Where did the water go?

By Dr Martha Knox Haly

Australia has a problem with corruption in water supply because we don’t measure or manage water nationally.

According to ANU research report in 2022, 200,000 Australians living in remote communities do not have access to safe drinking water. These communities consume water with unsafe levels of uranium, arsenic, nitrates, fluoride and E. coli. Six hundred thousand Australians were drinking water that did not meet standards for appearance, taste, or odour.

Two million Australians were not included in clean water reporting for the United Nations Sustainable Development Goals. The exclusion occurs because areas with fewer than 10,000 connections are excluded. The absence of data means the Australian Government cannot adequately plan for water infrastructure. It also explains why some Australians live in third-world conditions.

Climate change brings an extra layer of complexity to safe water supply. Altered weather patterns are driving hydrological shifts, leading to reduced water availability. Higher frequency of natural disasters associated with climate change, such as floods, droughts, bushfires and cyclones reduce sources of safe drinking water through contamination.

Stockholm International Water Institute expert Alejandro Jiménez noted: ‘A lack of clarity and overlapping mandates hinder the performance of public institutions, as these can lead to competition, mistrust, or fragmented information collection.’ Remote Australian communities are a case study in this regard. ANU researcher Dr Eric Vanweydeveld squarely blamed poor water quality in remote indigenous communities on inadequate institutional architecture. The absence of a dedicated water authority meant that multiple bureaucracies and levels of government perpetuated blame shifting and lack of resolution.

Public governance of water is essential because the absence of rules  around water management poses a national risk. The Stockholm International Water Institute (SIWI) noted that water sector corruption undermines national development, not just because it discourages investment in new water infrastructure. The equitable distribution of water and costs is distorted because fresh water and sanitation installations are more costly. In their observations of sub-Saharan Africa, SIWI found that the poor and those living in regional areas are less likely to have access to clean drinking water. SIWI was referring to a third-world country, and yet this is exactly the situation facing Australian remote communities in a first-world economy.

Vanweydeveld’s suggested remedy was a federally based national water monitoring program. Australia is lucky in one sense, being an island, so it does not have to navigate the complexity of transboundary water agreements. Regulation is needed to apply across states and territories, because rivers and water sources are not confined to particular state or territory borders. Australian states and territories vary in their allocation levels.In the past, NSW pursued a particularly aggressive allocation policy, deploying more of its available water than some southern states. If the allocation policy is excessively generous, allocations will become unreliable in dry years or during drought. Accurate, quantifiable water management goals are also a core part of nationally determined contributions to climate change under the Paris Agreement. The regulator has to be national and charged with harmonising water allocations across states and territories. At present, national agreements are painfully brokered one river at a time across multiple states.

The absence of a dedicated Federal regulator perpetuates the problem of inadequate water measurement. Lack of data makes it difficult to identify all the stakeholders around a particular water source. It leaves loopholes for private-sector interests to exploit community water allocations, laying the groundwork for water theft and a second tragedy of the commons.

In Australia, most water users have an entitlement, which refers to the amount of water that can be taken, whilst allocation represents the amount of water that is available against an entitlement. Australia’s indigenous populations are over-represented in remote, poorly serviced regions with less than 10,000 people (which are not counted in national data). There is, therefore, a greater risk that they will be deprived of their legitimate status as water users with an entitlement.

Inadequate institutional structures are also associated with a greater risk of corruption. Corruption in water governance began to emerge in Australia from 2015 onwards. Australian water scandals have tainted both the major political parties, and incorporated attempts to induce politicians and public servants to act in a partial manner (Australian Water Holdings scandal), distorted water buy backs (sales to Eastern Australian Agriculture), excessive water extractions, failure to prosecute excessive extractions (abuses of the Barwon Darling Water Sharing Plan) and efforts to sideline traditional owners from water management (the recent appointment of a Territory Water Controller in the Northern Territory by the Coalition Government).

The Murray -Darling Basin plan was implemented by the Gillard Government in 2012. The intention was to restore the ecological health of the Murray River.  Environmentalists and downstream communities in South Australia wanted more water left in the river. Agriculturalists and irrigators in Queensland and NSW wanted to extract as much water as possible. Water buy-backs involve the Government pushing water entitlements from growers and irrigators to reduce the amount of water that is extracted. The first buyback occurred in 2008 when Water Minister Penny Wong purchased water entitlements for $50 million. Initially, water buybacks were conducted through an open tender process, enabling the government to evaluate the entitlements on offer and the prices owners were selling for. Entitlements could be highly reliable, supplementary or overland flow (water from heavy rain or rising groundwater usually associated with flooding). Overland flows are least reliable (and least valuable), as they only occur during heavy rainfall. An open tender process set the price of a highly reliable water entitlement. Prior to 2015, water was purchased at approximately $ 2,000 per gigalitre.

In 2017, National Party MP Barnaby Joyce was the Federal Minister for Water. He oversaw a process where vendors could negotiate directly with the department without a tender process. In August 2017, a vendor Eastern Australia Agriculture sold overland flows for $78.9 million dollars. The company was domiciled in the Caymans, so it was not possible to see who was the ultimate recipient of the money. Angus Taylor (then Minister for Energy) had been a former director of Eastern Australia Agriculture from 2008-2009. The overflow entitlement did not deliver water back to the Murray. the Auditor General would produce a scathing report in 2020, highlighting the lack of transparency, absence of competition and that the Department of Agriculture had paid $13 million more than the water was worth.

Corruption can take the form of public services behaving in partial manner, favouring one group over the general community. This group allowed to continue exploitation without fear of prosecution. This is precisely what happened in the Barwon Darling Water Sharing Plan in Australia.

The Barwon Darling Water Sharing Plan (BDWSP) was a highly technical water-sharing agreement covering the Murray-Darling Basin. There are multiple stakeholders, with a high level of public sector involvement in private allocations. This feature alone represents a significant corruption risk. In 2020 the NSW ICAC investigated alleged abuses by NSW public servants in Commonwealth buybacks within the Barwon Darling Water Sharing Plan. The buybacks had been conducted through a closed tender process. No one was found to be ‘corrupt’, but the NSW ICAC concluded that many actions were inconsistent with the objectives of the scheme.

It was clear that the boundaries between wealthy irrigators and public servants had been blurred, and that public servants were found to have acted partially.  Public servants favoured wealthy irrigators, permitting pumps attached to water extraction licenses, which breached the Water Management Act 2000. Excessive water was extracted, or pumps had been tampered with to give misleading extraction readings, and there was a failure to prosecute.

The ICAC recommended that the compliance team be properly resourced and that regular water extraction audits, with rules governing water extraction, be established and regularly reviewed by environmental experts. This included clear rules around cease to pump thresholds, removing imminent flow provisions (where water extraction occurs in anticipation of restorative rainfall), protection of upstream water releases being intercepted and extracted by downstream users, and extraction restrictions to protect water after the first drought-breaking rains after a ‘low flow or cease to flow period’. The ICAC investigation showed that corrupt irrigation practices had pushed the Barwon Darling water supply into drought in 2017.

The ICAC 2020 investigation recommended that environmental scientists conduct regular independent environmental health audits of riverine health, and that a qualified independent reviewer regularly evaluate the effectiveness of the “Water stakeholder and community engagement policy.” There were also basic work recommendations, including developing a model procedure for meetings with external stakeholders; publishing meeting details, attendees, topics of discussion, and recommendations; and formalising information-sharing and consultation protocols with external stakeholders, scientific/technical staff, and adjacent agencies.

What the ICAC report did not mention, was that the Barwon-Darling Water Supply Plan failed to allocate any water to the Barkindji Native Title holders. In 2017, the Aboriginal Water Initiative Unit was disbanded in the water regulator. It meant there was no Aboriginal voice in the cosy relationships between public servants and irrigators. The governance structure, procedures, policies, and resources around indigenous community engagement were destroyed. This included discontinuing the Aboriginal Water Initiative System database, which informed community development licences. The unit had been a small step to address the oversight caused by a system that failed to count locations with fewer than 10,000 connections.

Even where the Indigenous community is indisputably documented as water entitlement owners, there is still a push by special interest groups to elbow indigenous communities out of the picture. In May 20225, the Northern Territory Country Liberal Party government removed traditional owners from automatic consideration as stakeholders. The power to apply for water reserves on Aboriginal land was allocated to the Territory Water Controller.  This is another example of why a Federal regulator is so badly needed.

Water corruption scandals have also marked the other side of politics. In the NSW ICAC’s 2017 Credo Investigation, it was found that NSW Labor parliamentarians Edward Obeid Sr, Joseph Tripodi, Anthony Kelly, and staffer Gilbert Brown had engaged in serious corrupt conduct involving North West Sydney water infrastructure. The Obeid family had acquired shares in Australian Water Holdings (AWH). The Obeids tried to manipulate the cabinet and parliamentary processes to secure a public-private partnership in which AWH would build water infrastructure for North West Sydney. A false cabinet minute was tabled, which outlined the proposal and misrepresented its benefits. The NSW Government had a clear process for evaluating public-private partnerships. An expert evaluation of the proposal found that it did not represent value for money. Fortunately, the minute was withdrawn by then Premier Kristina Keneally on the grounds that it represented bad policy. Keneally rejected the minute on advice from experts in her own department and treasury, marvelling that the proposal ‘would not go away.’ The ICAC identified compliance with policy guidelines, the involvement of experts, and Keneally’s personal integrity as key preventive elements.

These cumulative scandals and massive fish die-offs in 2017, 2018, 2019 and 2020 fuelled public demand for transparent management of the Murray-Darling River. Accurate, timely and public measurement is a powerful anti-corruption strategy. The Federal Coalition Government announced a $13 billion expenditure on hydrometric networks and a remote sensing system in 2020. The project was managed by the Albanese Federal Labor Government from 2022 onwards.

The completed Hydrological sensing system incorporated 4 water monitoring projects in the northern Murray–Darling Basin. These represented a collaboration between the New South Wales Government, the Queensland Government, the Bureau of Meteorology, Geoscience and the Murray Darling Basin Authority. $35 million was spent on the Murray–Darling Basin Water Information Portal, developed by the Bureau of Meteorology. The portal displays information and interactive diagrams on water availability, water quality, water markets, water allocations, water in storage, groundwater stream flow, and water levels. The website is also a cultural repository of indigenous weather knowledge and of the contribution of water to cultural identity for the Gomeroi/Kamilaroi nations in the northern basin.

The second project incorporates water monitoring stations, with 23 new hydrometric stations complementing the existing 124 hydrologic indicator sites. These stations measure water levels, flow rates, precipitation, and water quality (dissolved oxygen, pH, temperature, contaminants, and floodplain water extraction in the northern basin). The third project covers the use of remote sensing and spatial tools, including Earth observation satellites through the Sentinel-2 program. Remote sensors track and prevent emerging fish flow events that precede fish die-offs. Drone monitoring is conducted on Lake Victoria to regulate flow and salinity, and to monitor changes in vegetation and sediment.

The fourth project  is an online water accounting and reporting tool where license holders can view entitlements, extractions, trades, and water-sharing rules. Within the water trading process, blockchain technology is being incorporated into water rights management to promote transparency. Its benefits are that it represents an auditable, decentralised, secure, unchangeable ledger that records water usage and trading under enforceable conditions. This has been represented as a tool for equitable distribution and for setting groundwater use limits. AI and machine learning are also being used to monitor, activate and adjust irrigation schedules.

This detailed, comprehensive architecture for water measurement enabled ANU scientists and the Wentworth Group of Concerned Scientists to conduct further environmental research. Critical research showed that too much water was still being extracted. River health is still declining, and additional environmental health indicators need to be incorporated alongside physical flow and water-level measures. The research by Professor Jamie Pittock concluded that the $13 billion investment has failed to arrest the decline in Australia’s most important river system. Pittock led a team of 12 scientists from different universities over a 4-year study examining 27 indicators of success. These indicators incorporated Indigenous, environmental and social well-being measures. The study identified crop irrigation as a key contributor to toxic blue-green algae, dramatic falls in bird and fish populations and undrinkable town water supplies. Damage caused by invasive species, climate change, dams that block the supply, and bush clearing was increasing the salt content of water entering the river.

Pittock’s team found that the flows required to achieve environmental outcomes were not met at 65% of river gauge sites, and that 79% of commonwealth water releases from 2014-2019 remained in river channels rather than rejuvenating floodplain wetlands. BOM mapping shows that 50 Indigenous nations in the basin now have rights over less than 0.2% of water. Water returned to rivers is not effectively used to restore the environment. 79% of commonwealth water releases from 2014-2019 stayed in river channels rather than spilling out to rejuvenate floodplain wetlands. Safe drinking water requirements were still not being met in predominantly indigenous communities such as Wilcania.

Additional research by the NSW Chief Scientist, Professor Hugh Durrant-Whyte, would attribute widespread fish deaths in 16-18 March 2023 to a combination of drought, low-oxygen water, and algal blooms, particularly downstream of the main weir at Menindee Lake. Rapid cycling between floods and droughts had caused a boom in fish populations, but the presence of weirs and dams meant those fish were trapped as the water dried up, unable to move upstream.

The Wentworth Group took 72 measurements (these incorporated requirements for riverine health) at the 23 new hydrometric stations. The data indicated that only 26% of the environmental flow requirements were assessed and achieved. Only 2 of the 8 Ramsar wetlands received the overbank flows that they needed to stay healthy, and that 74% of environmental indicators had declined over the previous decade. Private property, roads, and bridges limit river operators’ capacity to release water in required amounts; flow requirements need to be incorporated into management decisions. This provided a very specific map of where human-generated barriers on private properties needed to be removed, and who needed to extract less water.

The ANU research demonstrated the need for a national water regulator, and the Wentworth report shows that the regulator needs a substantial expert workforce. This workforce needs to build knowledge of ecosystems, carbon sinks (wetlands and mangroves), the nexus between water–energy–food, source-to-sea governance, sectoral overlap, and investigative competence in detecting illegal connections, extraction pumps, and canals.  Expertise must be buttressed by internal career paths, abundant educational opportunities  and employment security. The corruption prevention strategy has highlighted that the marketisation of the Murray-Darling is unsustainable, and that the river must be restored to the commons. Recently, the Federal Government has dramatically increased its water buybacks. Pressure is now being placed on rice, cotton, and dairy farmers to pursue other farming avenues.

However, water corruption is not just an economic and environmental risk; it is also a threat to a society’s peace and stability. According to the Pacific Institute, wherever two groups share a water basin, this can become a source of conflict. Currently, the Ukraine-Russia conflict, Asia, Latin America, Africa, and the Middle East are the hotspots for water conflicts. Acts of war include attacks on water infrastructure, denial of access, water theft, disputes of ownership and management. If Australians want to avoid water wars, an incorruptible Federal Water Regulatory is a must.

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