Presentation of the National Water Plan

Executive Summary:

• On November 21, 2024, the President of Mexico, Claudia Sheinbaum, accompanied by the heads of the Ministry of Environment and Natural Resources (“SEMARNAT”), the National Water Commission (“CONAGUA”) and other authorities, presented the National Water Plan (“PNH”).
• The PNH proposes a new paradigm in the regulation of water use in Mexico, and reinforces the efforts of authorities to prevent the contamination of water sources.

Below we will present the points of the PNH that could have a direct impact on the use of water for the industrial and service sectors:

Order the concession titles to exploit water: The PNH seeks to redefine the current concession system established in the National Water Law (“LAN”), arguing that said system allows speculation and water hoarding, since this system allows the transfer of concessioned volumes of water for another person to use, regardless of whether said volume is destined for a different activity (for example, an agricultural concessionaire transfers its volume of water to an industry; once said process is completed, the water would no longer be used for agriculture but for industrial purposes).

This proposal arises because there was a 10-year period in which more than 360 thousand concessions were granted in the country. This data does not consider that the concessions were the instrument to regulate the exploitation of water, this is because, previously, water in Mexico was exploited under the “free flow” modality, which consisted of using water without any control by CONAGUA.

In our opinion, if this provision is implemented, it could make it more difficult for the industrial sector to obtain concessions, an unfair punishment, since the PNH itself recognizes that in Mexico 76% of water use is destined for agricultural activities, 15% for urban public use and only 9% for the industrial sector. 

• Sanitation of rivers, mainly the Lerma-Santiago Pacific River, Atoyac River and Tula River: Certainly, the care of these rivers represents a great advance in the human right to a healthy environment and the right to health in general. However, this means that CONAGUA will be closing down polluting companies and imposing sanctions, these being hefty fines.

Although these three rivers will be the most important for the PNH, the reality is that actions will be strengthened throughout the country to prevent water pollution.

• Creating the inspection program: As mentioned, CONAGUA plans to strengthen its inspection and sanctioning efforts, not only with regard to wastewater, but also with regard to water exploitation.

It should be noted that CONAGUA has administrative powers, both environmental and fiscal, so, in addition to the fines and closures mentioned above, the collection of fees for the use of water will be stricter.

• New legal framework: The current LAN is planned to be reformed, and at the same time the new General Law on National Waters to be issued. It should be noted that, on November 12, an initiative was presented containing the new water law, where there is a high probability that this will be the new law.
• Create the National Registry of Water for Wellbeing: which consists of an update of the Public Registry of Water Rights, to simplify and update water information.
• Issue a decree on administrative facilities so that expired concessions can be renewed: as long as the aquifer allows this exploitation.
• Simplify and digitize all procedures: To this end, CONAGUA intends to invest in its system and create an electronic file for each concession. Therefore, the number of procedures with CONAGUA will be reduced from 27 to 19, the number of requirements will be reduced from 19 to 9, and the response period will be changed from 15 to 60 days maximum. If this idea is approved, the procedures regarding water will undoubtedly be much faster and more agile.
• National agreement for the human right to water and sustainability: It is a plan in which the government invests in water infrastructure, together with the private sector. In addition, it is proposed that the private sector voluntarily give up 2,500 billion cubic meters of water under concession.

Although some proposals are favourable, such as river clean-up initiatives or the digitalisation of procedures, the reality is that, if this plan is implemented, companies could see their current rights compromised, or they could have difficulties when exploiting new volumes of water. For this reason, we propose the following:

• Environmental compliance: In addition to the above, it is recommended to have adequate treatment of wastewater and avoid contamination; this action should already be carried out by the compliance policies of the companies, however, if the PNH is applied, the consequences of contamination may be greater, either through more expensive fines, or even the closure of the company.
• Tax compliance: It is recommended to verify that fees, especially for water use, are up to date.
• Start with the transfer of water rights: In the event that an increase in water consumption is required in the near future, it is recommended to begin processing the transmission under the current LAN.
• Speed ​​up the procedures currently being carried out before CONAGUA: so that these can be resolved under the current LAN.
• Seek compensation measures for water catchment: This practice is known as water balancing, and consists of generating works that allow the capture of water in the same volume that is intended to be extracted. With this type of action, the authorities can have more favorable positions when authorizing transmissions, extensions or other procedures.

The NHP should not be seen as a loss of current water rights, or as an obstacle to investments in the country; the NHP seeks to make water use more sustainable and regulated. Although it could have points of improvement, and may be based on some prejudices towards the industrial sector, we must understand it and apply it in the best way, in order to guarantee a continuous water supply in the industrial sector, as well as the possibility of discharging wastewater.