According to our Constitution, the water found in the territory (including rivers, lakes and aquifers) is the property of the Nation. Therefore, the use and exploitation of the same is regulated and, in general, it is necessary to have a concession title issued by the National Water Commission (CONAGUA) to exploit national waters.  

While access to water is a human right, this resource has become increasingly scarce. In addition, in 2022, Mexico suffered droughts that compromised access to water. 

For this reason, CONAGUA has prioritized the verification of compliance with the concession titles granted to use water in industrial, agricultural or other economic activities, in order to suspend or revoke those titles with non-compliance. Likewise, during 2022 it was more common for CONAGUA to expire volumes of concessioned water that were not being used. These actions are aimed at ensuring the supply of water for human consumption. 

In this regard, we recommend that holders of a concession to exploit national waters consider the following points to avoid the imposition of fines or losing the rights granted in the concession titles and, thus, compromising their water supply: 

1. Avoid exceeding the volume of water granted. Extracting more water than permitted by the corresponding concession title is a breach that could lead to the imposition of fines and even the revocation of the concession.  

2. Avoid expiration by paying warranty fees or investing in water-saving technologies. Concessioned water volumes that are not used for two consecutive years could be expired by CONAGUA and, therefore, subtracted from the authorized volume. In this case, the concessionaire would lose the right to exploit the expired volumes. To avoid expiration, it is possible to make a guarantee payment to CONAGUA. This payment is calculated based on the volume of water granted and the volume used in the two-year period, and its function is to notify CONAGUA that the concessionaire is interested in using this volume in the future. Likewise, it is possible to make investments to implement projects that aim to save and use water efficiently, which must be notified to CONAGUA before the end of the two years in which less water has been used. It should be noted that these types of projects can also help comply with ESG policies (“environmental, social and governance”) of a company. 

3. Adhere to the terms and conditions set forth in the corresponding concession title. Concessionaires must comply with the payment and operational obligations established in the concession title to avoid falling into cross-noncompliance that could lead to the suspension or revocation of the concession title, as well as the imposition of fines, updates and surcharges. In addition to the issuance and administration of concession titles to exploit national waters, CONAGUA has oversight powers to verify the payment of fees for the exploitation of national waters and, in the event of detecting noncompliance, impose fines and require updates and surcharges, as well as to ensure that water bodies are not overexploited. 

4. Verify that the meters are in operation. Concessionaires are required to measure their consumption using meters authorized by CONAGUA. If they detect a fault, they must immediately notify CONAGUA to avoid anomalies in the water consumption records while the meter is being repaired. 

5. Keeping track of water. Dealers are required to submit declarations of their consumption and pay fees for said consumption through the DECLARAGUA platform.

6. Use the extracted water for the use authorized in the concession title. Concession titles establish the use to which the extracted water may be put. Use for purposes other than those authorized is a breach by the concessionaire that could result in the revocation of the concession. 

7. Request an extension of the concession at least 6 months before its validity expires. Unlike other authorizations that allow for an extension request at any time prior to their expiration, concession extensions must be requested at least 6 months prior to the end of their validity.  

8. Avoid supplying water to third parties. Only the holder of a concession may use the volume extracted. Authorization from CONAGUA is required, or in some specific cases prior notification to said authority, to supply water to third parties (including related persons and subsidiary companies). Failure to comply with the above may result in the revocation of the concession. 

9. Verify compliance with a concession prior to its acquisition. Before acquiring concessions for the exploitation of national waters in the water market, it is advisable to carry out an audit. If the holder of the corresponding concession has failed to comply with its obligations, such failures could affect its validity and result in CONAGUA refusing to authorize its transfer. 

Most economic activities require the use of water. Despite the implementation of technologies for saving and sustainably using water, some industries require large volumes of water for their operation, and the lack of it could even compromise their operation. Therefore, concession titles for the exploitation of national waters are valuable assets that must be taken care of in order to keep them in force and to continue having access to this resource.