The Water Legislation Amendment (InspectorGeneral of Water Compliance and Other Measures) Bill 2021 (Cth) (Amendment) was passed by the Commonwealth Parliament on 24 June 2021. This is the most significant amendment to Water Act 2007 (Cth) in almost a decade. The EDO’s Freshwater Team examines the lead up to this amendment, evaluates its strengths and highlights opportunities for further reform. 

Dr Emma Carmody, Managing Lawyer – Freshwater

Kate Chipperfield, Senior Solicitor – Freshwater


The Water Act 2007 (Cth) (Water Act) was passed at the height of the Millennium Drought by the Howard Government in recognition of the fact that water resources in the Murray-Darling Basin (MDB) were overallocated. It established the Murray-Darling Basin Authority (MDBA) and ascribed to it a range of functions, including the development and implementation of the Basin Plan and responsibility for compliance and enforcement under the Water Act. It also included some civil offence provisions potentially applicable to individual water users.  

What was the problem?

Briefly, the compliance and enforcement provisions under the Water Act were not sufficiently robust. For example, there were no criminal offences for acts that harmed Basin water resources (including internationally protected Ramsar-listed wetlands).

Furthermore, best practice dictates that compliance and enforcement functions should be held by independent, specialist agencies.  This is particularly true for water management as it is highly contested, politicised and subject to claims of maladministration.1 Relevantly, the Productivity Commission found that the ‘MDBA has conflicting roles. It supports Basin Governments (as their agent) to implement the Plan and is also required to ensure compliance with the Plan.’ It accordingly recommended that the MDBA be ‘split into two separate institutions – the Murray-Darling Basin Agency and the Basin Plan Regulator.’2

What about the ‘Northern Basin Commissioner’ and Interim Inspector-General?

A number of investigations and reports were commissioned in 2017 and 2018 by both levels of government in response to allegations of non-compliance in the northern MDB contained in the Four Corners’ episode ‘Pumped.’3  In response to these events, former Minister Littleproud appointed Mr Mick Keelty to role of ‘Northern Basin Commissioner’. This position was superseded by the ‘Interim Inspector General of the Murray-Darling Basin’, with Mr Troy Grant being appointed to that role in late 2020.

However, these roles were non-statutory in nature and to that extent were not accompanied by any formal powers to investigate allegations of non-compliance or misconduct or to enforce the law.

What do the amendments do?

The Amendment can be divided into three broad areas. First, it establishes an Inspector-General for Water Compliance (IG),4 the purpose of which is to monitor, and provide independent oversight of:

  • the performance of functions and exercise of powers by Commonwealth and Basin State agencies under the Water Act and regulations, the Basin Plan and water resource plans;5 and 
  • the implementation of a range of MDB intergovernmental agreements.6

Second, it creates new civil and criminal Commonwealth water offences.  Third, it transfers responsibility for compliance and enforcement under the Water Act from the MDBA to the new IG.  That is, implementation of the Basin Plan (the MDBA’s job) is now separate from compliance and enforcement (the new IG’s job).

What do the new IG rules add up to?7

The following table sets out some of the key features of the Amendment. It also includes some opportunities to strengthen the role of the IG and offence provisions at the appropriate juncture.

AdvantagesOpportunities for reform
The IG has broad discretion
Broad discretion means the IG has the required flexibility to appropriately scope and conduct its investigations pursuant to its compliance and enforcement functions.8 The IG will also have flexibility in conducting inquiries into Commonwealth or Basin State agencies9 as it sees fit (notwithstanding the potential for Ministerial direction).10 This freedom will assist compliance aims, especially where the IG is committed to effectively carrying out its functions.It is not clear within the Act what happens if the IG chooses not to exercise its discretion to carry out its functions. This could be remedied by the inclusion of a duty for the IG to exercise their functions consistently with, and so as to promote, the international treaties that underpin the Water Act.  
What the IG must do?
The IG must:
  • publish15 its annual work plan16 and, if it conducts an audit,17 publish the audit report.18
  • conduct an inquiry if requested by the Minister19  (though it could also do this of its own initiative).20
  • take reasonable measures to protect confidential information from disclosure.21
The requirement for the IG to inquire could be similar to other commissions of inquiry that are required to investigate all complaints (unless vexatious, among other things).22

It is not clear within the Act what happens if the IG chooses not to exercise its discretion to carry out its functions. This could be remedied by the inclusion of a duty for the IG to exercise their functions consistently with, and so as to promote, the international treaties that underpin the Water Act.  
The IG should be independent
Compliance and enforcement functions, previously held by the Authority, will be separated and moved to the IG.  The government has indicated that the IG will sit within the Commonwealth Department of Agriculture, Water and the Environment and will be supported by the Office of Water Compliance (which is a non-statutory office).23 The Minister indicated in his Second Reading Speech that ‘ethical walls’ would be established to maintain the IG’s independence.24

The role and associated office should be entirely separate from any water agency to avoid any real or perceived conflict of interest (noting that internal ‘ethical walls’ are legally nebulous and potentially difficult to enforce).25

Furthermore, the entire Office of Water Compliance (not just the role of IG) should be legislated (as per the model followed by the NSW EPA, for example).
Public interest
More robust compliance26 and inquiry powers27 are in the public interest.Ideally, there would be an express positive duty to take all reasonable steps to act consistently with, and so as to promote, the international treaties that underpin the Water Act.

There could be greater transparency requirements, including to publish reports and to publish any directions to which the IG is subject.28
Take offences
Civil and criminal Commonwealth water take offences have been established to fill the gap if a Basin State fails to enforce a state water management law.29

This includes an aggravated take offence30 (and a conspiracy to commit provision)31 where the consequences for breaking the law will be higher if certain ‘aggravating’ circumstances exist, including unlawful take that:
  • causes serious direct or indirect harm to the environment32
  • is taken from a protected wetland, including internationally protected Ramsar wetlands.33
New offences relating to interference with water markets are also included.34  
The penalties for taking water when not permitted under State law include:
  • a criminal penalty of:
    – 3 years imprisonment or 180 penalty units ($39,960),35 or both, and
  • a civil penalty of:
    – 10,000 penalty units ($2.22 million) for a corporation;36 and
    – 1,000 penalty units ($222,000) for an individual.37
For the aggravated offence:
  • the criminal penalty is:
    – 5 years imprisonment or 300 penalty units ($66,600),38 or both,
  • and the civil penalty is:
    – 50,000 penalty units ($11.1 million) for corporations;39 and
    – 5,000 penalty units ($1.11 million) for individuals.40
These penalties may not be commensurate with the types of irreversible damage that could result from a significant aggravated take offence. Further, penalties should ideally be set as the higher of either a particular number of penalty units or (for example) 3 times the benefit obtained (or detriment avoided) by committing the offence.41

The establishment of an IG for water compliance is a welcome and overdue development.  However, the success of the role will ultimately depend on a number of factors. These include how the IG chooses to exercise its discretion; whether the office is appropriately resourced to conduct complex investigations into allegations of non-compliance; and whether it maintains its independence (in particular in relation to any possible allegations involving Commonwealth water officials).

As noted above, future opportunities for reform include moving the IG into an entirely separate and independent compliance and enforcement agency to avoid any real or perceived conflict of interest; adding a positive duty to act consistently with, and so as to promote, the international treaties which underpin the Water Act; and stronger penalties.

1 See the Murray-Darling Basin Royal Commission Report 2019, pp 54-55, 247, 265, 647, 669.

2 Productivity Commission, Inquiry report – MDB Plan: Five-year assessment, 19 December 2018.

3 These include the 2017 Murray-Darling Basin Water Compliance Review and the 2018 Independent Investigation into NSW Water Management and Compliance, Ken Matthews Interim Report.

4 The Inspector-General is to be appointed by the Governor-General by written instrument (section 215J(1)) for a time period not exceeding 4 years (section 215K(1)).

5 Section 215C.

6 Section 215(1)(c); see section 215(3) for the listed Basin agreements.

7 This is a summary and is non-exhaustive.

8 See Part 10AA and Part 8.

9 Part 10AB.

10 Section 215D.

11 Section 73L.

12 Sections 215V and 215VA.

13 See sections 238, 223B, 224A, 239AC, 239AD.

14 Section 165.

15 Section 215E(4).

16 Section 215E(1).

17 Section 73L(1).

18 Section 73L(4).

19 Section 239AA(2)

20 Section 239AA(1) and Part 10AB generally.

21 Section 215U.

22 Compare this with sections 11(1)-(2) of the Inspector-General of Intelligence and Security Act 1986 (Cth).

23 Home | Interim Inspector General of Water Compliance ( (accessed 6 July 2021). We further note that under the Amendment, the IG may delegate certain functions to departmental staff (section 215W).

24 Minister for Resources, Water and Northern Australia, Keith Pitt, Second Reading Speech, Water Compliance (Inspector-General and Other Measures) Bill 2021, 26 May 2021, House of Representative Hansard, page 8.

25 Compare this with the Inspector-General of Intelligence and Security and the Inspector-General for Biosecurity, which are both separate from the agencies they monitor.

26 See Part 10AA.

27 See Part 10AB.

28 Compare with Natural Resources Access Regulator Act 2017 (NSW) sections 7(2), 7(5) and 13(3).

29 See section 73A.

30 See section 73B.

31 Section 154A(1)(e).

32 Section 73B(1)(e)(v)-(vi).  Note, the wording of these subsections refers to ‘significantly contributes to, or is likely to significantly contribute to, serious hard to the environment’, where ‘harm’ is defined to include indirect or direct harm.

33 Section 73B(1)(e)(vii).

34 See Part 2, Division 3A, Subdivision B and sections 73F, 73G, 73H in particular.

35 At the current penalty unit rate of $222 which applies from 1 July 2020, section 73A(2).  Note, section 147(3)(b) of the Water Act regarding penalties up to 5 times higher than this amount if the ‘wrongdoer’ is a body corporate.

36 At the current penalty unit rate of $222, section 73A(5).

37 Ibid.

38 At the current penalty unit rate of $222, section 73B(2), see note at n. 35 above.

39 At the current penalty unit rate of $222, section 73B(6).

40 Ibid.

41 For further information regarding the calculation of water-related penalties, see: Loch, A., Pérez-Blanco, C.D., Carmody, E. et al. Grand theft water and the calculus of compliance. Nature Sustainability 3, 1012–1018 (2020).