THE IMPACT ON DEVELOPMENT AND INVESTMENT OF WATER LAW AND POLICY FRAMEWORKS IN NORTHERN AUSTRALIA: A REVIEW
Publication Date (Web): 31 January 2017
Northern Australia (or, “the North”) is defined as all of the Northern Territory (NT) and those parts of Western Australia (WA) and Queensland (QLD) north of the Tropic of Capricorn. The vast land mass of the North means that its resources are governed by four distinct jurisdictions: the Commonwealth (Federal Government), Northern Territory, Western Australia and Queensland. The resulting regulation is individualistic to the jurisdictions, meaning that there is no consistent water law across northern borders despite the sharing of water resources between WA and the NT and, to a greater extent, the NT and QLD. With Commonwealth policy supporting the development of Northern Australia, investors are actively scrutinizing market potential. The current interest is also buoyed by the recognised room for growth in areas of northern agriculture, aquaculture and infrastructure, which is propelled by both the substantial underdevelopment of the North and a burgeoning Asian middle class, which offers a close trade neighbour to the northern jurisdictions.
The obvious challenge in water law in Northern Australia arises from legal inconsistency across jurisdictions. In the absence of a Commonwealth referral of power from WA and QLD, as illustrated in the Murray Darling Basin region of Australia’s east coast, water laws in the North will continue to be inconsistent and impact the attractiveness of the investment market. This is particularly problematic for water resources that are shared across jurisdictions. There currently exist no intergovernmental agreements in the North, either between States and the Territory (including with respect to the Great Artesian Basin), or States, the Territory and Commonwealth Governments. Northern Australia would be wise to consider a ‘whole of system’ approach – which accounts for the North’s climate, isolation and land mass and is similar in effect to that endorsed by the National Water Initiative – and create a legal framework that is consistent across jurisdictions and, therefore, conducive to development. In the absence of doing so, the jurisdictions run the risk of poor equitable distribution of water, its ongoing undervaluation, poor monitoring, limited data availability and, most notably, stalled development opportunities. Consistency in policy and law will not only secure investment but will also ensure that ongoing investment is supported by understood, and therefore sustainable, water resources.
Development of the North will also create a greater need for water storage, as the area suffers from ephemeral stream flows, a disproportionately long dry-to-wet season ratio, and large volumes of rainfall falling in a few short months. Managed aquifer recharge creates an opportunity to store water underground, and quarantine it against high evaporation rates, for year-round use. Consequently, it also means that the natural distribution of water has the potential to change relative to the scale of northern development.
Each of these areas – reconciling distinct water laws, the possible creation of an intergovernmental agreement, and managed aquifer recharge – bring unique legal challenges that remain largely unexplored and, in their current state, have the prospect of hampering development in the North. This article will examine the current water law and policy frameworks that exist in the North and scrutinise their impact on development and investment. The article concludes that the current state of flux of some of these frameworks is creating investor uncertainty. This must be addressed as a first step before any real progress can occur with respect to reducing barriers to northern development.
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