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Focus: WA water resources management options

24 November 2009

In brief: The Western Australian Government recently published a Discussion Paper on the proposed Water Resources Management Bill, a key element of the state's much-anticipated water reform agenda. Senior Associate Robyn Glindemann and Lawyer Jessica D'Souza report on the Discussion Paper's implications for industry.

How does it affect you?

  • If the Discussion Paper's proposals become law:
    • a predictable system of water allocations will be created, backed by a statutory water plan;
    • the security and certainty of water entitlements will be enhanced;
    • free trade of water entitlements will be promoted, with entitlement holders being able to decide whether to trade, and to set the volume and price of the trade; and
    • the current licensing arrangements, including for mine dewatering will remain in place, with some modifications.
  • We understand that the consultation period for the Discussion Paper is expected to close in late January 2010. The proposed timeline for the Water Resources Management Bill includes the release of a Green Bill for consultation in late 2010, before the Bill is introduced into Parliament in Spring 2011.

Background

More than a decade ago, the Council of Australian Governments (COAG) agreed a suite of national reforms to enhance water management and supply. The current framework for water reform is the National Water Initiative (NWI), which WA adopted on 6 April 2006. The Blueprint for Water Reform in Western Australia, together with the Government's response to that document and the 2007 State Water Plan, tailor the NWI for application in WA.

Several Bills are currently being prepared to implement the state's commitments under the NWI. The Water Services Bill is expected to be introduced into Parliament in Spring 2010. This Bill is intended to consolidate various pieces of legislation regulating the licensing of water services providers and is well advanced. The Water Resources Management Bill is the subject of the Discussion Paper, which seeks to 'outline possible legislative change to guide equitable and economic allocation of water now and into the future'. Many of the ideas the Discussion Paper raises reflect the principles in the NWI and therefore are not new. But, after a long silence, it would appear that legislative water reform will, once again, be back on the agenda from 2010.

Resource allocation models

The Discussion Paper highlights the need for 'secure, perpetual water access entitlements to a share of available water'. It suggests that water allocation plans should be adapted for individual areas and that stakeholders should be consulted in the development of those plans. Under existing legislation, water management plans are not enforceable. The Discussion Paper canvasses the option of making such plans binding, to give 'greater certainty and security of title for all water users'.

The Discussion Paper suggests implementing two water entitlement regimes:

  • In areas where the demand for water is strong and water has been fully allocated, or is approaching full allocation, water allocation plans would be used to establish consumptive pool regimes. Under such a regime, people would be given perpetual water access entitlements as shares of a consumptive pool and the water allocation plan would dictate unique operating rules for the pool.
  • The current licensing regime (taking of fixed volumes of water) would continue to operate in areas where a consumptive pool is not established by a water allocation plan or where there is little competition for the water.

Those with rights to access water in a consumptive pool would be required to hold a Water Access Entitlement (WAE). The WAE would have a water account attached to it, which would monitor credits and debits of water from trades, water use and water allocation announcements. Separate permits would be required for the construction or operation of water supply works. It will not be necessary to own land in order to hold a WAE, although it is suggested that the current land ownership/occupation for licences should remain.

The Discussion Paper proposes the following improvements to the current licensing system where it is to be retained:

  • consolidation and simplification of the matters that must be considered in assessing licence applications;
  • the registration of security interests in licences; and
  • the establishment of a moratorium on licence applications when a resource is fully allocated.

The Discussion Paper suggests that conversion from a licensing regime to the WAE regime should occur when the water use reaches 70 per cent of the sustainable limit for the resource, subject to establishment of an allocation plan for the consumptive pool. It also proposes the use of special purpose licenses for temporary activities, like mine dewatering.

The Discussion Paper also recommends that there should be an option to exempt certain activities or areas from licensing or consumptive pool management (where appropriate), and that landowners and occupiers should retain their rights to take water for domestic use and watering livestock (subject to certain limitations). On the other hand, a WAE or licence may be required for plantation forests.

Trading water entitlements

The Discussion Paper suggests that entitlement holders should be free to decide whether to trade and to determine volume and price. People would be entitled to trade land and water separately, and water entitlement trades would only need ministerial consent if required by the relevant water allocation plan.

There may, however, be a 'use it or lose it' limitation, where landowners who acquire a licence (by grant) for a project and then purport to sell the licence without developing that project may lose their right to the licence.

Cost implications of the legislation

The Discussion Paper suggests that compensation should continue to be paid where there is a permanent reduction in licensed water that is not fair and reasonable. It also proposes an approach to risk allocation, consistent with NWI principles, in circumstances where a WAE holder's entitlement is reduced.

The Discussion Paper indicates that regulatory powers should continue to provide for recovery of the costs of operating the water register, water planning, licensing and water management, monitoring and assessment.

Conclusion

The Water Resources Management Bill is intended to consolidate legislation that is nearly 100 years old and is no longer capable of regulating water resources in accordance with current best practice principles. It is well overdue.

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