Kellie Tranter ( 15.9.10 )
Did you notice recent reports that one Richard Lourey is abroad hawking Australian water ? Yes, he's a water marketeer. Yes, he's selling Australian farm water to investors in Asia, Europe and North America. Yes, he's trying to flog water rights along the Murray-Darling Basin ! Surely you remember the Murray-Darling Basin ? Yes, that's the one: the major river system for the eastern half of our continent that doesn't have enough consistently runing water to survive, let alone to satisfy the already rapacious demands of its human exploiters. Yet he's trying to get overseas speculators in on a bit of wheeling and dealing in its precious flow ? It shouldn't come as a surprise if you look at recent history.
The World Bank:
The water privatisation policy of the World Bank was articulated in a 1992 paper entitled "Improving Water Resources Management". The Bank believes that water availability at low or no cost is uneconomic and inefficient. Even the poor should pay...
In 2003 the International Consortium of Investigative Journalists discovered that despite the World Bank's contentions that it does not "force" privatisation on the poor.....Using data available from the World Bank Web site, ICIJ analysed 276 loans labelled "water supply" awarded by the bank between 1990 and 2002. In about one third of the projects, the World Bank required the country to privatise its water operations in some way before it received funds.
Here in good old New South Wales the free marketeers didn't need the helping hand of external "persuasion": water privatisation here seems to have been kicked off at the COAG meeting in February 1994 with the descision to establish an open water market as part of a national push towards a National Land & Water Resources Audit 2002-08.
This local philosophy was consistant with the World Bank's approach. An article "Tradable Property Rights to Water How to improve water use and resolve water conflicts" ( PDF 159KB ) that appeared in the World Bank's Public Policy for the Private Sector February 1995 edition took the now familiar line that.....
...Tradable water rights can help shift water to high value uses in a way that is cheaper and fairer than some of the present alternatives...Under a tradable water rights system, the public sector's role in the construction, operation and maintenance of hydraulic infrastructure can be reduced to financing selected high-return activities with strong positive externalities or public goods characteristics. The market-not the-government-will determine the allocation and pattern of water use and the prices charged for water rights...
A great idea if they're creating a true market instead of a casino, and if the players and the regulators can be "trusted" with our most precious resource of all. But they weren't and they can't.
Commoditisation Of Water In NSW:
The Carr government introduced the Water Management Act in 2000. It's most significant change was that one did not have to own or occupy land to hold a water licence. It permitted them to be held by anyone, including a passive investor, allegedly facilitated objectives such as maximising the social and economic benefits of water to the community while being consistant with the maintenance of long-term productivity of land. Unfortunately this kind of government propaganda, dubious economics and high fallutin` "public benefit" claptrap prevailed in the absence of any objective public benefit or organised community opposition.
Ongoing concerns have been raised about privatisation. The ultimate question is whether or not the punative intention of the legislation has played out ? You can bet it hasn't, and it won't. Haven't we already seen farmers express concerns about Maquarie Agribusiness buying up water rights to secure water for its investments ?
Privatisation:
Not long before Carr took up his post with Maquarie Bank his government laid the groundwork for a futures market in water rights. A NSW State Water media release from July 2005 reads:
...A water index futures market would provide reliant, or water exposed businesses with an opportunity to hedge their risks to future climatic factors, particularly water availability. An ability to hedge future risks leads to better informed investment decisions and in turn stimulates economic activity, creating jobs and more certain profits for businesses. The establishment of a futures market would enable financial service organisations to develop simple yet effective products for the rural community designed to reduce the impact of drought and flood...
Rubbish ! "Financial service organisations" exist to make profit and they will profit by selling water to "miners" or farmers, who are ultimately the only other real market in rural Australia, at prices that guarantee their profits. The press release doesn't mention environmental concerns or any limitations on the activities of overseas "investors" or local speculators.
Essentially buying water now operates, it seems like a bet on future scarcity but with a guaranteed "win" for those who have the money to play. In the driest inhabited continent on the planet and its drought conditions, the only way for the price to go is up. It won't be long before those who can afford to pay for the water will have the luxury of it. And domestic consumers are going to suffer as much as our surviving farmers.
Water Brokers:
Now with such a wonderful, well thought out scheme to benefit all and sundry one would have thought that the NSW State Government would have had an effective licensing regime in place when it introduced Water Management Act 2000. After all, everyone else seems to be regulated nowadays.
Apparently not. The National Water Commission did commission the Allen Consulting Group to investigate national and jurisdictional governance arrangements for the conduct of market intermediaries and appropriate governance options, but a "minimalist intervention" approach was recomended.
So the wheelers and dealers are free to wheel and deal, substantially regulated only by the general law: for water brokers that are corporations the ( Federal ) ACCC has released a publication called Water brokers and exchanges-your fair trading obligations, and for partnerships or sole traders the equivalent State laws administered by the ( NSW ) Dept, of Fair Trading come into play. If that arrangement is OK, why was Waterfind, one of Australia's main water brokers calling late last year for more regulation of water brokers ?
Conclusion:
Our "new" federal government needs to take responsiblity for managing Australia's limited water resources. Within the framework of addressing water and food security, the requirements for industry and agriculture have to be met in tandem with the needs of the general population. Private enterprise does not and will not distribute water equitably or in a way that promotes the national interest.
It needs to be noted that if the federal government does not voluntarily assume the role of conservator and distributor of water, acting without fear or favour to promote the national interest, sooner or later scarcity will force that role upon them. Corrupt state governments can have no part in such undertakings, and neither can cashed up private companies who grease the wheels of government for their own ends.
Did you notice recent reports that one Richard Lourey is abroad hawking Australian water ? Yes, he's a water marketeer. Yes, he's selling Australian farm water to investors in Asia, Europe and North America. Yes, he's trying to flog water rights along the Murray-Darling Basin ! Surely you remember the Murray-Darling Basin ? Yes, that's the one: the major river system for the eastern half of our continent that doesn't have enough consistently runing water to survive, let alone to satisfy the already rapacious demands of its human exploiters. Yet he's trying to get overseas speculators in on a bit of wheeling and dealing in its precious flow ? It shouldn't come as a surprise if you look at recent history.
The World Bank:
The water privatisation policy of the World Bank was articulated in a 1992 paper entitled "Improving Water Resources Management". The Bank believes that water availability at low or no cost is uneconomic and inefficient. Even the poor should pay...
In 2003 the International Consortium of Investigative Journalists discovered that despite the World Bank's contentions that it does not "force" privatisation on the poor.....Using data available from the World Bank Web site, ICIJ analysed 276 loans labelled "water supply" awarded by the bank between 1990 and 2002. In about one third of the projects, the World Bank required the country to privatise its water operations in some way before it received funds.
Here in good old New South Wales the free marketeers didn't need the helping hand of external "persuasion": water privatisation here seems to have been kicked off at the COAG meeting in February 1994 with the descision to establish an open water market as part of a national push towards a National Land & Water Resources Audit 2002-08.
This local philosophy was consistant with the World Bank's approach. An article "Tradable Property Rights to Water How to improve water use and resolve water conflicts" ( PDF 159KB ) that appeared in the World Bank's Public Policy for the Private Sector February 1995 edition took the now familiar line that.....
...Tradable water rights can help shift water to high value uses in a way that is cheaper and fairer than some of the present alternatives...Under a tradable water rights system, the public sector's role in the construction, operation and maintenance of hydraulic infrastructure can be reduced to financing selected high-return activities with strong positive externalities or public goods characteristics. The market-not the-government-will determine the allocation and pattern of water use and the prices charged for water rights...
A great idea if they're creating a true market instead of a casino, and if the players and the regulators can be "trusted" with our most precious resource of all. But they weren't and they can't.
Commoditisation Of Water In NSW:
The Carr government introduced the Water Management Act in 2000. It's most significant change was that one did not have to own or occupy land to hold a water licence. It permitted them to be held by anyone, including a passive investor, allegedly facilitated objectives such as maximising the social and economic benefits of water to the community while being consistant with the maintenance of long-term productivity of land. Unfortunately this kind of government propaganda, dubious economics and high fallutin` "public benefit" claptrap prevailed in the absence of any objective public benefit or organised community opposition.
Ongoing concerns have been raised about privatisation. The ultimate question is whether or not the punative intention of the legislation has played out ? You can bet it hasn't, and it won't. Haven't we already seen farmers express concerns about Maquarie Agribusiness buying up water rights to secure water for its investments ?
Privatisation:
Not long before Carr took up his post with Maquarie Bank his government laid the groundwork for a futures market in water rights. A NSW State Water media release from July 2005 reads:
...A water index futures market would provide reliant, or water exposed businesses with an opportunity to hedge their risks to future climatic factors, particularly water availability. An ability to hedge future risks leads to better informed investment decisions and in turn stimulates economic activity, creating jobs and more certain profits for businesses. The establishment of a futures market would enable financial service organisations to develop simple yet effective products for the rural community designed to reduce the impact of drought and flood...
Rubbish ! "Financial service organisations" exist to make profit and they will profit by selling water to "miners" or farmers, who are ultimately the only other real market in rural Australia, at prices that guarantee their profits. The press release doesn't mention environmental concerns or any limitations on the activities of overseas "investors" or local speculators.
Essentially buying water now operates, it seems like a bet on future scarcity but with a guaranteed "win" for those who have the money to play. In the driest inhabited continent on the planet and its drought conditions, the only way for the price to go is up. It won't be long before those who can afford to pay for the water will have the luxury of it. And domestic consumers are going to suffer as much as our surviving farmers.
Water Brokers:
Now with such a wonderful, well thought out scheme to benefit all and sundry one would have thought that the NSW State Government would have had an effective licensing regime in place when it introduced Water Management Act 2000. After all, everyone else seems to be regulated nowadays.
Apparently not. The National Water Commission did commission the Allen Consulting Group to investigate national and jurisdictional governance arrangements for the conduct of market intermediaries and appropriate governance options, but a "minimalist intervention" approach was recomended.
So the wheelers and dealers are free to wheel and deal, substantially regulated only by the general law: for water brokers that are corporations the ( Federal ) ACCC has released a publication called Water brokers and exchanges-your fair trading obligations, and for partnerships or sole traders the equivalent State laws administered by the ( NSW ) Dept, of Fair Trading come into play. If that arrangement is OK, why was Waterfind, one of Australia's main water brokers calling late last year for more regulation of water brokers ?
Conclusion:
Our "new" federal government needs to take responsiblity for managing Australia's limited water resources. Within the framework of addressing water and food security, the requirements for industry and agriculture have to be met in tandem with the needs of the general population. Private enterprise does not and will not distribute water equitably or in a way that promotes the national interest.
It needs to be noted that if the federal government does not voluntarily assume the role of conservator and distributor of water, acting without fear or favour to promote the national interest, sooner or later scarcity will force that role upon them. Corrupt state governments can have no part in such undertakings, and neither can cashed up private companies who grease the wheels of government for their own ends.
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