Sheinbaum, CONAGUA Proclaim End of “Water Black Market”

President Claudia Sheinbaum and CONAGUA Director Efraín Morales López detailed structural changes to Mexico’s water governance through the new General Water Law, which establishes a rights-based model prioritizing domestic consumption. This reform targets a "water black market" by eliminating private concession transfers and imposing criminal penalties, including five-year prison sentences for illegal extraction. The regulatory shift mandates the regularization of sector-wide presumptive debts and intensified CONAGUA inspections, directly impacting compliance and cost structures for the industrial, real estate, and bottling sectors.

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President Claudia Sheinbaum and Efraín Morales López, Director General of the National Water Commission (CONAGUA), detailed a series of structural changes taking place within Mexico’s water governance as a result of the country’s new General Water Law. Speaking during the president’s daily press conference, the officials proclaimed the end of Mexico’s “water black market,” characterizing the legislation as a definitive shift toward equitable access. According to Sheinbaum and Morales, the new law is aimed at ending hoarding, speculation and illegal usage that flourished under previous regulatory frameworks.

General Water Law

The General Water Law was published in the Official Gazette of the Federation on Dec. 11, 2025, following its Dec. 3 approval in the Chamber of Deputies with 328 votes in favor, 131 against and five abstentions. The law simultaneously reforms, adds to and repeals numerous provisions of the National Water Law to align the sector with a rights-based model.

The new legal framework defines water as a public good of social interest and prioritizes personal and domestic consumption over all other uses. It establishes clear responsibilities for federal, state, and municipal authorities to guarantee access, quality and affordability.

A central provision of the law prohibits the total suspension of potable water and sanitation services due to non-payment. Service providers are now legally required to maintain a minimum supply sufficient to meet basic human needs, marking a departure from purely commercial provision models.

Elimination of the "Water Black Market"

During the presentation, Morales asserted that the new legislation eliminates the private transfer of concessions, a mechanism he claimed facilitated a "water black market." "It is a profound change that cuts off this regime of privileges and gives way to a system that privileges the human right to water," Morales said.

Under the former scheme, concessions granted for agricultural use were frequently transferred to industrial, real estate, or service activities for significant profit. Morales cited a case in Zacatecas where seven original concession titles were transformed into 50, generating up to MX$54 million (US$3 million) for a private individual. 

Sheinbaum explained that this speculative model prevented legitimate users from accessing the resource. "If this aquifer allowed the exploitation of 100 cubic meters and it was already concessioned to someone who never used it, another person who really needed it could no longer obtain it," she said.

Enforcement and Sanctions for Abuse

The federal government documented several cases of abuse to justify the new enforcement powers. In Queretaro, authorities identified concessions held by the family of federal deputy Mario Calzada that were ostensibly for agricultural use,and thus exempt from payment,but were used to supply real estate developments and for sale via water trucks. "While the people next door have no water, agricultural concessions were used to profit," Sheinbaum said, noting that these concessions have been withdrawn.

Other documented cases included illegal well drilling in Nayarit, where water was sold for up to MX$5,000 (US$281) per truck, and clandestine taps in Los Cabos that diverted water before it reached the general population. Under the new law, such practices can result in fines of up to MX$3.5 million (US$197,028) and prison sentences of up to five years.

Corporate Regulation and Revenue Growth

CONAGUA has also identified irregularities among various companies, including soft drink and bottling entities, involving hoarding, overexploitation and unpaid rights. One case revealed debts of MX$234 million (US$13.2 million), while others involved unmonitored discharges and lack of proper metering. Morales López warned of a presumptive debt of nearly MX$12 trillion (US$202.5 billion) across the sector and urged companies to regularize their status or risk the cancellation of concessions.

The implementation of the new law has already impacted federal finances, with tax collection increasing by approximately MX$3 billion (US$168.8 million) in 2025. Projections for 2026 suggest an additional increase of MX$6.3 billion (US$354.6 million). To date, CONAGUA has conducted over 7,000 inspections, resulting in more than 1,000 closures due to illegal use.