Murray-Darling plan a failure of evidence-based policy and co-operative federalism

By Stephen Easton

Monday February 4, 2019

Key points:

  • MDBA chief says it is caught between differing legal opinions.
  • Royal commissioner rejects the key AGS advice as incorrect and an “outlier” among many opinions.
  • Opposition calls for public service commissioner to investigate, might support federal royal commission.

Public servants are in the firing line of a caustic final report from the South Australian Royal Commission into the Murray-Darling Basin Plan, which found the federal agency at the centre of the agreement has acted unlawfully, on “dubious” advice from the Australian Government Solicitor.

Royal commissioner Bret Walker charges the Murray-Darling Basin Authority with gross negligence and maladministration through an unlawful effort to manage political pressure. He finds it is failing in its fundamental duty to faithfully enact the legislation that created it, in a set of excoriating findings that also reflect very poorly on current and former ministers of several jurisdictions.

Water Resources Minister David Littleproud and the MDBA immediately disputed the most damning conclusions. The agency gave a blanket denial of any claim it acted “unlawfully or improperly” and Littleproud pointed to its legal advice, which Walker rejects.

The Greens argue chief executive Philip Glyde must be sacked. Shadow environment minister Tony Burke has called for the Australian Public Service Commissioner to investigate, and left the door open to supporting a federal royal commission.

“If these findings are right then serious action needs to be taken by the Commonwealth, and if those findings are based on the fact that not all the evidence was before the commission then those people need to have their names cleared,” said Burke, who was the federal minister when the basin plan was established, and may well be again if he returns to government in May.

Littleproud is standing by Glyde, who agreed it was a “very damning report” but argued the agency was “caught between competing legal opinions” in interviews with the ABC.

“It is vital that this work continues and that the Basin Plan is implemented in full,” said an MDBA statement, echoing the overwhelming response from various ministers and stakeholders. The MDBA chief and his minister aim to maintain public trust and support with positivity about what had been achieved to date, while ominously pointing out the complex multi-government agreement was forged through extremely difficult political compromises.

The political pressure on the basin plan remains and fears it could collapse, that are sometimes more like threats, are central to Walker’s findings. He concludes the process of determining the amount of water available for irrigation is unlawful, precisely because it takes these political considerations into account.

“The determination of an [environmentally sustainable level of take], and the setting of a [sustainable diversion limit] that reflects it, do not involve political compromise under the relevant provisions of the Water Act.

“They are to be based on the ‘best available scientific knowledge’. Socio-economic considerations, ideology and realpolitik are not involved in this process if it is to be lawful.

“Best available scientific knowledge is neither secret nor classified. It is available to the scientific community, and the broader public. It involves processes and actions that represent science — that is, that are capable of being reviewed, checked and replicated.”

The report accuses the MDBA of “a major failure of process” in which it unlawfully “set out to gauge the limit of sectional or political tolerance” for restrictions on agricultural water use, instead of sticking to the science, and cloaked its work in unwarranted and unjustified secrecy.

“The story of this cynical disregard for the clear statutory framework for decision-making on this crucial measure is unedifying, to the lasting discredit of all those who manipulated the processes to this end.”

The source of the problem

The image of protesters burning copies of an MDBA guidebook outside its regional offices in 2010 was a clear reminder of the inherent difficulty of evidence-based policy. And in this unprecedented experiment in co-operative federalism, the politics are much more complex than in a single jurisdiction.

The “harsh and strident denunciation” of the agency’s 2010 determination is where the process began to unravel, in Walker’s view. Governments caved in to the pressure and leaned on the bureaucracy to provide more water to farms — but there was no legal basis for this revision, according to the report. The MDBA aimed to please its masters.

“As an independent statutory authority fully funded by the taxpayer, we have no vested interest,” said Glyde in one of his interviews. “We are the only ones with no skin in the game.”

Environmental experts from the Wentworth Group of Concerned Scientists, whose views are quoted throughout the report, warn against throwing public servants under the bus.

Australian National University professor Jamie Pittock told The Sydney Morning Herald politicians still have primary responsibility and the MDBA had limited authority. University of New South Wales professor Richard Kingsford argues the environment typically comes second to the economy in government in an op-ed focused on NSW issues.

“At an institutional level, environment agencies are weak,” he writes in the SMH.

“Environment ministers are usually low in the cabinet pecking order. Talented environment ministers are rapidly promoted up and out. Ministerial muscle lies with natural resources portfolios that serve powerful export industry lobbies, such as irrigated agriculture and mining. Where senior ministers hold environment portfolios, they often also juggle others that consume attention, such as energy.”

If one accepts the well-supported findings, this was a gigantic failure encouraged and endorsed by governments, and enabled by public servants who were too willing to conjure up legal flexibility that did not exist.

“The legal advice to the Commonwealth Government under both sides of politics for the last seven years has been consistent – the Basin Plan is lawful and was lawfully made,” argues Littleproud.

Walker disagrees with a crucial piece of advice from the Australian Government Solicitor, which he calls an “outlier” because it differs from the opinions of “many highly qualified and regarded lawyers” – leading him to believe it probably also contradicts earlier advice to the MDBA as well.

“The MDBA is confident that the Basin Plan has been made lawfully and is based on best available science,” the agency asserts. “There is extensive documentation in our published reports to support this.”

Walker strongly disagrees with this too. He is highly critical of the agency for a lack of transparency around its scientific determinations, and says it “failed to act on the best available scientific knowledge” in four ways.

“a. Science, as that term should be understood, was not used. The MDBA has failed to disclose key matters, such as its modelling. Science is open, available, and can be critiqued and checked. It can be validated or invalidated.

“b. The MDBA completely ignored climate change projections for the determination of the ESLT and the setting of a Basin-wide SDL that reflects this. That is unlawful. It ignores the best available scientific knowledge. As an administrative decision it is indefensible.

“c. Politics rather than science ultimately drove the setting of the Basin-wide SDL and the recovery figure of 2750 GL. The recovery amount had to start with a ‘2’. This was not a scientific determination, but one made by senior management and the Board of the MDBA. It is an unlawful approach. It is maladministration.

“d. In 2011, management of the MDBA improperly pressured the CSIRO to alter parts of the CSIRO’s ‘Multiple Benefits’ report. This rendered parts of that report misleading, as they no longer reflected the views of, at the very least, Dr Matthew Colloff, who was one of the authors. The CSIRO should not have agreed to the changes that were made. This conduct too represents maladministration.”

Lawyers can’t decide the right amount of water to use for irrigation, and Walker does not attempt to; he simply concludes the environmental flows have been unlawfully reduced and therefore new determinations would increase them. The commissioner acknowledges this is not an exact science and whatever figure emerged would be an estimate.

“But that is no warrant to treat science’s best efforts at quantification as amenable to extra nudging or shoving on the grounds of their inherent uncertainty and so as to meet non- (or anti-) scientific pressures such as vested commercial interests or sectional partisan politics,” he argues.

Walker is not a scientist, but he is a highly qualified expert on the precise meaning of the words in the act, and in his view they have been deliberately misinterpreted in several important ways.

However, he warns against inter-government litigation as a solution, and “emphatically” recommends against the SA government taking legal action based on his findings. Instead, he calls for the agency to re-run crucial processes that were unlawful, in his view, and the government to embark on a major program of reform, audit, review, and monitoring.

“Officials were and are bound by the law to determine the ESLT/SDL on the basis of the best available science and for the purpose of preventing compromise of the key environmental values pertaining to the Basin water resources.

“They have not done so, and not inadvertently. They have failed to disclose the justifications, if any, for their ESLT/SDL outcomes, at least in terms that answer an acceptable description of ‘best available scientific knowledge’. That conduct is contrary to the letter and spirit of the Water Act, a sorry state of affairs that did not go unremarked at the time.

“All this can, and should, be rectified.”

Highlights of the unwelcome recommendations

The commissioner’s 44 detailed recommendations are unwelcome in multiple jurisdictions, including SA, following a change of government. But the problem with rejecting the report entirely is a convincing alternative narrative must be advanced, and that is a tall order.

Walker calls for the MDBA to redo its SDL determination process according to his reading of the law, which would mean less water for agriculture, and probably more political fallout.

Early responses from state governments indicate there will be strong resistance to serious change, and continued defence of the plan’s questionable legality, leaving the agency in an even more awkward position.

Several recommendations go to more transparency, including legislative amendments aimed at ensuring an open process where “all science is to be made available completely and in full, to the scientific community and general public” before the MDBA makes determinations.

Other recommendations include:

  • An urgent review of the risks to the plan posed by climate change, which Walker finds the MDBA has not adequately considered.
  • The establishment of two new federal agencies: an independent Climate Change Research and Adaptation Authority, and an “independent, scientifically astute and experienced body responsible for auditing the effectiveness of the implementation of the Basin Plan”.
  • A series of modifications to the “adjustment mechanism” so that any reductions in environmental water are scientifically and legally justified.
  • “A fully resourced, scientific analysis” of the ecological degradation of the Menindee Lakes and Lower Darling, where all the fish have been dying.
  • An auditor-general’s inquiry into the “irrigation infrastructure upgrade schemes” preferred by the current government as an alternative to buying back water, to assess probity and how much water has been recovered.
  • An immediate repeal of the recent and controversial 70-gigalitre cut to environmental recovery in the northern basin and a re-run of the Northern Basin Review, again going back to the science and making the modelling public. The commissioner found the NBR was also conducted unlawfully.
  • Various measures to strengthen recognition of Aboriginal views and interests in water resources, which have been largely sidelined, according to the report.
  • Immediate and comprehensive environmental monitoring of the whole basin, independent of government and the MDBA, which “should not mark its own work” in Walker’s view.
  • Stricter compliance measures, harsher penalties and more auditing, as well as more research by basin states to better understand topics like the environmental requirements of floodplains and the amount of groundwater in the basin regions.

More risks ahead from ‘highly ambitious’ plan

Meanwhile, there is another long and detailed report on the Murray-Darling Basin Plan to consider: the Productivity Commission’s recent five-year review, which also calls for major reform.

Littleproud cheerfully focused on its most positive findings but briefly noted it also found “challenges going forward” that left “a lot more work to be done by the Commonwealth, the basin states and the MDBA” to improve outcomes.

The PC sees significant risk of failure ahead, however, and made some pretty serious recommendations of its own.

It argues the basin governments should be responsible for leading implementation, not the MDBA, which has “conflicting roles” in the PC’s view: implementing the plan on behalf of the state governments while also handling compliance. It recommends the agency’s regulatory role should be split off into a separate entity.

“In the Commission’s view, the significant risks to implementation cannot be managed effectively under current institutional and governance arrangements. Reform is required.”

It calls on the MDBA to “update its modelling to reflect current information” and warns that a $1.3 billion plan to achieve equal environmental outcomes with 605 gigalitres less water using various infrastructure is “highly ambitious” and will require “sound governance” and independent assurance mechanisms to have a hope of succeeding – in line with some of Walker’s recommendations.

It also says governments need a monitoring strategy, and that the federal agency needs to “substantially revise” its evaluation framework.

“The complex challenges ahead have been made more difficult because of the way Basin Governments have approached the implementation of the Plan,” says the report, with two supporting points: the process has “lacked transparency and candour with stakeholders” and “it has been unclear who is responsible and accountable for leading implementation”.

Failing to make the right improvements will “undermine confidence that the Basin Plan has been worthwhile” as well as threatening environmental outcomes and wasting money, the PC warns.

The Victorian minister, Lisa Neville, typifies the sort of response basin governments can be expected to maintain: she stands by the plan and does not support changing the recovery targets, because it might “jeopardise” everything.

“All Basin States need to move forward in implementing the Basin Plan, providing communities with confidence that the balanced social, economic and environmental outcomes of the Plan can be achieved,” she says, seemingly endorsing a “triple bottom line” approach Walker found legally unjustified.

Neville, like the SA Premier Steven Marshall, suggested the royal commissioner had gone too far and should have focused on the rorting in New South Wales that catalysed the inquiry when exposed by Four Corners.

Her NSW counterpart Niall Blair is strongly criticised in the report and immediately came out swinging in a parochial and combative joint press statement with Deputy Premier John Barilaro. They said “the gloves are off” and promised the state government would “fight tooth and nail” for its regional communities.

SA premier Steven Marshall gave a cautious response and called for a meeting between all six governments to discuss the report. When pressed, he rejected a finding that his Water Minister, David Speirs, “almost certainly” breached the ministerial code of conduct.

Walker argues he agreed to a recent political deal against the state’s interests in a “capitulation” to the current federal government, NSW and Victoria.

Demonstrating that Walker and those who gave evidence to the Royal Commission occupy a different reality to these politicians, Littleproud claimed a major problem was the former SA government that started the inquest, and which was far less amenable to the deal.

“Minister Speirs acted with integrity in dealing with me,” the federal minister said, adding that governments “were able to take the politics out of the Basin Plan” when a Liberal government was elected in SA.

Better than nothing?

A blizzard of other political responses, analyses, partial reports and opinion articles that rapidly followed the Walker report, well before there was time for anyone to properly read and digest its contents, but together they reinforce an observation in its opening lines.

Walker describes two “opposite impressions” from his inquiry. First, “admiring praise” for the unprecedented and forward-looking legislation – and for the plan itself but “with crucial qualifications” – and secondly, a “deep pessimism” about its implementation.

Never far away is the warning, whether veiled or explicit, that pragmatism demands political compromises, because restricting irrigation flows too much could lead to the plan falling apart. “There are many ways in which study of the grand national endeavour in question leaves a decidedly sour taste,” he comments.

Much of his most important evidence came from a few former staff, such as former senior executive Jason Alexandra, who now believes “radical transparency” is the key to restoring trust in the plan.

Another former MDBA staffer, Maryanne Slattery, now comments on the issue for The Australia Institute. Writing for  The Sydney Morning Herald on Friday, she sought to explain – but not excuse – the culture among the agency’s staff.

“During my time as a director of the Murray-Darling Basin Authority, a common view was that a badly implemented plan was better than no plan at all.”

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