Australia: The Murray Darling Basin Plan – courts and water use

The court weighing in on the cancellation of Novak Djokovic's visa was a recent example of how the courts function to keep a check on government power, a process known as "judicial review".

In Djokovic v Minister for Immigration, the Federal Court of Australia held that the power to cancel a visa for "public health, safety and good order" under the Migration Act 1958 (Cth) permitted the Minister to cancel Djokovic's visa as an unvaccinated sportsperson. However, migration matters are just one type of executive power that the courts are able to engage with and decide whether a decision was made in accordance with a given law. Water law is an area where courts have a role to play in ensuring that the decisions of the relevant Minister and statutory bodies are consistent with what is authorised by legislation.

The Murray Darling Basin Plan (Basin Plan) is a statutory plan made under the Water Act 2007 (Cth) (Water Act) to improve the health of the Murray Darling Basin by setting aside water for the environment. However, what if the Basin Plan did not achieve this aim? If a decision has been made without complying with the procedures set out in a statute it may be invalid.

Could the Basin Plan be challenged?

This article looks at how a court would hypothetically consider a challenge to the legal validity of the Basin Plan if it were challenged on environmental grounds. Such a challenge would be a judicial review, similar to the Djokovic case, where one may argue that the Water Act does not give the Murray Darling Basin Authority (MDBA) power to create a Basin Plan that is not environmentally sustainable.

The Water Act contains prescriptive requirements for the preparation of the Basin Plan. A key concept is sustainability. Viewed as a whole, the Water Act could be said to direct the preparation of a Basin Plan that delivers a sustainable Murray Darling Basin. These environmental objectives under the Water Act are noted at section 3, including:

Other sections in the Water Act make clear that sustainability is a requirement when creating the Basin Plan and deciding on sustainable diversion limits. For example, section 22 states that the Basin Plan must include "management objectives and outcomes to be achieved by the Basin Plan" which must address "long-term average sustainable diversion limits" and section 21 states that the Basin Plan is to be prepared in accordance with the National Water Initiative which contains sustainability objectives.

When deciding what the Water Act actually allows, courts will also look at what Parliament intended. For example, when the Water Bill 2007 was introduced into the Lower House, The Honourable Malcolm Turnbull noted that the Bill would ensure "clear pathways to return all water resources to environmentally sustainable levels of extraction".

The Basin Plan set the amount of water to be secured for the environment each year at 2,750 gigalitres (GL) target. This target has since been amended using the Sustainable Diversion Limit Adjustment Mechanism and from 2019 the sustainable diversion limit has been reduced by 605 GL to 2145 GL. Initial research and policy documents identified 3,000 to 7,600 GL per year being required to deliver sustainable environmental flows.

With a diversion limit under the Basin Plan substantially different to what is considered sustainable, would a court find the Basin Plan is not made in accordance with the Water Act and is invalid?

South Australian Royal Commission a guide?

If the findings of the 2019 South Australian Royal Commission in relation to the Murray Darling Basin Plan are anything to go by, the answer to this question is probably yes – the Basin Plan is invalid. In its report, the Royal Commission relevantly concluded the following:

The lawfulness of the Basin Plan is particularly relevant given the CSIRO predicted that by 2030 surface water availability across the entire basin is expected decline due to the impacts of climate change, with flows reaching the end of the Murray River being reduced by 24 per cent.

It is worth noting that not following a law when making a decision or exercising power does not automatically render it invalid. The test from Project Blue Sky Inc v Australian Broadcasting Authority (Project Blue Sky) is whether it was the purpose of the legislation that such a breach should lead to invalidity. This is a problem with respect to an instrument like the Basin Plan because its invalidity would lead to major public inconvenience.

Public inconvenience represents a significant challenge to a plaintiff seeking to attack the Basin Plan. It has been a decade since the Basin Plan was adopted, and longer still since its preparation commenced. Invalidity would result in great inconvenience to many parties. Water entitlement holders whose entitlements have been affected through the implementation of the Basin Plan would be significantly aggrieved.

Potential for challenge in the future

As water scarcity produces increased need for management and competition for dwindling resources, challenging government decisions by way of judicial review for failing to meet the overarching goals of water legislation may become an increasingly viable and impactful method for water users and communities.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.