BY ADAM WEBSTER

At the end of April, the South Australian Royal Commission into the Murray-Darling Basin released its second issues paper. The issues paper focuses on the legal construction of the Water Act 2007 (Cth) and calls into question the approach taken by the Murray-Darling Basin Authority in determining the amount of water that must be recovered in order to achieve an environmentally sustainable level of take from the Basin. The Royal Commission has effectively provided any future litigant with a ‘roadmap’ for a legal challenge to the Basin Plan.

A ‘blue print’ for a legal challenge

The Murray-Darling Basin Authority must prepare a Basin Plan. The Basin Plan must include the ‘maximum long-term annual average quantities of water that can be taken, on a sustainable basis, from the Basin water resources as a whole’ (Water Act 2007 (Cth) s 22, item 6). A long-term average sustainable diversion limit must reflect an environmentally sustainable level of take (Water Act 2007 (Cth) s 23).

The question raised in the Royal Commission’s issues paper is: what factors must be taken into account in determining the ‘environmentally sustainable level of take’ (ESLT) from the Basin? This is obviously important as it informs the determination of long-term average sustainable diversion limit for the Basin and the amount of water that is recovered for the environment.

In the issues paper the Royal Commissioner, Bret Walker SC, makes the argument that ‘the Water Act, properly defined, requires environmental considerations to be paramount, and that economic and social outcomes are irrelevant to the determination of the ESLT.’  The Commissioner reaches the conclusion that the proper construction of the Act requires the ESLT to be determined ‘solely on the basis of environmental criteria’. Social and economic outcomes should be optimised within the Basin Plan only after setting the ESLT and are not relevant to determining the ESLT.

The Commissioner’s construction of the Water Act is not the approach that has been taken by the Murray-Darling Basin Authority (MDBA). The MDBA has taken a ‘triple bottom line’ approach – ‘seeking equal environmental, social and economic outcomes’ – in the development of the Basin Plan. The MDBA’s triple bottom line approach is supported by legal advice from the Australian Government Solicitor.

If Walker’s analysis of the process for determining the ESLT of take is correct, it would have implications for how much water is required to be recovered for the environment (currently 2,750GL per year), and would presumably require an increase in the volume of water recovered for the environment because any social and economic outcomes currently taken into account would need to be disregarded.  As Walker notes, the MDBA’s 2010 ‘Guide to the Basin Plan’ advised that somewhere between 3,000GL and 7,600GL per year needs to be recovered in order to achieve an environmentally sustainable level of take based solely on environmental concerns. The Commissioner’s analysis of the proper construction of the Water Act also has implications for the Commonwealth Government’s recent attempts – which Labor indicated last week it would support – to reduce the water recovered for the environment by a further 70GL. This further reduction might also be inconsistent with the Commissioner’s construction.

The statutory construction question raised by the Commissioner has been identified previously, as he acknowledges in the paper. The issue was raised in parliamentary submissions by Professor George Williams and Dr Paul Kildea, and the Australian Network of Environmental Defender’s Offices in 2011. Anita Foerster of the Melbourne Law School has also written in detail on this issue.

While there has been an unsuccessful challenge to the Water Act by irrigators on constitutional grounds, the statutory construction point made by the Commissioner has not been put before a court. One can appreciate that irrigators would be unlikely to use Walker’s argument to mount a legal challenge to the allocation of water by the MDBA, as if the Commissioner is correct, it could lead to more water being recovered for the environment and therefore even less water for irrigators.

If the South Australian Government wanted legal advice on the proper construction of the Water Act, why not just brief legal counsel to provide an opinion? Providing the Royal Commissioner with such broad terms of reference to examine ‘any legislative or other impediments to achieving any of the objects and purposes of the Act and Basin Plan’ has the result that the Commissioner examines the legal issues in public and the Government loses any benefit of keeping this legal advice confidential. On the other hand, while there might be good legal reasons for wanting such legal advice kept confidential, there might be strong political reasons for wanting this made public – keeping the Commonwealth second-guessing as to what action South Australia might take next. At first glance, the idea of the Royal Commissioner providing South Australia with a template to challenge the allocation of water under the Water Act might seem strange. However, viewed in the context of the history of South Australia’s battle over the waters of the River Murray, it looks much more like history repeating itself.

South Australia’s 130-year battle over the Murray

The current tensions between South Australia, the Commonwealth and the upstream states are nothing new. This is not the first time that South Australia has held a Royal Commission into the use of the waters of the River Murray. Furthermore, it is not the first time that a Royal Commission has examined some of the key legal issues surrounding the regulation of the waters of the Murray-Darling Basin.

As early as 1887, the South Australian Government appointed a Royal Commission to investigate:

the questions of utilising the waters of the River Murray for irrigation purposes, and the preservation of the navigation and water rights of this province in the river; and, for that purpose, to confer and consult with any Commission appointed, or to be appointed, by the Governments of New South Wales and Victoria on the same subject.

One of the key legal issues for the 1887 Royal Commission was whether s 5 of the New South Wales Constitution Act 1855 (Imp) – which defined the boundary between New South Wales and Victoria and placed the River Murray within the territory of New South Wales – granted New South Wales a right to the waters of the River. The 1887 Royal Commission did not produce any detailed legal analysis of this issue, but did spend some time considering this and other key legal issues. The 1887 Royal Commissioners became aware that the Attorney-General, Charles Kingston, had sought legal opinions from the South Australian Crown Solicitor, Charles Mann, as well as prominent Adelaide lawyers John Downer and Josiah Symon. These legal opinions were made available to the Royal Commissioners, who considered whether the South Australian Government should petition the Imperial Government to resolve the uncertainty over the colonies’ rights to access the waters of the Murray.

These technical legal issues were swept to one side with the Australasian Federal Conventions in Adelaide and Melbourne and the drafting of the Australian Constitution. It was hoped that the drafting of the Australian Constitution would provide an opportunity to resolve any legal and political differences. Alas, despite much time being spent during the Convention debates concerning the distribution of water from the Murray between the states, no provision was made in the Constitution. Nevertheless, South Australians still held out hope that Federation, establishment of the Commonwealth Government, and the creation of the High Court, might assist in settling the disputes over the waters of the Murray.

In 1902, the Premiers of New South Wales, South Australia and Victoria agreed to establish a joint Royal Commission to examine the issues surrounding the allocation of water from the River Murray. On 7 May 1902 three Commissioners – one from each State – were appointed

to make a diligent and full enquiry concerning the Conservation and Distribution of the Waters of the River Murray and its Tributaries for the purposes of Irrigation, Navigation, and Water Supply, and to report as to the just allotment of the waters of the Murray basin to the use of each State.

While none of the three Commissioners were lawyers, seven leading legal scholars gave detailed evidence on the legal issues surrounding the regulation of the waters of the Murray-Darling Basin. In 1906, South Australia sought further legal advice, briefing Victorian Isaac Isaacs and South Australian Josiah Symon and Patrick Glynn. While much time and effort was put into understanding the legal issues, the dispute was resolved by negotiation and the River Murray Waters Agreement was signed in 1914.

Over the past 130 years South Australian Governments and Royal Commissions have, on a number of occasions, examined the legal issues in relation to the sharing of the waters of the Murray-Darling Basin. There have also been numerous threats by the South Australian Government to test these legal arguments before the courts. However, despite these threats, the tensions amongst the states and between the states and the Commonwealth over the Murray-Darling Basin have always been resolved by political agreement. While the South Australia Government has been quick to examine and assert its legal rights, the state has been more cautious in litigating these issues.

South Australia: Legally, Politically and Geographically Challenged

Law, politics and geography places South Australia in a difficult negotiating position.

Unlike in the United States, Australian courts have not had to address the question of whether states have a legal right to a share of the water from a river that flows through that state. (This question has been examined in the academic literature, but never been put before an Australia court.) As a result, South Australia has no ‘fall back’ legal position.

Challenging the proper construction of the Water Act is also not without its political risks. There is also the chance that reopening the negotiation for the Basin Plan could leave South Australia in an even worse position. This is a real possibility, given that the current Commonwealth Government has shown a desire to reduce the volume of water recovered for the environment.

And as the downstream state, not being able to assert a legal right or secure a political deal leaves South Australia in a weak position geographically – as history shows, it is then at the mercy of the upstream states.

While the former South Australian Premier Jay Weatherill seemed willing to confront some of these legal and political challenges, the change in government at the South Australian election makes it less likely that the State will use the Commissioner’s ‘blue print’ to challenge the Basin Plan. It has been reported that the new Liberal Government might scale back the terms of reference of the Royal Commission at the request of the Federal Government.

Sadly, the history of the Murray-Darling Basin dispute tells us we might have to wait until the next extreme drought event before governments seriously turn their mind to addressed the long-term environmental sustainability of the Basin.

 

Adam Webster is a Departmental Lecturer in Law and Public Policy and Co-Director of the Master of Public Policy Program at the Blavatnik School of Government, University of Oxford.

Suggested citation:  Adam Webster, ‘South Australia’s Royal Commission provides ‘blue print’ to challenge Basin Plan’ on AUSPUBLAW  (21 May 2018) <https://auspublaw.org/2018/05/south-australias-royal-commission/>