WA water laws to be overhauled

By Tim Macknay.

Key Points:
The WA Government’s reforms represent a major overhaul of the current water regime to address the real and potentially disastrous consequences of unsustainable water use.

In response to declining rainfall and the spectre of significant water shortages in the south of the state, the Western Australian Government has initiated a broad scale reform of the state's water legislation.

The existing regulatory regime for water in Western Australia relies primarily on the Rights in Water and Irrigation Act 1914 (WA). As well as preserving common law riparian rights, that Act provides for the issue of licences to landowners or occupiers to take groundwater or surface water for commercial or industrial purposes. Licences are issued and regulated by the Water and Rivers Commission. Historically, the issue of water licences paid only limited regard to environmental limits on water resources, however the combination of declining rainfall and increased demand has rendered this regulatory approach inadequate.

The reform programme

The State's reform process commenced with the establishment of the Department of Water, which will assume the responsibilities of the Water and Rivers Commission.

The legislative reforms are to take effect in two stages. Firstly, legislation is being introduced to support new administrative and institutional structures set up to deal with water management. The Water Resources Legislation Amendment Bill 2006 (WA), currently before State Parliament, will formally abolish the Water and Rivers Commission and transfer that body's powers to the Department of Water and its responsible Minister. The Minister for Water will also assume additional powers and functions, most notably the power to require information from "water service providers".

The second stage of the reforms will be implemented through a proposed Water Resources Management Bill, which is expected to be drafted and introduced into Parliament in 2008. This Bill follows on from a policy development and public consultation process which commenced with the release of A Blueprint for Water Reform in Western Australia in February 2007, followed by the Government's response to the Blueprint, and culminating in the Water Resource Management Bill Draft Report that was released for stakeholder consultation in April 2007.

The proposed legislative changes, as outlined in the Draft Report, significantly include:

• the introduction of binding Statutory Management Plans
• changes to the current water access arrangements; and
• increased incentives for water trading.

Statutory Management Plans

The existing Rights in Water and Irrigation Act 1914 provides for the development of water resource management plans, but these plans are merely guidance documents without statutory force. The Draft Report envisages binding Statutory Management Plans. The plans will be prepared by the Department of Water (with input from water users and key stakeholders) for each "water system" (ie. catchment or groundwater area) identified by the Minister for Water as requiring a Plan.

The plans will provide the legal framework for managing each water resource and will regulate:

• the amount of water available for consumptive use (the "consumptive pool")
• rules governing the allocation of water access entitlements; and
• rules for water trading.

Each Plan will be tailored to suit the specific water resource, ensuring that circumstances particular to each resource are taken into account. The Draft Report envisages that the Plans will be revised every ten years, and will not be subject to merits appeal. The capacity to seek judicial review of a Plan may also be limited.

Changes to water access arrangements

The Draft Report envisages the following changes to the water licensing regime, which are intended to promote certainty for users and efficiency in use:

• water entitlements will be issued to entitlement holders in the form of unit shares in a consumptive pool
• it will no longer be necessary to have legal access to the land associated with a water resource in order to hold a water entitlement
• entitlements will be allocated by auction or tender, rather than on a first come first served basis
• the tenure of entitlements will be increased from the current ten year maximum to a 40 year maximum with an option for renewal (subject to management and environmental conditions); and
• a Torrens-like system of registration for water licensing and entitlements will be introduced.

The changes will place new requirements on some groups by imposing additional regulations and licensing requirements on certain farm dams and plantation forests which have an impact on the water supply. Water resource management charges and metering obligations will also be imposed on certain licence and permit holders. Riparian rights protected under the current legislative system will remain.

Increased incentive for water trading

The proposed legislation will also include provisions supporting a water trading scheme. Currently, water trading in Western Australia is governed by the Rights in Water and Irrigation Act and the State-wide Policy No 6: Transferable (Tradeable) Water Entitlements for Western Australia. However, the current system presents significant difficulties for water trading, as Government approval is required for each trade, and the water use is restricted by the existing licence or licences. The proposed legislative reforms will aim to stimulate water trading activity by;

• restricting access to additional water resources
• creating legally recognised and tradable water licences or water access entitlements; and
• providing access to information and prices through a trading register.

The new system will operate subject to the rules in individual statutory water management plans and will include compliance measures in place that impose metering obligations and prevent anti-competitive behaviour.

Separate legislation is also being prepared for the reform of legislation relating to water services based on the Review of Western Australia's Water Service Legislation. This legislation will addresses the regulation, powers and governance of water service providers.

The Government’s reforms represent a major overhaul of the current water regime to address the real and potentially disastrous consequences of unsustainable water use.

For further information, please contact Brad Wylynko.