Since 1992, water use in Mexico has been governed by the National Water Law (LAN), a framework established during the administration of President Carlos Salinas de Gortari as part of an economic liberalization program. The LAN replaced the previous system, which distinguished between allocations — granted to municipalities for public use — and concessions, issued to corporations for commercial purposes.

A major overhaul of the Mexican water regulation system at the time, the LAN streamlined the process for corporate entities to acquire water concessions, removed limits on how many concessions they could hold, and instituted a uniform payment scheme for public and private users. It also created the National Water Commission (Conagua), a decentralized branch of the Environmental Ministry (Semarnat) as a governing authority over water administration.

However, in the years since the LAN has faced criticism for favoring corporate interests at the expense of environmental sustainability and marginalized communities. A 2023 study by the Mexican Institute for Competitiveness (IMCO), a public policy research think tank, highlighted significant gaps in oversight of private concessions, leading to overexploitation of water resources.

The report noted that poor monitoring has enabled pollution and waste, particularly in industries like livestock farming and mining, where inadequate wastewater treatment has contaminated groundwater. The study also found that inspections by Conagua and the Office of the Attorney General for Environmental Protection (Profepa) dropped by 70% between 2019 and 2022, compared to the previous eight years when annual inspections averaged more than 8,000 per year.

The push for reform

Since its implementation, the LAN has been at the center of numerous conflicts over water access. In 2012, Article 4 of the Constitution was amended to recognize access to water and sanitation as human rights, mandating the creation of a new General Water Law to replace the LAN. Yet, more than a decade later, this legislation remains unpassed.

In October, Morena party deputy Xóchitl Zagal Ramírez introduced a bill to establish the General Water Law. The proposal would reduce the maximum term for water concessions from 30 years to 15 years, require environmental impact studies for potential concessionaires, and allow Conagua to scale back volumes for overexploited concessions.

Some water experts, however, caution that such measures could discourage foreign investment.

Raúl Rodríguez, president of the non-profit Water Advisory Council, explained the challenges to Mexico News Daily. “Our current president wants to shorten concession terms and reduce water volumes for several industries. Despite new agreements with the business sector, this creates uncertainty for companies that need assurance of water availability for their operations,” he said.

Rodríguez suggested the government focus on incentivizing wastewater reuse rather than limiting concessions, emphasizing that such a strategy would benefit both private companies and the broader public.

Industrial contributions and challenges

Mexico’s industrial sector accounts for approximately 5% of the country’s water usage, compared to 76% for agriculture and 14% for domestic supply. Despite its smaller share, the industry is subject to stringent regulations under LAN. Companies are required to invest in water treatment technologies to comply with national and international standards, such as the United Nations’ 2030 Sustainable Development Goals.

A recent example of water efficiency in the industry is Heineken’s brewery in Chihuahua, which uses just under two liters of water to produce one liter of beer — far below the global average of four liters. Industrial parks in northern and central Mexico, which host manufacturers from aerospace to agriculture, often build on-site water treatment systems to ensure a reliable supply.

However, some regions face acute water challenges. Overexploitation of aquifers is widespread; 105 of Mexico’s 653 aquifers are severely depleted. In areas like Baja California, desalination plants have become a necessity to address water scarcity. Similarly, northern states like Tamaulipas increasingly rely on isolated water treatment systems for industrial use, bypassing centralized plants.

A report by the Mexican Association of Private Industry Parks (Ampip) underscores the importance of these measures, noting that industrial parks — primarily located in Monterrey, Tijuana, Querétaro, and San Luis Potosí — must comply with strict water recycling requirements.

Yet, challenges persist. According to the Ministry of Foreign Affairs in the Netherlands, only 1% of Mexico’s wastewater is recycled, with regional variations in treatment rates. Rodríguez emphasized that the federal government and private sector recently agreed to return more than 2 billion cubic meters of treated water for reuse in industries that do not require potable water, such as mining, metallurgy, and green irrigation.

Historical context and the National Water Plan

Under the LAN, water for use in the industrial sector is allocated through concession titles that allow extraction from rivers, lakes, and groundwater. María Teresa Gutiérrez, director of Agua.org.mx, explained that Conagua assesses water availability before granting permits. “If the site is located in an overexploited aquifer, the concession is not granted,” she said.

Companies in high-water-use sectors, such as beverages and metallurgy, undergo rigorous audits to ensure compliance with recycling and reuse requirements. “The urban public service is subsidized, but industries operate differently. They must demonstrate robust water management strategies to gain approval,” Rodríguez explained.

“Once the permission is granted, companies must produce an action plan [to demonstrate their commitment to water conservation] and those that are in the soft drink and beer industry and the metallurgy sector are audited more rigorously so their plan must be more comprehensive,” he added. 

As of 2025, public and private businesses have permission to extract 237 billion cubic meters of water per year, according to Conagua’s  Public Registry of Water Rights.

Conagua declined to respond to Mexico News Daily over questions about potential changes to the LAN. The agency’s federal budget for fiscal year 2025 is projected to decrease by 40%, raising concerns about its capacity to manage water resources effectively.

The Constellation Brands controversy

The LAN’s limitations were spotlighted in the 2020 cancellation of a US $1.4 billion brewery project in Mexicali by U.S.-based Constellation Brands, producers of major export brands such as Cerveza Modelo. The project was halted after a public referendum, with residents citing concerns about water scarcity.

Critics argue the decision was politically motivated. “The company had all the permits required by LAN,” said Ramírez. However, others, such as Bernardo Villasuso, Latin America Director for Nalco Water Light, defended the move, stating, “It’s logical for the government to ensure water-intensive industries are located in areas with adequate resources.”

Duncan Wood, CEO of the Pacific Council, highlighted broader issues, including climate change, population growth, and cross-border water-sharing agreements, as contributors to water stress in northern Mexico. “Even if Constellation Brands invested US $800 million, the lack of water for farming communities threatened livelihoods,” he said.

A study by El Colegio de la Frontera Norte found inconsistencies in water availability projections for the Mexicali aquifer, exacerbating tensions between local stakeholders and the brewery project.

Governance and the path forward

As debates over water access continue, experts agree that governance reforms are crucial. Gutiérrez emphasized the need for a new legal framework prioritizing conservation, restoration, and sustainable water use. “The sectors using the most water often wield the most influence, complicating efforts to enact change,” she said.

The recently proposed National Agreement for the Human Right to Water and Sustainability, which aims to improve water recycling and reduce corporate overuse, could be a step in the right direction. However, barriers remain, with political and economic interests slowing progress.

“The LAN must evolve to balance human rights, environmental protection, and industrial needs,” Gutiérrez said, underscoring the importance of integrating technology and policy to secure Mexico’s water future.

Originally from Texas, Nancy Moya has two degrees from New Mexico State University and the University of Texas at El Paso. With 15 years of experience in print and broadcast journalism, she’s worked with well-known outlets like Univision, The Associated Press, El Diario de El Paso, Mexico’s Norteamérica and Mundo Ejecutivo, Germany’s Deutsche Welle and the Spanish-language El Ibérico of London, among others.