Alleged irrigator water theft heading for the courts?

A cousin by marriage of the current Australian Minister for Agriculture and Water Resources David Littleproud, John Norman, finds his agricultural business practices under scrutiny.....

The Guardian, 9 April 2018:

Fraud charges are expected to be laid against one of Queensland’s biggest cotton irrigators, John Norman, within a matter of weeks.

If the trial of the owner-operator of Norman Farming, and former cotton farmer of the year goes ahead, it is likely to draw attention to the links between the irrigator’s family and that of the federal minister for agriculture and water resources, David Littleproud.

If the charges are laid, they will also throw the spotlight on the Queensland government’s failure in administering a key plank of the $13bn Murray-Darling basin plan, how it withheld critical information about the alleged crimes, and how it raises queries as to whether it lied about its own investigation.

For the past 18 months, an expanding team of undercover detectives, cybercrime experts and forensic accountants have been investigating Norman’s business on the Queensland/New South Wales border, an irrigated cotton aggregate stretching 45km north from the McIntyre river.

The investigation has focused on whether Norman Farming misused upwards of $25m in Murray-Darling basin infrastructure funds that were supposed to make the irrigator more efficient and deliver water back to the ailing river system downstream.

The plan for the basin is funded by the commonwealth and administered by state governments. But allegations that the $150m Healthy Headwaters Water Use Efficiency projects in Queensland, part of the MDB plan, lacked any genuinely independent checks on projects, means it may have been left open to corruption.

“It’s been a loosey-goosey slush fund helping irrigators get richer,” according to Chris Lamey, a dry-land farmer who’s seeking compensation from Norman, his neighbour. “It’s achieved the opposite of what was intended. There’s a lot of water not getting into NSW now and it’s backed up in dams next door to me.”

Queensland’s covert police investigation into Norman Farming went public in October 2017, when dozens of major crime squad detectives holding multiple subpoenas fanned out from Goondiwindi in early-morning high-speed convoys, heading across the floodplain to the irrigator’s properties and several of its contractors in and around the border river town…..

Just because Nationsls MP for New England Barnaby Joyce is now sitting on the backbenches in disgrace doesn't mean the Turnbull Government can ignore all those dodgy water deals he made

Example of a dodgy water deal par excellence where a Cayman Islands corporation can pocket $78.8 million from a suspect water sale in the beleaguered Murray-Darling Basin........

Eastern Australia Agriculture Pty Ltd (EAA) was incorporated in 2007 and is based in St George, Australia. It operates as a subsidiary of Eastern Australian Irrigation Limited.

According to The Courier Mail on 21 March 2018; the company is based in the tax haven of the Cayman Islands.

The Land reported on 19 October2011 that; EAA shareholders are based in Grand Cayman in the Cayman Islands. Its directors include former Ridley Corporation managing director Matthew Bickford-Smith and former Colly Farms's grower services manager Peter Cottle.

EEA’s portfolio comprises two properties - “Kia Ora” (7km south of St. George) and “Clyde” (10km south-west of Dirranbandi) totalling 37,590ha made up of 12,800ha of cotton producing irrigation land with further areas of development potential.

These properties are close to the notorious water harvester,“Cubbie Station”, in the Condamine-Balonne Valley.

EAA’s entire properties, including the water licences were reported to have been independently valued at est. $107m in 2017.

In 2017 the Turnbull Government agreed to purchase over 29 gigalitres of water for $80,041,455  from EEA, which originally insisted on $2,200 per megalitre. But after negotiation, the Government paid a higher price - $2,745 per megalitre.

Then Deputy Prime Minister and Minister for Water, Barnaby Joyce, approved the final purchase of 29,159 megalitres of OLF licences in May 2017 - 14,969 ML from “Clyde” and 14,190 from “Kia Ora”.

Department of Agriculture and Water Resources (DAWR) due diligence later reduced the total volume to 28,740 megalitres and the price paid to $78,891,300.

The water purchased was for Over Land Flow (OLF) licences, which cannot be traded between irrigators, because they are attached to land. They have no legal status or any recognition at a location other than where they were originally purchased. That is, there appears to be no legal basis for the Commonwealth to ensure it gets to the places it is intended to be used. [The Australia Institute, March 2018, “That’s not how you haggle”, p.3]

The sale of EAA’s OLF licences represented 74% of the value of both EAA properties.

EAA recorded a $52m gain on the sale in their 2017 Annual Report. [ibid, p.8]

The purchase appears to be in breach of the Commonwealth Procurement Rules because it was not made available to all licence holders in the valley…. [ibid, p.3]

Only a handful of NSW landowners to face court over Murray-Darling Basin water theft allegations?

ABC News, 8 March 2018:

The NSW Government will prosecute several people over alleged water theft on the Barwon-Darling, eight months after Four Corners investigated the issue.

WaterNSW has named the people it is taking to the Land and Environment Court over alleged breaches of water management rules.

They are prominent irrigator Peter Harris and his wife Jane Harris, who own a major cotton farm near Brewarrina in the state's north-west and were named in the Four Corners story.

The couple have been accused of taking water when the flow conditions did not permit it, and breaching licence and approval conditions.

Three members of another prominent family are also facing charges: cotton grower Anthony Barlow from Mungindi near Moree and Frederick and Margaret Barlow.

The Barlows have been accused of pumping during an embargo and pumping while metering equipment was not working.

WaterNSW gave false figures: Ombudsman

WaterNSW announced the prosecutions an hour before the NSW Ombudsman released a scathing report saying the agency had given the Government incorrect figures on its enforcement actions.

The state's ombudsman, Michael Barnes, found WaterNSW gave incorrect figures when it provided statistics that showed there had been a significant increase in enforcements between July 2016 and November 2017.

"The information provided to us indicated that the updated statistical information from WaterNSW that we'd published was significantly incorrect," he said.

"There had, in fact, been no referrals for prosecutions and no penalty infringement notices issued in the relevant period."

Mr Barnes said he initiated a separate investigation after his office received complaints about the figures, and he found WaterNSW had inflated the statistics.

"As part of our investigation, we confirmed with Revenue NSW that no penalty infringement notices were issued by WaterNSW in the relevant period," he said.

The ombudsman said he raised the issue with WaterNSW, which has admitted to the mistake and apologised.

Mr Barnes also said he believed the error was unintentional.

The agency's CEO, David Harris, said staff have now manually reviewed all actions taken.

"Some of the detail WaterNSW provided was incorrect and, although it was revised, it is not acceptable and we are acting to ensure it does not happen again," he said……

NSW Ombudsman, Correcting the record: Investigation into water compliance and enforcement 2007-17: A special report to Parliament under sections 26 and 31 of the Ombudsman Act 1974, 8 March 2018, Amended enforcement outcome statistics:

Murray-Darling Basin: water mismanagement just keeps rolling on

Image sourced from Twitter

Having miserably failed to enforce even the most basic of safeguards against widespread water theft in the Murray Darling Basin - such as not allowing unmetered water extraction -  the Murray Darling Basin Authority and then water resources minister and now humble Nationals backbencher Barnaby Joyce have left us having to rely on leaks to the media to find out the true state of play in the national water wars.

The Sydney Morning Herald, 4 March 2018:

The ailing state of the Darling River has been traced to man-made water extraction, according to a leaked report by the agency charged with overseeing its health.

The "hydrologic investigation", dated last November and obtained by Fairfax Media, analysed more than 2000 low-flow events from 1990-2017 on the Barwon-Darling River between Mungindi near the NSW-Queensland border down to Wilcannia in far-western NSW .

The draft report – a version of which is understood to have been sent to the Turnbull government for comment – comes days after WaterNSW issued a red alert for blue-green algae on the Lower Darling River at Pooncarie and Burtundy.

Bourke is among towns also on stage-two water restrictions as the Darling dries up in places

The paper by Murray-Darling Basin Authority's (MDBA) own scientists found flow behaviour had changed since 2000, particularly in mid-sections of the river such as between the towns of Walgett and Brewarrina.

On that section, low or no-flow periods were "difficult to reconcile with impacts purely caused by climate", the scientists said.

Indeed, dry periods on the river downstream from Bourke were "significantly longer than pre-2000", with the dry spells during the millennium drought continuing afterwards.

Water resource development – also described as "anthropogenic impact" – must also play "a critical role" in the low flows between Walgett and Brewarrina, the report said.

The revelations come after the Senate last month voted to disallow changes to the $13 billion Murray-Darling Basin Plan that would have cut annual environmental water savings by 70 billion litres…..

A spokeswoman for the authority said the report was "undergoing quality assurance processes prior to publication", with a formal release on its website likely in coming days.

The MDBA commissioned the internal team to "address some of the specific concerns raised" by its own compliance reviews and those of the Berejiklian government, she said.

Terry Korn, president of the Australian Floodplain Association,  said the report confirmed what his group's members had known since the O'Farrell government changed the river's water-sharing plan in 2012 to allow irrigators to pump even during low-flow periods.

Poor policy had been compounded by "totally inadequate monitoring and compliance systems", Mr Korn said.

"Some irrigators have capitalised on this poor management by the NSW government to such an extent that their removal of critical low flows has denied downstream landholders and communities their basic riparian rights to fresh clean water," he said. "This is totally unacceptable."….

Fairfax Media also sought comment from federal Agriculture Minister David Littleproud.

Once publicly outed for sitting on the review report the Murray Darling Basin Authority finally decided to publish it this week.

Murray Darling Basn Compliance Review Final Report, November 2017 by clarencegirl on Scribd

https://www.scribd.com/document/372999806/Murray-Darling-Basn-Compliance-Review-Final-Report-November-2017

The Sydney Morning Herald, 20 February 2018:

The NSW government intervened to urge the purchase of water rights from a large irrigator on the Darling River that delivered a one-off $37 million profit to its owner while leaving downstream users struggling with stagnant flows.

Gavin Hanlon, the senior NSW water official who resigned last September amid multiple inquiries into allegations of water theft and poor compliance by some large irrigators, wrote to his federal counterparts in the Agriculture and Water Resources Department, then headed by Barnaby Joyce, in late December 2016 urging the buyback of water from Tandou property to proceed.

The Tandou water purchase proposal "should be progressed...given the high cost of the alternative water supply solution" for the property south-east of Broken Hill, Mr Hanlon wrote, according to a document sent on December 23, 2016 and obtained by Fairfax Media.

Early in 2017, the Australian Bureau of Agricultural and Resource Economics and Sciences estimated the property's annual water entitlements of 21.9 billion litres to be $24,786,750 "based on recent trade values", according to another document listed as "Commercial in Confidence".

Despite this valuation, the federal government by 16 March, 2017 would pay Tandou's owner Webster Ltd more than $78 million. At its announcement on 21 June last year, Webster said in a statement it "expects to record a net profit on disposal in the order of $36-37 million".

The transfer of the water rights are apparently the subject of inquiries by the NSW Independent Commission Against Corruption, with several people saying they have discussed their knowledge of the deal with the agency. An ICAC spokeswoman declined to comment.

Webster Ltd styles itself as a leading Australian agribusiness company with a rich, diverse history spanning over 180 years.

Liberal Party donor Christopher Darcy “Chris” Corrigan is Executive Chairman and a significant shareholder in this company

The mess that Barnaby left

Environmental Defender’s Office NSW, undated 2017:

Inland Rivers Network v Harris & Another

EDO NSW, on behalf of its client the Inland Rivers Network, has commenced civil enforcement proceedings in the NSW Land and Environment Court in relation to allegations of unlawful water pumping by a large-scale irrigator on the Barwon-Darling River.

The two water access licences at the centre of these allegations allow the licence holder to pump water from the Barwon-Darling River in accordance with specified licence conditions, as well as rules set out in the relevant ‘water sharing plan’. The conditions and rules specify – amongst other things – how much water can be legally pumped in a water accounting year (which is the same as the financial year) and at what times pumping is permissible (which depends on the volume of water flowing in the river at any given time). 

Our client alleges that the holder of these licences pumped water in contravention of some of these conditions and rules, thereby breaching relevant provisions of the Water Management Act 2000 (NSW) (WM Act). The allegations are based on licence data obtained by EDO NSW earlier in 2017 from Water NSW, a state-owned corporation charged with the responsibility of regulating compliance with the WM Act. 

Analysis of this data, along with the relevant rules and publicly available information on river heights, indicates that the licence holder may have pumped significantly more water than was permissible on one licence during the 2014-15 water year, and taken a significant amount of water under another licence during a period of low flow when pumping was not permitted in the 2015-16 water year. Despite being made aware of these allegations by EDO NSW on two occasions, in April and August 2017, and having had access to the data since at least July 2016, Water NSW has not provided any indication that it intends to take compliance action against the licence holder.

Both allegations concern the potentially unlawful pumping of significant volumes of water, which may have had serious impacts on environmental flows in the river and downstream water users. However, our client is particularly concerned by the alleged over-extraction in the 2014/15 water year, as this period was so dry that the Menindee Lakes – which are filled by flows from the Barwon-Darling River – fell to 4 percent of their total storage capacity. This in turn threatened Broken Hill’s water security and led the NSW Government to impose an embargo on water extractions during part of that year in order to improve flows down the Barwon-Darling into the Lakes and Lower Darling River. 

In these proceedings, the Inland Rivers Network is seeking, amongst other things, an injunction preventing the licence holder from continuing to breach the relevant licence conditions. In addition, and in order to make good any depletion of environmental flows caused by the alleged unlawful pumping, our client is also asking the Court to require the licence holder to return to the river system an equivalent volume of water to that alleged to have been unlawfully taken, or to restrain the licence holder from pumping such a volume from the river system, during the next period of low flows in the river system. Failure to comply with a court order constitutes contempt of court, which is a criminal offence. 

EDO NSW is grateful to barristers Tom Howard SC and Natasha Hammond for their assistance in this matter.

Brendan Dobbie, Senior Solicitor at EDO NSW, has carriage of this matter for IRN.

The Australia Institute, Moving targets: Barnaby Joyce, Warrego valley buybacks and amendments to the Murray Darling Basin Plan, February 2018:

In 2008, then Senator Joyce criticised the Labor government’s purchase of water in the Warrego valley: that is going to have no effect whatsoever in solving the problems of the lower Murray-Darling, and especially the southern states.

Despite the now Deputy Prime Minister and Water Minister’s own fierce criticism of that purchase, he approved the $16,977,600 purchase of another 10.611 gigalitres of water in the Warrego valley in March 2017 at more than twice the price paid by the Labor government. Questions should be raised about what changed the Deputy Prime Minister’s mind and whether that purchase was value for money.

This purchase also has serious implications for the recent amendments to the Basin Plan that was disallowed by the Senate on 14 February 2018.

This purchase was not required to meet the water recovery target in the Warrego under the Murray-Darling Basin Plan. Instead, it was intended to count towards the water recovery target in the Border Rivers. This swap required an amendment to s6.05 of the Basin Plan, which was tabled in parliament and disallowed by the Senate. Yet, the Warrego purchase was not reflected in the Sustainable Diversion Limits (SDLs) put to Parliament as part of the amendments.

Murray-Darling Basin Authority (MDBA) is required to base its recommendations to change SDLs based on best available science, but the proposed amendments allowed MDBA and States to subsequently change the SDLs in a valley without any consideration of the science.

While MDBA was seeking public submissions on changes to valley SDLs, based on science; the Department of Agriculture and Water Resources (DAWR) was in negotiations to change those valley targets, not based on science.

Parliament was asked to pass an amendment to the Basin Plan with SDLs that would have been changed based on a deal agreed over a year earlier, if the amendment had passed.

Given that the new SDLs were known and agreed by governments, it is not apparent why the MDBA did not include the new SDLs in the amendment put to parliament.

Remember the man who spent millions unsuccessfully seeding clouds and more money chasing the myth that NSW coastal rivers could be turned inland?

In 2007 Malcolm Bligh Turnbull as federal water minister squandered $10 million on an aerial rain dance and also spent money on an ill-fated, flawed desktop study for the damming and diversion of at least one NSW Coastal river.

Well, Mr. Turnbull as Australian Prime Minister returned to his favourite pastime last year - spending other people’s money on dubious water projects - and is holding fast to yet another hare-brained proposal, Snowy 2.0.

Financial Review, 4 January 2018:

Nine months ago Snowy Hydro, the electricity generator and retailer owned by the Commonwealth, Victoria and NSW governments, announced that it would be carrying out a feasibility study into a massive expansion of the Snowy hydro generation system to add 2000 megawatts of pumped hydro generation capacity. Snowy Hydro's announcement of the feasibility study followed an earlier announcement from the Prime Minister that Snowy 2.0 was expected to cost $2 billion.

The feasibility study was published shortly before Christmas and the final investment decision is expected by the end of 2018. All economic analysis has been excluded from the public version of the feasibility study. But the publicly available version does report the "base cost" of Snowy 2.0 (to Snowy Hydro) is likely to be in the range from $3.8 billion to $4.5 billion. This "base cost" excludes land and developments costs, funding and financing costs, GST, project management or hedging costs. And the feasibility study warns that there are risks, opportunities and contingency amounts that significantly affect this range.

In addition to the costs that Snowy Hydro incurs, Snowy 2.0 will be the largest point connection in the National Electricity Market's history and will require massive transmission expansion along the Great Dividing Range. TransGrid in NSW provided early estimates of transmission costs in NSW related to Snowy 2.0 of $0.6 billion to $1.4 billion. Estimates of the requirement in Victoria are not yet known but are likely to be even higher because the necessary upgrade to Victoria will be even larger.

So, in round numbers, a conservative estimate of the total capital outlay attributable to Snowy Hydro 2.0 will be at least $8 billion, four times more than the prime minister suggested when announcing this project. It would be surprising if the estimate at the time of the final investment decision is any lower than this, and the actual build cost will surely be yet higher, quite possibly significantly so.

Will it nonetheless be money well spent? This is very unlikely. Pumped hydro is an inefficient storage technology. Australia already has significant pumped hydro capacity – 900 megawatts (MW) at Tumut 3 in Snowy and 500 MW at Wivenhoe in Queensland. Both are rarely used because they are inefficient.

The feasibility study says that at capacity, Snowy 2.0 will only produce about 1 kilowatt hour for each 1.5 kilowatt hours needed to pump water to the top reservoir. Add to that 10 per cent for losses in transmitting electricity from generators in the Hunter and Latrobe valleys to pump the water uphill. And then add another 10 per cent for losses in transmitting the stored electricity back to the main load centres in Sydney and Melbourne where most of it will be consumed. In other words, Snowy 2.0 will use about 1.8 kilowatt hours for each kilowatt hour that it actually delivers to consumers. By comparison, a battery installed on a customer's premises or on the local grid can be expected to use about 1.1 kilowatt hour for each kilowatt hour delivered.

It is inconceivable that Snowy 2.0 will produce revenues that are vaguely close to that needed to compensate its capital outlays. This is because the volume of electricity it can produce, valued at the difference between the price paid to pump water uphill and the price received when running the water back down the hill again, will be much too small.

Experience in other countries is also instructive. The feasibility study likens Snowy 2.0 to the Dinorwig pumped hydro plant in Wales. Dinorwig, along with the smaller Ffestiniog, has comparable capacity to Snowy 2.0. In its most recent market transaction six months ago, the market value of Dinorwig and Ffestiniog was established at $236 million, a small fraction of its initial build and subsequent refurbishment costs.

It is almost certainly the case in Australia that the market value of Snowy 2.0 will be a small fraction of its likely construction cost. If they decide to proceed with Snowy 2.0, the Commonwealth, NSW and Victorian governments will be forced to substantially write down their investment, at tax payers' expense. Or, if they can not stomach that, electricity consumers will be forced to fund the deadweight.

There is time to dodge this bullet. At the very least, independent investment advisors should now be asked to opine, in publicly available reports, on likely market valuations of Snowy 2.0, before any further contemplation of this project.

The Snowy 2.0 feasibility study can be found here.

A word of warning to readers. SMEC (formerly the Snowy Mountains Engineering Company and now a member of the Subarna Jurong Group) has been involved in the Snowy 2.0 feasibility study since May 2017.

In October 2017 mainstream media reported that SMEC had five of its subsidiaries banned by the World Bank after a corruption investigation

SA Royal Commission into Murray-Darling Basin management and alleged water theft

The NSW Berejiklian Government will not be happy with this………

ABC News, 30 November 2017:

Allegations of water theft upstream in the Murray-Darling Basin (MDB) have prompted South Australian Premier Jay Weatherill to launch a state royal commission to identify any perpetrators.

New South Wales and Queensland were slapped with a scathing assessment of compliance with the MDB Plan on Saturday, after a review found poor levels of enforcement.

The review also found a lack of transparency surrounding the states' water management, along with Victoria's.

Mr Weatherill said the report did not go far enough and announced a royal commission.

"The review that was handed down did not go into detailed findings of who committed water theft and who behaved inappropriately in relation to the river," he said.

"There have been no specific findings in relation to individuals or groups of individuals."

When asked whether a state royal commission could force bureaucrats from interstate to give evidence, Mr Weatherill said the royal commissioner would be given the powers of compulsion.

"And they will have no choice but to come forward," he said.

"A state-based royal commission does have the capacity to analyse things that touch on other states, provided there is a connection to South Australia.”

"That's our very clear legal advice and it's our intention to pursue this royal commission's power to their fullest extent, so we can get to the bottom of this water theft."…..

Despite labelling it "just another stunt", the Federal Government said it would cooperate with SA's royal commission.

Assistant water resources minister Anne Ruston said the issues in the basin were being addressed but the Commonwealth would not stand in the way of the commission, and neither should NSW or Victoria.

"I'd like to think they'd cooperate, certainly the Commonwealth will cooperate, we haven't got anything to hide," she said.

The Australian Government’s 25 November 2017 The Murray–Darling Basin Water Compliance Review can be read here.

NSW Environmental Defender's Office has served irrigator and Nationals donor Peter Harris a summons demanding he return more than five billion litres of water he is alleged to have illegally taken from the Barwon-Darling River

The Australian, 14 November 2017:

The NSW Environmental Defender’s Office has served irrigator and Nationals donor Peter Harris a summons demanding he return more than five billion litres of water he is alleged to have ­illegally taken from the Barwon-Darling River.

The incidents of alleged water theft are the subject of ICAC, Ombudsman and Office of Water inquiries, which follow the standing down and resignation of former senior NSW water bureaucrat Gavin Hanlon.

It has also been revealed that NSW Primary Industries Minister Niall Blair benefited Mr ­Harris, a cotton farmer, and other irrigators by changing the laws to pardon Mr Harris retrospectively for illegal flood works and that Mr Blair lobbied Environment Minister Gabrielle Upton to change the law to justify a decision to give Mr Harris more water trading rights.

In their action in the Land and Environment Court, the plaintiffs demand “the return of water, up to the equivalent of the total volume ... (to) occur immediately after the water is extracted from the water source and has passed through metering equipment” to measure it, but before it is stored.

Alternatively, the defender’s office is seeking orders so that Mr Harris forfeits his entitlement to the equivalent amount of water in ­future to replenish the river.

The summons was served on Peter James Harris and Jane Maree Harris and the matter is listed for December 8.

The amount of water allegedly taken would fill more than 2000 Olympic swimming pools.

Office chief executive David Morris said the action was being taken because the NSW government was not moving quickly enough to penalise Mr Harris.

“On two occasions EDO NSW has written to the NSW government outlining concerns about potential breaches of the Water Management Act 2000 (NSW) and informing the government of intention to commence civil enforcement proceedings,” he said.

“No adequate response has been received from the government. In the face of government inaction, our client (the Inland Rivers Network) has seen no other choice but to commence proceedings in the Land and Environment Court.”

Castle Hill, Townsville carries the message "STOP ADANI"

A major heritage-listed landmark shows that not everyone in Townsville, Queensland, appears to be happy with becoming a mining FIFO dumping ground hub for the financially dubious multinational Adani Group ……

Castle Hill aka Cutheringa Mountain est elevation 264 metres

Image: Townsville Bulletin, 16 October 2016

Via @VanOnselenP