Australian Water Rights — Best Practice?

A Productivity Commission study has found significant differences in the way water rights are defined, allocated and administered in Australia and overseas.

The study — Water Rights Arrangements in Australia and Overseas — compares arrangements for managing water rights against accepted best practice principles.

Productivity Commission Chairman Gary Banks said: ‘In all the jurisdictions studied, there is growing concern that water should go to its most valued uses — including for environmental purposes.’

The Commission found that there are two contrasting systems used to allocate water across competing users:

• In most Australian jurisdictions, and in South Africa, governments devise plans to share the volume available for consumption among right holders. Governments can modify these allocations for various reasons, including to increase the water available to the environment.
• In California, Colorado and Chile, water rights are secured as legal property. Users can trade their rights in markets, provided doing so does not adversely affect the rights of others. Government agencies can only allocate additional water to the environment by purchasing water rights, harvesting additional water, or investing in water savings programs.

The Commission noted that both systems have strengths and weaknesses, and quite different implications for the distribution of water between users and uses.

Mr Banks said: ‘The study shows the importance of having sound governance arrangements for administering and enforcing water rights. It is also clear that adjusting any one component of such complex systems could have wider ramifications for their integrity’.