Water rights and the water markets in Australia-

Water rights and the water markets in Australia- unfinished business and a regulatory tool to improve working. Professor Jennifer Mc. Kay, School of Law South Australia , DWG 2015 Fortalenza

Panel on environmental flows Dr 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 flows The 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 method The 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 planning Environmental 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 State or territory Australian Capital Territory Lead jurisdictional body for water management / Principal legislation Environment ACT/ Water Resources Act 1998 Name of the Plan No of plans as on 30 June 2010 Water Resources Management Plan 1 New South Wales Department of Natural Resources/Water Management Act 2000; Water Act 1912 Water sharing plan 54 Northern Territory Department of Natural Resources, Environment and the Arts/Water Act 1992 Water allocation plan 3 Queensland Department of Natural Resources, Mines and Water / Water Act 2000; Wild Rivers Act 2005; Integrated Planning Act 1997 Water resource plan 21 South Australia Department of Water/Natural Resources Management Act 2004; Groundwater (Border Agreement) Act 1985 Water allocation plans 15 Tasmania Department of Primary Industries and Water/ Water Management Act 1999 Water management plans 6 Victoria Department of Sustainability and Environment /Water Act 1989; Groundwater (Border Agreement) Act 1985 Regional sustainable water strategies 2 Water management plans/Water Allocation Plans 11 Western Australia Department of Water /Rights in Water and Irrigation Act 1914

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 flows Throughout 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 issue Research 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 scarce towns in MDBC Source: EBC, RMCG et al (2011 a) MDBA website

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 water start.

Environmental flows Based on these volumes, the Authority recommended that the increase in environmental flows should be between 3, 000 and 4, 000 GL/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, 000 GL/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, 000 GL/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: Mc. Kay J (2003) & Mc. Kay 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. , Mc. Kay, J & Wu, Z (2012), ‘Sustainable Water Planning in Australia-A survey of our sustainability water policy entrepreneurs’, Water, 39 (5): 62 -65. Wu, Z, Mc. Kay, J & Keremane, G. B. (2012), ‘GOVERNANCE OF URBAN FRESHWATER: Some views of three urban communities in Australia’, Water, 39 (1): 88 -92. Mc. Kay, 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): 432445

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 issues The 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 (Mc. Kay 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. Mc. Kay 2013

Water markets-rural community concerns While 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 2004 a; 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 2004 b; Tisdell and Ward 2003).

Water Markets community response Fenton 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 while almost two-thirds (61. 8%) of farmers they surveyed accepted that water entitlements should be separated from land, only about half (50. 8%) of community members shared this view (2003: 66). More community members than farmers supported intervention by water authorities if the economic viability of communities is threatened (Tisdell and Ward 2003: 68).

Water markets – the hopes market-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, 2004 a, 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. 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 markets Calls 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 MDBC Under 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 COOPERATION Developing innovative structures for intergovernmental cooperation 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

I am able to achieve sustainable water management Source: Mc. Kay, 2008

Corporate governance legal types of WSBs by State – Urban and Rural (Mc. Kay 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 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 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

Water Act 2007 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 water start.

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.

Are Statutory Water Plans the right way to approach sustainable water policy? (water planners responses) • 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.

28 ANAO, Public Sector Governance Vol 1, Better Practice Guide, July 2003, Governance is defined as the “processes by which organisations are directed, controlled and held to account, encompassing elements such as authority, 29 Webbe S and Weller P, 2008, A Public accountability, stewardship, Interest Map: An Independent Review of leadership, direction and control exercised in the organisation”. 28 Good governance is essential Queensland Government Boards, to achieving a public sector entity’s objectives in an effective and transparent manner and Committees and Statutory Authorities 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

28 ANAO, Public Sector Governance Vol 1, Better Practice Guide, July 2003, 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

MDBA All public sector organisations are required to be transparent, responsive and accountable for their activities 34 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 MDBA The 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 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

MDBA On 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

mdba Under 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.

MDBA Difficulties 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 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

AUST ENERGY MARKET COMMISSION State 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 ACT Examples • 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 g. UARANTEE Company limited by guarantee A company limited by guarantee will generally be formed for a not-forprofit 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: Mc. Kay, 2008

The ESD process is transparent Source: Mc. Kay, 2008

There is a huge amount of trust between the State gov. and this organization Valid Frequency 0 - Strongly disagree 1 Valid Percent Cumulative Percent 8 4. 4 2 1. 1 5. 5 2 23 12. 6 18. 0 3 24 13. 1 31. 1 4 27 14. 8 45. 9 5 - neither disagree or agree 32 17. 5 63. 4 6 18 9. 8 73. 2 7 26 14. 2 87. 4 8 18 9. 8 97. 3 9 4 2. 2 99. 5 100. 0 183 100. 0 10 - Strongly agree Total Source: Mc. Kay, 2008

I am clear on what it means to this organisation to achieve sustainable water management Source: Mc. Kay, 2008

Ownership of the non-major desalination plants in Australia 1985 -90 Period 1991 -95 1996 -00 2001 -05 2006 -10 2011 -12 Year not known Total 1 2 1 3 0 7 9 2 4 2 3 1 0 21 6 19 2 5 3 11 1 2 4 3 16 40 20 6 14 1 6 3 10 1 5 56 8 30 5 27 2 13 3 7 10 43 2 28 122 4 1 2 9 20 1 35 2 1 1 2 1 5 14 85 9 45 5 52 4 16 15 85 4 3 51 286 QLD NSW SA VIC WA NT Total Public Private Public Private 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 Australia QLD Type of Business Public Private Model NSW Public Private Public WA Private Public NT Public Private 0 0 11 3 0 1 15 0 1 10 68 1 0 43 0 8 15 1 2 2 1 0 11 2 2 0 3 0 1 23 14 0 1 Private Public Total 0 1 Private 6 1 Private 1 1 1 39 198 1 1 BOO 10 yrs D&C 2 VIC 2 3 1 BOO (NC) SA 2 15 1 11 2 19 4 4 1 2 D&C hire DCM 3 DCOM 4 Alliance 5 2 6 6 12 7 1 5 3 2 3 8 2 EPC contractor 5 21 1 3 EPC Contractor /Consortiu m holding 4 5 3 2 4 1 O&M 6 1 1 3 1 1 O&M/Hire Service Provider 1 Sale Hire 23 9 5 Short term hire 1 Turn Key Lump Sum Total 9 44 Source: Keremane et al. , 2013 1 1 6 31 5 43 4 13 11 1 64 4 3

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: 48 PM 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.

Australian water holdings 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 -36 mfs. html#ixzz 34 m. TSDf 00

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 T 4 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.

privatization of water supply Flow is an Australian company backed by Australian, NZ and international investment. In March 2013 global asset management leader, Brookfield Infrastructure, took a 51 per cent shareholding in Flow Systems Bundled water and energy infrastructure and services can reduce costs, enable innovation, underpin sustainability and deliver greater customer empowerment. Flow works with developers and Governments to unlock these benefits and deliver new multiutility solutions. Flow works with developers and Governments to unlock the advantages of bundling water and energy services. http: //flowsystems. com. au/energy/

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

Corporation 2005). Some perennial ideas can be dismissed on the basis of simple physical arguments. Water is heavy. A kilolitre (k. L) 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 markets which had ceased to be used (dozers). The introduction of trade gave owners of such rights an incentive to exercise them and sell them, effectively increasing the volume of extraction rights. Second, the policy failed to take account of the water cycle as a whole. Stream flows are only a small part of a system in which rainfall initially flows over the surface of the land, or into the water table, before entering streams and river systems. Removal of water from one part of the system affects its availability in others. Tradeable, and therefore valuable, rights over irrigation water were created, but water could be appropriated at other points in the cycle at no cost. Groundwater could be extracted from bores,

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 k. L, an estimate that includes the purchase of electricity generated by wind power. Other cost estimates are higher, often around $1. 50 per k. L, 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

Water markets market-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, 2004 a, 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

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 markets Calls 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/ Water, sewage% expenditure 1. 13 0. 94 0. 88 % expenditure 0. 90 0. 74 4204__Energy. Equity_low_res. pdf 0. 67 0. 63 0. 61 0. 67 Energy supply — electricity and gas 9 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__Energy. Equity_low _res. pdf

http: //www. acoss. org. au/images/uploads/4204__Energy. Equity_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 gas 9 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 ven Institutional 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’s Centralism 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 responses markets 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 2004 b; 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 Deakin South 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. , Mc. Kay, J & Wu, Z (2012), ‘Sustainable Water Planning in Australia-A survey of our sustainability water policy entrepreneurs’, Water, 39 (5): 62 -65. Wu, Z, Mc. Kay, J & Keremane, G. B. (2012), ‘GOVERNANCE OF URBAN FRESHWATER: Some views of three urban communities in Australia’, Water, 39 (1): 88 -92. Mc. Kay, 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): 432445