Hoarding water to make money? What the new water amendment bill would do

New national law aims to stop water hoarding and private trading

The proposed National Water Amendment Bill aims to stop individuals and companies profiting from withheld water allocations by closing loopholes that allow unused entitlements to be treated as private assets. The bill would introduce a “use it or lose it” principle, ban private water trading, and give the Minister of Water and Sanitation broader powers to reallocate unused water.

What is water hoarding?

Under South Africa’s existing water framework, historic lawful water use can remain in place indefinitely. That has allowed licence holders and those with existing lawful use to hold allocations they do not use, viewing those entitlements as commercially valuable. The Department describes this practice as water being treated like a private commodity rather than a shared public resource.

“Water use exercised through existing lawful use is normally hoarded, even if it is not used, since this use is viewed as a possible business tool associated with water trading,” said Dr Sean Phillips, Director General of Water and Sanitation.

Key proposals in the bill

The amendment contains several major interventions designed to free up scarce water for reallocation and to address persistent inequities in allocation:

• Use-it-or-lose-it: Licences that remain unused for a defined period could be revoked and reverted to the Department for reallocation.
• Ban on private trading: Private deals to buy and sell water use would be prohibited; temporary transfers would be capped at 24 calendar months.
• Surrendered water returns to the state: Water surrendered by a licensee would be handed back to the national government and could not be traded privately.
• Ministerial reallocation powers: The minister could reallocate water between sectors, provinces or catchments after consultation and consideration of factors listed in the National Water Act.
• Fit-and-proper test: Authorities could refuse to consider licence applications from those who have committed gross transgressions of water legislation.

Why the bill’s changes matter

The bill is framed as a response to structural problems that the department says have blocked transformation in water use since 1998. According to the department, of the 21 billion cubic metres of currently allocated water, 54% goes to agriculture and 84% of that agricultural allocation goes to commercial agricultural companies. Historically disadvantaged individuals account for only 3% of agricultural water use overall, and since 1998 just 19% of new agricultural licences have been issued to historically disadvantaged individuals.

To identify allocations that can be freed up, the department is conducting a nationwide validation of existing lawful water use; that audit is reported to be about 50% complete. The department also noted an administrative improvement: 80% of water-use licence applications were finalised within 90 days in 2025/26, up from 35% in 2022/23.

Public accountability and redistribution

The amendment would give legal force to transformation targets by allowing regulations that prescribe criteria for redressing past racial and gender discrimination in water use. It would also enable the state to act where water is concentrated in the wrong hands or wrong regions by providing a statutory mechanism for reallocation.

“This will enable scarce water to be freed up for reallocation, which in turn will assist the Department to achieve its objective of increasing greater equity in water use allocations,” Dr Phillips said.

What residents should expect and who to contact

If enacted, the bill would change how unused or surrendered water allocations are handled and restrict private trading of water use. For questions, concerns or to follow the legislative process, residents can refer to the Department of Water and Sanitation and the Minister of Water and Sanitation, who are central to the changes proposed in the amendment.