The Water Management Amendment Act 2014 (NSW) was passed without amendment on 17 September 2014 and contains some important changes to how water is accessed and licensed in NSW. The amendments are intended to ease the regulatory burden on water users and assist the Government to meet challenges in managing the State’s water resources that have arisen in recent years. The changes introduce a number of philosophical changes in the approach to regulating water, including compensation for licence holders of flood plain licences where the licensed water allocation is either reduced or cancelled. Water allocations under water sharing plans for regulated rivers will also no longer be based on the worst drought on record.
The other key changes are:
- defining “overland flow water”
- the expansions of harvestable rights and creation of floodplain harvesting access licenses
- providing increased certainty for holders of supplementary water licenses
- the creation of “term water allocation transfers”.
Overland flow water
Water flowing over the ground that is not within a river, lake or estuary or collected from a roof is now defined as “overland flow water” and is included within the definition of “water source”. This will ensure consistent terminology is used across the legislative framework for water regulation. Overland flow water is included within the State’s water rights which are vested in the Crown. This means that the Crown holds the rights to the control, use and flow of overland flow water.
Under the Water Management Act 2000 (NSW), rural landholders are able to construct and use dams to capture and store rainwater run-off in accordance with harvestable rights orders issued by the Minister under the Act. The harvestable rights amendments expands this entitlement and enables other kinds of works to be constructed and used to capture harvestable rights water. Maps referred to in harvestable rights orders issued by the Minister will be made available online.
Two new categories of access licences have been created for the harvesting of water flowing across a floodplain, being for regulated rivers and for unregulated rivers. The amendments to the Act enable the regulations to provide for matters relating to these new licence categories including defining the circumstances where existing floodplain harvesting activities will be converted into a licence, and the terms and conditions. Compensation rights have now been made available through the amendments to holders of floodplain licences. This means that where the licensed water allocation is either reduced or cancelled, the licence holder will be entitled to compensation for that loss.
Supplementary water licences
Under the Water Management Act, supplementary water licences entitle the licence holder to shares of water from a regulated river. Prior to the amendments to the Act, where a water management plan no longer made provision for the extraction of water under that licence the Minster was previously required to cancel a supplementary water licence. Interestingly, unlike the holders of most other commercial licence types, holders of supplementary water licences in regulated rivers were not entitled to compensation in the event their allocations were reduced or cancelled in the event of a change to a water management plan.
The amendments to the Act makes the tenure of supplementary water licences in a regulated river perpetual and affords compensation rights to their holders. However, these amendments do not extend to supplementary water licences in groundwater sources, due to a general phasing out of these licences in an effort to reduce total entitlements.
These changes are intended to deliver greater certainty for irrigators, allowing them to plan for the future of their business enterprises in the longer term.
Term water allocation transfer
The NSW Office of Water each year makes water allocations which state how much of their water entitlement a licence holder may take from a water source over the next year. The amendment to the Act enables water licence holders to trade their water allocations for up to ten years in advance, called a “term water allocation transfer”. The purchaser of the water allocations will be entitled to have the use of all or part of the seller’s water allocation for the term of the trade. Previously, the Act only allowed for trades of water allocations one year in advance.
Water sharing plans
Previously, regulated river water sharing plans required that water be set aside within a storage reserve, such as a dam, to ensure entire or near entire water allocations to high-security licences in regulated rivers are available should there be a repeat of the worst drought on record. This rule was created prior to the recent ‘millennium drought’. This drought saw water allocations being granted in excess of water availability and resulted in high-security licence holders suffering reduced allocations and environmental water provisions being suspended. Notably, the inclusion of the millennium drought data in water sharing plans would result in significant quantities of water being withdrawn from regulated rivers and held in storage in case a drought of equivalent severity occurs again.
The wash up
The amendments to the Act effectively ensure that the millennium drought data is ignored for the purposes of determining the size of storage reserves. Instead, data relating to the worst drought prior to the commencement of the water sharing plan will continue to be used. This is intended to ensure that water shares are allocated between high-security licences and general security licences, and the environment, as decided when the water sharing plans were first established.
Joshua Same, Senior Associate
Jessica Mort, Lawyer