Express law No. 59

21 August 2007

Water Bill 2007

On 17 August the Water Bill 2007 and the Water (Consequential
Amendments) Bill 2007 passed through the Commonwealth
Parliament.

The Water Bill includes a number of measures to provide
for sustainable management of the Murray-Darling Basin
water resources. Some provisions of the Bill deal with
broader national water issues.

Background

On 25 January 2007, the Prime Minister released a National
Plan for Water Security (the NPWS). The NPWS addresses
modernising irrigation and the overallocation and overuse
of water resources in the Murray-Darling Basin. The NPWS
builds on the 2004 National Water Initiative agreement
(NWI), which was an intergovernmental agreement signed
by state and territory governments and the federal government.
The key objectives of the NWI are to improve the efficiency
of water use and establish clear pathways to return extractions
from all water sources to environmentally sustainable levels.

Following a national water summit on 23 February 2007,
the Commonwealth, in consultation with states and territories,
prepared a draft comprehensive Commonwealth Water Bill,
which provided for new, unified arrangements for the sustainable
management of water resources in the Murray-Darling Basin
and other matters of national interest in relation to water
and water information. This comprehensive Water Bill was
to be based in part upon a referral of powers by Basin
states to the Commonwealth.

However, following the failure of Victoria to agree to
the referral of powers, the Prime Minister announced on
24 July 2007 that the Commonwealth government would proceed
with a Water Bill based on the Commonwealth's existing
constitutional powers.

This Water Bill implements some of the key proposals outlined
in the NPWS.

Key elements of the Water Bill

The key elements of the Water Bill are as follows.

Establishment of the Murray-Darling Basin Authority

A new Murray-Darling Basin Authority will be established
by Part 9 of the Water Bill as an independent expert body
which reports to the Commonwealth Minister for the Environment
and Water Resources. The Authority will have responsibility
for the preparation and enforcement of the Basin Plan (see
below). It will also have various other functions including
measuring and monitoring Basin water resources.

The Basin Plan

The Authority must prepare a strategic plan for the integrated
and sustainable management of water resources in the Murray-Darling
Basin (Division 1 of Part 2). This Basin Plan will be made
by the Commonwealth Minister. The Water Bill sets out mandatory
content for the Basin Plan in clause 22, including:

  • limits on the amount of water that can be taken from
    Basin water resources on a sustainable basis (known as
    long-term average sustainable diversion limits)
  • identification of risks to Basin water resources,
    such as climate change, and strategies to manage those
    risks
  • requirements that a Basin state water resource plan
    will need to comply with if it is to be accredited
  • an environmental watering plan to optimise environmental
    outcomes for the Basin
  • a water quality and salinity management plan which
    must include targets
  • rules about trading of water rights in relation to
    Basin water resources.

Commonwealth agencies must perform their functions and
exercise their powers consistently with and in a manner
that gives effect to the Basin Plan (clause 34).

The Murray-Darling Basin Commission, Basin state agencies,
operating authorities, infrastructure operators and holders
of water access rights must not do acts in relation to
Basin water resources that are inconsistent with the Basin
Plan (clause 35).

Water resource plans

Water resource plans will generally be prepared by Basin
states and provided to the Commonwealth Minister for accreditation
(Division 2 of Part 2). The Authority will provide advice
to the Minister on whether or not to accredit them. Water
resource plans will be accredited only if they are consistent
with the Basin Plan and include long-term average sustainable
diversion limits. Again, Commonwealth agencies must perform
their functions and exercise their powers consistently
with and in a manner that gives effect to the Basin Plan
(clause 58). The Murray-Darling Basin Commission, Basin
state agencies, operating authorities, infrastructure operators
and holders of water access rights must not do acts in
relation to Basin water resources that are inconsistent
with the water resource plan (clause 59).

The Bill provides for the Commonwealth to manage its share
of the impact of the Basin Plan – in particular,
any reduction of the long-term average sustainable diversion
limit – on water access entitlement holders. In some
cases, entitlement holders who suffer a loss because of
the Plan will be entitled to a payment from the Commonwealth
(Division 4, Part 2).

Water charge and water market rules

The Bill will also enable the Minister to make water charge
and water market rules, having regard to advice from the
Australian Competition and Consumer Commission (ACCC) (Part
4). The Water Bill sets out Basin water charging and water
market and trading objectives and principles that the rules
must implement (Schedules 2 and 3). These objectives and
principles are consistent with those set out in the NWI.
The ACCC will enforce the rules.

The Commonwealth Environmental Water Holder

The Commonwealth Environmental Water Holder is a statutory
office holder that will manage the Commonwealth's
environmental water within the Murray-Darling Basin in
order to protect and restore the Basin's environmental
assets. It will also manage water owned by the Commonwealth
outside the Basin (Part 6).

Water information

The Water Bill will confer a number of new functions on
the Bureau of Meteorology, including functions concerning
the collecting, holding, managing, interpreting and disseminating
of Australia's water information, reporting on Australia's
water resources, compiling and maintaining the National
Water Account, and issuing National Water Information Standards
(Part 7). There are two mechanisms in the Water Bill whereby
a person can be required to provide water information to
the Bureau:

  • in compliance with regulations which specify persons
    or classes of persons that must provide specified water
    information to the Bureau
  • pursuant to a requirement to give water information
    sought by the Director of Meteorology.

More information

Text of the Water Act 2007 will be available on
Comlaw shortly:
www.comlaw.gov.au

For further information please contact:

Robert Orr QC
Deputy General Counsel
Australian Government Solicitor
T 02 6253 7129 F 02 6253 7304
robert.orr@ags.gov.au

Dr Genevieve Ebbeck
Senior General Counsel
Australian Government Solicitor
T 02 6274 1451 F 02 6274 2186
genevieve.ebbeck@ags.gov.au

Important: The material in Express law is
provided to clients as an early, interim view for general
information only, and further analysis on the matter
may be prepared by AGS. The material should not be
relied upon for the purpose of a particular matter.
Please contact AGS before any action or decision is
taken on the basis of any of the material in this message.