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Legal and Constitutional Affairs References Committee
Water Act 2007

KELLY, Mrs Josephine, Private capacity


CHAIR: We have your submission, No. 54. Do you wish to make any amendments or alterations?

Mrs Kelly : Yes, there is a typing error on page 7 in paragraph 30. Three lines from the bottom it says 'environmentally sustainable level of rake' and of course it should be 'take'.

CHAIR: Thank you. We invite you to make an opening statement, after which we will have questions. I know you are aware of who is online as you have been sitting and listening to the hearing today.

Mrs Kelly : Yes. Just very briefly, in my view social and environmental outcomes are not relevant to the determination of the amount of water that is to be allocated to the environment. I do not think that anybody, when you analyse what they have said, disputes that. Secondly, the AGS advice that was tabled by the minister in the House of Representatives last October does not say otherwise. It is important to bear in mind, when you look at that advice, what matters the advice was addressing. The advice was addressing where social and environmental factors are relevant; it was not addressing where they were not. That is the critical question. So there is no inconsistency between what the approach of the Murray-Darling Basin Authority was in preparing the guide and that advice as tabled by the minister.

Minister Burke actually acknowledged in his ministerial statement on 25 October 2010 that the environmental issues are dominant in the act. He said that, subject to environmentally sustainable limits, you go to particularly economic factors, but there is nothing in the advice he tabled to support a proposition that the act gives you the triple bottom line.

As far as international conventions are concerned, in my view they do not prevent taking into account social and environmental impacts when you are looking at determining the amount of water for the environment. Those conventions, as the AGS advice says, use very high-level language; it is not prescriptive. To the extent that there are requirements under those conventions, it is very much up to the governments how they implement them, and I think that was referred to earlier today in some of the submissions. So, in my view, the act can be amended to permit social and economic outcomes to be considered when determining the water allocation for the environment and be consistent with the international conventions.

CHAIR: Thank you for that opening statement. Senator Crossin, we will go to you first, if you are ready.

Senator CROSSIN: Yes, thank you. Can I just pick up on that. Do you think there is scope within the relevant international agreements of the Water Act for consideration of social and economic factors?

Mrs Kelly : Do you mean under the convention?

Senator CROSSIN: I am talking about within the relevant international agreements of the Water Act.

Mrs Kelly : There are a number of the international agreements or conventions referred to. The main ones are the Ramsar convention, which talks about wetlands, and also the convention on biodiversity.

Senator CROSSIN: If we go to the Ramsar convention, do you think there is adequate scope for consideration of social and economic factors within that?

Mrs Kelly : Both those conventions, in my view, refer to social and environmental factors. They also talk about the sovereignty of the individual countries that are implementing them. Again, in my view, both those conventions would allow the government to amend the legislation. The decision that has been made is a draftsman's decision or a decision by this government to put the environment first in terms of the sustainable level of take.

Senator CROSSIN: So you do not believe that the Water Act clearly relies on social and economic factors in determining those environment factors?

Mrs Kelly : In my view, in determining a certain level of water for the environment the act does not allow social and economic impacts of such a level of water for the environment to be taken into account. So you cannot look at what the effect will be on a rural community of a certain reduction in the allocation for the environment.

Senator CROSSIN: That is in conflict with some of the witnesses we have had today.

Mrs Kelly : I do not think so, with respect.

Senator CROSSIN: Sorry?

Mrs Kelly : I disagree with that. I do not think it is in conflict. For example, Professor Gardner and Dr Foerster say that social and economic factors are relevant because you basically have to have a healthy river and, therefore, that is of social and economic interests because you cannot have economic activity if you do not have a healthy river. That is the line of argument. My argument is that, when you determine the amount of water for the environment, at that point you cannot take into account the impact that a reduction of water for agriculture, for example, will have on the rural communities.

Senator CROSSIN: But there are some people who will argue today that the act allows for a productive base for a water solution and who believes it does not focus purely on environmental consideration and that the act actually acknowledges the human use of the basin in determining that.

Mrs Kelly : To the extent that that is said, what is meant is the fact that you have to have a healthy river for it to be able to be used by human beings. It is not actually saying, 'What is the effect on a rural community of reducing the allocation for agriculture by increasing the environmental needs to be satisfied?'

Senator CROSSIN: But it could be interpreted differently.

Mrs Kelly : I think that, as was previously indicated and as is also stated in the AGS advice, the fact is that key 'environmental assets', 'ecosystem outcomes' and 'productive base' are not defined in the act. It does confer discretion on the decision maker. But what you are looking for is an environmentally sustainable level of take, and focus is on the environmental values being preserved by the water allocation for the environment. I confirm my view that what it certainly means is that you cannot take into account any adverse impact that would be suffered by a rural community by increasing the allocation for the environment to the detriment of allocation for irrigation, for example.

Senator CROSSIN: Can I just finally ask you, is it the wording in the act that is the problem or is it the interpretation that it needs to provide flexibility that is causing a problem for people—that is, the application of the act? Is it that each time the application becomes an area of conflict you run away and change the wording in the act or is in fact the wording of the act strong enough to guide the Basin Plan with some flexibility?

Mrs Kelly : As I have already indicated, my view is that, if you want social and environmental impacts of reductions of water because of an increase in allocation to the environment, the act does not allow you to take that into account. Therefore the act needs to be amended if you want to change that outcome. If you are happy to have the outcome as has been described by Professor Gardner and Dr Foerster and others, then you leave it as it is. But if you are concerned to ensure that the impacts on regional and rural Australia are taken into account then it has to be amended.

Senator JOYCE: Thank you very much, Mrs Kelly. I think what you say is very pertinent. They are very selective in dodging around the issue—there is almost a pathological avoidance of grasping the nettle and understanding that it is an environmental act. If an environmental act is what you want then it is a good act, but if you want one of equivalence then it does not provide that. So what are your suggestions for amendments that could be made so as to deliver on the promise made by both the Labor Party and the coalition, that it is not a case of optimising, integrating or considering but a case of equivalence? How could we do that? Could we do it?

Mrs Kelly : As a lawyer, I would have some difficulty with getting an equivalent outcome because mostly you would say it is up to a decision maker. You would say, 'You can take into account these considerations.' So my suggestion in my submission has been that you put in a consideration of social, environmental and economic factors when determining the level of water for the environment. That is the best I can do, I suppose. As to getting equivalence, I would have some difficulty in coming up with a form of words that I could give you at this point.

Senator JOYCE: Then it really becomes a case of: who goes to the High Court? In one direction it is quite obvious. The last witness, as you rightly said, described it perfectly: basically they said that this is an environmental act and therefore it is good, and the human interest is looked after—just as it says in the Ramsar convention—by water flowing down the river; that is a human benefit. Well of course it is, but that says nothing about growing crops or sustaining a town—in fact, it never mentions that in Ramsar at all. Say an outcome is brought about—and there has been discussion about winding down the amount from 4,000, and there is currently a bracket between 3,000 and 4,000—and they come out with, for instance, 2½ thousand gigs, which is what they are actually taking out. I do not know whether they did, but let us say they just stated that. What would be the process then for an environmental group which was, rightly, in consideration of the act, unhappy with that? What could they do? They have a legal avenue in front of them, don't they?

Mrs Kelly : Well, it would depend on whether they could point to a failure of the decision makers. There is no merits review; it is judicial review. So it would depend on whether there was any ground of judicial review that they could point to in terms of the decision that had been made to come to that amount of water: have they followed all the procedures and take into account all the relevant considerations? So I cannot answer the question on a particular amount of water. You would have to go through the decision making process.

Senator JOYCE: But where would they end up? Say, hypothetically, they decide to take out one gig and everyone screams blue murder. Where are they off to?

Mrs Kelly : Probably to the Federal Court or, if there were a constitutional issue, to the High Court straight off.

Senator JOYCE: And what would the High Court take into account? Would it take into account the statements by the minister, the statements by Mr Knowles, or what is actually written in the act?

Mrs Kelly : Obviously, fundamentally you would have to look at what the act has required. It would also be getting into the territory of the international conventions to see if obligations have been enacted and implemented, to the extent that you can find them.

Senator JOYCE: I am just going to read out this paragraph from the Australian Government Solicitor. It says:

Neither the Convention on Biological Diversity nor the Ramsar Convention require that the Parties disregard economic and social considerations …

That is a very peculiar form of words. 'Requires them to disregard' means that they have the option to regard—

Ms Kelly : They can have it taken into account, which is what I have said.

Senator JOYCE: Don't you find that all through this debate there is this form of weasel words where people talk about things that they do not need to do? It is sort of a self-fulfilling argument—'I'm not obliged to disregard'—which means what?

Ms Kelly : What Mr Orr QC, I think, says there—and this is what I have said—is that neither of those conventions requires the outcome of the act to be that you cannot take into account social or environmental impacts at the point of determining the amount of water for the environment. You were given a history earlier by Dr Gardner and Professor Foerster about the water initiative and the decision, apparently, to bring the river back to a sustainable level. It has been an Australian political decision to do that, and that is what the act has done.

Senator JOYCE: What would happen if there was a town, and, let us say, an environmental asset—let us call it a swamp—and in this environmental asset, the swamp, there was a precious frog, and just before the swamp with the precious frog there was a town that had a rice mill. You might say, 'The water that has to go to that swamp is 10 gigs; but that is the water, unfortunately, that we need for the rice mill, so now we've got a choice between the rice mill and the Ramsar convention area with the frogs.' Who would win? The rice mill or the frogs?

Ms Kelly : Under the act, the frog.

Senator JOYCE: The frogs would win. That is not precisely what the people in the Murray-Darling Basin were thinking about. So it does not really matter what Mr Knowles does or what Mr Burke says or what happens; how are we going to get an equivalence between the frogs and the people without changing the act? Or can we not do it?

Ms Kelly : I am not sure what measures can be taken. There is a huge discretion—as, I think, Professor Foerster and Dr Gardner and others before have already said—about determining what the key environmental assets, outcomes et cetera are in that provision. But, in saying that, there are also guidelines as to how you make that determination. So I suppose that, at one extreme, you could say that there could be hard decisions made about what key environmental assets and outcomes are. But I do not know how that would work.

Senator JOYCE: In conclusion, just as an example, because it is so classic I am going to read something for the Water Act that I am sure you are aware of. It is in part 2, section 44, subsection 5. It reads:

The Minister must not give a direction under subparagraph (3)(b)(ii)—

which talks about his instructions to the Murray-Darling Basin Authority, on matters referred to—

in subsection 22(1)—

and in subsection 22(1)(d) it says:

the social and economic circumstances of Basin communities dependent on the Basin water resources.

So if the minister was to write up and say, 'you can't look after the frogs; you've got to look after that town, and I'm directing you to do that', with that section alone would they be able to take that to court and say 'the minister's not allowed to say that'?

Ms Kelly : I think that is right: section 44 has a number of limitations on what the minister can do.

Senator BIRMINGHAM: Ms Kelly, thanks so much for your evidence today. It was put to us earlier, and you touched on this towards the end of the evidence with Senator Joyce, that having a means within the existing act to reduce the reductions in water allocation necessary to achieve an environmentally sustainable level of take would be to somehow reduce the number of key environmental aspect assets and key ecosystem functions, and you just alluded to that. In doing that, is it possible, the authority having already given consideration to the science and the evidence that they claim to have done in preparing the guide, for them now to revise that science and come up with a far smaller list of key assets or key functions under the act?

Mrs Kelly : It would depend on the scientific advice, and I am not a scientist.

Senator BIRMINGHAM: But if there were enough room for argument within the scientific advice then there would be enough room for them to revise those numbers or exact assets and functions?

Mrs Kelly : But one might think that, if there were a radical reduction in the number of environmental assets identified, there would be perhaps people who were concerned particularly about wanting to maintain the existing emphasis on the environmental outcomes. One could suspect that there might be a legal challenge to any such decision. It would depend on how it was done and what considerations were taken into account—what it was based on.

Senator BIRMINGHAM: Sure. Your submission contends that, in determining what those key assets and key functions are, there is no role for economic or social considerations. Is that correct?

Mrs Kelly : What I was doing was emphasising paragraph 32 of the AGS advice to just try and make a point, because in that paragraph they talk about how you could identify a key asset. They say:

For example, the MDBA and the minister could not—

this is doing the negative thing again—

identify an environmental asset as key if this was not necessary to achieve the specific requirements of the Water Act (such as those under s 21) and would have significant negative social and economic effects.

I am just putting it in the positive and saying that, if it was necessary to achieve the specific requirements then social and economic effects are not relevant. I was trying to just make the point, concentrating on the way that the AGS has looked at that matter and putting it in the positive. That was really what I was trying to achieve there. In terms of discarding assets and saying no, they are not key assets: yes, social and environmental matters are relevant, but if an asset is necessary to achieve the specific requirements of the Water Act then they are not. That is what Mr Orr is saying there.

Senator BIRMINGHAM: So, for Senator Joyce's example before of the wetland downstream from the town with the cotton mill, if that wetland is a Ramsar listed site and there is quite clearly advice that a minimum flow is necessary to maintain the ecological functions of that site then there is no ambiguity in that regard?

Mrs Kelly : If something is a Ramsar site, given that the Ramsar convention is one of the conventions on which the legislation is based, I just cannot imagine that a Ramsar wetland would not be a key environmental asset.

Senator BIRMINGHAM: But, more generally, where the MDBA has decided to go down the path of, shall I say, system health, where they have looked at the entire health of different catchments within the system, ultimately adding up to the entire system, there is plenty of scope for potential refinement of what key functions could be within that system health?

Mrs Kelly : It depends on the scientific advice. I am sure they have many environmental scientists—zoologists, biologists, hydrologists—in the monumental amount of science input in relation to each of those. It would just depend on what that material said.

Senator BIRMINGHAM: In regard to the interpretation of these international agreements, in your understanding, has the interpretation of these agreements been tested at all in Australia or elsewhere that you are aware of?

Mrs Kelly : I am not aware that they have been tested, for example, in the High Court in Australia. I should just say that, while the EPBC Act and the Water Act at the Commonwealth level are where you see these conventions relied on, because of the Intergovernmental Agreement on the Environment, I think, many years ago, a lot of the ideas in these conventions and other international environmental conventions percolate through the whole system of our environmental law throughout the country—for example, the precautionary principle and ecologically sustainable development. There are lots of principles out of these conventions which have been incorporated into our environmental law and have been subject to legal consideration, judicial consideration.

Senator BIRMINGHAM: Principles like wise use of wetlands.

Mrs Kelly : Wise use I think you probably have to look internationally and, as Professor Gardner said at the meetings of the members of the parties to the conventions and what they have said about those, but that would only be guidance anyway.

Senator BIRMINGHAM: If through the course of this year—in fact in a month's time—and then beyond that we end up with a draft plan and then a final plan which does provide a sense of balance which makes everybody equally unhappy with the outcome, will that be more a result of some good luck and some interesting manipulation of the terms, the science and the advice and, more importantly, in terms of your expertise, would they still be benefit, even if we get an acceptable plan now, to clarify aspects of the act ahead of the development of future iterations of that plan?

Mrs Kelly : I certainly think so, yes, because people may be happy with it this time, however it is done, and not challenge the legality of it, but down the track, if there is a change in approach, somebody may be so unhappy that it would be much better to have certainty in terms of legislative scheme.

Senator BIRMINGHAM: And to get that certainty it would be far better to get the states and the Commonwealth to agree on a reasonable referral of powers arrangement rather than having to hang off with these international agreements?

Mrs Kelly : That would clearly be much the better way to go.

CHAIR: Thank you for your evidence today, Mrs Kelly.