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Water licensing is a water demand management tool requiring private landowners, or at times specific potential water users, to apply for (or purchase) a license or permit for water-use or water affecting activities (e.g. construction, diversion, artificial recharge) in the watershed. Water licensing allows authorities and watershed managers to keep track of how much water is used, where and by whom, imposing timely restrictions where needed. Examples include mining operations in watersheds requiring water use permits, or applying for a permit to drill a borehole on private property, as well as permits to extract water for storage or irrigation.
Water licenses/permits are typically granted for a limited time and are subject to a number of regulatory obligations to ensure that water abstraction or other activity impacts are controlled and documented. If the obligations are not followed, the consequence may be a penalty (usually in the form of a fine), or permit retraction.