Compliance and the Murray-Darling Basin Authority
The investigations into alleged instances of water theft, and the
subsequent reviews and reports into water compliance—including this inquiry—have
highlighted the vital roles that proper monitoring, regulatory oversight and
compliance need to play in order to properly administer and manage the MDB.
The committee received significant evidence pointing to gaps in the
metering systems and compliance structures in a number of Basin states, meant
to ensure that water was properly allocated throughout the Basin for both users
and the environment.
Following the serious allegations and concerns that came to light, the
MDBA undertook to review its role in water compliance, particularly with regard
to its oversight of the actions of Basin states. This chapter considers the
findings of the Murray-Darling Water Compliance Review conducted by the MDBA,
and the role of the MDBA in compliance more broadly.
MDBA compliance functions
The compliance and enforcement functions of the MDBA are complex. The
enforcement role of the MDBA is primarily in relation to the Basin Plan which
does not fully come into effect until 2019. As noted by the MDBA, its
regulatory role will increase from July 2019, and if 'instances of unauthorised
take constitute action that is inconsistent with a WRP, or leads to an
exceedance of an SDL, MDBA may take compliance action'.
In 2016‑17, out of a budget of $44.746 million, the MDBA
spent $1.747 million on compliance‑related activities, with 16 staff
allocated to these activities. In 2017‑18, with a budget of
$40.970 million, $2.917 million was allocated for compliance-related
activities. In 2017-18, 32 staff were dedicated to compliance, which included
14 staff for the Water Compliance Review.
While the MDBA holds some powers to investigate breaches of water rules,
Mr Phillip Glyde, Chief Executive of the MDBA, said that it did not have the
'breadth of capability that the state governments would have' regarding
compliance. He argued that the MDBA was 'quite comfortable with the fact that
the New South Wales government and the Queensland government are looking
specifically and deeply [at water rule breaches], with their stronger powers in
relation to those particular issues'. Further to this, Mr Glyde stated that:
The responsibility and the legal power for enforcing water
entitlements in a particular jurisdiction rest with that jurisdiction, which is
why, when we get allegations, we refer them to authorities in the jurisdictions.
The MDBA submitted that:
The MDBA's current role in compliance allegations concerning
individual water users is limited. Such a role was never contemplated for the
Authority, and it is not resourced to perform this intensive role across the
Basin. Rather, it has been assumed that Basin states are enforcing their own
Mr Glyde stated that the MDBA was generally supportive of the
recommendations of the Matthews review, as they related to the MDBA.
Mr Glyde advised that the MDBA would develop a comprehensive response that
took into consideration the findings of both the Matthews review and MDBA's own
compliance review, detailed below.
Murray-Darling Water Compliance Review
On 5 September 2017, the then Prime Minister and then Deputy Prime
Minister announced the Murray-Darling Water Compliance Review (WCR), to be
presented to the Murray‑Darling Basin Ministerial Council (Ministerial
Council). The MDBA was tasked with conducting the WCR, which would 'provide an
independent, Basin-wide strategic review into compliance with state- and
territory-based regulations governing water use in the Murray‑Darling
As part of the WCR, the MDBA examined the:
- appropriateness of and compliance with state laws and statutory
instruments such as WRPs;
- adequacy of water measurement and monitoring arrangements,
- adequacy of penalty arrangements to deter and punish non‑compliant
- adequacy of governance and institutional arrangements ensuring
legally compliant water use; and
- steps required to improve confidence in water compliance and
In addition, an independent, expert panel would provide advice on the
approaches and methodologies used by the MDBA in conducting the WCR. The expert
panel would present a separate report to the Ministerial Council, assessing the
MDBA report. The expert panel would also examine the compliance and enforcement
arrangements of the MDBA, how these interact with Basin state arrangements, and
present options for improving the overall effectiveness of the Basin Plan.
In its submission to the inquiry, DAWR advised that the Australian
Government considered the WCR to be an 'appropriate whole of Basin response to
the allegations aired by the Four Corners report', which would complement the
other investigations already completed or in train.
State compliance and enforcement
The WCR found that the Basin states had significant variations in their
compliance cultures, resourcing levels, transparency and 'comprehensiveness and
clarity of the policy framework'. Via a state-by‑state analysis, the WCR
determined that South Australia has had a long commitment to a compliance
culture, with licensed water take metered since 1994. SA had a well‑codified
compliance regime, with good transparency and detailed annual reports on
compliance activity and outcomes.
In Victoria, compliance was undertaken by regional water authorities. In
examining Goulburn Murray Water, the WCR determined that the modern, remote
sensed meters in place provided accurate and real‑time data, through a
networked system. The WCR argued that 'whereas excess take by an entitlement
holder pumping from a river might be seen as a victimless crime, in a network
system it is a crime against neighbours'. The network system therefore leads to
a compliance culture amongst irrigators.
However, the WCR suggested that Victoria lacked a full suite of
penalties and sanctions for illegal water take, resulting in administrative
compliance action reliant on limited penalties and sanctions, or by criminal
prosecution requiring a very high standard of proof.
The WCR noted that compliance in NSW was hindered by the fact that the
state had both the greatest number of water licences and volume of water take,
and the largest geographic area in the Basin. In addition, there was a
'significant volume' of unregulated water and floodplain harvesting, making it
difficult to determine breaches. The WCR found that addressing these issues had
been a low priority for NSW for the past 20 years. As a result, the WCR
The absence of a culture of compliance, organisational
instability and limited resourcing have meant that compliance has relied
heavily on custom and practice, resulting in a lack of effectiveness,
consistency and transparency.
With regard to Queensland, the WCR noted that the state only adopted a
cap on diversions in 2010, and thus had the least experience with compliance.
While Queensland was at the time undertaking a significant review of metering,
the WCR was of the view that compliance efforts would be hampered by
significant floodplain harvesting, as well as 'challenges of distance and an
industry with some very large entitlement holders'.
Between the Basin states, the WCR noted a 'striking variation' in enforcement
activity. For example, in 2016‑17, Victoria issued 562 warning letters
and notices, SA issued 355 and NSW issued 44. Across all Basin states there
were a very small number of prosecutions, with no prosecutions in 2016‑17
in NSW and Queensland, and six in the other states.
The WCR concluded that NSW, Queensland and Victoria had a 'notable lack
of transparency', reflecting a closed culture and lack of codification of
compliance tasks, thus restricting the ability to publish results. In NSW and
Queensland, the WCR stated that compliance was 'bedevilled by patchy metering,
the challenges of measuring unmetered take and the lack of real‑time,
accurate water accounts'. It also determined that NSW and Queensland had low
levels of compliance resources, with South Australia more adequately equipped.
The WCR concluded that ineffective compliance systems could be explained
by a lack of commitment to compliance by responsible organisations.
Additionally, the difficulty in proving water offences constrained enforcement
activity. The WCR therefore suggested that the burden of evidence of water
breaches be reduced, and the offences simplified, perhaps by way of strict
liability offences and the use of technology.
Water resource plans
The WCR noted that full compliance with the Basin Plan could not be
achieved until state WRPs were accredited, due for completion by 30 June 2019.
However, the WCR acknowledged that progress on the development of state WRPs
has not been adequate. While there are 36 WRPs to be developed across the Basin
(the majority of which are in NSW), to then be accredited by the MDBA by
30 June 2019, only one WRP has been accredited, in Queensland. The
WCR notes particular concern with the progress made by NSW and Victoria, but
considers South Australia, Queensland and the ACT better placed to meet the
timeframes. The WCR details actions the MDBA would take to help ensure the
30 June 2019 deadline was met by all Basin states.
The WCR called for the ability to manage water flows on an event‑by‑event
basis, rather than on the basis of long‑term average use levels, and to
protect low flows for downstream communities. To this end, the WCR found that
the Barwon‑Darling WSP does not adequately protect environmental water,
especially during low flows. The Northern Basin Review, completed in late 2016,
presented measures to improve the protection of environmental flows in the
unregulated rivers of northern NSW.
MDBA compliance and enforcement
The WCR noted that under the Basin Plan, the MDBA had considered water
compliance and enforcement a matter for the states. Despite this, the WCR
in the course of the Review, it has been made very clear that
the community does not accept this arrangement. Numerous stakeholders have
expressed considerable frustration that the MDBA did not respond adequately to
allegations of serious breaches. They are looking to the MDBA to take more
responsibility for compliance and enforcement.
The MDBA has not given sufficient attention to compliance,
has not provided a clear statement of its compliance role, and has not dealt
adequately with allegations of compliance breaches. The Review presents a
program of actions the MDBA will undertake to redress these deficiencies and
cement its role in compliance and enforcement.
While making a number of recommendations to Basin state governments to
improve water management, and detailing the actions the MDBA would take to
improve its functions, the WCR recommended that COAG commit to a Basin
Compliance Compact. The Compact would commit Basin state governments to 'the
actions required to restore public confidence in water management within the
Basin'. The Compact would be published by 30 June 2018, with annual
progress reports detailing the progress in each state in enacting the WCR
- implementation of improved water metering and measurement;
- the state's compliance strategy and how the strategy addresses
the concerns raised by the WCR;
- the state's compliance activities, including the timeliness of
responding to allegations;
- the development of WRPs compliant with the Basin Plan;
- implementation of measures to improve the protection of
environmental water; and
- the establishment of a network of water compliance practitioners
to promote best practice (coordinated by the MDBA).
More details on each of these key recommendations made by the WCR are
The WCR called on Basin state governments to implement a metering target
of 95 per cent per water resource area for meterable take. Such a
target would in effect implement the 'no meter, no pump' rule (as proposed by
the Matthews review). It was also argued that this target would avoid placing
cost burdens on small entitlement holders, as the metering would apply to those
extracting more than 20 megalitres (ML) on average annually. The WCR made
recommendations as to the appropriate standards of the meters, how the meters
should be installed and audited, and that the pump details and water
entitlements be made publicly available.
To further improve the measurement of water take, particularly with
regard to floodplain harvesting in the Northern Basin, the WCR recommended that
NSW and Queensland improve the assessment of water taken by floodplain
harvesting in their annual accounts, and have accurate measurements of non‑metered
floodplain harvesting in place by 30 June 2022.
The MDBA undertook to publish, by 30 June 2018, guidelines for the
requirements of hydrometric networks and hydrologic models for compliance and
enforcement. From 2018 onwards, the MDBA would also publish an annual report on
the 'data quality and assurance processes for hydrometric data for Basin Plan
reporting and river operations in the River Murray System'.
To this end, in August 2018 the MDBA released a program report titled
'Model improvement program from MDBA hydrological models'. The report 'outlines
components and timeframes for three models used to support Basin Plan
The WCR made a number of recommendations for Basin states to implement
effective compliance regimes. The WCR determined that good governance for water
compliance required Basin states to adopt the following elements:
- organisational stability and a strong compliance culture, led
'from the top';
- the clear assignment of responsibilities and accountabilities for
decision‑making, with transparency and close connections in making
- compliance functions to be held within one agency, with a
separation between enforcement and customer service (as in place in South
Australia and Goulburn Murray Water);
- adequate resourcing of and budget allocations to compliance
functions, in conjunction with well‑trained and knowledgeable staff;
- the publication of compliance risk tools, risk classification of
water sources and annual audit priorities (with South Australia at the time the
only state publishing its compliance strategy);
- clear escalation pathways for enforcement action against alleged offences,
and publication of this pathway (with South Australian at the time the only
state publishing its escalation pathway);
- good annual reporting on compliance activity, including numbers,
types and locations of breaches, the actions taken, outcomes achieved and the
timeliness of each step in the compliance pathway; and
- provision of clear, simple and publicly available information to
entitlement holders so that they understood their rights and obligations and could
therefore voluntarily comply with the rules.
The WCR recommended that each state review its compliance and governance
arrangements, considering the elements listed above, and for each state to
publish it compliance strategies. Both tasks were to be completed by
30 June 2018. By 31 March 2018, the MDBA would issue
guidelines for the consistent reporting of compliance activities.
Given the shared nature of water resources across the Basin, the WCR
called for consistency across the states in the penalties and sanctions imposed
against water breaches. It was also recommended that an appropriate range of administrative, civil and
criminal penalties be put in place across all states, so that 'the punishment
can match the crime', and to allow compliance resources to be allocated in a
way that was proportionate to the offence.
The WCR acknowledged the strong community and stakeholder concerns that
the MDBA's compliance powers were unclear, including the view that the MDBA
should more actively enforce compliance with the Basin Plan.
The Basin Plan is enacted through state WRPs. The WCR noted that under
these arrangements, states have the lead compliance and enforcement function
against individual water entitlement holders. It was stated that the 'MDBA is
not resourced to take over this role, and it would be inefficient for the MDBA
to do so'. However, the WCR continued that:
the MDBA's role is to hold states to account if they are not
performing their compliance and enforcement functions effectively. The MDBA
accepts that it has not adequately escalated allegations of water theft when
the relevant state authorities have not dealt adequately with them. A more
assertive and transparent approach to compliance by the MDBA is needed,
including a proactive escalation strategy (set out in Attachment B [of the
WCR]), an audit and assurance program, better public reporting, and a
willingness to employ its enforcement powers where necessary.
The WCR detailed the actions the MDBA would take to improve its
compliance functions. These actions included:
- taking a more proactive approach to compliance and enforcement by
adopting a revised proactive escalation strategy;
- revising and publishing the MDBA compliance and enforcement
strategy, ensuring its compliance with the Basin Plan. The strategy would
include, among other things, a risk‑based audit program to check that the
obligations of the Basin Plan are being met, including via state compliance
- the establishment of a dedicated compliance and enforcement
branch and an independent assurance committee that will provide advice to the
MDBA on its enforcement and compliance work.
The WCR further suggested that to improve implementation of the Basin
Plan, the governance arrangements between the Australian Government and state
agencies should be improved and streamlined. Improvements would aim to 'better
reflect roles and responsibilities so as to ensure that all relevant agencies
are engaged on issues for which they have responsibility and avoid
duplication', while improving transparency and the integration of decision‑making.
The WCR agreed with the assertions made in Four Corners that the rules
in the Barwon‑Darling system allowed environmental water to be used by
irrigators. The WCR called for improvements to the water entitlement system, to provide
confidence that water recovered for environmental purposes was used as such.
The WCR saw scope for the improved protection of environmental water in the
unregulated northern Basin, and in more regulated areas of the southern Basin
(such as the Murray and Murrumbidgee rivers).
While it was acknowledged that work was underway in NSW and Queensland
to better protect environmental water, the WCR recommended that NSW and
Queensland take action to 'immediately introduce Daily Extraction Limits and
encourage the development of voluntary agreements to protect low flows (of less
than 2000ML/ day at Bourke)'.
The WCR recommended that the NSW and Queensland governments revise their
WRPs to ensure they include effective policies for the protection of
environmental water, particularly during low flows. Such policies should
'include event-based management or other innovative policy tools capable of
delivering equivalent environmental outcomes'.
Independent Panel Report –
Murray-Darling Basin Water Compliance Review
The independent panel reviewing the MDBA's WCR also made a number of
findings and recommendations regarding compliance and enforcement, in addition
to those recommendations and actions presented by the WCR (which the panel
The independent panel found that it was difficult to understand the
progress of Basin Plan implementation, given the variety of reports between the
MDBA, the CEWH and the Basin states. Nevertheless, the panel found that
insufficient progress had been made in the accreditation of WRPs and in the
protection of environmental water. It further contended that while the MDBA had
a central leadership and coordinating role:
it has been unable to assert its authority during the
development of water resource plans and transition to SDLs; the Australian
Government Department of Agriculture and Water Resources (DAWR) and the Basin
Officials Committee (BOC) also have important roles which are not being effectively
discharged. The Panel notes an underlying lack of acceptance that the Water Act
has fundamentally changed roles and responsibilities for management of Basin
water resources: it is not business as usual.
The independent panel made a number of recommendations relating to
accountability, including, among other things, that:
- the MDBA revise and clearly communicate its compliance and
enforcement arrangements, provide advice on how it will assess compliance and
report publicly, while providing clear guidance on the reporting obligations of
all stakeholders, and
- COAG endorse amendments to the Water Act with regard to the
appointment of members to the MDBA. Those appointed should have a 'high level
of expertise, and be widely recognised as having high standing in, one or more
fields relevant to the Authority's functions', with members collectively having
experience across the necessary variety of fields.
In finding that Basin states should continue to be responsible for water
law enforcement, the independent panel also found that clarity was needed as to
when the MDBA would act in instances of illegal take, and WRPs were needed to
help provide this clarity on MDBA action. The panel recommended that COAG
endorse amendments to the Water Act that would provide a 'more comprehensive
suite of sanctions and powers, such as appropriate evidentiary provisions and
The independent panel supported the WCR's calls for improved water
measurement and monitoring. It made the additional recommendations that the Minister
call on DAWR to take a more active role, given the significance of WRPs to the
administration of the Water Act. Further, the MDBA should work with the states
and the Bureau of Meteorology to improve environmental water management via a
review of the hydrometric network.
In relation to environmental water, the panel considered that there was
a 'concerning systemic failure to protect low flows in unregulated rivers in
the northern Basin', and that the water take rules in NSW had contributed to
the loss of low flows in unregulated rivers. The independent panel also argued
that held environmental water was not properly protected from take. To address
this, the panel recommended that the MDBA ensure accredited WRPs include
policies for the protection of environmental water, particularly low flows in
the northern Basin.
In concluding, the independent panel stressed that the review and
subsequent report of the WCR was both valuable and essential. Without the WCR,
the panel considered that the Basin Plan could have been placed in 'real
jeopardy', due to lack of action by the MDBA and the failure of Basin states to
deliver on their commitments.
Independent Assurance Committee
On 12 February 2018, the MDBA announced the appointment of members to an
Independent Assurance Committee (IAC), established to provide 'expert advice on
the design, implementation and adequacy of the MDBA's Basin Plan compliance
program'. The establishment of the IAC was a result of the WCR and aims to
ensure the MDBA 'fully and proactively' executes its compliance functions.
Mr Glyde advised that the IAC would:
provide advice – which will be publicly available – on the
MDBA's compliance strategy and approach, program design and agency capability.
[The IAC] will help [the MDBA] to ensure adequate attention
is given to high risk areas for Basin Plan implementation, including state and
MDBA compliance arrangements and reporting, state water resource plans and
improved management of environmental water.
The IAC consists of four independent experts with knowledge in various
relevant fields. As part of its annual work program, in 2018 the IAC was
expected to implement MDBA actions resulting from the WCR, provide advice on
the Compact, and progress with Commonwealth accreditation of Basin state WRPs
and the protection of environmental water.
MDBA compliance action since the WCR
Since the completion of the WCR, the MDBA and the Ministerial Council
have taken steps to implement the recommendations of that review. The MDBA has
established an Office of Compliance to provide a 'focal point within the MDBA
to improve water compliance in line with the Basin Plan'.
The MDBA has further developed an online register, detailing how it has
handled allegations of non‑compliance that have been reported to it. The
MDBA has adopted a compliance escalation pathway, to be followed when handling
In June 2018, the MDBA published its 'Compliance and enforcement policy
2018‑21', detailing the MDBA's approach to compliance and enforcement
under the Water Act and Basin Plan. The policy outlines the seven compliance
areas of the MDBA, being:
- WRPs and ensuring state water laws remain consistent with accredited
- SDLs, including continual improvement to measuring consumptive
- compliance and enforcement in relation to illegal take;
- improving water metering and measuring of water take (including
the use of remote sensing and emerging technologies);
- planning and protection of environmental water;
- water trade; and
- water quality and salinity.
Basin Compliance Compact
At a meeting of the Ministerial Council on 19 December 2017,
Basin state water ministers acknowledged that confidence in the governance of
the MDB had been eroded by the allegations of water theft and inadequate
enforcement of the rules. The Council committed to 'prompt and effective
responses to the reviews that had been conducted to date, and to those still
To that end, the ministers agreed to appoint an independent person to
examine and collate the findings and recommendations of the various compliance
reviews, to provide the Council with advice on implementation. The Council
further determined that Basin officials would establish a draft Basin
Compliance Compact (Compact), as recommended by the WCR. The draft Compact
detail a compliance implementation framework, including
specific plans for improving compliance and enforcement activities for each
Basin jurisdiction and for the MDBA, and transparent reporting and
accountability arrangements on progress. 
The MDBA supported the appointment of an independent person to assist
with implementation of the compliance review recommendations. The MDBA also
noted that the Compact had been recommended by the WCR, and thus supported its
development. Mr Glyde of the MDBA observed that given the numerous reviews
completed and ongoing, a 'well‑coordinated response and plan of action
will be essential to give proper effect to the numerous recommendations
resulting from the reviews'.
The draft Compact was agreed to by the Ministerial Council, at its
meeting on 8 June 2018, but is yet to be endorsed by COAG. The
Compact addresses and responds to the WCR, the interim and final reports of the
Matthews review, and the independent audit of Queensland water measurement and
compliance, completed in March 2018. The Compact commits the Basin
states—within set timeframes—to 'building improved compliance and enforcement
practices into their 'business as usual' management of Basin water resources',
with a focus on five key themes:
- transparency and accountability;
- compliance and enforcement frameworks;
- metering and measurement;
- finalising water resource plans, and
- protecting and managing environmental water.
Importantly, the Compact commits Basin states to effective water metering,
and notes that all water meters should comply with the national standard
(AS4747), by no later than June 2025. Additionally, Basin states would be
required to meter all take via water entitlements (however defined by each
jurisdiction) by June 2025, and introduce a program, no later than 2025, to
progressively automate the reporting of water take. The Compact specifically
notes that for higher risk take, 'including large users in the Barwon‑Darling',
that the take be accurately metered and telemetered by December 2019.
The Basin states, as parties to the Compact, agreed to the adoption of
'consistent approaches for compliance arrangements and practices across the
Basin' which would be supported by a 'network of compliance practitioners, who
will share knowledge and experience'.
The Compact further notes that:
telemetry should be utilised to improve the timeliness and
efficiency of capturing and reporting water take data for compliance, and flag
possible breaches of water management rules for immediate investigation.
However, currently there are insufficient meters that meet
the standard to suit every metering situation, and telemetry may not be cost
effective for some water users. A risk-based approach will initially be taken,
with the ultimate aim of achieving comprehensive coverage of compliant meters
and telemetry across the Basin.
Navigation: Previous Page | Contents | Next Page