On 29 January, the South Australian Murray-Darling Basin Royal Commission, constituted by Bret Walker SC as Commissioner, delivered its almost 800-page report to the South Australian Government.

Here, planning and environmental lawyer Dr Joseph Monaghan summarises some of the key findings and asks whether a Federal Royal Commission is needed to achieve progress.

Climate change

The Commissioner found that climate change had not been considered by the Murray-Darling Basin Authority (MDBA) when setting Sustainable Diversion Limits (SDLs) under the Basin Plan.

SDLs limit how much water, on average, can be used in the Basin by communities, farmers and industry, while keeping the rivers and environment healthy.

Not taking climate change into account when setting SDLs was a fundamental problem from both a legal perspective and from the perspective of ensuring the Basin Plan achieved its environmental objectives laid out in the Water Act 2007.

In the course of investigating the climate change issue the Commissioner also said the MDBA had ignored advice from the CSIRO in relation to climate change.

Some of the Commissioner’s key findings include:

• ‘The best available scientific knowledge developed worldwide continues to point toward significant warming in the Southern Basin to 2030 and beyond, and a significant if not catastrophic reduction in run-off depending on global greenhouse gas emission scenarios.’[i]
• ‘In 2009, the CSIRO advised the MDBA that … the MDBA should consider the recent climate of the past 10–20 years, and its climate change projections. This advice was ignored by the MDBA. This amounts to negligence, and maladministration.’
• ‘The MDBA’s failure to heed the advice of the CSIRO, and to follow the requirements of the law, imposed by the Water Act, has not been explained and cannot be justified.
• ‘The Commissioner agrees with the view of the CSIRO at the time that limited inclusion of climate change projections was not scientifically defensible.’

Environmentally Sustainable Level of Take (ESLT) interpretation

One of the debates that arose when the Basin Plan was prepared centred upon whether it was lawful and in accordance with Water Act requirements. The MDBA’s 2010 Guide to the proposed Basin Plan was prepared on the basis that the environment was prioritised in setting the SDLs, as required by the Water Act.

In contrast, the SDLs under the 2012 Basin Plan were set on the basis of a ‘triple bottom line’ approach. This, it was said by some at the time,[ii] contravened the requirements of the Water Act and made the Basin Plan unlawful.

These questions of statutory interpretation were considered by the Royal Commission, which found that parts of the Plan were in fact unlawful on the basis it was prepared in accordance with a triple bottom line approach.

Some of the Commissioner’s key findings:

• ‘There is no ‘triple bottom line’ legislated in the Water Act concerning the setting of a SDL that must reflect an ESLT, or in the scientific judgement to be made as to what are key environmental assets, ecosystem functions and environmental outcomes. That phrase is an inappropriate figure of speech or political slogan that the MDBA has unwisely adopted. Any optimisation of environmental, social and economic outcomes must come later.’
• ‘The triple bottom line approach pervades the ESLT methodology and determination and thereby necessarily infects the setting of the Basin-wide SDL. The adoption of a triple bottom line approach resulted in the SDL not reflecting an ESLT, contrary to sec 23 of the Water Act.’
• ‘Politics rather than science ultimately drove the setting of the Basin-wide SDL and the recovery figure of 2750 GL. The recovery amount had to start with a ‘2’. This was not a scientific determination, but one made by senior management and the Board of the MDBA. It is an unlawful approach. It is maladministration.’

With respect to groundwater SDLs, the Royal Commission found:

• ‘It is perhaps characteristic of the haphazard manner in which the groundwater SDLs were apparently developed, that the required recovery amount arising from the setting of the SDL cannot be readily ascertained from a single documentary source. That a certain level of forensic analysis is required to ascertain how the Basin-wide groundwater recovery target has been set is another example of the manifestly inadequate documentation and explanation provided by the MDBA in its administration of the Water Act.’

Buybacks and efficiency upgrades

Buybacks and efficiency upgrades are means by which the SDLs are achieved. The Commission compared the cost of buybacks and structural adjustment programs with the cost of infrastructure projects. It found that, from a cost perspective, buybacks and structural adjustment programs were significantly better.

The Commissioner said there was little evidence to support claims in relation to the mass exodus of people from farming where buybacks have been implemented:

• ‘Buyback was the subject of considerable criticism by some persons and representative bodies during the Commission’s consultations. That criticism is misplaced on the basis of the evidence.’
• ‘For over five years, efficiency measures have been favoured as a means of recovering water for the environment. This is despite: the significantly greater cost to the taxpayer than a buyback for each megalitre of water recovered, and the concerns raised by (and the failure to investigate) the concept of return flows.’

Constraints

The Report also includes a chapter on ‘constraints’. This is anything that reduces the ability to deliver water for the environment, including physical restrictions – such as low-lying bridges, crossings or private land – as well as operational aspects like river rules or operating practices.

The Commissioner said a compensation scheme should be put in place for those affected by the removal of constraints:

• ‘Major infrastructure projects often involve the compulsory acquisition of property, on the basis they are one example of government action felt to be in the interest of the public at large. The removal of constraints as part of the implementation of the Basin Plan falls well within any sensible definition of a major infrastructure scheme.’
• 'For progress to be made with landowners and others who will be impacted by constraint easing or removal, it is likely that the process will have to become compulsory in the national interest. This means, of course, an appropriate acquisition and compensation scheme will need to be put in place. Such a scheme should reflect the well-known concept of ‘just compensation’, and provide for mediated or arbitrated outcomes.’
• ‘Even without an appropriate compulsory compensation/acquisition scheme, the $200 million set aside by the Commonwealth Government for constraint removal is likely to be inadequate.’

Water Resource Plans

One of the terms of reference for the Royal Commission was to investigate the progress of Basin States (New South Wales, Victoria, the ACT, Queensland and South Australia) in preparing Water Resource Plans (WRPs).

WRPs are the plans by which Basin States say that they will achieve the SDLs. The states prepare WRPs for individual catchments, which are submitted for federal approval.

What progress have the Basin States made in relation to the preparation of WRPs over the past six years, given WRPs must be in place by 1 July 2019?

The Commissioner found:

• ‘It is a matter of lively concern that two Basin States [Victoria and New South Wales] should be perceived by the MDBA to have displayed a lack of full commitment to a process that is required by law and is so fundamental to the success of the Water Act and Basin Plan.’
• ‘A primary concern is that WRPs will be required by the Basin Plan to implement SDLs that do not reflect ESLTs determined in accordance with either the requirements of the Water Act or the best available science…’
• ‘WRPs have been delayed as a result of a lack of commitment to the Basin Plan by the States of Victoria and New South Wales, and by a lack of proper resourcing. New South Wales has, in particular, suffered from staff turnover and departmental restructuring.’

Where to next?

The Report constitutes the most comprehensive analysis to date in relation to the Murray-Darling Basin Plan. The question now is what weight will law and policy makers, and the MDBA, give to the recommendations and findings? Some have already suggested the Royal Commission’s findings have fallen on deaf ears.

In my opinion, it may take a Federal Royal Commission for the recommendations and findings of the Royal Commission to drive change. Not because the South Australian Royal Commission was inadequate; to the contrary, the Royal Commission seems to have conducted itself with rigour and integrity.

Rather, it may be that a Federal Royal Commission is needed to ensure meaningful engagement by each of the Basin States and the Commonwealth in the Royal Commission process and its outcomes.

The MDBA’s response to the Royal Commission, which broadly rejects its criticisms, can be found here.

Read all our Murray-Darling Basin coverage here.

Dr Joseph Monaghan is a planning and environmental law partner at Holding Redlich solicitors. In 2017 he was awarded his doctoral degree in law for his thesis titled ‘Law and policy of the Murray-Darling Basin’.

[i] All quotes are taken from the South Australian Murray-Darling Basin Royal Commission Report (2019).

[ii] See for example G Williams and P Kildea, ‘The Water Act and the Murray-Darling Basin Plan’ (2011) 22 Public Law Review 9, 13. See also Australian Network of Environment Defenders Offices, Submission to Senate Standing Committee on Legal and Constitutional Affairs, Inquiry into Provisions of the Water Act 2007, March 2011.