Under the Panama Canal Treaty (1977) the Republic of Panama was obliged to provide sufficient water for the operation of the Canal and for cities in the area. This led to the creation of several national parks, the promotion of sustainable development activities, and the implementation of base-line studies, all with support from USAID (United States Agency for International Development).
A Panama Canal Authority (PCA) was created by Constitutional reform in 1994 which granted legal obligations and rights to manage the PCW. A land use plan and an Organic Law for the PCA were approved in 1997, though the former has yet to be implemented. Selecting ways to define and implement a plan and creating and strengthening the co-ordination mechanism for all the parties involved in the Inter-institutional Commission for the Hydrographic Watershed (ICHW) are probably the most important problems being faced by the PCA at this time. The Department of Security and the Environment includes an Environmental Management Division and a Watershed Management Section, all formalised between January and March 2002. The new structure includes a specialised unit for monitoring the PCW, and studies of the “western” watershed are under way. Besides this, the PCA has obtained advisory and training services from US agencies and consulting firms with experience in watershed management.