Legal Tools for the Management of Scarce Water Resources

Israel suffers from an acute and chronic water scarcity. The annual renewable fresh water availability in Israel is less than 300 CM per capita, far less than the 1,000 CM minimum quantity quoted at times by the World Bank. The shortage requires a mechanism to allocate the short supply while preserving the water resources.

In theory, an optimal allocation of scarce water resources where no water rights exist can be achieved either by economic tools, for example by auctioning water allocations, which will lead to the most economically beneficial use of water, or by administrative allocation where the government allocates water quotas to designated users/uses at fixed prices. For historical reasons stemming from the desire to preserve a green environment and to encourage agricultural settlement in remote areas, Israel employs the latter mechanism. The Director of the Governmental Authority has therefore a role both in the management and preservation of Israel’s scarce water resources as well as in their allocation in accordance with national policy planning objectives.

Pursuant to the Water Law no water may be used without a permit. Since the permit is required both for the extraction of water as well as for its use the Director of the Governmental Authority controls de facto both the quantity that may be drawn from each water resource as well as the quantity that may be used by each consumer. The licensing system provides the Director of the Governmental Authority with a tool for the control of water uses in areas or times of shortage.

If in any region of the country local water availability falls short of demand the Governmental Authority may proclaim such region as a Rationing Area. The water allocation regime applied for Rationing Areas is different than the ordinary allocation regime. Whereas in non-rationing areas there is no priority in allocating water between purposes of uses or the amounts to be used, such is not the case in Rationing Areas. The 1976 Rationing Area Regulations introduce a prioritizing in water allocations to be employed by the Director of the Governmental Authority in issuing water use permits. The descending order of priority is domestic consumption, industrial use, agricultural use and various other uses. Agricultural uses, being the most substantive users have been granted a third rank priority only, after domestic and industrial uses. A further provision of the Rationing Area Regulations allows the Director to establish, amend or reduce water allocations, determine times of supply and demand the introduction of water saving measures.