Governance arrangements under the Intergovernmental Agreement on Murray-Darling Basin Reform
This chapter discusses the adequacy of the current whole of basin
governance arrangements under the Intergovernmental Agreement on Murray-Darling
The independence of the Murray-Darling Basin Authority, and the
continuing role that the Basin States play in the management of the
Murray-Darling Basin, were the focus of the committee's consideration in
relation to the governance arrangements. Other issues addressed were: the
extent to which the Intergovernmental Agreement on Murray-Darling Basin Reform
covered the 'whole-of-basin'; and the role of Indigenous Australians in the
management of the Murray-Darling Basin.
Adequacy of current whole-of-Basin governance arrangements under the
On 3 July 2008 the Intergovernmental Agreement on Murray-Darling Basin
Reform (IGA) was signed by the Commonwealth and Basin States – Queensland, New South
Wales, Victoria, South Australia and the Australian Capital Territory.
The IGA implements the Memorandum of Understanding on Murray Darling
Basin Reform (MoU), which was signed at the Council of Australian Governments
meeting on 26 March 2008. Under the MoU the Commonwealth and Basin States agreed to merge the Murray-Darling Basin Commission (MDBC) and the Murray-Darling
Basin Authority to create a single institution, to be known as the
Murray-Darling Basin Authority (the Authority) which is responsible for developing,
implementing and monitoring the Basin Plan. The Basin Plan will include a
sustainable cap on surface and groundwater diversions and provide for the
critical human needs of communities that use water from the Murray.
The IGA seeks to establish 'a new culture and practice of Basin wide
management and planning, through new structures and partnerships'.
The governance arrangements for the Basin are set out in Schedules B and C of
the IGA. Those arrangements are:
The Commonwealth Water Minister is responsible for the Authority
and is responsible for approving the Basin Plan. The Minister can choose not to
adopt the Basin Plan and refer it back to the Authority with suggestions for
consideration by the Authority.
The Ministerial Council, comprising one Minister from each Basin
Government (with the Commonwealth Minister being the Council chair) advises the
Commonwealth Water Minister on the Basin Plan. The Ministerial Council can
refer the Basin Plan back to the Authority for reappraisal, if necessary. The
Ministerial Council also has a role in considering and determining outcomes and
objectives on major policy issues not addressed in the Basin Plan.
The Authority, in addition to the preparation, implementation,
monitoring and enforcement of the Basin Plan, will implement decisions made by
the Ministerial Council and the Basin Officials Committee;
The Basin Officials Committee, comprising officials from the six
Basin Governments, has an advisory role to the Authority on the Basin Plan. The
Basin Officials Committee role also includes:
providing advice to the Ministerial Council on issues not
addressed in the Basin Plan;
giving effect to policies and decisions which the Ministerial
setting objectives and outcomes in relation to River Murray
operation by the Authority;
responsibility for resolving operational management and delivery
inconsistencies arising from the application of the Basin Plan the States'
management and delivery of water entitlements and allocations;
responsibility for high level decision making in relation to the
operation of the River Murray System; and
responsibility for monitoring the asset management plan.
A Basin Community Committee, consisting of a chair and 16 other
members, including one member of the Authority. Members of the Basin Community
Committee are appointed by the Ministerial Council. The Basin Community
Committee will provide advice to the Authority, through the Authority member of
the Committee, and provide advice to the Ministerial Council on matters for
which it seeks the Committee's advice.
Under the IGA the Basin States also agreed to pass legislation providing
for a referral of certain powers to the Commonwealth in accordance with
paragraph 51(xxxvii) of the Constitution. The matters covered include:
transferring the current powers and functions of the MDBC to the
strengthening the role of the Australian Competition and Consumer
Commission (ACCC); and
enabling the Basin Plan to provide arrangements for meeting
critical human needs.
Adequacy of governance arrangements
Submissions to the inquiry made a number of criticisms of the
whole-of-Basin governance arrangements set out in the IGA, including:
the decision making role of the States and the purported
independence of the Authority;
the IGA arrangements are not, in fact, 'whole-of-Basin', because
it excludes key water sources in the Murray-Darling Basin (MDB or Basin); and
the arrangements do not adequately provide for consultation and
representation of Indigenous people.
Role of the States and independence
of the Murray-Darling Basin Authority
Responsibility for management of the MDB has historically been a
difficult issue in Commonwealth-State relations. Associate Professor John Williams, of the University of Adelaide Law School, explained to the committee the
negotiations which took place between the drafters of the Constitution in
relation to the MDB, which resulted in States being assigned the authority for
management of rivers. Associate Professor Williams described the MDB as 'not so
much a national river system; it is the rivers of four states and one territory'.
It is this fragmented management arrangement that some submitters
believe is to blame for the current state of the Murray-Darling Basin. For example, the submission from Dr Kerrie Muller stated:
Current Governance structures are too clumsy and
ill-co-ordinated to be effective at managing a system as complex as the Murray-Darling Basin. Tensions exist between community and Statutory Groups, Agencies
within each State as well as between the States and the Commonwealth Agencies
that prevent cohesive action. State borders as well as 'policy borders' such as
the constrained scope of the Living Murray program also impede cohesive
and timely action and key activities are falling between the gaps.
The predominant criticism of the IGA governance arrangements is that,
because of the continuing decision-making role that the Basin States have in
the Ministerial Council, the Authority lacks the independence it needs to
manage the Basin for the benefit of all. For example, the Coorong, Lakes and
Murray Waterkeeper said:
The Intergovernmental Agreement is inadequate [and] promoted
in a way that deceives the Australian public. Much has been made of the
independence of the new Murray-Darling Basin Authority but it is not truly
independent. It is subject to direction by the Ministerial Council and the
Basin Officials Committee.
What we have is a system that establishes the same partisan
and parochial capacity of the old system which is responsible for so much of
the impact we are now confronting.
Mr Mitch Williams, MP, the South Australian Shadow Minister for Water
Security made the following observation:
We believe that the Governance arrangements under the
Intergovernmental agreement fail to change the status quo leaving powers with
individual states to at least frustrate if not prevent necessary changes.
Professor Diane Bell expressed her disappointment at the scope of powers
of the Authority:
I, along with a number of others concerned about
over-allocation and mismanagement of water in the eco-system, had hoped that
the referral of powers and the new IGA would make it possible for the new
administrative body to address the needs of the eco-system as a whole. However,
it appears that what we have is another layer of bureaucracy and no political
will to exercise what powers exist or to explore creative possibilities that
might extend existing powers.
The National Farmers' Federation (NFF) noted the criticism of the new
governance arrangements. However, the NFF did see a positive side to the composition
and role of the Ministerial Council:
...where governments are [required] to provide financial
support for decisions, and where all can agree, then the decisions are robust
Although the NFF believes that the IGA arrangements provide for a robust
decision making process, the NFF also acknowledged that the Authority's
autonomy is constrained by retention of States management control via the
Ministerial Council and Basin Official's Committee and that 'the expectations
of some individuals and organisations of an autonomous Authority are gone'.
The submission of the Department of the Environment, Heritage, Water and
the Arts (DEHWA) noted that the Basin States would retain a decision-making
role through a new Ministerial Council. However, DEHWA described the process as
more 'streamlined' because the new Ministerial Council will have only a single
representative from each of the Basin States. In contrast, the previous body,
the Murray-Darling Basin Ministerial Council had up to three Ministerial
representatives from each of the Basin States. DEWHA's submission also
describes the Authority as an 'independent, expert' body.
The committee also notes the evidence of Mr Rob Freeman, Chief Executive
of the Authority, who described the relationship between the Basin States and
the Authority as follows:
In undertaking this planning role [for the Basin Plan] the
Murray-Darling Basin Authority is independent of basin states, but clearly the
role has to be undertaken in partnership with states that will have responsibility
for implementing consistent water resource plans.
Alternative governance arrangements
The committee received a number of suggestions on how the Basin could be
better managed. A number of submissions argue for a Commonwealth take-over of
the management of the entire Basin. Some submissions support the establishment
of an independent body with responsibility for management of the whole-of-Basin
either in addition to, or as an alternative to, a Commonwealth take-over of the
Basin. For example, the Southern Alexandrina Business Association suggests that
whole of Basin control can only be attained if States referred all necessary
powers to the Commonwealth, with States having no power of veto.
The Conservation Council of South Australia recommends 'immediate and
urgent unilateral Commonwealth action to place control of the governance
arrangements of the entire basin under a single, unified, independent,
science-based, environmentally-focussed body'.
Similarly, Ms Liz Yelland argued for a 'strong integrated single management
body at arms length from Government in the manner of the Reserve Bank'.
The committee also heard from a number of witnesses emphasising the
importance of regional governance across the Basin. For example, Mr Bruce Brown
of the Namoi Catchment Authority told the committee that, particularly in
relation to the spending of government money on water infrastructure, a skills
based regional governance structure would be better than 'some central
entity...preaching to a regional community about how those dollars should be dissipated'.
When pressed by the committee, Mr Brown refused to be drawn on whether
catchment management authorities should be retained under state government
I think I am on the record that it would be better for the
catchment management authorities in the Murray-Darling Basin to become in some
way associated with the Murray-Darling Basin Authority and/or the Australian
government. It is clear, simple management that I think would make everybody's
job a hell of a lot easier ... but whether you can actually politically achieve
that is another question.
...If the Murray-Darling Basin is under Commonwealth government
control, and I am a catchment management entity that is in one of those
catchments, does it make sense to be a statutory entity under a state
government? I will not say any more.
In contrast to many of the submissions that the committee received, Dr
Willem Vervoot and Mr Floris van Ogtrop saw a role for all levels of government
in the management of the Basin. Dr Vervoot and Mr van Ogtrop described their
vision of a 'holistic management approach' through a 'continuum of management
Both State governments and Federal government are equally
equipped to make management decisions in the Basin. We firmly believe in a
holistic management approach that eliminates State borders but maintains local
knowledge and management input. A continuum of management decisions from the
federal to the local level, supported by University and government research, is
the only solution.
A Commonwealth take-over of
the governance of the Murray-Darling Basin
Associate Professor Williams outlined the options open to the
Commonwealth to take over management of the Basin:
The first alternative is a negotiated incremental take-over.
This in part is what has been achieved to date through the use of cooperative
schemes such as the Murray-Darling Basin Act or references of power by section
51(xxxvii) of the Constitution...
The second alternative, if we do not go down the referral of
power approach, is the question of the Commonwealth wresting control over the
rivers from the states by using its existing powers.
In terms of the existing Constitutional powers which the Commonwealth
might use to effect a take-over of the Basin, Associate Professor Williams identified section 51(i) of the Constitution (the trade and commerce power) as
the primary source of power:
...it is arguable that the Commonwealth, in the regulation of
trade and commerce, could regulate the supply of interstate water, and
invalidate those impediments to the movement of interstate water in trade and
commerce. So, for instance, the Commonwealth could eliminate caps that state
governments put up, or instrumentalities, in the trade from one state to
However, Associate Professor Williams indicated that section 100 of the
Constitution would provide grounds for a challenge to the use of the trade and
commerce power in this way.
Other Constitutional powers which Associate Professor Williams stated
may be relied upon include: section 51(xx) (the corporations power); section
51(xxix) (the external affairs power); and section 51 (xxxi) (acquisition of
property on just terms):
...the Commonwealth parliament does have significant powers
over the rivers, but in relation to things that are done to the rivers by
corporations in trade and commerce and in terms of acquisition. It did not have
that power in 1901. While it is not a perfect solution, and it would be subject
to a High Court challenge by some states – I suspect not all states – and some users,
I believe the Commonwealth parliament, having passed a law to deal with
significant aspects of the river, would be on strong constitutional ground.
The committee notes that Associate Professor Williams' preference would
be for a single national authority and that could be achieved by a referral of
powers from the States. However, the committee also notes the limitations of
referrals of power:
First of all, the Commonwealth stands in the shoes of the
states, but only where the states have given them the authority.
So, for instance, South Australia could refer today the whole
of the river within its jurisdiction, but the Commonwealth would stand in
exactly the same position as South Australia, an end user. It might have more
money than South Australia, but it would be an end user. Referrals are usually
partial and that is the thing. The incremental move up is the problem. The
states give you a half a glass of water and you can play with what is left of
Lastly, the states can end the referral. There is provision
for the states to pull out of the deal, by gazettal of a governance
IGA arrangements are not
Another criticism of the IGA governance arrangements is that they do not
provide for 'whole-of-basin' control:
While the Intergovernmental agreement claims to [cover] the
'whole-of-basin', it leaves out of its control vast water resources in the
Goulburn, Murrumbidgee and the northern reaches of the Darling. These are vital
parts of the region drained by the Murray-Darling system.
Groundwater is excluded from the agreement.
Other submissions also emphasised that control of the entire MDB system
meant including all the tributaries in all of the States under the IGA.
The Acheron Valley Watch Inc expressed concern at the exclusion of the Goulburn
River and the Murrumbidgee River from the IGA:
As major tributaries to the Murray River the Goulburn river
and the Murrumbidgee river should not be excluded from the Intergovernmental
Agreement on the Murray-Darling Basin Reform and in particular, from the
operation of the 'River Murray System' as established in clause 3.2.9 of the
This political decision to exclude major tributaries of the Murray from the operation of the River Murray System is wrong in principle and creates
a dangerous precedence, because it enhances the 'prisoners dilemma' with
drastic effects on the state of the environment. The 'prisoners dilemma'
describes a perception bias in which many projects of individual actors appear
to be relatively small on their own with seemingly negligible impact, but when
added up they create a large cumulative negative impact on the River Murray
System and the subcatchments of its tributaries.
The committee notes the evidence of Mr Rob Freeman, Chief Executive of
the Authority, that:
water resources of the Murrumbidgee River and Goulburn River are
not excluded from the Commonwealth Water Act, and will be subject to the Basin
water resource plans that apply to those tributaries will have to
be consistent with the Basin Plan.
A description of the area encompassed by the MDB is set out in section
18A of the Water Act 2007, and an indicative map of the MDB is set out
in Schedule 1A of the Water Act 2007.
Role of Indigenous people in
decision-making for the Basin
The Australian Human Rights Commission (AHRC) provided the committee
with a detailed submission outlining the importance of the MDB to the
Indigenous Owner groups (who identify as 'Indigenous Nations'):
The Indigenous Nations of the Murray-Darling River Basin
possess distinct cultural and customary rights and responsibilities including:
a spiritual connection to the lands, waters and natural resources of the Basin;
management of significant sites located along the river banks, on the river
beds, and sites and stories associated with the water and natural resources
located in the rivers and their tributaries; protection of Indigenous cultural
heritage and knowledge; accessing cultural activities such as hunting and
fishing, and ceremony.
AHRC noted that historically Indigenous peoples have been excluded from
water management and that Indigenous Australians have had little to no
involvement in consultations processes, and the development of water policy,
resulting in a limited capacity to negotiate enforceable water rights. The AHRC
went on to state that governments must work collaboratively and develop policy
that deals with Indigenous disadvantage from a holistic perspective, including
participation and engagement in governance and water management reform
processes in relation to the MDB.
One of the key recommendations by the AHRC was that statutory provision
should be made for mandatory Indigenous membership on the Authority and on the
Basin Community Committee.
Given the history of disjointed management of the MDB, the committee
understands the appeal of a Commonwealth take-over of the MDB and the
establishment of an independent body responsible for the MDB.
However, the committee also recognises that in the absence of a referral
of full powers from the Basin States, any Commonwealth take-over would rely on
an omnibus of Constitutional powers. While perhaps welcomed by some Basin
States, such a take-over would inevitably be challenged by other Basin States.
Given the situation in the MDB, what is required right now is
cooperation between the Commonwealth and the Basin States, not divisive
political manoeuvring. For this reason, the committee feels that the governance
arrangements under the IGA represent a positive step for the management of the
The committee notes the submission of the AHRC that there should be a
role for Indigenous people in decision-making in the Basin. However, the
committee notes that the Authority is a governing body, not a representative
body. For this reason, the committee's view is that the appropriate selection
criteria for members of the Authority is already set out in the Water Act
2007, specifically, people with a high level of expertise in one or more of
the fields relevant to the Authority's functions and not a member of the
governing body of a relevant interest group. The committee notes that
Indigenous representation on the Basin Community Committee is provided for in
the Water Act 2007.
The committee recommends that the Commonwealth work towards a full and
unconditional referral of powers relevant to the management of the MDB and, in
the absence of such full referral, consider pursuing other options to provide
for complete federal management.
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