In more detail

Access to water as a human right

The GWL states that every person has a human right to water in accordance with the Constitution and international treaties signed by Mexico. All government agencies have an obligation to promote, respect, protect and guarantee human access to water. Water supply must be sufficient in quality, continuous and equitable to sustain human life.

Water concession titles will no longer be transferable

Concession holders will no longer be able to transfer their concession titles. The NWL introduced the concept of water volume reassignments, which will conceptually replace transfers. A reassignment is defined as a process whereby the National Water Commission (CONAGUA) disposes of water volumes located in reserve funds and assigns them or grants new concession titles in accordance with the rules to be established by upcoming regulations. The NWL states that these reassignments must be resolved in an expedited manner.

The granting of new concessions must take into account water availability

To grant new concession titles, CONAGUA will have to take into account median annual water availability, which will be subject to review every two years, along with water exploitation rights duly recorded before the newly created National Water Rights Registry and the corresponding water extraction regulations.

Concession renewals

Water concessions will continue to be subject to renewals for the same period for which they were granted. There was general concern that a renewal would be on a one-time basis only, but this restriction was ultimately removed by Congress. To decide on a renewal, CONAGUA will be required to take into account hydric responsibility and full compliance with water fee payment obligations.

Prioritizing human consumption of water

The NWL states that any water permit or concession, as well as any renewal thereof, must prioritize human and domestic consumption in accordance with the principles established in the GWL. If the availability of water for human or domestic consumption may be at risk, CONAGUA — after technically evaluating all relevant information — may reduce or cancel water concessions.

This is a highly subjective provision that grants CONAGUA too much discretionary authority in deciding whether to amend or revoke a concession title. In our opinion, there should be clear rules on how CONAGUA may conduct the evaluations.

Use of water by third parties

Prior to being amended, the NWL allowed a concession holder to grant the temporary use of water to a third party without the need of having to transfer a concession title. This scheme has been eliminated by the amended NWL. Only a concession title holder may use or exploit water.

Change in the use of water

The NWL allowed water authorized for a specific purpose (agricultural, farming, industrial) to be amended as long as CONAGUA was notified. This possibility has been eliminated by the amended NWL.

Total or partial forfeiture of a concession

CONAGUA will continue to be able to declare partial or total forfeiture of a water concession if a concession holder does not use all of the water during two consecutive years without a justified cause. The mechanism to avoid a forfeiture declaration continues to be the same.