On July 1, 2020, the National Water Commission (“CONAGUA”) published in the Official Gazette of the Federation the “Agreement establishing extraordinary transitional measures to guarantee the supply for domestic and urban public use to population centers, as part of the comprehensive response to the health emergency generated by the SARS-CoV-2 virus (COVID-19)” (the “Agreement”).
The Agreement establishes extraordinary transitional measures to guarantee the supply of national waters for domestic and urban public use to population centers, supplied through the states, the municipalities and/or their respective municipal operating agencies and/or the state commissions responsible for providing the public service of drinking water, drainage, sewerage and sanitation (the “Authorities”). Specifically, the Agreement establishes the following: • In basins and/or aquifers where water for human consumption is required, generated by the increase in demand in the face of the health emergency caused by the SARS-CoV-2 virus (COVID-19), and where there is no water availability, it is authorized, on a temporary and extraordinary basis, for concessionaires of national waters to provisionally grant to the Authorities, after prior notice to CONAGUA, a portion of their water volume in order to temporarily allocate it to meeting the needs established in the Agreement. • The notice that concessionaires may submit to CONAGUA, regarding the volume of water provisionally delivered to the Authorities, must comply with the following: o Be in writing, stating the number of the concession title that supports the concessionaire’s right and the volume of water that will be allocated for the purposes established in the Agreement. o Establish the measurement system with which the volume to be delivered to the Authorities will be quantified. o State whether the concession holder’s infrastructure will be used to extract the volume of water. o Establish the period for which the agreed volume of water will be made available; and o Establish, where applicable, the manner in which damage caused to the concessionaire’s infrastructure through the use of such infrastructure for the purposes of the Agreement will be compensated. The foregoing may be carried out through the submission of a notice of provisional use of water volumes pursuant to Article 23 BIS of the National Waters Law, supplemented by the execution of a special-purpose contribution agreement that, where applicable, must be signed by the concessionaire or its legal representative, as well as by the official with sufficient authority on behalf of the Authorities to enter into this type of agreement. • The volume of water that, pursuant to the Agreement, is delivered by concessionaires on a provisional basis to the Authorities will be accounted for as “human consumption.” • The measures provided for in the Agreement will not apply to volumes of water in respect of which suspension, extinguishment, lapse or revocation has been declared, which have expired, or those for which the concession title extension procedure is pending resolution by CONAGUA. • The Agreement will be in force for six (6) months from the date of its publication or “until the water supply conditions for the population related to the health emergency generated by the SARS-CoV-2 virus (COVID-19) are overcome,” whichever occurs first. At Von Wobeser, we have advised several of our clients in handling situations of this nature in coordination with CONAGUA and the corresponding Authorities under the terms established in the applicable provisions; therefore, we can support you in addressing any matter related to the Agreement. For further information, contact our experts: Edmond Grieger, Partner: +52 (55) 5258-1048 | egrieger@vwys.com.mx Rebeca Márquez, Associate: +52 (55) 5258-1048 | rmarquez@vwys.com.mx Ariel Garfio, Associate: +52 (55) 5258-1048 | agarfio@vwys.com.mx Roberto Flores, Associate: +52 (55) 5258-1048 | rflores@vwys.com.mx
