Waterlines - Australian Sustainable Development Institute

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Waterlines - Australian Sustainable Development Institute

Improving environmentalsustainability inwater planningMark HamsteadHamstead Consulting Pty LtdWaterlines Report Series No 20, September 2009


WaterlinesThis paper is part of a series of works commissioned by the National Water Commission onkey water issues. This work has been undertaken by Hamstead Consulting Pty Ltd on behalfof the National Water Commission.© Commonwealth of Australia 2009This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no partmay be reproduced by any process without prior written permission from the Commonwealth.Requests and enquiries concerning reproduction and rights should be addressed to theCommonwealth Copyright Administration, Attorney General’s Department, Robert GarranOffices, National Circuit, Barton ACT 2600 or posted at www.ag.gov.au/cca.Online/print: ISBN: 978-1-921107-84-9Improving environmental sustainability in water planning, September 2009Author: Mark HamsteadPublished by the National Water Commission95 Northbourne AvenueCanberra ACT 2600Tel: 02 6102 6000Email: enquiries@nwc.gov.auDate of publication: September 2009Cover design by: AngelInkFront cover image courtesy of Tim StorerAn appropriate citation for this report is:Hamstead M, 2009, Improving environmental sustainability in water planning, Waterlinesreport, National Water Commission, CanberraDisclaimerThis paper is presented by the National Water Commission for the purpose of informingdiscussion and does not necessarily reflect the views or opinions of the Commission.


ContentsForeword by the Chair and Chief Executive OfficerExecutive summaryiiiiv1. Introduction 12. Definitions and concepts 42.1 International definitions 42.2 National definitions 52.3 Discussion of definitions and concepts 73. Challenges in implementing sustainability in water planning 123.1 Water ecosystems under stress 123.2 Misleading reporting using annual volumes 133.3 Defining ‘key’ ecological requirements 153.4 Taking account of broader, long-term value of services 163.5 Dealing with uncertainty 163.6 Clarity and transparency 173.7 Addressing impacting activities in an integrated manner 173.8 Appreciating the cost of the needed actions 174. A framework for environmentally sustainable water planning 194.1 Prioritising planning effort 194.2 Providing an adaptive planning framework 204.3 Water planning in high competition water systems 254.4 Achieving equity in sharing benefits and costs 304.5 Addressing impacting activities in an integrated manner 335. Determining environmentally sustainable levels of extraction 345.1 Water ecosystems, ecosystem services and levels of extraction 345.2 Condition and trends 355.3 Defining ‘key’ environmental assets and functions 365.4 Non-renewed water sources 405.5 Not ‘compromising’ key environmental assets 405.6 Determining whether a water system is overallocated or overused 446. Moving forward 476.1 Key events 476.2 Addressing critical knowledge gaps 476.3 Implementation 487. Conclusion 508. References 51Appendix A: Relevant existing definitions 54Appendix B: International initiatives 60Appendix C: National initiatives 64NATIONAL WATER COMMISSION – WATERLINESi


FiguresFigure 1: Outcomes, objectives, strategies, monitoring and evaluation ............................................ 22Figure 2: Water allocation planning in high competition systems ...................................................... 26Figure 3: Dynamics and stability in ecosystem services .................................................................... 42Figure 4: Conceptual model of scales of factors related to river and wetland condition .................... 73Abbreviations and acronymsAWR 2005 Australian Water Resources 2005COAGEPBC ActESDHCVAEFARWHNWCNWICouncil of Australian GovernmentsCommonwealth Environment Protection and BiodiversityConservation Act 1999Ecologically sustainable developmentHigh conservation value aquatic ecosystemFramework for Assessment of River and Wetland HealthNational Water CommissionNational Water InitiativeiiNATIONAL WATER COMMISSION – WATERLINES


Foreword by the Chair and Chief Executive OfficerThe National Water Commission initiated this Waterlines report, Improving theenvironmental sustainability in water planning, in light of the challenges governmentsare facing to meet a key objective of the National Water Initiative (NWI), to return allcurrently overallocated and overused groundwater and surface water systems toenvironmentally sustainable levels of extraction.Commitments by governments to address this issue date back as far as 1994, whenjurisdictions agreed to substantially complete the process for identifyingoverallocated systems by 2005. More recently, under the NWI, the Australian, stateand territory governments made commitments to make substantial progress by2010 towards adjusting all overallocated and / or overused systems toenvironmentally sustainable levels of extraction.Progress towards this NWI requirement has been disappointing and the risk ofirreversible environmental damage has intensified as a result of ongoing drought andclimate change. Having assessed progress towards this objective to date, theCommission considers that this commitment will not be met.The water planning process is the key mechanism by which governments determineenvironmentally sustainable levels of extraction for our groundwater and surfacewater systems. However, divergent interpretations and approaches by governmentsfor determining sustainability have complicated planning efforts and frustratedattempts to build a nationally-consistent picture of the extent of overallocation andoveruse.The Commission has urged the development of nationally-consistent definitions andapproaches to overallocation, overuse and sustainable yields since 2005, as anessential step to resolving this issue. The Commission believes that the currentnational inconsistency has contributed to uncertainty amongst water accessentitlement holders and is undermining community confidence in Australia’smanagement of water resources.The Commission has produced this report to explore the reasons why a consistentnational approach has proven so difficult and to suggest how these key NWIconcepts could be interpreted and implemented.Achieving a nationally-consistent understanding of these concepts will not beenough to achieve environmental sustainability. But it is a vital first step.Ken Matthews AOChair and Chief Executive OfficerNATIONAL WATER COMMISSION – WATERLINESiii


Executive summaryIntroductionThe National Water Initiative (NWI) requires the return of overallocated and overused systemsto environmentally sustainable levels of extraction (cl 23). Environmentally sustainable levelsof extraction also need to be determined for less stressed systems to ensure that they do notbecome overallocated. While such terms as ‘environmentally sustainable levels of extraction’and ‘overallocation’ are defined in the NWI, each Australian jurisdiction has different views onhow to determine environmentally sustainable levels of extraction and hence whetherparticular systems are overallocated or not. They have also taken different approaches todetermining the level of stress (or risk to) environmental values may be exposed to comparedwith economic benefits or impacts. For many parts of Australia, this manifests itself as thedebate about how much additional water can be taken from rivers or aquifers without therebeing an unacceptable risk of environmental damage. For water systems where extractionlevels are already high and there is strong evidence of environmental decline, modifying andreducing extraction to halt environmental loss (or both) has proven to be one of the mostdifficult aspects of Australia’s water reforms.The NWI defines environmentally sustainable level of extraction as ‘the level of waterextraction from a particular system which, if exceeded would compromise key environmentalassets, or ecosystem functions and the productive base of the resource’. However, there is alack of clarity about what ‘environmental assets, or ecosystem functions and the productivebase of the resource’ means; about how to tell which of these are ‘key’ and which are not; andabout what it means to ‘compromise’ them. Because of this lack of common understanding,assessments such as Australian Water Resources 2005 have failed to determine the extent ofoverallocation; NWI provisions such as the requirement to return overallocated systems tosustainable levels of extraction (cl 23 iv) are rendered less effective; and there remains adiscontinuity between (a) broad community expectations for maintaining the condition ofrivers, aquifers and ecosystems and (b) what water planning and management appear to bedelivering.Challenges in implementing sustainability through water planningParticular challenges in implementing sustainable levels of extraction are as follows:It has been assumed by many that a sustainable level of extraction can be defined by asingle number—an annual extraction limit for a water system. However, it is thehydrologic regime as a whole that is important for sustainability. This regime is defined bythe effects on the natural flow regimes of (a) constraints on the timing and location ofextraction and (b) for rivers, the management of flows using infrastructure. A singlenumber cannot represent it. Attempts at demarcation of volumes into consumptive wateron the one hand and environmental water on the other flounder because water flowing ina system can be both at different times. Attempts to define sustainability in terms ofsimple hydrologic ratios lead to misleading results.ivNATIONAL WATER COMMISSION – WATERLINES


There is a lack of clarity as to whether environmental values, key or otherwise, can beindependently defined, and if so, whether not ‘compromising’ environmental assets orfunctions should have primacy over consumptive use, or whether it is a legitimateoutcome under the NWI to trade off environmental values to support consumptiverequirements. This has led to different interpretations and reporting of whether watersystems are overallocated or not.A large proportion of the services provided by water ecosystems are broad and long-termpublic benefit services such as flood drainage, water purification, aesthetic values andrecreational benefits. The loss of biodiversity threatens our food supplies, opportunitiesfor recreation and tourism, and sources of medicines. These services are not captured inmarkets. The difficulty in understanding and explaining the value of the public goodservices has meant that the immediate and obvious benefits associated with servicessuch as water supply have weighed far more highly in decisions about managingresources than the less obvious and broader public good services.Frequently, decision makers have taken ecological risks because there is not enoughinformation to demonstrate that scientifically-assessed risks of ecological damage arecertain to occur. Additionally there is a lack of recognition of the fact that gradual declinesin health, which do not destroy an ecosystem, still weaken the ecosystem’s resilience,making it more vulnerable to catastrophic failure in critical events, such as extremedroughts. The more immediately obvious benefits of economic use of water havegenerally had greater weight in trade-off decisions than uncertain environmental benefitsor impacts.Many water plans lack specific measurable objectives, strategies and rules clearlyaligned to achieving those objectives, and monitoring aligned to reporting onperformance. Additionally, water plans rarely state in a clear way the nature of the tradeoffsthat have occurred. This lack of clarity results in confusion of expectations and aninability to determine whether the plans are effective or not. It also inhibits effectiveadaptive management.While water extraction and flow management are often major stressors, other activitiessuch as land use, riparian vegetation management, stock access in the riparian zone andgrowth in water interception activities are also very significant. Sustainably managingwater ecosystems requires all of these to be addressed in an integrated manner, but thelevel of success on the ground has been limited.Only in the past few years have governments come to realise that reducing extraction ofwater often comes at a substantial cost to irrigators and other water users, and expectingthem to bear all that cost with a neutral draw on public funds is not accepted as beingequitable.A framework for sustainable water planningEnvironmentally sustainable water planning can operate only within an effective planningframework. The following elements are considered to be of key importance.A prioritised planning schemeThis recognises that that the level of investment in water planning should vary with the level ofcompetition for water and the environmental, economic and social services that are at stakeand potentially at risk.NATIONAL WATER COMMISSION – WATERLINESv


Three different classes of water management commonly apply:Conservation management applies to water systems that have little or no waterextraction, retain a high degree of naturalness, and are designated to be protected. Waterplanning and management in such systems aims to maintain ecosystem health andunique ecological characteristics, with minimal exposure to risk associated with extractionof water. The level of investment in planning would be expected to be low.Low competition management applies to water systems where there are low levels ofdemand for water supply, and risks to ecosystem assets and services can be managedby general or regional management arrangements that have low socio-economic impact.The level of investment in plan development and implementation would be expected to below to moderate.High competition management applies to water systems where current or projecteddemand for water supply is likely to result in loss or degradation of ecosystem attributesunless management arrangements that may have substantial socio-economic impact areimposed. Such systems require a statutory water plan. The levels of investment in bothplan development and implementation would be expected to be high.It is expected that the principles and practices for high competition management, which arethe focus of this paper, could be appropriately adapted for the other two cases.An adaptive planning frameworkThis includes formal reviews of plans at appropriate intervals, taking account of planperformance and changes in knowledge and values; well structured plans, with clear, specificoutcomes and objectives and internally consistent strategies and monitoring programs; clear,public documentation of the knowledge, assumptions and assessments on which the plan isbased, and the uncertainties and risks involved; and an ongoing research program designedto address critical knowledge gaps.A structured water planning processThis process recognises that the fundamental tension in water allocation planning is betweenextraction of water for towns, agriculture and industry (‘consumptive’ use) on the one hand,and all the other ecosystem services, including the condition of the ecosystem itself as anatural service-producing asset, on the other. It includes provision for ‘key’ or minimumecological outcomes as well as aspirational ecological outcomes, with the former being inprinciple not able to be traded-off. A detailed description is provided section 4.3.Appropriate linkages into broader natural resource planning and managementWhile the hydrologic regime is an important factor in the health or status of rivers, wetlands,and other water dependent ecosystems, it is not the only factor. Management of riparianvegetation, fish and land use activities within the catchment are also major factors. To focussolely on water extraction without consideration of these other factors means that efforts tomaintain ecosystem health will be less effective and inefficient. Integrating water planning withregional natural resource management planning is one way of addressing this.Determining environmentally sustainable levels of extractionA conceptual approach to providing and assessing environmentally sustainable levels ofextraction is proposed. It consists of the following elements.viNATIONAL WATER COMMISSION – WATERLINES


The meaning of ‘level of extraction’Water systems are complex natural assets that deliver a range of services, one of which iswater supply. These systems need to be properly maintained. It is important to recognise that,for maintaining water ecosystems, it is the hydrologic regime as a whole that is relevant—thetimings and patterns of flows as well as annual volumes. The term ‘level of extraction’ shouldbe interpreted as meaning the hydrologic regime that results from extraction, subject toextraction rules and limits and the active management of water within the system. Attempts todefine ‘sustainable levels of extraction’ solely in terms of annual volumes should beabandoned.However, this does not mean that sustainability can always be achieved just through bettermanagement of remaining flows. There is a clear need in many surface and groundwatersystems to return significant volumes of water to achieve environmental sustainability.Further development of regular, repeatable assessments of the condition of waterecosystemsEcological condition indices, such as the Murray–Darling Basin Sustainable Rivers Audit andthe Victorian Index of Stream Condition provide an independent assessment of whether waterplanning and management is achieving its outcomes, and underpin ongoing adaptiveplanning and management. These condition assessments, repeated over time, provideinvaluable data on the status of ecosystems. They will, as they are repeated, show trends inthat status and provide quantifiable targets for ecosystem condition. To further support waterplanning and management, increased coverage, and the extension of such approaches toaddress the status and trends in condition of groundwater and groundwater-dependentecosystems, would be of considerable value.Development of a process for identifying ‘key ecological assets, ecosystem functionsand the productive base’ for the purposes of water planningIt is proposed that ‘key ecological assets, key ecosystem functions or the productive base ofthe resource’ should be described by defining each ‘asset’ spatially (for example, a riversystem, subcatchment, wetland, aquifer, or some combination), and for each such definedasset, setting condition targets. These targets would inherently ‘encompass ecosystemfunctions and the productive base’. The process for doing so should consist of:further developing statutory national and state listings of ‘key’ ecological assets andspecies, including geographically defined features such as wetlands, river reaches,subcatchments; groundwater-dependent ecosystems not otherwise addressed, such askarsts and areas of important terrestrial vegetation; and important or threatened species.These listings reflect the importance of the asset or species at the global and nationallevel. The details of such listings must not only identify the assets but also state targetconditionregional or catchment-based assessments, which identify particular water ecosystems, orparts thereof, that will not put currently valued services and biodiversity (at a broaderscale) if they are allowed to degrade or remain in a degraded condition. These mightinclude already heavily degraded rivers that are heavily used but are offset by other riversthat are maintained in very good condition. The assumption is that everything else isimportant and therefore is ‘key’. Such assessments might well be integrated withcatchment-based natural resource planning processes.NATIONAL WATER COMMISSION – WATERLINESvii


condition targets, which include ‘ecological functions’, for all ‘key’ assets. These targetswould best be specified in terms of the indicators for the condition assessmentsdiscussed above. The starting point and default would be current condition. A lesser levelof health than current could be allowed, provided it can be demonstrated to be reversiblein a reasonable time period, otherwise ‘maintain or improve’ should apply.failing such assessments, a default position that defines ‘key ecological assets, keyecosystem functions or the productive base of the resource’ as being all the rivers,aquifers and water-dependent ecosystems covered by the plan in their current condition.The value of ecological services is, in the end, a community judgement informed by science.The challenge is to properly take account of the importance of these services, not just to thelocal community but also to the broader national and global community, and to not onlycurrent but also to future generations, particularly in relation to biodiversity. Thus there is aneed for a national or state process to ensure these broader, long-term interests arerepresented, in addition to a more local assessment to address immediate community values.Use of non-renewed water systemsThere are cases in Australia where aquifers with effectively nil recharge are being drawndown for consumptive use. It is proposed that such use, although clearly not sustainable inthe long term, is nonetheless acceptable in terms of intergenerational equity, provided anassessment shows that there are no ‘key’ ecological assets or functions that would becompromised as a result.More rigorous implementation of risk assessment practices to identify ‘compromise’ ofkey environmental assets and functionsIncorporating risk management into water planning practice provides a framework foridentifying ‘compromise’ (to put at risk or jeopardise) of key environmental assets andfunctions. To a large extent, past practice was a function of the limited scientific knowledge. Ithas tended to assume a single future pattern of climate, and (usually implicitly) assumeoptimistic ecosystem responses and resilience. We are only now beginning to understandlong-term climatic cycles and possible climate change implications for rainfall, runoff andgroundwater recharge. Likewise, knowledge of ecological threshold points is an area ofgrowing awareness and understanding. Risk assessment requires consideration of a fullrange of future possibilities.It is proposed that a ‘key’ ecological asset would be considered as compromised if a riskassessment shows that there is a moderate or higher risk that the target condition(encompassing ecosystem functioning) cannot be maintained in the long term.Determining whether a water system is ‘overallocated’ or ‘overused’Under the NWI, determining whether a water system is overallocated or overused hinges oncomparing the potential or actual extraction of water to what would be allowed under an‘environmentally sustainable level of extraction’, which in turn is defined as ‘the level of waterextraction from a particular system which, if exceeded would compromise key environmentalassets, or ecosystem functions and the productive base of the resource’.While annual volume ratios can be a useful indicator of potential environmental impacts, theycannot be used for a definitive assessment of overallocation. While higher ratios mean thehydrologic regime is more likely to be impacted and ecosystems put at risk, low ratios do notnecessarily mean there is no problem.Ecological condition and trends are also important for indicating problems. The existence of adeclining trend in the condition of an environmental asset should mandate either action toviiiNATIONAL WATER COMMISSION – WATERLINES


arrest it or an explicit decision to accept it. Where a declining trend continues in a watersource, despite a water plan indicating otherwise, it is evidence of a need to review thescience on which the plan is based and the effectiveness of the plan’s implementation.However, a declining trend cannot on its own be considered as definitive evidence ofoverallocation. It would need to be accompanied by further studies showing that the declineis, at least, likely to be attributable to the changed water regime. Condition monitoring alsodoes not provide a means for assessing proposed or expected future water regimes.It is proposed that sustainability assessment be based on direct application of the NWIdefinition. It is self evident that assessment against this definition can occur only if ‘key’environmental assets and functions are known. Additionally, assessment of whether thoseassets are compromised can be done only through some sort of risk assessment. Thus asystem could be considered to have an ‘environmentally sustainable level of extraction’ if:the key ecological assets and ecosystem functions that depend on water have beenidentified through an appropriate process, resulting in identified assets with associatedcondition targets; the condition targets encompass ecosystem functionality (see above forthe proposed approach); anda risk assessment has shown that those key assets and functions are not compromisedby the hydrologic regime that is associated with the level of extraction; that is, the riskassessment, taking account of risk mitigation measures, shows that there is less than amoderate risk that the target condition (encompassing ecosystem functioning) cannot bemaintained in the long term (see above).There will always be a level of uncertainty and debate in these processes, firstly becauseidentifying ‘key’ assets requires value judgements to be made, and secondly because of theuncertainties about future climate and ecological responses. Conformance with standards andguidelines for process can be used as the test of whether an assessment is reasonable.Standards and guidelines for identifying the ‘key’ assets and functions and assessing riskswould need to be developed. Each assessment would need to be properly documented andbe able to be subjected to independent review for compliance with those standards andguidelines.Transparency of process will invigorate public debate and clarify expectations. Explicitidentification of key and non-key assets will make clear to all what is now happening implicitly.Trade-offs being made will become apparent. If a process for identifying and valuing assetsand functions has not met broader public expectations, it will soon become evident.Moving forwardDevelopment of an approach to implementing and assessing sustainability in water planningis critical for:implementing key elements of the NWI, including ensuring future development isenvironmentally sustainable, and returning overallocated systems to environmentallysustainable levels. The Biennial Assessment in two years time could be the first toinclude an independent assessment of these if an approach can be agreed and adopteddeveloping the Murray–Darling Basin Plan during the next two years, which relies on thesame conceptual framework as the NWI in terms of identifying and addressingoverallocationNATIONAL WATER COMMISSION – WATERLINESix


providing guidance for the most effective investment of funding for addressingoverallocation under the $12.9 billion Commonwealth Water for the Future programthrough improving planning practice so as to have clearer identification and prioritisationof ‘key’ environmental assets and ecosystem functions, and the level of risk they arecurrently underproviding a basis for more rigorous water planning as vital state-based water plans aremade or reviewed over the next decade.To support the proposed approach, there is a need for improved availability of information,assessments and assessment tools. The following actions are recommended:define more clearly the benefits and water requirements of non-market environmentalservices of water ecosystems such as biodiversity maintenance, soil formation,photosynthesis, carbon and nutrient cycling, regulation of floods, disposal of wastes,maintenance of water quality, recreation, aesthetic values, tourism and spiritual valuesexpand coverage of water ecosystem condition assessments using standard methodssuch as those developed for the Murray–Darling Basin Sustainable Rivers Audit, theVictorian Index of Stream Condition and the Framework for the Assessment of River andWetland Healthimprove the understanding of thresholds in ecosystem responses to different surfacewater flow regimes and groundwater regimes, so that risks can be scientifically assessedand uncertainty reduceddevelop assessment methods for water planning to assess risks for environmental, socialand economic outcomesassess existing and already proposed methods for listing of ‘key’ ecological assets andhow species might be enhanced and made more effective in representing the broader,long-term value of ecological assets and functions.Finally, to implement the practices outlined above, the following actions are recommended:develop general guidelines for water allocation planning that show how the concepts andapproaches should be integrated into water planning practice. The outline of the steps inwater planning set out in this report could form the basis for these guidelines. Adaptationsof the guidelines to low competition management and conservation managementsituations would also be neededdevelop guidelines for achieving equity in water plan development, addressing proceduralfairness, distributional equity, methods for valuing services, and socio-economic impactassessmentdevelop guidelines and examples of well-structured water plans, with clear, specificoutcomes and objectives and internally consistent strategies and monitoring programsdevelop guidelines for clear, public documentation of the knowledge, assumptions andassessments on which a water plan is based, and the uncertainties and risks involveddevelop and trial the proposed method for identifying ‘key’ environmental assets andfunctions in different situationsdevelop and trial risk assessment methods for environmental assets and functions.xNATIONAL WATER COMMISSION – WATERLINES


1. IntroductionThe National Water Initiative (NWI) requires the return of overallocated and overused systemsto environmentally sustainable levels of extraction (cl 23). While such terms as‘environmentally sustainable levels of extraction’ and ‘overallocation’ are defined in the NWI,each Australian jurisdiction has different views on whether particular systems areoverallocated or not and has taken different approaches to determining the level of stress orrisk environmental values are exposed to when weighed against economic impacts. For manyparts of Australia, this manifests itself as the debate about how much additional water can betaken from rivers or aquifers without there being an unacceptable risk of environmentaldamage. For water systems where extraction levels are already high and there is strongevidence of environmental decline, modifying or reducing extraction to halt environmental losshas proven to be one of the most difficult aspects of Australia’s water reforms.The 1994 COAG Water Reform Framework contained provisions for ‘environmental waterrequirements to maintain the health and viability of river systems and groundwater basins’(Australian Government 1994). The framework envisaged that substantial progress would bemade within four years to return overallocated or stressed systems to a better balance inwater resource use, including appropriate allocations to the environment. In 1996, theARMCANZ and ANZECC Ministerial councils established 12 principles to provide direction onproviding water for the environment (Australian Government 1996); but implementationproved to be more challenging than was expected. In 2001, work commenced to revise theARMCANZ/ANZECC 1996 principles to provide more detail and guidance in water planning.These revised principles were never completed, being overtaken by commencement of workon the NWI.While some progress has been made, the matter is still far from resolved. There iswidespread acceptance that many important water-dependent ecosystems are stressedbecause of changes in flow volumes and timings and that the current dry period, especially inthe southern Murray–Darling Basin, has pushed a number of surface and groundwaterdependentsystems towards significant and probably irreversible damage. Despite this, therehas been a reluctance to identify surface and groundwater systems as overallocated. Onlythree surface water management areas were identified by jurisdictions as being overallocated(only one of these was in the Murray–Darling Basin) when the Australian Water Resources2005 report was produced in 2007. There is thus a clear disjuncture between unmetcommunity expectations in relation to preservation of ecological assets and officialunderstanding of, and therefore reporting of, what is ‘overallocated’.The Murray–Darling Basin Cap, established in 1994, was a first-step measure to halt declinein the basin’s environmental values. In simple terms, the Cap was designed to halt furthergrowth in extraction of water. While a critical first step, it was a political ‘line in the sand’ thatwas drawn without reference to ecological needs, and little assessment was undertaken todetermine whether limiting extractions to 1993–94 levels of development would, in fact, haltdecline in the basin’s environmental values. Later work by scientists recommended anaverage 1500 gigalitres per year over and above volumes provided for by the Cap bereturned to the Murray River (Jones et al. 2003). In the Murray, there is therefore a significantcost just to prevent decline or loss of the environmental attributes currently present, and ahigher cost to recover attributes. If future inflows decline as forecast by CSIRO, thenmodelling shows that, under the current water sharing arrangements, it is the environmentthat will be most affected (CSIRO 2008b).NATIONAL WATER COMMISSION – WATERLINES 1


The recent commitment of a large part of the federal government $12.9 billion ‘Water for theFuture’ program to address overallocated water systems recognises the reality that sustainingenvironmental attributes in heavily committed water systems can only come at a cost. It maynot be enough. A Murray–Darling Basin Plan, due to be developed during the next couple ofyears, is required to address overallocation. Hard decisions will need to be made, in a shorttimeframe, about the level of preservation or recovery of environmental attributes needed. Inthe end, the Murray–Darling Basin Plan is likely to need to identify which environmentalassets are most important across the whole basin in order to guide where AustralianGovernment investment should go to maximise environmental benefit. These valuejudgements will need to be supported by the best available scientific assessments regardingthe water regimes required to deliver them.At the other end of the spectrum, there are areas of Australia, particularly in the tropical north,where decisions are being made during the next few years about how much water extractionshould be allowed in relatively pristine water systems. Here again, the question that must beanswered is what level of risk to, or loss of, environmental attributes is consideredsustainable.The Australian Water Resources 2005 report noted that (NWC 2006):Agreement on a consistent approach to sustainable resource management, including thedefinition of sustainable yield or a surrogate, is needed across many jurisdictions and alsonationwide.The diversity of interpretations and procedures has made it very difficult for the NationalWater Commission to determine whether the intention of the NWI is being met and to assesswhether surface and groundwater systems are being managed in an environmentallysustainable manner. The Commission recently noted (NWC 2007):The overallocation and/or overuse of water resources is still being addressed bygovernments in different ways in different states. The Commission considers that anumber of states do not meet the requirement of the NWI to move to sustainable levels ofextraction. The Commission is strongly of the view that a new, shared nationalunderstanding of overallocation is required which reconciles the varying approaches (andterminology) used by states.The current, much publicised threat of irreversible damage to the Coorong and lower lakes ofthe River Murray highlights some of the issues. Our current water management framework isnot coping with this situation. Planning in the past never considered the possibility of adrought of the kind being experienced. There is enormous tension between trying to maintainthe integrity of the NWI system of water entitlements and minimise economic impacts on theone hand, and the need for flexibility to address an unanticipated urgent environmental needon the other.Are our management arrangements environmentally sustainable if a high priority waterecosystem is placed at this level of risk? Are our water planning processes addressing risksand providing contingency plans? Is the loss or permanent change of a Ramsar listed wetlandacceptable if it might have happened anyway under the current drought? How far can we goin trading off environmental assets for economic benefits and still call it environmentallysustainable? How resilient are these systems and can they recover if water is subsequentlyprovided? Can we be managing sustainably if rivers are in poor and often declining health?To determine whether water systems are overallocated or overused there first must be anagreed understanding of what an environmentally sustainable level of extraction is and how totell whether it is in place or not.2 NATIONAL WATER COMMISSION – WATERLINES


The purpose of this report is to assess current challenges with understanding andimplementing environmental sustainability, and recommend how water planning practicesmight be enhanced to better address it in a way that is consistent with the intent of the NWI.The report includes the following sections:a discussion of relevant sustainability definitions and concepts, both national andinternationala discussion of the challenges that have arisen with implementing these conceptselements of the framework needed for environmentally sustainable water planninga proposed approach to identifying ‘environmentally sustainable levels of extraction’recommendations for addressing critical knowledge gaps and implementing the proposedapproach.NATIONAL WATER COMMISSION – WATERLINES 3


2. Definitions and conceptsThe concept of ‘overallocation’ in the NWI takes as its benchmark ‘environmentallysustainable levels of extraction’. This is presumably predicated on also meeting internationalsustainable development requirements adopted by Australia, national norms applying to watermanagement, and relevant state legislation and policies. In fact, it is reasonable to assumethat the NWI definition of ‘environmentally sustainable levels of extraction’ should beinterpreted in the context of these broader provisions.2.1 International definitionsThe Convention on Wetlands of International Importance was the first modern intergovernmentaltreaty between nations aiming to conserve natural resources. The signing ofthe Convention on Wetlands took place during 1971 in the Iranian town of Ramsar. TheRamsar Convention's broad aims are to ‘halt’ the worldwide loss of wetlands and to‘conserve’, through ‘wise use and management’, those that remain.Through this concept of ‘wise use’, which was pioneering when the Ramsar Convention wasdrafted, the convention emphasises that human use on a sustainable basis is entirelycompatible with Ramsar principles and wetland conservation in general. In 2005, ‘wise use’was defined in Resolution IX-I of the convention as follows:Wise use of wetlands is the maintenance of their ecological character, achieved throughthe implementation of ecosystem approaches, within the context of sustainabledevelopment.In 1987, the World Commission on Environment and Development, in a report titled OurCommon Future (commonly known as the Brundtland Report), defined sustainabledevelopment as:satisfying the needs of the present without compromising the ability of future generationsto meet their own needs.At the 1992 Earth Summit in Rio de Janeiro, world leaders agreed on the Convention onBiological Diversity. This pact among the vast majority of the world’s governments sets outcommitments for maintaining the world’s ecological underpinnings as we go about thebusiness of economic development. The Convention recognises that biological resources arethe pillars upon which we build civilisations. Nature’s products support such diverse industriesas agriculture, cosmetics, pharmaceuticals, pulp and paper, horticulture, construction andwaste treatment. The vast array of interactions among the various components of biodiversitymakes the planet habitable for all species, including humans. Our personal health, and thehealth of our economy and human society, depends on the continuous supply of variousecological services that would be extremely costly or impossible to replace. These naturalservices are so varied as to be almost infinite. For example, it would be impractical to replace,to any large extent, services such as pest control performed by various creatures feeding onone another, or pollination performed by insects and birds going about their everydaybusiness. The loss of biodiversity threatens our food supplies, opportunities for recreation andtourism, and sources of wood, medicines and energy.The Convention on Biological Diversity addresses the conservation of biodiversity in thecontext of the ongoing meeting of human needs. It has three main goals: the conservation ofbiological diversity, the sustainable use of its components, and the fair and equitable sharingof the benefits from the use of genetic resources.4 NATIONAL WATER COMMISSION – WATERLINES


Also adopted at Rio was Agenda 21, an international blueprint that outlines actions thatgovernments, international organisations, industries and the community can take to achievesustainability. These actions recognise the impacts of human behaviours on the environmentand on the sustainability of systems of production. The objective of Agenda 21 is thealleviation of poverty, hunger, sickness and illiteracy worldwide, while halting the deteriorationof ecosystems which sustain life.The general objective of Agenda 21 in relation to freshwater resources, is tomake certain that adequate supplies of water of good quality are maintained for the entirepopulation of this planet, while preserving the hydrological, biological and chemicalfunctions of ecosystems, adapting human activities within the capacity limits of nature.2.2 National definitionsAustralia's response to the Brundtland Report, the Convention on Biological Diversity, andAgenda 21 was to adapt the concept of sustainable development, taking into account ourunique natural environment, the aspirations and values of the Australian people and theprevailing patterns of economic production and consumption. Australia’s 1992 NationalStrategy for Ecologically Sustainable Development defines ecologically sustainabledevelopment asusing, conserving and enhancing the community's resources so that ecologicalprocesses, on which life depends, are maintained, and the total quality of life, now and inthe future, can be increased.Its core objectives are (emphasis added):to enhance individual and community wellbeing and welfare by following a path ofeconomic development that safeguards the welfare of future generationsto provide for equity within and between generationsto protect biological diversity and maintain essential ecological processes and life-supportsystems.The strategy’s guiding principles are (emphasis added):decision-making processes should effectively integrate both long-term and short-termeconomic, environmental, social and equity considerationswhere there are threats of serious or irreversible environmental damage, lack of fullscientific certainty should not be used as a reason for postponing measures to preventenvironmental degradation (the precautionary principle)the global dimension of environmental impacts of actions and policies should berecognised and consideredthe need to develop a strong, growing and diversified economy that can enhance thecapacity for environmental protection should be recognisedthe need to maintain and enhance international competitiveness in an environmentallysound manner should be recognisedcost-effective and flexible policy instruments should be adopted, such as improvedvaluation, pricing and incentive mechanismsdecisions and actions should provide for broad community involvement on issues thataffect them.NATIONAL WATER COMMISSION – WATERLINES 5


The strategy indicates that these guiding principles and core objectives are to be consideredas a package. No objective or principle should predominate over the others. A balancedapproach is required that takes into account all these objectives and principles to pursue thegoal of ecologically sustainable development.The 1999 Commonwealth Environment Protection and Biodiversity Conservation Act (theEPBC Act) formally brought these agreed ecologically sustainable development principles intolegislation, applying them to decisions on activities or actions that affect aspects of theenvironment that are matters of national environmental significance. It has as its objects,amongst other things (section 3, emphasis added) to: provide for the protection of theenvironment; promote ecologically sustainable development through the conservation andecologically sustainable use of natural resources; and promote the conservation ofbiodiversity. It does this by including provisions to protect and conserve world heritage places,national heritage places, declared Ramsar wetlands (no ‘significant’ impact on the ‘ecologicalcharacter’ of a wetland), listed threatened species and communities (prevention of extinction,and promotion of recovery), and listed migratory species (consistent with the BonnConvention, Japan Australia Migratory Bird Agreement and China Australia Migratory BirdAgreement to which Australia is a signatory). It also requires application of the precautionaryprinciple to decisions made under the Act, with the precautionary principle being that adoptedunder the 1992 National Strategy for Ecologically Sustainable Development, outlined above.Part 10 of the EPBC Act goes a step further: it allows the Minister to require a ‘strategicassessment’ of the impacts of actions under a ‘policy, plan or program’ in relation to heritageplaces, national heritage places, declared Ramsar wetlands, listed threatened species andcommunities, and listed migratory species. Presumably this strategic assessment would applyto the Murray–Darling Basin Plan, and possibly state and territory allocation plans for waterresources, although it is unclear whether this legal question has been examined thoroughly.The NWI defined environmentally sustainable level of extraction as ‘the level of waterextraction from a particular system which, if exceeded would compromise key environmentalassets, or ecosystem functions and the productive base of the resource’, linked definitions ofoverallocation and overuse to whether or not there is an environmentally sustainable level ofextraction, and mandated the returning of overallocated or overused water systems toenvironmentally sustainable levels of extraction. It reflects a particular application of ESDprinciples to water systems, going further to require a level of recovery, but at the same timeallows a level of trade off of ‘environmental and other public good’ values for economicbenefits. The difficulties that arise in interpreting and applying NWI concepts and definitionsare discussed later.The Commonwealth Water Act 2007 builds on the concepts in the EPBC Act and the NWI,and it applies them specifically in relation to management of the water resources of theMurray–Darling Basin. The objects of this Act (s. 3) are:(a) to enable the Commonwealth, in conjunction with the Basin States, to manage theBasin water resources in the national interest; and(b) to give effect to relevant international agreements (to the extent to which thoseagreements are relevant to the use and management of the Basin water resources)and, in particular, to provide for special measures, in accordance with thoseagreements, to address the threats to the Basin water resources; and(c) in giving effect to those agreements, to promote the use and management of theBasin water resources in a way that optimises economic, social and environmentaloutcomes; and6 NATIONAL WATER COMMISSION – WATERLINES


(d) without limiting paragraph (b) or (c):(i) to ensure the return to environmentally sustainable levels of extraction for waterresources that are overallocated or overused; and(ii) to protect, restore and provide for the ecological values and ecosystemservices of the Murray-Darling Basin (taking into account, in particular, the impactthat the taking of water has on the watercourses, lakes, wetlands, ground waterand water-dependent ecosystems that are part of the Basin water resources andon associated biodiversity); and(iii) subject to subparagraphs (i) and (ii) to maximise the net economic returns tothe Australian community from the use and management of the Basin waterresources; and(e) to improve water security for all uses of Basin water resources; and(f)to ensure that the management of the Basin water resources takes into account thebroader management of natural resources in the Murray-Darling Basin; and(g) to achieve efficient and cost effective water management and administrativepractices in relation to Basin water resources; and(h) to provide for the collection, collation, analysis and dissemination of informationabout:(i) Australia's water resources; and(ii) the use and management of water in Australia.Of particular relevance are the definitions contained in the Act, which are consistent withthose in the NWI:‘environmental assets’ includes water-dependent ecosystems, ecosystem services, andsites with ecological significance.‘environmentally sustainable level of take’ for a water resource means the level at whichwater can be taken from that water resource which, if exceeded, would compromise keyenvironmental assets of the water resource, or key ecosystem functions of the waterresource, or the productive base of the water resource, or key environmental outcomesfor the water resource.‘environmental outcomes’ includes ecosystem function, biodiversity, water quality, andwater resource health.Other policies and programs are generally consistent with those listed above. The NationalPrinciples for the Provision of Water for Ecosystems states that its goal of ‘providing water forthe environment is to sustain and where necessary restore ecological processes andbiodiversity of water dependent ecosystems’. The National Wetlands Policy has anoverarching goal to conserve, repair and manage wetlands wisely. At a national level, there isalso the Directory of Important Wetlands Australia, and currently under development, is aproposed High Conservation Value Aquatic Ecosystems framework, which will prepare anational system for the identification, classification and management of Australia's highconservation value aquatic ecosystems.2.3 Discussion of definitions and conceptsLike its international precedents, Australia’s 1992 National Strategy for EcologicallySustainable Development recognises that people and ecosystems are linked together. Itimplicitly allows for some level of trade off of ecological features for community welfare andNATIONAL WATER COMMISSION – WATERLINES 7


economic development, provided biological diversity and ‘essential’ ecological processes andlife-support systems are maintained. There is a parallel here with the NWI, which likewiserecognises that development of water systems is needed for economic and social benefits,but that there is a minimum or ‘key’ level of environmental assets and functions that are to beprotected. For rivers and aquifers in Australia, which tend to be naturally highly variable fromyear to year, this reflects a generally held assumption that a flow regime can be modified andreduced to an extent and still maintain the main environmental features of the previousregime, including biodiversity.Water ecosystems can be considered as service-producing assets (natural ‘capital’). Someservices (such as water supply) are tangible. They are delivered to identifiable individuals orinstitutions, and they are capable of being captured in market systems. Other services areless tangible public benefits (such as preservation of biodiversity, aesthetic benefits), whichare difficult to quantify, difficult to attribute to individuals, but nonetheless of great value. TheNWI refers to these as ‘environmental and other public good outcomes’. The issue is notwhether we should draw on these services to meet our needs; it is about recognising thelimitations on the service producing capacity of the natural assets and sharing that capacityequitably within and between generations.Ideally, we would draw on the services of water ecosystems without degrading the natural‘capital’ that produces them. The international and national principles set out above do not,however, preclude drawing on the ‘capital’, provided it is done in a way that: preserves thehydrological, biological and chemical functions of ecosystems (Agenda 21); protects, restoresand provides for the ecological values and ecosystem services (Water Act 2007); andprotects biological diversity and maintains essential ecological processes and life-supportsystems (National Strategy for Ecologically Sustainable Development 1992). The underlyingassumption here is that natural ‘capital’ has a degree of regenerative capacity, but it has itslimits. Consistently with this, the precautionary principle requires that threats of ‘serious orirreversible’ damage should be avoided. Applying this to the NWI, ‘serious or irreversibledamage’ aligns with loss of a ‘key’ environmental asset or function, and ‘compromise’ (toplace at risk or in jeopardy) aligns with the existence of a ‘threat’.These requirements in themselves pose new definitional issues and questions, which havehindered a smooth and consistent transition to implementation. What, for example, constitutes‘damage’ in natural systems that are constantly changing and responding to natural climatecycles and threats? What scales, both temporal and spatial, are envisaged? What isreversibility, and over what timeframe could this occur? To what extent should we assumetechnology and funding will be available to future generations to ‘reverse’ damage to waterecosystems?There is, and will remain, a fair amount of ambiguity around each of the above concepts.Underlying them is the concept of intergenerational equity, which says that humans 'hold thenatural and cultural environment of the Earth in common both with other members of thepresent generation and with other generations, past and future' (Weiss 1992). It means thatwe inherit the Earth from previous generations and have an obligation to pass it on inreasonable condition to future generations. Weiss (1992) has identified several models fordefining intergenerational equity, with the two extremes being the ‘preservationist’ model andthe ‘opulence’ model. In the preservationist model, ‘the present generation does not destroyor deplete resources or significantly alter anything; rather it saves resources for futuregenerations and preserves the same level of quality in all aspects of the environment’. Underthe opulence model ‘the present generation consumes all that it wants today and generatesas much wealth as it can, either because there is no certainty that future generations will existor because maximising consumption today is the best way to maximise wealth for future8 NATIONAL WATER COMMISSION – WATERLINES


generations’. In addition, under the opulence model, ‘we do not need to be concerned aboutthe environment for future generations, because technological innovation will enable us tointroduce infinite resource substitution’.Weiss (1992) argues that neither of these interpretations is practical or valid, and that thereare three principles that form the basis of intergenerational equity. First, each generationshould be required to conserve the diversity of the natural and cultural resource base, so thatit does not unduly restrict the options available to future generations in solving their problemsand satisfying their own values; future generations should also be entitled to diversitycomparable to that enjoyed by previous generations. This principle is called ‘conservation ofoptions’. Second, each generation should be required to maintain the quality of the planet sothat it is passed on in no worse condition than that in which it was received, and so that it isreceived in a condition comparable to that enjoyed by previous generations. This is theprinciple of ‘conservation of quality’. Third, each generation should provide its members withequitable rights of access to the legacy of past generations and should conserve this accessfor future generations. This is the principle of ‘conservation of access’.She further argues that:the proposed principles recognize the right of each generation to use the Earth'sresources for its own benefit, but constrain the actions of the present generation in doingso. Within these constraints they do not dictate how each generation should manage itsresources. They do not require that the present generation predict the preferences offuture generations, which would be difficult if not impossible. Rather, they try to ensure areasonably secure and flexible natural resource base for future generations that they canuse to satisfy their own values and preferences. They are generally shared by differentcultural traditions and are generally acceptable to different economic and politicalsystems.The precautionary principle is an attempt at a practical manifestation of intergenerationalequity. It implies that ‘serious or irreversible damage’ fails the intergenerational equity test,and that the threat or risk of this needs to be managed, and indeed prevented. Again, muchdiscussion continues among academia and practitioners about the precautionary principle,and its related concepts of ‘serious’ or ‘irreversible’ damage. Arguments rage about ‘weak’precaution and ‘strong’ precaution.According to the New Zealand Government (2006):The weak version is the least restrictive and allows preventive measures to be taken inthe face of uncertainty, but does not require them (eg, Rio Declaration 1992; UnitedNations Framework Convention of Climate Change 1992). To satisfy the threshold ofharm, there must be some evidence relating to both the likelihood of occurrence and theseverity of consequences. Some, but not all, require consideration of the costs ofprecautionary measures. Weak formulations do not preclude weighing benefits againstthe costs. Factors other than scientific uncertainty, including economic considerations,may provide legitimate grounds for postponing action. Under weak formulations, therequirement to justify the need for action (the burden of proof) generally falls on thoseadvocating precautionary action. No mention is made of assignment of liability forenvironmental harm.Strong versions justify or require precautionary measures and some also establish liabilityfor environmental harm, which is effectively a strong form of ‘polluter pays’. For example,the Earth Charter (2000) 1 states: ‘When knowledge is limited apply a precautionary1 See , accessed 3 March 2009NATIONAL WATER COMMISSION – WATERLINES 9


approach …. Place the burden of proof on those who argue that a proposed activity [orindeed lack of action] will not cause significant harm, and make the responsible partiesliable for environmental harm.’ Reversal of proof requires those proposing an activity [orproposing not to undertake restorative measures in the case of restoring water for theenvironment] to prove that the product, process or technology is sufficiently ‘safe’ beforeapproval is granted. Requiring proof of ‘no environmental harm’ before any actionproceeds implies the public is not prepared to accept any environmental risk, no matterwhat economic or social benefits may arise (Peterson 2006). At the extreme, such arequirement could involve bans and prohibitions on entire classes of potentiallythreatening activities or substances (Cooney 2005). Over time, there has been a gradualtransformation of the precautionary principle from what appears in the Rio Declaration toa stronger form that arguably acts as a restraint on development in the absence of firmevidence that it will do no harm.In 2006, Justice Preston of the NSW Land and Environment Court provided the most detailedexposition of the precautionary principle in Australian case law to date (Telstra CorporationLimited v Hornsby Shire Council). The most significant points of Justice Preston's decision arethe following findings:The principle and accompanying need to take precautionary measures is triggered whentwo prior conditions exist: a threat of serious or irreversible damage, and scientificuncertainty as to the extent of possible damage.Once both are satisfied, ‘a proportionate precautionary measure may be taken to avertthe anticipated threat of environmental damage, but it should be proportionate’.The threat of serious or irreversible damage should invoke consideration of five factors:the scale of threat (local, regional, etc); the perceived value of the threatenedenvironment; whether the possible impacts are manageable; the level of public concern,and whether there is a rational or scientific basis for the concern.The consideration of the level of scientific uncertainty should involve factors which mayinclude: what would constitute sufficient evidence; the level and kind of uncertainty; andthe potential to reduce uncertainty. The principle shifts the burden of proof. If the principle applies, the burden shifts: ‘adecision maker must assume the threat of serious or irreversible environmental damageis … a reality [and] the burden of showing this threat … is negligible reverts to theproponent …’The precautionary principle invokes preventative action: ‘the principle permits the takingof preventative measures without having to wait until the reality and seriousness of thethreat become fully known’.‘The principle should not be used to try to avoid all risks.’The precautionary measures that are appropriate will depend on the combined effect of‘the degree of seriousness and irreversibility of the threat and the degree of uncertainty …the more significant and uncertain the threat, the greater … the precaution required’.‘… measures should be adopted … proportionate to the potential threats’.It can be seen that assessment of risk is fundamental to the precautionary principle, and itappears in the NWI as requiring that key ecological assets be not compromised (that is, put atrisk). A strong interpretation of the precautionary principle, as advocated by Judge Preston,also shifts the burden of proof where there is uncertainty. In relation to water planning, thisimplies a change in approach, from allowing water regime changes to continue or occur10 NATIONAL WATER COMMISSION – WATERLINES


unless it can be demonstrated that damage is likely (as has typically occurred in the past), toconstraining or reducing water regime changes unless it can be demonstrated that damage isunlikely or at least reversible.Concepts of ecological sustainability and preservation of biodiversity have to date in Australiabeen applied only to specific new development activities where there are risks to identifiedthreatened, endangered or vulnerable species, or to certain identified ‘assets’, such asRamsar wetlands, wetlands of national importance, SEPP 14 wetlands (in NSW), worldheritage sites, or national heritage sites. They have not been applied more strategically topolicies, plans or programs. While this gives us a starting point, the issue of maintainingbiodiversity, key ecological processes and ecosystem functions outside of these specifiedareas, and in situations where species are not necessarily endangered when a decision isbeing made, has proved even more of a challenge, and it can be argued that it has beenlargely ignored to date.The Commonwealth Water Act 2007 seems to imply that the ecological values andecosystem services of the Murray–Darling Basin will be protected, restored and provided for,and only within this sustainable context can the economic values derived from waterextraction be maximised (see objects). It appears to be talking about (arguably key)ecological values and ecosystem services in all areas of the basin, not just at icon sites, oronly in areas that support endangered, threatened or vulnerable species.In the context of the discussion above, we are left with both policy and technical gaps:What are the minimum or ‘key’ environmental assets and functions that are to beprotected to provide for intergenerational equity? Are there ‘key’ water related assetsother than those currently provided for in Commonwealth and state legislation, and if so,are there processes for determining these?Does intergenerational equity allow ‘key’ environmental assets or functions to be tradedofffor socio-economic benefits in some circumstances?Where should the burden of proof lie where there is uncertainty about the affects of analtered water regime on ecological assets and functions?At this stage, jurisdictions are free to interpret as they see fit or politically expedient. Shouldthere be some more uniform approach, or should the current situation continue? It is arguedthat the apparent desired ‘consistency’ and ‘comparability’ in water planning will remaindifficult under the status quo.NATIONAL WATER COMMISSION – WATERLINES 11


3. Challenges in implementingsustainability in water planning3.1 Water ecosystems under stressAustralia’s water ecosystems are generally not in a pristine state. Past management and useof water has resulted in significant changes. Many have changed irrevocably. Theconstruction of dams, artificial lakes and wetlands, barrages, the growth of towns and citiesand land use practices and so on in the past means many water ecosystems are in asignificantly changed state.Until recently, water resource development concentrated on the provision of water for urban,industrial and agricultural uses. Little or no attention was paid to the ecological consequencesof development decisions. As the scale of our water resource developments increased tomeet social and economic needs, impacts on the ecology of waterways and other waterdependentecosystems became more evident. Well reported events such as the1000-kilometer algal bloom in the Darling River in 1991–92, and the decline of worldrecognised wetlands, have served to focus attention on these unintended consequences.The reasons for this decline are complex. Rivers are simultaneously affected by multipledegrading processes resulting from development of land and water resources. Thesestresses are principally changes in land use, damaged riparian vegetation, poor water quality,increased sediment bedload, fragmentation of habitat, and modified hydrology throughextraction of water and regulation of flows. Aquifers are affected by land use changes,pollution and water extraction. Because of the number of degrading processes, remedialmanagement focusing on single issues alone is unlikely to address the decline.The recently published audit of river health in the Murray–Darling Basin (Davies et al. 2008)reported that, of 62 zones in 23 valleys, two were rated in good health, eleven were inmoderate health and the remaining 49 were in poor (19 zones), very poor (27 zones) orextremely poor health (three zones). Nine of 13 upland zones were in very poor or extremelypoor health. Numerous local studies likewise show that the state of many of our rivers,aquifers and water bodies has declined significantly from their natural state, with aconsequent loss of serviceability to local communities as well as broader national andinternational benefits.There is a growing consensus that the level of degradation in many of these areas isunacceptable, as evidenced by the groundswell of political intent (and funding) and publicoutcries over the past 15 years. It would be fair to say, however, that to date littleimprovement has been made, and it is questionable whether all this apparent activity haseven halted the declining health of many water resources. The cost of returning such systemsto ‘acceptable’ status is often very large, and in many cases, return is not possible at all.The continued broad community disquiet about degradation of ecological assets, despitethere being water plans in place, indicates that the intergenerational equity and ecologicalconservation arguments have not been resolved. There remains considerable dispute aboutwhat changes are needed, the importance of doing so compared to immediate economicneeds, and importantly, who should bear the cost of changes required. Past and currentgenerations have already eaten into the natural capital, and if recovery is possible, the intergenerationalequity issue is whether the current generation should pay or whether equity12 NATIONAL WATER COMMISSION – WATERLINES


should be spread into the future either by delaying recovery or by not attempting to recover atall.Additionally, there are many areas of the country where the river and groundwater systemsremain relatively undeveloped and pristine. For such areas, particularly in northern Australia,the challenge is to not repeat the mistakes made in other areas in the past.3.2 Misleading reporting using annual volumes3.2.1 Annual volumes versus hydrologic regimeThe NWI uses the terms ‘water resource’, ‘water source’ and ‘water system’ to representwater as it moves, flows and is recharged in some defined boundaries on or under the land. Ituses the term ‘ecosystem’ in a way that implies the ecosystem is a separate entity to thewater, for example in the use of the term ‘water sources and dependent ecosystems’. Fromthis model arises the implied concept that a water source is a like a big tank that isperiodically refilled, and from which water can be taken to supply either ecosystems orconsumptive uses. The consumptive pool concept is based on this thinking, as is use of theterm ‘environmental water’ in several parts of the NWI. The term ‘level of extraction’ is oftenassumed to refer to some kind of annual or long-term average quantity, though it could beinterpreted as applying to instantaneous rates of extraction at any point in time also.It is important to recognise that, in reality, the tank and the ecosystem are one and the same.It is the manner in which water is stored and moves about within the ecosystem that affects itsintegrity and capacity to deliver the outcomes that we expect of it. Water flowing within riversor aquifers can provide ‘environmental or other public benefit outcomes’ for an extendedperiod, then be extracted for consumptive use. Attempts at demarcation of volumes intoconsumptive on the one hand and environmental on the other flounder because of this. Infact, most water flowing through rivers is not stored and is only partially controlled, if at all.Rather, constraints are placed on how much of it can be extracted as it passes downstream.Enormous environmental benefit is derived from these flows. Similarly in aquifers, there is noholding of recharge and releasing it, but rather regulation over the timing, rate and location ofextraction.It is possible for an environmental water manager to hold rights to volumes of water capturedin a dam (specified in water access entitlements or otherwise), and use that water to achieveimproved environmental outcomes. However, this must always be kept in perspective,recognising that what is happening here is that the environmental water manager is beinggiven some capacity to adaptively manipulate aspects of the water regime (the stocks andflows of water within the water ecosystem), but the water regime as a whole is a much biggerthing, and realistically, the volumes of water that can be managed in such a way are relativelysmall.A range of management measures are used with the intention of achieving environmentalwater requirements. For regulated rivers, these typically include such things as an annualextraction limits, constraints on delivery of water, dam release rules, end-of-system minimumflow rules. For unregulated rivers (or unregulated flows in regulated rivers), they typicallyinclude annual extraction limits and access rules dependent on river level or flow volumes atspecific sites. For groundwater, they typically include annual extraction limits, buffer zonesfrom connected rivers or key environmental assets within which pumping is prohibited orrestricted, and pumping restrictions based on groundwater levels and groundwater quality.‘Tank’ thinking leads to the tendency to define sustainability in terms of the proportion ofaverage inflow or recharge that is or can be extracted for consumptive use. While suchNATIONAL WATER COMMISSION – WATERLINES 13


figures can be useful for rough indicators, they fail to recognise the complexity of waterecosystems, and that sustainability is impacted not just by the volume withdrawn but by thetiming and location of extraction; by the manner in which flows within the river or aquifersystem are impaired or altered; and by other non-hydrologic factors such as riparian zonemanagement. It is the set of measures together which define the hydrologic regime, not justan annual extraction limit. Adverse effects of extraction as a whole can often be significantlymitigated by well targeted flow rules or pumping constraints.A rule of thumb that has been widely used states that rivers can be maintained in ‘excellent’condition if more than 60 per cent of flows are retained, ‘satisfactory’ condition if 30–60 percent are retained, and ‘survival’ if only 10 per cent of flows are retained (Schofield et al. 2003,p. 16). Ratios such as these can be very deceiving, masking the true impacts of extraction.This is particularly obvious in unregulated rivers where low-flow and event-based pumpingconstraints are far more relevant to environmental sustainability than annual extraction limits.In many unregulated rivers, the extraction limit may be only a few per cent of the averageannual flow, yet unconstrained pumping of low flows may be destroying environmentalattributes.In summary, it is the hydrologic regime as a whole that is important for sustainability. Thecombination of constraints on the timing and location of extraction and the management offlows using infrastructure, acting on the natural flow regime, define this regime. A singlenumber cannot represent it. Attempts at demarcation of volumes into consumptive on the onehand and environmental on the other flounder because water flowing in a system can be bothat different times. Attempts to define sustainability in terms of simple hydrologic ratios lead tomisleading results.3.2.2 Nominal versus actual volumesFrequently, nominal volumes on water access entitlements and actual volumes extracted areconfused. It is the volume of water that is or may be extracted that is significant forenvironmental sustainability; however, sums of nominal volumes are frequently used as ifthey represented this volume.The nominal volume on an NWI-consistent water access entitlement represents the quantityof shares the entitlement holder has in a varying consumptive pool. The quantity actuallymade available varies from time to time as rainfall, and thus the consumptive pool, varies.This quantity is known as the water allocation. Water allocations are most commonly issuedon a yearly basis. Thus the water allocation represents the water that can actually be taken.In some cases, the nominal volume on the water access entitlement and annual waterallocations are very close. For example, ‘allocations’ of water under Victorian high securitywater shares is expected to be 100% of the nominal volume in all but a few years on average(though the recent drought makes even this questionable). In many other cases, the nominaland seasonally allocated volumes are very different. For example, NSW general securitylicences have allocations of water that are frequently far less than the nominal one (1)megalitre per unit share of entitlement.The relationship between the nominal volume on an entitlement and the actual volume thatcan be extracted from time to time is often referred to as its reliability, and it is expressed invarious statistical forms. Reliabilities of classes of entitlements vary enormously betweenwater systems and between different classes of entitlements.Finally, the volume that is actually extracted is a different figure again. This is becauseentitlement holders frequently do not take all of the allocations that they could because theydo not need to or do not get the chance to. For example water allocations given to14 NATIONAL WATER COMMISSION – WATERLINES


unregulated river water access entitlements represent a maximum that can be taken subjectto firstly, the rivers actually flowing, and secondly, constraints on pumping to protect low flowsand sometimes freshes.In summary, the common practice of reporting nominal volumes on water access entitlementsas if they represent the actual volume either made available or actually extracted is highlymisleading, particularly when it is compared to annual average flow or recharge rates.3.3 Defining ‘key’ ecological requirementsThe NWI has, as an objective, the returning of overallocated or overused systems toenvironmentally sustainable levels of extraction (clause 23). The definition of ‘environmentallysustainable level of extraction’ requires that ‘key environmental assets or functions and theproductive base of the resource’ not be compromised (Schedule B of the NWI). There is arange of possible interpretations of this. Are ‘environmental assets’ rivers, aquifers andwetlands or are they particular aspects of them? Are ‘ecosystem functions’ ecologicalprocesses within assets or does the use of the word ‘or’ imply assets and functions areinterchangeable terms? Does the ‘productive base’ refer to the capacity to supply waterquantity and quality for economic purposes, or does it refer to ecologic primary productionprocesses? Importantly, which assets and functions are considered to be ‘key’?The term ‘key environmental assets, or ecosystem functions and the productive base of theresource’ seems to be a grab bag of terms intended to capture the attributes of a river oraquifer system that underpin its capacity to meet ‘environmental and other public benefitoutcomes’ as well as supply water for towns, industry and agriculture. It implies that there issome basic level of environmental assets or functions that are ‘key’, as well as the productivebase of the resource (whatever that means), which cannot be traded off.On the other hand, the NWI states that the environmental outcomes to be met are determinedby water plans that settle the trade-offs between competing outcomes for water (clauses 35and 36). The implication of these two statements taken together is that trade-offs can occur,but only with ‘non-key’ environmental assets or functions.In practice many trade off decisions are made outside of statutory water planning processes.For example, the Northern Territory has a general policy rule that limits extraction to no morethan 20 per cent of recharge, this being considered to be a conservative measure to ensureenvironmental assets and functions are preserved with low risk. In effect, this is a broad-brushtrade-off decision made as a matter of policy rather than as a result of a formal scientific orplanning process. Where actual or potential extraction is likely to exceed this limit, a watersystem could be considered to be notionally overallocated without there being a plan. In fact,it is when a water system is notionally considered to be overallocated that jurisdictions oftentake the next step of developing a water plan.Whether the trade-off is through a statutory water planning process or otherwise, the morefundamental issue is whether there is a water requirement for ‘key’ environmental assets orfunctions that can be determined scientifically and independently of the trade-off process.Some jurisdictions have argued that determining what is ‘key’ is not an absolute process butrather a community decision, and that any and all environmental attributes can be traded offin the water planning process. With this approach, declaring that a system is ‘overallocated’can be done only after the trade-off position is established through a water planning process,and it would apply where there is a decision in the plan to reduce or constrain entitlementsbelow current levels. Risk of permanent loss of ecosystem attributes can be consideredsustainable because this is the position that the people have decided they are happy to livewith in return for economic benefits.NATIONAL WATER COMMISSION – WATERLINES 15


In summary, it is not clear whether environmental values, key or otherwise, can beindependently defined, and if so, how or whether not ‘compromising’ environmental assets orfunctions should have primacy over consumptive use, or whether it is a legitimate outcomeunder the NWI to trade off environmental values to support consumptive requirements. Thishas led to different interpretation and reporting of whether water systems are overallocated ornot.3.4 Taking account of broader, long-term valueof servicesA large proportion of the services provided by water ecosystems are broad and long-term.Our personal health, and the health of our economy and human society, depends on thecontinuous supply of various ecological services that would be extremely costly or impossibleto replace. These natural services are varied. For example, it would be impractical to replace,to any large extent, services such as pest control through predation, pollination performed byinsects and birds, flood drainage, water purification, aesthetic values, and recreationalbenefits. The loss of biodiversity threatens our food supplies, opportunities for recreation andtourism, and sources of medicines.The scale at which these services are considered is important. For example the loss of onebird breeding wetland does not mean the loss of the birds if there are other breeding areas forthat species, and the birds use those areas, and the populations are not threatened.Biodiversity is not lost if one river is degraded but there are several other adjoining rivers withthe same types of ecosystems in good condition, which support the same species. But eachloss of habitat reduces the resilience of the species, and too much loss renders themvulnerable to extinction. The scale of this varies from global for migratory birds to regional forparticular species and ecosystem types.There are international agreements such as the Ramsar Convention for wetlands, andnational and state initiatives such as threatened species and heritage rivers legislation andpolicies on conservation areas, state river health targets. However, the strength andcompleteness of these is limited.These services are not captured in markets. The difficulty in understanding and explaining thevalue of these public good services has meant that the immediate and obvious benefitsassociated with services such as water supply have weighed far more highly in decisionsabout managing resources than the less obvious and broader public good services.3.5 Dealing with uncertaintyThe uncertainty associated with our understanding of ecosystem water needs, together withthe fact that declines in ecosystem health are gradual and often not immediately obvious, hasled to divisions about what are the causes and whether the uncontrollable or hard to controlfactors (for example, climate change, introduced species) are the key drivers of declineregardless of what can be done with flow and extraction management.Additionally there is a lack of recognition of the fact that gradual declines in health, which donot destroy an ecosystem, still weaken the ecosystem’s resilience, making it more vulnerableto catastrophic failure in critical events as extreme droughts. The lack of understanding ofecosystem resilience, in particular threshold points, is an increasingly recognised knowledgeshortfall.Uncertainty about future climate has been poorly considered until recently. The recent severedrought was unanticipated by many water plans and exposed their weakness in relation to16 NATIONAL WATER COMMISSION – WATERLINES


addressing uncertainty in future inflow and recharge patterns. For example, several waterplans in southern NSW were suspended shortly after they were commenced. In most cases,planning assumed a continuation of past patterns. Little thought was given to the uncertaintyof this assumption. In recent years there has been considerable investment nationally inunderstanding the mechanisms and drivers of climate, and providing information on the rangeof feasible climatic futures, including the pioneering CSIRO Sustainable Yield projects.Consideration of a range of possible future climate scenarios is only starting to be built intowater planning processes.Frequently, decision makers have taken ecological risks because there is not enoughinformation to demonstrate that scientifically assessed risks of ecological damage are certainto occur. The more immediately obvious benefits of economic use of water have generallyhad greater weight in trade-off decisions than uncertain environmental benefits or impacts.This is contrary to the precautionary principle, which states that uncertainty should not beused to postpone action where risks of serious or irreversible damage are present.3.6 Clarity and transparencyMany water plans have general aspirational objectives, which allow for wide interpretation.With such objectives, it is difficult to know whether success is being achieved or not. They arefrequently unrealistic, for example creating an expectation of delivering a level of ecologicalhealth that is not consistent with the trade-offs inherent in the body of the plan. Those whoaccepted the plan did so on the basis of their understanding of the objectives, and they aredisappointed when outcomes do not line up. Monitoring programs are also frequently generaland do not provide a clear indication of whether objectives are being achieved or not. There isa need for the discipline of specific, realistic measurable objectives, with strategies and rulesclearly aligned to achieving those objectives, and monitoring aligned to reporting onperformance.Additionally, water plans rarely state in a clear way the nature of the trade-offs that areinherent in the plan. While no plans expressly state that certain ecological assets are not tobe supported, many water plans expose those assets to a significant level of risk as a resultof the adopted water sharing arrangements, and few plans clearly state that level of risk.3.7 Addressing impacting activities in anintegrated mannerWhile water extraction and flow management are often major stressors, other activities suchas land use, riparian vegetation management, stock access in the riparian zone and growth inwater interception activities are also very important; in many areas, these activities are moresignificant than water extraction. Sustainably managing water ecosystems requires all ofthese to be addressed in an integrated manner, with priority of investment taking account ofthem all. While broad objectives and policy settings have been intended to do this, andconsiderable investment has been made in addressing the impacts of non-extractionactivities, the level of success on the ground has been limited.3.8 Appreciating the cost of the neededactionsIn 1994 it is doubtful whether governments realised the cost of reducing the rate of waterextraction to a level considered as sustainable. Treasuries expected implementation of waterplans to be cost neutral. Only in the past few years have governments come to realise thatNATIONAL WATER COMMISSION – WATERLINES 17


educing extraction of water often comes at a cost to irrigators and other water users, andexpecting them to bear all that cost with neutral draw on the public funds is not accepted asbeing equitable.The experience in cases such as the Namoi groundwater plan, and obtaining water for theLiving Murray and the Snowy initiatives has brought the importance of properly addressingthis into sharp focus. The NWI recognises this in its risk sharing formulation, but this does notapply until after 2014 or later, depending on when current plans are reviewed. Some stategovernments still have the policy that necessary reductions in water extraction will be costneutral to state treasuries, meaning all the costs are to be borne by water users. Victoria hasrecognised that reallocation of water to environmental purposes requires a substantialinvestment of public funds. The Australian Government’s $12.9 billion ‘Water for the Future’fund signals a new national direction in funding the re-allocation of water, which is broadlyconsistent with the NWI.18 NATIONAL WATER COMMISSION – WATERLINES


4. A framework for environmentallysustainable water planning4.1 Prioritising planning effortStatutory frameworks and water allocation planning processes within those frameworks definethe allocation of water from water systems. In a general sense, water planning encompassesboth the making of formal, statutory water plans and the establishment of broad statutoryrules and guidelines, both of which aim to manage water ecosystems to achieveenvironmental, social and economic objectives.To achieve efficiency, it is evident that the level of investment in water planning should varywith the level of competition for water and the environmental, economic and social servicesthat are at stake and potentially at risk. The reality of limited funding and resourcing meansthat it is important to have a framework that prioritises effort to where the risks and gains aregreatest.Clause 38 of the NWI indicates that jurisdictions have discretion in determining wherestatutory water plans are to be prepared, and where they are not. Jurisdictions in Australiaalready prioritise their activity. Three different classes of water management commonly applyin different circumstances.conservation managementlow competition managementhigh competition management.These classes to a large extent reflect current practice in jurisdictions, which have inevitablybeen driven by the need to prioritise and focus planning and management resources andminimise unnecessary regulation. They are descrobed in more detail below.The discussion in this report focuses on planning practice in high competition systems. Theprinciples and practices discussed can be adapted to the other two cases with appropriatesimplification and modification to reflect the lower level of planning investment required.Conservation managementConservation management applies to water systems that have little or no water extraction,retain a high degree of naturalness, and are designated to be protected. They are systemsthat are highly valued for their unique or representative ecological characteristics or their‘other public good’ services. Examples include designated wild rivers in Queensland andnatural catchments and rivers designated under the Heritage Rivers Act in Victoria.Water planning and management in such systems aims to maintain ecosystem health andunique ecological characteristics, with minimal exposure to risk associated with extraction ofwater. Generally this means constraining water extraction to minimal levels. Managementarrangements may be implemented through general statutory rules or water plans of apredetermined nature, with some adjustments for specific local conditions. The level ofinvestment in planning would be expected to be low.Low competition managementLow competition management applies to water systems with low levels of demand for watersupply and for which risks to ecosystem assets and services can be managed by general orregional management arrangements that have low socio-economic impact.NATIONAL WATER COMMISSION – WATERLINES 19


Low competition water ecosystems may have a simplified water entitlement system, as thefull NWI arrangement would not be needed or cost effective. In such cases jurisdictions areexpected to have ‘an ongoing process … in place to assess the risks of expected developedand demand on resources … with a view to moving these areas to a full entitlementframework when this becomes appropriate for their efficient management’ (NWI cl. 33).Substantial increases in demand for water (current or projected) or reductions in projectedinflow or recharge may trigger a low competition system to become a high competitionsystem, requiring the development of a statutory water plan and the implementation of morecomplex management arrangements.Management arrangements may be implemented through either general statutory rules orthrough water plans of a predetermined nature, with adjustments for specific local conditions.The level of investment in plan development and implementation would be expected to be lowto moderate.High competition managementHigh competition management applies to water systems where current or projected demandfor water supply is likely to result in loss or degradation of ecosystem attributes unlessmanagement arrangements that may have substantial socio-economic impact are imposed. Insuch cases, the mechanism for determining the trade-off to be adopted and the managementregime to be imposed is a statutory water plan. The levels of investment in both plandevelopment and implementation would be expected to be high.4.2 Providing an adaptive planning frameworkWater planning is occurring in an ever-changing environment with considerable uncertaintyabout what the future holds. If anything, the recent drought has brought home the fact thatlooking at past events is not enough when planning for the future. Climate is changing aroundus, as is our understanding of it. Human society is also changing, not only in terms ofpopulation, distribution and demands, but also in terms of culture and values.For water plans to be successful in not compromising key ecological assets, key ecosystemfunctions, or the productive base of the resource, there needs to be an inbuilt framework ofcontinual review to take account of changes in values, knowledge and the operatingenvironment. There needs to be a conscious recognition of uncertainty, and expectation ofsurprises. Plans need to be treated as hypotheses, as experiments from which managers canlearn.Currently, water planning practice in Australia has plans being reviewed at timeframesranging from four to ten years. Plan reviews need to:assess whether plan outcomes are still relevant and appropriate, taking account ofchanges in human needs and values in relation to ecosystems and ecosystem servicesassess whether the plan has been successful in achieving its intended outcomes, and ifnot why nottake account of changes in the knowledge and risk assumptions on which the plan wasbased.For reviews to be successful, they need to be informed by appropriate monitoring andassessment programs that identify whether the plan has been successful in achieving itsobjectives and outcomes. There should be a direct relationship between outcomes, objectives20 NATIONAL WATER COMMISSION – WATERLINES


and strategies. The monitoring programs should be attuned to the objectives and risksidentified in the plans.Specific, well-crafted plan objectives are of critical importance. This is generally an area ofweakness in planning practice in Australia. For example, the Water Sharing Plan for theMacquarie and Cudgegong Regulated Rivers (2003) contains the Macquarie Marshes. Asection of the Macquarie Marshes is listed under the Ramsar Convention, which placesobligations on governments to act to maintain it. Supplying water to the Macquarie Marshes isa major feature of the plan.The plan has as its objectives to:(a) maintain or enhance the ecological functions and values of riverine environments(b) support a sustainable regional economy(c) protect the social values and benefits provided by the river system(d) recognise and respect Aboriginal cultural responsibilities and obligations to thelandscape.Surprisingly, these objectives make no mention of the key environmental feature, theMacquarie Marshes. Likewise, the plan’s performance indicators are general and make nospecific mention of the Macquarie Marshes. Yet the plan contains very specific rules aboutvolumes of water able to be extracted and volumes set aside for the Macquarie Marshes.Lack of specificity undoubtedly causes confusion. The Macquarie Marshes as a whole is anarea of some 200,000 hectares, of which approximately 20,000 hectares are the Ramsarlisted wetland. It is not clear what area and what state of health the water sharing plan istargeting. Commentators reporting that only 10 per cent of the Macquarie Marshes is in goodhealth imply that the target is the whole Macquarie Marsh area (for example, National ParksAssociation 2006, Siewart 2007), but the reality is that the consumptive use of water forirrigation inevitably means that there will be some loss.Many water plans in Australia are of a similar nature: they have broad, general objectives anda lack of internal coherence between objectives, strategies, monitoring and reporting. Whenthese plans are reviewed, it will be difficult to know whether they have been successful or not.In addition, this vagueness means that there will inevitably be confusion within the communityabout what the plan portends to do and not do.Greater discipline in plan writing is needed. Water plans could be built around a logicalstructure as follows (Figure 1):Outcomes state the results the plan intends to be achieved. They may or may not betotally achievable within the term of the plan, and they will generally be in part reliant onfactors beyond the scope of the plan, but the plan must contribute towards achievingthem. They should preferably be specific, measurable and achievable.Objectives state specific measures that are intended to be achieved during the term ofthe plan by the strategies in the plan. Objectives should be S.M.A.R.T (specific,measurable, achievable, relevant, time bound).Strategies are the things that the plan puts in place to achieve the objectives. They arespecific tasks and actions that are capable of being implemented.NATIONAL WATER COMMISSION – WATERLINES 21


Figure 1: Outcomes, objectives, strategies, monitoring and evaluationPLANNINGMONITORING AND EVALUATIONOutcomesThe desired end resultsEffectiveness assessmentDid the objectives contribute to theoutcomes?ObjectivesThings the plan wants toachieve to contribute tothe outcomesPerformance assessmentDid the strategies achieve the objectives?StrategiesThings the plan does toachieve the objectivesAuditWere the strategies implemented?Monitoring and evaluation occurs at three levels:1. the implementation audit— whether or to what extent the strategies are beingimplemented2. the performance assessment—whether the strategies are delivering the objectives3. the effectiveness assessment—whether the objectives are contributing to the desiredoutcomes.Monitoring programs are then constructed accordingly.An example of good practice structuring in a water plan would be something like the following.22 NATIONAL WATER COMMISSION – WATERLINES


Example: Good practice structuring in a water planOutcome:Maintain the area and biodiversity of the XX wetland at 2005 levels.Objective:Flood the wetland over its 2005 area at least once every 2 years on average, with thelongest gap between flooding events being 5 years.Strategy:Provide a contingency allocation volume of 20% of inflows to the Big Dam up to avolume of yy megalitres per year, able to be held in storage and released on call.Develop and apply a decision protocol for calling on this water to top up natural floodevents so as to achieve the objective.An audit might assess:Was the contingency allocation accumulated as per the plan, and was there amanagement arrangement in place to call it out when it would best contribute to theobjective?A performance assessment might examine:To what extent were the strategies (i.e. the contingency allocation volume) successfulin achieving the objective? Were the strategies adequate and relevant?The relevant flood frequency statistics would be the performance indicators, and themonitoring program would need to include flood event recording.An effectiveness assessment might examine:To what extent did achieving the plan objectives (i.e. the flooding frequency) contributeto the outcome? Were the objectives relevant and adequate?Wetland area and biodiversity measurements would be the performance indicators,and the monitoring program would need to include collection of this information.The above example is for one element of a water plan. Plans would be expected to haveseveral outcomes with sets of corresponding objectives, strategies and performanceindicators.While the terminology above is not used consistently (for example, what are called outcomeshere may be referred to as objectives, and what are called objectives here may be referred toas targets) many water plans in Australia incorporate aspects of this structuring to varyingdegrees.Good documentation is also essential for effective reviews. It is particularly important that theknowledge, as well as knowledge gaps, assumptions and levels of uncertainty, on which theplan was based is clearly documented. In many cases, plans in Australia are accompanied bypublished technical assessments and supporting information for this purpose.It is also important that the final positions adopted in the plan are clearly set out. Victoria’sCentral Sustainable Water Strategy (DSE 2006) provides an example as shown below.NATIONAL WATER COMMISSION – WATERLINES 23


Example: Werribee River strategy from Victoria’s Central Sustainable Water StrategyThe Werribee River has a significantly changed flow regime due to several large in-streamstructures throughout the catchment and a significant increase in the number of farm dams.However, some river reaches retain high environmental and social values. The keyenvironmental objectives identified for the Werribee River are to:contribute to the protection of multiple threatened plant and animal species (includingAustralian Grayling Prototroctes maraena and Tupong Pseudaphritis urvillii)improve water quality and fish habitatrestore estuary and fringing red gums.It is estimated that environmental flows would need to be increased by an average of14,500 megalitres to meet the scientific recommendations. The Werribee River issignificantly modified so the management response is to use opportunities to moderatelyincrease the environmental flow and continue investment in complementary habitat worksidentified in the Regional River Health Strategy.The Government commits to enhancing environmental flows in the Werribee River by6000 megalitres by 2015. The benefits of the increased environmental flows will bemonitored and assessed to determine whether further enhancements are required. TheGovernment’s commitment to enhance the environmental flow regime of the WerribeeRiver by 6000 megalitres will provide for summer low flows for the entire river and freshesyear round in the lower parts of the river to improve water quality and the estuary and toprotect key plants and animals.To provide the full 14,500 megalitres would require consumptive use to be reduced by onethird. This could not be achieved without a significant reduction in irrigation activity andwithout severely compromising urban supplies to Melton and Bacchus Marsh.While this is to be applauded as a clear statement of the position adopted and the reason forit, it fails in one area—identifying what the risks and implications of not meeting thescientifically recommended water requirements are in terms of the health of the river.Lastly an adaptive planning framework should necessarily include ongoing research toaddress critical knowledge gaps. This program of research should be set out in the plan itself,forming part of the plan’s strategies.In summary, an adaptive water planning framework is needed. It should include:formal reviews of plans at appropriate intervals, taking account of plan performance andchanges in knowledge and valueswell structured plans with clear, specific outcomes and objectives and internallyconsistent strategies and monitoring programsclear, public documentation of the knowledge, assumptions and assessments on whichthe plan is based, and the uncertainties and risks involveda research program designed to address critical knowledge gaps.24 NATIONAL WATER COMMISSION – WATERLINES


4.3 Water planning in high competition watersystemsFigure 2 shows a generic process for water plan development in high competition systems.The process recognises that the fundamental tension in water allocation planning is betweenextraction of water for towns, agriculture and industry (‘consumptive’ use) on the one hand,and all the other ecosystem services, including the condition of the ecosystem itself as anatural service-producing asset, on the other.While the diagram suggests a linear process, there is in reality a high degree of iteration, withwork in later stages often leading to re-addressing earlier stages. This is particularly the casein the development and assessment of management strategies, as is shown with the two-wayarrows, but it also applies to other steps. Additionally it is common for aspects of the work,such as development of models and ecological assessments, to be done prior to planinitiation. This should be borne in mind when considering the steps of the process describedbelow.Lastly, the figure proposes that minimum or ‘key’ ecological (and consumptive) outcomes arenot negotiable. This is a challenging position to take for ecological outcomes, as the cost ofdoing this is high in some cases. Hence robust socio-economic impact assessments areimportant.Planning initiationEffective initiation sets the scene for effective planning, and it is essential for engenderingcommunity confidence in the plan. It is critical to procedural fairness—ensuring that affectedpersons are identified and given to understand what the implications of the plan are for them,and how to find out more and input to the process. Initiation should aim to:define the scope of the plan– the waters to be addressed by the plan– boundaries and requirements defined by policy and legislationidentify the relationship to other plans and planning processesidentify stakeholders and their interests and issues relevant to the plandefine the planning timetable and the outputs of the planning processidentify how stakeholder engagement is to occur, including the role, membership andexpectations of a water advisory committee if it is deemed appropriatedetermine resources (such as people, information, assessments) needed and ensuretheir availabilityinform public and stakeholders of process, implications and opportunities to participate.NATIONAL WATER COMMISSION – WATERLINES 25


Figure 2: Water allocation planning in high competition systemsPlanning initiationHydrologic assessmentIdentify and value current ecologicalassets and environmental and other publicgood services provided by the watersystemAssess trends and risks to those assetsand services under current managementarrangementsIdentify and value current consumptive useservices provided by the water systemAssess trends and risks to those servicesunder current management arrangementsDetermine minimum and aspirationaloutcomes for those assets and servicesDetermine minimum and aspirationaloutcomes for those servicesEstimate water regime changes neededfor minimum and aspirational outcomesEstimate water regime changes needed forminimum and aspirational outcomesIdentify alternative sets of specific objectivesand management strategies to achieve them(noting minimum outcomes are notnegotiable)Assess and document benefits, costs andrisks of each set of management strategiesDetermine the management strategies to beadopted, with corresponding final outcomesand objectivesDocument decision, including assumptions,considerations, trade-offs, justificationImplement, monitor, respond, review26 NATIONAL WATER COMMISSION – WATERLINES


Hydrologic assessmentIt is important that the water ecosystem hydrology is firmly understood. Only then can therelationship between this and the ‘services’ provided be defined or managed in subsequentsteps. The usual method is to compare the estimated natural hydrologic regime with theregime under current development and full development of water entitlements (under currentarrangements). In this way the alterations that have occurred already, and those might occurif management remains unchanged, can be readily seen. This analysis should be undertakenfor a range of feasible future climate scenarios.Hydrologic assessments generally rely on the construction of numerical models. Thesemodels are used both at the initial stage of planning for baseline assessment and later in theprocess as part of testing different management strategies. The planning process is heavilyreliant on them. After an analysis of water planning practice across Australia, Hamstead et al.(2008, p. 97) recommended continued development of both surface and groundwater models,with different types and complexities of models for different circumstances. Theyrecommended continued development of nationally recognised guidelines and peer review ofmodels.Identifying and valuing ecosystem assets and servicesThe ecological assets and the services currently provided are identified and valued. It isimportant this process take account of broader and long-term values at the international,national and regional levels. This might best be done as part of a broader natural resourcemanagement planning process that incorporates scientific identification of supporting andregulating services and community valuation of them (see section 5.3). The output would beexpected to be identification of specific assets and ecosystem services that are ‘key’, togetherwith condition targets and information on the relative value of other services.For consumptive use, this step similarly identifies and values the range of services provided(such as town water supply, agricultural production, mining, and industrial use), included thebroader socio-economic benefits associated with those services (such as maintaining ruralcommunities). Minimum or essential requirements would typically set by policy and legislation(such as meeting essential town and domestic water needs).The value of services is a community judgement that should be informed by science. Ideally itrepresents how important they are to local communities as well as the general public, and tocurrent and future generations. Natural resource management programs in Australia havedone considerable work on identifying and valuing water ecosystems in relation to theirservices (West Gippsland Catchment Management Authority (2005). The methods that havebeen used integrate technical assessments with information gathered through communityconsultation. A proposed approach is discussed in section 5.3.It is important to use open processes and ensure that all stakeholders have beenappropriately engaged, for the purposes of procedural fairness, and also to provide importantinformation to support equitable distribution of benefits and costs at a later stage in theplanning process. The methods used should be as objective as possible, with the outputssupported by hard information, including scientifically conducted natural resource andcommunity value assessments.Preferably, much of this work will have been done prior to plan initiation through naturalresource management planning processes. The assessment of trends and risks wouldnormally be done alongside this process.NATIONAL WATER COMMISSION – WATERLINES 27


Assessing trends and risksThis represents the baseline assessment of the condition of ecological assets and services,covering current condition, trends in condition, and risks. It assumes current managementarrangements continue.Considerable work has been done on indices of ecosystem health in recent years (such asthe Victorian Index of Stream Condition, the Murray–Darling Basin Sustainable Rivers Audit).These condition assessments, repeated over time, provide invaluable data on the status ofecosystems. They will, as they are repeated, show trends in that status (see section 5.2).For consumptive use, basic information that is commonly prepared includes town waterdemand and current and potential demand for water under licensed irrigation and industryentitlements. Going beyond this, it is important to assess trends, including town waterdemand projections, growth in use of existing entitlements, potential new agricultural andindustrial developments, and related social values and dependencies on water use.Risk assessment then identifies threats to valued assets and services. In doing these riskassessments, it is important to as much as possible identify and consider thresholds—forecological assets and for communities, local economies and social value structures. Suchthresholds must be related to possible events in the water regime, and take account of trendsin the condition of the assets or service under threat. Estimation of the range of futurepossible climatic sequences significantly enhances risk assessments (see section 5.5.3).It is important that all of these assessments are done using robust methods and by peoplewho are perceived by stakeholders to be independent and unbiased.Determining minimum and aspirational outcomesMinimum environmental and other public benefit outcomes are represented by conditiontargets for different parts of the ecosystem, specifically those required to maintain the specificassets and services determined to be ‘key’ through the identifying and valuing processes.Minimum consumptive use outcomes might be supply of suitable quality water for thosepurposes designated as essential.Beyond those outcomes identified as ‘key’, the local community may want outcomes thatrepresent higher levels of services that are consistent with those identified as having a high,but not ‘key’ value. This could extend to such things as improving the health of degradedecosystems or protecting additional ecological assets on the one hand, or allowing fulldevelopment of water entitlements, or expansion of water entitlements, on the other.In most cases, there will already be a good idea of the range of outcomes that is likely to bepossible, based on the preliminary assessments that led to the plan being initiated.Estimating water regimes changes required for minimum andaspirational outcomesThis is a scientific process that typically requires development and use of hydrologic timeseries models, coupled with information on possible future climates and scientificassessments of the water regime required to achieve ecological condition outcomes. In thecase of the ecological assessments, it is important that the scientific assessments alsoindicate complementary measures needed to achieved the outcomes (such as land usecontrols) and how important these are compared to the specified water regime requirements.28 NATIONAL WATER COMMISSION – WATERLINES


It is also important that these assessments are done using robust methods, by people whoare perceived by stakeholders to be independent and unbiased, and that the assessmentsare documented and made publicly available.Identifying alternative sets of specific objectives and managementstrategies to achieve themTypically, the water regime requirements for environmental and other public good services willbe in conflict with those for consumptive use. Sets of possible management strategies need tobe identified that enable all minimum outcomes to be met, but with different levels ofaspirational outcomes. Note that the minimum outcomes are not negotiable.Sets of strategies might include regulatory rules, infrastructure investments, and contingencymeasures that are to be implemented on the basis of monitoring. These all should bedesigned to meet outcomes and address identified risks to those outcomes (see section5.5.4). Any necessary complementary measures should also be identified (see section 4.5).Assess benefits, costs and risks of each set of management strategiesFor each set of management strategies being considered, the benefits, costs and risks areassessed. As stated earlier, it is important that these assessments are done using robustmethods, by people who are perceived by stakeholders to be independent and unbiased, andthat the assessments are documented and made publicly available. It is important that goodassessments of socio-economic impacts are included.Determine the management strategies to be adopted, withcorresponding objectives and outcomesThis involves weighing up benefits and costs of the management strategies and determiningthe strategies to be adopted. While this is informed by the assessments of benefits andimpacts, this is a value-laden decision, guided by the ecological and consumptive userequirements that have been determined to be ‘key’ (see section 0) and the principles ofdistributional equity. Minimum outcomes are, however, precluded from being traded-off.Procedural fairness would advocate that the decision maker must be and be seen to beindependent and unbiased, that the decision be informed also by input from all impactedstakeholders, and that the basis for the decision be open to public cross-examination.Document decisionTo complete the plan development process, thorough documentation of the approved plan isessential. Both the plan and all relevant assessments should be placed on the publishedrecord. To all for effective implementation and review, it is important that the basis for thedecision is recorded as well as the knowledge and assumptions that informed it. Thoseimpacted should be made aware of the outcomes of the process.Implement, monitor and respond, reviewFor water plans to be successful, a framework of continual review to take account of changesin values, knowledge and the operating environment is essential. There needs to be aconscious recognition of uncertainty, and expectation of surprises. Plans need to be treatedas hypotheses, as experiments from which managers can learn (see section 4.2). An integralpart of plan implement is making provision for monitoring, audits of implementation, andreviews of performance and effectiveness (see Figure 1).Effective compliance is an essential aspect of plan implementation. Monitoring of planeffectiveness will be of little value if the measures set out in the plan are poorly implemented.NATIONAL WATER COMMISSION – WATERLINES 29


Water sharing plans in Australia typically impose regulatory rules and obligations oninfrastructure operators and water users. Those thus affected by the plan need to have aclear understanding of their obligations and limitations, and there should be mechanisms foraudit and enforcement of compliance.4.4 Achieving equity in sharing benefits andcostsEquitable sharing of the costs of ecosystem maintenance and the benefits of ecosystemservices is a fundamental, yet often overlooked, aspect of environmentally sustainablemanagement. Major international conventions (Ramsar, Agenda 21, Convention onBiodiversity) all recognise that addressing the current needs of people in an equitable manneris essential. Australia’s National Strategy for Ecologically Sustainable Development has asone of its three objectives to ‘provide for equity within and between generations’. Equity andfairness are objectives common to natural resource legislation across Australia. Yet themethods for achieving this equity are poorly defined.In a recent report, Hamstead et al. (2008) noted that procedural fairness and distributionalequity were of critical importance to successful water planning. Community and stakeholderinvolvement in water planning, while important to this, is not of itself sufficient.Plan development processes should ensure the following:All affected parties have the opportunity to hear and understand the potential implicationsof the plan for them. This means that stakeholders should be identified and theimplications presented to them in a manner that is clear and understandable. This usuallyrequires ‘translation’ of technical information into straightforward language.All affected parties have the opportunity to have their views presented and considered indecision making. This requires both broad and targeted consultation strategies andensuring affected parties know up front when and how they will have an opportunity toinput. It also requires that the decision maker’s response to submissions be recorded andreported.Decision making should both be, and be seen to be, unbiased and informed. Thisrequires the technical information and assessments to use methods and be done bypeople who are seen to be unbiased experts, that the decision-making process is openand not able to be unduly influenced by particular groups, and that the decision-makingperson or body is perceived to be independent. The principles on which the decision is tobe based should be predetermined and known.Decision-making should be open to cross-examination. This may be achieved by suchthings as independent review panels, hearings or capacity to appeal in the courts.Transparency and openness is needed at all stages of the process.Procedural fairness generally goes a long way to achieving distributional equity, but there areadditional practices that are important for this, including:inclusion in decision-making principles of the need to share costs and benefits fairlyidentification and valuation of the services provided by ecosystems and to identifiedbeneficiaries30 NATIONAL WATER COMMISSION – WATERLINES


a willingness to identify and consider a broad range of management options to achievethe desired outcomes, including giving affected parties an opportunity to identify suchoptionsrobust socio-economic assessment of management options, which identifies risks topotentially affected parties and the mechanisms that are available to address those risksa process for weighing up the value of the services and the costs of maintaining theecosystem attributes, which takes account of non-market public good services that aredifficult to value in economic termsa recognition that public funding may be needed for equitable sharing of costs to occur.Planning processes in Australia incorporate these principles to varying degrees. A fullerdiscussion can be found in Hamstead et al. (2008). Syme et al. (1999) provides an excellentanalysis of fairness in water planning in Australia based on a series of case studies over adecade.The NWI includes a ‘risk sharing’ formula, which sets out how the costs associated withreduced water availability should be shared between water users and governments. Thiscould be used to inform decision making for water plans, though how well it applies for otheraspects of sharing of costs and benefits requires further thought. In fact, the risk-sharingformula has yet to be tested in any jurisdiction.Robust assessment of the socio-economic benefits and impacts is vitally important toachieving equity. In the end, water planning involves decisions on how the benefits and costs(including impacts) associated with using and managing the water system are shared. Theseassessments contribute to procedural fairness and distributional equity by providing tangibleinformation on benefits and impacts, without which decisions about how benefits and costsare shared are largely based on opinions and lobbying.A social and economic impact assessment documents the intended and unintended social,cultural, demographic, and economic consequences, both positive and negative, of currentand proposed management strategies, to all major stakeholders. Impacts related to waterplanning, for example, can be both direct (for example, altering the amount of water availablefor extraction) and indirect, and can be further removed in space or time (for example, drivinga greater distance for rural services). Thus secondary and cumulative impacts, as well asalternatives should be identified (IAIA 2003).Many books and manuals are available on how to undertake social and economicassessments. NSW is one of the few jurisdictions in Australia that has supported agenciesand community committees to undertake social and economic assessments in thedevelopment of water plans. This has been done through an Independent AdvisoryCommittee on Socio-Economic Analysis, which developed water planning specific guidelines:Socio-economic Assessment Guidelines for River, Groundwater and Water ManagementCommittees (IACSEA 1998).These guidelines were designed to assist community committees in carrying out socioeconomicassessments in a way that enhances effective participation in an adaptive process,while ensuring a consistent approach is taken across the state. The guidelines clearlydifferentiate between two phases:the use of assessments done early in the planning process to profile community andindustry characteristics, trends and risks and to act as a baseline, andimpact assessment of options or scenarios.NATIONAL WATER COMMISSION – WATERLINES 31


Current water planning processes routinely identify and quantify consumptive uses of water.Typically consumptive use can be broken into the following categories:stock and domestic water use on rural propertiestown water usemining and industrial water useagricultural water use.Water for domestic needs is treated implicitly as a basic human right, to be met at almost anycost. This is demonstrated in legislation, which always places water for domestic needs at thetop of water sharing priorities. It has also been demonstrated most clearly in the recentdrought, where, in the NSW Murray system, established rights to water under water accesslicences has been to varying extents suspended in order to ensure water supply for ‘critical’human needs. These even applied to the suspension in access to seasonal water allocationsalready granted in some areas, which had significant financial implications for affectedirrigators, who had assumed the security of such allocations once issued.There also seems to be a high value placed on having such water supplied to you whereveryou are. From a purely economic point of view, it is hard to see the justification for investmentof many millions of dollars of public funds to maintain supplies of small quantities of water toscattered rural households along the Great Darling Anabranch, or adjoining the Lower Lakesof the Murray, as has happened in recent years. The option of relocating the people seems tobe rarely considered because of the high level of community resistance. Clearly a high valueis being placed on this through political democratic processes.In the majority of cases of high competition water systems in Australia, the major consumptivewater use is irrigation. Well established methods are used to estimate the economic value ofirrigation. More challenging is assessing the social value of irrigation in sustainingcommunities. Threats to irrigation become threats to whole communities where it is the majoreconomic activity. Thus the value of irrigation can extend beyond farm gate returns to thevalue of having thriving towns in rural areas. Again, there is an implicit value placed onmaintaining such towns. Arguments against water trading often have an underlying theme ofprotecting the integrity of local communities that are dependent on irrigation.What is required then is not just an assessment of dollar values of water-dependentcommercial production, but clear identification of the social values that are associated with it.How important is it to maintain social and community structures that depend on irrigation orother water-using industries? How important is it to maintain water supply to support ruralproperties and hamlets? Looking at it another way, are we prepared to let some of these go ifthe environmental values to be gained are sufficiently high? The reality is that people can anddo move when they need to, but habitats cannot.Social assessments should include ‘cultural impacts involving changes to the norms, values,and beliefs’ (Burdge 2004a, p3) and identifying how affected people will respond in attitudeand actions. Perceptions and attitudes are important variables that can lead to realconsequences, such as land speculation or fear of losing one’s livelihood. As a result, socialscience methods (such as surveys and interviews) are used, supplemented with publicinvolvement procedures and consultation with the affected population (Burdge 2004a, p3).Variables include changes and impacts on: population composition and distribution;community and institutional structures; political and social resources (including power andconflict); individuals and family (including stability, networks, social wellbeing); and communityresources such as community infrastructure, land use patterns, and cultural resources32 NATIONAL WATER COMMISSION – WATERLINES


(Vanclay et al. 2004). It may also assess community sensitivity to change indices andcommunity wellbeing (Hausler and Fenton 2000; Hassall et al. 2003).What actually happens without this kind of information is that decisions are made throughpolitical processes rather than through informed judgements, and distributional equity isfrequently a casualty.Baldwin et al. (2009) provide a review of current socio-economic assessment practice inwater planning and recommend areas where further development is needed and can beachieved.4.5 Addressing impacting activities in anintegrated mannerRecognising that water is only one element in an ecosystem, it is essential that waterplanning is not done in isolation of other planning processes. The management of waterecosystems is intimately linked to the uses of the ecosystem services by towns and industry,to management of land and vegetation, to changes in population, and to economicdevelopment. There are feedback loops between ecosystems and social frameworks that usethem: human activity affects the ecosystems, and ecosystem status affects humans.While the hydrologic regime is an important factor in the health or status of rivers, wetlandsand other water dependent ecosystems, it is not the only factor. Management of riparianvegetation, fish and land use activities within the catchment are also major factors. It is thuscritical for ecosystem health that all these factors be managed in an integrated fashion. Tofocus solely on water extraction without consideration of these other factors means thatefforts to maintain ecosystem health will be less effective and inefficient.Integrating water planning with regional natural resource management planning is one way ofaddressing this. Regional natural resource management strategies or catchment action planscan provide the catchment context for water planning. They bring with them broader naturalresource management assessments of land use, rivers, aquifers and dependent ecosystems.Intertwining the two planning processes can lead to investment and trade-offs that areproperly prioritised to deliver the best results and more likely to achieve ecological targets.NATIONAL WATER COMMISSION – WATERLINES 33


5. Determining environmentallysustainable levels of extraction5.1 Water ecosystems, ecosystem servicesand levels of extractionThe UN Millennium Ecosystem Assessment 2005 defines an ecosystem asa dynamic complex of plant, animal, and microorganism communities and the non-livingenvironment interacting as a functional unit.Water ecosystems can be characterised as physical structures (such as river bed and banks,floodplain forms, aquifer geology), water chemistry (such as salinity, nutrient levels, turbidity),living organisms (flora and fauna including microorganisms) and hydrology (quantities andflows) all interacting together. Being explicit about the inclusion of physical and chemicalcharacteristics within the definition of ecosystems recognises that ecological processes areabout living organisms and the physical and chemical environment in which they sit and withwhich they interact.Water ecosystems can be defined as units at a range of spatial scales for managementpurposes. Common surface water ecosystem management units are catchments,subcatchments, valleys, floodplains, individual wetlands and river reaches. Common units forgroundwater ecosystems are water-bearing geological formations of various sizes, zoneswithin such formations, and groups of linked (vertically or horizontally) formations.Water ecosystems provide services to humanity. Most obvious is the supply of water fordomestic, agricultural and industrial purposes, but additionally they supply much more. TheUN Millennium Ecosystem Assessment 2005 characterises these services as:provisioning services—including supply of water for towns and agriculture, but can alsoinclude direct harvesting of fish and plants, timber grown in wetlands, and supply ofgenetic materialsregulating services—including regulation of floods, disposal of wastes, groundwaterdischarge and recharge, and maintenance of water qualitycultural services—providing recreational, aesthetic, tourism and spiritual benefitssupporting services—underpinning all the above, such as biodiversity maintenance, soilformation, photosynthesis, and nutrient cycling.These services can apply at a local, regional, national and global scale. Biodiversitymaintenance, for example, is flagged as being a global issue in the UN Convention onBiodiversity. This Convention recognises that the capacity of the earth’s ecosystem as awhole to continue to supply services which support humanity and to recover from natural (andman made) disasters is reliant on biodiversity.Water sharing in the NWI includes the concepts of ‘resource security’ outcomes and‘environmental and other public benefit’ outcomes (clause 37), as the two main competingtypes of outcomes. Resource security is related to the allocation of water for ‘consumptiveuse’, which is defined as the use of water for private benefit consumptive purposes includingirrigation, industry, urban and stock and domestic use.34 NATIONAL WATER COMMISSION – WATERLINES


Environmental and other public benefit outcomes are defined as including:in relation to environmental outcomes—maintaining ecosystem function (for example,through periodic inundation of floodplain wetlands), biodiversity, water quality, and riverhealth targetsin relation to other public benefits—mitigating pollution, public health (for example, limitingnoxious algal blooms), Indigenous and cultural values, recreation, fisheries, tourism,navigation and amenity values.It can be seen that these two NWI outcomes encompass the services outlined in theMillennium Ecosystem Assessment. In this instance ‘resource security’ corresponds to thewater supply aspect of provisioning services, and ‘environmental and other public benefits’corresponds to all the other types of services. This is in fact a reasonable reflection of thereality of water allocation planning, which is essentially about putting in place rules that defineand limit extraction of water for consumptive purposes so as to not overly impact on all theother services, or rather to limit such impacts to an agreed level. The benefits of consumptiveuse are considered on one side of the scale and the benefits of all the other services on theother, and a decision is made as to what is a reasonable balance.This balancing analogy fails in one respect—that there is in fact a link between the two typesof services. To a significant extent, the supporting services underpin the consumptive useservices. This is particularly true for water quality, which can have a major impact on theusability of water for consumptive purposes.It is important, then, to move in our thinking:from water resources, sources and systems that supply water to ecosystems andconsumptive usesto water ecosystems that supply a range of services, of which water supply for towns,industry and agriculture is but one.Conceptually, this means moving from a water tank with taps for the environment and taps forconsumptive purposes, to a complex natural asset that delivers a range of services, one ofwhich is water supply, and which needs to be properly maintained to do so. The way we drawon those services and the way we maintain the asset affects our ability to continue to draw onthose services into the future.It is also important to recognise that, for maintaining water ecosystems, it is the hydrologicregime as a whole that is relevant, not just average annual volumes. The hydrologic regimeconsists of the way water is stored and moves about, and recognises that water ecosystemsare spatially complex and vary constantly over time. The term ‘level of extraction’ can andshould be interpreted as meaning the hydrologic regime that results from extraction subject toextraction rules and limits and the active management of water within the system.However, this does not mean that sustainability can always be achieved just through bettermanagement of remaining flows. There is a clear need in many surface and groundwatersystems to return significant volumes of water to achieve environmental sustainability.5.2 Condition and trendsThere has been considerable work in recent years on development of approaches toassessing the health of rivers and wetlands. In 1999, Victoria completed its first statewideindex of stream condition assessment. This assessed and rated the condition of river reachesbased on indices for five themes: hydrology, physical form, streamside zone, water quality,NATIONAL WATER COMMISSION – WATERLINES 35


and aquatic life. Implicitly the ratings were high for close to natural condition. This wasrepeated in 2004, and it is to continue into the future on a five yearly basis.The Murray–Darling Basin Sustainable Rivers Audit recently published its first report of riverhealth across the Basin (MDBC 2008). This used a series of indicator measurements for threethemes: fish condition, macroinvertebrate condition, and hydrology condition. Conditionassessments were rated against what the indicator condition would be expected to be hadthere been no significant human intervention. The report makes it clear that the intention is tobenchmark condition in a way that is repeatable, and that these are not intended to imply thatthe reference condition is the management target. It indicates that the assessments will berepeated and published at three yearly intervals, with the next report to add assessmentthemes of physical form and riparian vegetation, and to include information on trends.At a national level, the National Water Commission has developed and proposes the adoptionof a framework that can form the basis of national river and wetland health assessments. TheFramework for the Assessment of River and Wetland Health (FARWH) is designed to bringtogether results of existing broad-scale assessments conducted at state, territory and basinscales. FARWH was developed when scoping undertaken for the Australian Water Resources2005 baseline assessment identified (a) difficulties in reporting on river and wetland health ina comparable manner within and across jurisdictions, and (b) deficiencies in the level ofinformation available for current NWI reporting requirements. It is based on the premise thatecological integrity is represented by all the major components of the environment thatcomprise the ecosystem. Components of water ecosystems proposed to be assessed inFARWH are: catchment disturbance, hydrological change, water quality and soils, physicalform, fringing zone, and aquatic biota.These condition assessments, repeated over time, provide invaluable data on the status ofecosystems and will, as they are repeated, show trends in that status. Water planning andmanagement would benefit substantially from increased coverage and the extension of suchapproaches to address the status and trends in condition of groundwater and groundwaterdependentecosystems would be of considerable value.5.3 Defining ‘key’ environmental assets andfunctionsThe National Strategy for Ecologically Sustainable Development has as one of its threeobjectives ‘to protect biological diversity and maintain essential ecological processes and lifesupportsystems’. This is reflected in the NWI and the Water Act 2007, which both talk aboutthe ‘environmentally sustainable take of water’ as that which does not compromise keyecological assets, or key ecosystem functions, or the productive base of the resource.As was discussed in section 3.3, interpreting what ‘key’ means has been a major stumblingblock. There is a lack of clarification of what it means in policy, legislation and practice. It istherefore essential to have a workable approach to determining ‘key’ ecological assets andecosystem functions in water planning to enable these provisions to be given effect.Locally prepared plans are typically dominated by current, local imperatives in trade-offs,where broader ecological perspectives are not well defined. Because of this it is proposedthat deciding ‘key’ ecological assets, ecosystem functions and the ‘productive base’ be doneat the international, national and regional levels through listings or policies and catchment orregional assessments.This builds on work already in place such as the Ramsar Convention for wetlands, andnational and state initiatives such as threatened species and heritage rivers legislation,36 NATIONAL WATER COMMISSION – WATERLINES


policies on conservation areas, and state river health targets. However, the strength andcompleteness of these is limited.Listings of geographically defined ecosystems such as wetlands, subcatchments, riverreaches are one approach. These could be further developed, so there is a nationalcoverage, and extended to address important groundwater-dependent terrestrial vegetation,karst ecosystems, and so on. They could also addressed at three scales—international,national, and regional—on the basis that biodiversity can be important at these three levels.Species listings are also well established, and theyrepresent another way of identifying ‘key’ecological assets.Such listings need to be given statutory backing where it is absent. Criteria for whatconstitutes ‘key’ and therefore should be listed at each of these levels will be needed where itis not currently present. Importantly, listings need not only to identify the assets, but also tostate the asset condition that is to be maintained or achieved.More challenging is addressing key ‘ecosystem functions’ in such a system. What this meansis not clearly defined, but one interpretation would be that it refers to what the MillenniumEcosystem Assessment 2005 calls supporting services—those which underpin all the otherservices such as biodiversity maintenance, soil formation, photosynthesis, and nutrientcycling. These are partly addressed by geographically defined ecosystem and specieslistings, but it is unlikely that this is sufficient. Such things as nutrient removal and floodplainsoil regeneration are system-wide features.The meaning of the term ‘productive base’ in national definitions is also not defined and canbe interpreted many ways, but one interpretation that complements ‘ecological assets’ and‘ecosystem functions’ is that it relates to the water ecosystem’s capacity to supply watersuitable for human use in towns, agriculture and industry. This productive base can be lost ifnatural storage capacity is lost or the quality of the water declines to the point of beingunusable. Examples include:compaction of aquifers leading to loss of natural storage capacityextensive outbreaks of blue-green algae in riverssalinisation of rivers or aquifers.Of course, these same attributes also underpin ecosystem functioning and the condition ofecological assets.One approach to addressing ‘ecosystem functions’ is to assume ecosystem ‘health’incorporates the status of ecosystem functions. In NSW, the State Water ManagementOutcomes Plan (NSW Government 2002) was an attempt to apply this. The first long-termoutcome it states is:Primary ecological production maintained or improved, including:(a) carbon cycling,(b) production to respiration ratios, and(c) carbon and food fluxes between rivers and floodplains, estuaries and coastal waters.This set the benchmark statewide as not to allow these things to decline. The plan thenincluded a range of strategies, expressed as five-year targets and designed to contribute tothe outcome. Water sharing plans were required under legislation to be ‘consistent’ with theState Plan (Water Management Act 2000 s 16(1)). The plan expired in 2007, and it has notbeen replaced. It is not clear how effective this plan was in providing water sharing plans witha solid indication of minimum ecosystem function requirements.NATIONAL WATER COMMISSION – WATERLINES 37


In relation to ‘key’ assets and functions, it is essential not only to identify what they are, butalso to indicate what condition they should be in. The aforementioned NSW State WaterManagement Outcomes Plan targets the current state of ‘health’ of water ecosystems as theminimum level. This applies the ‘conservation of quality’ principle discussed in section 2.3. Itcould also be called the ‘maintain or improve’ or ‘line in the sand’ principle.The Victorian River Health Strategy is similar in nature. It states that it seeks to:protect the rivers that are of highest community value from any decline in conditionmaintain the condition of ecologically healthy riversachieve an overall improvement in the environmental condition of the remainder of thestate’s rivers.Again, this appears to be based on the ‘maintain or improve’ principle. In addition it is explicitin allowing offsetting to occur, for example a decline in one area can be offset by animprovement in another, so the there is an ‘overall improvement’. The success of this strategyin providing solid guidance for water planning needs to be assessed.An alternative to the ‘maintain or improve’ principle is the ‘conservation of options’ or ‘noirreversible damage’ principle, which means that decline in condition can occur as long as it isreversible. It is well known that ecosystems have threshold levels. The return to previouscondition once a threshold has been exceeded can be difficult. Application of the ‘noirreversible damage’ principle requires understanding such threshold levels. Because of theuncertainty involved, it can be much more risky than the ‘maintain and improve’ principle. Away of dealing with this is to turn the burden of proof around, so that there must be scientificevidence that a certain water regime will not result in irreversible damage, otherwise a moreconservative regime is required.A combination of these two principles is also possible. A lesser level of health than currentcould be allowed, provided it can be demonstrated to be reversible in a reasonable timeperiod, otherwise ‘maintain or improve’ applies.To be consistent with this, it is proposed that ‘key ecological assets, key ecosystem functionsor the productive base of the resource’ should be described by defining each ‘asset’ spatially(for example, a river system, subcatchment, wetland, aquifer, or some combination) and foreach such defined asset setting condition targets, which inherently ‘encompass ecosystemfunctions and the productive base’. The process for doing so should consist of:Identifying ecological assets of state or national significanceFurther develop statutory national and state listings of ‘key’ ecological assets andspecies, including geographically defined features such as wetlands, river reaches,subcatchments; groundwater-dependent ecosystems not otherwise addressed, such askarsts and areas of important terrestrial vegetation; and important or threatened species.These listings indicate the importance of the asset or species at the global and nationallevel.38 NATIONAL WATER COMMISSION – WATERLINES


Identifying key assets at the regional levelIn addition to the assets listed at a state or national level, regional-based orcatchment-based assessments can identify and prioritise the remaining rivers, aquifersand water-dependent ecosystems as being of high or low ecological value. Suchassessments might well be integrated with catchment-based natural resource planningprocesses. Particular water ecosystems, or parts thereof, that will not put currently valuedservices and biodiversity (at a broader scale) at risk if they are allowed to degrade orremain in a degraded state, would be classed as low. These might include rivers that areheavily used, or potentially heavily used, or already heavily degraded, but that are offsetby other rivers that are maintained in very good condition. Everything else, by inference,is of importance and is listed as high ecological value. Those listed as high value wouldbe considered to be ‘key’. That is all rivers, aquifers and water-dependent ecosystems inthe area not excluded by being classified as low ecological value. It is important in doingso that the spatial extent of these assets is clearly defined, so there can be no ambiguityabout what is to be protected. A method for doing this using regional assessment needsto be developed.Condition targetsFor all ‘key’ assets, condition targets are needed. The ‘ecological functions’ arerepresented by stating condition targets for these assets. These would best be specifiedin terms of condition indicators, as discussed in section 5.2. Further work is needed toexpand these indicators to cover all types of water-dependent ecosystems. The startingpoint and default would be ‘current condition’. A lesser level of health than current couldbe allowed, provided it can be demonstrated to be reversible in a reasonable time period,otherwise ‘maintain or improve’ should apply.DefaultsFailing such assessments, a default position defines ‘key ecological assets, keyecosystem functions or the productive base of the resource’ as being all the rivers,aquifers and water-dependent ecosystems covered by the plan, and the default conditiontarget is their current condition.These defined assets and condition targets become the minimum ecologic outcomes for inputto the water planning process as defined in section 4.3. They may be added to in order toaddress ‘other public good’ services such as cultural or recreational.The value of ecological services is, in the end, a community judgement that has beeninformed by science. The challenge is to properly take account of the importance of theseservices, not just to the local community, but also to the broader national and globalcommunity, and not just to current but also to future generations, particularly in relation tobiodiversity. Thus there is a need for a national or state-driven process to ensure thesebroader, long-term interests are represented, in addition to a more local assessment toaddress immediate community values.It is important to use open processes and ensure that all stakeholders have beenappropriately engaged, for the purposes of procedural fairness, and also to provide importantinformation to support equitable distribution of benefits and costs at a later stage in theplanning process. The methods used should be as objective as possible, with the outputssupported by hard information, including scientifically conducted natural resource andcommunity value assessments.NATIONAL WATER COMMISSION – WATERLINES 39


5.4 Non-renewed water sourcesIt may be argued that there are cases where extraction of water could reasonably exceed therecharge to the aquifer and that this is an acceptable situation. In cases such as those wherethere is a risk of increasing salinization of the aquifer, there is a case for extracting morewater than is available from recharge because the aquifer will eventually be unusable.In Australia there are cases where aquifers are consciously being ‘mined’ in full knowledgethat in doing so future generations will not have the water supply option that we have today.For example, for aquifers in the arid centre of Australia, where recharge is virtually nil, theNorthern Territory Government has a policy of managing extraction so that ‘there will be nodeleterious change in groundwater discharges to wetlands; and total extraction over a periodof not less than 100 years will not exceed 80% of aquifer storage at start of extraction’(Landcare Council of the Northern Territory 2005, Appendix 5).It can legitimately be argued here that, where the water is not being renewed through naturalprocesses, then it can only ever be used for water supply once and it might as well be now.While this is true, the risk is that there may be ecosystems dependent on the water resourcethat would be lost. It is proposed that the principle that should apply is that taking water fromsuch a system should not occur unless there is an assessment that shows there are no ‘keyecological assets’ that would be compromised as a result.5.5 Not ‘compromising’ key environmentalassets5.5.1 Risk assessmentThe Brundtland Report definition of sustainable development includes a discussion about not‘compromising the ability of future generations to meet their own needs’. Likewise, the NWIdefinition of environmentally sustainable level of extraction is that which, ‘if exceeded wouldcompromise key environmental assets, or ecosystem functions and the productive base of theresource’. In this context, the word compromise means to ‘put at risk’ or ‘place in jeopardy’.Risks are threats to ecosystems and ecosystem services that may arise in the future.There is a considerable body of information, including national standards, on risk assessmentand management. Risk assessments are based on identifying possible threatening events,the consequences of those events and the likelihood of those consequences occurring.Taking account of uncertainty is a major factor in these assessments where water resourcesand ecosystems are concerned. For example, there is a high degree of uncertainty aboutfuture climatic patterns, and about how ecosystems will respond to changes in hydrology.Scientific assessments are used to estimate the likelihood and consequences of hydrologicchanges, and best practice assessments provide an indication of the uncertainty involved.This can then be factored into responses to identified risks.The concept of risk was introduced in the National Principles for Water for Ecosystems(Australian Government 1996), which defined the environmental water requirement as ‘thewater regimes needed to sustain the ecological values of aquatic ecosystems at a low level ofrisk’. The principles state that the environmental water requirement should be met subject to‘recognising the existing rights of other water users’, and that where it is not met, the systemis considered to be ‘overcommitted’ and action should be taken. Assessing the environmentalwater requirement required scientific assessments of ecological responses and risks. Thishas to some extent been built into water planning practice. However, there is considerableroom for improvement in assessing risk.40 NATIONAL WATER COMMISSION – WATERLINES


Water planning practice in the past has not dealt well with future threats. It has tended toassume a single future pattern of climate, and (usually implicitly) assume optimisticecosystem responses and resilience. What is missing is robust consideration of what mighthappen if these assumptions are in error, and strategies to manage such occurrences.To a large extent, past practice was a function of limited scientific knowledge. We are onlynow beginning to understand long-term climatic cycles and possible climate change effects onrainfall, runoff and groundwater recharge. Likewise, knowledge of ecological threshold pointsis an area of growing awareness and understanding.There is a lot of uncertainty in the future, and water planning practice needs to incorporateapproaches to take account of this, so as to not ‘compromise’ ecological assets and services.Risk management is a well-developed discipline that is designed for just this purpose, andthere is no reason it cannot be more fully incorporated into water planning. It goeshand-in-hand with the adaptive planning frameworks discussed in section 4.2.It is proposed that a ‘key’ ecological asset or function would be considered compromised if arisk assessment shows that there is a moderate or higher risk that the target condition(encompassing ecosystem functioning) cannot be maintained in the long term.Further work is needed on techniques for applying risk assessment and managementmethods to water planning. The matters in the following subsections are considered to beessential.5.5.2 ThresholdsAn important consideration in assessing trends and risks is to, as much as possible, identifypossible threshold points. Thresholds represent points where systems rapidly change fromone state to another. Figure 3 illustrates how this works (see the next page). In the figure, anecosystem service has been perturbed twice. The two horizontal lines represent differentsystem states. Hypothetically, such a service exhibits stochastic (random or uncontrolled) andinherent variability (fluctuations above and below the two horizontal lines). The systemrecovers after the first perturbation, with its resilience being measured by the duration of therecovery phase or return time to its first state. Note that crossing the threshold of the secondstate does not cause a shift when in the first state. The second perturbation causes theservice to cross the second threshold, which leads to a regime shift or catastrophic change toan alternative stable state. The long dashed lines illustrate two thresholds. Only when asystem crosses a threshold does it switch to an alternate state.There is increasing evidence that ecosystems seldom respond to gradual change in a gradualway. Lakes often appear to be unaffected by increased nutrient concentrations until a criticalthreshold is passed and the water shifts abruptly from clear to turbid. Submerged plantssuddenly disappear and animal and plant diversity is reduced—an undesired state from botha biological and economic point of view. Substantially lower nutrient levels than those atwhich the collapse of the vegetation occurred are required to restore the system. Theeconomic and social intervention involved in a restoration is complex and expensive, andsometimes it is even impossible.Studies of rangelands, forests and oceans also show that human-induced loss of resiliencecan make an ecosystem vulnerable to random events like storms, droughts or fires that thesystem could earlier cope with. An ecosystem with low resilience can often seem to beunaffected and continue to generate resources and ecosystem services until a disturbancecauses it to exceed a critical threshold. Even a minor disturbance can cause a shift to a lessdesirable state that is difficult, expensive, or even impossible to reverse (SwedishEnvironmental Advisory Council 2009).NATIONAL WATER COMMISSION – WATERLINES 41


Figure 3: Dynamics and stability in ecosystem servicesSource: Millennium Ecosystems Assessment Conceptual Framework Working Group (2003)There has been a considerable amount of work over recent years to identify ecologicalthresholds, including such things as critical flooding frequencies for wetland survival and forfish and water bird breeding (see for example DSE 2008). Saline intrusion or structuralcompaction of aquifers are further examples.Thresholds also apply to human activity. Urban water supply systems often have critical drysequences, which if exceeded, would result in system failure. Walker et al. (2009) reported ona resilience assessment of the Goulburn-Broken catchment in Victoria, which identified arange of known or likely thresholds in the catchment relating to biodiversity, agriculturalactivity, the local economy, and social value structures.Trends in condition are important. If the first state line in Figure 3 was sloping downwards,then it would be inevitable that, in time, a normal perturbation would occur which would triggera threshold change. On a river system, if connected wetlands or in-stream drought refugesare reduced in number and area, then it may take only a single event to trigger a major loss ofbiodiversity. This may even be totally unrelated to the water regime; for example, the eventcould be a highly destructive wildfire or pollution event.In summary, assessments of thresholds and the current capacity of valued assets to absorb‘shocks’ of various kinds are needed if we are genuinely planning for sustainability. Suchassessments fit hand-in-glove with risk assessment and management in providing tools toreduce uncertainty in water planning.5.5.3 Future inflow forecastsIn the past, we have assumed the future would be a continuation of historic recorded inflowpatterns. Putting it another way, we implicitly assumed that the likelihood of anything otherthat a continuation of past patterns was negligible. Recent years have shown that this was adangerous assumption.Reduced rainfall in the south-west of Western Australia has resulted in inflows to public watersupply dams decreasing by 70 per cent since the mid-1970s. CSIRO and the Bureau ofMeteorology (2007) have since released a report, Climate Change in Australia, whichconcluded that the 15 per cent decrease in rainfall in south-west Western Australia during thepast 30 years is likely to be at least partly due to human-induced increases in greenhousegases. The future projection for Perth is for further decline in winter and spring rainfalls. The42 NATIONAL WATER COMMISSION – WATERLINES


most severe projections by CSIRO are for average annual rainfalls to decline in the southwestof Western Australia—by 20 per cent by 2030, and 60 per cent by 2070—from thestandard period used to forecast streamflows. This is based on a high emissions scenario.More recent work by CSIRO (the ‘Sustainable Yields’ Project, see CSIRO 2008b) considereda range of future inflow scenarios for water systems in the Murray–Darling Basin as follows:a continuation of the climate of the past 112 yearsa continuation of the climate of the recent 10 yearsprojections of climate in 2030 taking account of global warming.Global warming scenarios were determined using data from a set of 15 internationallyrecognised global climate models, which simulate the effect of rising levels of greenhousegases in the atmosphere on regional rainfall patterns. Data from three different emissionscenarios (low, medium and high emissions) for each model were used, giving in total 45 datasets. From these scenarios, three were selected as representing upper, lower and medianlikely levels for average future inflows. This approach was intended to encompass uncertaintyin both future emission levels and in the models themselves. Derived future climatic statisticswere then imposed on 112 years of historic climatic data to produce adjusted datasets for thepurpose of modelling impacts.CSIRO then combined these climatic scenarios with system models to simulate systembehaviour under different development scenarios to provide information on associated flowsand availability of water for extraction and watering of environmental assets.The CSIRO range of scenarios can be used to help address the uncertainty involved inprojecting future inflows. They provide some information on the likelihood of high-risk orthreshold events occurring. While a prolonged dry sequence might not occur in the‘continuation of the past’ scenario, it might occur in one or more of the projected futurescenarios. For example, a critical length dry sequence that occurs rarely and in only oneclimate scenario might be considered less likely than if it occurred a number of times inmultiple scenarios.In addition to specific threshold events, these scenarios provide information on a likely rangeof what might be typical flows. Water supply schemes, irrigation and industry need to considerwhat might be the future average water availability, in addition to being able to deal withoccasional extreme events, to assess what their condition might be in when such an eventoccurs. For example, if statistically average conditions are keeping water storages low, townswill be much more vulnerable to extreme events when they occur. Likewise, ecologicalsystems, if already stressed under typical conditions (such as reduced average floodfrequency for a wetland) will be more vulnerable to occasional extreme events. Thus it isimportant to consider the likely state of ecosystems, towns, industries and agriculture whenevents occur, in addition to the events themselves.Note that, by accepting these and only these climate scenarios, we are also assuming thatthey present our best estimate of the likely range of future inflows, and that future inflowpatterns outside of these bounds are unlikely. This is clearly a significant improvement onpast single-scenario practice, but it remains to be seen whether it is valid.5.5.4 Risk mitigation measuresTypically a water planning process will identify and assess multiple sets of managementstrategies or scenarios before resolving on a final position (see Figure 2).NATIONAL WATER COMMISSION – WATERLINES 43


Scenarios for areas with expected increases in water use might include different infrastructureoptions or different levels of increased allocation for consumptive use. For overallocatedareas, the broad question is how much to attenuate consumptive use so as to address therisks identified in the baseline assessment. This is not a simple linear situation. Consumptiveuse scenarios typically have a range of variants, such as different dam capacities anddifferent quantities of extraction reduction. Scenarios are selected to represent a range of theconsitions that are considered needed or possible. Commonly, scenarios are revisediteratively after further analysisFor each consumptive use scenario, risk assessment is done again, using the range of futureinflow scenarios to identify events and sequences that are likely to have impacts and to gainan understanding of their likelihood and consequence.Once risks have been identified and evaluated, risk mitigation measures can be identified.Risk mitigation measures can reduce either likelihood or consequence. They may relate to:measures implemented well before the occurrence of eventsadaptive response at the onset and during the occurrence of eventsrecovery after the occurrence of events.For example if there is a risk of water supply failure to a town, responses could be either to:do something beforehand to remove the risk—for example, add a reserve water supplymonitor the situation and have in place a plan to implement should the event occur—forexample, truck in water, buy irrigation allocations on the market if they are availablelet the town run out—people temporarily move out and come back when the droughtbreaks (admittedly this is an unlikely option …).Similarly, for an endangered fish that would die out in a severe drought, options could be:improve and extend habitat now so the species is less vulnerablehave an emergency plan to buy water and shore-up drought refuges should the eventoccurstock up an aquarium or aquaculture pond with the fish so they can be used to restockthe river after the drought.The nature of the response would be expected to depend on the likelihood of occurrence. Forexample, something that is very likely would probably warrant up-front action, whereas lesslikely events might be more appropriately addressed by adaptive response measures.5.6 Determining whether a water system isoverallocated or overused5.6.1 Using annual volume ratiosIt has been shown that simple ratios of extraction to water availability have been usedinappropriately in the past as indicators of sustainability (see sections 3.2.1 and 5.1). Acommonly used indicator is the ratio of average water extracted to average water available ina water system. For example the CSIRO Sustainable Yields report for the Lachlan River inNSW describes a 28 per cent ratio as a ‘moderately high’ level of development (CSIRO2008a). Higher ratios clearly mean the hydrologic regime is more likely to be affected andecosystems put at risk. However, low ratios do not necessarily mean there is no problem.44 NATIONAL WATER COMMISSION – WATERLINES


Unregulated rivers in particular can have very low ratios but high impacts, because extractivedemand is typically high when the rivers are low.While annual volume ratios can be a useful indicator of potential environmental impacts, theycannot be used for a definitive assessment of overallocation.5.6.2 Considering ecological condition and trendsImprovements or no change in ecological condition could be considered evidence that thatsystem is not overallocated if there are no plans to alter the hydrological regime significantlyin the future. This relies on broadly accepted, robust, monitoring of ecological condition beingin place in all high competition water systems (see section 5.2 for further discussion).Unfortunately, the contrary is not necessarily true. That is, if ecological condition is declining,it may or may not be caused by the water extraction regime, and it cannot on its own beconsidered definitive evidence of overallocation. It would need to be accompanied by furtherstudies showing that the decline is at least likely to be attributable to the changed waterregime. This approach also does not provide for assessing proposed or expected future waterregimes, which is the territory covered by water planning. Overall then, ecological conditionmonitoring is not of itself adequate for assessing whether a system is overallocated.Ecological condition and trends are important for indicating problems. The existence of adeclining trend should mandate either action to arrest it or an explicit decision to accept it.Where a declining trend continues in a water source that a water plan had expected to bearrested, it is evidence of a need to review the science on which the plan is based and theeffectiveness of the plan’s implementation.5.6.3 Applying the NWI definitionUnder the NWI, determining whether a water system is overallocated or overused hinges oncomparing the potential or actual extraction of water to what would be allowed under an‘environmentally sustainable level of extraction’, which in turn is defined as ‘the level of waterextraction from a particular system which, if exceeded would compromise key environmentalassets, or ecosystem functions and the productive base of the resource’. It is proposed thatan assessment be based on direct application of this definition.It is self evident that assessment against this definition can only occur if ‘key’ environmentalassets and functions are known.Additionally assessment of whether those assets are compromised can be done only throughsome sort of risk assessment.Thus a system could be considered to have an ‘environmentally sustainable level ofextraction’ if:the key ecological assets and ecosystem functions that depend on the water have beenidentified through an appropriate process, resulting in identified assets with associatedcondition targets; the condition targets encompass ecosystem functionality (see section5.3 for proposed approach)a risk assessment has shown that those key assets and functions are not compromisedby the hydrologic regime associated with the level of extraction; that is, the riskassessment, taking account of risk mitigation measures, shows that there is less than amoderate risk that the target condition (encompassing ecosystem functioning) cannot bemaintained in the long term (see section 5.5 for discussion of approaches).NATIONAL WATER COMMISSION – WATERLINES 45


As noted in section 5.1, the term ‘level of extraction’ can and should be interpreted asmeaning the hydrologic regime that results from extraction subject to extraction rules andlimits and the active management of water within the system.Such assessments are essential inputs to the development of water sharing plans thatproperly address ecological risks. However, current practice in Australian water planningvaries considerably in the extent such work is done. The water regime adopted in a waterplanning process should be informed by the results of risk assessments on ‘key’environmental assets and functions for a range of scenarios.There will always be a level of uncertainty and debate in these processes, firstly becauseidentifying ‘key’ assets requires value judgements to be made, and secondly because of theuncertainties about future climate and ecological responses. Conformance with standards andguidelines for process can be used as the test of whether an assessment is reasonable.Standards and guidelines for identifying the ‘key’ assets and functions and assessing riskswould need to be developed. Each assessment undertaken would need to be properlydocumented and be able to be subjected to independent review for compliance with thosestandards and guidelines.Transparency of process will invigorate public debate and clarify expectations. Explicitidentification of key and non-key assets will make clear to all what is now happening implicitly.Trade-offs will become apparent. If a process for identifying and valuing assets and functionshas not met broader public expectations it will soon become evident.46 NATIONAL WATER COMMISSION – WATERLINES


6. Moving forward6.1 Key eventsIn Australia, important water planning milestones are on the near horizon:The NWC is about to conclude its second biennial assessment of implementation of theNWI by jurisdictions, including considering whether ‘overallocation’ is being addressedand ‘sustainable levels of extraction’ are being achieved. It is doubtful whether the currentassessment will be able to address these meaningfully because of the unresolvedmatters discussed in this paper. Putting in place an improved approach to assessingsustainable levels of extraction and identifying overallocation before the next assessmentwill be a major step forward in advancing the implementation of the NWI.A water plan for the Murray-Darling Basin is about to be prepared, which is to define‘limits on the amount of water that can be taken from basin water resources on asustainable basis’. The basin plan is to ‘ensure the return to environmentally sustainablelevels of extraction for water resources that are overallocated or overused’ and ‘to protect,restore and provide for the ecological values and ecosystem services of theMurray-Darling Basin’ and must ‘promote sustainable use of the Basin water resources toprotect and restore the ecosystems, natural habitats and species that are reliant on theBasin water resources and to conserve biodiversity’ and ‘take account of the principles ofecologically sustainable development’ (Water Act 2007, ss. 3 and 21). It clearly mustaddresses the conceptual issues discussed in this paper and determine an approachwithin the next two years.State-based water plans in drought stressed areas, particularly the southernMurray-Darling Basin, are being or about to be reviewed, and there will need to be harddecisions made about preservation of ecological assets and water for consumptive use.The Australian Government has committed $12.9 billion over ten years, of which a largepart is to address overallocated water resources. The Australian parliament recentlyvoted to advance the rate of spending. As the cumulative quantity of expenditureincreases, it will be increasingly important to ensure it is wisely targeted. It is likely thatstate water plans and the plan for the Murray–Darling Basin will provide the basis forguiding where investment is most needed to achieve ecological objectives. The cleardetermination and statement of ecological objectives and risks advocated in this paperwill be needed to maximise the effectiveness of this large investment.6.2 Addressing critical knowledge gapsTo implement the practices outlined, there is a need for improved availability of information,assessments and assessment tools. Australia’s aquatic ecologists, hydrologists andhydrogeologists have yet to fully integrate their scientific understanding into generalprocedures and knowledge that can be more generally applied. Monitoring, assessments andassessment tools need to be best practice and able to stand up to audit and peer review inorder to gain the confidence of stakeholders in the planning process where difficult trade-offsare being made.NATIONAL WATER COMMISSION – WATERLINES 47


The following areas for development are recommended:defining more clearly the benefits and water requirements of non-market environmentalservices of water ecosystems such as biodiversity maintenance, soil formation,photosynthesis, carbon and nutrient cycling, regulation of floods, disposal of wastes,maintenance of water quality, recreation, aesthetic values, tourism and spiritual valuesexpanding the coverage of water ecosystem condition assessments using standardmethods such as those developed for the Murray–Darling Basin Sustainable Rivers Audit,the Victorian Index of Stream Condition and the Framework for the Assessment of Riverand Wetland Health. The periodic repetition of these assessments provides clearindications of trends in condition, which are essential for assessing the effectiveness ofwater planning and management. They can also provide quantifiable condition targets foruse in future plans. In addition, development and deployment of similar assessments ofcondition of groundwater and groundwater-dependent ecosystems would be ofconsiderable valueimproving the understanding of thresholds in ecosystem responses to different surfacewater flow regimes and groundwater regimes, so that risks can be scientifically assessedand uncertainty reduceddeveloping risk assessment methods that are suitable for water planning in relation toenvironmental, social and economic outcomesassessing how existing and already proposed methods for listing of ‘key’ ecologicalassets and species might be enhanced and made more effective in representing thebroader, long-term value of ecological assets and functions. Consider expansion to covergroundwater-dependent ecosystems not otherwise addressed such as karsts and areasof important terrestrial vegetation. These listings should reflect the importance of theasset or species at the global and national level. The details of such listings shouldpreferably not only identify the assets but also state target condition.6.3 ImplementationThis paper proposes a range of processes that could form the basis for better deliveringenvironmental sustainability through water planning. These are generally not new things, butrather the proposal is to develop and expand practices that are already around. To implementthese proposals, the following actions are recommended, in addition to addressing the criticalknowledge gaps listed above:Develop general guidelines for water allocation planning to show how the concepts andapproaches developed should be integrated into water planning practice. The outline ofthe steps in water planning set out in section 4.2 could form the basis for theseguidelines. Adaptations of the guidelines to low competition management andconservation management situations (see section 4.1) would also be needed.Further to the previous point, develop guidelines for achieving equity in water plandevelopment, addressing procedural fairness, distributional equity, methods for valuingservices and socio-economic impact assessment (see section 0).Considering the model illustrated in Figure 1, develop guidelines and examples of wellstructuredwater plans, with clear, specific outcomes and objectives and internallyconsistent strategies and monitoring programs.48 NATIONAL WATER COMMISSION – WATERLINES


Develop guidelines for clear, public documentation of the knowledge, assumptions andassessments on which a water plan is based, and the uncertainties and risks involved.Develop and trial the proposed method for identifying ‘key’ environmental assets andfunctions in different situations (see section 5.3).Develop and trial risk assessment methods for environmental assets and functions (seesection 5.5).NATIONAL WATER COMMISSION – WATERLINES 49


7. ConclusionWater allocation planning in Australia is in a state of rapid evolution. National and statepolicies over the past two decades, including the NWI, have mandated sustainable use ofwater resources. Varying interpretations of definitions has meant that jurisdictions haveclaimed they are meeting agreed policy commitments, even though implementation of thesepolicies in on-the-ground water planning and management has not met the expectations ofthe federal government and the community at large. Faced with clear evidence ofenvironmental decline and severe water shortages, the pressure for continuing improvementis strong and is being supported by substantial investment by governments.This paper has considered issues associated with implementing the NWI concepts ofoverallocation and environmentally sustainable level of extraction. These concepts are centralto commitments to sustainability, yet they are poorly defined. This paper includes discussionof what these terms might mean, taking account of national and international agreements andinterpretations on sustainability. The proposals for interpreting and applying these concepts towater planning practice constitute significant steps towards more environmentally sustainablewater planning and better protection for Australia’s water resources.50 NATIONAL WATER COMMISSION – WATERLINES


8. ReferencesAustralian Government 1994, COAG Water Reform Framework, Environment Australia,accessed 3 Feb 2009.Australian Government 1996, National Principles for the Provision of Water for Ecosystems,Department of Environment and Heritage,, accessed 3 Feb 2009Baldwin C, O’Keefe V and Hamstead M, 2009, Reclaiming the balance: social and economicassessment – lessons learned after 10 years of water reforms in Australia, prepublicationdraft.Burdge, R 2004a, 'Social impact assessment: definition and historical trends', in R Burdge(Ed.), The Concepts, Process and Methods of Social Impact Assessment, Social EcologyPress, Middleton, Wisconsin, pp. 3–11.Cooney R 2005, ‘From promise to practicalities: The precautionary principle on biodiversityconservation and sustainable use.’ Chapter 1 in Rosie Cooney and Barney Dickson (Eds),Biodiversity and the precautionary principle: Risk and uncertainty in conservation andsustainable use, Earthscan, London.CSIRO 2008a, Water Availability in the Lachlan, Summary Report, March 2008, p. 8.CSIRO 2008b, Water availability in the Murray-Darling Basin, The whole-of-basin report fromthe CSIRO Murray-Darling Basin Sustainable Yields Project, CSIRO,,accessed 3 March 2009CSIRO and Australian Bureau of Meteorology 2007, Climate change in Australia: technicalreport 2007, CSIRO.Davies P, Harris J, Hillman T and Walker K 2008, SRA Report 1: A report on the ecologicalhealth of rivers in the Murray–Darling Basin, 2004–2007, Prepared by the IndependentSustainable Rivers Audit Group for the Murray–Darling Basin Ministerial Council, Murray–Darling Basin Commission, Canberra.DNRE 2002, Victorian river health strategy, Victorian Department of Natural Resources andEnvironment, August 2002.DSE 2006, Sustainable water strategy – Central Region, Department of Sustainability andEnvironment, Melbourne, Victoria.DSE 2008, Northern Region Sustainable Water Strategy Discussion Paper, Department ofSustainability and Environment, Melbourne, Victoria.Hamstead M, Baldwin C and O'Keefe V 2008, Water allocation planning in Australia – Currentpractices and lessons learned, Waterlines Occasional Paper No.6, April 2008 National WaterCommission, Canberra.Hassall and Associates Pty Ltd, Ross, H & Maher, M 2003, Profiling – Social and EconomicContext: Social Impact Assessment of Possible Increased Environmental Flow Allocations tothe River Murray System, Stage 1, Volume 2, Murray–Darling Basin Commission, Sydney.Hausler, S and Fenton, M 2000, Burnett Basin WAMP: Social assessment report (preliminarydraft), Department of Natural Resources, Brisbane.NATIONAL WATER COMMISSION – WATERLINES 51


IACSEA 1998, Socio-economic assessment guidelines for river, groundwater and watermanagement committees, Independent Advisory Committee on Socio-economic Analysis.Part of information package provided by the NSW Department of Land and WaterConservation to water planning committees.IAIA 2003, Social Impact Assessment: International Principles, International Association forImpact Assessment, , accessed 2 March2009.Jones G, Hillman T, Kingsford R, McMahon T, Walker K, Arthington A, Whittington J, GawneB, Thoms M, Young B 2003, Ecological assessment of environmental flow reference pointsfor the River Murray system, Interim Report prepared for the Murray-Darling BasinCommission, Living Murray Initiative, Murray-Darling Basin Commission, Canberra.Landcare Council of the Northern Territory 2005, Integrated natural resource managementplan for the Northern Territory, Northern Territory Government, Darwin.MDBC 2008, Murray-Darling Basin Rivers: ecosystem health check, 2004–2007. Murray–Darling Basin Commission, Canberra.Millennium Ecosystems Assessment Conceptual Framework Working Group, Ecosystemsand human well-being: a framework for assessment, Island Press, USA.NSW Government 2002, State Water Management Outcomes Plan, Department of Water andEnvironment, Sydney, accessed 3 March 2009.NSW Government 2003, Water Sharing Plan for the Macquarie and Cudgegong RegulatedRivers Water Sources 2003,,accessed 17 Feb 2009National Parks Association of NSW 2006, Macquarie Marshes project briefing notes,, accessed 17 Feb 2009.New Zealand Government 2006, Precautionary principle: origins, definitions, andinterpretations, Treasury Publication, ,accessed 3 March 2009.NWC 2007, Australian Water Resources 2005, National Water Commission, Canberra,,accessed 3 Feb 2009.NWC 2007, National Water Initiative – First Biennial Assessment of Progress inImplementation, National Water Commission, Canberra.Peterson D 2006, Precaution: principles and practice in Australian environmental and naturalresource management, Productivity Commission, Presidential Address, 50th AnnualAustralian Agricultural and Resource Economic Society Conference, Manly, New SouthWales.Schofield N, Burt A, Connell D 2003, Environmental water allocation: principles, polices andpractices, Land and Water Australia, Canberra.Siewert, S 2007, Saving our dying wetlands: The Macquarie Marshes, Speech, ,accessed 17 Feb 2009.52 NATIONAL WATER COMMISSION – WATERLINES


Swedish Environmental Advisory Council 2009, Resilience and sustainable development,Ministry of the Environment, ,accessed 28 Feb 2009.Syme G, Nancarrow B and McCreddin J 1999, ‘Defining the components of fairness in theallocation of water to environmental and human uses’, Journal of EnvironmentalManagement 57:51–70Vanclay, F and Social Section of IAIA 2004, 'International principles for social impactassessment', in R Burdge (Ed.), The concepts, process and methods of social impactassessment, Social Ecology Press, Middleton, Wisconsin, pp. 273–81.Walker BH, Abel N, Anderies JM and Ryan P 2009, ‘Resilience, adaptability, andtransformability in the Goulburn-Broken Catchment, Australia’, Ecology and Society 14(1):12,available at .Weiss 1992, Environmental change and international law: New challenges and dimensions,Edited by Edith Brown Weiss, The United Nations University, 1992.West Gippsland Catchment Management Authority 2005, West Gippsland river healthstrategy, Traralgon, Victoria.NATIONAL WATER COMMISSION – WATERLINES 53


Appendix A: Relevant existingdefinitionsUN Brundtland Report (1987)The aim of sustainable development should be to satisfy the needs of the present withoutcompromising the ability of future generations to meet their own needs.National Strategy for Ecologically Sustainable Development (1992)The strategy defines ecologically sustainable development for Australian purposes asUsing, conserving and enhancing the community's resources so that ecologicalprocesses, on which life depends, are maintained, and the total quality of life, now and inthe future, can be increased.National Water Initiative (2004)Environmentally sustainable level of extraction is the level of water extraction from a particularsystem which, if exceeded would compromise key environmental assets, or ecosystemfunctions and the productive base of the resource.Environmental and other public benefit outcomes are environmental and other public benefitoutcomes are defined as part of the water planning process, are specified in water plans andmay include a number of aspects, including:environmental outcomes—maintaining ecosystem function (for example, through periodicinundation of floodplain wetlands); biodiversity, water quality; river health targets;other public benefits—mitigating pollution, public health (for example, limiting noxiousalgal blooms), Indigenous and cultural values, recreation, fisheries, tourism, navigationand amenity values.Overallocation refers to situations where with full development of water access entitlements ina particular system, the total volume of water able to be extracted by entitlement holders at agiven time exceeds the environmentally sustainable level of extraction for that system.Overused refers to situations where the total volume of water actually extracted forconsumptive use in a particular system at a given time exceeds the environmentallysustainable level of extraction for that system. Overuse may arise in systems that areoverallocated, or it may arise in systems where the planned allocation is exceeded due toinadequate monitoring and accounting.National Principles for Provision of Water for Ecosystems (1996)The term environment as used in this document refers to the natural components of aquaticecosystems, the flora and fauna, and the natural ecological processes that take placebetween individual plants and animals, their surroundings, and between each other. Themaintenance of species biodiversity, community structure and functioning and naturalecological processes are important elements (and indicators) of the maintenance of overallenvironmental integrity.Water-dependent ecosystems are those parts of the environment, the species compositionand natural ecological processes of which are determined by the permanent or temporary54 NATIONAL WATER COMMISSION – WATERLINES


presence of flowing or standing water. The in-stream areas of rivers, riparian vegetation,springs, wetlands, floodplains and estuaries are all water-dependent ecosystems.Ecological values are defined as the natural ecological processes occurring within waterdependentecosystems and the biodiversity of these systems.Environmental water requirements are descriptions of the water regimes needed to sustainthe ecological values of aquatic ecosystems at a low level of risk. These descriptions aredeveloped through the application of scientific methods and techniques or through theapplication of local knowledge based on many years of observation.Environmental water provisions are that part of environmental water requirements that can bemet. Environmental water provisions can refer to:unregulated flows in rivers and water in wetlands and aquifersspecific volumetric allocations or releases from storageswater levels maintained in wetlandswater in transit for other users, the pattern of flow of which may be defined to meet anenvironmental need.Draft revised National Principles for Provision of Water for Ecosystems(2001)Water-dependent ecosystems are those parts of the environment, the species compositionand natural ecological processes of which are determined by the permanent or temporarypresence of flowing or standing water above or below ground. The in-stream areas of rivers,riparian vegetation, springs, wetlands, floodplains, groundwater and estuaries are all waterdependentecosystems.Ecological assets (or values) are defined as the essential ecological processes, habitats andbiodiversity occurring within water-dependent ecosystems. The maintenance of speciesbiodiversity, community structure and functioning and natural ecological processes areimportant elements (and indicators) of the maintenance of overall ecosystem integrity. (Theterms, ecological assets and ecological values are used interchangeably within the text of thisdocument.)Ecological water requirements are descriptions of the water regimes needed to sustain theecological values of water-dependent ecosystems at a low level of risk.Environmental water provisions are those water regimes that are provided as a result of thewater allocation decision-making process taking into account ecological, social and economicimpacts and implications. They could meet in part or in full the ecological water requirements.National Groundwater Committee (2000)Sustainable groundwater yield is defined as:The groundwater extraction regime, measured over a specified planning timeframe, thatallows acceptable levels of stress and protects dependent economic, social, andenvironmental values.This definition is based on adopting the following approach to its implementation.Extraction regimeIt is recognised that sustainable groundwater yield should be expressed in the form of anextraction regime, not just an extraction volume. The concept is that a regime is a set ofNATIONAL WATER COMMISSION – WATERLINES 55


management practices that are defined within a specified time (or planning period) and space.Extraction limits may be expressed in volumetric quantity terms and may further specify theextraction or withdrawal regime by a combination of accounting rules, rates of extraction overa given period, impact, water level or quality trigger rules. The limits may be probabilistic orconditional.The extraction regime has often being defined as a maximum volume that may be taken inany single year. In some cases, where draw beyond the rate of recharge may be acceptable,it may be only for a specified period, after which time the rate may be less than the rate ofrecharge to compensate. In some cases and under specific circumstances (for example, highor low rainfall years) the amount of water that may be taken may be greater or less than thelong-term value and the conditions for this can be specified.Acceptable levels of stressThe approach recognises that any extraction of groundwater will result in some level of stressor impact on the total system, including groundwater-dependent ecosystems. The concept ofacceptable levels of stress as the determining factor for sustainable yield embodiesrecognition of the need for trade-offs to determine that is acceptable. How trade-offs aremade is a case-specific and site-specific issue and a matter for the individual states toadminister. The trade-offs will often involve balancing between environmental, social andeconomic needs. In some cases, the stress may be temporary as the system adjusts to a newequilibrium.The definition should be applied in recognition of the total system. That is, it should recognisethe interactions between aquifers and between surface and groundwater systems andassociated water-dependent ecosystems. The definition implies that integrated managementdecisions must be taken to fully satisfy its spirit.In calculating sustainable yield, a precautionary approach must be taken so that estimates arelower where there is limited knowledge. Application of the calculated sustainable yield as alimit on extractions must be applied through a process of adaptive management involvingmonitoring impacts of extraction. Sustainable yields should be regularly reassessed and maybe adjusted in accordance with a specified planning framework to take account of any newinformation, including improved valuations of dependent ecosystems.Storage depletionThe approach recognises that extraction of groundwater over any timeframe will result insome depletion of groundwater storage (reflected in a lowering of water levels orpotentiometric head). It also recognises that extracting groundwater in a way that results inany unacceptable depletion of storage lies outside the definition of sustainable groundwateryield.Where depletion is expected to continue beyond the specified planning timeframe, anassessment needs to be made of the likely acceptability of that continuation and whetherintervention action might be necessary to reduce extraction. If intervention is likely to benecessary, then planning for that action should be undertaken so that it can be implementedat the end of the specified timeframe.Major considerations in determining the acceptability of any specific level of storage depletionshould be ‘inter-generational equity’, and a balance between environmental matters identifiedin the National Principles for Provision of Water for Ecosystems, social and economic values.56 NATIONAL WATER COMMISSION – WATERLINES


Protecting dependent economic, social and environmental valuesThe definition recognises that groundwater resources have multiple values, some of whichare extractive while others are in situ (for example, associated water-dependent ecosystems),and all have a legitimate claim on the water resource.In considering trade-offs in resource values, due recognition should be given to environmentaldependencies, the risk of irreversible impacts; and any decisions shall be made inaccordance with the principles of ecological sustainable development.UN Millennium Ecosystem Assessment (2005)An ecosystem is defined as a dynamic complex of plant, animal, and microorganismcommunities and the nonliving environment interacting as a functional unit.Ecosystems are considered as units that provide services that benefit people. These servicesare categorised as:provisioning services—such as food, water, timber, and fibreregulating services—that affect climate, floods, disease, wastes, and water qualitycultural services—that provide recreational, aesthetic, and spiritual benefitssupporting services—such as soil formation, photosynthesis, and nutrient cycling.Water Act 2007The consumptive pool is the amount of water resources that can be made available forconsumptive use in a particular water resource plan area under the rules of the waterresource plan for that water resource plan area.Consumptive use is the use of water for private benefit consumptive purposes includingirrigation, industry, urban and stock and domestic use.Environmental assets include:(a) water-dependent ecosystems(b) ecosystem services(c) sites with ecological significance.The environmentally sustainable level of take for a water resource is the level at which watercan be taken from that water resource, which if exceeded, would compromise:(a) key environmental assets of the water resource(b) key ecosystem functions of the water resource(c) the productive base of the water resource(d) key environmental outcomes for the water resource.Environmental outcomes include:(a) ecosystem function(b) biodiversity(c) water quality(d) water resource health.NATIONAL WATER COMMISSION – WATERLINES 57


Note 1: Paragraph (a) would cover, for example, maintaining ecosystem functionby the periodic flooding of floodplain wetlands.Note 2: Paragraph (d) would cover, for example, mitigating pollution and limitingnoxious algal blooms.The long-term average sustainable diversion limit is the maximum long-term annual averagequantity of water that can be taken, on a sustainable basis, from:(a) the basin water resources as a whole, and(b) the water resources, or particular parts of the water resources, of each waterresource plan area.Overallocation—there is an overallocation for a water resource plan area if, with fulldevelopment of water access rights in relation to the water resources of the area, the totalvolume of water able to be extracted by the holders of water access rights at a given timeexceeds the environmentally sustainable level of take for those water resources.Overuse—there is an overuse for a water resource plan area if the total volume of wateractually taken for consumptive use from the water resources of the area at a given timeexceeds the environmentally sustainable level of take for those water resources.Note: An overuse may arise for a water resource plan area if the area is overallocated, or ifthe planned allocation for the area is exceeded due to inadequate monitoring or accounting.Take water from a water resource means to remove water from, or to reduce the flow of waterin or into, the water resource including by any of the following means:(a) pumping or siphoning water from the water resource(b) stopping, impeding or diverting the flow of water in or into the water resource(c) releasing water from the water resource if the water resource is a wetland or lake(d) permitting water to flow from the water resource if the water resource is a well orwatercourseand includes storing water as part of, or in a way that is ancillary to, any of the processesor activities referred to in paragraphs (a) to (d).A water allocation is the specific volume of water allocated to water access entitlements in agiven water accounting period.A water access entitlement is a perpetual or ongoing entitlement, by or under a law of a state,to exclusive access to a share of the water resources of a water resource plan area.Water access right:means any right conferred by or under a law of a state to do either or both of thefollowing:(i) to hold water from a water resource(ii) to take water from a water resource(b) without limiting paragraph (a), includes the following rights of the kind referred to inthat paragraph:(i) stock and domestic rights(ii) riparian rights(iii) a water access entitlement(iv) a water allocation58 NATIONAL WATER COMMISSION – WATERLINES


(c) includes any other right in relation to the taking or use of water that is prescribed bythe regulations for the purposes of this paragraph.Water-dependent ecosystems are surface water ecosystems or a groundwater ecosystems,and their natural components and processes, that depend on periodic or sustainedinundation, waterlogging or significant inputs of water for their ecological integrity. Awater-dependent ecosystem includes an ecosystem associated with:(a) a wetland(b) a stream and its floodplain(c) a lake or a body of water (whether fresh or saline)(d) a salt marsh(e) an estuary(f)a karst system, or(g) a ground water system.A reference to a water-dependent ecosystem includes a reference to the biodiversity of theecosystem.NATIONAL WATER COMMISSION – WATERLINES 59


Appendix B: International initiativesAustralia is not alone in recognising the need for action to address declining water systems,nor in struggling with how to do so. In 1987, the World Commission on Environment andDevelopment, in a report titled Our Common Future (the Brundtland Report), recognised thatsustainable development meant adopting lifestyles within the planet’s means. The report alsoclearly identified that the current patterns of economic growth could not be sustained withoutsignificant changes in attitudes and actions. Various international agreements have beenaimed at addressing environmental decline resulting from rapid economic developmentwithout thought of the long-term environmental consequences. International assessmentsshow that success so far has been limited. Key international initiatives are outlined below.The following information has been sourced from the websites cited.Ramsar Convention (1971)[http://www.ramsar.org]The Convention on Wetlands of International Importance was the first modern intergovernmentaltreaty between nations aiming to conserve natural resources. The signing ofthe Convention on Wetlands took place during 1971 in the small Iranian town of Ramsar.Since then, the Convention on Wetlands has taken the common name of the RamsarConvention.The Ramsar Convention’s broad aims are to halt the worldwide loss of wetlands and toconserve, through wise use and management, those that remain. This requires internationalcooperation, policy making, capacity building and technology transfer. Though the centralRamsar message is the need for the sustainable use of all wetlands, the ‘flagship’ of theConvention is the List of Wetlands of International Importance (the ‘Ramsar List’). There arepresently 158 Contracting Parties to the Convention, with 1755 wetland sites, totalling 161million hectares, designated for inclusion in the Ramsar List.Under the Ramsar Convention a wide variety of natural and human-made habitat types,ranging from rivers to coral reefs, can be classified as wetlands. Wetlands include swamps,marshes, billabongs, lakes, salt marshes, mudflats, mangroves, coral reefs, fens, peat bogs,or bodies of water—natural and artificial, permanent and temporary. Water within these areascan be static or flowing; fresh, brackish or saline; and they can include inland rivers andcoastal or marine water to a depth of six meters at low tide. There are even undergroundwetlands.The Ramsar Convention encourages the designation of sites containing representative, rareor unique wetlands, or wetlands that are important for conserving biological diversity. Oncedesignated, these sites are added to the Convention's List of Wetlands of InternationalImportance and become known as Ramsar sites. In designating a wetland as a Ramsar site,countries agree to manage it to ensure that its ecological character is maintained over time.Wetlands can be included on the List of Wetlands of International Importance because of theirecological, botanical, zoological, limnological or hydrological importance.Australia was one of the first countries to sign the Ramsar Convention, and Australiadesignated the world's first Wetland of International Importance in 1974: Cobourg PeninsulaAboriginal Land and Wildlife Sanctuary in the Northern Territory. Australia currently has 65Wetlands of International Importance listed under the Ramsar Convention coveringapproximately 7.5 million hectares.60 NATIONAL WATER COMMISSION – WATERLINES


Under Article 3.1 of the Convention, Contracting Parties agree to ‘formulate and implementtheir planning so as to promote the conservation of the wetlands included in the List, and asfar as possible the wise use of wetlands in their territory’. Through this concept of ‘wise use’,which was pioneering when the Convention was drafted, the Convention continues toemphasize that human use on a sustainable basis is entirely compatible with Ramsarprinciples and wetland conservation in general. The Ramsar ‘wise use’ concept applies to allwetlands and water resources in a Contracting Party’s territory, not only to those sitesdesignated as Wetlands of International Importance. Its application is crucial to ensuring thatwetlands can continue fully to deliver their vital role in supporting maintenance of biologicaldiversity and human well-being.As this term ‘wise use’ gained currency within the Ramsar community and was usedelsewhere for different purposes, the Conference of the Parties recognised the need forgreater precision and adopted a definition at its 3rd meeting in Regina, Canada, in 1987. Thisdefinition was revised in Resolution IX.1 Annex A (2005) as follows:Wise use of wetlands is the maintenance of their ecological character, achieved throughthe implementation of ecosystem approaches, within the context of sustainabledevelopment.Various guidelines and manuals have been prepared to provide contracting governmentsinterpret and apply the ‘wise use’ principle.The Ramsar Convention is not a regulatory regime and has no punitive sanctions forviolations of or defaulting upon treaty commitments. Nevertheless, its terms do constitute asolemn treaty and are binding in international law in that sense.Agenda 21 (1992)[http://www.environment.gov.au/about/international/uncsd/publications/agenda21.htmland http://www.un.org/esa/sustdev/documents/agenda21/english/agenda21toc.htm]Agenda 21 is an international framework agreement for pursuing global sustainabledevelopment that was endorsed by national governments, including the AustralianGovernment, at the 1992 Rio Earth Summit. It is an international blueprint that outlinesactions that governments, international organisations, industries and the community can taketo achieve sustainability. These actions recognise the impacts of human behaviours on theenvironment and on the sustainability of systems of production. The objective of Agenda 21 isthe alleviation of poverty, hunger, sickness and illiteracy worldwide while halting thedeterioration of ecosystems that sustain life.Agenda 21 recognises that governments and international agencies cannot alone achievesustainable development, and that the community, through representative and industryorganisations, must be a key player in the development of policy and in achieving thenecessary changes. It identifies the key role that must be played by strategies, plans andpolicies at a national level, the need for integrated decision making at all levels, and theimportance of community involvement in implementation. In addition to finance andtechnology, its implementation requires education, institutional and legal structures, data andinformation and the building of national capacity in relevant disciplines.Australia has responded to Agenda 21 through, amongst other things the 1992Intergovernmental Agreement on the Environment and National Strategy for EcologicallySustainable Development.NATIONAL WATER COMMISSION – WATERLINES 61


– the exacerbation of poverty for some groups of people.These problems, unless addressed, will substantially diminish the benefits that futuregenerations obtain from ecosystems.The degradation of ecosystem services could grow significantly worse during the first halfof this century and is a barrier to reducing global poverty and achieving the MillenniumDevelopment Goals.The challenge of reversing the degradation of ecosystem while meeting increasingdemands for ecological services can be partially met under some scenarios consideredby the MA, but will involve significant changes in policies, institutions and practices thatare not currently under way.Many options exist to conserve or enhance specific ecosystem services in ways that reducenegative trade-offs or that provide positive synergies with other ecosystem services. Thebottom line of the MA findings is that human actions are depleting Earth’s natural capital,putting such strain on the environment that the ability of the planet’s ecosystems to sustainfuture generations can no longer be taken for granted. At the same time, the assessmentshows that with appropriate actions it is possible to reverse the degradation of manyecosystem services over the next 50 years, but the changes in policy and practice requiredare substantial and not currently underway.NATIONAL WATER COMMISSION – WATERLINES 63


Appendix C: National initiativesSince the early 1990s, there has been a rapid progression in development of policy at thenational level to address sustainable management of water resources. Relevant nationalinitiatives are set out below. Despite the advances, it is still evident that the path of change isfar from complete. In particular, the Millennium drought and the threat of major ongoingclimate change impacts means the assumptions about sustainability that underpinned waterplanning in the past can no longer be used. We face a new reality, where risks are muchgreater, and the task of maintaining water ecosystems much harder and more costly than wasconsidered possible a decade ago.The following information has been sourced the websites cited.The Murray-Darling Basin Agreement (1992)[http://www.mdbc.gov.au/about/the_mdbc_agreement]The Murray-Darling Basin Agreement replaced the earlier River Murray Waters Agreement,which had been in place since 1915. The Murray-Darling Basin Agreement provides theprocess and substance for the integrated management of the Murray-Darling Basin. Thepurpose of the agreement (Clause 1) is:to promote and co-ordinate effective planning and management for the equitable efficientand sustainable use of the water, land and other environmental resources of the Murray-Darling Basin.The agreement was signed by the governments of the Commonwealth, New South Wales,Victoria and South Australia in 1987. In its initial form, it was as an amendment to the RiverMurray Waters Agreement. Five years later, a totally new Murray-Darling Basin Agreementwas signed in 1992, replacing the River Murray Waters Agreement. The new agreement wasgiven full legal status by the Murray-Darling Basin Act 1993, which was passed by all thecontracting governments. Queensland also became a signatory in 1996, under terms set outin Schedule D to the Agreement. In 1998, the Australian Capital Territory formalised itsparticipation in the Agreement through a Memorandum of Understanding. The agreement wasratified by identical legislation that was enacted by the parliaments of all the signatorygovernments.The agreement established new institutions at the political, bureaucratic and communitylevels to underpin its implementation, namely:the Murray-Darling Basin Ministerial Councilthe Murray-Darling Basin Commissionthe Community Advisory Committee.The agreement sets out the objectives, functions and composition of the new institutions andthe procedures to be followed for natural resource management, water distribution, assetmanagement and financial disbursements. The functions of the Ministerial Council include:to develop, consider and, where appropriate, to authorise measures for the equitable,efficient and sustainable use of such water, land and other environmental resources.In 2002, the Murray-Darling Basin Ministerial Council established The Living Murray initiative,and allocated $150 million to an environmental works and measures program. The followingyear, the Australian, NSW, Victorian, South Australian and ACT governments together64 NATIONAL WATER COMMISSION – WATERLINES


pledged $500 million for water recovery through The Living Murray. This funding will addresswater allocation and flow within the Murray-Darling Basin, allowing for investments inenvironmental works, with the first step focusing on achieving environmental results at the sixRiver Murray ‘icon sites’.In 2006, the Australian Government invested a further $500 million over five years into theMurray-Darling Basin Commission, some of which will go towards achieving the objectives ofThe Living Murray first step decision.National Strategy for Ecologically Sustainable Development (1992)[http://www.deh.gov.au/esd/national/nsesd/index.html]Australia's response to the Brundtland Report and Agenda 21 was to adapt the concept ofsustainable development, taking into account our unique natural environment, the aspirationsand values of the Australian people and the prevailing patterns of economic production andconsumption. Developed in parallel with Agenda 21, the National Strategy for EcologicallySustainable Development sets out the broad strategic and policy framework under whichgovernments are to cooperatively make decisions and take actions to pursue ecologicallysustainable development in Australia. It is to be used by governments to guide policy anddecision making, particularly in those key industry sectors, which rely on the utilisation ofnatural resources.The strategy defines ecologically sustainable development for Australian purposes asUsing, conserving and enhancing the community's resources so that ecologicalprocesses, on which life depends, are maintained, and the total quality of life, now and inthe future, can be increased.The goal of the strategy is:Development that improves the total quality of life, both now and in the future, in a waythat maintains the ecological processes on which life depends.The core objectives are:to enhance individual and community wellbeing and welfare by following a path ofeconomic development that safeguards the welfare of future generationsto provide for equity within and between generationsto protect biological diversity and maintain essential ecological processes and life-supportsystems.The guiding principles are:decision making processes should effectively integrate both long and short-termeconomic, environmental, social and equity considerationswhere there are threats of serious or irreversible environmental damage, lack of fullscientific certainty should not be used as a reason for postponing measures to preventenvironmental degradationthe global dimension of environmental impacts of actions and policies should berecognised and consideredthe need to develop a strong, growing and diversified economy which can enhance thecapacity for environmental protection should be recognisedNATIONAL WATER COMMISSION – WATERLINES 65


the need to maintain and enhance international competitiveness in an environmentallysound manner should be recognisedcost-effective and flexible policy instruments should be adopted, such as improvedvaluation, pricing and incentive mechanismsdecisions and actions should provide for broad community involvement on issues whichaffect them.These guiding principles and core objectives are to be considered as a package. No objectiveor principle should predominate over the others. A balanced approach is required that takesinto account all these objectives and principles to pursue the goal of ecologically sustainabledevelopment.Inter-Governmental Agreement on the Environment (1992)[http://www.deh.gov.au/esd/national/igae/index.html]This agreement provides sets out the responsibilities of the Commonwealth, state andterritory governments in relation to environmentally responsible development andimplementing ecologically sustainable development. It establishes cooperative arrangementsand protocols for addressing cross border and international issues.National Water Quality Management Strategy (1994)[http://www.deh.gov.au/water/quality/nwqms/]The National Water Quality Management Strategy process involves community andgovernment development and implementation of a management plan for each catchment,aquifer, estuary, coastal water or other waterbody. This includes use of high-status nationalguidelines with local implementation.COAG Water Reform Framework (1994)[http://www.environment.gov.au/water/publications/action/pubs/policyframework.pdf]This framework committed state and territory governments to implement a framework that hasbeen designed to deliver a more sustainable and efficient water industry through a range oninitiatives including cost recovery water pricing, clearly specified water entitlements, legallyrecognised environmental water, enhanced water entitlement trading and institutional reform.Subsequently implementation of the framework was linked into receiving competition policypayments.National Strategy for the Conservation of Australia’s Biological Diversity(1996)[http://www.deh.gov.au/biodiversity/publications/strategy/index.html]Conservation of biological diversity is a foundation of ecologically sustainable developmentand is one of the three core objectives of the National Strategy for Ecologically SustainableDevelopment. Biological resources provide all our food and many medicines and industrialproducts. Biological diversity underpins human wellbeing through the provision of ecologicalservices such as those that are essential for the maintenance of soil fertility and clean, freshwater and air. It also provides recreational opportunities and is a source of inspiration andcultural identity.66 NATIONAL WATER COMMISSION – WATERLINES


The Convention on Biological Diversity, ratified by Australia on 18 June 1993, deals at aglobal level with the full range of biological diversity conservation, its sustainable use, and thefair and equitable sharing of the benefits arising from this use. The National Strategy for theConservation of Australia’s Biological Diversity aims to bridge the gap between currentactivities and the effective identification, conservation and management of Australia’sbiological diversity. The strategy’s primary focus is Australia’s indigenous biological diversity.The strategy includes goals and actions in the areas of conservation, integration ofbiodiversity conservation into natural resource management and management of threateningprocesses.With regard to water resource management, the strategy requires governments to ensure theconservation of biological diversity is ‘taken into account’.National Principles for the Provision of Water for Ecosystems (1996)[http://www.deh.gov.au/water/publications/pubs/ecosystems.pdf]As one of the major components of the 1994 COAG water reform framework, the COAGrecommended the introduction of comprehensive systems of water allocations including thedetermination of clearly specified water entitlements, the provision of water for theenvironment and water trading arrangements.In undertaking this work, it was recognised that direction was required on how the issue ofwater for the environment should be dealt with in water allocation decisions. Specifically,there was a need for national policy on questions such as:the definition of environment in this contextthe aim of providing water for the environmentmethods of providing water for the environmentmanagement of environmental water provisions.The National Principles for the Provision of Water for Ecosystems were developed in 1994–96by the Agriculture and Resource Management Council of Australia and New Zealand togetherwith the Australian and New Zealand Environment and Conservation Council. The purpose ofthe National Principles was to provide policy direction on how the issue of providing water forecosystems should be dealt with in the context of general water allocation and managementdecisions, to ensure that these decisions would be sustainable in the long term.In the late 1990s, it became apparent that the National Principles for Provision of Water forEcosystems would benefit from further refinement to reflect advances in knowledge andexperiences arising from implementing the 1994 COAG water reforms. These included theneed for recognising (and integrating where necessary) the catchment linkages that water forecosystems has with land and river use and management activities, the need for adaptiveplanning and management based on monitoring and improvements in knowledge, and theneed for the existing principles to be more explicit.After considerable work a revised draft was prepared, however it was never adopted as it wasovertaken by work on the National Water Initiative.The Environmental Protection of Biodiversity Conservation (EPBC) Act,1999[http://www.comlaw.gov.au/comlaw/Legislation/ActCompilation1.nsf/0/019B48F4E8C92609CA25700000090254?OpenDocument]NATIONAL WATER COMMISSION – WATERLINES 67


The EPBC Act is the Australian Government’s key piece of environmental legislation. Theobjectives of the EPBC Act are to:provide for the protection of the environment, especially matters of national environmentalsignificanceconserve Australian biodiversityprovide a streamlined national environmental assessment and approvals processenhance the protection and management of important natural and cultural placescontrol the international movement of plants and animals (wildlife), wildlife specimens andproducts made or derived from wildlifepromote ecologically sustainable development through the conservation and ecologicallysustainable use of natural resourcesUnder the Act, approval is required from the Australian Government Minister for theEnvironment and Water Resources for any proposed action, including projects,developments, activities, or alteration of these things, likely to have a significant impact on amatter protected by the EPBC Act.The environment assessment process of the Act protects matters of national environmentalsignificance including:World Heritage propertiesNational Heritage placeswetlands of international importancethreatened species and ecological communitiesmigratory speciesCommonwealth marine areasNational Land and Water Resources Audit (1997–2002)[http://www.nlwra.gov.au/]The National Land and Water Resources Audit (the Audit) was established in 1997 under theNatural Heritage Trust Act. The Audit was established to:provide a baseline for the purposes of carrying out assessments of the effectiveness ofland and water degradation policies and programsimprove Australian Government, state and regional decision making on natural resourcemanagement.From 1997 to 2002 the Audit significantly progressed the collection and collation of primarydata and information related to Australia’s natural resource management. These reports haveset the benchmark for reporting on the condition of Australia's natural resources.Recommendations to further develop the assessments of Australia's natural resources wereidentified in the Final Report of the Audit (2002).68 NATIONAL WATER COMMISSION – WATERLINES


The Intergovernmental Agreement on a National Water Initiative [NWI](2004)[www.nwc.gov.au/resources/documents/Intergovernmental-Agreement-on-a- national-waterinitiative.pdf]The National Water Initiative builds on the 1994 COAG framework. It was prepared inrecognition of the need to advance water reform and address many issues, which arose in theimplementation of the 1994 framework.The National Water Initiative signifies:a commitment to identifying overallocated water systems, and restoring those systems tosustainable levelsthe expansion of the trade in water resulting in more profitable use of water and morecost-effective and flexible recovery of water to achieve environmental outcomesmore confidence for those investing in the water industry due to more secure wateraccess entitlements, better registry arrangements, monitoring, reporting and accountingof water use, and improved public access to informationmore sophisticated, transparent and comprehensive water planningbetter and more efficient management of water in urban environments, for examplethrough the increased use of recycled water and stormwater.Australian Water Resources 2005[http://www.water.gov.au/]Australian Water Resources 2005 (AWR 2005) is the National Water Commission's baselineassessment of Australia 's water resources in 2004–05 (the first year of the NWI). The primarypurpose of AWR 2005 is to provide a baseline picture of a range of water management andresource issues from which future comparisons, and the success of NWI reform processes,can be measured. AWR 2005 aims to define water resource knowledge gaps that are criticalto the success of NWI measures. AWR 2005 is being structured to provide a repeatableframework and to work towards the establishment of an ongoing water data informationinfrastructure: the Australian Water Resources Information System.In accordance with the overarching objectives of the NWI, the key objectives of AWR 2005include:providing a comprehensive and up-to-date baseline snapshot of Australia's waterresource conditions over the period July 2004 to June 2005 in the context of long-termpatterns of water availability and useconforming with established national data standards of the Executive Steering Committeefor Australian Water Resource Information, and relevant methodologies and protocols asestablished for the Australian Water Resource Assessment 2000structured to provide a repeatable frameworkbe based on existing data sources to the maximum extent possibleidentify gaps and potential new work that could be needed to develop an interactive,interoperable, real-time water resource information asset for the future management ofAustralia's water resources including informing, and being informed by the major wateraccounting project under development as part of the NWI.NATIONAL WATER COMMISSION – WATERLINES 69


AWR 2005 aimed to address three headline parameters that each raise a number ofquestions about some core water resource information needs of the NWI: water availability,water use, and river and wetland health. During AWR 2005, it was recognised that it wasnecessary to integrate the findings from the three headline parameters to address strategicissues in water management across Australia. The following high-level questions wereconsidered: Was our consumptive use sustainable in 2004–05? Where does consumptive use exceed entitlement in 2004–05?Is there a correlation between the health of rivers and wetlands and consumptive use in2004–05? Where are our overallocated rivers and catchments in 2004–05?What are the implications of surface water and groundwater interactions on consumptiveor environmental use of water in 2004-05?Key findings included:Water planning approaches are highly varied across Australia 's 340 surface water and367 groundwater management units. At present only 18 per cent of surface watermanagement areas, and 33 per cent of groundwater management units have a draft orfinal management plan in place. In many areas across Australia, surface andgroundwater resources are physically connected, however integrated planning andmanagement of water resources is the exception rather than the rule.In recent years there has been much work to better define overallocated water resourcesystems. For example, governments have agreed to recover water to addressoverallocation in the Murray-Darling Basin (500 gigalitres per year, as a first step) and theSnowy River (212 gigalitres per year). Despite these advances there is still no nationallyagreed, standardised method for calculating and reporting sustainable yield.More than 3500 wetlands are given protection in Australia under the International RamsarConvention and Commonwealth, State and Territory legislation. In contrast, only ahandful of rivers of high conservation value are protected, in Victoria (with 43) and NewSouth Wales (with 5). National Parks and other terrestrial systems do not necessarilyprotect the catchment conditions and flow requirements required for the health of riversand wetlands within them.Water Act 2007This Commonwealth Act establishes an independent Murray-Darling Basin Authority with thefunctions and powers, including enforcement powers, needed to ensure that basin waterresources are managed in an integrated and sustainable way. The Act requires the Authorityto prepare a strategic plan for the integrated and sustainable management of water resourcesin the Murray-Darling Basin. This plan is referred to as the Basin Plan. The Act establishesmandatory content for the Basin Plan, including:limits on the amount of water (both surface and ground water) that can be taken frombasin water resources on a sustainable basis—known as long-term average sustainablediversion limits. These limits will be set for basin water resources as a whole and forindividual water resourcesidentification of risks to basin water resources, such as climate change, and strategies tomanage those risks70 NATIONAL WATER COMMISSION – WATERLINES


equirements that a state water resource plan will need to comply with if it is to beaccredited under this Actan environmental watering plan to optimise environmental outcomes for the basin byspecifying environmental objectives, watering priorities and targets for basin waterresourcesa water quality and salinity management plan which may include targetsrules about trading of water rights in relation to basin water resources.The Act establishes a Commonwealth Environmental Water Holder. The CommonwealthEnvironmental Water Holder will manage the Commonwealth's environmental water to protectand restore the environmental assets of the Murray-Darling Basin, and outside the Basinwhere the Commonwealth owns water.Water for the Future (2008)[http://www.environment.gov.au/water/action/index.html]Building on the 2007 National Plan for Water Security of the previous government, on 26March 2008, the Council of Australian Government (COAG) agreed to a new forward workprogram on water to develop concrete actions on high priority water management issues inboth rural and urban Australia. This priority work is to build on and accelerate implementationof the NWI. COAG also agreed to a cooperative and accountable Memorandum ofUnderstanding between all Murray–Darling Basin states.On 29 April 2008 the Minister for Climate Change and Water, outlined the Government's planon water, 'Water for the Future', which expanded the previous $10 billion commitment to$12.9b. Key elements of the plan are:taking action on climate changeusing water wiselysecuring water suppliessupporting healthy rivers.A large proportion of the funding is to be spent on addressing overallocation in the Murray–Darling Basin through purchase of water entitlements and investment in water savingsmeasures.Framework for Assessment of River and Wetland Health (2007)[http://www.water.gov.au/RiverandWetLandHealth/Assessmentofriverandwetlandhealth/Nationalframework/index.aspx?Menu=Level1_5_2_1]The Framework for Assessment of River and Wetland Health (FARWH), developed by theNational Water Commission in conjunction with the Australian states and territories, is basedon the premise that ecological integrity is represented by all the major components of theenvironment that comprise the ecosystem. The function of the FARWH is to bring together inan assessment a number of related elements of river and wetland condition. The approachadopted has been informed by our understanding of the links between catchments, river andwetland habitats and their aquatic biota.NATIONAL WATER COMMISSION – WATERLINES 71


Components of water ecosystems that it is proposed will be assessed in the FARWH are:Catchment Disturbance Index that incorporates the effects of land use, change invegetation cover and infrastructure (e.g. roads, rail-lines) on the likely runoff of sediments,nutrients and other contaminants to rivers and wetlands. The index should incorporate theeffects of large-scale non-point source impacts.Physical Form Index may use measures of sediment inputs, riparian vegetation structureand connectedness (dams, weirs, levee banks, groundwater abstraction) to assess thestate of local habitat and its likely ability to support aquatic life.Hydrological Disturbance Index that recognises the importance to aquatic ecosystemfunction of water regime, both surface flow and groundwater, depending on theecosystem. Changes in hydrology and its management underpins much of the NWI.Water Quality and Soils Index that considers the effects on biota of long-term changes inwater quality characteristics (rivers and wetlands) and soil quality (wetlands) such aschanges in suspended sediment and total nutrient concentrations or loads, and theeffects of short-term changes in salinity and toxicant levels.Fringing Zone Index represents structural and condition features of the streamside zone,or the zone surrounding a wetland. While this index may contain features relevant to thePhysical Form and Biota Indices, the zone is seen as such an important focus ofmanagement that it requires its own category.Aquatic Biota Index that represents the response of biota to changes in the environment.This index may be based on extensive national sampling of invertebrates sensitive todisturbance. Other components of the biota (e.g. fish, water plants, algae, and riparianvegetation condition) would give a fuller picture of the response of ecosystems to change.This hierarchical model, shown in Figure 4, demonstrates catchment features such aslongitudinal and lateral connectivity (dams and levees) and land use, which in turn have aneffect on habitat features (riparian vegetation, snags, channel geomorphology), and thesetogether affect the biotic components of the system (algae, aquatic vegetation, insects, fish,water birds).72 NATIONAL WATER COMMISSION – WATERLINES


Figure 4: Conceptual model of scales of factors related to river and wetland condition(source: NWC 2007, Australian Water Resources 2005: Assessment of River and WetlandHealth: A Framework for Comparative Assessment of the Ecological Condition of AustralianRiver and Wetlands)High conservation value aquatic ecosystems project (2008)[http://www.environment.gov.au/water/environmental/ecosystems/index.html]The Aquatic Ecosystems Task Group, established by the Natural Resource ManagementMinisterial Council, has been tasked with developing a national policy framework for theidentification, classification and management of high conservation value aquatic ecosystems(HCVAE). This work is ongoing and is aimed at assisting jurisdictional governments to meettheir commitments under the NWI to identify and acknowledge surface and groundwatersystems of high conservation value, and manage these systems to protect and enhancethose values.NATIONAL WATER COMMISSION – WATERLINES 73

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