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2016-2017-2018-2019
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
EXPORT CONTROL AMENDMENT (BANNING COTTON EXPORTS TO ENSURE
WATER SECURITY) BILL 2019
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator Patrick)
EXPORT CONTROL AMENDMENT (BANNING COTTON EXPORTS TO ENSURE
WATER SECURITY) BILL 2019
OUTLINE
The purpose of the Export Control Amendment (Banning Cotton Exports to Ensure Water
Security) Bill 2019 is to ensure water and food security in the Murray-Darling Basin through
the imposition of a ban on the export of cotton from Australia.
The Bill is a necessary response to the failure of the Australian Government, and the
governments of New South Wales, Queensland and South Australia, to respond positively to
the findings and recommendations of the South Australian Murray-Darling Basin Royal
Commission.
Regrettably, it is necessary to open debate on an unpalatable measure that may ultimately
prove necessary to protect and restore the environmental health of Australia's biggest and
most vital river system.
In his report, released on 31 January 2019, Commissioner Bret Walker SC delivered a
damning indictment of water and environmental management under the Murray-Darling Basin
Plan and recommended a complete overhaul of the scheme, specifically to reallocate much
more water from irrigation to the environment.
The Royal Commission found that the Murray-Darling Basin plan ignored potentially
"catastrophic" risks of climate change.
The Commissioner found that Commonwealth officials have committed gross
maladministration, negligence and unlawful actions.
The Murray-Darling Basin Authority has repeatedly pushed aside and suppressed good science
while the defence of sectional interests has prevailed over the health of our major river system.
Perhaps most importantly, the Commissioner found that the so-called "triple bottom line"
approach, in which economic and social factors are considered to reduce the water recovery
target for the environment, is fatally flawed, and at odds with provisions of the Water Act 2007
(Water Act) which requires that Basin water resources be managed "in the national interest"
and, inter alia, " to protect, restore and provide for the ecological values and ecosystem
services of the Murray-Darling Basin".
Large scale water buybacks, and a consequent reduction in irrigation - especially in the
northern Murray-Darling Basin - are essential to restore the environmental health of the river
system and ensure water security for cities, towns and communities downstream.
Regrettably, narrow sectional interests have led the New South Wales and Queensland
Governments to effectively reject the report and its recommendations. The Australian
Government appears indifferent, while the South Australian Government's response has been
low-key and non-committal.
In these circumstances, in which there is no political movement to embrace the Royal
Commission's report, it is necessary to open debate on other measures to protect and restore
the environmental health of the Murray-Darling Basin.
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In this the role of cotton production in the Murray-Darling Basin cannot be ignored.
The overwhelming majority of Australian cotton is grown in the Murray-Darling Basin with
some 90 per cent exported, mainly to China and India.
According to the Australian Bureau of Statistics (ABS), 21.4 per cent of Murray-Darling Basin
irrigation water was used in cotton production in 2005-06.
For 2010-11, the ABS further reported that:
The largest volume of irrigation water was applied to cotton, which used 1,882 gigalitres,
or 2 per cent of the national irrigation total for the year (6,645 gigalitres).
In the Murray-Darling Basin, cotton accounted for the largest area of irrigated land, with
332,000 hectares, or 28 per cent of the total irrigated land in the Murray-Darling Basin;
and
Cotton also used the largest volume of irrigation water in the Murray-Darling Basin, with
1,789 gigalitres being applied, which represented nearly 40 per cent of all irrigation water
used in 2010-11.
For 2011-12, the ABS reported that 1,996 gigalitres were applied to cotton production in the
Murray-Darling Basin, nearly one third - 32 per cent - of all water used in the Murray-Darling
Basin in that year.
The most recent ABS statistics for agricultural water use in 2016-17 don't include figures for
the Murray-Darling Basin. However in 2016-17 cotton production used 2,566 gigalitres of
9,104 gigalitres of national agricultural water use - 28.2 per cent. Given that there is hardly
any cotton grown outside the Murray-Darling Basin (only 2 per cent), the percentage of water
used for cotton production in the Basin is probably significantly higher.
Cotton is the single largest challenge of managing the water resources of the Murray-Darling
Basin. Although the Royal Commission report does not single out cotton, in the absence of
Commonwealth, state and territory government commitments to fully implement the
Commission's recommendations, that is what must be done in Australia's national interest and
for the health of our rivers.
This Bill is intended to trigger a national debate on the future of the cotton industry in the
context of its impact on the Murray-Darling Basin.
Major choices need to be made and the environmental health of the river system, water and
food security must be our national priorities, not cotton exports.
Export cotton production should not be given the same priority as food production, or for that
matter the needs of towns and cities dependent on the river system for water supply, or the
overall environmental health of the river system all the way to the Coorong lagoon in South
Australia.
This Bill will prohibit absolutely the export of cotton grown in Australia.
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It is not unusual to regulate or, in some cases, ban the export of agricultural commodities in
the national interest.
The Export Control Act 1982 (Export Control Act) allows the making of regulations relating
to "prescribed goods" that are declared as such by regulations.
Subsection 7(1) of the Export Control Act provides that regulations may prohibit the export of
prescribed goods from Australia.
The Bill will insert new section 7AA which provides that three years after the section
commences, the regulations are taken to have:
(a) declared that cotton grown in Australia is a prescribed good; and
(b) prohibited absolutely the export of cotton grown in Australia.
The prohibition will apply to the export of cotton grown anywhere in Australia.
The production of cotton for use in Australia will not be affected.
The three-year time frame before the ban will take effect will allow cotton farmers to
anticipate and prepare for an end to cotton exports.
No doubt some cotton farmers may shift production to other irrigated crops. Some may move
to other activities including significantly less irrigated water. Overall, it could be anticipated
that termination of the cotton export market would result in significant reduction in demand
for Murray-Darling Basin water resources. This would provide an opportunity to return
significant volumes of water to the environment, consistent with the objectives of the Water
Act to manage Basin water resources in the national interest and to protect and restore the
ecosystem of the Basin.
The proposed three-year time frame will also provide the Australian Government and the
governments of New South Wales, Queensland, Victoria, South Australia and the Australian
Capital Territory time to reconsider and implement the recommendations of the Murray-
Darling Basin Royal Commission.
If governments can come together and adopt policies based on open and transparent science,
and consideration of the national interest rather than the defence of narrow sectional interests,
the measure proposed in this Bill may well prove unnecessary. In the absence of such action,
the environmental degradation of the river system will undoubtedly continue and calls for
radical action, most likely focussed on the cotton industry, will grow.
It is regrettable that the Australian Parliament should have to consider such a measure, but in
the absence of real commitments to put the health of the Murray-Darling first and foremost,
and implement the Royal Commission's recommendations, this is something that must be
considered in Australia's national interest.
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NOTES ON CLAUSES
Clause 1: Short Title
1. This clause is a formal provision and specifies that the short title of the Act may be
cited as the Export Control Amendment (Banning Cotton Exports to Ensure Water Security)
Bill 2019.
Clause 2: Commencement
2. This clause provides for the commencement of the whole of the proposed Act to be the
day after this Act receives the Royal Assent.
Clause 3: Schedules
3. This clause states that each Act specified in a Schedule to this Act is amended or
repealed as is set out in the applicable items in the Schedule. Any other item in a Schedule to
this Act has effect according to its terms.
Schedule 1 - Amendments
Export Control Act 1982
The Export Control Act 1982 (Export Control Act) allows the making of regulations relating
to "prescribed goods" which are defined as "goods, or goods included in a class of goods, that
are declared by the regulations to be prescribed goods for the purposes of this Act."
Subsection 7(1) of the Export Control Act provides that regulations may prohibit the export of
prescribed goods from Australia.
Section 8 of the Export Control Act provides that the export of prescribed goods that are
prohibited absolutely is an offence, punishable on conviction by imprisonment for a period not
exceeding 5 years.
Item 1--After section 7
Item 1 inserts after section 7 a new section 7AA which would prohibit the export of cotton that
has been grown in Australia. Subsection (1) of new section 7AA would introduce the term
'start time' which is defined as the start of the day that is three years after section 7AA would
commence.
Subsection (2) of new section 7AA would provide that three years after the start of the day
after the section has commenced, regulations made under the Export Control Act would be
taken to have declared that Australian-grown cotton is a prescribed good, and to have made an
absolute prohibition in relation to exporting that cotton.
Section 7AA is intended to apply to the export of cotton grown anywhere in Australia. The
production of cotton for use in Australia, however, would not be affected.
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Section 99 of the Australian Constitution provides that the Commonwealth "shall not, by any
law or regulation of trade, commerce, or revenue, give preference to one State or any part
thereof over another State or any part thereof." The Bill is intended to comply with this
constitutional provision.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Export Control Amendment (Banning Cotton Exports to Ensure Water Security) Bill 2019
This Bill is compatible with human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act
2011.
Overview of the Bill
The purpose of this Bill is to amend the Export Control Act 1982 to prohibit the export of
cotton grown in Australia.
Human rights implications
This Bill does not engage any of the applicable rights or freedoms as it prohibits, for the
purposes of ensuring water security, the export of a particular agricultural crop grown in
Australia.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights issues.
Senator Patrick
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