The South Australian Murray-Darling Basin Royal Commission (royal commission) was damning in relation to the conduct of the Murray-Darling Basin Authority (MDBA) regarding a number of issues concerning the Basin Plan. This in turn led to the commissioner expressing views as to the governance of the MDBA, both with respect to when that authority was constituted, when the 2010 Guide to the proposed Basin Plan and 2012 Basin Plan were being prepared, and the governance of the MDBA as presently constituted.
Openness and accountability
The royal commission was highly critical in relation to what it saw as a disconnect between claimed openness and accountability on the part of MDBA, and actual openness and accountability in the conduct of MDBA.
The areas of limited or no disclosure highlighted by the royal commission were legal advices and construction of the Water Act 2007 (Water Act), the modelling for the Guide to the proposed Basin Plan/ Environmentally Sustainable Level of Take (ESLT), the modelling to justify the 70 GL per year reduction in recovery of water for the northern Basin, the Sustainable Diversion Limit (SDL) adjustment mechanism, which the commissioner found ‘has been made with a wholly inflated air of secrecy’1 and that the Commonwealth Department of Agriculture and Water Resources ‘has not been upfront as to why it has prioritised efficiency measures over buybacks, and has done little to publicly justify the additional expense of this policy preference.’2
The commissioner went on to state that ‘… the MDBA has succeeded in giving the word transparency an Orwellian twist when they use it. The Commissioner does not mean this as a compliment.3… The MDBA is not ASIO.’4
The commissioner’s criticisms in turn extended to the MDBA’s reliance upon Australian Government Solicitor (AGS) legal advice, which purported to support the critical ‘triple bottom line’ approach to the setting of SDLs, and implicit criticism by the AGS itself:
- ‘The AGS opinion contains a number of dubious propositions about the meaning and effect of particular provisions in the Water Act and relevant international conventions, and an unlikely and incorrect conclusion about the role of economic and social considerations in determining the ESLT…’5
- ‘Moreover, to the extent that the AGS opinion has been relied on to interpret what is meant by the ESLT [Environmentally Sustainable Level of Take] and how it should be determined, it has resulted in unlawful conduct’6
- ‘… it became clear, and the commissioner accepts as uncontroversial, that the MDBA had previously obtained legal advice, at least from the AGS, on precisely these matters of construction, but with a different effect’7
- ‘As a result of the fallout from the Guide in 2010 and 2011, the MDBA, and perhaps those advising it, came under pressure to reduce the proposed recovery amount, which could be achieved if they were to adopt a triple bottom line approach to the construction of the Water Act.’8
The NWC played an important role in the governance of the Murray Darling Basin which worked well, and was abolished without justification. It warrants renewed consideration in the context of achieving the best and most effective governance arrangements.
The National Water Commission (NWC)
The NWC previously played a role in relation to monitoring the progress of reform in the MDB. This body was somewhat controversially abolished in 2014. With the abolition of the NWC, the role of monitoring the progress of reform largely fell to the Productivity Commission. The commissioner was critical of the loss of the NWC’s monitoring function from a governance perspective, relevantly finding that:
- ‘The [NWC] formed an important part of the governance structure in the Basin’s legislative scheme, and since its abolition in 2014, there has been an erosion of the national oversight of water reform in the Basin’9
- ‘The NWC played an important role in the governance of the Murray Darling Basin which worked well, and was abolished without justification. It warrants renewed consideration in the context of achieving the best and most effective governance arrangements’10
- ‘The evidence persuasively shows that the NWC provided a necessary check and balance, and oversight that is now lacking in the implementation of the Basin Plan. To some extent, the MDBA has been left to check its own work, which is entirely unsatisfactory, and in other cases bodies such as the Productivity Commission fail to provide the expert, independent and appropriately funded oversight that is needed in the complex and specialised Basin context’11
It has been the writer’s view that the abolition of the NWC in 2014 raised serious questions over the implementation and monitoring process for the Basin Plan. Any steps by government to restore or create a body with similar functions to the NWC are likely to be important to ensuring effective governance and implementation of the Basin Plan.
The Northern Basin Review (NBR)
One area focused upon by the royal commission was the NBR, a project which resulted in a 70 GL reduction in the amount of water to be recovered for the environment in the Northern Basin. The royal commission was interested in how the NBR came to pass and the basis for its conclusion to reduce environmental water. The royal commission relevantly found:
- ‘The [NBR] is an example of gross maladministration by the MDBA. It is an example of how the current management of the MDBA has shown itself unwilling and incapable of fulfilling their statutory functions and obligations’12
- ‘It has never been made clear by the MDBA what power was relied on to undertake the [NBR].’13
- ‘Ultimately, after approximately four years of research and public consultations, the MDBA recommended that the SDL for the northern Basin be increased by 70 GL.’14
- ‘Notwithstanding the purpose of the NBR, it is apparent that the reports prepared by, or on behalf of, the MDBA were based on little new research or information…’15
Compliance and enforcement
Following the ABC TV Four Corners ‘Pumped’ program in 2017 compliance and enforcement issues received widespread public attention. Compliance and enforcement issues were the subject of consideration by the royal commission. The commission sets out a useful summary in Chapter 16 of the numerous enquiries that have recently been conducted in relation to compliance and enforcement.
These include the Ombudsman of New South Wales report into water compliance and enforcement, which found that aspects of ‘the conduct of both DPI Water and WaterNSW in performing their water compliance functions had been unreasonable, based on irrelevant considerations or otherwise wrong within the meaning of s 26 of the Ombudsman Act 1974’.16
Analysis and comments
The commissioner found maladministration by previous and current senior management of the MDBA.
It is very important to keep in mind that the findings of maladministration were made by a royal commission following a hearing process. As the writer understands, MDBA public servants were not allowed by the Federal Government to give evidence at the royal commission. The Federal Government and the MDBA reportedly sought an injunction to prevent the royal commission from taking action to require current and former federal staff to attend before the royal commission.17 The MDBA did make a submission.18
The MDBA’s response to the royal commission’s criticisms can be found here:
The MDBA’s response stands in contrast to the way in which, for example, major banks have responded to the recent banking royal commission, who have typically used the language of their ‘learnings’, ‘mistakes’ and ‘responsibility’ for ‘failings’ in post-royal commission public statements.
At a time when we are often being told that public confidence in institutions is at all-time lows,19 it is incumbent upon the leaders of any organisation found by a royal commission to have engaged in maladministration to acknowledge past wrongs and take responsibility for change.
Criticisms made by a royal commission that an organisation suffered and suffers from maladministration would be hard for any organisation to take, but it does not necessarily follow that an organisation faced with such criticisms must necessarily reject them.
Commissioner Walker lays down a pathway in his report which is ultimately positive and restorative. He states that the underlying injustice that he identifies in his report can be ‘remedied’20 through new determinations of the ESLTs, and SDLs for both surface water and groundwater that reflect those ESLTs, which should be carried out promptly.21 This is something that the MDBA can now do.