Australia: Proposed NSW Water Access Regime – Fathoming The Depths

Last Updated: 12 July 2006
Article by Susan Yee-Kong

The release of the NSW government’s consultation paper on access to water infrastructure is one of many steps it needs to take in order to reach its goal of a state based access regime.

The NSW government released its ‘Water for Life’ consultation paper in May 2006. This includes an outline of the NSW government’s proposed framework for the way in which access to water and waste water infrastructure in the greater Sydney and Hunter regions will be negotiated, and how disputes may be arbitrated.

This announcement of a consultation process is at least partially a response to the Australian Competition Tribunal’s (ACT) recent affirmation of the National Competition Council’s (NCC) decision that the Sydney Water waste water infrastructure be ‘declared’ for the purposes of the Trade Practices Act 1974 (TPA), upon which we commented in our March 2006 Competition & Trade Practices issues summary.

The establishment of an industry-specific State access regime will enable the NSW government to:

  • Prevent future declarations of other water infrastructure services and seek the revocation of declaration of Sydney Water’s waste water infrastructure services.
  • Ensure that regulated access to water infrastructure services occurs on terms and conditions determined by the NSW government.

The proposal to introduce a state based access regime cannot change the fact that significant sewerage transmission and interconnection services in Sydney have already been ‘declared’ under the TPA. This means that access disputes over those declared services will be arbitrated by the Commonwealth and will not be governed by any state based access regime for the next 50 years, in accordance with the terms of the declaration.

However, following the establishment of the NSW water infrastructure access regime, the NSW government is likely to take steps to have the declaration revoked to ensure that its new regime can exclusively ‘cover the field’ in terms of dispute arbitration.

Access to essential infrastructure services via the Trade Practices Act

There is no generic NSW legislation under which a person can apply to obtain access to essential infrastructure services in NSW. Rather it is the TPA that establishes an umbrella framework for access to essential infrastructure services in Australia. The TPA provides three means by which there can be access to essential infrastructure services.


Access seekers can apply to the NCC for such services to be ‘declared’, and this was the approach successfully pursued by Services Sydney. A declaration may be made if the following criteria are satisfied:

  • Access would promote competition in another market.
  • It is uneconomical for anyone to develop another facility.
  • The facility to which access is required is of national significance.
  • Access to the facility must be able to be provided without undue risk to human health or safety.
  • There must not be an existing effective access regime in relation to the facility.
  • Access must not be contrary to the public interest.

The purpose of the criteria is to limit declarations, and so applications of the TPA’s access regime, to infrastructure services that:

  • Are provided by a nationally significant facility.
  • Have natural monopoly characteristics – that is, it is uneconomic to duplicate the facility.
  • Occupy a ‘bottleneck’ position in an industry – that is, access to the infrastructure service is essential to competition in a related market.

The public interest assessment weighs the costs and benefits of imposing access regulation.

If a service is declared, the access regime established by the TPA applies to that service. The service provider is obliged to negotiate with any person seeking access concerning the terms and conditions of access. Any disputes concerning the proposed terms and conditions can be escalated by an access seeker to the ACCC, who ultimately has the power to determine the terms and conditions of access by way of arbitration.

Effective access regimes

A state or territory government can put in place an industry-specific access regime for essential infrastructure services. Once this is done, the Council cannot recommend a declaration for those services if it considers the access regime to be effective. The criteria for effectiveness are set out in clause 6 of the Competition Principles Agreement and are similar to the declaration criteria set out above.

The question of what may be considered to be effective can be determined as part of the assessment of an application for declaration. Alternatively, it may be considered prior to any application for a declaration, if the state or territory government submit the access regime to the NCC for endorsement as an ‘effective access regime’. If the relevant Commonwealth Minister accepts an NCC recommendation for certification of the regime as effective, the regime exclusively governs access to the relevant service.

Voluntary access undertakings

The TPA provides that a provider of essential infrastructure services can voluntarily submit an ‘access undertaking’ to the ACCC. If the ACCC accepts this undertaking, the services cannot be the subject of a declaration – the terms and conditions of access contained in that undertaking will prevail. Likewise, if the services are already declared, the ACCC cannot accept an access undertaking for those services.

An effective access regime or an ACCC accepted access undertaking in respect of a service prevent declaration of that service. There is therefore a significant incentive for state and territory governments and governmentowned service providers to establish access regimes and / or submit undertakings they designed to avoid the imposition of Commonwealth regulation on their activities, and to allow service providers to obtain a greater degree of certainty about the terms and conditions upon which they will be required to provide access.

Implications for the co-existence of declarations and an access regime over the same services

The TPA prevents declaration where there is an effective State or Territory access regime or an ACCC accepted access undertaking, and prevents the ACCC accepting an access undertaking where declaration has occurred. However, not surprisingly, this Commonwealth legislation does not prevent a State or Territory from establishing its own access regime in respect of a declared infrastructure service.

As a result, it is possible for two access regimes, the Commonwealth’s TPA regime and a State or Territory regime, to apply to the same infrastructure service. This would be the case in respect of those of Sydney Water’s waste water infrastructure services declared under the TPA, if the NSW government established its water infrastructure regime.

The co-existence of the declaration and any state based access regime for water infrastructure is likely to cause regulatory uncertainty. Should the NSW government put its water access regime in place, it would then have two different regimes governing the arbitration of disputes concerning access to water infrastructure in NSW – the Commonwealth regime and the NSW regime.

An access seeker would need to use the procedures under the state based access regime in relation to the non-declared water infrastructure services – that is, the services of Sydney Water, other than its waste water infrastructure services, and those of Hunter Water. However, two differing sets of arbitration processes under two distinct arbitrators will potentially apply to any access dispute in respect of Sydney Water’s waste water infrastructure services.

The situation is further complicated by the potential for any person, whether Sydney Water or an access seeker, who obtains an advantage from the Commonwealth regime over the state based regime, to argue that the Commonwealth regime alone applies to Sydney Water’s waste water infrastructure services. This is because the Constitution provides that Commonwealth legislation applies to the exclusion of state legislation to the extent of any inconsistency. The uncertainties have the potential to cause greater delays and costs in the administration and implementation of access.

Revocation of declaration

In practice, however, it seems likely that the NSW government intends to move quickly, following the establishment of its water infrastructure access regime, to have declaration of Sydney Water’s waste water infrastructure revoked, either before or after seeking certification of its regime.

The substitution of a state based access regime or undertaking for the declared services could only occur if the NCC recommended revocation of the declaration made by the ACT.

There are no provisions in the TPA expressly conferring a power on any person to seek a recommendation for revocation from the NCC. Further, while the NCC cannot revoke a declaration unless the criteria for declaration are no longer satisfied, the NCC has a discretion whether to revoke where this requirement is met. Once again, however, these elements of the TPA are unlikely to raise any barrier to the NSW government in obtaining revocation, as the NCC is likely to act in accordance with the intent that the TPA not cover a service that is subject to an effective access regime1 regardless of the lack of legislative compulsion.

Revocation pre-conditions

The relevant Minister can only revoke the declaration if it receives a revocation recommendation from the NCC. The NCC can only make that recommendation if it is satisfied that, at the time it is considering its recommendation, the tests for making a declaration would not be satisfied. This would include in particular whether the declaration continues to promote competition in another market, and the effectiveness of the new access regime in relation to the facility.

While the NCC may make such a recommendation on the basis that an ‘effective’ access regime now exists, a crucial step for the NSW government is to first seek to develop an effective access regime – that is, a regime that conforms to the Competition Principles Agreement principles for such a regime – before seeking revocation. Provided, however, the NSW government makes some effort to ensure its regime accords with those principles, even where the regime is not strictly an effective access regime, the pre-conditions for revocation will almost certainly be met. This is because the NCC is likely to conclude that continued declaration of Sydney Water’s waste water infrastructure services will not promote competition in any related market, where a State regime would compel regulated access to those services in the absence of declaration.2

Obtaining this recommendation may take some time, as there are at present no statutory timeframes in which the NCC must adhere in making the recommendation.

1 Clause 6(2) of the Competition Principles Agreement expressly states that the intent of the Commonwealth and State and Territories Governments that are signatories to that Agreement was that the TPA access regime not cover any infrastructure service that is subject to a State or Territory effective access regime, except where issues arise from the relevant facility being situated in more than one jurisdiction.

2 The NCC adopted this line of reasoning in recommending against the declaration of Freight Victoria Limited’s Victorian intra-state rail network (see NCC’s Final Recommendation for Freight Australia’s application for declaration of its Victorian rail network services, December 2001). The NCC concluded in assessing the application for declaration that the existing (but not certified) Victorian rail access regime, which covered the intra-state rail network, was not an effective access regime. However, it nonetheless concluded that the operation of the regime had the effect that declaration of the network would not promote competition in any market.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.