EXPLANATORY STATEMENT
Issued by the Authority of the Murray-Darling Basin Authority
Water Act 2007
Murray-Darling Basin Agreement (Adjusting Valley Accounts and State Transfer Accounts) Protocol 2010
The Murray-Darling Basin Agreement (Agreement) is Schedule 1 to the Water Act 2007 (Act). The Agreement allows for the Murray-Darling Basin Authority (Authority) to make protocols in respect of certain matters.
This instrument, the Murray-Darling Basin Agreement (Adjusting Valley Accounts and State Transfer Accounts) Protocol 2010 (Protocol), is made under paragraphs 6(1)(c) and (f) of Schedule D to the Agreement and section 18E of the Act . The Protocol is a legislative instrument made by the Murray-Darling Basin Authority members: see section 18D of the Act.
The Protocol requires that the Authority, each State Contracting Government and each licensing authority follow a specified process for determining applications for interstate transfers of allocations. This process is set out in Schedule 1 to the Protocol and is made up of 5 sequential steps. The steps deal with lodgement of applications, consideration of applications by the transferee’s authority, consideration and finalisation of applications by the transferor’s authority, finalisation of applications by the transferee’s authority, and the reconciling of records in relation to interstate transfers of allocations by the Authority. No regulatory impact analysis is required as the Protocol does not change existing arrangements except to permit allocation transfers for a limited time from 19 January 2010 to 30 June 2010.
Details of the Protocol are set out in the Attachment.
The Protocol commences on the day after it is registered on the Federal Register of Legislative Instruments.
The Protocol is not subject to disallowance by Parliament nor the sunsetting rules in Part 6 of the Legislative Instruments Act 2003: see section 18D of the Act.
Consultation
In amending the Protocol, the Authority has consulted each of the Contracting Governments through two processes as required under the Agreement. Firstly, the Basin Officials Committee (BOC) provided advice to the Authority on the best mechanisms for allowing allocation transfers out of the Lower Darling for the 2009/10 water year. In addition, the Authority office has also consulted with the technical staff of each of the Contracting Governments in terms of the proposed clause amendments that will enable allocation transfers as requested by BOC. Each of the Contracting Governments technical staff indicated support for the proposed clause amendment.
ATTACHMENT
Details of the Murray-Darling Basin Agreement (Adjusting Valley Accounts and State Transfer Accounts) Protocol 2010
Section 1 – Name of Protocol
Section 1 provides that the name of the Protocol is the Murray-Darling Basin Agreement (Adjusting Valley Accounts and State Transfer Accounts) Protocol 2010.
Section 2 – Commencement
Section 2 provides that the Protocol commences on the day after it is registered.
Section 3 – Revocation
Section 3 revokes the predecessor to the Protocol, being the Schedule E Protocol – Adjusting Valley Accounts and State Transfer Accounts made on 24 April 2007. This Protocol largely remakes its predecessor. The only substantive change is to clause 31 of Schedule 1.
Section 4 – Incorporation of Schedule 1
Schedule 1 contains the substantive provisions of the Protocol.
Schedule 1 contains the operative provisions of the Protocol. The provisions are substantially the same as the predecessor to the Protocol (the Schedule E Protocol – Adjusting Valley Accounts and State Transfer Accounts made on 24 April 2007).
The only substantive change is to subclause 9(31).
SCHEDULE 1 – Adjusting valley accounts and state transfer accounts
Clause 1 identifies the provisions of the Agreement under which the Protocol is made.
Clause 2 sets out the purpose of the Protocol. The purpose is relevant in interpreting and applying the Protocol.
Clause 3 sets out the matters to which the Protocol applies: intervalley and interstate trade in the southern connected Murray-Darling Basin; transfers of allocations (temporary trade); and transfers of entitlements (permanent trade) through exchange rate or tagged trade.
Clause 4 defines a number of terms used in Schedule 1.
Clause 5 provides an overview of the Protocol and Table 1 sets out the valley and transfer accounts that need to be adjusted for trade between particular zones.
Clause 6 sets out general rules applicable to valley accounts. The purpose of clause 6 is to regulate the way in which valley accounts are managed. Among other things, the provisions of clause 6:
- are designed to ensure that valley accounts are accurate and kept up to date; and
- regulate the power of the Authority to give directions – and the responsibility of State Contracting Governments to implement directions – for the use of water standing to the credit of a valley account; and
- contain specific rules for particular valleys (eg the Murrumbidgee / Yanco / Billabong and Lower Darling valleys).
Clause 7 sets out general rules applicable to State transfer accounts. The purpose of clause 7 is to ensure that State transfer accounts are accurate and kept up to date. Subclause 7(2) provides for specific rules that the Authority must comply with in making adjustments for tagged trade.
Clause 8 sets out detailed procedures for the Authority to follow in making adjustments the delivery of State entitlements for interstate transfers of entitlements and allocations. Clause 8 is intended to supplement clause 7.
Clause 9 contains detailed provisions for how particular valley accounts are to be managed.
Subclause 9(31) – which deals with allocation transfers into and out of the Lower Darling – is amended in this Protocol. Subclause (31) previously permitted the facilitation of transfers while the Menindee Lakes System was under the Authority’s control, but prohibited the approval of transfers when below 480/640 GL under NSW control.
Under the changes, transfers may be approved when the Menindee Lakes System is below 480/640 GL under NSW control if both of two grounds are satisfied. The first ground is that the approval would not significantly affect a third party. The second ground is that the approval would not adversely impact State entitlements under the Agreement.
However, this new basis for approving transfers is only open from 19 January 2010 to 30 June 2010.