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2012
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
NATIONAL WATER COMMISSION AMENDMENT BILL 2012
EXPLANATORY MEMORANDUM
(Circulated by authority of the Parliamentary Secretary for Sustainability and Urban Water,
Senator the Honourable Don Farrell)
NATIONAL WATER COMMISSION AMENDMENT BILL 2012
GENERAL OUTLINE
1. The National Water Commission Amendment Bill 2012 (the Bill) will continue the
National Water Commission (NWC) as an independent statutory body beyond its
current sunset date of 30 June 2012. The Bill implements the Government's response
to the independent Review of the NWC and refocusses the NWC's role to oversight
and assessment of national water reforms (primarily the National Water Initiative
(NWI) and Murray-Darling Basin (MDB) reforms).
2. The independent Review of the NWC was commissioned by the Commonwealth
Government on behalf of the Council of Australian Governments, in accordance with
the NWI and section 38 of the NWC Act. The Review concluded that the NWC should
continue, without sunset, for the duration of the NWI.
3. The Review found that implementation of the NWI is occurring within a highly
complex and evolving environment.. This complex environment requires an
independent and specialist institution to credibly engage with, and report on, the
progress of water reform.
4. The purpose of this Bill is to amend the National Water Commission Act 2004 (NWC
Act) which establishes the NWC. The Bill will amend the functions of the NWC by
refocussing its operations to deliver three core ongoing functions (monitoring, audit,
assessment). These three functions capture all the formal commitments in the NWI
and other agreements. The NWC will also assist with the implementation of the NWI
by providing advice, information and guidance on these three core functions, as well
as performing activities to promote the objectives and outcomes of the NWI. These
functions are designed to enable the NWC to meet its principal purpose, which is to
`assist and pursue, through strategic guidance and information, implementation of
water reforms by all jurisdictions leading to the effective and timely achievement of
the NWI objectives'.
5. With the ending of all programs funded from the Australian Water Fund (AWF), the
Bill closes the AWF Account and the NWC's specific ability to administer any AWF
funds, but will enable the NWC to administer Australian Government funding
programs that may be allocated to it in the future.
6. The Bill will reduce the number of NWC Commissioners (including the Chair) from
seven to five, due to the NWC's refocused functions. The Bill will remove the sunset
clause from the current Act, enabling the NWC to continue to operate, without sunset,
for the duration of the NWI. It provides that the NWC's performance will continue to
be evaluated with a statutory review to be conducted once every five years.
7. The Bill also makes minor amendments to update the terms and definitions currently
in the NWC Act, as well as minor administrative amendments to ensure the effective
operation of amendments to the functions and governance arrangements for the NWC.
FINANCIAL IMPACT STATEMENT
8. This Bill will have a minimal financial impact. Funding is provided within the
provisional budget estimates for the NWC.
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REGULATORY IMPACT STATEMENT
9. The NWC does not have a regulatory or compliance function. There will be no
additional regulatory burden on businesses or not for profit organisations resulting
from this Bill. A Regulatory Impact Statement is not required.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS- PART 3 HUMAN
RIGHTS (PARLIAMENTARY SCRUTINY) ACT 2011
10. This Bill amends the NWC Act which established the NWC in 2004 to assist with the
implementation of the NWI. The principal provisions of the Bill which provide for the
continuation of the NWC with refocussed functions do not engage with any of the
human rights recognised or declared in the instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
11. This Bill also makes administrative and technical amendments including amending the
offence provision in section 43 relating to confidentiality.
12. The amendment to section 43 corrects a technical drafting error which meant that, if
read literally, section 43 would prevent the making of a record or disclosure of
information unless this was done both in the course of performing duties under the Act
and was also separately authorised by law. The amendment clarifies that information
may be recorded or disclosed if one of these exemptions is satisfied, consistent with
the original legislative intent. The restrictions on disclosure in section 43 engage the
right to freedom of expression in Article 19 of the International Covenant on Civil and
Political Rights. Article 19 permits restrictions on freedom of expression as provided
by law, when necessary to protect public order which includes the protection of
confidential information. The restrictions on record-making and disclosure in section
43 are compatible with the Article as they are necessary to protect the confidentiality
of information held by the NWC.
NOTES ON INDIVIDUAL CLAUSES
Section 1 - Short Title
13. This clause provides that the Act is to be cited as the National Water Commission
Amendment Act 2012.
Section 2 - Commencement
14. This clause specifies when different provisions of the Bill will commence.
15. Sections 1 to 3 shall commence on the day this Act receives Royal Assent. All items
under Schedule 1, Part 1 shall commence on 1 July 2012, while all items under
Schedule 1, Part 2 shall commence on the day this Act receives Royal Assent.
Section 3 - Schedule(s)
16. This clause provides for amendments to the Bill specified in the Schedule.
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Schedule 1 Part 1 - Amendments to the National Water Commission Act 2004
commencing on 1 July 2012
Clauses 1 to 5 Section 4 - Definitions
17. These clauses amend section 4 of the NWC Act by defining certain terms used in the
Bill and repealing definitions which are no longer relevant to the operation of the
NWC Act.
18. Clause 1 repeals the definition of the `Australian Water Fund' (AWF) because the
AWF no longer exists.
19. Clause 2 repeals the definition of the `Australian Water Fund Account' (AWFA),
because the AWFA will be closed by this Bill.
20. Clause 3 amends the definition of `COAG' to provide clarification that a reference to
COAG also includes subcommittees of COAG that deal with matters relating to water.
These amendments are designed to provide the ability for the NWC to engage with the
various water-related COAG subcommittees as are constituted from time to time, for
example the Standing Council on Environment and Water.
21. Clause 4 repeals the definition of the Natural Resources Management Ministerial
Council (NRMMC). The NRMMC was abolished in June 2011 as part of the
restructure of COAG's Ministerial Councils.
22. Clause 5 provides that the definition of the NRMMC continues to apply for the
purposes of the Water Act 2007(Cth) as if the definition in section 4 had not been
repealed.
Clause 6 Section 7 - Functions of the NWC
23. This Clause replaces current functions under the NWC Act with a refocused set of
core functions in monitoring, audit and assessment.
24. Most of the functions are drafted broadly to provide flexibility for the NWC to
determine key priority areas for its operations, in consultation with state and territory
governments, through engagement with COAG water-related committees, on at least
an annual basis. Specific reporting functions have generally been discontinued with
these amendments. It is for the NWC to determine what is significant within each core
function and it will determine how to prioritise its functions, according to available
resources. The one exception is the provision requiring the NWC to perform triennial
assessments of NWI parties' progress in achieving the objectives and outcomes in the
NWI.
Paragraph 7(1)(a) - Audit
25. New paragraph 7(1)(a) provides the NWC with a general function to audit progress in
water reform if requested by COAG. In particular it will enable the NWC to carry out
audits to determine whether parties to the NWI are implementing their commitments
under the NWI, or any other agreement between the Commonwealth and a State or
Territory, in relation to the parties' management and regulation of their water
resources, and the effectiveness of that implementation. This function is in addition to
the audit function provided to the NWC under Part 3 of the Water Act 2007.
Paragraph 7(1)(b) - Triennial assessments
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26. New paragraph 7(1)(b) provides the NWC with a specific function to undertake
triennial assessments of progress on implementation of the NWI, with the first to
occur in 2014. It maintains a similar function to that currently under paragraph 7(1)(h)
of the NWC's original functions, but amends the timeframe for performance to once
every three years, rather than the two yearly assessments that have been performed by
the NWC to date.
Paragraph 7(1)(c) - Assessment
27. New paragraph 7(1)(c) provides the NWC a general function to conduct assessments
on matters that are significant for achieving the NWI objectives and outcomes. These
assessments are to be performed by the NWC on a discretionary basis. It is expected
that the NWC would consult COAG through its water officials committees on its
proposed assessment work program. This program, however, would be a matter for the
NWC Commissioners to determine. It is expected these assessments would contribute
to the triennial assessments provided for under paragraph 7(1)(b).
Paragraph 7(1)(d) - Monitoring
28. New paragraph 7(1)(d) provides the NWC a general function to monitor areas that are
significant for achieving the objectives and outcomes of the NWI. The NWC will be
able to monitor trends and actions by all stakeholders in implementing the NWI. This
paragraph replaces the specific monitoring functions the NWC had previously, and
allows the NWC to determine when it should undertake monitoring activities. It is
expected that the NWC would consult COAG through its water officials committees
on its proposed monitoring activities. This program of activity, however, would be a
matter for the NWC Commissioners to determine.
Paragraphs 7(1)(e), 7(1)(f) and 7(1)(g) - Incidental functions
29. New paragraph 7(1)(e) provides the NWC with the ability to assist with the
implementation of the NWI by providing information and guidance on the three core
functions of auditing, assessment and monitoring outlined above, as well as to
undertake activities that promote the objectives and outcomes of the NWI. This
provides the NWC with the capacity to engage stakeholders and promote the outcomes
of the audit, assessment and monitoring functions it performs.
30. New paragraph 7(1)(f) provides for the NWC, if requested by the Minister, to advise
and make recommendations to the Commonwealth in relation to the performance of
the NWC's audit, assessment and monitoring functions. The Chair of the NWC is
required to keep the Minister informed of the general operations of the NWC in
respect of the performance of its functions under s 9 of the NWC Act. This
amendment provides the Minister the reciprocal ability to seek advice from the NWC.
31. New paragraph 7(1)(g) provides for the NWC, if requested by the Minister, to advise
and make recommendations to the Minister in relation to any Commonwealth program
that relates to the management and regulation of Australia's water resources.
Paragraph 7(1)(h) - Advice to COAG
32. New paragraph 7(1)(h) provides for the NWC to continue to have a role in assessing
the implementation of agreements (other than the NWI) between the Commonwealth
and State or Territory relating to water management, where that agreement provides
for the NWC to have such a role. The provision is very similar to the repealed section
7(1)(e) under which the NWC has assessed the implementation of the 2008
Intergovernmental Agreement on Murray-Darling Basin Reform.
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Paragraph 7(1)(i) - Advice to COAG
33. New paragraph 7(1)(i) provides COAG (or appropriate subcommittee) the ability to
commission the NWC to conduct any study or analysis, or to provide any report in
relation to matters of national significance relating to water (including the sustainable
management of water resources and access to, and use of, water), or the COAG Water
Reform Framework. In relation to the 1994 COAG Water Reform Framework, this
function is intended to provide COAG with the ability to request advice on any
outstanding commitments under the Framework.
Paragraph 7(1)(j) - Other functions
34. New paragraph 7(1)(j) provides for the NWC to be able to perform any other function
prescribed by other Commonwealth acts and regulations. This amendment reproduces
the repealed section 7(1)(f), which has been used to confer upon the NWC the
Murray-Darling Basin Plan audit function under the Water Act 2007 (Cth), and
functions under the Carbon Credits (Carbon Farming Initiative) Regulations 2011.
Clause 7 Transitional and application provision - functions
35. This clause provides for two transitional provisions.
36. The first clause provides that the NWC is to conduct its first assessment under
paragraph 7(1)(b) of the NWC Act in 2014.
37. The second clause allows any functions conferred or prescribed on the NWC under
paragraph 7(1)(f) prior to the commencement of this Act to continue under new
section 7(1)(j). This provision specifically relates to the functions conferred on the
NWC by the Water Act 2007 and the Carbon Credits (Carbon Farming Initiative)
Regulations 2011.
Clause 8 Subsection 7(5) - Parties to the NWI include the Commonwealth
38. The amendment to subsection 7(5) is a technical amendment to reflect that paragraph
7(2)(c) has been removed.
Clause 9 Paragraph 8(1)(b) - Constitution of the NWC
39. This paragraph amends the constitution of the NWC. It provides that there will be at
least 2, but no more than 4, NWC Commissioners in addition to the Chair. This is a
reduction from the current number of commissioners reflects the change in scope of
the NWC resulting from this Bill.
Clause 10 Subsections 8(2) and (3) - Constitution of the NWC
40. These subsections are amended to reduce the maximum number of NWC
Commissioners that may be nominated by the Commonwealth on the one hand, and
the States and Territories on the other. This reflects the reduction to the number of
Commissioners.
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Clause 11 Subsection 19(1) - Meetings
41. This subsection is amended to reduce the number of Commission meetings that must
be held each calendar year to five. This reflects the refocussing of the NWC's
functions.
Clause 12 Application provision - Meetings
42. The clause makes it clear that the amendment to the minimum number of meetings in
subsection 19(1) will apply in relation to 2012 and later calendar years.
Clause 13 Subsection 19(3) - Meetings
43. This subsection is amended to reduce the number of Commissioners who constitute a
quorum at a NWC meeting from 4 to 3. This reflects the overall reduction in the
number of Commissioners.
Clause 14 Subsection 24(1)(a) - Functions of the CEO
44. This subsection is amended to remove the CEO's function to administer financial
assistance, awarded by the Minister to particular projects relating to Australia's water
resources, from the Australian Water Fund Account. This reflects the closure of the
Australian Water Fund Account as a result of this Bill. However, the CEO shall retain
the function to administer financial assistance, awarded by the Minister to particular
projects relating to Australia's water resources, from any Commonwealth program
that relates to the management and regulation of Australia's water resources and
referred to in paragraph 7(1)(g). The intent of this amendment is to leave open to the
government the option of program management by the NWC, should it be desired in
the future.
Clause 15 Subsection 25(2) - Appointing the CEO
45. This subsection is amended to increase the maximum period of appointment of the
CEO from three years to five years. This increase is consistent with the current term of
appointment of departmental secretaries that has occurred since the NWC Act
commenced.
Clause 16 Subsection 25(3) - Appointing the CEO
46. This clause inserts a note into section 25. Where a person is appointed as both the
CEO and a Commissioner, the increase to the CEO's maximum term to five years has
no bearing on the maximum term of a Commissioner's appointment, which remains
three years under section 11.
Clauses 17 to 20 Part 5 and Section 38 Subsections 38(1) and 38(2) - Reviews of the
NWC
47. These amendments to subsection 38(1) and subsection 38(2) provide for future
reviews of the NWC to take place. The first review is to be undertaken by the end of
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2017, with further reviews to follow every five years. The amendments also provide
COAG with the ability to establish the processes for conducting these reviews.
Clause 21 Part 6 - The Australian Water Fund Account
48. Deletion of this Part repeals the Australian Water Fund Account (a Special Account
for the purposes of section 21 of the Financial Management and Accountability Act
1997 (Cth)). This reflects the scheduled closure of the Raising National Water
Standards program. The Chair, Commissioners and CEO will be paid out of the
NWC's annual Departmental appropriation in future.
Clause 22 Section 44 - Public availability of audits and assessments
49. This section is amended to retain the intent of section 44 under the current NWC Act.
It requires the NWC to make public on its website any audit or assessment (including
any advice or recommendations) done under 7(1)(a), (b) or (c), unless the Minister
does not agree. Where the Minister does not agree, the Minister is required to make
public on the NWC's website the reasons for withholding publication. Advice and
recommendations done pursuant to the NWC's other functions must not be made
public without the agreement of the Minister. Anything else undertaken by the NWC,
for example monitoring reports of observed facts, information and guidance, or studies
or analysis in a report to COAG that does not contain advice or recommendations,
may be made publicly available by the NWC at its discretion.
Clause 23 Subsection 45(2) - Annual report
50. This subsection is amended to reflect the closure of the Australian Water Fund
Account under Clause 20. The amendment requires the NWC to include in its annual
report details of any financial assistance administered from a Commonwealth program
referred to in paragraph 7(1)(g).
Clause 24 Application provision--financial assistance and annual report
51. This clause provides that the amendment of subsection 45(2) applies in relation to the
financial year ending on 30 June 2013 and later financial years. It does not apply in
relation to the financial year ending 30 June 2012.
Schedule 1 Part 2 - Amendments to the National Water Commission Act 2004
commencing on Royal Assent
Clause 25 Section 39 - Sunset provision
52. This section is repealed to remove the NWC Act's 30 June 2012 sunset clause. It is
intended that NWC Act will continue for the life of the NWI.
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Clause 26 Paragraph 43(c) - Confidentiality
53. This paragraph is amended to correct a minor drafting error to ensure section 43
operates as intended. This provision permits the making of a record or disclosure of
information where the record or disclosure is made in the course of performing
functions or duties under this Act, or where the record or disclosure is permitted by
any other law.
Clause 27 Subsection 45(1) - Annual report
54. This subsection is amended to require the NWC to report pursuant to the relevant
government guidelines. The NWC had previously been required to complete its annual
report and present it to Parliament within 60 days after 30 June of each year.
Clause 28 Application provision - annual reports
55. This clause provides that the amendment to subsection 45(1) has effect in relation to
the financial year ending on 30 June 2012 and later financial years.
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