ICAC recommends changes to government water management in NSW after years of focus on irrigation industry interests

Friday 27 November 2020

The NSW Independent Commission Against Corruption (ICAC) has made 15 recommendations to the NSW Government to improve the management of the state’s water resources, after the undermining of the governing legislation’s priorities over the past decade by the responsible department’s repeated tendency to adopt an approach that was unduly focused on the interests of the irrigation industry.

In a report released today, Investigation into complaints of corruption in the management of water in NSW and systemic non-compliance with the Water Management Act 2000, the ICAC examined multiple allegations, over almost a decade, in two related investigations (Operation Avon and Operation Mezzo), concerning complaints of corruption involving the management of water, particularly in the Barwon-Darling area of the Murray-Darling Basin. Ultimately the Commission was not satisfied in relation to any of the matters it investigated that the evidence established that any person had engaged in corrupt conduct for the purposes of the Independent Commission Against Corruption Act 1988.

However, it did form an opinion that in many of the matters it investigated the evidence established that certain decisions and approaches taken by the NSW Government department with responsibility for water management over the last decade were inconsistent with the object, principles and duties of the Water Management Act 2000 (WMA) and failed to give effect to legislated priorities for water sharing.

The report notes that at a policy level, the investigation found that the development and implementation of the 2012 Barwon-Darling Water Sharing Plan represented a failure to adhere to the priorities set out in the WMA.

Specific failures in the administrative arrangements concerning water regulation and compliance also created an atmosphere that was overly favourable to irrigators. This was largely due to chronic underfunding, organisational dysfunction and a lack of commitment to compliance.

More generally, the irrigator focus of the Department of Primary Industries – Water (DPI-W) was entrenched in its approach towards stakeholder consultation, which focused on the irrigation industry, while restricting information available to other stakeholders, such as environmental agencies. As a result, the policy-making process became vulnerable to improper favouritism, as environmental perspectives were sidelined from policy discussions.

The Commission has made 15 recommendations to address these issues and to promote the integrity and good repute of public administration in relation to water management. Specifically, the recommendations concern the undue focus on irrigators' interests within water agencies and deal with the:

•    lengthy history of failure in giving proper and full effect to the objects, principles and duties of the WMA, and its priorities for water sharing
•    failure to fully implement water sharing plans and ensure they are audited
•    need to fund independent scientific audits to determine the ecological health of rivers
•    lack of transparency, balance and fairness in consultation processes undertaken by water agencies in relation to external stakeholders
•    sidelining of public officials undertaking environmental roles within the NSW Government
•    control weaknesses in the classification and handling of confidential and sensitive information
•    flaws in the recruitment procedures used to engage a director of intergovernmental strategic stakeholder relations at DPI-W
•    regulatory failures in the state’s water market
•    lack of transparency and accountability in water account information.

The Commission is not of the opinion that consideration should be given to obtaining the advice of the Director of Public Prosecutions with respect to the prosecution of any individual.

The ICAC determined that it was not in the public interest to conduct a public inquiry in this matter. Instead, the Commission was satisfied that the matters investigated could be satisfactorily addressed by way of a public report pursuant to section 74(1) of the ICAC Act.  

In making that determination, the Commission had regard to the following considerations:

•    the Commission obtained and reviewed a significant amount of cogent evidence in the course of the investigation that indicated the possibility of corrupt conduct
•    careful review of this evidence and of the submissions received from affected persons led to the conclusion that no corrupt conduct findings could be made
•    a public inquiry would only duplicate the evidence already obtained and would not materially assist the investigation
•    a public inquiry would risk undue prejudice to peoples’ reputations, given the Commission’s findings in relation to the majority of the allegations investigated
•    a public inquiry would involve an unnecessary use of Commission resources.

Investigation report                      Fact sheet