Mexico City, January 9 2025.
1. National waters. By Article 27 of the Political Constitution of the United Mexican States, the waters found in the national territory, including rivers, lakes, and aquifers, are the property of the Nation. Consequently, their use and exploitation are subject to the regulation of the National Waters Law and its Regulations. To exploit or use national waters a concession title issued by the National Water Commission (hereinafter, “CONAGUA”) is required.
Although access to water is a human right recognized in Article 4 of the Constitution, this resource has become increasingly scarce. In this context, the implementation of a new, stricter water regulation is anticipated, which will affect the current regulatory framework, granting greater faculties to CONAGUA to address the overexploitation and inequitable distribution of water.
2. Verification and surveillance faculties of CONAGUA. CONAGUA, in the exercise of its verification and surveillance faculties, is responsible for overseeing compliance with the obligations outlined in the concession titles granted for the exploitation or use of national waters, whether for industrial, agricultural, or any other activities. In case of non-compliance, CONAGUA may initiate administrative procedures, which could result in the imposition of sanctions, such as the suspension or revocation of the concession titles.
3. Legal recommendations. In this regard, below you will find our recommendations in view of the New Water Regulation with the purpose of avoiding the imposition of fines or losing the rights granted in the current concession titles, compromising your water supply and, thus, your operations.
- Avoid exceeding the volume of water granted. It is essential to keep an accurate and updated control of the volume of water withdrawn, making sure not to exceed the volume authorized in the concession title. Failure to comply with this condition could result in the imposition of fines and, in the worst case, revocation of the concession title.
- Prevent Expiration through the Payment of Guarantee Quotas. Concessioned water volumes that are not used for a period of two consecutive years could be canceled by CONAGUA, which would result in the loss of the right to exploit the unused volumes. It is important to note that the payment of guarantee quotas does not grant the right to use water, but rather maintains the validity of the right to request its future use.
- Compliance with the Terms and Conditions of the Concession Title. Concessionaires must comply with all operating and payment obligations established in the concession title. Failure to comply with these obligations may result in penalties, such as fines, updates, and penalties, and even the suspension or revocation of the concession title. In addition, CONAGUA has the power of inspection to verify compliance with the payment of fees and to ensure the sustainability of water bodies.
- Water Accounting. Concessionaires are required to keep an accurate accounting of the volume of water used and declare consumption through the platform DECLARAGUA. They are also required to pay the corresponding fees, according to the volume extracted.
- Use of Water for Authorized Purposes. The water extracted under the concession must be used exclusively for the purposes authorized in the concession title. The use of the resource for purposes other than those established constitutes non-compliance that could result in the revocation of the concession.
- Concession Extension Request. It is recommended to request the extension of the concession title at least one year prior to its expiration, given that the deadlines for the authority’s response may be long. Unlike other authorizations that allow requesting extensions at any time before their expiration, the concession of national waters requires an anticipated procedure.
Likewise, in actual practice, inconsistencies have been noted concerning the date that CONAGUA recognizes as the beginning of the term of the Concession Titles. For this reason, Basham’s litigation team has conducted several strategic litigations to ascertain the longest term in favor of the concession holder.
- Avoidance of Third-Party Water Supply. The holder of a concession is the only one authorized to use the concessioned volume of water. Any attempt to supply water to third parties must be made with the knowledge of CONAGUA and comply with temporary and circumstantial aspects. Without proper authorization from CONAGUA, this could result in the revocation of the concession title.
- Verification of Compliance Before the Transfer of Concessions. Before acquiring a national water concession, it is highly advisable to conduct a detailed audit of the obligations of the previous concessionaire. Noncompliance with the conditions established in the concession title by the previous holder could affect the validity of the concession and be grounds for CONAGUA to deny authorization for its transfer.
- Compliance with the corresponding pollutant parameters. Wastewater discharges to receiving bodies owned by the Nation must comply with specific maximum permissible pollutant limits. If the CONAGUA issued the Discharge Permit establishing Particular Discharge Conditions, it will be mandatory to comply with them; otherwise, the provisions of the Mexican Official Standards in force must be observed. If the quality of the discharges does not comply with the applicable parameters, CONAGUA may impose fines and even order the suspension of activities that give rise to the discharges.
4. Conclusion. Adequate and responsible use of national waters is essential for the sustainability of economic activities that depend on this resource. Water concessions, therefore, represent valuable assets that must be carefully managed to avoid the loss of water rights. By implementing the suggested preventive measures and keeping up to date with current regulations, companies can ensure the continuity of their operations without compromising access to water, while avoiding penalties and the revocation of concessions.
At Basham, Ringe y Correa, S.C., we are ready to advise you on any issue related to regulatory, environmental, and national water matters, whether consulting or litigation.
Sincerely,
Juan Carlos Serra Campillo
Jesús Manuel Colunga Victoria
César Augusto Reyes López
Marina Fernández Lozano
mfernandez@basham.com.mx
