of the National Water Plan 2024-2030, the guiding instrument for the country’s water policy. This program establishes as priorities the comprehensive and sustainable management of the resource, the fight against corruption in the allocation and operation of concessions, as well as equitable access to water as a human right. In this sense, the new General Water Law represents the normative translation of the program’s objectives, as it seeks to organize the list of concession holders, close spaces for irregular practices and make the granting and oversight of titles transparent.
It is worth mentioning that within this project, the figure of the Water Crime is presented, which within the initiative different assumptions of typification and its corresponding penalties are indicated, which are reflected below:
The initiative also reflects the Federal Government’s intention to exercise stricter control over sectors considered to have a high impact, such as mining, prioritizing the human and environmental use of water over industrial uses. In this sense, there is an imminent need to review the current concessions of the companies, so as to ensure the neatness of the documentation, as well as that everything is in order in the face of possible changes and, above all, to adapt their strategies for the use and management of the resource to a more restrictive environment.
In conclusion, the project represents a paradigm shift in national water resource management, with direct implications for legal certainty, project planning, and regulatory compliance. Concession companies must prepare for a period of increased state oversight and control, where legal prevention and proactive management of regulatory compliance will be crucial to ensuring the continuity of their operations under the new water rules.
Associate
