EXPLANATORY STATEMENT
Issued by authority of the Murray-Darling Basin Authority
Water Act 2007
Murray-Darling Basin Agreement (Schedule D – Processing Interstate and Intervalley Trade) Protocol 2026
Legislative authority
Section 18E of the Water Act 2007 (Cth) (Water Act) confers on the Murray-Darling Basin Authority (Authority), in a referring State or the Australian Capital Territory, the functions, powers and duties that are expressed to be conferred on it by or under the Murray-Darling Basin Agreement (Agreement), and relate to the water and other natural resources of the Murray-Darling Basin.
Paragraph 6(1) of Schedule D to the Agreement provides that the Authority may, in consultation with the Basin Officials Committee (BOC), from time to time make protocols about matters covered by Schedule D.
Purpose
The Murray-Darling Basin Agreement (Schedule D – Processing Interstate and Intervalley Trade) Protocol 2026 (the Protocol) supplements Schedule D as it relates to the processing of interstate and intervalley transfers.
The purpose of this Protocol is to repeal certain earlier instruments and to contribute, in part, to implementing the principles agreed to by Contracting Governments to facilitate opportunities and to process applications for interstate and intervalley transfers in the southern-connected Murray-Darling Basin (sMDB).
Background
Schedule D to the Agreement governs arrangements for accounting, administration, and coordination of interstate and intervalley transfers within the sMDB. It establishes agreed structures and mechanisms for transfers between valleys and States to contribute to an efficient and effective water market within the sMDB.
Clause 6 of Schedule D to the Agreement permits the Authority to make protocols in relation to matters covered by Schedule D. The Protocol regulates the interstate and intervalley transfers in accordance with Schedule D to the Agreement, including across the Barmah Choke.
Consultation
Subclause 6(3) of Schedule D to the Agreement requires that the Authority notify each Contracting Government when it has determined to make, amend, review, or revoke a protocol and of the subject matter of any such proposed protocol amendment, review or revocation. The Authority complied with this requirement, by giving notice to BOC members (each of whom represents a different Contracting Government).
Subclause 6(4) of Schedule D provides that a Contracting Government may nominate a person with relevant expertise and experience to give advice to the Authority in preparing, amending, reviewing or revoking a protocol. Subclause 6(5) requires the Authority to consider any advice given by a person nominated under subclause 6(4) before it makes, amends or revokes a protocol.
The Authority considered the advice given by the nominated representatives of Contracting Governments in preparing the Protocol, noting that those representatives endorsed the making of the Protocol.
Details
Details of the Protocol are set out in Attachment A.
Other
Under section 18D of the Water Act, a protocol made by the Authority under a Schedule to the Agreement is a legislative instrument, but is not subject to disallowance under section 42 of the Legislation Act 2003 or sunsetting under Part 4 of Chapter 3 of that Act.
As this legislative instrument is not subject to disallowance, a Statement of Compatibility with Human Rights is not required by paragraph 15J(2)(f) of the Legislation Act 2003.
Attachment A
Details of the Murray-Darling Basin Agreement (Schedule D – Processing Interstate and Intervalley Trade) Protocol 2026
Section 1 – Name
This section provides that the name of the Protocol is the Murray-Darling Basin Agreement (Schedule D – Processing Interstate and Intervalley Trade) Protocol 2026.
Section 2 – Commencement
This section provides that the Protocol will commence on 1 July 2026.
Section 3 – Authority
This section states that the Protocol is made under clause 6 of Schedule D to the Agreement and section 18E of the Water Act 2007.
Section 4 – Purpose
This section provides that the purpose of the Protocol is to contribute, in part, to the implementation of the principles contained in the Annexure to the Protocol, which have been agreed by the Contracting Governments.
Section 5 – Application
This section provides that the Protocol applies to interstate transfers and intervalley transfers.
Section 6 - Definitions
This section provides the definitions for terms and expressions used in the Protocol. A number of expressions used in the Protocol are defined in the Act or the Agreement.
Section 7 – Schedule
This section gives effect to Schedule 1, which repeals (in full) each of the instruments specified in Schedule 1.
Section 8 – Processing transfers
This section provides that the Authority, State Contracting Governments and approval authorities will process transfers for the purpose of the Protocol.
Sub-section (2) provides additional requirements for approval authorities when processing interstate and intervalley transfers relating to the balance of the Barmah Choke.
Section 9 – Notification of changes to State water transfer laws
This section requires each State Contracting Government to notify each other State Contracting Government and the Authority of any changes to State water transfer laws that affect the processing of interstate and intervalley transfers under this Protocol.
Section 10 – Barmah Choke allocation account
This section requires the Authority to record information against the Barmah Choke allocation account whenever it is notified that a transfer across the Barmah Choke has been approved by an approval authority or a State Contracting Government.
Sub-section (2) provides that transfers across the Barmah Choke must not be approved if the transfer would result in a negative balance in the Barmah Choke allocation account.
Sub-section (3) requires that the Authority must, in maintaining the Barmah Choke allocation account, establish systems for the purpose of enabling updates to the balance of the Barmah Choke in real time (or as close as reasonably possible) and publish information on the balance in a manner that makes it generally available.
Section 11 – Restrictions on transfer of water access entitlements
This section provides that a water access entitlement may not be transferred from above to below the Barmah Choke unless the entitlement has previously been entered in the Barmah Choke entitlement record as having been transferred from below to above the Barmah Choke.
Section 12 – Exceptional circumstances advice
This section provides that the Authority may provide advice in relation to water allocation transfers across the Barmah Choke where it is satisfied that exceptional circumstances exist or are likely to exist in respect of transfers of water allocations from above to below the Barmah Choke.
Sub-section (2) provides that “exceptional circumstances” exist if the usual challenges in delivering water within the channel capacity at the Barmah Choke are significantly reduced.
Under subsection (3) the Authority may only advise that exceptional circumstances exist, if the Authority is satisfied that the advice, if acted upon, would not lead to material negative impacts on the environmental condition of the Barmah-Millewa Forest or on the availability of water to fulfil third party water access rights.
Subsection (4) prescribes the matters the Authority must have regard to in deciding whether exceptional circumstances exist.
Subsection (5) requires the Authority to publish reasons explaining the basis on which it is satisfied that exceptional circumstances exist or are likely to exist in a manner that makes those reasons generally available.
Section 13 – Announcement of matters relevant to exceptional circumstances advice
Sub-section (1) and (2) provide that the Authority must announce whether it will consider providing advice on exceptional circumstances under clause 12 of Schedule D to the Agreement for each financial year by no later than 31 May before the beginning of the relevant financial year.
Under subsection (3) the Authority may make such an announcement based on any information it considers relevant.
Under subsection (4) the Authority may revoke and substitute an announcement at any time before the start of the specified financial year.
Subsection (5) clarifies that any announcement by the Authority under this section does not require the Authority to provide advice under clause 12 of Schedule D to the Agreement.
Section 14 – Arrangements to support equitable trade opportunities
Under this section, the Authority, New South Wales and Victoria must agree to arrangements for processing transfers across the Barmah Choke.
Section 15 - Review
This section provides for the circumstances in which the Authority may review and, if appropriate, consider amending this Protocol.
Schedule 1 – Repeals
Item 1:
The whole of the Murray-Darling Basin Agreement (Schedule D — Calculating Cap Adjustments) Protocol 2010 is repealed.
Item 2:
The whole of the Murray-Darling Basin Agreement (Schedule D — Conversion Factors and Exchange Rates) Protocol 2010 is repealed.
Item 3:
The whole of the Murray-Darling Basin Agreement (Schedule D — Permissible Transfers between Trading Zones) Protocol 2010 is repealed.
Item 4:
The whole of the Murray-Darling Basin Agreement (Schedule D — Processing Interstate Exchange Rate Transfers) Protocol 2010 is repealed.
Item 5:
The whole of the Murray-Darling Basin Agreement (Schedule D — Processing Interstate Transfers of Water Allocations) Protocol 2010 is repealed.
Item 6:
The whole of the Murray-Darling Basin Agreement (Schedule D — Tagging Entitlements for Extraction in another State) Protocol 2010 is repealed.
Annexure 1
This Annexure contains the principles agreed to by Contracting Governments in seeking to further the purposes of Schedule D to the Agreement.