Water Licensing
Embargo on water trades to the environment – frequently asked questions
What does the embargo on the permanent trade of NSW water entitlements for environmental purposes mean?
From 29 May 2009, NSW will not be processing any permanent water trades where the entitlements are being purchased for the environment. This includes water purchased by the Commonwealth and/or State Governments, non-Government Organisations, corporations or private individuals.
Are there any exceptions?
Yes. Purchases which are required to meet existing commitments under the Funding Agreement with the Commonwealth for NSW Rivers Environmental Restoration Program are exempt.
The embargo does not apply to environmental entitlements created from water savings works. NSW will allow the transfer of water from an existing entitlement where water savings have been generated by investment in water supply infrastructure, including on-farm and within supply channels and in river systems, and the savings are made from improved water use efficiency.
Temporary (annual) trades of water allocation for environmental purposes are permitted where there is an environmental watering plan that has been approved, in writing, by the NSW Minister for Water.
NSW will continue to process permanent trades, including interstate trades, for all other purposes such as for irrigation, industrial, town water supply, and Aboriginal cultural purposes. These trades will not be affected by the embargo on licence purchases for environmental purposes.
What power does the Minister have to do this?
The Minister for Water has the power to do this under the provisions of the Water Management Act 2000 and has made an Order under section 71Z of the Act. To view the order go to the Government Gazette Special Supplement No 80 Friday 29 May 2009.
I have accepted an offer from the Commonwealth to purchase my water – will this trade still occur?
This trade will be allowed to proceed provided contracts have been executed prior to 29 May 2009. This means that both parties must have signed the contract before that date.
Supporting documentation such as a copy of the signed and dated execution page of the contract should be provided in support of the application. This should be addressed to your local DWE licensing officer who is dealing with your application or enquiry.
Approval is still subject to the normal assessment process for a trade.
Why has the NSW Government moved to embargo permanent trade for the environment?
The NSW Government supports the purchase of water for the environment as a means to secure the sustainability of the Murray–Darling Basin. However there is not a level playing field in water trading. Both Victoria and South Australia have a number of barriers in place that restrict the amount of water that can be purchased from these States. As a result, the vast majority of water entitlements purchased for the environment in the Murray–Darling Basin have come from NSW.
On 21 May, 2009 the Commonwealth Environmental Water Holder's website identified that 37,789 megalitres (ML) of entitlements had been purchased by the Commonwealth of which 29,701 ML had come from NSW. With the recent purchase of 240,000 ML from Twynam Agricultural Group, this shows that over 97 per cent of entitlements purchased for the Commonwealth Environmental Water holder have to date come from NSW.
Why should this matter?
NSW has led the way in water reform in NSW for some 14 years. This includes implementing a substantial water reform agenda that commenced in NSW in 1995, followed by the requirements of the National Water Initiative 2004 and more recently NSW has endorsed the Commonwealth Government's Murray–Darling Basin water reforms. For example:
- NSW the first state to separate of water from the land title creating the water licence as a separate business asset and creating perpetual water licences for commercial purposes that no longer have to be renewed
- 90 per cent of water use in NSW is now managed through statutory water sharing plans. These plans set limits on overall water extractions. As a result in the state's major water sources, that is, the rivers regulated by major dams, more than two-thirds of natural flows are retained in the river system for the environment over the long term and specific water is provided for environmental purposes. NSW is ahead of the game in having statutory plans.
- Through the water sharing plan rules, an additional 200 GL per year on average, has been recovered for the environment in the major regulated rivers above that required under the Murray–Darling Basin cap.
The NSW government does not want to prevent individual irrigators buying or selling water nor does it oppose the principle of buying water for the environment. In fact the NSW Government has actively supported and funded the purchase of water entitlements through a number of programs such as The Living Murray, Water for Rivers and Riverbank. However, the current situation where environmental water for the Murray–Darling Basin is being predominantly purchased from NSW is having a disproportionate impact on NSW industries and regional communities.
How long will the embargo continue?
NSW constitutes 56 per cent of the land area of Murray–Darling Basin and uses, on average, about 50 per cent of the Basin's surface water. In fairness, it seems appropriate that around 50 per cent of licence buybacks should come from NSW not 97 per cent as is currently the case.
The embargo will remain until a fairer deal between the Commonwealth and all the States is put in place.
Where can I obtain further information?
More information can be obtained from the Department of Water and Energy licensing staff in:
Deniliquin
8-20 Edwardes Street
PO Box 205 Deniliquin NSW 2710
t: (03) 5898 3900
f: (03) 5881 3465
Dubbo
209 Cobra Street
PO Box 717 Dubbo NSW 2830
t: (02) 6884 2560
f: (02) 6884 0096
Forbes
9 Spring Street
PO Box 291 Forbes NSW 2871
t: (02) 6850 2800
f: (02) 6852 3419
Leeton
27-33 Chelmsford Place
PO Box 156 Leeton NSW 2705
t: (02) 6953 0700
f: (02) 6953 4468
Tamworth
155-157 Marius Street
PO Box 550 Tamworth NSW 2340
t: (02) 6701 9600
f: (02) 6701 9680