NSWIC Monthly Update NEW SOUTH WALES IRRIGATORS’ COUNCIL October 2013 Thank you for agreeing to receive our monthly update. We appreciate you taking the time to keep abreast of what NSWIC is doing to represent Water Access License holders in NSW. This electronic bulletin is a collation of our weekly updates which are sent to our Member organisations. If you would like more details about your local Member of NSWIC, please don't hesitate to contact us. Basin Plan Related Recommitting to Buyback Cap A win! Or, at very least a reaffirmation of a previous win. You'll recall that then Opposition Leader and now Prime Minister, Tony Abbott, wrote to NSWIC last year committing to cap buybacks at 1,500 gigalitres. We distributed that letter far and wide to make certain it couldn't be walked away from. Parliamentary Secretary to the Minister for the Environment (the bloke in charge of water), Senator Simon Birmingham, gave his first interview in the role to Lauren Wilson from The Australian. In the article, published on Thursday (10 Oct) and available here, he again committed to the buyback cap. This time, of course, the commitment is from the Government - and hence has practical implications. We issued a media release (here) calling it a "great result". Well done to all who were involved in securing this commitment in the first instance. It's always good to see a real, material outcome after such a prolonged engagement. Constraints Management Strategy The Murray-Darling Basin Authority released its draft Constraints Management Strategy (available here). It doesn't provide solutions (and probably wasn't designed to) but rather identifies both physical and rules-based constraints that need to be "further investigated". It isn't often that we call the MDBA to give them a heads up about a media release that we're issuing. In this instance, we did - to explain to them that yes, we understand their role and, no, there probably isn't much else they could have done. The MDBA were tasked as part of the Basin Plan process with writing this report. It is therefore incumbent on them to identify which rules make delivery of their ideal environmental outcomes difficult or impossible. We wanted to let them know that we were aware of that, but also to make it very clear that changes to fundamental rules isn't something that we'll willingly embrace. So whilst their Strategy merely identifies the rules, our response takes it one step further to say that identification is paramount to suggesting change that won't be countenanced. We needed to stake our position immediately on this issue - so this pre-emptive step is a tactic to position ourselves such that adverse rule changes are identified in Canberra as something that will be difficult to achieve. You can access our release here. Despite our courteous approach to the Authority on the matter, a video appeared on their website (here) in which Chairman Craig Knowles decries the "media clips" that he's been reading saying that some of the responses to the CMS are "simply not true". Note that we were not advised of the intent to place the video prior to it being publicly available nor was it the MDBA that alerted us to it. He says the aim of the document is "merely to start a conversation". (Of course, the last time a "conversation" was started was in 2007 - and we ended up with a Basin Plan.) What that statement clearly misses is that such a discussion - led by regulatory authorities - has massive implications for the market. How can confidence been instilled in the market when the entity responsible for the Water Trading Rules is "starting a discussion" about the fundamental rules governing that market...? MDBA "Engagement" Following on with the Constraints Management Strategy, we advised that we'd attempted a more cordial engagement with the MDBA by contacting them prior to releasing it to both give them a "heads up" and also to explain the reason for the content (we want to draw a 'line in the sand' now on the concept of rules changes). We regret to advise that said 'more cordial' approach was well and truly rejected by the MDBA via their CEO, Rhondda Dixon. At a meeting in Griffith, Dr Dixon took aim at NSWIC (and Andrew) over the release and its content. We don't so much mind a stoush on the issues - that's all part of the job. What we do mind is a question of personal integrity. When a representative of a Member of NSWIC pointed out to Dr Dixon that we had contacted the MDBA prior to the release, she said "that is not true," which is a pretty confronting accusation. We contacted Dr Dickson via email to seek clarification and to provide the (significant) evidence that we had, indeed, contacted the MDBA. Dr Dickson responded via email that the comment was that we had "consulted" on our release "with the implication that (they) had the opportunity to comment on its content before publication." We checked this further with our Members in attendance and came to the conclusion that Dr Dickson had a quite different recollection of the exchange. There's obviously no point getting further involved in an argument over this. We have let Dr Dickson know that we're disappointed that what started out as an approach by us to a more cordial engagement has ended in this fashion. Obviously we won't continue that approach. Minister Hodgkinson on Constraints Management The NSW Government responded pretty positively, from our perspective, to the MDBA CMS document. Minister Hodgkinson simply said that there was no way they'd be party to removing constraints that allowed an additional 450 gigs to be diverted to environmental use. The only constraints that they will look at being party to addressing are those which allow better delivery (i.e. offsets) under 2,750. That's a fantastic result - and one confirmed by the Minister's letter to the Griffith Area News as kindly provided by one of our Members (see the clipping here). Constraints Management Strategy Submission We've been publicly critical of the CMS for good reason - it contemplates (or "starts a conversation" in the words of Chairman Craig Knowles) about changing rules that underpin the water market. Moreover, the "strategy" is designed to allow acquisition of a further 450 gigalitres over and above 2,750. The leadership of the MDBA - particularly Dr Dickson - has been very critical of NSWIC in discussing our response. In light of that, they're certainly not going to like our draft submission. No matter how many times we read the CMS or consider the detail of the issue or reconsider the first draft that we wrote in response, though, we cannot find positives. Our Members don't want an additional 450 gigalitres being acquired, they don't want to see the water market foundation undermined with "conversations" about rules and many believe they've been mislead into thinking the CMS was about explaining how flow regimes associated with 2,750 would be delivered. We've little doubt that the MDBA will launch another attack on NSWIC - so we need to be able to act with your authority. Many thanks to our Members who provided input to our submission, the as-submitted version of which can be seen here. We understand that they've received a number of submission, many of which reflect the same dissatisfaction in ours. We don't think they'll be left in much doubt... CEWH Temp Trade We were asked by a Member to look into a rumour getting about the 'bidgee that the CEWH was on the verge of doing a large trade deal with a Chinese consortium to grow cotton. We spoke with David Papps who advises "absolutely not", notes that they are still struggling to finalise how they will trade and noted again their intention to ensure everybody was aware of their actions well before they were undertaken. ACCC / State Water Update As submissions to the ACCC on State Water's bulk water pricing submission have closed and the draft determination is not expected until February 2014, we have inquired with the ACCC on interim stakeholder meetings between now and the end of the year. We were told that the ACCC is planning to meet with NSWIC and its Members over the next few months to discuss the submissions. We suggested the ACCC could join the pre-council meetings on 6th November as many Members would already been in Sydney in preparation for NSWIC's AGM on 7th November. The ACCC agreed and will be joining us for a session in the afternoon. Whilst we're on this issue, a submission has been made to the ACCC by the Peel Valley Water User Association that is perhaps less than flattering of NSWIC. It serves to underscore the necessity of sticking together in the face of regulators such as the ACCC. The Peel Valley Water User Association is entirely welcome to its own views - as are any Member or stakeholder of NSWIC (it says so in our submission) - but remember that regulators look for and dissent in order to discount a submission that doesn't accord with their own view. Here's what the issue is: 3.13.21 - Additional comments - NSW Irrigators Council We acknowledge that our position will probably differ from that which will be presented by the NSW Irrigators Council. However, our Association does not have representation on the NSW Irrigators Council, nor do we have any communication with them, so they cannot possibly represent the views of the Peel Valley Water Users Association.