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Water Rights Arrangements in Australia and Overseas, Commission Research Paper, Productivity Commission, Melbourne

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Water Rights Arrangements in Australia and Overseas, Commission Research Paper, Productivity Commission, Melbourne :DWHU5LJKWV $UUDQJHPHQWVLQ $XVWUDOLDDQG &RPPLVVLRQ 2YHUVHDV 5HVHDUFK3DSHU Under Embargo until 1am, Friday 11 July 2003 Commonwealth of Australia 2003 ISBN 1 74037 131 3 This work is subject to copyright. Apart from any use as permitted under the Copyright Act 1968, the work may be reproduced in whole or in part for study or training purposes, subject to the inclusion of an acknowledgment of the source. Reproduction for commercial use or sale requires prior written permission from the Department of Communications, IT and the Arts. Requests and inquiries concerning reproduction and rights should be addressed to the Commonwealth Copyright Administration, Intellectual Property Branch, Department of Communications, IT and the Arts, GPO Box 2154, Canberra ACT 2601. This publication is available in hard copy or PDF format from the Productivity Commission website at www.pc.gov.au. If you require part or all of this publication in a different format, please contact Media and Publications (see below). Publications Inquiries: Media and Publications Productivity Commission Locked Bag 2 Collins Street East Melbourne VIC 8003 Tel: (03) 9653 2244 Fax: (03) 9653 2303 Email: [email protected] General Inquiries: Tel: (03) 9653 2100 or (02) 6240 3200 An appropriate citation for this paper is: Productivity Commission 2003, Water Rights Arrangements in Australia and Overseas, Commission Research Paper, Productivity Commission, Melbourne. The Productivity Commission The Productivity Commission, an independent Commonwealth agency, is the Government’s principal review and advisory body on microeconomic policy and regulation. It conducts public inquiries and research into a broad range of economic and social issues affecting the welfare of Australians. The Commission’s independence is underpinned by an Act of Parliament. Its processes and outputs are open to public scrutiny and are driven by concern for the wellbeing of the community as a whole. Information on the Productivity Commission, its publications and its current work program can be found on the World Wide Web at www.pc.gov.au or by contacting Media and Publications on (03) 9653 2244. Foreword This study is part of the Commission’s program of benchmarking the performance of economic infrastructure industries. It follows an earlier review of the arrangements for setting drinking water quality standards. The present study compares the legal, organisational and regulatory arrangements for managing water rights, against accepted best practice principles. Governments in Australia and overseas have been undertaking significant reforms to the institutions and processes for allocating and pricing water. In Australia, change has been encouraged by the Council of Australian Governments’ Water Reform Framework, motivated by the need to ensure the long-term sustainability of both the water sector and the environment. This study reveals significant differences among the benchmarked jurisdictions in the way that water rights are defined, allocated, regulated and administered. In some jurisdictions, water rights are the personal property of water users; in others, they are vested in the State. Such differences have implications for both the management of water rights and the efficiency of resource allocation. Research for this study was undertaken within the Economic Infrastructure Branch, under the guidance of Commissioner Neil Byron. The Commission was assisted by many organisations and individuals, both in gathering the information for the study and reviewing the findings. The Commission is grateful for the advice and assistance provided by government and industry bodies. Further feedback from readers would be welcome. Gary Banks Chairman October 2003 FOREWORD III Contents Contents v Abbreviations viii Overview xiii 1 Introduction 1 1.1 The study 1 1.2 Processes 5 1.3 Report structure 5 1.4 Terminology 7 2 The water sector 9 2.1 The water cycle 10 2.2 Water supplies 10 2.3 Water use 17 2.4 Water and land impacts 24 2.5 Economics of water use 30 2.6 In summary 36 3 Legal framework 39 3.1 Evolution of water law 39 3.2 Current legislative framework 44 3.3 Water rights 49 3.4 Inter-jurisdictional arrangements 64 3.5 In summary 64 Attachment 3A: 67 CONTENTS V 4 Organisations involved in the water rights system 73 4.1 Overview of organisations 73 4.2 Coordination of resource management 80 4.3 Separation of functions 83 4.4 Reporting requirements 87 4.5 Resourcing 91 4.6 In summary 91 5 Definition of water rights 93 5.1 Universality 95 5.2 Predictability of volume and enforceability 98 5.3 Certainty of title 102 5.4 Duration 104 5.5 Exclusivity 106 5.6 Detached from land title and use restrictions 111 5.7 Divisibility and transferability 112 5.8 In summary 113 Attachment 5A: 116 6 Government involvement in water allocation 135 6.1 Acquisition programs 137 6.2 Resource plans 139 6.3 Inter-jurisdictional arrangements 140 6.4 Agencies 142 6.5 Processes 145 6.6 In summary 155 Attachment 6A: 158 Attachment 6B: 181 7 Administering water rights 183 7.1 Organisations 183 7.2 Functions 189 7.3 Comparisons 193 7.4 In summary 202 Attachment 7A: 204 VI CONTENTS 8 Distribution management 219 8.1 Distributors and their reporting requirements 219 8.2 Water accounting 221 8.3 Water distribution 235 8.4 In summary 242 Attachment 8A: 244 9 Pricing 251 9.1 Pricing infrastructure services 252 9.2 Pricing conveyancy losses 260 9.3 Pricing water rights management 260 9.4 Pricing environmental third-party effects 261 9.5 In summary 263 Attachment 9A: 265 10 Monitoring and enforcement 269 10.1 Enforcement agencies 269 10.2 Monitoring procedures 276 10.3 Enforcement procedures 288 10.4 In summary 292 Attachment 10A: 295 A Participants 307 Glossary 311 References 321 CONTENTS VII Abbreviations ABARE Australian Bureau of Agricultural and Resource Economics ABS Australian Bureau of Statistics ACT Australian Capital Territory ACTEW Australian Capital Territory Electricity and Water AF Acre-feet ANAO Australian National Audit Office AOP Annual Operating Plan ARMCANZ Agriculture and Resource Ministerial Council of Australia and New Zealand BoM Bureau of Meteorology BoR (US) Bureau of Reclamation (United States) CBDA California Bay–Delta Authority CES Cooperative Extension Service CMA Catchment Management Agency CNA Comisión Nacional del Agua, National Water Commission (Mexico) CNR Comisión Nacional de Riego, National Irrigation Commission (Chile) CoAG Council of Australian Governments CONAMA Comisión Nacional del Medio Ambiente, National Commission for the Environment (Chile) CPA Catastro Público de Aguas, Public Water Cadastre (Chile) CRP (Queensland) Community Reference Panel CSIRO Commonwealth Scientific and Industrial Research Organisation CSO Community Service Obligation VIII ABBREVIATIONS CVPIA Central Valley Project Improvement Act 1992 (United States) CWMB Catchment Water Management Board (South Australia) DEAT Department of Environmental Affairs and Tourism (South Africa) DGA Direccion General de Aguas, Directorate General of Water (Chile) DLA Department of Local Affairs (Colorado) DSD Department of Social Development (South Africa) DSE Department of Sustainability and Environment DIPNR Department of Infrastructure, Planning and Natural Resources (NSW) DWAF Department of Water Affairs and Forestry (South Africa) DWLBC Department of Water, Land and Biodiversity Conservation (South Australia) DWR Department of Water Resources (California) ECs Electrical Conductivity units EIA Environmental Impact Assessment EPA Environment Protection Authority EPA (California) Environmental Protection Agency (California) ESCAP (UN) Economic and Social Commission for Asia and the Pacific (United Nations) ESD Ecologically Sustainable Development ESDSC Ecologically Sustainable Development Steering Committee EWA Environmental Water Allocation F&WS Fish and Wildlife Service (United States) GL Gigalitre GPRA Government Performance Results Act 1993 (United States) HIZ High Impact Zone HLSGW High Level Steering Group on Water IAC Industries Assistance Commission ABBREVIATIONS IX IACSEA Independent Advisory Committee on Socio-Economic Analysis IAG Independent Audit Group IBWC International Boundary and Water Commission IC Industry Commission ICM Integrated Catchment Management IDMP Irrigation Drainage Management Plan ISF In-stream flow LAO Legislative Analyst’s Office (California) LIZ Low Impact Zone LWMP Land and Water Management Plan MAF Million Acre-Feet MDA Murray–Darling Association MDBA Murray–Darling Basin Agreement MDBC Murray–Darling Basin Commission MDBMC Murray–Darling Basin Ministerial Council ML Megalitre mm millimetre NCC National Competition Council NCWCD Northern Colorado Water Conservancy District NHT National Heritage Trust NLWRA National Land and Water Resources Audit NR&M Department of Natural Resources and Mines (Queensland) NRC National Research Council Water Science and Technology Board, Committee on Western Water Management NTUs Nephelometric Turbidity Units OECD Organisation for Economic Cooperation and Development OSE Office of the State Engineer (Colorado) PC Productivity Commission QCA Queensland Competition Authority RIS Regulatory Impact Statement X ABBREVIATIONS ROL Resource Operations Licence ROP Resource Operations Plan RWA Rural Water Authority SCA Sydney Catchment Authority SCEH Standing Committee on Environment and Heritage SoI Secretary of the Interior (United States) SWC Sydney Water Corporation SWRCB State Water Resources Control Board (California) TER Tax equivalent regime UCRC Upper Colorado River Commission UMN
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