South Africa’s growing water insecurity has moved from an environmental concern to a central economic and regulatory challenge. Deteriorating infrastructure continues to worsen the situation. Recurring supply disruptions also place strain on national systems. In addition, unlawful water use increases pressure on already limited strategic water resources. These factors together strain the country’s water governance framework.
Against this backdrop, policymakers introduced the 2026 National Water Amendment Bill (NWA Amendment Bill). They tabled it before the National Assembly on 21 January 2026. The bill proposes the most significant overhaul of the National Water Act 36 of 1998 in over a decade. The 2026 National Water Amendment Bill, therefore, marks a major regulatory turning point.
The prohibition of private water trading
For sectors that rely on predictable access to water, the implications are significant. Agricultural users and industrial water users face the most direct exposure. The NWA Amendment Bill signals a decisive policy shift. It introduces broad changes across the water regulatory system.
These changes include the prohibition of private water trading. They also expand regulatory powers. In addition, the bill strengthens compliance and enforcement provisions. As a result, the 2026 National Water Amendment Bill could reshape how water rights function in practice.
In light of these developments, it becomes necessary to assess the legal implications. From an environmental law perspective, stakeholders must evaluate the impact of the 2026 National Water Amendment Bill. The key focus falls on water-use rights, licensing frameworks, and commercial operations.
The proposed prohibition of private water trading
Section 25 of the National Water Act currently allows temporary transfers of water-use authorisations. In practice, users rely on this provision in two main ways.
First, a person authorised to use water for irrigation may temporarily allow another use. That use may apply to a different purpose or another property nearby. Second, a water user may surrender a water-use entitlement. This surrender often supports another party’s licence application.
The 2023 Constitutional Court judgment in Minister of Water and Sanitation and Others vs Lotter N.O. and Others (CCT 387/21) [2023] ZACC 09 confirmed an important principle. It held that private persons may engage in “private water trading” under section 25. This applies where no clear legal prohibition exists. However, the 2026 National Water Amendment Bill directly targets this practice.
The bill introduces an explicit prohibition on trading water-use entitlements. Under this new framework, all surrendered entitlements revert to the Minister of Water and Sanitation. The Minister then reallocates these entitlements in the public interest. This shift marks a structural change under the 2026 National Water Amendment Bill.
The amendments also tighten transfer conditions. They cap temporary transfers at 24 months. They also limit surrender arrangements. Holders may only use surrenders to support their own licence applications. These applications must relate to other land owned by the holder. Third-party applications will no longer qualify under the 2026 National Water Amendment Bill.
Existing lawful water uses
The NWA Amendment Bill also proposes to repeal section 33 of the National Water Act. This section currently allows users to declare historical water use as existing lawful water use (ELWUs). This transitional mechanism dates back to 1998.
The mechanism allows users without formal licences to regularise their water use. They do this through established administrative processes. However, the 2026 National Water Amendment Bill seeks to end this mechanism. It removes the pathway for retrospective recognition of ELWUs. It instead requires full licensing or general authorisation compliance.
The responsible authority will also gain additional powers. It may impose new conditions on ELWUs. It will also bring these uses into the licensing or general authorisation framework. This change increases regulatory oversight. It also reduces the automatic continuation of historical water rights under the 2026 National Water Amendment Bill.
Reallocation of powers and strategic water source areas
The NWA Amendment Bill strengthens ministerial authority over water allocation. It empowers the Minister to reallocate water-use authorisations. These reallocations may occur across sectors, provinces, or catchments. The public interest will guide all decisions.
This approach centralises water governance at a national level. It reinforces the state’s role as custodian of water resources. Under the 2026 National Water Amendment Bill, water users must also reassess allocation efficiency. Unused or underutilised allocations may face reduction or reallocation risk. The bill also introduces a framework for strategic water source areas. The Minister may identify and gazette these areas. The Minister may also regulate activities within them.
In some cases, the bill prohibits certain water-use licences. This applies to opencast mining, underground mining, forestry plantations and selected agricultural activities. These restrictions aim to protect critical catchment zones. They also support long-term national water security goals under the 2026 National Water Amendment Bill.
Penalty provisions and director liability
The NWA Amendment Bill significantly increases penalties for non-compliance. Current provisions allow unspecified fines. They also allow imprisonment of up to five years. However, the new framework replaces this structure. It introduces fines of up to R10 million. It also increases imprisonment terms to up to 10 years for serious offences.
The bill also introduces personal liability for corporate decision-makers. Directors and municipal managers must take reasonable steps to prevent offences. If they fail, courts may hold them personally liable.
Courts may also order recovery of rehabilitation costs. They may also recover financial benefits gained from offences. These measures reinforce accountability under the bill. They also signal that environmental harm can no longer function as a routine business cost.
What should affected organisations do now?
Stakeholders across agriculture, mining and industry must prepare for significant change. The proposed reforms may materially affect operations. They may also affect commercial planning.
The restrictions on tradable water-use entitlements will reduce flexibility. The Minister’s expanded reallocation powers will also reshape long-term planning. As a result, projects that depend on stable water access may face new risks under the 2026 National Water Amendment Bill. Organisations should therefore act early. They must assess their exposure to licensing, trading arrangements and water-use rights. They should also evaluate operational dependencies on water allocations.
Early engagement will be essential. Strategic planning will also be necessary. Specialist legal advice will help organisations navigate the evolving framework introduced by the 2026 National Water Amendment Bill.
| James Ross | Director | Corporate & Commercial Law | mail me | |  |
| Alysa Bunting | Associate Designate | Corporate & Commercial Law | mail me | |  |
| Emily Raubenheimer | Candidate Attorney | mail me | |  |
| | Cliffe Dekker Hofmeyr | | |
