Progress on National water reform and future reform priorities

VSGO has a dedicated Land, Planning and Environment Practice Group.  Recently the Group heard Jane Doolan of the Productivity Commission speak about the Commission's inquiry into National Water Reform.

If you haven't had the chance to look at the draft report, we've summarised the key points in this blog.

National Water Reform 

Earlier this year the Productivity Commission launched a major review of Australian water reform and on 15 September 2017 the Commission released its draft inquiry report into National Water Reform. The purposes of the national inquiry report canvass an assessment on Australia's progress on national water reform such as how past water policy decisions have been made and how effective those decisions have been. In particular the report highlights Australia's water reform achievements and progress over the last 20 to 30 years. The inquiry has also developed draft future reform priorities in water resource management and rural and urban water services. The aim is to ensure the water sector's effectiveness and efficiency through 'consistent and coordinated regulatory and management arrangements that are aligned with the National Water Initiative' (NWI). An aim of the report is to ensure that future policies will reflect significant challenges facing the water sector such as population growth, climate change and community expectations and dependence on water environments. 

Australian Water Reform 

The Commission report identifies Australia's water sector as an international world leader in water management. It goes on to highlight the importance of a coordinated and thoughtful approach to water management, particularly given Australia's arid environment and reliance on our water economy. 

Australia's national approach to water reform began in 1994 through the COAG water reform framework and has continued through subsequent initiatives such as the introduction of the Water Act 2007 (Cth) and the Murray-Darling Basin Plan in November 2012; however the cornerstone of Australia's water reform efforts has been the 2004 NWI. 

Progress and achievements 

The report identifies that National water reforms have significantly improved Australia's approach to water management. The report endorses the continued national relevance of the NWI and its principles, emphasising that the NWI's objectives and outcomes have largely been met however notes that progress has slowed in recent years. Examples of such progress include the development of key foundations of water management such as the:

• creation of legislative and policy frameworks which provide for clear and long-term water entitlements for consumptive uses
• establishment of water planning arrangements for the majority of areas of intensive water use across Australia
• establishment of water markets which allow water to be traded to higher value uses 
• implementation of water resource accounting such as water metering
• provision of integrated management of water for environmental sustainability purposes in most jurisdictions.

The report also identifies the improvement of urban water and irrigation infrastructure services as a consequence of improved institutional and pricing reforms.

The Commission further identifies that overall water reform has delivered significant benefits to irrigators, other water users and the broader community.

Why is reform required? 

Along with identifying progress made to date the Commission report identifies further work required by the Government such as:

• actioning unmet NWI objectives and outcomes; 
• addressing gaps and limitations in existing NWI policy settings highlighted by the Millennium Drought; and 
• responding to the challenges which have emerged in the 13 years since the NWI was signed. The challenges are posed by population growth, climate change and changing community expectations and need to be addressed in policy frameworks. 

It is these gaps in current water policy that form the rationale for the recommended reform priorities. 

Future reform priorities

The report identified the following reform priorities: 

• maintaining the key foundations of water management; and 
• improving and enhancing national policy settings in areas such as entitlement and planning arrangements for extractive industries, and the water requirements of Indigenous people. 

Of importance are recommendations to revise existing policies such as the current arrangements for extractive industries and incorporating alternative water sources. 

Final Report 

The final report was handed to the Australian Government on 19 December 2017. The release of the final report by the Government is the final step in the process. 

Resource

National Water Reform Report: https://www.pc.gov.au/inquiries/current/water-reform/draft

VGSO frequently assists regulators and authorities with advice on policy implementation and legislative developments.  VGSO also assists with intergovernmental agreements, memoranda of understanding, and responses to inquiries.  For a discussion of the services VGSO can provide in this area, please contact Annette Jones, Acting Managing Principal Solicitor, or Natasha Maugueret, Managing Principal Solicitor. 

Natasha Maugueret

Managing Principal Solicitor

natasha.maugueret@vgso.vic.gov.au

8684 0223

Annette Jones

Acting Managing Principal Solicitor

annette.jones@vgso.vic.gov.au

8684 0431

High Court decision affecting Victorian hunting and fishing laws

Native title cases can make your head hurt. But it is always interesting to see the highest court in the land grapple with the complex interplay between statutory regimes and native title rights.

Karpany v Dietman is no exception. It considered whether the native title right to fish provided a defence to a prosecution under an SA law prohibiting fishing, and also whether the native title right was extinguished by a previous SA fishing law.

The decision is an important one for any Victorian government officers that regulate hunting, gathering or fishing, as it increases the likelihood of native title operating as a defence in prosecutions of this type.

The facts

Owen and Daniel Karpany, two members of the Narrunga People (an Aboriginal group in South Australia), were charged on 12 December 2009 for possessing undersized abalone.

They argued s 211 of the Native Title Act 1993 (Cth) as a defence. Section 211 provides a defence to federal and State prohibitions on hunting, fishing, gathering and 'cultural or spiritual' activities where a person has a native title right to carry on the activity, so long as:

• it is for a domestic or communal purpose, not a commercial one;
• it does not exceed the scope of the native title rights; and
• the prohibition applies other than in accordance with a 'licence, permit or other instrument'. The Karpanys argued that the Minister's ability to grant exemptions from this prohibition met this requirement.

The two issues for the High Court were:

• whether the Fisheries Act 1971 (SA) (1971 Act) extinguished the Karpanys' native title right and thus s 211 was inapplicable; and
• whether the words 'licence, permit or other instrument' in s 211 should be read broadly to include the SA Minister's statutory power to grant exemptions to the fishing prohibition.

The decision

The High Court found for the Karpanys on both issues.

First, it held that the native title right to fish had not been extinguished by the 1971 Act because the 1971 Act regulated fishing, rather than replacing all existing fishing rights with statutory ones. The Court noted that the 1971 Act's prohibitions were subject to exceptions and exemptions, including ones facilitating the exercise of the native title right to fish. As the 1971 Act did not generally prohibit the exercise of native title fishing rights, it did not extinguish those rights.

Secondly, the Court agreed that the statutory power of the Minister to grant exemptions from the current fishing prohibition was a 'licence, permit or other instrument' for the purpose of s 211(1)(b). The Court said that those words accommodated 'a large range of possible statutory regimes', and were apt to cover 'any form of statutory permission issued to individuals or classes or groups of people to carry on one or other of the classes of activities described in s 211(3)' (that is, hunting, fishing and gathering).

How this decision affects the Victorian government

There are two ways this decision could affect Victorian government officers.

First, it is more likely that s 211 of the Native Title Act 1993 (Cth) could be raised as a defence to a hunting or fishing prosecution. When its preconditions are met, s 211 trumps State restrictions on these activities, allowing native title rights to be exercised for personal, domestic, non-commercial or communal needs. This is because s 109 of the Constitution invalidates any State laws that are inconsistent with a Commonwealth law (such as s 211).

Section 211 will apply if the State restriction applies other than in accordance with a 'licence, permit or other instrument'. For example, in Victoria, Part 8 of the Fisheries Regulations 2009 (Vic) applies various restrictions to the taking of abalone. But where a restriction is subject to an exemption based on a licence, the restriction could be removed by s 211. The broad approach to interpreting 'licence, permit or other instrument' in Karpany may mean that the point is more whether there is an exemption power of some kind, even if it is not usually thought of as a licence or permit.

It is important to note that the State law relaxed by s 211 was an offence provision which applied to persons who did not hold a licence. The effect was that native title holders could take undersized abalone which no one else could, unless the Minister actually exempted them from the operation of the legislation. The existence of that exemption power (not its past or likely use) was enough to trigger s 211.

Moreover, Karpany is another instance that shows native title does not need to have been formally recognised to argue the s 211 defence. Having said that, the prosecution did not argue that the Karpanys did not have the necessary native title fishing rights.

Secondly, the decision shows the High Court will not be easily persuaded that a State statutory licensing regime extinguishes native title rights to take resources. Native title rights to fish for non-commercial purposes have been recognised to exist over parts of Victoria.

In short, Victorian government officers need to keep in mind that native title rights to fish or hunt may form a defence to a prosecution if it was done for domestic or communal purposes. Seek legal advice on your specific legal regime if you want to know whether it meets the particular requirements of s 211 of the Native Title Act 1993 (Cth).

If you are in the Victorian Government and require legal advice on native title rights or this decision, please contact:

Mary Scalzo
Managing Principal Solicitor
t 9947 1419
mary.scalzo@vgso.vic.gov.au

James Stephens
Principal Solicitor
t 9947 1422
james.stephens@vgso.vic.gov.au

Water Bill Exposure Draft: what changes will flow?

Following a comprehensive review of Victorian water law, a Water Bill Exposure Draft was released to the public in December 2013.

The Exposure Draft proposes to bring the two current Acts that govern water use and management in Victoria - the Water Act 1989 and the Water Industry Act 1994 - into a single streamlined Water Act. In addition to ironing out issues created by confusing, duplicated and obsolete provisions in the current legislation, the Exposure Draft also seeks to modernise water management practices and implement Government policies including the Living Victoria policy and the forthcoming Melbourne's Water Future strategy.

Although many features of the current legislative regime will remain the same, the Exposure Draft proposes a new, more logical structure that should make it easier to find relevant information. It seeks to streamline and consolidate provisions which are spread across the current Acts, both of which have been subject to many water reform amendments since their commencement. A table that sets out where the equivalent provisions in the current Acts can be located in the new Exposure Draft is available here. Some current provisions - such as those governing the power to impose water restrictions - will be dealt with by Regulation.

The Exposure Draft also proposes a number of substantive changes aimed at promoting 'whole of water cycle' management and to bring Victorian water law into line with contemporary water and legislative practice.  Four of the most substantive changes are outlined below.

New 'core considerations' for decision makers

Under the current legislation, the obligations on decision makers regarding matters that must be taken into account are difficult to navigate, inconsistent and repetitive. The Exposure Draft sets out a new single set of 'core considerations' at the front of the Bill which the Minister - or water corporations and catchment authorities acting on the Minister's behalf - will be required to take into account before making certain decisions, including considering applications for new licences and water shares.

The proposed core considerations include the impact a decision will have on other water users, on environmental water (and water that may not meet the definition of 'environmental water' but which has multiple uses including preserving environmental values and the health of water ecosystems); and on the protection of the environment generally. The concept of 'environmental water reserve' has been replaced by the broader concept 'environmental water'. This is intended to better capture the concept of water in life cycle terms including: water held under an entitlement or right for the environment, and water committed under other entitlements for environmental purposes.

Replacing the current piecemeal approach with a standardised set of core considerations that will govern the making of many decisions relating to water use and management should enable greater consistency and efficiency in decision making as well as ensuring environmental protection is a priority.

Water Resource Management Order

A new concept called the Water Resource Management Order (WRMO) is proposed to describe all water management arrangements for a particular area. This will act as an umbrella under which all entitlements in the particular area will sit. That means that bulk entitlements, water shares, take and use licenses as well as statutory rights (eg, for domestic and stock use) will be located in one place and easier to understand. The current mix of regulatory instruments have been described as complex and inconsistent. The WRMO proposes to simplify water system management rules. The WRMO will include cap and trade rules that determine the maximum volume of water that can be allocated within a particular area or water system.

Statutory rights for local councils to water in stormwater drains

At common law, the position in relation to property rights that attach to the water collected in stormwater pipes and drains is complex and difficult to understand. The Exposure Draft proposes to extinguish these common law rights and confer new express rights for local councils to manage water in their stormwater works.

Under the Exposure Draft, all rights to water in local council and water corporation stormwater pipes and drains will be vested in the Crown, with the rights to take and use that water expressly conferred on local councils and water corporations. Having clear rights to use and control this water is aimed at encouraging investment in local projects to harvest and make use of stormwater that is currently going to waste.

Changes to the enforcement regime for water-related offences

The Exposure Draft also proposes a significant overhaul of the compliance and enforcement regime currently in place under the Water Act 1989 for water-related offences, including providing clearer explanations of what conduct will constitute an offence, and increasing penalties to improve deterrence.

The changes comprise multiple enforcement options that are more targeted to the nature of the particular offence, and provide alternatives to costly and time consuming court proceedings such as the use of penalty infringement notices.

The provision relating to liability for flows of water (currently s 16, new clause 671) has been clarified in a number of ways. The flows of water for which an owner of land may be held liable includes water from a tank, sewer, drain, pipe, fitting or appliance of any kind on the land.

The Exposure Draft also sets out new requirements for the valid appointment of appropriately trained Authorised Water Officers who will be responsible for administering the compliance and enforcement regime.

The Exposure Draft is open for public comment until 14 February 2014. Once finalised, it is intended that the new Water Bill will be introduced to Parliament during 2014 with a view to a new Water Act commencing on 1 January 2016.

For more information, please contact:

Eliza Bergin
Principal Solicitor
t 8684 0267
eliza.bergin@vgso.vic.gov.au

Water law changes in the pipeline

The Water Act 1989 (Vic), one of the longest Acts in the statute book, is under review.  Changes are not expected to significantly impact water users, however, it will change the way the Government manages water so it is important for government officers who work in areas affected by water law or the emergency services (as the review affects flood mitigation infrastructure) to keep abreast of the changes.

The Act provides the framework for allocating surface water and groundwater across Victoria.  It details the Crown’s entitlements to water and private entitlements to water from all rivers, streams and groundwater systems in Victoria, providing Water Authorities with bulk entitlements to water for urban supply or irrigation.  Authorities allocate a volumetric water entitlement to licenced individuals or companies for commercial or irrigation purposes.  It also gives individuals the right to take and use water for domestic and stock purposes.

The Act was developed over 20 years ago when the pressures on the State's water resources were very different.  Its predecessor was enacted in the 1800s to allow the development of irrigation in northern Victoria.  Environmental considerations are a much more recent addition.  In particular, in 2005, the Act pioneered the use of the environmental water reserve, which was designed ‘to set aside a share of water in rivers and aquifers across the State for the environment’. This was the first time that rivers and aquifers gained a legal right to a share of their own water.

The purpose of the review of the Act is to streamline the legislative framework for water management and use.  This includes considering whether changes are needed to implement the Commonwealth's Murray-Darling Basin Plan, released in November 2012.  The review will also implement new water policies adopted by the Government, including the Living Melbourne Living Victoria urban water plan and the land use change policy developed through the Western and Gippsland regional sustainable water strategies.

Currently, we are waiting with baited breath for the release of a discussion paper outlining proposed reforms to the Act and an exposure draft.  An expert panel established by the Minister is preparing this.  A six-week consultation process will occur following the release of the paper.

The discussion paper will consider the following issues:

• Whether the way water resources are managed and allocated can be simplified, without having an adverse impact on entitlements.
• Whether public dams that could present a hazard if they fail should be licensed in the same way as private dams.
• Whether any further refinements to the water corporation governance reforms of 2012 are required.
• Whether the current water service delivery functions and powers of water authorities can provide sustainable and integrated water services.  This includes ensuring the rights to alternative water sources are clear enough to enable greater use of recycled water and stormwater.
• Whether the functions and powers that aim to protect and improve river health, floodplain management and regional drainage are sufficient.  This includes making legislative changes needed to implement the government's response to the Environment and Natural Resources Committee inquiry into floodplain mitigation infrastructure in Victoria, some of which are discussed in the recently released Government’s Response to this inquiry.

If you are in the Victorian Government and require advice about how the water law reforms could affect your area, please contact:

Eliza Bergin
Principal Solicitor
t 8684 0267
eliza.bergin@vgso.vic.gov.au