What's the hype about FPH disallowance

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What's the hype about FPH disallowance mean

The NSW Legislative Council (Upper House) recently supported a disallowance motion to rescind the NSW Government’s Water Management (General) Amendment (Exemptions for Floodplain Harvesting) Regulation 2020 the “exemption” on water users needing to hold a water licence to utilise their approved floodplain works as of 3 July 2008 (eligible floodplain harvesting works), to collect overland flow.

The motion was supported 22- 16 with Labor, the Greens, one Nation and Shooters, Fishers and Farmers voting in support with independents.  The debate is available here.

The purpose of the licence exemption was as an interim transitional step whilst the licencing and metering of floodplain harvesting is finalised (1 July 2021), to bring the management of FPH out of the  Water Act 1912 and into the contemporary Water Management Act 2000 (which requires all take to have either a licence, licence exemption, or a right). It was flagged in 2013, but unfortunately wasn’t implemented until February this year during the first flush event.

Does NOT make floodplain harvesting automatically illegal.
Does NOT mean tighter regulations for northern irrigators, but the opposite.
Does NOT impact the volume of water available to irrigators in the northern basin.
DOES create uncertainty for the regulator and water users everywhere in NSW about their obligations in operating farms during a rain event or a flood.
DOES remove one of the only restrictions the NSW Government had on limiting take of overland flow to eligible works approved or constructed prior to 3 July 2008.  Water users who have developed or redeveloped their farms post 2008, can now continue to use their works.
DOES make it more difficult to apply a S324 embargo to floodplain harvesting, as occurred for the first ever time recently whilst this regulation was still in place
DOES mean NSW has just taken a backward step for all stakeholders across NSW to (finally) properly regulate floodplain harvesting.
The solution and the priority of all stakeholders across the state, is for timely and proper finalisation of the nearly 20-year commitment by multiple governments to licence floodplain harvesting to ensure water take is accountable, measured, transparent and within the allowable limits.  

To understand the relevance of this exemption to water users in all of NSW, it’s important to be aware of how overland flow as defined in the 2000 Act in WMA Section 4A:

4A Meaning of "overland flow water":

(1) In this Act, "overland flow water" means water (including floodwater, rainfall run-off and urban storm water) that is flowing over or lying on the ground as a result of--

(a) rain or any other kinds of precipitation, or

(b) rising to the surface from underground, or

(c) any other process or action of a kind prescribed by the regulations.

(2) Water is flowing over the ground for the purposes of subsection (1) even if it flows over the ground by means of artificial structures such as roads, canals or road gutters.

What does the disallowance mean?

Rescinding the exemption does not automatically make the taking of overland flow illegal.

That's because water management is complex, managed across a number of Acts, regulations, government gazettes and water sharing plans.

It creates uncertainty for the regulator and water users everywhere in NSW about their obligations in operating farms during a rain event or a flood, that’s because overland flow take is all of those things.

These forms of water take, return to being estimated interceptions, as they did prior to 7 February 2020 when the exemption regulation was executed.  This remains in place until replaced by the foreshadowed licences or another exemption or right.  Estimating interceptions is not good practice however, this isn’t unusual as it is how take by commercial plantations, runoff dams and take under basic landholder rights is also accounted for in water sharing plans, cap and the Basin Plan[2].

The disallowance decision also removes one of the only restrictions the NSW Government had on limiting take of overland flow by removing the reference to eligible works approved or constructed prior to 3 July 2008. 

This means now all approved works, regardless of their approval or construction date in NSW, that can intercept or capture overland flow (as described above), return to relying on the pre-existing, historical interception activities in the 1912 Act that are foreshadowed to be licenced activities under the 2000 Act.  Licencing will be consistent with 1993/94 Cap and the Basin Plan, as well as other regulatory obligations to manage overland flow on-farms like agriculturally contaminated water.

Because floodplain harvesting licences were committed as part of the development of the first water sharing plans in 2004, but are not yet issued, historical transitional arrangements in a range of regulations and WSPs remain relevant as with Schedule 10 of the 2000 Act.

Schedule 10 sets out the transition path. Specifically, any entitlement from an old Act is ‘replaced’ and automatically brought into the WMA, provided it meets the WMA requirements (i.e. the NWI principles).

If it does not meet WMA requirements (i.e. volumetric), Schedule 10 says: “the 1912 Act, the 1948 Act or the 1994 Act, as the case requires, is taken to continue to apply to the entitlement until such time as” it can meet WMA requirements (i.e. volumetric licences come in), or if it explicitly ceases to be in force (i.e. gets repealed), whichever comes first.

The Healthy Floodplains Program and the Floodplain Harvesting Action Plan outlines the steps required before July 2021, whereby the issuing of floodplains harvesting licences in the five northern valleys.

Who benefits from the disallowance?

Other than lawyers, any water users in NSW who has developed or redeveloped their farms post 2008, will benefit from being able to continue to use these works to intercept and capture overland flow until licences are issued.

Water users where there is no prior commitment to licencing floodplain harvesting are also likely to benefit, as their activities would fall within the same category as estimated interceptions and in transition, until such time as a licence or an exemption is issued.

Because this is state legislation and regulation, any beneficiaries are state-wide and not just limited to northern basin.

What are the impacts?

The disallowance motion does not mean tighter regulations for northern irrigators but the opposite.

Because the “exemption” restricted the types of works not requiring a licence, to eligible works approved or constructed prior to 3 July 2008.  This meant any overland flow take would, for the first time, be limited to these conditions. 

But overland take is now unlimited, across NSW until licences are issued.

This has the potential to impact the environment, communities and other irrigators and could have been minimised through this exemption.

The disallowance motion will not impact the volume of water available to irrigators in the northern basin.  There is already an assumed allowable level of overland take within valley limits and the Sustainable Diversion Limit. Other diversions can be increased to continue to maintain access to the SDL.  This is clearly explained by the MDBA in their transitional water take report:

“…. it is important to note that this is not new water becoming available. Water taken by authorised floodplain harvesting works was already legally available for use, and is not presently measured.”[3]

Until licences are issued, the NSW Government have few options to regulate and manage this form of take, which transgresses both the 1912 Act and the 2000 Act, multiple regulations and conditions, rather than clearly in one overarching framework.  Providing uncertainty for the regulator and water users across all of NSW.

While not perfect, the “exemption” provided the government with the first necessary tools to begin better regulation of overland flow take.

As Minister Pavey said in a media release on 23 September: “It provides clear, enforceable rules that apply until licensing is in place which will reduce – not increase – the capability to harvest floodplain water in the Northern Basin”.

What is the solution?

The only enduring solution is to finalise the nearly 20-year commitment by multiple governments to licence floodplain harvesting and incorporate overland flow into the current licencing framework.  This will ensure water take is accountable, measured, transparent and within the allowable limits.  Until such time it remains unregulated, which is clearly untenable for everyone who shares in floodplain flows.

Until licences are issued, northern NSW irrigator industry commits to implementing the required metering steps as per the NSW Floodplains Harvesting Measurement Policy 2020, if we experience a flood. Irrigators of the northern basin have always supported a metering framework for Floodplain Harvesting. We will continue to support the transitional arrangement as a necessary step in the move to a more accountable, transparent system with the licencing floodplain harvesting.

What is the background?

Historically, floodplain harvesting was regulated under Part 2 and Part 8 of the 1912 Act. In 2000, following the NWI, NSW adopted the new 2000 Act, (the Water Management Act or WMA). The WMA requires all forms of water take to have either a: licence, licence exemption, or be a right (e.g. basic landholder right).

NSW has not fully completed the transition from the 1912 Act to the 2000 Act. They are yet to establishing volumetric licences for FPH. This is occurring through the Healthy Floodplains Project, with volumetric licencing and metering to be required from 1 July 2021 for all eligible FPH.

As early as 2013, given licencing is a lengthy process, it was flagged that FPH needed an interim step to bring the activity into line with the 2000 Act and contemporary licencing standards. Thus a ‘licence exemption’ was required in the interim. This licence exemption was (finally) drafted in Dec 2019, but not put into place until February 2020. This very unfortunately occurred amidst the First Flush Event, which caused significant confusion about the intent and purpose of the long foreshadowed (and entirely separate) regulation.

There was a Parliamentary Inquiry established on 27 February into the impact and implementation of the Exemption. The Final Report, submissions, and hearing videos are available from the committee website. The inquiry found that communication of the Exemption was inadequate which “contributed to poor perceptions of the Regulation, as well as to perceptions of inequity between the northern and southern basin”; and that the absence of regionally based DPIE officers undermined communication efforts and negatively impacted stakeholders.

A video from DPIE explaining the interim measures is available via youtube.

More information is on our page Floodplain Flow and Licencing.

We also have this document outlining some of the misrepresented facts used in the debate.

[2] As explained in Recent Water Take Reports by the MDBA page 96 https://www.mdba.gov.au/sites/default/files/pubs/Transition%20Period%20Water%20Take%20Report%202017-18.PDF

[3] Page 99 https://www.mdba.gov.au/sites/default/files/pubs/Transition%20Period%20Water%20Take%20Report%202017-18.PDF

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