The 1998 State of the Environment Report is the second of our annual reports that focuses on a selected area or aspect of the environment, which the Environmental Management Authority (EMA) has prioritised for attention. The 1997 Report dealt with Biodiversity while the focus this year is on freshwater because of the importance of this resource to our quality of life and indeed our very survival. Freshwater management is also critical to the sustenance of our wildlife and ecosystems. We should be careful to note though, that in one of the marvels of nature, our forested watersheds provide us with free water management services by purifying water and impeding flooding in low lying areas. We ignore these facts at our peril. Continuing deforestation is the major cause of the annual flooding which has now become common place in Trinidad during the wet season. This phenomenon is coupled with the paradox of inadequate supplies of potable water for some members of the populace. Freshwater is also a critical resource for industry. Industrial applications range from the use of water for equipment cooling to its use as a receptacle for liquid wastes. It is this latter use that frequently conflicts with its other use in sustaining life. The pervasive nature of freshwater pollution from domestic sewage, agricultural and industrial effluent, is a significant threat to the environment in Trinidad and Tobago.