Reforming the regulatory framework for water resources in the Northern Territory ‒ consultation underway

On 19 October 2018, the NT Government released the Northern Territory Water Regulatory Reform Directions Paper for consultation and is seeking feedback on a suite of issues for reform of the NT Water Act 1992 in order to develop a more comprehensive and contemporary management framework for the Territory's water resources.

As detailed in the Directions Paper, the NT Government has already committed to several water related reforms, including:

• Introduction of the Water Legislation Amendment Bill 2018into the NT Legislative Assembly on 22 August 2018 which proposes to amend the Water Act to enable it to regulate water use by, and associated with, mining and petroleum activities in the same way as applies to all other water users and to update the offences and penalties for alignment with national water industry best practice.
• Implementation of the Strategic Aboriginal Water Reserves Policy in new and revised Water Allocation Plans (WAPs). The Directions Paper provides that the process has commenced to amend the Water Act to provide for a new Beneficial Use category called Strategic Aboriginal Water Reserve (SAWR) and to require the inclusion of SAWRs in all new and revised WAPs where applicable.
• Work is already underway to assess options for improved controls and interactions between the Water Act and the Planning Act in relation to future subdivisions and access to alternative water supplies. This reform is to be progressed separately to those reforms identified in the Directions Paper.
• A process is also currently underway to resolve minor administrative issues with the current Water Act which impede its operational efficiency.

As a next step, the Directions Paper outlines broad reform directions with respect to the regulatory framework under the Water Act and the Water Regulations. Following consideration of the feedback on the Directions Paper, more detailed reform solutions will be progressed through a series of position and draft policy papers.

While the Directions Paper identifies a range of proposed reforms, we have extracted some of the key items below.

Improving the NT Water Allocation Planning Framework

The NT Water Allocation Planning Framework was implemented in 2000 and provides the policy basis for determining the "estimated sustainable yield" under a WAP which is used to determine the volume of water that can be allocated for consumptive use within the applicable WAP area.

The Directions Paper states that the addition of further information to this Framework could allow for more consistent decision-making with respect to water allocations and that the following issues (amongst others) could be considered as part of a review of the Framework:

• what is the "sustainable" use of water resources;
• how climate zones are classified under the Framework;
• clarification on the use of conservation buffers/zones to prevent degradation of water quality and/or water-dependent ecosystems;
• how cultural water values are considered;
• how are water-dependent ecosystems classified and what are their values; and
• revision of the Framework as it applies to the arid zone, possibly requiring water available for consumptive purposes such as public water supply, industry or agriculture being based on maintaining storage.

Protecting future water supply

Under the Water Act there is no specific power for the Minister or Controller of Water Resources (Controller) to set aside water resources for future public water supplies outside of a WAP area, which means that there is a risk that:

• water resources needed to support anticipated growth in the Territory are allocated to other uses and will not be available when needed; and/or
• any available water may not be of suitable quality for public water supply.

It is proposed that this risk could be addressed by the introduction of a power to allow for the reservation of water for future public water supply security, the specifics of which could be further developed after an a assessment of approaches taken in other jurisdictions is undertaken.

Water allocated for best and highest value

In its Sustainable Water Use policy paper, the NT Government commits to including a "water for purpose" principle within the allocation and licencing provisions under the Water Act to stop over-claiming of water for profit only.

To support this principle, the Directions Paper proposes the following reforms:

• Alternative allocation approaches: identifying alternative approaches to the existing "first-in-first-served" process for considering water licence applications.
• Staged allocations linked to development milestones: requiring that development milestones be met before further entitlements are released.
• Management of unused water: an overarching policy to guide consistent decision-making with respect to the management of unused water.
• Water trading: currently under the Water Act, water trading can only occur where a WAP has been declared for a WAP area as the WAP establishes the trading rules and arrangements for trade. Therefore, the is no ability fora licensee to trade outside of a WAP area. The Directions Paper proposes the introduction of the ability to trade in areas without a declared WAP to allow water trading to occur when a WAP has lapsed or is in draft form or in areas outside of a WAP area.
• Pricing framework for water: currently fees and charges for licence and permit applications or for administrative variations to licences or permits, are for the most part met by the NT Government. The recovery of reasonable costs for administrative fees and charges are applied in other jurisdictions and this should be considered for the Territory. It is proposed that a pricing framework be developed based upon what has and has not worked in other jurisdictions.

Streamlined and accountable regulation

The Directions Paper proposes the following to achieve more streamlined and accountable regulation of water licences:

• Longer licence tenure: licence tenure could be increased beyond the current limit of 10 years for some circumstances and systems. For example, there may be a case to increase the licence tenure:
  • in regions where licences have been in place for some time, the impact of those extractions is understood and where development is likely to be long-term; or
  • for some beneficial use types, specifically for public water supply, where water extraction will be required for a longer period; or
  • to align licence tenure with the period of non-pastoral use permits issued under the Pastoral Land Act.
• Perpetual entitlements untied to land in some systems: statutory-based entitlement arrangements would be considered in fully allocated systems that provide for water-access entitlements that are not tied to land, and are tradeable. This would align with other jurisdictions which have "permanent" water licences, which are instruments with perpetuity which can be mortgaged or bequeathed.

Stock and domestic provisions

Currently under the Water Act, the owner and occupier of land has a right to take water from a waterway on or adjacent to the land and groundwater from beneath the land for "stock and domestic" purposes which includes:

• the use of the owner, occupier or their family and employees for domestic purposes;
• drinking water for the grazing of stock on the land; or
• irrigating a garden, not exceeding 0.5 hectares, which is part of the land and used solely in connection with the dwelling.

The Directions Paper identifies the following key issues with respect to the stock and domestic provisions:

• assess the relevance of the definition of stock and domestic use as concern has been raised that the definition describes the way the water is used rather than establishing volumes or limits on the take of water; and
• investigate the feasibility of mechanisms to prioritise protections for those stock and domestic water users who have no other options for their potable water supply.

Risk assessment of water resources

Currently under the Water Act, the same provisions apply when assessing and deciding a water licence irrespective of the risk the extraction poses on the applicable water resource system. The Directions Paper identifies the need to introduce a mechanism to impose risk-based licence assessment and reporting processes so that the level of regulation corresponds to the level of risk. It is proposed that this could be in the form of a power to declare a schedule of areas that require a higher and/or different standard of management and regulation.

Fit and proper person test

It is proposed that a "fit and proper person" test be incorporated into the licensing decision-making framework which would, for example, preclude water entitlements being granted to persons or companies found guilty of serious criminal offences. This would be consistent with the provisions in the draft Environment Protection Act and Environment Protection Regulations which are currently available for public consultation until 3 December 2018.

Review provisions

Currently under the Water Act, certain actions and decisions made by the Controller or the Minister can be reviewed, however the nature of the review that applies to each of those actions and decisions is not expressly stated in the Act. The Direction Paper notes that whilst the Supreme Court has determined that the review provisions under the Water Act apply a merits review, the following warrants consideration as part of the reform process:

• the kind of review which is appropriate for various actions and decisions that may be reviewed, such as:
  • internal review: where an officer not involved in the original decision-making reviews the merits of a decision made by a delegate of the Controller. The outcome of an internal review process is that the primary (original) decision may be upheld or replaced;
  • judicial review: a common law right, which is undertaken by the Supreme Court and considers the lawfulness of a decision and the decision-maker’s authority to make it; or
  • merits review: a statutory process whereby a new decision-maker generally reconsiders all relevant facts and evidence and makes a new decision in place of the original decision-maker; and
• the Northern Territory Civil and Administrative Tribunal as an appropriate reviewing body.

Timing of reforms

The Directions Paper outlines the stages within which each of the currently committed and proposed reforms are to occur:

• Within six months: include mining and petroleum industries, inclusion of Strategic Aboriginal Water Reserves provisions, minor administrative improvements, trade policy, management of Unused Water policy, fit and proper person test, revised Review provisions, and controller's function.
• Within 12 months: revised stock and domestic provisions, alternative (to FIFS) allocation approaches, ministerial reserves, staged allocations, pricing framework, protections for future public water supply, and surface water harvesting.
• Within 18 months: expanded NT Water Allocation Planning Framework, clearer guidance on adaptive management, risk assessment framework, power not to assess an application, management of interconnected systems, licence tenure, unbundling, and include an Object (objectives) in the Water Act.

Have your say

Feedback on the Directions Paper can be provided by completing the online feedback form.

If you would like any further information with respect to the current NT water regulatory framework or require assistance with providing your feedback on the Directions Paper please contact us.

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