13 Oct 2011

The National Water Initiative - report says there's more scope for reform

by Jamie Doran, Christine Jones

The Report confirms that all facets of water use – agricultural, environmental, mining and urban – are likely to remain on the reform agenda for some time.

The National Water Commission recently released its third biennial assessment of the 2004 National Water Initiative, setting out three key areas for future water reform in Australia.


The National Water Initiative (NWI) is an agreement of Federal, State and Territory Governments through the Council of Australian Governments (COAG) regarding water use and management. Its objective is to "result in a nationally-compatible, market, regulatory and planning based system of managing surface and groundwater resources for rural and urban use that optimises economic, social and environmental outcomes".

The NWI sets out 10 ways to implement this objective, including by achieving:

  • clear and nationally-compatible characteristics for secure water access entitlements;
  • transparent, statutory based water planning;
  • the return of all currently over-allocated or overused systems to environmentally-sustainable levels of extraction; and
  • removal of barriers to trade in water.

The Report has been prepared by the National Water Commission under a specific statutory obligation (under the National Water Commission Act 2004 (Cth)) to review the NWI comprehensively in 2010-2011.

Summary of the Report

The Report includes an assessment of:

  • The extent to which actions under the NWI have improved the sustainable management of Australian water resources and have contributed to the national interest (Chapters 1 to 3).
  • The impact of the implementation of the NWI on regional, rural and urban communities (Chapter 4).
  • Progress against performance indicators developed by the National Resource Management Ministerial Council in consultation with the Commission (Appendix A).

Key recommendations and findings

In the Report, the Commission identifies three key elements as essential to continuing national water reform: renewed leadership, a maturing of the water management agenda and a focus on the national arrangements that will make it happen.

Continuing political commitment is a key focus of the Report, with the Commission finding that the NWI has delivered significant, tangible benefits for Australia, but that a number of its intended benefits are yet to be fully delivered. Of particular significance is the finding that many water resources are still not being managed sustainably, and in many jurisdictions accountability for environmental outcomes remains weak.

The mining sector's impact on water resources is also recognised in the Report, and in particular, the impact of the coal seam gas industry in New South Wales and Queensland. The Commission recommends that states and territories review their existing mining and petroleum regulatory arrangements to ensure they address water resource impacts.

The Report also points to the likelihood of further urban water reforms. The Commission recommends that COAG should develop a new set of objectives and actions to provide national leadership in this area. This recommendation is consistent with the Commission's recent publication Urban Water in Australia: Future Directions. The Productivity Commission's final report into Australia's Urban Water Sector, which was released earlier this week (on 12 October 2011), also points to the need for further reform.

The Report confirms that all facets of water use – agricultural, environmental, mining and urban – are likely to remain on the reform agenda for some time.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.