TRANSCRIPT |The Hon. Troy Grant – Inspector-General of Water Compliance, 2022 River Reflections Conference, 2 June 2022

TRANSCRIPT |The Hon. Troy Grant – Inspector-General of Water Compliance, 2022 River Reflections Conference, 2 June 2022

It’s terrific to join you here, and also those online, in beautiful Mildura for the 2022 Murray Darling Basin Authority’s River Reflections Conference.

I’d like to join with the minister and Sir Angus’ acknowledgement of the Traditional Owners not only of this land, their elders past and present – all Traditional Owners throughout the Murray Darling Basin.

Well, today it is exactly 300 days since I was appointed as Inspector-General of Water Compliance.

And, as I promised back then, we have hit the ground running. We’ve set up an excellent team, a team I am proud to lead, who really have worked hard in putting together clear and concise work – project work – that is evidence based and directly goes to the themes and the concerns of those right across the Murray Darling Basin which led to our establishment.

Those communities said to me, in my time as Interim Inspector-General, ‘people listen to us but they never hear what we’ve got to say.’ As you will see in the coming weeks in the publications that we produce, we have heard them. And we are responding as best we can, and we will through the evolution of our annual work plans continue to produce the work to identify the issues and call out those problem areas to rebuild that trust and confidence, which is the task I have been given.

So, it’s only appropriate that this 300-day mark to start that first part of our reflection. And today is an opportunity for me to do that and probably what is the most critical failure of the plan to date after 10-years. And that’s the absence of water resource plans in New South Wales (NSW), commonly known as WRPs.

So, I’d like to take this opportunity to address you today about the absence of WRPs in NSW and the immediate rolling knock-on effect that has in both the Sustainable Diversion Limit compliance space, known as SDLs, and the ripple effect across the Basin.

I am concerned, seriously concerned, that WRPs are not in place across NSW after 10-years. Every state, and the territory, had 7 years to build these plans. They were due to start in 2019 and already, they are 3 years overdue.

While NSW WRPs remain outstanding, full compliance with the Basin Plan cannot be achieved. I am the enforcement agency, the sole enforcement agency, for WRPs. But I can’t enforce the rules in the plans that don’t yet exist. WRPs are an essential part of implementing the Basin Plan to achieve that success we’re all after. Accredited WRPs are required to enable compliance and enforcement; and those plans also ensure the following:

The limits on how much water can be taken from the system and that those water takes are maintained

That water will be made available to the environment

Consideration for cultural values and uses; and finally,

Water quality targets are managed.

The single most important compliance matter in the Basin Plan is SDL compliance. It is the foundational cornerstone of the limit on how much can be taken across these valleys where the WRPs are defined and still have a sustainable river.

NSW’s level of accountability under the Basin Plan is not equal to that of other Basin states and the territory, each of who have accredited WRPs.

They’re all in place in Victoria, Queensland, the ACT and South Australia, they all have accredited WRPs in place and I’m active with my team in the compliance of those plans in those areas.

The MDBA and NSW Government have an agreement in place which has enabled SDL accounting to occur from 1 July 2019 – and this has been constructed and designed to help SDL accounting and compliance continue in the absence of these WRPs. This agreement between NSW and the MDBA, it’s an administrative agreement. And it is important that they have achieved that level of administrative agreement, because without it we wouldn’t have any indication of the scale of the potential compliance risk we have in NSW. But these arrangements were supposed to be short-term, a short-term fix until these accredited plans could be constructed, authorised and accountable to law. And by now, it should’ve moved from an ‘administrative’ arrangement. The whole point of the Basin Plan was to put in place legally enforceable arrangements and they simply don’t exist in NSW.

In addition to SDL compliance, our office monitors and detects compliance with the rules contained inside those accredited WRPs through our monitoring, risk assessment work, and using tools such as reviews, standards, guidelines, inquiries, audits and investigations. None of these things can happen until the WRP are accredited.

Let us look for a moment of what that means. ‘So what?’ some people might say, ‘what does it matter?’ Let’s have a look at a knock-on effect of the absence of an accredited WRP and its effect on SDL non-compliance.

A long-term average SDL is set, and that helps determine the operation of the Basin Plan and does not depend on whether a WRP has been accredited. However, WRPs are relevant to SDL accounting and compliance arrangements, in particular, they’re relevant in the following ways:

In developing the WRPs, States may bring forward updated BDLs, which are baseline diversion limits, are those estimates - taking into account of improvements in knowledge; and WRPs provide the details which inform SDL accounting and compliance arrangements, including state reporting under s71 of the Act and the assessment of compliance for Basin Plan purposes.

The Basin Plan establishes a method for determining compliance with long-term annual diversion limits through a register of take, and that’s the responsibility of the MDBA, compliance methods and triggers, and a reasonable excuse process.

So, if an area – anywhere in the Basin – cumulatively exceeds its permitted take by 20%, then the Basin Plan outlines the rules around non-compliance and reasonable excuse which can then be enforced.

The Basin Plan requires a WRP to set out the method for determining the maximum quantity of water permitted to be taken for consumptive use in each accounting period. The WRP also establishes the method for determining annual actual take.

Both the Register of Take and the method for determining non-compliance (which also includes reasonable excuse) is highlighted in the Basin Plan, and are operative only after the accreditation of that WRP.

But yet – none… zero… zilch, of the 20 WRPs have been accredited in NSW.

As a result, there is currently no legal basis upon which my office can assess NSW’s compliance with the long-term annual SDLs for the purpose of the Water Act. Or more importantly, we have no capacity to enforce the WRP.

To put all of that into perspective with a practical example, can I take you to the 2019-2020 year. The MDBA register of take identified NSW had exceeded their SDL by 32% in the Barwon-Darling surface water SDL resource unit. If there was an accredited WRP in the Barwon-Darling, NSW would have to demonstrate that this level of take is reasonable, that there is no growth in use in the Barwon-Darling and provide a pathway back to sustainable levels. If they were found non-complaint, they may even have to reduce water take in future years. As it currently stands, NSW are getting a free pass. Because they are late with their plans. It really isn’t a fair playing field across the Basin until all WRPs are accredited.

In reality, WRPs are where the rubber hits the road under the Basin Plan. On water management issues, like the topical floodplain harvesting, WRPs are where NSW must show that floodplain harvesting is within sustainable levels. We know that floodplain harvesting is still occurring unregulated in northern NSW. Until it’s regulated it also remains unmeasured. Currently – another free pass for NSW because they are late with their 20 WRPs. This doesn’t meet anybody’s expectations.

I am looking forward to receiving the 2020/21 Register of Take from the MDBA in coming days, however the absence of any accredited WRPs in NSW means that the Inspector-General for Water Compliance office is unable to establish non-compliance and therefore unable to enforce the SDL in NSW under the legislation.

So, the way I see it as Inspector-General, it is appropriate I call out repeated behaviours and actions that lead to non-compliance; and call out the practice of allowing those noncompliant behaviours to compound further and potentially become an embedded culture of non-compliance.

It is also appropriate that the Australian public and the water dependent communities throughout the Basin expect regulators to act within the laws of the land. It is appropriate that the public expect oversight bodies, like myself, that we call out those who might also be marking their own ‘homework’, or more to the point – using administrative mechanisms as a convenience to avoid applying the law in difficult or contentious situations.

This is about integrity. It is fundamental that of the 20 NSW WRPs are submitted and accredited – they must be an absolute priority for both NSW and I call on the MDBA today to make them an absolute priority.

As the Inspector-General with oversight of compliance, I cannot ensure compliance within the rules that haven’t yet been set under a legislative base.

Another legislative mechanism outside of my powers available to speed up WRPs sists within the Commonwealth Water Act. It considers a scenario where a state fails to produce a WRP capable of being accredited. This this obviously cannot be allowed to go on forever. So, the Basin Plan in its design includes a step-in power for the Commonwealth Minister to address such a scenario. I’ll let you guess what my first conversation with the new Commonwealth Minister may relate to.

The step-in power and processes are prescribed in detail within the Water Act. Simply put, the Commonwealth Minister may adopt a WRP that is prepared by the MDBA rather than the State, in this case being NSW.

In the very system the participating states have agreed on and built, the states hold most of the detailed information - as is their right under the Constitution. The question here is -- as a result of the non-compliance or absence of an accredited WRP -- could the MDBA actually make a better plan than the ones submitted by the states?

The better outcome here is that – in the case for NSW – that the state government needs to submit 20 WRPs which are consistent with the Basin Plan and are capable of being accredited – and they need to do that now, immediately.

I understand that NSW have recently submitted some draft WRPs to the MDBA for the second time, three years late, and are committed to submitting all 20 second draft WRPs to the MDBA by 30 June, which I think is in about 4 weeks time. I really hope the NSW Government, especially the NSW Water Minister, Kevin Anderson, have produced 20 plans that are capable of accreditation under the Basin Plan. Otherwise, there are likely to be significant questions being asked throughout the Basin, and rightly so, about the intent of the NSW Government to implement the Basin Plan in their state. And it is also reasonable that Commonwealth step in, and that step-in powers would become much more likely, and unfortunately, much more necessary.

Closing this loop – the MDBA need to assess those WRPs as quickly as possible. As I said earlier, after all, they’ve had 7 years to build these things. The other states and the territory have managed to do so, and they’re already 3 years behind their commitment of when they would’ve been done. Failure to get them done now could see us in a situation where this administrative status quo continues for up to another 5 years.

Let us not forget – this is a critical point -- across the Basin, NSW is responsible for around 50 per cent of the water take -- more plainly – that’s currently the lion’s share of water removed from the system in any one year without any legislative enforcement capability for failing to comply.

In closing, 300 days since being appointed – as I said earlier, and quite significant pieces of work have commenced and are near completion insofar as review, reporting, analysis, investigation, and importantly for the Basin: truth testing.

Since starting up our office, we have expanded out footprint, ears and eyes across the Basin through an effective field officers network… I have travelled the Basin, and continue to travel the expanse of systems that make up the Basin. Speaking face-to-face with the communities that live and work along the rivers. I speak with the farmers, landholders and businesses whose livelihoods rely on an effective and lawfully governed Basin. I’ve met with and established good relationships with state bodies and regulators to see and learn about the work being done to effectively manage and deliver compliance. I can see the opportunities and the challenges for the Basin. And I understand the Basin Plan is a massive and ambitious generational body of work – technically, physically and legislatively.

And again, I make no apology for beginning to call out inaction, deficiencies, inefficiencies, mistruth, and lawbreakers. I make no excuses for them and their behaviours to the Australian community.

I also don’t think the sky is falling. There is a lot of excellent work being done by many to make this Basin Plan work. I also know it is a hard sell to herald the protection and better management of water, especially when so many communities and systems are awash with it due to the rolling effect of Australia’s current La Niña events.

Our water resource is not an open tab on the bar. As Basin-wide custodians of a such a precious and finite resource, and a contested resource, you don’t get to choose what part of very specific and prescriptive laws in the Water Act do or don’t apply to you. We certainly don’t get to treat the Australian public with disregard when it comes to being honest, accountable and responsible with a highly contested national water resource. We also don’t get to flout the rules without consequence.

In the coming weeks and months you will hear more from me and my office as we engage with the public as I passionately believe communicating is also educating. You will see plenty of publications from our first year work plan hit the public domain through our reporting system and releasing a number of findings – all transparently available on our web page. You will see us holding those charged with delivering the Basin Plan to account at all levels – asking the hard question, dispelling mistruths, seeking the truth and taking action through inquiry or prosecution.

NSW has been the focus of my address today. But it is also important that I acknowledge the good work that is being done. They have come a long way, particularly in the regulatory space of water theft, and in the metering space. WRPs is not an issue that sits with their Natural Resource Access Regulator. This is not their job. And the work they have done has contributed significantly in the trust and confidence space that we’re collectively trying to improve. They still have a long way to go, as do we all. But this message today is for other parts of the NSW water family, and particular, the NSW Water Minister.

So, I may have hit the 300 day mark today, but this really is only the beginning of what will be a period of ongoing hard work, strengthening of partnerships as you heard from the Minister, Basin-wide reforms, innovation, cultural change, technological advancements in water management and regulation, and importantly - good governance.

I look forward to the challenges that lay ahead. And I look forward to keeping you all up to date throughout what will be a very challenging but ultimately a very rewarding journey. Thank you today for your time.



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