Introduction
2.1
This chapter explores the evidence presented in relation to the Water Legislation Amendment (Inspector-General of Water Compliance and Other Measures) Act 2021 (the Act), including broad support for the role of Inspector‑General of Water Compliance (Inspector-General) and opportunities for reform.
2.2
The vast majority of inquiry participants, including community and environmental groups as well as industry, offered support for the role of Inspector‑General, describing it as 'an important initiative which will improve the governance of Basin Plan implementation'. Of these, many welcomed the separation of the Murray–Darling Basin Authority's (MDBA) implementation and compliance roles between two agencies. The Nature Conservation Council of NSW explained that this 'reduces the potential for conflicts of interest'. Others, such as Murray Irrigation, emphasised the importance of the Inspector-General as a 'positive step' toward the strategic management of the Murray–Darling Basin.
2.3
The majority of those who provided evidence in support of the role of Inspector-General argued that its effectiveness is dependent on three key factors: how the Inspector-General chooses to exercise discretion; whether the Office of Water Compliance is appropriately resourced to conduct investigations and assessments regarding allegations of non-compliance; and whether the Inspector-General and associated office maintain independence.
2.4
Many submitters made recommendations during the course of the inquiry to strengthen the role of Inspector-General. This evidence is discussed below and the chapter concludes with the committee's view.
Independence
2.5
The central concern raised throughout the committee's inquiry was the need for the Inspector-General and Office of Water Compliance to be, and seen to be, independent. This was highlighted by submitters who argued that independence is key to ensuring effective regulation as well as building public confidence in the new office. The Conservation Council SA and Goulburn Valley Environmental Group argued that '[t]his independence will prove to be particularly important in relation to possible allegations involving Commonwealth water officials'.
2.6
The Inspector-General is supported by the Office of Water Compliance which sits in the Department of Agriculture, Water and the Environment (the Department) portfolio. Inquiry participants, such as Healthy Rivers Lower Murray, submitted that this will 'no doubt result in a conflict of interest'. The Environmental Defenders Office (EDO) argued that:
This model arguably has the potential to undermine the independence of the [Inspector-General] and to give rise to real or perceived conflicts of interest (particularly given the Department’s role in administering irrigation efficiency programs and managing strategic buybacks, which have been subject to various complaints and investigations).
2.7
The Conservation Council SA highlighted that '[w]ater management is often a highly politicised topic' and, as a result, 'nesting this role within a Department has the strong potential to negate its "independence"'. Likewise, Mr John Pettigrew, President, Goulburn Valley Environment Group, noted that '[p]erception is everything in the delivery of the Basin Plan and water matters across the basin'.
2.8
As noted in Chapter 1, the Hon Keith Pitt, Minister for Resources and Water, indicated in his second reading speech that 'ethical walls' would be established to maintain the Inspector-General's independence. However, the EDO submitted that internal ethical walls are 'legally nebulous and potentially difficult to enforce'. Similarly, Mr Craig Wilkins, Chief Executive, Conservation Council SA, argued that:
The concept of having an internal firewall between different parts of the same department, in practice, doesn't go far enough in terms of reassuring the public that there is true independence both in terms of the rules in place and also the culture.
2.9
The committee repeatedly heard that the Inspector-General must be 'truly independent'. For a number of inquiry participants, this meant that both the Inspector-General and Office of Water Compliance should be 'entirely separate from any water agency to avoid any real or perceived conflict of interest'.
2.10
Mr Pettigrew emphasised the need for both independence in fact and in appearance: '[i]t's perception as well as the practical running of the office'. This, he argued, is particularly important to maintain public confidence in the office:
If there's going to be a perception in the community that somehow the inspector-general lacks the culture or ability to appropriately investigate, that's going to undermine public confidence in this process.
2.11
The committee received wide-ranging evidence that the entire Office of Water Compliance should also be legislated to enhance independence. Ms Melissa Gray, Community Organiser, Nature Conservation Council of NSW, argued that this is needed 'for complete transparency and the absolutely best chance of political independence'.
2.12
These concerns were put to the MDBA. In response, Mr Andrew Reynolds, Acting Chief Executive, MDBA, stated that 'interactions we have had with the Inspector-General and his office to this point in time would indicate a very conscious effort to be independent'.
2.13
At the committee's public hearing, the Hon Troy Grant, Inspector-General, reassured the committee that he had no concerns regarding independence. He characterised the Department's role as only providing 'back of house' support, such as departmental staffing, payroll and financial reporting. Mr Grant explained:
The department plays no role in regard to our operational reporting or any of the operational work we do—our decision-making in regard to work we'll undertake for inquiries, investigations and audits. They have no role whatsoever in that process. There is a strong firewall between us and the Water Division of the Department of Agriculture, Water and the Environment. We're supported in back of house by the Compliance Enforcement Division, which is led by First Assistant Secretary Peter Timson. They have no role in water, which is another protection from any perceived potential conflicts with the Basin Officials Committee group that sits under [the Department] and also the Water Division that sits under [the Department]. There are complete firewalls and protections, and no impact regarding our independence.
2.14
Additionally, the committee heard that the Inspector-General should not only be independent of all other government agencies, but also political affiliations. In particular, several submitters raised concern that Mr Grant, a former New South Wales politician, had been appointed as Inspector‑General. For example, Goulburn Valley Environmental Group submitted that it was 'disappointed that the role to "deliver the highest accountability for water use" was awarded to a member of the National Party and ex-deputy premier of NSW'.
Discretion
2.15
As noted in Chapter 1, the Act confers broad discretion on the Inspector‑General with respect to compliance and enforcement action. However, some submitters were concerned that it is unclear from the Act what would happen if the Inspector-General chooses to not exercise its discretion to carry out its functions. Ms Gray explained that, without a penalty for not acting and not investigating issues, 'there's a huge gap in the strength of these laws that are needed to protect these very critical wetlands'.
2.16
For the EDO, there is a real risk that the Inspector-General could fail to enforce relevant environmental and water laws. The solution, it argued, is the inclusion of an express positive duty which requires the Inspector-General to exercise its functions consistently with, and so as to promote, the international treaties that underpin the Water Act 2007 (the Water Act). This view was shared by the Nature Conservation Council of NSW, Healthy Rivers Lower Murray and Goulburn Valley Environmental Group.
2.17
Further, the committee heard evidence in support of a requirement for the Inspector-General to investigate all complaints, subject to reasonable exceptions. The EDO noted that this is presently required of similar statutory offices, such as the Inspector-General of Intelligence and Security. In particular, several submitters argued that a requirement to investigate all complaints would promote consistent application of the law, as well as ensuring that valid complaints, including those that are politically inconvenient or embarrassing, cannot be ignored.
2.18
In contrast, Mr Grant suggested that, because states remain the primary regulators of water in the Murray–Darling Basin under the Act, a requirement on the Inspector-General to investigate all complaints could risk duplication, erode trust and confidence in the Murray–Darling Basin Plan (the Basin Plan) and result in individuals not knowing who to report to. He outlined the current complaints process as follows:
We are open and available to anybody that wants to make a complaint in relation to any compliance issues. We then assess them, go through a triage process [inaudible] legislative responsibilities, or they sit primarily with the states and then we can refer, and we can also monitor that investigation outcome … Generally speaking, because of the oversight functions, we look at everything and listen to everything, and then, if it is not our responsibility to work with it, we can still refer and monitor.
Resourcing
2.19
The effectiveness of any organisation is, in large part, dependent on the resourcing provided to it. Without adequate resourcing, Mr Wilkins argued, 'it is possible for this to be a tick-a-box exercise rather than a genuine oversight enterprise'. He warned the committee that:
Any office is only as good as the ability to follow through on its tasks with appropriate resourcing, so if there is this approach from the government to increase compliance and accountability it should be matched by appropriate resourcing.
2.20
Similarly, Ms Gray explained that '[t]here needs to be assured, proper guaranteed resourcing moving forward so that the work can be done without political compromise'.
2.21
Murray Irrigation argued that the Inspector-General needs 'to be given the funding, legal powers and respect to assess performance independently'. In addition, Mr Phillip Snowden, Director, Murray Irrigation, emphasised the need for the Inspector-General to be 'provided with the resources and legislative support to be able to fully investigate, understand and independently quantify [third‑party impacts] so that they can be resolved'.
2.22
The committee was informed that the Office of Water Compliance presently employs 29 staff working from five regional offices across the Murray–Darling Basin, including 18 staff moved from the MDBA to the Inspector-General in August 2021 as part of the transition of compliance functions, and is looking to fill a number of vacancies.
2.23
Given the recent inception of the role of Inspector-General and Office of Water Compliance, some submitters highlighted that 'at this stage, it is too early to provide a view on the substantive issues concerning the effectiveness of the Inspector‑General's office'. Similarly, Mr Isaac Jeffrey, Chief Executive Officer, National Irrigators' Council (NIC), argued that:
… it's only been operational for a few months, so my first thought would be to let them get some time with their legs under the desk before other funding decisions are made.
Transparency
2.24
Submitters repeatedly called for increased transparency during the course of the inquiry. The committee heard that improved transparency is especially important for public confidence and accountability given the complex arrangements for management of the Murray–Darling Basin and its resources across jurisdictions. For example, Murray Irrigation submitted that it is essential that the Inspector-General report publicly, while the EDO contended that there is a need for 'greater checks and balances with respect to decision‑making and improved disclosure of meaningful information'.
2.25
Several inquiry participants, including the NIC, emphasised the potential for the Inspector-General to promote information sharing and build public confidence. Submitters made a number of specific suggestions aimed at increasing transparency. This included a requirement that the Inspector‑General publish reports and any directions to which it is subject. Further to this, the Lifeblood Alliance argued that an 'obligation for full, timely and independent reporting directly to Parliament must be enshrined in the Act'.
2.26
The EDO submitted that the Act should be amended to:
require more specific, prescribed content for annual reports, such as a requirement to report on trends where confidentiality is an issue;
require the Inspector-General to report publicly on inquiries conducted under section 239AA unless doing so would breach any legitimate confidentiality requirements; and
expressly prohibit the Inspector-General from failing to publicly report under section 239AE on the basis that doing so could cause embarrassment to, or a loss of confidence in, the Australian Government, or because the information could be misinterpreted or misunderstood.
2.27
The committee also heard that the Inspector-General should perform an educational function. Dr Anne Jensen, Member, Lifeblood Alliance, stated that information on basin water is fragmented and complex. She argued that there is a need to build community water literacy: 'there should be some sort of easily understood and easy to read summary each year that people could begin to rely on as an interpretation of all the technical information'.
2.28
The need for an annual audit was reiterated by Mr Bob Newman, Healthy Rivers Ambassador, Healthy Rivers Lower Murray, who argued that 'a more thorough report on a whole suite of actions is needed'. In its submission, Healthy Rivers Lower Murray also suggested that the Inspector-General be subject to annual reporting requirements and provide inputs to improved water literacy.
2.29
In addition, Mr Charles Everist, Senior Policy Advisor, Victorian Farmers Federation, described the difficulty farmers face understanding water availability and what it is being used for:
When water is released from the dams, we know how much is flowing in the river, but we don't know what share of that water is environmental water, we don't know what share is for irrigators and we don't know what share is going to South Australia. That leads to all sorts of questions and a lack of confidence in the system.
2.30
Mr Jeffrey expressed support for 'almost an education type role as well because [water policy] is such a complex and often confusing area'. He continued:
… if there is a role there to play in providing that single source of truth, providing that information and helping educate people on how the system works and to avoid the situation where a negative press story might influence the debate more than is necessary, I think there is a vital role there for him to play in doing that.
2.31
Similarly, when questioned in relation to whether the Inspector-General ought to play an education role, or whether such a function ought to sit with the MDBA, Mr Reynolds stated:
I think good-quality, transparent and readily understood information is essential for water management in the basin. If the inspector-general can contribute to enhancing the availability or understandability of that information then that's a very worthwhile exercise for him to undertake.
2.32
The committee heard that restoring trust and confidence is a key priority for the Inspector-General. To this end, Mr Grant advised the committee that his intention is to report annually on the work plan and efforts are underway to develop a communications plan with the goal of creating greater public awareness of his office. He explained:
I've given a commitment at multiple forums and to the Senate before that our office will be completely transparent, that what we do publish will be readily available and freely available on our web site, and that peoples' attention will be drawn to those bodies of work.
2.33
The Inspector-General also responded to concerns regarding complex and fragmented information. Mr Daniel Blacker explained that 'being able to digest and translate [data] into something meaningful for communities, water users and others … [is] certainly an area of focus'. The committee understands that conversations are being had about the possibility of producing an Inspector‑General's State of the Basin Report to outline compliance, oversight and inquiry matters for the previous 12 months.
Confidential information
2.34
Under subsection 215U(1) of the Act, the Inspector-General has a duty to take reasonable measures to protect confidential information from disclosure. However, the EDO raised concern that confidential information is not defined in the Act. It argued that this is 'problematic insofar as it could result in either unnecessarily narrow or broad interpretations of the concept which could affect the administration of justice, due process and public reporting requirements'.
2.35
The EDO also noted that under subsection 215U(1) information disclosed to the Inspector-General by a member of the public or a public servant is not automatically classified as confidential information. It submitted that this may have 'a chilling effect on people who would otherwise consider coming forward with information about fraudulent or other unlawful activity or maladministration of relevant laws'.
Powers of inquiry
2.36
As noted in Chapter 1, the Inspector-General is supported by new inquiry powers, including the power to compel persons to give specified information and to enter a person's premises. A number of submitters argued that stronger inquiry powers are needed to improve oversight of water management. For example, the EDO suggested that the Act could be strengthened by adopting robust inquiry powers and functions from similar legislation regarding compliance and enforcement, anti‑corruption and commissions of inquiry.
2.37
According to the EDO, the Act should be amended to require the Inspector‑General to seek to protect the public's interest in lawfully managed water resources in the Murray–Darling Basin and to impose a positive duty to report conduct and reasonable suspicion of conduct. The EDO drew the committee's attention to the ways in which other statutory offices are required by law to actively promote public interest and transparency. Such a requirement, it argued, would be comparable to obligations imposed on the Chief Commissioner under the Independent Commission Against Corruption Act 1988 (NSW).
2.38
Further, the committee heard that the Inspector-General should be given expansive inquiry powers to investigate and report on a range of issues. Murray Irrigation suggested that this should include the following matters:
the adherence of the Commonwealth and state governments to pre-existing agreements and obligations;
the consistency and performance of approaches across the Murray–Darling Basin in relation to measurement, monitoring and enforcement;
audited processes and data allowing a benchmark approach to river management efficiency and the minimisation of water losses;
the conclusions and recommendations of earlier reviews and reports on the Murray–Darling Basin and action taken in response; and
the investigation of any corruption where this is evidenced.
2.39
For Healthy Rivers Lower Murray, the Inspector-General 'must have the capacity to investigate all aspects of water management including the obligations of state and federal agencies'.
2.40
Additionally, an independent panel is expected to provide the Inspector‑General with advice. The NIC submitted that those appointed to advisory panels to assist the work of the Inspector-General under subsection 215TA(1) should have 'a level of knowledge of irrigation'.
Work plan
2.41
The committee heard concerns that the Inspector-General's 2021–22 work plan 'doesn't go far enough to address the fundamental issues'. Particular concern was raised by some submitters regarding sustainable diversion limits and environmental water recovery. Mr Reynolds, however, suggested that 'it's better, at this stage, as a matter for the state jurisdictions with the support of the MDBA as the technical body that assists with that information'.
2.42
The role of Inspector-General encompasses compliance, oversight and inquiry functions. Mr Grant explained that the role of the Inspector-General is not to set rules or develop policy, but rather to ensure that water is managed in accordance with the rules set by the Basin Plan and Water Act. He continued:
That is an area where I think a lot of people would like us—or there is an expectation on us—to do a lot of roles that probably don't fit within the legislation, because we aren't policy setters; we're not rule setters. They sit with the Commonwealth and/or the states constitutionally and within their own Acts.
2.43
Mr Grant outlined work presently underway, including seven reviews and reports of significance into the Basin Plan and water compliance, five investigations and three planned audits.
Duplication
2.44
During the course of the inquiry, the committee received evidence regarding the role of the Inspector-General in relation to the basin states. The committee heard that the Inspector-General should not duplicate the role of the states, which remain the primary regulators of water in the Murray–Darling Basin, but instead oversee states' compliance with the implementation of the Basin Plan to ensure effective management of basin resources. According to Mr Grant:
We're the regulator of last resort. The state jurisdictions are the primary regulators for water theft and take and those sorts of responsibilities. There are then arrangements within the legislation for us to take over those investigations or to come in and take on an investigation in preference to the states, under certain circumstances and arrangements.
2.45
As noted in Chapter 1, the Act enables the Commonwealth to step in and take enforcement action on water theft if a basin state is unwilling or unable to do so. The NIC noted that the Inspector-General is a 'useful guarantee provided there are arrangements in place to ensure there is no duplication of effort and cost'. Similarly, Ms Christine Freak, Policy Manager, NSW Irrigators' Council, relayed an expectation that the Inspector-General would intervene only in circumstances where there is concern that state agencies are not acting appropriately.
2.46
For Dr Jensen, the Inspector-General offers 'a new opportunity to keep the Basin Plan on target and on time'. Mr Newman added that:
It is an auditing role of commitments that have been made, and the Basin Plan is a very thorough Act. It sets out all the requirements and it creates the opportunity for checklists and time frames. So, yes, it's an auditing role. I don't see the Inspector-General having the skills to cover all of those issues, but it needs to have the skills to ensure that they are covered and that they are put in the right place.
2.47
A number of inquiry participants highlighted inconsistency in water compliance across basin states and the committee heard calls for the Inspector‑General to work with states to develop a consistent approach to water compliance.
2.48
Mr Jeffrey welcomed the idea of the Inspector-General promoting greater consistency across basin states:
I think that anything that helps with the flow of information across borders—potentially even harmonisation of some rules, or even just terms, because there are a lot of things that are the same across jurisdictions but have different meanings and different terms. If he can provide that sort of role it would be very beneficial.
2.49
Ms Claire Miller, Chief Executive Officer, NSW Irrigators' Council, explained that, at present, 'each state is held to account against its own standards, rather than one standard across the entire basin that all states are measured against'. She highlighted the need for 'one rule for all states'. Similarly, Ms Gray argued that greater uniformity is needed across water resource plans.
2.50
Mr Pettigrew saw the role of Inspector-General as critical to coordinating investigations and inquiries across jurisdictions.
2.51
Furthermore, the committee received evidence addressing the relationship between, and respective roles of, the MDBA and Inspector-General. Mr Reynolds explained that the establishment of the role of the Inspector‑General marks a change in the responsibilities of the MDBA:
While the Inspector-General is responsible for enforcing compliance with the Basin Plan and water resource plans, and conducting investigations and audits, the MDBA retains its roles to assess and provide advice to the minister on water resource plans, report on sustainable diversion limit accounting, including the register of take, assessing cap compliance, and undertaking the Basin Plan evaluation.
2.52
The committee heard that a memorandum of understanding is currently being developed in consultation with basin states, as well as between the Inspector‑General and MDBA, to clarify roles, information sharing practices and avoid duplication. Mr Reynolds indicated that this would address issues such as 'how we'll work together, how information will be shared and the like, as well as delivering on some of the current functions that need to be undertaken immediately'.
2.53
It was unclear when the memorandum of understanding is expected to be finalised. The committee was informed that, although discussions had commenced prior to August 2021, it was only at that point in time that 'specific content and starting to work towards development of a draft document would have commenced'. When questioned on this topic, Mr Tim Goodes, Executive Director, Basin Plan Portfolio, MDBA, replied 'I'm not sure there's a time frame'. Similarly, Mr Reynolds stated:
We haven't agreed a time frame with the Inspector-General at this point in time. We are discussing what the content of that MOU would be. I hope that we will be able to resolve that over the coming months, but we haven't agreed a time frame at this point.
2.54
The issue of data sharing was of particular concern. Mr Goodes explained:
The states are required to provide [the MDBA] with their use data for compliance with the sustainable diversion limit, and we're required to share that with the Inspector-General. There have been some discussions about protocols for how that happens most effectively and efficiently and in terms of format.
2.55
In addition, Mr Grant noted efforts to coordinate and consult included a regulatory leaders forum and ongoing community engagement. He stated that once border restrictions ease:
… I'll be on the road extensively meeting face-to-face with communities from every viewpoint, whether it's Indigenous, environmental, industry, government, general community or whoever needs to see me. I'll make myself available. We've already got pretty good relationships across the basin, and we hope to expand and solidify those with this new role.
2.56
On this point, numerous inquiry participants relayed positive interactions with the Inspector-General and Office of Water Compliance to date. For example, Mr Jeffrey stated that '[NIC] have met with him a couple of times now and found him to be very open and honest, and very focused on what the office is going to achieve or trying to achieve'.
Stronger penalties
2.57
It was widely reported that penalties under the Act are not commensurate to the harm caused and, in the case of financial penalties, larger than the gain associated with non-compliant activity. By way of example, Mr Pettigrew noted that in many cases 'the penalties are of a lesser value than even the value of the water being taken'.
2.58
For Ms Gray, current penalties are not sufficient to prevent water theft 'and irreversible damage to wetlands is something that the community shouldn't have to suffer'. In addition, the Nature Conservation Council of NSW highlighted the types of irreversible damage to environmental assets that could result from a significant aggravated take office.
2.59
Many submitters argued that the Act would benefit from stronger penalties in order to deter potential offenders and protect environmental assets. This included the EDO, Nature Conservation Council of NSW and Goulburn Valley Environmental Group.
2.60
For the EDO, '[p]enalties should be set as the higher of either a particular number of penalty units or (for example) 3 times the benefit obtained (or detriment avoided) by committing the offence'. Similarly, the Conservation Council SA argued that penalties should be set at three times the benefit obtained by committing the offence in order to deter irrigators and protect environmental assets.
Committee view
2.61
The committee welcomes the establishment of the statutory role of the Inspector-General as a long overdue and much-needed addition to the regulatory framework for the management of the Murray–Darling Basin. The committee is strongly of the view that effective compliance and enforcement is essential for public confidence and to ensure a productive and healthy Basin.
2.62
During the course of the inquiry, evidence was provided by a diverse range of stakeholders throughout the Murray–Darling Basin, often with very different, and sometimes competing, interests. While the role of Inspector-General received overwhelming support, inquiry participants expressed concern in relation to a number of matters and proposed a number of recommendations to further strengthen the capacity and capability of the Inspector-General.
2.63
The committee also heard evidence from inquiry participants who were worried about implementation of the Basin Plan and many raised concerns about water reform more broadly. These issues are beyond the scope of this inquiry—the focus of which has been potential further amendments to the Act—but have been comprehensively addressed in previous reviews and reports, including the recent inquiry by the Senate Select Committee on the Multi‑Jurisdictional Management and Execution of the Murray Darling Basin Plan (the Select Committee).
2.64
The committee is particularly mindful that the Inspector-General and associated office were only recently established and, at this point, does not seek to make any major institutional reforms. Nonetheless, the committee received compelling evidence that gains can be made in a number of key areas. These include better communicating the respective roles of basin states, the MDBA and the Inspector-General, strengthening protections afforded to individuals who disclose information to the Inspector-General and ensuring the Inspector‑General has appropriate resourcing and independence to conduct in‑depth investigations into allegations of non-compliance.
2.65
Compliance is first and foremost the responsibility of the basin states. The committee acknowledges the concerns raised by submitters during the course of the inquiry in relation to interactions between the Inspector-General and basin states and the potential for duplication. The committee agrees that inter‑agency collaboration should be enhanced to permit the sharing of information and data and welcomes the work underway to establish more formal arrangements between the Inspector‑General and basin states, as well as the MDBA.
2.66
However, the committee is concerned that, while discussions are underway, a memorandum of understanding has not yet been finalised, nor has a time frame for its agreement been set. There are six governments involved in the management of the Murray–Darling Basin and, as a result, information regarding compliance is dispersed across a number of agencies and jurisdictions. It is clear from the evidence that there is a need to formalise working arrangements and information sharing practices between the Inspector‑
General, MDBA and basin states. This should be addressed as a matter of priority.
2.67
The committee recommends that the Inspector-General of Water Compliance works with the Murray–Darling Basin Authority and basin states to finalise a memorandum of understanding as a matter of priority. The memorandum of understanding should, amongst other things, clarify responsibilities and data sharing arrangements.
2.68
The committee received evidence from a range of submitters that complexity and fragmentation of information is undermining transparency and water literacy. This is a significant barrier for stakeholders to meaningfully engage in discussions about water management. The committee encourages the Inspector-General to work with stakeholders and basin states to avoid duplication and provide clear information on its activities.
2.69
The committee recommends that the Inspector-General of Water Compliance works with stakeholders and basin states to avoid duplication and provide quality information on its compliance, oversight and inquiry activities in plain English.
2.70
The committee agrees with the evidence of submitters, such as the NIC, that consultation and communication with industry and basin states in implementation of compliance responsibilities is critical. In addition, the committee has heard that the Inspector-General ought to work with basin states to develop consistent standards and guidelines. As part of the inquiry, the committee has had regard to the final report of Select Committee which made a series of pertinent recommendations aimed at improving consultative practices and the quality and accessibility of information. The committee urges the Australian Government to respond expeditiously to the final report.
2.71
The committee considers, based on the evidence received, the role of Inspector‑General needs to be better publicised. A number of submissions noted confusion around the respective functions of the Inspector-General, the MDBA and state agencies in relation to water compliance and policy development. The committee suggests the respective roles of each entity be clarified as part of a broader information campaign.
2.72
The committee recommends that the Australian Government better publicises the Inspector-General of Water Compliance's functions through the development of an information campaign. The campaign should, amongst other things, clarify how the Inspector-General of Water Compliance's role interacts with the Murray–Darling Basin Authority and basin state agencies.
2.73
The Inspector-General is required to hold the MDBA, Commonwealth and basin states to account. As a result, it is vital for the Inspector-General to be adequately resourced to ensure it can discharge its compliance, oversight and inquiry functions in an independent and timely manner. The committee agrees with inquiry participants, such as the Goulburn Valley Environment Group, who noted that the independence of the Inspector-General, both perceived and actual, is critical in ensuring its efficacy and effectiveness in performing its audit and investigative functions, notwithstanding any relationship with the agency being reviewed. The evidence from the Inspector-General and MDBA indicated that it has not encountered any barriers by virtue of its situation within the Department that meaningfully impede its work. Nonetheless, the committee acknowledges that there may be merit in the Australian Government reconsidering the current reporting and portfolio arrangements to improve the Inspector-General's independence.
2.74
The committee recommends that the Australian Government assesses whether the Inspector-General of Water Compliance is adequately resourced to conduct in-depth investigations into allegations of non-compliance.
2.75
The committee recommends that the Australian Government considers whether the Inspector-General's current portfolio arrangements are appropriate and whether alternative arrangements could improve actual, or perceived, independence.
2.76
This inquiry highlighted the Inspector-General's broad discretion with respect to compliance and enforcement action. Concerns were expressed that it is unclear from the Act what would happen if the Inspector-General chooses to not exercise its discretion to carry out its functions. As a result, some submitters argued that the Inspector-General should be required to investigate all complaints. The Inspector‑General explained that, under the Act, states remain the primary regulators of water in the Murray–Darling Basin. Where matters are not resolved, the Inspector-General has appropriate powers to step in, however, a requirement to investigate all complaints would risk duplication, erode trust and confidence in the Basin Plan and complicate reporting lines. Therefore the committee is not satisfied that it would be appropriate to impose a requirement on the Inspector-General to investigate all complaints.
2.77
The committee agrees in principle with the EDO that protections available to individuals, including members of the public or public servants who disclose information to the Inspector-General, need to be strengthened. This is necessary to encourage the reporting of misconduct and corruption.
2.78
The committee recommends the Australian Government strengthens protections afforded to individuals who disclose information to the Inspector-General of Water Compliance.
2.79
The committee is concerned by the evidence that various offence provisions, such as those designed to prevent water theft, do not have a sufficient deterrent effect. Specifically, the committee acknowledges the concerns of some inquiry participants, and in particular environmental groups, that penalties under the Act should be increased to reflect the harm caused. The committee considers that these penalties have an important role to play in deterring and punishing environmental harm.
2.80
The committee recommends that the Australian Government reviews penalty provisions under the Water Legislation Amendment (Inspector‑General of Water Compliance and Other Measures) Act 2021 to ensure penalties are sufficient to deter offenders and proportionate to harm caused.
2.81
The committee shares the view of submitters and the Senate Standing Committee for the Scrutiny of Bills that tabling documents in Parliament is important to parliamentary scrutiny, as it alerts parliamentarians to the existence of documents and provides opportunities for debate that are not available where documents are not made public or are only published online. In particular, tabling reports on the operation of regulatory schemes promotes transparency and accountability. As such, the committee believes that the Act should require certain reports and guidelines to be tabled in Parliament.
2.82
The committee recommends that the Australian Government amends the Water Legislation Amendment (Inspector-General of Water Compliance and Other Measures) Act 2021 to require the responsible Minister to table the following reports in each House of the Parliament:
reports into audits under section 73L and 73M;
annual reports under section 215Y;
reports on inquiries conducted by the Inspector-General of Water Compliance under sections 239AE and 239AF; and
guidelines issued by the Inspector-General of Water Compliance under section 215V.
2.83
The committee will actively monitor the Inspector-General's compliance priorities and performance as part of the estimates process on an ongoing basis.
Senator Glenn Sterle
Chair