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Legal and Constitutional Affairs References Committee
18/05/2011
Water Act 2007

RIVERS, Ms Nicola, Law Reform Director, Australian Network of Environmental Defender's Offices

SYDES, Mr Brendan, Chief Executive Officer, Australian Network of Environmental Defender's Offices

[11:27]

Evidence was taken via teleconference

CHAIR: We welcome representatives from the Australian Network of Environmental Defender's Offices. We have your submission No.16. Do you wish to make any amendments or alterations?

Ms Rivers : No, we do not.

CHAIR: We invite you to make a short opening statement at the conclusion of which we will have questions from the committee.

Ms Rivers : Thank you, I will just make a short statement first. As indicated in our submission, in our view the key purpose of the Water Act is to return extraction in the basin to long-term sustainable levels to support both the ecosystems that depend on the basin as well as continued productive use of the basin. The act is really based on a recognition that long-term social and economic values depend on environmental health. The act is not just aimed at maintaining healthy ecosystems, although that is a very important part of the act; it is also about maintaining the system in a state where it can continue to support economic uses.

As we note in our submission, economic and social considerations are part of the decision of what the sustainable diversion limits should be, as the question of what is sustainable includes consideration of how much water is needed to maintain the productive base of the resource and resource health. The ultimate aims of the Water Act and the Basin Plan are to have a balance in the system and that the system function well. Current levels of the extraction do not allow that. The only way to achieve it is to have more water remaining in the system so that there is a healthy, productive base for ecosystems and for human use. That is the framework that we believe the act sets up and it is consistent with the NWI and the National Plan for Water Security.

CHAIR: Thanks very much for that. Mr Sydes, did you wish to add anything?

Mr Sydes : No.

Senator JOYCE: I want to refer you to paragraph 22 on page seven of your submission, where you say:

... the Authority's analysis found that 3000GL is the minimum level that could be considered sustainable and that 7600GL is what is actually required to meet environmental values.

Do you still hold the belief firmly that 7,600 gigalitres is what needs to be removed from the system?

Ms Rivers : We rely on scientific assessment for that. As you are aware, we are lawyers and it is outside our area of expertise to make comment on the actual amount of water that is needed for the system. So that figure is taken purely from the guide, the assessment that the Murray-Darling Basin Authority had done to determine what the environmental requirements were. We do not have an expert view on that either way, as lawyers. We are relying on the scientific evidence.

Senator JOYCE: So what would you do, as lawyers, and with the resources available, if the decision was made by the minister and Mr Knowles that all they were going to remove from the system was, say, 2,000 gigalitres? What would be your course of action then?

Mr Sydes : You mean if we were approached for advice about that? How would we go about that exercise?

Senator JOYCE: Yes. What would you do?

Mr Sydes : Sorry, is that what you mean?

Senator JOYCE: Yes, that is exactly what I mean. What is the legal process that you would follow, having a view towards the environment and having knowledge, as it says your submission, that 7,600 gigalitres is what is actually required and that only 2,000 gigalitres is what was offered? What would be your legal process?

Mr Sydes : It would be a matter of scrutinising the draft instrument, the actual Basin Plan—

Senator JOYCE: Yes, in the final plan.

Mr Sydes : as it would be published to guide interpretation of that. Looking at that from a lawyer's point of view you would be looking at whether the process of developing that and the substantive reasons put forward were consistent with the legal framework.

Senator JOYCE: So it is consistent with the legislative framework, but do you have the capacity to take it to court?

Ms Rivers : You cannot make a determination of that without actually seeing a plan, I suppose. You would have to look at all aspects of the plan to see if it did in fact comply with the act. So it is not something that we can comment on at this stage.

Mr Sydes : There is no facility in the legislation to seek, for instance, a merits review from the AAT of the decision or anything like that.

Senator JOYCE: But do you have the capacity, if you believe it does not comply with the act, to challenge it?

Mr Sydes : You are asking us to address hypothetical questions, I suppose, and I am not sure what you mean by the capacity. As I said, there is no appeal rights or merits review provisions built into the legislation itself, but that is not to say it is not the case, as with any other legislation, that there might not ultimately be some role for courts to ensure that decision making sticks within the parameters of—

Senator JOYCE: With your legal knowledge, can you just walk us through what that legal process is?

Mr Sydes : In the absence of any merits review opportunities set out in the legislation itself, it would be a matter of picturing something in the form of judicial review, which would largely be a fairly narrow sort of exercise of ensuring that the authority or the minister stuck within the parameters of the legal framework.

Senator JOYCE: And if they had not stuck within the parameters of the legal framework, where would you go? You are a competent solicitor. Tell me exactly what you would do.

Mr Sydes : The jurisdiction to deal with any issue to do with Commonwealth legislation would probably arise in the Federal Court, maybe the High Court if there were constitutional aspects to it. So it would be a matter of investigating that option, and if there was a viable action then someone could pursue proceedings in that sort of forum. There has been a bit of publicity around that, I think largely coming from those who are trying to generate concern that that is an inevitability or a likelihood with the publication of the Basin Plan. But the reality has been in the past that the challenges under, for instance, the New South Wales framework or under the Commonwealth decision making have been pursued by irrigators and so forth. So there are precedents for it.

Senator JOYCE: But you have the capacity to take it to the High Court and say, 'This is not compliant.' You are representing the environment, and no doubt if someone gave you the brief you would represent them, wouldn't you?

Mr Sydes : We would consider it, but there are a whole range of factors that would have to be taken into account to determine whether or not there was a viable course of action along the lines of what you have described.

Senator JOYCE: Tell me what those are.

Mr Sydes : For us, and for those in the environment movement, if I can purport to speak for them in very general terms, the emphasis has been on trying to get the best possible outcome through the process of developing the Basin Plan. Any legal challenge would certainly be a last resort.

Senator JOYCE: But it is a resort, isn't it?

Mr Sydes : Well, we live in a democratic system; we have a system where we have courts that supervise the exercise of executive decision making under legislation of all sorts. It is always there as an option.

Senator JOYCE: Of course. And as you have rightly said, it is determined by examination of the legislative instrument. That is what you would be using in the court, would you not?

Mr Sydes : I would not like to front up to the court and say, 'We are here to challenge decision making under a legal framework but we are not going to take you to that legal framework.'

Senator JOYCE: And what would be the sort of evidence you would take to support your case?

Mr Sydes : You are really talking hypotheticals. It is very difficult to say, and indeed if it were in the nature of a judicial review application it is not really a matter of evidence; it is a matter of interpretation.

Senator JOYCE: You seem to be very reticent to answer the question. Is there any reason for that?

Mr Sydes : I beg your pardon?

Senator JOYCE: You seem to be very reticent in your answer. Is there any reason for that? Do you feel inhibited at all in answering these questions?

Mr Sydes : I do not think I am being reticent at all, so I disagree with the premise of your question.

Senator JOYCE: I am just asking you a plain legal question: what would you take as part of your mechanisms of mounting a case? You keep on saying that it is a hypothetical. The legislation is before us, you have clearly said that 7,000 gigalitres is what is actually required, yet you do not seem to be willing at all to even entertain the idea of a court case. Do you rule out completely that you would ever—

Mr Sydes : I would like to give a response to the earlier question. Those figures come from the guide, and our expertise is legal expertise rather than determining whether or not those figures are appropriate. Secondly, it is hypothetical in that I understood your question to be about challenge to those figures or the plan if they are included in the plan when it is produced. The plan has not been produced yet.

Senator JOYCE: Were you happy with the draft? Were you happy with the outcome as was prescribed in the draft?

Mr Sydes : I have not seen the draft.

Senator JOYCE: Well, everyone else has—the guide to the draft.

Mr Sydes : The guide, if that is what you are referring to.

Ms Rivers : We had some concerns with the guide, like a lot of people did. There were some elements of it were sound and some elements that we had concerns with.

Senator JOYCE: What elements were you concerned with?

Ms Rivers : Some of the conclusions that the authority had made in relation to amounts of water and what conclusions they would have did not seem to accord with some elements of the legislation, so they made some assumptions that did not seem to be, for example, based on the best available science in some cases.

Senator JOYCE: Give me one or two examples of some of those conclusions and your belief of what actually should have been there.

Mr Sydes : The principal example is the one that is outlined in paragraph 22, I suppose. Their guide is not the draft of the Basin Plan; you need to understand that it is a preliminary step to that. The draft is yet to come. But they have said that the nominated figure is 7,600 gigalitres, and then they have nominated a lower range and then picked the figure at the bottom end of that range, I suppose, as an SDL. That raises questions around the consistency of that approach with the legal framework for setting the SDL.

Senator JOYCE: In your knowledge, do you believe the Australian Government Solicitor has a competent interpretation of federal government acts?

Mr Sydes : Yes.

Senator JOYCE: Obviously the conjecture is two different opinions, one that is on the record from before, which reflected that the advice that Mike Taylor was getting—and this was in the papers sometime back—was not the same as what seemed to be reflected in Minister Burke's. Whatever that reflection was from the Australian Government Solicitor, that would be a fairly competent analysis of the legislation, would it not?

Ms Rivers : Yes. We obviously saw the advice that was released by Minister Burke. We have not seen previous advice that the Australian Government Solicitor gave to the authority, but we agreed with the interpretation of the advice that was released by Minister Burke. And we believe that that advice seems to be consistent with advice that had been previously given to that authority. As I said, we have not seen that advice, but when we looked at the guide and had discussions with the authority on what the Australian Government Solicitor had advised, it did seem to us that the advice was consistent. I guess the understanding and interpretation of the advice may be what has differed. So different questions to AGS would produce a different focus in their advice, and the advice that was released by Minister Burke clearly focused on the social and economic considerations because that was the question that was asked. But we did think that that was sound advice and we did agree with it.

Senator JOYCE: Do you think that the authority was right in capping cuts at 4,000 gigalitres?

Ms Rivers : In terms of the actual numbers it is very hard for us to say because, as I said, that is outside our area of expertise; we would just rely on the science for that. What we could look at was what the act actually requires. Do the outcomes that that certain number achieve meet the requirements of the act? We could look at things like what is a sustainable diversion limit, what is required under the sustainable diversion limit, what may be required under international agreements, and what may be required around optimising the social, environmental and economic considerations. So we do not have a view about a particular number, I guess. We have a view about whether what will be achieved will meet the requirements of the act.

Senator JOYCE: Okay. Give me your interpretation of the sections of international agreements that you would utilise in determining whether there had been compliance in this piece of legislation with those international agreements—obviously the Ramsar one being the obvious one. What would you be looking for in the final guide to show congruence between the Ramsar agreement and the guide?

Ms Rivers : It is not a very straightforward question. The international agreements are not always written in a way that you can clearly can say that this will comply and this will not comply. It is a difficult question. The act itself does give some guidance in relation to, for example, the Ramsar convention. What a court should be looking at is whether the guide appropriately attempted to implement those agreements and not so much the actual letter of the law there. So it is a difficult question. I do not think anyone can really say exactly what is or is not required to meet those international agreements.

Senator JOYCE: Is capping consistent with the act?

Ms Rivers : Sorry, what do you mean by capping?

Senator JOYCE: A cap—that you will not take more than 4,000 out. Is that consistent with the act?

Mr Sydes : Well, the act requires the setting of a sustainable diversion limit, so if that is what you are referring to the...

Senator JOYCE: Beg pardon?

Mr Sydes : It is part of the whole scheme of the act to set a sustainable diversion limit.

Senator JOYCE: Is capping consistent with the act, yes or no?

Mr Sydes : The act requires, as a central part of the basin planning process, the setting of sustainable diversion limit. If that is what referring to in your reference to a cap, then yes, it is a central part of the scheme of the legislation.

Senator CROSSIN: Thank you for your submission. I want to take you to your summary of key points in your submission on page two. You say here that the act is actually based on a recognition that the long-term social and economic values depend on environmental health. Would you subscribe to the view that by nature of the fact that you cannot have a healthy river without looking at the consequences, the economic and social values are interrelated with the determinants of the environmental needs?

Ms Rivers : Yes, that is our view. I think that the heart of the act and the basin plan will be the sustainable diversion limits. In our view, from a reading of the act that sustainable diversion limit does consider social and economic factors as well as environmental factors. The definition around the environmentally sustainable level of take specifically talks about the productive base of the water resource, which encompasses things like mitigating pollution, reducing the risk of algal blooms and removing salinity from the basin, which are all factors that are very important for continued productive human use of the basin—agriculture and tourism, and those kinds of things. So, with the premise of the act and those considerations, it is actually difficult to separate what we would consider environmental considerations or maintaining ecosystems from other environmental services which maintain a productive base for human use as well.

Senator CROSSIN: So can you perhaps just explain to me how that works in practice on a day-to-day basis, then?

Ms Rivers : Sorry, how which works?

Senator CROSSIN: How does it apply? We hear a lot of people say that the three are interrelated. You hear a lot of people say that they actually are not; they cannot find a link between them. But how does this actually work in terms of the way in which the plan would operate? If you are going to calculate the environmental health of the river, how do you, on a practical basis, include the economic and social outcomes as well?

Ms Rivers : I guess the act allows a reasonable amount of discretion for the decision maker—the Murray-Darling Basin Authority and the minister—to determine how to do that. The act, I guess, sets up a framework for trying to bring about sustainable extraction levels and obviously has the direction to optimise social, economic and environmental factors. But there is quite a lot of discretion, so obviously that is the process that the authority has been undertaking over the last few months. So, from a legal perspective, there is no one way to do that. Obviously the authority is looking at what are those key environmental assets in the basin that need to be maintained and protected, and also how much water is needed for things like reduction of salinity and algal blooms, and trying to put that in numbers for each basin to ensure that there is enough water in to do those things. But from a legal perspective, as I said, there is a lot of discretion for the authority to determine how best to do that.

Senator CROSSIN: So the environmental requirements actually cannot operate in isolation, you would say, without looking at the social or economic use of the basin. Is that right?

Ms Rivers : I guess they are linked.

Senator CROSSIN: Could you ever prescribe it in an act?

Ms Rivers : Ever prescribe?

Senator CROSSIN: Could you ever be that specific that you could prescribe it in an act? Surely it is a matter of assessment year in and year out, and varying—

Mr Sydes : Sure, so the act sets up a legislative framework for decision making as an ongoing process. I suppose that the key question really is: how do you go about operationalising sustainable development or sustainability, and how do you put that into a legal framework dealing with—

Senator CROSSIN: Yes, and how do you do that given climate variations, given economic use and given a healthy state of rivers? Can you ever be that specific other than what is currently outlined in the objects of the act?

Mr Sydes : As Nicola has already indicated, it typically requires a fair amount of discretion to be given to whatever agency, authority, institution or ministerial decision maker might be involved in administering and applying a legislative framework over a period of time. But you can, as the act does, set up a framework that sort of directs not so much a balancing process, I suppose, but a process of integrated consideration of those various factors. That is clear until about the starting point, I suppose, and the starting point here is to say that we need to set a sustainable diversion limit, which as Nicola has already indicated is a process of considering environmental considerations in the productive base of the basin and so forth. So it is not a simple exercise of mandating that you will do something in one particular moment in time; it is, as you have indicated, an ongoing process, but one that needs to be guided by high-level principles as well. The discretion that the likes of the authority or the minister has is then constrained or operates within the parameters of those guiding principles.

CHAIR: Senator Crossin, could we make this the last question before we go to other senators?

Senator CROSSIN: Sure. Given the history of the use of this area in our country for agricultural and economic purposes, I find it hard to think that you would just purely look at the SDLs based on only environmental factors and not look at the impact it would have on the economic and social outcomes up and down and around this basin. The two have always been inextricably linked in history in our country. When we look at the extraction of water, is consultation undertaken with people who use that water, through the authority?

Ms Rivers : I guess the NWI, A National Plan for Water Security and then the act are based on the premise that extraction is not currently sustainable, so at the starting point it does take into account the current uses of the basin and how the water is being used. I guess a decision was made by all the governments that it currently was unsustainable, and therefore the NWI and then the act were needed. It is not that it does not take into account those factors; I think it very much does. It is just that, having recognised that the extraction is not currently sustainable, this act tries to achieve the balance over the longer term to return it to sustainable extraction levels.

The other thing that needs to be remembered is that in other parts of the act there are provisions specifically around minimising economic and social impacts—for example, the transitional provisions. There are a number of provisions in there that allow time to bring in these limits. You also have to consider things outside the act—for example, the water buybacks and the investment in infrastructure, which are specifically aimed at minimising those impacts and looking at the basin as a whole and the historical use of the basin.

Focusing just on one particular aspect of the act does not give the complete picture. The whole picture is around the investment that is going into it as well the understanding of the historical use of the basin that has led to the need for this act.

CHAIR: Thanks for that.

Senator HANSON-YOUNG: I guess the debate we have been having this morning is around the ability for the authority to follow the act in order to achieve the objectives without the argument that people are suggesting that it is so self-interpretive that there is no clarity there. Your submission clearly says that it is quite clear—that we need to ensure that we have the sustainability of the diversion limits so that we can keep the river system going, but of course that has to, by consequence, also ensure that there is sustainable usage as well. I am with you on this. I believe that the act does do that. If the final plan were based on what the guide has set as the various different limits, do you think that the 3,000 to 4,000 gigalitres would indeed be a breach of the Water Act?

Ms Rivers : Again, it is hard to say without looking at the actual plan, because there are a lot of different elements of the plan. It is about a lot more than just the sustainable diversion limits—

Senator HANSON-YOUNG: Yes.

Ms Rivers : so you would have to look at it holistically. Really it is a hypothetical question at this stage. Our assessment of that would just be based on looking at the science, basically: does the science show that the requirements of the act are being met? It would depend on the science that was produced with the draft plan or the final plan. If you could see from the final plan that in fact the requirements of the act were not met through the particular number, that is when you would potentially have legal concerns.

Senator HANSON-YOUNG: What do you think would be the indicators of a plan that did not comply with the act? What would be the key indicators?

Mr Sydes : You would be looking at things like whether the authority in developing the plan had considered all the things that they are required to consider or have regard to under the legal framework, for instance.

Senator HANSON-YOUNG: And the process thus far, do you believe that that has happened?

Mr Sydes : In broad terms, yes.

Senator HANSON-YOUNG: Okay.

Mr Sydes : As Nicola has already pointed out—the question is not what the guide says, the question from the legal perspective will be what the legal instrument, or the draft of that legal instrument, the draft basin plan—says, rather than this documentation that we are working from now, or that you have referred to. It is really just an attempt to start the debate. The act itself envisages that the formal process of consultation will be around the draft of the basin plan, which will be drafted as a legal instrument. That is what, as lawyers, we would be particularly interested in scrutinising.

Senator HANSON-YOUNG: The terms of reference of this inquiry, specifically in relation to the legalities of the act in terms of its connection with what we have seen thus far in terms of the guide, I assume that you have both seen the publicly tabled legal advice from the government solicitor, and the minister's statement, in relation to the objectives of the act and whether there is clarity around the needs for the environmental balance. Have you seen it?

Ms Rivers : Yes, we have.

Senator HANSON-YOUNG: So, based on the minister's interpretation of that legal advice, do you think that the minister's interpretation is correct?

Ms Rivers : I guess it is difficult to know what the minister's interpretation is. I have seen the statement that the minister made, but I guess it is reasonably brief, so it is difficult—I cannot really say what his understanding of the interpretation, but the Australian Government Solicitor's interpretation was that social and economic considerations are important and are in the Act and can be considered by the authority. I understand that that is also the minister's understanding and that is our view as well.

Senator HANSON-YOUNG: So you agree with the Government Solicitor's advice?

Ms Rivers : Yes, we do. I think there has been a number of varied interpretations of that advice, and so I guess commentary on that advice has differed, but when we look at it from our legal perspective, yes, we think that is sound advice.

Senator HANSON-YOUNG: There was a question around points made in that advice about limits to the authority—limits on the authority, in certain aspects, to implement all of the things that the act is requiring. Are those limits obvious to you?

Ms Rivers : I am not exactly sure what you were referring to from that advice. I can go back and have a look at it and take the question on notice if you'd like.

Senator HANSON-YOUNG: Could you? The Government Solicitor's advice specifically points to limits on the authority. If you could take that on board and get back to us on notice, as to your interpretation of that—

Mr Sydes : Is it specifically in terms of those paragraphs of the advice that you are referring to?

Senator HANSON-YOUNG: Yes. Paragraph 25 and 26, I think, from memory.

Ms Rivers : Ok, that is fine. We will do that.

Senator HANSON-YOUNG: Thank you.

CHAIR: Thanks very much. Before I go to Senator Birmingham and Senator Xenophon can I just indicate that the committee is acting under certain time constraints in accordance with the program, but, happy for questions, noting that time constraint.

Senator BIRMINGHAM: Thank you for that reminder, Chair. Thank you both for your evidence today. The act lists certain international conventions. Is it your belief or understanding that there is capacity to meet obligations under those conventions prescribed in the Act, and still balance, under those conventions, economic or social considerations?

Ms Rivers : Yes, I think so. Really, the requirement to give effect to those international obligations is not really something new; it something that we are required to do anyway. We have signed up to those conventions, and it is really, in our view, just restating our obligation in that area, and it is quite appropriate that an act such as this have regard to those international obligations. Those international conventions within themselves do recognise as well that there will be, I guess, human use of natural systems, so the Ramsar convention encompasses the concept of wise use of wetlands. Those conventions do not require that all natural systems be returned to their pre-European pristine state; it just requires in some cases that they be used sustainably or essential systems be maintained. So, yes, those international conventions are still consistent with the aim of having long-term sustainable use of resources.

Mr Sydes : If you have a look at those international agreements, you will see that they are a pretty broad canvas. That reflects their nature I suppose as international legal instruments. There is a fair bit of emphasis on sovereign nations entering into international agreements to then decide how they are going to operationalise them in a domestic context, which is what the Water Act does here. Any sort of argument that there is some sort of detailed prescription in the international agreements that they are going to drive the water resource management regime here and the Water Act in a certain direction I think misunderstands how those international agreements are framed and what they contain.

Senator BIRMINGHAM: On the operationalisation of those international agreements, what acts prior to the Water Act had the Commonwealth government undertaken to comply with those agreements or is this in fact the first real step to provide compliance in this space?

Mr Sydes : The principal legislative vehicle for implementing international environmental agreements in the Australian context was the EPBC Act introduced in 1999.

Senator BIRMINGHAM: However, in regards to—

Mr Sydes : The Environment Protection and Biodiversity Conservation Act.

Senator BIRMINGHAM: Yes, I am aware of the act. But, with regard to issues of water use and pre-existing water use, the EPBC Act has fairly limited capacity.

Ms Rivers : International agreements can be implemented through federal or state law. Legislation does not have to specifically refer to the international agreements necessarily, but there is an understanding when a country signs up to an international agreement that they are and will comply with the international convention through either federal or state law. There is implementation of those agreements through state law as well as federal law.

Mr Sydes : As you would understand, we have not previously had Commonwealth water legislation. I suppose to that extent this is new territory. Implementation of things like Ramsar and so forth is done through the EPBC Act but also at a more program level I suppose and through encouraging state based legislatures to do various things under their legislative regimes where historically natural resource management has been their responsibility.

Senator BIRMINGHAM: With regard to what areas of the environment are covered by the scope of this act and what areas of the environment must be considered under a sustainable diversion limit, do you agree there is capacity, as the Irrigators Council was arguing previously, for a trade-off in the act? Is there capacity, if the government decides that some environmental assets and some ecosystems are not able to be saved or preserved in a way that also achieves an economic or social balance, for that to be an acceptable outcome?

Mr Sydes : The framework of the legislation requires the determination of what are environmental assets but then what are the key environmental assets. As Nicola has already pointed out, there is a fair bit of discretion there to be exercised by the authority and by the minister in determining what those key environmental assets are, but it is not without limit.

Senator BIRMINGHAM: From your analysis of the released Guide to the Basin Plan, do you think the MDBA went through an effective process of determining what the key environmental assets were as against what environmental assets were?

Mr Sydes : That is a complicated question. I suppose it is something that would warrant further scrutiny because of some of the mechanisms used to determine what the key environmental assets are. As I said, it is not a straightforward question because I understand in the guide there are various criteria they have used. For instance, if it is something that is already internationally legally recognised as a Ramsar wetland it is relatively straightforward, but once you start to get down below that level it becomes a much more complicated exercise.

Senator XENOPHON: Thank you, Chair. I am conscious of time constraints. Ms Rivers and Mr Sydes, thank you for your submission and your evidence. I just want to focus on one particular part of your submission that is of particular concern to me. Page 4, paragraph 6 of your submission makes reference to SDLs and how they are defined. In a footnote you refer to section 22 of the Water Act and, in particular, item 6, which states that the matters to be included in the mandatory content of the Basin Plan include looking at:

The maximum long-term annual average quantities of water that can be taken, on a sustainable basis, from:

(a) the Basin water resources as a whole; and

(b) the water resources, or particular parts of the water resources, of each water resource plan area.

Then it says:

The averages are the long-term average sustainable diversion limits …

And it goes on to set that out.

I have a particular concern for those irrigators in South Australia that were early adopters of water efficiency measures who by and large cannot avail themselves of the $5.9 billion fund set aside for water efficiency measures in other parts of the basin because they have already reached those water efficiency outcomes in terms of getting rid of open channels, having pipes and having pressurised systems and the like to reduce evaporation. My question to you is this: how do you read that part of the Water Act that I have referred to in the context of giving appropriate acknowledgement to early adopters of water efficiency measures in the context of determining an SDL? If you need to take that on notice, I am very happy for you to do so.

Mr Sydes : I am not sure I fully understand the question.

Senator XENOPHON: It is my fault if that is the case. You made reference in your submission to section 22 of the Water Act, which relates to the matters that must be considered in the Basin Plan; correct?

Ms Rivers : Yes.

Senator XENOPHON: Then you made reference in footnote 6 of page 40 of your submission to item 6, which talks about the matters to be included. Item 6 makes reference to:

The maximum long-term annual average quantities of water that can be taken, on a sustainable basis, from:

(a) the Basin water resources as a whole; and

(b) the water resources, or particular parts of the water resources, of each water resource plan area.

In other words, it focuses on a particular area. I think there are 23 catchment areas that need to be considered; is that right?

Ms Rivers : Yes.

Senator XENOPHON: The question I pose is: how do you interpret that from your perspective for a particular water catchment area where they have already undertaken water efficiency measures and that can be reflected in terms of their productive capacity, for instance, comparable crops, megalitres used et cetera?

Ms Rivers : There is some discretion in the act to take things into account in implementing the act, looking at the social and economic considerations. The act requires that, yes, you have to implement sustainable diversion limits, but you must do it in a way that optimises the environmental, social and economic outcomes. If the authority were able to ensure that that particular catchment still had enough water to be sustainable and the water came from somewhere else that would still be fine. There is some level of discretion in the act to take those things into account where possible.

Senator XENOPHON: I understand that, but does the act give sufficient weight to early adopters? You have had the Prime Minister saying that early adopters of climate change measures should be rewarded, but it does not seem to be—

Mr Sydes : There is a broader question there, I suppose, about whether those sorts of broader equity considerations and so forth can be or ought to be dealt with purely under the legislative framework or whether they are part of the broader policy program. It is important to understand that the act does not operate in isolation and just on its own. It is part of a broader—

Senator XENOPHON: Sure. I think both you and Ms Rivers have made reference to a holistic approach—looking at water buybacks, for instance. Is that one way of restoring or taking into account equity issues in early adoption?

Mr Sydes : Yes, I suppose it would be to say, 'If we want to have a policy objective that early adopters ought not to be effectively subsequently penalised then there are policy mechanisms available to deal with that.'

Senator XENOPHON: Chair, I am conscious of time constraints. Finally—and if you need to take this on notice I do not mind—do you see any part of the act that would give scope or weight to early adopters other than the general discretion that Ms Rivers has referred to?

Ms Rivers : We are happy to take that on notice, if you like, and provide you with an answer in the next few days.

Senator XENOPHON: I appreciate that.

CHAIR: Thank you, Mr Sydes and Ms Rivers, for your evidence today.