First audit by Inspector-General of Water Compliance drives transparency

The Inspector-General of Water Compliance (IGWC) has released his independent audit report of Goulburn Murray Water’s (GMW) compliance with disclosure obligations under the Murray-Darling Basin Plan. This audit is part of the IGWC workplan conducted to ensure that the water market is fair, transparent, and operating in line with Water Trading Rules in the Basin Plan.

The Inspector-General of Water Compliance, the Hon. Troy Grant said

We know from the ACCC water markets inquiry that a wide range of improvements to Basin water markets are needed. While that work is underway by others, I am focused on enforcing the current rules in the Basin Plan.

This is the first audit report issued since the IGWC was established in August 2021.

The Inspector-General of Water Compliance, the Hon. Troy Grant said

We’re hitting the ground running. My office is also currently auditing aspects of SDL compliance, Water Resource Plan Compliance, and overland flow compliance as part of an active audit program to support compliance with the Basin Plan.

The audit found that although GMW have systems and processes in place, further improvements are needed to ensure that all relevant interests are properly identified and GMW can verify that other parties are notified of these interests where they exist.

The Inspector-General of Water Compliance, the Hon. Troy Grant said

Whilst there is room for improvement, we were able to independently confirm that the number of trades and volume of water affected by GMW’s dual role is proportionately quite low and not a significant risk to water markets. This helps build community trust and confidence.

The audit also recommended that better records should be maintained so applications submitted for approval can be reconciled with trade information that is published.

The Inspector General of water Compliance, the Hon. Troy Grant said;

I was encouraged by GMW’s response to this audit and its desire for strong compliance with its disclosure obligations under the Basin Plan. I welcome their commitment to action the recommendations provided in the audit report. This will significantly reduce the risk of any future non-compliance with disclosure obligations under the Basin Plan.

Background

The IGWC has been created to serve as a strong and independent regulator of Australia’s largest water resource, by separating compliance from Basin Plan implementation. As the IGWC is not a government department and will not formulate or set policy, it will be able to provide an independent, fair, evidence based and balanced voice for communities in the Murray Darling Basin.

GMW were selected for this audit as they an approval authority for water trades. As an approval authority they have disclosure obligations under the Basin Plan where they have a legal, equitable or commercial interest in any trade submitted for approval.

Planning and fieldwork for this audit was conducted by the Murray-Darling Basin Authority (MDBA). The final report was prepared by the IGWC following machinery of government changes and a transfer of audit powers from the MDBA.

Fast facts:

• GMW is the largest approval authority in Victoria and Australia’s largest Irrigation Infrastructure Operator with over 20,000 customers across northern Victoria.
• GMW is one of the major Approval Authorities in the Basin and holds water access rights that are traded.
• GMW select from a panel of 5 water brokers for its own water trading activities.
• A related party includes any entity in which an approval authority has a controlling interest, or any natural person acting on behalf of an approval authority in return for a commission or fee.

Read the report

Copies of the full audit report and a snapshot report are available on our Reviews and reports page.