Analysis of institutional arrangements and constraints affecting the establishment of water markets across northern Australia

Analysis of institutional arrangements and constraints affecting the establishment of water markets across northern Australia Report

  • Author(s): W.D. Nikolakis, R.Q. Grafton
  • Published: 2009
  • Publisher: Charles Darwin University, Tropical Rivers and Coastal Knowledge (TRaCK)

Abstract: This report is the first of three reports and part of a two year project entitled Establishing water markets in northern Australia: a study to assess feasibility and consequences of market-based mechanisms of water delivery undertaken through the Australian National University’s Crawford School of Economics and Government. The Tropical Rivers and Coastal Knowledge (TRaCK) hub funded this project under Theme 6.1 “Sustainable Enterprises”. This research is being undertaken in collaboration with the North Australian Indigenous Land and Sea Management Alliance (NAILSMA). This first report provides analysis of current institutional arrangements and constraints affecting the establishment of water markets across tropical Queensland, Northern Territory and Western Australia, (with focus on the Gulf, Timor and North East drainage divisions). Research needs were identified by TRaCK and NAILSMA (and the Indigenous Water Policy Group), and from this structured interview questions were developed. Data collection involved a review of literature from a number of different sources (government, media and scholarly articles) and utilised qualitative interviews with 42 State, Territory, Commonwealth government officials, land council representatives and experts. Data was collected through structured personal interviews using an open ended format; telephone interviews were undertaken when face-to-face interviews were not possible. Most interviews were audio recorded, with transcripts sent back to all interviewees for confirmation. Findings were developed comparing multiple data sources, and sent out to interviewees for their feedback. Changes were made where appropriate and from this the final report was then produced. The research findings highlight that the jurisdictions analysed have the framework in place to support water markets, but some States have more robust frameworks in place (such as Queensland)— however, it is emphasised that the development and importance of water markets is influenced by the demand for water in each of the jurisdictions. This study found that all jurisdictions have focused on planning in the north and have taken a precautionary approach to implementing water reform. This approach has been implemented using best available knowledge, but it is informed by a recognition that generally there is a limited understanding of the characteristics of water resources across the north, as well as related ecological and cultural values. Several features are shared across jurisdictions including a desire to support Indigenous access to water that may be accommodated through an Indigenous reserve (which may include water for drinking, customary and consumptive purposes) or through an entitlement, or a blend of both. Including Indigenous people in water planning has been hampered by community capacity in the north and relevant governments are constrained in overcoming this challenge by limited resources. A key finding of the study is that inter-basin transfers are not, in general, supported by interviewees and, at present, cross border trading is highly circumscribed. Some concern was also raised about inclusion of mining activities in water markets. Various constraints were identified to the establishment of water markets across northern Australia. The key constraints identified generally across the north include physical limits to trade, knowledge gaps and legislative and institutional frameworks. In the Northern Territory, interviewees identified community attitude and values as being a major limitation on the establishment of water markets. In Queensland, the Wild Rivers Act 2005 which prescribes the intensity of water-based development in the north was viewed as a significant barrier to water trading. In Western Australia, land tenure issues, particularly native title processes were seen as being the most significant limitation (albeit indirect) to the establishment of water markets in the north. Despite these constraints, many respondents recognised that establishing a robust and cost effective water management framework has the potential to support sustainable development outcomes across the north.

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W.D. Nikolakis, R.Q. Grafton, 2009, Analysis of institutional arrangements and constraints affecting the establishment of water markets across northern Australia, Report, viewed 12 June 2024,

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