un bundling water rights and the water markets in australia- professor jennifer mckay, school of law...
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Un bundling Water rights and the water markets in Australia-Professor Jennifer McKay, School of LawSouth Australia
DWG 2015 Fortalenza
Panel National development planning and defined priority water users and institutional reforms needed for a water secure future
panel 24 th November Eiman
Unbundling water rights State first but federally driven SA
Up until 2009, a licence holder’s rights for taking and using water were lumped together, so that only one licence was need for a variety of purposes. As a result, however, application and approval processes were slow and expensive if a request to alter any of the conditions were made.
Water rights are now being separated (or ‘unbundled’) so that they can be managed as four separate items:
Water access entitlement (water licence)
Water allocation (volume allowed to be taken each year)
Water resource works approval
Site use
You need only apply for the right or rights you require and can make changes to one of them more quickly and easily
Unbundling SA all but MDB
Water affecting activity permits already exist alongside water licences and can authorise a number of activities, such as construction of wells and dams or the use of effluent and imported water. These permits continue to exist after water rights are unbundled, but in some cases a water resource works approval can replace the water affecting activity permit.
Unbundling in MDB areaWhat information will be reflected on my unbundled River Murray water licence?
The water licence will specify:
name of holder and contact details
water resource
date of issue and expiry (if relevant)
dates of any variation
whole of licence temporary transfers, including reversion date
water access entitlements including
– number of unit shares– the consumptive pool (in this case the River Murray Prescribed Watercourse) to which the shares relate– class of entitlement– temporary transfers of water access entitlements including number of unit shares, their class and date of return of any temporarily transferred entitlements
conditions - some classes of entitlements may have specific conditions
Unbundling MDB – number of unit shares– the consumptive pool (in this case the River Murray Prescribed Watercourse) to which the shares relate– class of entitlement– temporary transfers of water access entitlements including number of unit shares, their class and date of return of any temporarily transferred entitlements
conditions - some classes of entitlements may have specific conditions
Unbundling classes of water- conversion
You can convert from Class 3a to Class 3b or vice versa if you are moving water in or out of the Qualco-Sunlands Groundwater Control Trust Area. You cannot convert between other classes, because the relative reliability of the water allocations under each class has not been fixed in the water allocation plan and depends on the Minister’s decisions in relation to allocation of water during drought
water scarce towns in MDBC
Source: EBC, RMCG et al (2011a) MDBA website
Unbundling conditions MDB area
Unless there is a condition on the water allocation, the water can be used for any purpose as long as you have a site use approval that covers that use. For example, Class 3 entitlement allocations can be used for irrigation, domestic, industrial or recreational uses, provided the site use approval covers these purposes.
NATIONALAttributes of water products
This section will focus on attributes of water access entitlements and water allocations, which form the bulk of water products traded in Australia, and are the focus of the reports published on this website. Individual water products differ in each state and territory, however they are divided up in a similar manner across jurisdictions. Water products are categorised by the following attributes:
whether they are bundled with land
whether they come from surface water or groundwater
whether they come from regulated or unregulated water resources
whether they are high or low reliability
water rights –nb the term means allocation
terminology
Water rights in Australia Right Description Tradeability
Water access entitlement
The NWI definition of water access entitlement is:
A perpetual or ongoing entitlement to exclusive access to a share of water from a specified consumptive pool as defined in the relevant water plan.
The volume of water available to a water access entitlement may change if the amount of water available in a water management area changes. This may occur due to climate change or other environmental factors, and will ensure that over-allocation of water does not occur.
A water access entitlement can be represented on a water instrument. See Legal instruments
Tradeable with land in a bundled system, and without land in an unbundled system.
TERMINOLOGY State basedNational Term
Water access entitlement type (unbundled)
Water access entitlement type (bundled)
Water allocation
Water resource type (surface)
Water resource type (ground)
Water access entitlement reliability (for unbundled only)
State
NSW Water access licence (Water Management Act 2000
Victoria
UNbundled bundled with land
Vic
Water share
Approval for underground disposalBulk entitlementPrivate rightRegistration licenceSupply by agreementTake and Use licenceWater allowance
NSW
UNBUNDLED BUNDLED WITH LAND
NSW Water access licence (Water Management Act 2000)
Water licence (Water Act 1912)
thanks for the opportunity
Questions?
Panel on environmental flowsDr Barbara Willaarts Water Observatory Madrid –Monitoring status of surface water bodies in Spain lesson learnt and challenges ahead.
Dr Stanley Mbofho Liphadzi Water Research Commission South Africa- Sustainable Management of Water in South Africa
Dr Maria Leichner General Director Fundacion ECOS Uruguay and RFP South America CSO-GEF Network Environmental flows in Uruguay
Framework for Australia
SA and Victoria early Political Challenges in Water Allocation between States
The caption reads:’You see I intend to treat you with sisterly regard in the matter.
You will observe that the droppings I allow to go to you absolutely without condition’. The caption was a bitter critique of the ‘family’ of Federation, in which the smaller states languished at the mercy of the larger.
old inaccurate
Dethridge wheels
New technology
recent science improvements
Murrumbidgee Irrigation area NSW
Issue- the solar panels were stolen so now on the high pole!
Water licences water is not attached to land any more after 1983
Consumptive pool users only have a share of a ground water and / or surface water pool.
It is not a right, but a mere licence which can be defeated by a drought announcement or other changes.
In the Millennium drought many farmers had zero allocations for many years and the Federal Government sponsored adjustment packages to keep them on the land( like unemployment benefits) but also gave relocation packages in some areas.
Environmental flowsThe overall objective of environmental flow recommendations is to ensure that sufficient water is made available to support the needs of the entire riverine ecosystem.
Methodologies differ between the States
Previously, these assessments have focused largely on minimum flow requirements for instream fauna (such invertebrates and fish) by employing the instream Flow Incremental Methodology (IFIM) or other desktop approaches. However, new holistic methodologies that incorporate natural variability in stream flow, and the high flow water requirements of entire riverine ecosystems
Environmental flow- ideal methodThe process involves four main steps in Tasmania:
Identify freshwater ecosystem values in each catchment in order to define the objectives of the environmental flow assessment. Develop conceptual models that identify the ecosystem processes that support these values.
Identify representative river reaches, conduct assessments using hydraulic and hydrological models to characterise physical habitat and biological diversity of the system, and identify specific flow events that relate to these attributes.
Conduct hydrological analyses of flow data to define the pattern of occurrence of important flow events and the availability of important habitats for fauna.
Recommend a flow regime that meets the objectives of the environmental flow assessment, including rules for water abstraction.
Environmental flows and water planningEnvironmental flow assessments essentially describe the importance of different flows to the aquatic values of riverine systems. It is critical when interpreting environmental flow assessments that they are considered in the context of the community's environmental, economic and social objectives for the river(s) being examined. Thus, assessments provide an essential input to DPIPWE's water management planning process; however, all water users within a catchment are considered by DPIPWE during the development of water management plans. During this process, environmental water requirements are negotiated and implemented as environmental water provisions, which aim to balance economic, social and environmental values within catchments
Water Laws and plans in Australia States
Are Statutory Water Plans the right way?• YES - 61.5% • But also pointed out some concerns:
• unfairness in the processes for public consultation, • lack of knowledge of local, • cost of development and implementation of water plans, and • uncertainties in the science.
Environmental flowsThroughout Australia, environmental flow assessments are used to estimate the quantity and timing of flows required to sustain identified aquatic values in riverine environments. Typically, water management planning and other natural resource planning processes use environmental flow assessments to make informed decisions about water management.
There is no single standardised method for estimating environmental flows in Australia or in other countries; instead several methods are available, and their application is often tailored to meet the specific requirements of each assessment
National issueResearch Projects funded•Daly Basin Projects•Environmental flow requirements for Australian arid zone rivers•Productivity and water flow regulation in the Ord River of northwestern Australia (WA)•Snowy River benchmarking study (NSW)•Assessment of the impact of private dams on seasonal flow (Vic)•Importance of flood flows to the productivity of dryland rivers and their floodplains (Qld)•Environmental Flow Requirements on the Paroo / Warrego Rivers (NSW
Environmental flows in MDB in 2011
Using the best available science, and drawing upon a wide body of peer-reviewed work, in October 2010 the Murray-Darling Basin Authority came up with a volume of water for the environment equal to 3,856 GL/year, on average. This would give a “high uncertainty” of conserving key environmental assets and ecosystem functions.
It also had a larger number of 6,983 GL/year that would give a “low uncertainty” of conserving key environmental assets and ecosystem functions
Water Act 2007
Commonwealth (under multiple powers in section 51, including the referral of powers from the States) enacts the Water Act to apply to M D Basin
Commonwealth accreditation of all State Water Plans which must aim to achieve ESD ,gives a role to Australian competition and Consumer Commission to regulate process and enhances the Commonwealth environmental water holder. Buy backs of land and water start.
Environmental flows
Based on these volumes, the Authority recommended that the increase in environmental flows should be between 3,000 and 4,000GL/year. That means between 27% and 37% reduction in water extractions by irrigators if this extra water were obtained entirely from reductions in water course extractions.
The upper limit was set at 4,000GL/year rather than 7,600 GL/year by the Authority because it believed that reducing irrigation diversions by more than 4,000 GL/year would result in unacceptably high socio-economic costs
environmental flows uncertain science
According to Freeman “…the assets and functions are now yielding numbers below 3,000GL/year”. Whether this is old or new, all science used to make public policy decisions should be scrutinised and, wherever possible, be subject to peer review. If not, the evidence is compromised.
Yet, so far, the Authority has refused to establish an independent scientific assessment panel to review its “new science”, despite an explicit request to do so by the Wentworth Group of Concerned Scientists, the Australian Conservation Foundation and others
conflict resolution measures
New model for water utilties
Model of water business enterprise. Source: McKay J (2003) & McKay J, Water Policy (2005) 1-20
References cited
• Keremane, G., Mckay, J., Ettehad, E. & Wu, Z. 2013. The Evolution of Business Models for Non-Major Desalination Plants in Australia- Issues for Governance. The International Desalination Association World Congress on Desalination and Water Reuse. Tianjin, China.
• Keremane, G. B., McKay, J & Wu, Z (2012), ‘Sustainable Water Planning in Australia-A survey of our sustainability water policy entrepreneurs’, Water, 39 (5):62-65.
• Wu, Z, McKay, J & Keremane, G.B. (2012), ‘GOVERNANCE OF URBAN FRESHWATER: Some views of three urban communities in Australia’, Water, 39 (1):88-92.
• McKay, J. M. (2008). Insubstantial Tenuous and Vague Laws - The Achievement of Ecologically Sustainable Development by Water Supply Business CEO’s , Australian Business Law Review, 36(6):432-445
Thank you for invitation
Questions?
An old conflict
They hang the man and flog the woman That steal the goose from the common,
But let the greater villain loose That steal the common from the goose.
English folk poem, 1764
Water Markets legal issues in Australia
Constitutional
Institutional Structures
Monopolistic behaviour of water barons but this can be regulated by ACL
Separation of water from land aspect liked by farmers but not the broader community.
Community adoption of sustainable development ideals, loss of roles and collectivity in rights and obligations –a move away from the yeoman farmer of the last 200 years
The Water Act 2007
Basin Plan and regional water plans how these could assist communal management and have an impact on State Water markets
Long term issuesThe longer term social impacts of the effects of water
markets are unclear and the distribution of them may not make a significant contribution to sustainable communities or
to equitable regional development (McKay and Bjornlund 2001). 2014 Paper
Compensation for loss of water allocation is limited . This was a major issue.
Water Plans at a regional level can contribute to conversations in the local region to induce a collective approach. McKay 2013
Water markets-rural community concernsWhile the available data are relatively scarce, they do suggest that
rural community members fear the effects of water markets on their communities.
There is evidence that they disagree with water markets being the primary method of allocating water Bjornlund 2004a; Tisdell and Ward 2003).
Disquiet about water markets among residents of rural communities
is centred on an apprehension that the sustainability of rural
communities will be diminished and that ‘
emerge and manipulate the market for individual or corporate benefit (Bjornlund 2004b; Tisdell and Ward 2003).
Water Markets community responseFenton found that while 50% of respondents believed that individuals had the right to sell their water allocation, approximately 65%
were nonetheless opposed to water trading. Hence people living
in rural communities appear to distinguish between the
right of individual farmers to sell their water and an evaluation of whether this is desirable; there is a disjuncture between people’s
perceptions about what is good for individuals as opposed
to what is good for their community.
Tisdell and Ward separating water entitlements from land- initial pillar of the new water markets
Water markets – the hopesmarket-oriented approach was developed.
The market-based approach was first set out in
the communique of the 1994 COAG meeting and
was developed more fully in the National Water
Initiative announced in 2004 (Council of
Australian Governments 1994, 2004a, b). The
central idea was to replace bureaucratic systems of
water allocation based on licenses with tradeable
water rights. It was hoped that markets would
ensure that water was allocated to its most socially
valuable use.
The market-based approach to policy has thus far
had only limited success. A number of problems
have become evident.
National intervention in water since 1994
INTERGOVERNMENTAL AGREEMENT ON A NATIONAL WATER INITIATIVE 2008
Between the Commonwealth of Australia and the Governments of New South Wales, Victoria, Queensland, South Australia, the Australian Capital Territory
and the Northern Territory
PREAMBLE
1. Water may be viewed as part of Australia’s natural capital, serving a number of important productive, environmental and social objectives. Australia’s water resources are highly variable, reflecting the range of climatic conditions and terrain nationally. In addition, the level of development in Australia’s water resources ranges from heavily regulated working rivers and groundwater resources, through to rivers and aquifers in almost pristine condition.
RIGHTS TO WATER
no property, common property, state property and private property
no ``best'' regulation and that a mix of regimes can be found in most cases and environmental destruction can be
found in all regimes.
However, it is possible to identify conditions for the success of specific regulative systems conditions for the success of specific regulative systems. In the Australian context, I see this as the regional water plan, but there is a way to go in the administration of these and pressures such a coal seam gas.
water marketsCalls for a Commonwealth takeover of water
policy have also been justified on the basis of the
supposed desirability of a uniform policy
approach. However, given the differences in
climate and catchment hydrology between the
states and the fact that, with the exception of the
Murray–Darling Basin (which is already governed
by well-established federal institutions) there is no
real possibility of trading water between states,
there is no obvious reason to expect uniformity to
yield beneficial outcomes. Rather than a one-size-fits-all solution, it would be better to adopt policies
based on local circumstances, and the democratic
choices of local electorates.
Water Act 2007
The Water Act requires state regional water plans to be done and accredited as in the national interest
The accreditation process has not happened yet as the community are unhappy. 3 ATTEMPTS TO BALANCE ESD. Problem perception of unfairness and loss of State sovereignty
Philosophical issue can regional plans be amalgamated? Several regional interest plans do not make a whole
FIDUCIARY DUTIES MDBCUnder the Corporations Act, company directors owe their fiduciary duties to 'the company as a whole' and not to any particular shareholder
whether that shareholder is in a position to control the company or not. Even the board of a wholly owned subsidiary company
is not bound to comply with the directions of the controllers of the company.
Where a controlling member of a corporation attempts to dictate informally a course of action to the board, such a
communication is legally ineffective. The directors are under no duty to obey such a communication, and indeed would be in breach of their duty if they were to do so. See Mantziaris C, 1998
Ministerial Directions to Statutory Corporations, Parliamentary
Library Research Paper 7 1998-99, Australian Parliamentary Library
INTERGOVERNMENTAL COOPERATIONDeveloping innovative structures for intergovernmental co-operation
An earlier CAF paper observed that innovative, purpose-built intergovernmental bodies will be required to drive national reforms.
The Commonwealth Department of Finance and
Deregulation has acknowledged that:
when governments work co-operatively to develop policy objectives and consider forming bodies that are accountable to more than one government, these joint arrangements may require innovative governance structures.
The Ahead of the Game: Blueprint for the Reform of Australian Government Administration
also acknowledged the need for “fit for purpose” governance structures for intergovernmental bodies
Oecd on water Governance( urban)The OECD has noted that the formation and maintenance of a successful and effective government partnership depends
on trust, mutually agreed upon objectives, and a
governance framework that establishes the rules and guidelines for each partner.
A motherhood statement but one of great importance
I will explore the trust aspect now relying on our Australian research
Perceptions of water planners on water governance(Keremane et al 2012)
Perceptions of urban community on water (Wu et al 2012) governance
Source: McKay, 2008
I am able to achieve sustainable water management
Corporate governance legal types of WSBs by State –Urban and Rural (McKay 2008)
Who do you prefer to be governing Australia’s water resources? (Wu et al 2012)
Urban community’s view City of Salisbury City of Charles Sturt City of Gold Coast Response Totals
The federal government 1 1 1 1
National Water Commission 2 2 3 2
State government 3 3 2 3
Water resource management regional authority
4 4 5 4
Environment Protection Authority
5 5 6 6
Council 6 6 4 5
Water supplier 7 7 7 7
Note: Ranking Order: 1=most preferable to 7=least preferable
Thank you
Questions?
water rights complex in Australia
consideration of the water rights systems alone is not sufficient for the analysis of the institutional framework
In fact, the influence of all relevant public policies on a specific commodity or on the entire resource, and their
interaction with the given property and use right arrangement, should be given explicit consideration
Reform in the national interest does not have to involve the Commonwealth Government. The
establishment of the National Electricity Market Management Company (NEMMCO) to jointly
manage the national electricity market in eastern Australia
In a limited number of cases, intergovernmental entities
have been set up by States to further co-operation across borders (e.g.. Dumaresq-Barwon Rivers
Commission which enables management of jointly “owned” water infrastructure on the
NSW/Queensland border).
There is minimal guidance available to identify situations when adoption of harmonized or
common national approaches to reform makes sense.25 The most succinct rationale for cooperating
to achieve national reform is the Commonwealth criteria for National Partnership
Payments
Guidance for Ministerial Councils suggests that they should focus on items of “strategic national significance”
defined as issues of interest for all jurisdictions and those requiring resolution of disagreement on key issues of
Australia-wide concern. COAG, 2009, Commonwealth-State Ministerial Councils Compendium, October, p.6
The Intergovernmental Agreement on Federal Financial Relations outlines the basis of Commonwealth
support for national reform or service delivery improvement in areas of State or Territory responsibility,
where it:
• is closely linked to a current or emerging national objective or expenditure priority of the
Commonwealth — for example, addressing Indigenous disadvantage and social inclusion;
• has ‘national public good’ characteristics — where the benefits of the involvement extend
nationwide;
• has ‘spill over’ benefits that extend beyond the boundaries of a single State or Territory;
• has a particularly strong impact on aggregate demand or sensitivity to the economic cycle, consistent
with the Commonwealth’s macroeconomic management responsibilities; or
• addresses a need for harmonisation of policy between the States and Territories to reduce barriers to
the movement of capital and labour.
In general, the presumption in favour
Arose out of frustration of Howard Government with States on water reforms in NWI and non implementation of water allocation plans
Commonwealth (under multiple powers in section 51, including the referral of powers from the States) enacts the Water Act to apply to M D Basin
Commonwealth accreditation of all State Water Plans which must aim to achieve ESD ,gives a role to Australian competition and Consumer Commission to regulate process and enhances the Commonwealth environmental water holder. Buy backs of land and water start.
Water Act 2007
Instrument - state level water plan and Basin Plan
• The Water Act requires these to be done and accredited as in the national interest
• The accreditation process has not happened yet as the community are unhappy. 3 ATTEMPTS TO BALANCE ESD. Problem perception of unfairness and loss of State sovereignty
• Philosophical issue can regional plans be amalgamated? Several regional interest plans do not make a whole.
• YES - 61.5%
• But also pointed out some concerns:• unfairness in the processes for public consultation, • lack of knowledge of local, • cost of development and implementation of water
plans, and • uncertainties in the science.
Are Statutory Water Plans the right way to approach sustainable water policy? (water planners responses)
28 ANAO, Public Sector Governance Vol 1, Better Practice Guide, July 2003, <http://www.anao.gov.au>
29 Webbe S and Weller P, 2008, A Public Interest Map: An Independent Review of Queensland Government Boards,
Committees and Statutory Authorities
Governance is defined as the “processes by which organisations are directed, controlled and
held to account, encompassing elements such as authority, accountability, stewardship,
leadership, direction and control exercised in the organisation”.28 Good governance is essential
to achieving a public sector entity’s objectives in an effective and transparent manner and
assuring the community of the responsible management of public esources.
Intergovernmental bodies require each participant to invest some public resources or power in
the new entity. Yet governments remain accountable for the expenditure of their public funds,
the exercise of their public power and authority; and ultimately, for meeting the needs of the
people they represent no matter how a public body is constituted.29
28 ANAO, Public Sector Governance Vol 1, Better Practice Guide, July 2003, <http://www.anao.gov.au>
29 Webbe S and Weller P, 2008, A Public Interest Map: An Independent Review of Queensland Government Boards,
Committees and Statutory Authorities
In summary, intergovernmental bodies are established in three ways:
• through (formal or informal) agreement between jurisdictions (intergovernmental forum);
• through specific legislation by State or Commonwealth Government (statutory authority); or
• under the Corporations Act 2001 (company).
MDBA and NWC
created by legislation
statutory authority
can be staffed by one Dept public service
Accountable to Minister
subject to scrutiny of finances by Parliament
Policy standard setting for NWC abolished as of October 2014
MDBA regulation according to KPMG study for Victorian government
STANDING COUNCIL ON ENERGY AND RESOURCES
MINISTERIAL COUNCIL
Staffed by representatives from States
meets occassionally
SNOWY HYDRO
Corporations act 2001
staffed by non public servants
Finances subject to PARLIAMENTARY SCRUTINY
TRADING IS MAIN PURPOSE THEREFORE NEEDS TO NE INDEPENDENT
Australian energy regulator
regulation
Australian energy market commission
Standard setting
MDBAAll public sector organisations are required to be transparent, responsive and accountable for
their activities34 but the collective investment of public resources (and often powers) through
intergovernmental bodies makes this requirement particularly complex. As an example, the
Murray-Darling Basin Authority must account directly to the Commonwealth Minister for
Water, the State Ministers for Water (through the Murray-Darling Basin Ministerial Council),35
the Commonwealth Parliament (as a Commonwealth statutory authority) and indirectly to the
Parliaments in each participating jurisdiction and the citizens of each participating State.
MDBC TO MDBAThe former Murray-Darling Basin Commission (MDBC) was an unincorporated joint venture linking the
Australian Government and the five other governments with jurisdiction in the Murray-Darling Basin:
New South Wales, Victoria, South Australia, Queensland and the Australian Capital Territory. It was
initially established in 1988 under the Murray-Darling Basin Agreement, replacing the former River
Murray Commission which had been established in 1917 to put into effect the earlier River Murray
Waters Agreement. The commission primarily advised the Murray-Darling Basin Ministerial Council. It
consisted of a President, two Commissioners and two Deputy Commissioners from each party to the
Murray-Darling Basin Agreement. Decision-making was by consensus
MDBAOn 3 July 2008, COAG signed an Intergovernmental Agreement on Murray-Darling Basin Reform that
established new governance arrangements for the Murray-Darling Basin. In December 2008, after the
Basin states passed legislation to enable the Australian Government to amend the Water Act 2007 (Cth),
the Murray-Darling Basin Authority (MDBA) assumed responsibility for all functions of the former
MDBC. The MDBA is a Commonwealth Government Statutory Agency responsible for planning the
integrated management of the water resources of the Murray-Darling Basin, and is part of the portfolio of
Sustainability, Environment, Water, Population and Communities, reporting to the Minister for
Sustainability, Environment, Water, Population and Communities. Members of the Authority are
appointed by the Minister in consultation with the States, and are selected as experts in the areas of water,
the environment, natural resource management and agriculture, rather than as representatives of
stakeholders. Members include the Chair, Chief Executive, and four part-time members. A new Murray-
Darling Basin Ministerial Council was also established comprising the Commonwealth Water Minister,
who also chairs the council, and one minister from each of the Basin States and the ACT.
mdbaUnder the Agreement on Murray-Darling Basin Reform – Referral (2008), States and Territories agreed
to pass legislation to refer power to the Commonwealth Parliament in accordance with s. 51(xxxvii) of the
Constitution. The referred subject matter includes the management of Basin water resources to meeting
critical human water needs, water charging in relation to Basin water resources, and the transformation of
entitlements to water from a Basin water resource to enable trading in those water entitlements.49 State
legislation provides that the reference may be terminated – for example, in Victoria, the reference may be
terminated by the Governor in Council.
MDBADifficulties reaching agreement on a single accountability model for the work of the MDBA has led to a
complex governance structure. The preparation of the Murray-Darling Basin Plan is overseen by the
Commonwealth Minister and the six-member MDBA, with the Minister acting as the final decisionmaker.
The Ministerial Council and Basin Officials Committee are consulted on the Basin Plan. On the
other hand, the Ministerial Council is the decision-maker in relation to the planning and management of
the equitable, efficient and sustainable use of water, land and other environmental resources, with some
scope for delegation to the Basin Officials Committee.
The Commonwealth provided up-front funding of $3.3 billion as part of the agreement with Basin States
to establish the MDBA. The Commonwealth and Basin States also make annual contributions to the
MDBA. A new Chair was appointed in January 2011, while one Authority member resigned in February
2011.
AUST ENERGY MARKET COMMISSIONState statutory authority
An intergovernmental body can also be established by enacting legislation within a State
jurisdiction. Consistency can be achieved through either application of laws or mirror
legislation in participating jurisdictions.
There are currently only two examples of State statutory authorities – the Australian Energy
Market Commission (established under South Australian law
CORPORATION ACTExamples
• Australia and New Zealand School of
Government (Limited by guarantee)
• National E-Health Transition Authority (Limited
by guarantee)
• Australian Energy Market Operator (Limited by
guarantee)
• Austroads (Limited by guarantee)
• Australian Housing and Urban Research
Institute (Limited by guarantee)
• Snowy Hydro Limited (Limited by shares)
COMPANY LIMITED BY gUARANTEECompany limited by guarantee
A company limited by guarantee will generally be formed for a not-for-profit purpose, and will
have jurisdictions or Ministers as members of the company, rather than shareholders. Their
memorandum and articles of association are usually prescriptive, and will dictate that the
company is registered to provide a specified service to the public or a particular segment of the
population.
The OECD has noted that the formation and maintenance of a successful and
effective government partnership depends on trust, mutually agreed upon objectives, and a
governance framework that establishes the rules and guidelines for each partner.36
Degree of difficulty and effort put into by the CEOs in achieving ESD
Source: McKay, 2008
Source: McKay, 2008
The ESD process is transparent
There is a huge amount of trust between the State gov. and this organization
Frequency PercentValid
PercentCumulative
PercentValid 0 - Strongly
disagree8 4.4 4.4 4.4
1 2 1.1 1.1 5.5
2 23 12.6 12.6 18.0
3 24 13.1 13.1 31.1
4 27 14.8 14.8 45.9
5 - neither disagree or agree 32 17.5 17.5 63.4
6 18 9.8 9.8 73.2
7 26 14.2 14.2 87.4
8 18 9.8 9.8 97.3
9 4 2.2 2.2 99.5
10 - Strongly agree
1 .5 .5 100.0
Total 183 100.0 100.0
Source: McKay, 2008
Source: McKay, 2008
I am clear on what it means to this organisation to achieve sustainable water management
Ownership of the non-major desalination plants in Australia
Period
1985-90 1991-95 1996-00 2001-05 2006-10 2011-12Year not known
Total
QLDPublic 6 8 14
Private 1 9 19 20 30 4 2 85
NSWPublic 2 5 1 1 9
Private 2 2 5 6 27 2 1 45
SAPublic 3 2 5
Private 1 4 11 14 13 9 52
VICPublic 1 3 4
Private 2 1 6 7 16
WAPublic 2 3 10 15
Private 3 3 4 10 43 20 2 85
NTPublic 3 1 4
Private 1 2 3
TotalPublic 0 0 16 5 28 1 1 51
Private 7 21 40 56 122 35 5 286
Source: Keremane et al., 2013
Location of the non-major desalination plants in Australia (N =337)
Source: Keremane et al., 2013
Business models of non-major desalination plants in AustraliaType of
Business Model
QLD NSW SA VIC WA NT Total
Public Private Public Private Public Private Public Private Public Private Public Private Public Private
BOO1 3 6 1 1 0 11BOO (NC) 1 1 1 0 3
BOO 10yrs 1 0 1
D&C2 2 15 1 11 2 21 2 6 6 12 2 3 15 68D&C hire 1 0 1
DCM3 1 1 0DCOM4 19 4 4 2 7 1 5 3 8 10 43
Alliance 2 2 0
EPC contractor5 5 3 1 5 3 2 4 8 15
EPC Contractor /Consortium holding
1 0 1
O&M6 4 1 3 1 1 2 1 11O&M/Hire 2 0 2
Service Provider 1 2 0 3
Sale 23 0 23Hire 5 9 1 1 14
Short term hire 1 0 1
Turn Key Lump Sum 1 1 1 1
Total 9 44 6 31 5 43 4 13 11 64 4 3 39 198
Source: Keremane et al., 2013
Capacity of the non-major desalination plants in Australia
Source: Keremane et al., 2013
Non-major desalination plants and type of feed water
Brackish Water Seawater Others* Waste Water Unknown
Western Australia 57 23 13 6 30
South Australia 26 7 8 3 18
Northern Territory 5 3 0 1 0
Queensland 40 24 15 9 16
New South Wales 24 5 5 7 16
Victoria 3 2 2 3 11
Total 155 64 43 29 91
Note: * Others include tap water and river water
Source: Keremane et al., 2013
Barry O'Farrell to testify at Australian Water Holdings corruption inquiry
Published: April 14, 2014 - 12:48PM
Mr Pearce said he felt "like a schoolboy being called in to explain to the headmaster why he hadn't done his homework" when he walked into the meeting on May 27, 2011.
The commission is investigating allegations that the family of corrupt former Labor minister Eddie Obeid were "secret stakeholders" in Australian Water and stood to make up to $60 million from a proposed public-private partnership.
Mr Di Girolamo, a prominent Liberal Party fund-raiser and associate of the Obeid family, lobbied the O'Farrell government over the proposal.
The company also allegedly billed the state-owned Sydney Water secretly for millions of dollars in "administrative" expenses - including limousines and donations to the NSW Liberal Party - under a contract to supply water and sewerage infrastructure.
Within minutes of Mr Di Girolamo entering the witness box, Mr Watson had accused him of attempting to "milk it and get every cent you could get out of Sydney Water Corporation".
"I reject that, Mr Watson," Mr Di Girolamo said.
Australian Water became one of the biggest donors to the NSW Liberal Party in the months before the March 2011 election that swept Labor from power and installed the Barry O'Farrell-led Coalition.
Read more: http://www.smh.com.au/nsw/barry-ofarrell-to-testify-at-australian-water-holdings-corruption-inquiry-20140414-36mfs.html#ixzz34mTSDf00
Australian water holdingsMr Pearce said he felt "like a schoolboy being called in to explain to the headmaster why he hadn't done his homework" when he walked into the meeting on May 27, 2011.
The commission is investigating allegations that the family of corrupt former Labor minister Eddie Obeid were "secret stakeholders" in Australian Water and stood to make up to $60 million from a proposed public-private partnership.
Mr Di Girolamo, a prominent Liberal Party fund-raiser and associate of the Obeid family, lobbied the O'Farrell government over the proposal.
The company also allegedly billed the state-owned Sydney Water secretly for millions of dollars in "administrative" expenses - including limousines and donations to the NSW Liberal Party - under a contract to supply water and sewerage infrastructure.
Within minutes of Mr Di Girolamo entering the witness box, Mr Watson had accused him of attempting to "milk it and get every cent you could get out of Sydney Water Corporation".
"I reject that, Mr Watson," Mr Di Girolamo said.
Australian Water became one of the biggest donors to the NSW Liberal Party in the months before the March 2011 election that swept Labor from power and installed the Barry O'Farrell-led Coalition.
Read more: http://www.smh.com.au/nsw/barry-ofarrell-to-testify-at-australian-water-holdings-corruption-inquiry-20140414-36mfs.html#ixzz34mTSDf00
The new NSW Energy Minister, Anthony Roberts, suspended coal seam gas (fracking) company Metgasco’s drilling rights, halting operations at the disputed Bentley site in the state’s north. Mr Roberts says ICAC discovered links between Metgasco and former Labor powerbroker Eddie Obeid, while community consultation on the project was effectively bypassed. The matter has now beenreferred to the ICAC corruption commission.
But while the Northern Rivers community celebrates, elsewhere, members of the Central Coast and Hunter communities say the approval processes for the disputed quarry extension at Calga and T4 Coal Port extension at Newcastle showed similar disregard for community consultation. Notably, Tony Kelly, the Labor MP who now faces prosecution after ICAC found that he engaged in corrupt activities, was the Planning Minister when the mining company Rocla Materials first applied for the new quarry at Calga.
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The recent revelations about the business practices of Australian Water Holdings (AWH) uncovered by ICAC’s public inquiry are disgraceful.
And despite these disgraceful practices Sydney Water saw fit to award a further contract to AWH.
What this highlights is the urgent need for transparent procurement processes for all water servicing in NSW that will ensure mums, dads and businesses get the best possible services at the best cost.
It is no longer good enough for Sydney Water to manage government procurement of all water related infrastructure in their area. Large projects, such as the one awarded to AWH, should be made contestable and an independent market operator should procure the best servicing strategy and solution available in the market.
The water sector is one of the most unproductive sectors in the Australian economy and Sydney Water is a negative contributor to the NSW economy.
ICAC’s revelations highlight the system that allows these unproductive practices to exist. Remember it was not Sydney Water who complained to ICAC about AWH – it was the Sydney Morning Herald.
Corporation
2005).
Some perennial ideas can be dismissed on the
basis of simple physical arguments. Water is heavy.
A kilolitre (kL) of water, currently delivered to
urban consumers for around 70 cents, and to irrigators
for a fraction of this amount, weighs a
tonne. It follows that any scheme for transporting
water over long distances, without the assistance of
gravity, will involve prohibitive energy costs for
pumping (Quiggin 2005).
The most recent scheme of this kind to receive
serious attention was the proposal by the Tenix
corporation to construct a canal from the Kimberleys
to Perth, a distance of 3700 kilometres
water marketswhich had ceased to be used (dozers). The introductionof trade gave owners of such rights anincentive to exercise them and sell them, effectivelyincreasing the volume of extraction rights.Second, the policy failed to take account of thewater cycle as a whole. Stream flows are only asmall part of a system in which rainfall initiallyflows over the surface of the land, or into the watertable, before entering streams and river systems.Removal of water from one part of the systemaffects its availability in others.Tradeable, and therefore valuable, rights over irrigationwater were created, but water could beappropriated at other points in the cycle at no cost.Groundwater could be extracted from bores,surface flows of water could be captured by farmdams, and rainfall could be captured by tree cropsbefore it even entered the system. Given the incen
The technologies currently favoured for desalination
and recycling depend on filtering using reverse
osmosis. These technologies are energy intensive,
and their feasibility therefore depends on energy
costs.
The cost of supply of water from the desalination
plant now being constructed in Perth has been estimated
at $1.16 per kL, an estimate that includes
the purchase of electricity generated by wind
power. Other cost estimates are higher, often
around $1.50 per kL, reflecting differences in the
cost of constructing plants in suitable location,
delivery from the plant to consumers and assumptions
about operating load.
Recycling is generally less energy-intensive than
desalination. However, it raises a range of real or
perceived health and aesthetic concerns, reflected
in the defeat of a proposal for recycling in a referendum
held in Toowoomba, and in the political
judgement of the Queensland government that a
referendum should be held for the whole of southeast
Queensland.
Water marketsmarket-oriented approach was developed.
The market-based approach was first set out in
the communique of the 1994 COAG meeting and
was developed more fully in the National Water
Initiative announced in 2004 (Council of
Australian Governments 1994, 2004a, b). The
central idea was to replace bureaucratic systems of
water allocation based on licenses with tradeable
water rights. It was hoped that markets would
ensure that water was allocated to its most socially
valuable use.
The market-based approach to policy has thus far
had only limited success. A number of problems
have become evident.
The second major issue was the treatment of risk.
The 2004 COAG meeting communique specified
a framework that assigns the risk of future reductions
in water availability as follows:
• Reductions arising from natural events such as
climate change, drought or bushfire to be borne by
water users.
• Reductions arising from bona fide improvements in
knowledge about water systems’ capacity to sustain
particular extraction levels to be borne by water users
up to 2014. After 2014, water users to bear this risk
for the first 3 per cent reduction in water allocation,
the relevant state or territory government and the
Australian government would share (one-third and
two-third shares respectively) the risk of reductions of
between 3 per cent and 6 per cent; state/territory and
the Australian government would share equally the
risk of reductions above 6 per cent.
• Reductions arising from changes in government
policy not previously provided for would be borne by
governments.
• Where there is voluntary agreement between relevant
state or territory governments and key stakeholders,
a different risk assignment model to the
above may be implemented.
(COAG 2004a)
Yet there is no reason to suppose that the
Commonwealth would do any better than the
states. As shown by the examples above, the
Commonwealth has been as willing as any state
government to put short-term political objectives
ahead of the long-term goals of water policy. Moreover,
on most of the issues that need to be resolved
if progress is to be made, the Commonwealth
government is as divided as the states
water marketsCalls for a Commonwealth takeover of water
policy have also been justified on the basis of the
supposed desirability of a uniform policy
approach. However, given the differences in
climate and catchment hydrology between the
states and the fact that, with the exception of the
Murray–Darling Basin (which is already governed
by well-established federal institutions) there is no
real possibility of trading water between states,
there is no obvious reason to expect uniformity to
yield beneficial outcomes. Rather than a one-size-fits-all solution, it would be better to adopt policies
based on local circumstances, and the democratic
choices of local electorates.
Acf http://www.acoss.org.au/images/uploads/4204__EnergyEquity_low_res.pdf
Water, sewage% expenditure 1.13 0.94 0.88 % expenditure 0.90 0.74 0.67 0.63 0.61 0.67
Energy supply — electricity and gas9
1998–99 $/week 12.85 15.87 17.72 19.85 23.08 17.87
% expenditure 3.75 3.29 2.73 2.33 1.97 2.56
2003–04 $/week 16.4 20 23.27 25.46 31.68 23.59
% expenditure 3.97 3.31 2.71 2.34 2.11 2.64
http://www.acoss.org.au/images/uploads/4204__EnergyEquity_low_res.pdf
http://www.acoss.org.au/images/uploads/4204__EnergyEquity_low_res.pdf
Water, sewage
1998–99 $/week 3.89 4.55 5.71 6.92 8.5 5.91
% expenditure 1.13 0.94 0.88 0.81 0.73 0.85
2003–04 $/week 3.71 4.48 5.77 6.84 9.12 5.98
% expenditure 0.90 0.74 0.67 0.63 0.61 0.67
Energy supply — electricity and gas9
1998–99 $/week 12.85 15.87 17.72 19.85 23.08 17.87
% expenditure 3.75 3.29 2.73 2.33 1.97 2.56
2003–04 $/week 16.4 20 23.27 25.46 31.68 23.59
% expenditure 3.97 3.31 2.71 2.34 2.11 2.64
Institutional change North 4 elements
the agent
the source
the process and the direction of change and needs to be dynamic
origin
external or internal demand or supply induced
Institutional change van de venInstitutional design
Institutional adaptation
Institutional diffusion and collective action
4 incentives of change based on
function rational actor
social learning change in context
isomorphism including path dependency alternative institution dominant group
NIE say change is functional increasing efficienty
but the power component is the central incentive Ingram Wegerich
Power
Institutional change
is it continuous and evolutionary
or discontinuous and revolutionary
Direction of change since 1940’sCentralism Craven
But it is not that simple Brown AJ
More decentralised approaches have grown but a strong trend for uniform laws
local givernment nota lame duck incrased in importance
decentralisation though provatisation
contracting out of services
new strategies for community enegement and
Place management beer, bellamy and podger
Water markets community responsesmarkets among residents of rural communities is centered on an apprehension that
the sustainability of rural communities will be diminished and that ‘water barons’ emerge and manipulate the market for individual or corporate benefit (Bjornlund 2004b; Tisdell and Ward 2003).
).
central action and devolution within the pressures for strnger central action lie at least as many pressures for devolution in the resources and capacity to deal with today’s pressing social, economic and environmental challenges
Brown AJ
IN THE REAL WORLD OF PUBLIC POLICY AND POPULAR POLITICAL CULTURE, THE VAST BULK OF CITIZENS OPERATE ON AN ENTRENCHED ASSUMPTION THAT Australia has many more than the 6 States
Victoria vs SA
Victoria vs SA
The caption reads: ’You see I intend to treat you with sisterly regard in the matter.
You will observe that the droppings I allow to go to you absolutely without condition’. The caption was a bitter critique of the ‘family’ of Federation, in which the smaller states languished at the mercy of the larger.
APPEALS TO Prime Minister Deakin
Appeals to Prime Minister DeakinSouth Australia is appealing to the
Commonwealth, shown in the figure of the dapper Prime Minister Alfred Deakin, also of course a
Victorian. ‘Here Deakin’, he says, ‘make him turn
off the tap. Look at the dribble he’s leaving me.’
New model for water utilities
New governance model for water utilities
Framework of laws in Australia
Complexity in water
Nrm regions
MDBA- dispel myth of plenty of water
• Two million people
• 14% of Australian land area
• 40% of the gross value of agricultural output using over 50% of water
• 94% of rainfall evaporates
• 4% runs off
• 2% groundwater recharge
• Mean annual runoff 23,850 GL presently 11,200 GL
References cited
• Keremane, G. B., McKay, J & Wu, Z (2012), ‘Sustainable Water Planning in Australia-A survey of our sustainability water policy entrepreneurs’, Water, 39 (5):62-65.
• Wu, Z, McKay, J & Keremane, G.B. (2012), ‘GOVERNANCE OF URBAN FRESHWATER: Some views of three urban communities in Australia’, Water, 39 (1):88-92.
• McKay, J. M. (2008). Insubstantial Tenuous and Vague Laws - The Achievement of Ecologically Sustainable Development by Water Supply Business CEO’s , Australian Business Law Review, 36(6):432-445