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115UNIVERSITIES COUNCIL ON WATER RESOURCESJOURNAL OF CONTEMPORARY WATER RESEARCH & EDUCATIONISSUE 135, PAGES 115-130, DECEMBER 2006Issues for CEOs of Water Utilities with theImplementation of Australian Water LawsJennifer McKayDirector, Center for Comparative Water Policies and LawsUniversity of South AustraliaThe Australian Government has embarked ontwo phases of ambitious reform of state lawsand policies for water management. Thefirst in 1994 was known as Council of AustralianGovernment reforms (CoAG) and the second in2004 is known as the National Water Initiativereforms. These were prompted by a number ofdomestic environmental and social issues andinternational processes targeted at reducinggovernment activity in water management. The firstset required massive changes to water governancethat is separating functions into environmental,economic, and water supplier and also requiringEnvironmentally Sustainable Development (ESD)and integration in all water development proposals.The second phase extends the first but is much moreprescriptive and sets out 80 goals that water supplybusinesses and state governments must encouragerural and urban communities to achieve.This paper presents empirical data of the resultsof telephone interviews with 183 Chief ExecutiveOfficers of the major water supply businesses inAustralia. These respondents are highly educatedand experienced business professionals. Bearingthis in mind, the instrument designed for themrequired sophisticated responses to approximately100 questions about Environmentally SustainableDevelopment, integration, and other issuesabout water policy changes under CoAG and toa lesser extent the National Water Initiative. Theinterviews were conducted between late September2005 and late January 2006. This paper will reporton responses to questions about integration andEnvironmentally Sustainable Development inwater policy. For the Environmentally SustainableDevelopment questions, respondents weresimultaneously emailed response sets so theycould provide their view of the rank or order of thespecified issues.Paradigms in Australian Water PolicyDevelopmentAustralia has had four paradigms of formalwater resources laws and policies since 1788(Figure 1). Prior to 1788 there is evidence thatindigenous society engaged in regional sharingof parts of river and coastal systems in a complexsocial arrangement (Langdon 2002, McKay 2002a,2002b, 2003). The imposition of the legal rule ofTerra Nullius from 1788 and the deeming that therewere no pre-existing laws meant that the commonlaw of England was applied to the colony. Thismeant the riparian rule applied for surface water,thus limiting access to landholders by the river.In addition, the unimpeded extraction of groundwater rule applied.Development preceded apace in Paradigm 1 andthe riparian rule was replaced in each State by amore extensive water allocation system, relying onchannels and distributing water to users away fromthe main channel (Clark and Renard 1970, McKay2006). Briefly, Paradigm 1 allocated surface wateras if it would never run out and did not considersoil issues. The use of ground water was notregulated (following the common law rule). In thisParadigm, the States federated in 1901, but only onthe condition that Section 100 of the Constitutionpreserved the rights of the States to control theconservation of water and its use for irrigation.This section ensured that federal power overnavigation would be subordinate to these uses aslong as the use was reasonable. The predominantJOURNAL OF CONTEMPORARY WATER RESEARCH & EDUCATIONUCOWR