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Australia – Victoria’s New Water Law: Exposure Draft Released.

11 February, 2014

 

Legal News & Analysis – Asia Pacific – Australia – Environment 

 

WHAT YOU NEED TO KNOW

 

  • The Victorian Government recently released the exposure draft of a new Water Bill to replace the current Water Act 1989 (Vic) and the Water Industry Act 1994 (Vic). The Victorian Government plans to introduce the Bill into Parliament this year, with a proposed commencement date of 1 January 2016.
  • The majority of the draft Bill is a restatement and reordering of existing provisions and the overall structure of the water industry remains the same. However, there are some welcome clarifications and subtle shifts in focus for water management.
  • Of note, new licensing requirements will apply to future forestry plantations of a certain size in declared areas. Clarified rights to stormwater in public pipes and drains are intended to encourage greater investment in projects that harvest and use stormwater.
  • A modernised enforcement “toolbox” will give water authorities greater flexibility to enforce water laws, including drought-related measures.

 
WHAT YOU NEED TO DO

 

  • Interested parties are invited to make submissions until 5pm, Friday 14 February 2014.

 

Introduction

 
The draft Water Bill is the result of an extensive review of the current legislative framework and implements aspects of the Government’s Living Victoria policy and Melbourne’s Water Future strategy.

 
The majority of the draft Water Bill is a restatement and reordering of existing provisions and the overall structure of the water industry remains the same. In particular, the major players remain the same: rural and metropolitan water corporations, catchment management authorities and the Victorian Environmental Water Holder retain essentially the same powers and functions as under existing law. The draft Bill also modernises some provisions and brings them into line with current drafting practices.

 
Having said this, the devil is always in the detail and there are some welcome clarifications and subtle shifts in focus for water management.


Water Resource Management

 
Whole Of Water Cycle Management Approach

 
Reflecting a more holistic approach to water management, a key change to water management under the draft Bill is a new emphasis on whole of water cycle management. This is reflected in the proposed inclusion of the promotion of whole of water cycle management in the objects of the Bill and as an objective of water corporations when performing their functions. The Minister will also be able to require the preparation by water corporations of whole of water lifecycle management strategies and plans.

 
Water Resource Management Orders

 
A second key change is the replacement of a number of water instruments with a single instrument, a water resource management order (WRMO). This reform will provide greater transparency and make it much easier to determine the rules applying in an area.

 
WRMOs will contain all of the management arrangements for a particular area, such as a river basin or large water supply system, and will set out all relevant rules applying to that area. Notably, WRMOs could prohibit the issue of new entitlements when required to meet caps on entitlement volumes. During a declared water shortage, the Minister will be able to alter system management rules contained in WRMOs to give effect to temporary drought-relief measures.

 
It is intended that when existing entitlements are transferred into the new WRMOs that they will be retained, unaffected. This will include environmental entitlements held by the Victorian Environmental Water Holder. But in a further step to simplify water instruments, future environmental entitlements will be issued as bulk entitlements.

 
Long-Term Management Of Water

 
A further change to water management is to introduce a two-step process to identify and manage long-term risks to water resources.

 

  • Step one: at least every 15 years, a regional resource assessment of the health of the region’s water resources will be undertaken to identify significant issues and proposed responses. The assessment will be guided by a panel of experts and will be open for public input.

 

  • Step two: if the expert panel guiding the regional resource assessment (Step one) identifies significant issues and recommends a strategic review be undertaken, the Minister must initiate a strategic review to examine the options available to address the issues identified. These options could be changes to policy or system management rules, or other actions to improve the health of water resources. Notably, this process could result in the permanent adjustment (reduction) of entitlements. The Minister may also initiate a strategic review at any time. This process will be guided by a committee representing affected interests.

 
This two-step process will replace the current regional sustainable water strategies and 15-year state-wide review of entitlements under the Water Act 1989 (Vic). The new process is intended to be less resource intensive than previously, particularly given that there has been an intensive level of water management review and reform in the last 20 years.


Rights In Relation To Water

 
The draft Bill largely reproduces existing statutory rights to water contained in the Water Act 1989 (Vic) but tinkers at the edges of some rights and clarifies others. The result is a continuation of efforts over many years to codify common law riparian rights and to clarify the scope of statutory rights. The right of traditional owner groups to take water under the Traditional Owner Settlement Act 2010 (Vic) is maintained.

 
The Right To Take Water For Domestic And Stock Purposes

 
Of note, the statutory right to take water for “domestic and stock purposes”, without charge or any requirement to hold a licence, currently contained in section 8 of the Water Act 1989 (Vic) has been modified.

 
“Domestic and stock use” of water is to be redefined under the new provisions as the reasonable use of water for:

 

  • household purposes;
  • watering of animals kept as pets;
  • watering of livestock; and
  • watering an area, not exceeding 1.2 hectares, around a house,

 
but does not include use for dairies, piggeries, feed lots, poultry, aquaculture or any other intensive or commercial use, or watering commercial plantings.

 
While the new definition of “domestic and stock purposes” clarifies some existing uncertainties, because it refers to a “reasonable” use for the listed purposes there is still room for interpretation. To limit this, the draft Bill gives the Minister power to prescribe an upper limit for use of water for watering around a house and for watering livestock.

 
In addition, proposed changes to the wording of the current section 8(1)(a) right to take water for domestic and stock purposes from a waterway to which a person has access “by a public road or public reserve” – the latter to be changed to “Crown land” – will mean that the right will apply to much more land across the State than currently, perhaps unintentionally.

 
Rights To Stormwater

 
The draft Water Bill introduces a number of new provisions relating to rights to stormwater, intended to clarify the current mix of common law and statutory rights. The Victorian Government hopes that these provisions will encourage greater investment in projects that harvest and use stormwater thereby reducing potable water use in appropriate circumstances.

 

The draft Bill confirms the Crown’s right to the use, flow and control of all water in stormwater works (public pipes and drains), and will extend the current right of a water corporation to take and use stormwater in its stormwater works to all local councils in respect of stormwater in their stormwater works. Where there is demand for stormwater, the Minister can specify a “local stormwater area” through a WRMO. Once an area is specified, a take and use licence will be required to take water from stormwater works of a council. Outside such areas, councils will be able to supply a third party with stormwater from its works by agreement.

 
The right to collect and use (for any purpose) rainwater falling on a person’s roof is not affected by the new provisions.


New And Clarified Water Licencing Requirements

 
The draft Water Bill retains the bulk of the current system for allocating rights to take and use water, but in a number of areas seeks to clarify, simplify and increase the flexibility of these processes. Significantly, several new proposals have been included in the draft Water Bill in order to fully account for and manage interceptions of water and losses due to evaporations of water across water systems. These proposed provisions implement the requirements of the Murray-Darling Basin Plan to account for all uses and activities that intercept water. They include new requirements applicable to certain new forestry plantations and extending take and use licence requirements to aesthetic dams. The new requirements for forestry plantations are of particular interest.

 
New Requirements For New Forestry Plantations

 
New controls are proposed for new forestry plantations of a certain size (generally greater than 20 ha) in “declared plantation areas” in recognition of the need to account for the amount of water intercepted by forestry plantations.1 Plantation managers will need to obtain a take and use water licence and/or an offset area approval to account for the “additional” water intercepted by the new plantation. The additional water intercepted will be calculated only in relation to the area of forest plantation that exceeds the allowable plantation area according to a method provided in Regulations (yet to be drafted).

 

The concept of an offset area approval, while new in this context, draws on instruments used in other natural resource management contexts. The idea is that a forest manager can choose to offset all or some of the new forest’s additional water use by returning other forested land to a non-forest use with a lower water use, and maintaining it as such.

 
It will be an offence to plant a forest in a declared plantation area in excess of the allowable plantation area without having the required take and use licence and/or offset area approval in place. If the water system affected has reached its cap on entitlements, water may need to be traded to provide for new plantations. Applications for take and use licences for new forests will be dealt with in the same manner as for other uses, such as irrigation.

 
All landowners can plant up to the allowable plantation area without having to meet the new requirements and existing plantations will not be affected.


Powers Of Water Corporations

 
Most of the powers and functions of water corporations remain unchanged in the draft Bill. Notably, however, water corporations that have water supply, irrigation or bulk water supply functions will gain new powers in relation to declared “special water supply catchment areas”. These additional powers will enable water corporations to put into place plans for declared areas in order to protect potable water supplies for which they have responsibility, thereby filling a gap in the current legislative framework. Currently, these powers are only exercisable by catchment management authorities under the Catchment and Land Protection Act 1994 (Vic).

 
Some additional conditions on the right of entry onto private land will be introduced by the draft Bill. An enhanced notion of consent, “informed consent”, is proposed for entry onto land by an officer or authorised person in certain circumstances, for example entry onto residential land without having served 7 days’ notice. The “informed consent” provisions will require the officer or authorised person concerned to produce an ID card, fully explain the
purpose of entry and complete specified paperwork which the occupier of land must also sign before entry will be lawful. All officers entering land will be required to carry identification.

 
Where entry to private land is for the installation or construction of works (excluding sewerage works and property connection works), a water corporation will need to acquire:

 

  • an interest in the land, for example an easement; or
  • an access agreement which will be registered on title; or
  • the landowner’s agreement in writing to locate the works on or under their land.

 
In relation to entry for investigative purposes, only authorised water officers – trained and formally appointed – will be able to inspect and investigate compliance with the Act and Regulations.

 
These changes are intended to better balance the rights of landowners and the functional requirements of water corporations.


Contemporary Compliance And Enforcement Regime

 
The draft Water Bill also provides an updated and enhanced enforcement regime intended to better reflect the greater value that the community places on water and to allow water corporations more enforcement options. The new enforcement “toolbox” will include:

 

  • Required works notices – this replaces the current notice of contravention but will be more limited in its applicability. The relevant offences will be listed in Regulations (not yet drafted);
  • Remedial action notices – these require a person to “make good” or repair damage caused by unauthorised actions where there is a risk to the availability of water, neighbouring properties, the environment or public health and safety, or water infrastructure. These notices will be subject to review by VCAT;
  • Penalty Infringement Notices (PINs) for specified offences – PINs impose fines for relatively minor infringements and are similar to traffic fines. It is intended that they will be available for a wider range of situations than at present, as set out in Regulations (not yet drafted). We would expect to see PINs used on a regular basis for matters such as breach of water restrictions.

 
Existing powers to cancel, revoke or suspend the relevant licence and to reduce, restrict or discontinue water supply will be retained. The draft Bill contains new provisions for evidence collection and investigations.

 
The draft Bill introduces some new offences and streamlines others. In particular, the draft Bill proposed a new offence of discharging of trade waste in breach of a consent which will include breach of any conditions of a trade waste consent or breach of a trade waste agreement that is part of a consent. In addition, a new offence of entry into a closed catchment without the relevant water corporation’s written consent is proposed.

 

Increased Role For Regulations – No Role For By-Laws

 
The draft Water Bill proposes that a range of matters will be covered by Regulations. Because no draft Regulations have yet been made available publicly, at this stage of the process it is difficult to assess accurately the full impact of the changes proposed. Indeed, given the extensive list of matters that are to be dealt with by Regulation, one has to question
whether the Department will be able to develop sufficient Regulations within a reasonable time to enable the new Act to become fully operational by 1 January 2016, as anticipated. This may cause difficulties for water authorities carrying out their functions.

 
In addition, the new regime does not appear to contemplate continued use of water corporation-made by-laws. Instead, water corporations will have to rely on the Department to push Regulations through the legislative process.

 

Submissions

 
Interested parties are invited to make submissions until 5pm, Friday 14 February 2014.

 

End Notes:

 

1 The only areas currently being considered for declaration are: Crawford River catchment; Stokes River catchment; and Glenelg Water Supply Protection Area (particularly around Lake Mundi).

 

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For further information, please contact:

 

Robert Jamieson, Partner, Ashurst
robert.jamieson@ashurst.com

 
Meredith Gibbs, Ashurst
meredith.gibbs@ashurst.com

 
Sandford Clark, Ashurst
sandford.clark@ashurst.com


Ashurst Environment Practice Profile in Australia 

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