Water rights terminology

Water access entitlements

Reflecting the principles of the National Water Initiative, water access entitlements in most states and territories are defined as a share of a consumptive pool of a specified water resource. The water made available under a water access entitlement is commonly referred to as a water allocation.

Signatories to the National Water Initiative mostly introduced appropriate legislative and policy frameworks to ensure water access entitlement and allocation frameworks reflect the key principles, including that:

  • water access entitlements are separate from land
  • water access entitlements will:
    • specify essential characteristics of the water product
    • be exclusive
    • be able to be traded
    • be able to be subdivided or amalgamated
    • be mortgageable
    • be enforceable and enforced
    • be recorded in a publicly-accessible reliable water register
    • enable allocation of water to a water access entitlement to be consistent with a water plan.

The various water allocation plans sit within a contextual framework comprising State legislation, policy, inter-jurisdictional water sharing arrangements, other plans and administrative practices that were developing since well before the advent of the National Water Initiative. In all cases there is a primary statute that sets out, to varying degrees, the purposes and content of water allocation plans, the processes for preparing and reviewing the plans, the effect of the plans and the relationship of the plans to other statutory instruments.

The water allocation plans in the different jurisdictions have a number of similarities, but they also have marked differences, which make comparing them difficult. The different approaches to 'water planning' undertaken by the States and Territories result in significant variation between jurisdictions in the overall purposes of the various plans. These range from dealing with water sharing only, to water sharing and use, to total water cycle management (as is the case in Victorian sustainable water strategies). They also affect the statutory effect (whether binding on governments or not), the geographic scale in scope (for example, whether or not they include water use planning and water supply planning) and linkages to related planning processes such as Natural Resource Management planning.

Understanding the various jurisdictional contextual frameworks for water allocation planning in Australia is fundamental to understanding the water access entitlement arrangements and water markets operations that are in effect throughout Australia.

States and Territories adopted differing terminologies in their legislative and policy frameworks that describe this framework. The National, State and Territory terminology table summarises the jurisdictional water access entitlements framework. The table was developed in consultation with the jurisdictions to provide a consistent approach for the aggregation and display of water access entitlements and associated water markets information.

 

State and Territory terminology mapping

The table in the PDF below maps a national term to the State and Territory equivalent terms relevant to their jurisdiction, as agreed through the National Water Markets System Stakeholder Group. This mapping is used to provide a consistent framework to display and aggregate water access entitlements, water allocations and water markets information, not to compare the terms between States and Territories.

Water rights trading rules

Rules that govern trade in water access entitlements and allocations vary between States and Territories. Trade is generally only permitted where Government completed the appropriate water planning and management processes for an area.

Principles

Most rules are broadly consistent with the intent of Schedule G of the National Water Initiative, Principles for Trading Rules, which require that:

  • water access entitlements may be traded either permanently, through lease arrangements or through other trading options
  • all trades should be recorded on a water register
  • restrictions on extraction, diversion or use of water resulting from a trade can only be used to manage:
    • environmental impacts
    • hydrological, water quality and hydro-geological impacts
    • delivery constraints
    • impacts on geographical features (such as river and aquifer integrity)
    • features on major indigenous, cultural heritage or spiritual significance
  • trade may be refused on the basis that it is inconsistent with the relevant water plan
  • trade must not generally result in the sustainable yield being exceeded
  • where necessary, water authorities will facilitate trade by specifying trading zones and providing related information.

Generic rules

States and Territories impose generic rules on trade and specific rules that relate to the characteristics of each particular system, based on the outcomes of the relevant water management and planning processes. Rules often include restrictions on trade:

  • between unregulated and regulated streams where there are delivery capacity constraints in the system
  • downstream, where trade may exacerbate congestion at in-river choke points
  • upstream, outside of certain trading zones, to account for the impact of tributary inflows and the fewer physical supply sources able to contribute to meeting demand at upstream locations
  • between management areas for administrative, environmental and hydrological reasons that may adversely impact on the environment; for example, in areas of high salinity.

The extent to which non-landholders are permitted to trade also differs between States and Territories.

Generally, all States and Territories recognise riparian rights to water for stock and domestic use. Riparian rights such as these are generally not tradeable.

Specific rules

A major difference in trading rules between jurisdictions relates to trade within and external to irrigation districts. Irrigation companies, cooperatives and trusts impose trading rules on users' water 'entitlements' within these schemes. These rules reflect the specific characteristics of the district, type of infrastructure provided and the form of body corporate.

Rules that govern trade within and external to irrigation districts differ to those for statutory water entitlement holders that are located in-river.

In irrigation districts, transfers:

  • may not be permitted where the volume of water traded out of the district exceeds a stated limit (e.g. 4% per district)
  • that result in water permanently leaving the district may attract fees
  • of a temporary nature may attract an annual fee payable to the irrigation company corporation or trust from which the 'entitlement' is traded
  • may be permitted only for a minimum term
  • may require the approval of the company, corporation or trust subject to the availability of capacity within delivery channels to accommodate the transfer.

In some irrigation schemes, irrigators' water 'entitlements' do not have statutory basis, rather the irrigator holds shares in an infrastructure company which in turn is the holder of the statutory water access entitlement. This occurs in some schemes in South Australia, New South Wales, Tasmania and Western Australia. In all cases, the details related to the statutory water access entitlement are held at the state register while the details regarding shares issued to members are held in separate regional registers of the infrastructure operators.


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