4 October 2022

TRANSCRIPT | The Hon. Troy Grant – Inspector General of Water Compliance, 2022 Murray Darling Association Speech, 21 September 2022

I would like to acknowledge the Traditional Owners of this part of the Basin, the Wiradjuri people. Yoowindoo Troy Grant Inspector- General Water Compliance.  Nardoo Barney goo gulburra. Wirdujuri mayin Gulung.  Norrrambang-ga Neenah girra Dorrinya gay-ida. I pay my respects to their elders past, present, and emerging. I also acknowledge any Aboriginal and Torres Strait Islander people in attendance today.

It was May last year when I stood at the last MDA conference in Wentworth, outlining my intent and commitment pending the establishment of the Statutory Inspector-General of Water Compliance role in the federal parliament. At the time, I was the Interim Inspector-General, and my intent was ambitious. Since then, a little over 12 months, I’ve continued to travel the length and breadth of the Basin listening to communities and groups and hearing their concerns. Consequently, my intent remains ambitious.

I’ve continued to learn a lot. I’ve learnt that the trust and confidence in how water is managed remains low.

I’ve learnt there’s a distrust of government and bureaucracy, and that continues.

And that communities don’t think their most precious resource is being taken care of properly.

I’ve learnt that people who live and work in the Basin states don’t actually know much about the role of the Inspector-General of Water Compliance and what I do. And furthermore that foundational knowledge of how water is managed and regulated both within and outside the Basin is particularly poor – something that was rammed home to me yesterday at the Henty Field Days.

So I want to clear some of that up.

I’m going to tell you exactly what my office was established to do, but equally as important is what we don’t do and what we’ve done since the last MDA conference.

What we were established to do

The Inspector-General of Water Compliance was established to regulate the regulators, oversight those charged with water management in the Basin, and inquire into critical issues to build trust and confidence in the Basin Plan.

What my office isn’t here to do is to enforce rules on individual water users – unless as a last resort measure. That is the job of the state regulators. And we don’t have the resources or any interest in duplicating that role.

But the community continues to express to me and my office they aren’t happy with their state water managers.

So my role is to ensure water managers are being held to account and doing the right thing, according to the Basin Plan and most importantly, according to the law. The role of the Inspector-General isn’t to duplicate the role of states as the frontline regulators. Rather, the Inspector-General will oversee states’ compliance and ensure effective water management is undertaken.

We have significant oversight over Commonwealth agencies, making sure they are delivering on their obligations to the Murray Darling Basin Plan, and other water-related legislation. A number of upcoming projects will be focusing on this performance.

While my powers are extensive, they are not all encompassing and there are areas which I am not responsible for.

In short, as Inspector-General of Water Compliance I have the ability to use both oversight and compliance powers. Importantly, my role is independent and reports into the Australian Senate. The Inspector-General of Water Compliance is not a government department and does not create policy.

But what powers do we have if not policy creation? Legislation has been passed which includes new penalties for water theft and illegal trading of water. This legislation gives my office the power to act to ensure compliance and enforcement of water rules.

We can also look into areas of concern where trends and community sentiment indicate we should say, there’s a problem over there, we need to look into it.

We act based on evidence, and provide a balanced voice for communities.

That’s why my ties to communities are at the heart of our office through my Field Officers and the location of my staff throughout the Basin.

Steady as it flows report

And how has my office been providing a balanced voice for communities? On Monday, I’m releasing a review of River Murray operations and environmental water management – the Steady as it Flows report.

Today, you get to hear first what the report found.

After my address at last year’s MDA conference in Wentworth, I listened to what you told me. I heard what you had to say. It became very clear to me that there was a lack of trust in how the Murray Darling Basin Authority was managing the River Murray, as well as how the Commonwealth Environmental Water Holder was using its environmental water holdings. From there, our job was to sort fact from fiction.

The MDBA and the Commonwealth Environmental Water Holder are two key Australian Government agencies responsible for water management in the Murray-Darling Basin. Community engagement, in addition to what I heard from you, indicated there was an emerging concern about how the River Murray system was being managed by these governing bodies. I heard it through the work of our Field Officers who are on the ground speaking to communities, and I heard it directly.

So as part of my oversight abilities, I made a commitment to look into these concerns.

In particular, we dug deep, and we assessed whether each agency was relying on sound information to support their operations and decision-making processes.

And I’ve found these agencies are performing their functions according to the Water Act and the Basin Plan.

As a result, this report will be hard to swallow for many in the communities who told me these government agencies weren’t running the rivers, or environmental flows properly.

I’ve listened. Then I acted. And now, as I’m obliged to do, I’m reporting back to the community.

I want to build trust and confidence, but I can’t do that without being honest. And I can honestly say, this report found the Commonwealth Environmental Water Holder, and the Murray Darling Basin Authority are performing professionally and in accordance with their obligations.

As the Inspector-General, I can assure you, based on the evidence before me, that is the finding.

The IGWC examined internal operational documents, tools, and processes. We conducted targeted interviews with the MDBA, the CEWH and other state stakeholders directly involved in their operations.

This report is independent, it is thorough, and it looks at all the information available.

My role as the Inspector-General of Water Compliance is to provide this independent oversight; to ask the critical questions about how government agencies are performing in their roles; to gather and assess the data and evidence before me; and, to get to the bottom of issues.

One of the primary issues is the frustration from the community about ‘water for the environment’’ versus ‘water for irrigation’.

There is room in the system for both.

But increasing environmental pressures like climate change and more frequent droughts puts additional pressure on the system, which is obvious to us all.

This, rightly so, leaves the community wary, sceptical and cynical, about how decisions are being made to prioritise water releases.

When water availability is tight, concerns about mismanagement or poor systems comes to the fore.

People are looking, at that time, for a cause or someone to blame for these issues. And that’s quite a natural and normal human instinct.

In fact, the former Interim Inspector-General Mick Keelty pointed out in one of his reports that the community was of the belief that river operators face little to no accountability for minimising losses, and that there is no transparency in how they manage the river.

So I’ve investigated this claim. And while I did not find any specific wrongdoing, I did see opportunities to respond to community concerns.  These opportunities relate to communication and information provision – which quite frankly, in the last decade hasn’t been good enough. 

As challenging as it is for both agencies – and it is tough, it’s complex and very challenging, and that’s acknowledged – there are areas open for improvement. So any of these communication information provision failures don’t disproportionately demolish public confidence.

We all know that water management is an extremely complex area. This report into River Murray operations has highlighted that. It has also highlighted the siloed, individual approach to water in this country.

The Murray Darling Basin Agreement has been around since 1912. Long before the Plan. That’s 110 years. 110 years this country has been trying to work together on water management, and it still today remains a highly contested space. 

The River Murray system, an integral and vital part of the system, is operated according to this 110 year old Agreement, which sets out how water in the River Murray system is shared between Victoria, NSW and South Australia. However, it does not incorporate the management of water for the environment, which was only formally recognised with the introduction of the Commonwealth Water Act and the Basin Plan.

There is an inherent conflict here. This is what is at the heart of the sentiment from the community.

This conflict is exemplified in this process by the lack of clear and transparent processes for prioritising needs when there are competing demands for water delivery.

With increasing demands on the system, the Agreement does not provide river operators – and it’s not their fault – with an agreed process to prioritise which water user gets their water, in the event of a shortfall scenario occurring. This is a rare event, but it may occur. And it’s what drives that community fear.

It’s a design flaw, but it’s difficult to say what should be given priority.

Should it be irrigation, to provide food for the nation and our trade obligations?

Or should it be for the environment? Because without a healthy river ecosystem, as we all know, there is no water.

This is not a new issue, and it’s not one that’s not understood by everyone in this room. But with this risk having previously been identified by the Independent River Operations Review Group. I note that work is underway with an Independent Panel set up to report to the Basin Officials Committee on options for managing delivery challenges in the River Murray. This work must be given priority and it must come with outcomes.

But, as I said last year in my speech, we are a problem-solving office. We aren’t here to write reports about what the problems are or how they came to be, but it’s important to understand the history and context of the complex arrangements our office, water agencies and the community have to navigate.

Our focus is firmly fixed on the future.

Which is why I have identified opportunities for improvement, and provided them to the two agencies.

Firstly, I’m pleased to note that in December 2020, the Australian and NSW Governments announced the location of 20 new and upgraded gauging stations across the northern basin, including Darling, Macquarie, Culgoa, Gwydir, Border Rivers and Namoi catchments in New South Wales.

We all know the phrase ‘if you can’t measure it, you can’t manage it.’ It’s very true with water.

Any additional gauging points in the northern basin are likely to increase transparency by helping to understand the increasingly variable flows and their flow-on effects.

I am not singling out the northern part of the basin, as part of this story. Because it goes to the heart of what’s possibly a bigger issue.

There is often an ‘us and them’ mentality in the northern and southern basins. However, I hasten to point out that there is no actual defining line or border, or actual legislative definition between north and south. It is one Basin. This terminology has been perpetuated by communities who are looking to pass blame and point the finger north to south and south to north – especially during times of drought and low flows. This paradigm has been the single biggest reason for the erosion of trust and confidence in the Basin.

But back the gauging. By increasing gauging points anywhere in the system, it provides an added layer of transparency, to know how the river is running. Benefits may also come from additional gauging points in the southern basin, particularly on the tributaries that flow into the River Murray system, as well as an increase in the availability of telemetered measurement data.

Having real-time data for river operators will allow for a more efficient operation and decision-making processes of the River Murray system.

Secondly, the absence of agreed data standards adds another unnecessary layer of complexity and inconsistency to the data that is currently collected by the states and provided to the MDBA for managing the river system. Three partners with the MDBA, three sets of data, three sets of figures. All inconsistent. Poor Andrew Reynolds.

Inconsistent data can be confusing, and can make the job of the river operators more difficult. My observation is that a data standard would ease the pressure on river operators. As part of my legislative remit, I have the power to create standards.

To add to the confusion, each Basin government holds vital information about their own water rules, entitlements, allocations, and environmental water. However, the Bureau of Meteorology, with its Water Information Portal, is making great strides in consolidating important and varied streams of water information. And I encourage Matt Coulton and his team to keep up the great work.

Having this one-stop-shop for resources is welcomed, because my report found that there are still over 20 organisations and websites all providing different information about the Murray Darling Basin. No wonder people lose confidence and don’t know where to look or access the information important to them.

I know many will be sitting here wondering why a report into the River Murray operations and the CEWH was even necessary, given my findings.

It’s because it was overwhelmingly asked for and sometimes we need to spend time and resources on things to provide a level of assurance to the community. Especially when the community tells me things aren’t working. If something is even perceived as an issue, and I notice a trend, I’ll look into it.

And if I don’t find anything wrong, I’ll tell you because then you know I’ve looked at it, and I’m independent, and hopefully you will trust what we’ve found.

The Commonwealth Environmental Water Holder – the CEWH – has been the subject of multiple published inquiries and reviews since 2013. This automatically tells me there is a public perception that this organisation is not trusted.

Yet, the information from this review clearly indicates the opposite.

The CEWH is working with new objectives around an old river system with management arrangements that suited the river’s use more than 100 years ago. It has a culture of continuous improvement, and a willingness to learn and change as required, which are foundations for long-term success.

My review found the CEWH is open to feedback and current work to develop a corporate plan is seen as an important initiative to guide clear strategic intent and address the issues I’ve raised.

Investing in the Local Engagement Officer network, or the LEO as it’s known, will also be beneficial, to ensure there is robust community engagement. This Local Engagement Officer network is something the CEWH does well and I’d like to see expanded.  It’s important to acknowledge the CEWH has its successes, as well as failures. And again, go back to communication and information provision.

I have passed on my report to the relevant agencies, and my hope is that it provides transparency and accountability that is missing in the Murray Darling Basin water landscape

Other work

My office has been busy – very busy in the last 12 months.

Since I was last here, we’ve released an audit into Goulburn-Murray Water’s disclosure obligations under the Basin Plan, released the annual Sustainable Diversion Limit Statement of Compliance. And we’re about to release another audit in the coming weeks in relation to the Border Rivers Trade arrangements. That report will be titled ‘not happy’.

This work is laying the foundations for longer-term objectives.

We need to remember, that nationwide reform takes time.

This Steady as it flows report follows the Des Pearson Review.

The Des Pearson Review looked at compliance and enforcement across the Murray Darling Basin. I engaged the services of the eminent former Auditor-General of Western Australia and Victoria, Mr Des Pearson, to undertake a review.

Mr Pearson found something not too different to the River Operations report. He found that there needs to be better consistency and collaboration among Basin governments.

His review also found there needs to be more consistency of enforcement.

But, he did not find a ‘smoking gun’ when looking at how each Basin state manages illegal water management activities.

My office has started a podcast called ‘Water’s Edge’ which breaks down the complexities of all these reports and investigations. In the most recent episode, Des said in all his decades in auditing and the public service, he has never seen so many different terminologies and inconsistencies. It’s unique to the water space.

For example, what NSW refers to as ‘flood plain harvesting’ is ‘overland flow’ in Queensland.

This varied view of water management is confusing. It’s no wonder the community lacks trust and confidence in how government is managing the system when we can’t even agree on terminology.

We must start to view water in the Basin as an asset of the Australian people – not something that is owned by the states.

Again, I refer to what I said more than 12 months ago at the last MDA conference: it’s our job to compel the Basin states to do better. And trust me, we will. That’s why I have outlined five key actions in the Des Pearson report that I think will help address this siloed, segmented approach to water enforcement.

The first action was to establish a regulatory leaders forum. This is a quarterly meeting which provides regulatory leaders from each Basin state the opportunity to share ideas. We have them at the table working collectively together. We’ve already had three of those meetings.

Meetings commenced in October 2021, and so far, have proven to be beneficial. It allows the states to work collaboratively, share better practice and discuss current issues.

The second action item aims to improve the quality and consistency of water compliance performance reporting – what you get to see on how they’re travelling and how they’re measuring up  –  to be more transparent and to improve public trust. My aim is to have this finalised by the end of 2022 so that reporting against the framework can commence in mid-2023.

Having a Basin-wide metering standard is the third action item, and will be led by my office. Under the Water Act, the Inspector-General has the ability to issue standards relating to measuring water taken in the Basin. It will allow for a consistent standard for metering in the Basin, addressing a common community concern that water take is not being measured consistently or accurately.

The fourth action item is to review the water take that is accounted for using estimates (or models) as opposed to actually being measured.  A key feature of Water Resource Plans, which everyone knows my view on, is for Basin states to outline how they will determine how much water is taken each year, which is why the absence of accredited WRPs in NSW is such a critical issue. But I am comforted to learn that progress has been made since my speech in June.

Which leads to the final action item: determining the harm caused by unauthorised take. My office will develop a guideline for establishing the harm caused by unauthorised take from Basin water resources. This is key in determining what enforcement actions should be taken when water theft has occurred.

Something the community has told me is that they think that fines or punishment for unauthorised water take should be fair in comparison to the seriousness of the crime. This final action item will create a consistent baseline to quantify the actual harm caused by unauthorised water take. This will take a number of factors into account such as commercial cost, environmental harm and loss of water for First Nations Peoples. I intend to have this completed by the end of 2024.

Conclusion

The findings of the Des Pearson Review and this report into River Operations by the CEWH and the MDBA are examples of how the federated model is failing in the water space.

Yes, the purpose of federation was to bring the states and territories together. It ended the challenges of having different taxation, currency, laws and transportation issues we were facing as a country in 1901. But it has not changed how water is managed in all that time.

More than 121 years after federation, and we still don’t have it right.

While my office has hit the ground running, it will take a lot of work to get things performing better. As I said, these reforms cannot be rushed. And if we rush it, we’ll get it wrong. That’s why I am relying on the community to bring their concerns to me. I want you to liaise with our Field Officers. Tell them what you’re worried about. And we’ll find out the truth of the matter.

I don’t want the findings of the River Operations report to deter you from bringing your concerns forward. I need a starting point, and from there, I’ll investigate it if I think there’s a growing trend.

You might not like what I find, or you might not think I’ve looked in the right place, but we need the information to get things underway.

We’re an evidence-based agency. We believe in transparency, and accountability. And I make no apology for calling out the bad behaviour – as I have done in the past.

But I think it’s also important to recognise when things are being done lawfully and properly and importantly debunking any myths that are eroding public trust and confidence. In this instance, the Des Pearson Review and the River Operations and environmental watering report have not found any evidence of outright maladministration. They have found areas for improvement and these improvements can’t be understated as to their value in improving trust & confidence.

And it comes back to the lens I was talking about earlier. The Basin states need to look at the Murray Darling Basin Plan, and other water laws, with a wider lens – and not be so focused on what’s going on only in their patch.

The Federal Minister has clearly stated a key mantra to identify and find solutions to the challenges the Basin faces. Community and collaboration are key to advancing this country and water management and she couldn’t be more right.

It’s been terrific to see you all again thank you to the MDA for the opportunity and we look forward to working hard in collaboration to jointly achieve outcomes.

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