Nature Conservation Council of New South Wales Inc v Minister for Sustainable Natural Resources

(b) habitats, animals and plants that benefit from water or are potentially affected by managed activities should be protected and (in the case of habitats) restored, and

(c) the water quality of all water sources should be protected and, wherever possible, enhanced, and

(d) the cumulative impacts of water management licences and approvals and other activities on water sources and their dependent ecosystems, should be considered and minimised, and

(e) geographical and other features of indigenous significance should be protected, and

(f) geographical and other features of major cultural, heritage or spiritual significance should be protected, and

(g) the social and economic benefits to the community should be maximised, and (h) the principles of adaptive management should be applied, which should be responsive to monitoring and improvements in understanding of ecological water requirements. (3) In relation to water sharing: (a) sharing of water from a water source must protect the water source and its dependent ecosystems, and

(b) sharing of water from a water source must protect basic landholder rights, and

(c) sharing or extraction of water under any other right must not prejudice the principles set out in paragraphs (a) and (b). (4) In relation to water use: (a) water use should avoid or minimise land degradation, including soil erosion, compaction, geomorphic instability, contamination, acidity, waterlogging, decline of native vegetation or, where appropriate, salinity and, where possible, land should be rehabilitated, and

(b) water use should be consistent with the maintenance of productivity of land in the long term and should maximise the social and economic benefits to the community, and

(c) the impacts of water use on other water users should be avoided or minimised. (5) In relation to drainage management:

(a) drainage activities should avoid or minimise land degradation, including soil erosion, compaction, geomorphic instability, contamination, acidity, waterlogging, decline of native vegetation or, where appropriate, salinity and, where possible, land should be rehabilitated, and

(b) the impacts of drainage activities on other water users should be avoided or minimised. (6) In relation to floodplain management: (a) floodplain management must avoid or minimise land degradation, including soil erosion, compaction, geomorphic instability, contamination, acidity, waterlogging, decline of native vegetation or, where appropriate, salinity and, where possible, land must be rehabilitated, and

(b) the impacts of flood works on other water users should be avoided or minimised, and

(c) the existing and future risk to human life and property arising from occupation of floodplains must be minimised. (7) In relation to controlled activities: (a) the carrying out of controlled activities must avoid or minimise land degradation, including soil erosion, compaction, geomorphic instability, contamination, acidity, waterlogging, decline of native vegetation or, where appropriate, salinity and, where possible, land must be rehabilitated, and

(b) the impacts of the carrying out of controlled activities on other water users must be avoided or minimised. (8) In relation to aquifer interference activities: (a) the carrying out of aquifer interference activities must avoid or minimise land degradation, including soil erosion, compaction, geomorphic instability, contamination, acidity, waterlogging, decline of native vegetation or, where appropriate, salinity and, where possible, land must be rehabilitated, and

(b) the impacts of the carrying out of aquifer interference activities on other water users must be avoided or minimised. …

8 Classes of environmental water (1) The following classes of environmental water are recognised for the purposes of this Act: (a) water that is committed for fundamental ecosystem health at all times, and may not be taken or used for other purposes ( environmental health water ),

(b) water that is committed for specified environmental purposes at specified times or in specified circumstances, but may, at other times and in other circumstances, be taken and used for other purposes ( supplementary environmental water ),

(c) water that, pursuant to an access licence, is committed for specified environmental purposes, either generally or at specified times or in specified circumstances ( adaptive environmental water ). (2) Rules for the identification, establishment and maintenance of each class of environmental water ( environmental water rules ) are to be established for all of the water sources in the State, by means of a management plan, as soon as practicable after the commencement of this Act. 9 Act to be administered in accordance with water management principles and State Water Management Outcomes Plan (1) It is the duty of all persons exercising functions under this Act: (a) to take all reasonable steps to do so in accordance with, and so as to promote, the water management principles of this Act, and

(b) as between the principles for water sharing set out in section 5 (3), to give priority to those principles in the order in which they are set out in that subsection. (2) It is the duty of all persons involved in the administration of this Act to exercise their functions under this Act in a manner that gives effect to the State Water Management Outcomes Plan. 8 As opposed to other water management principles, the principles in relation to water sharing (s 5(3)); floodplain management (s 5(6)); controlled activities (s 5(7)); and aquifer interference activities (s 5(8)) "must" be applied. 9 In accordance with s 9 of the Act, when making a management plan the water management principles in s 5 are to be promoted, with priority to be given to the water sharing principles in the order set out in s 5(3). 10 The applicant claims that the consequence of the operation of s 9(1)(b) and s 5(3)(a) on the establishment of the rules for the identification and maintenance of classes of environmental water under s 8, by the water sharing provisions of management plans to which s 20(1)(a) applies, is that, in determining the priority between extraction and the environment, priority must be given to the environment. There is no real dispute about this and it is self-evidently correct, in general terms. 11 Division 2 of Pt 1 of Ch 2 of the Act provides for the establishment of a State Water Management Outcomes Plan ("SWMOP"). A SWMOP was gazetted on 20 December 2002. Pursuant to s 9(2) of the Act a person exercising functions under the Act has a duty to do so in a manner that gives effect to the SWMOP and under s 16(1) a management plan must be consistent with the SWMOP. 12 The Act contains significant provisions demanding accountability, including five year review requirements of the Department and the Act itself, management committees, auditing of management plans, public access to a register of access licences and an open standing provision. The Act binds the Crown. 13 The applicant accepts it is necessary for it to establish, in the context of s 20 (which sets out the matters which a water sharing management plan "must deal with") and s 50(2), that the Minister's plan has not dealt with a particular matter "in general terms". It is the applicant's case that the Minister's plan has not dealt with the matters at all. 14 Section 20 of the Act provides as follows:- 20 Core provisions (1) The water sharing provisions of a management plan for a water management area or water source must deal with the following matters: (a) the establishment of environmental water rules for the area or water source in relation to each of the classes of environmental water referred to in section 8 (1),

(b) the identification of requirements for water within the area, or from the water source, to satisfy basic landholder rights,

(c) the identification of requirements for water for extraction under access licences,

(d) the establishment of access licence dealing rules for the area or water source,

(e) the establishment of a bulk access regime for the extraction of water under access licences, having regard to the rules referred to in paragraphs (a) and (d) and the requirements referred to in paragraphs (b) and (c). (2) The bulk access regime referred to in subsection (1) (e): (a) must recognise and be consistent with any limits to the availability of water that are set (whether by the relevant management plan or otherwise) in relation to the water sources to which the regime relates, and

(b) must establish rules according to which access licences are to be granted and managed and available water determinations to be made, and

(c) must recognise the effect of climatic variability on the availability of water, and

(d) may establish rules with respect to the priorities according to which water allocations are to be adjusted as a consequence of any reduction in the availability of water, and

(e) may contain provisions with respect to the conditions that must (as mandatory conditions) be imposed on access licences under section 66 (1), including conditions providing for the variation, from time to time, of the share and extraction components of access licences, and

(f) must be consistent with the water management principles. (3) The rules referred to in subsection (2) (d) must comply with the priorities established under section 58. (4) The access licence dealing rules established under subsection (1) (d): (a) must comply with the access licence dealing principles, and

(b) subject to those principles, may regulate or prohibit any dealing under Division 4 of Part 2 of Chapter 3. 15 Section 35 of the Act provides as follows:- 35 Format of management plan (1) A management plan must include the following components:

(b) objectives consistent with the vision statement,

(d) performance indicators to measure the success of those strategies. (2) In the case of a water management area for which an equivalent management plan is already in force, the draft management plan may be in the form of: (a) an amendment to the existing management plan, or

(b) a new plan to replace the existing management plan. (3) Subject to subsections (1) and (2), the format of a management plan is to be as determined by the Minister. 16 Clause 9 of Sch 9 of the Act preserves existing entitlements under the Water Act 1912 to the extent provided in that clause. 17 The following categories of access licence are created by s 57 of the Act:- (a) local water utility access licences, (b) major utility access licences, (c) domestic and stock access licences, (d) regulated river (high security) access licences, (e) regulated river (general security) access licences, (f) supplementary water access licences, (g) unregulated river access licences, (h) aquifer access licences, (i) estuarine water access licences, (j) coastal water access licences, (k) such other categories of access licence as may be prescribed by the regulations.

18 In summary, the parties have joined issue on the following matters raised by the applicant:-

(1) The applicant submits there are no performance indicators contained in the water sharing plan capable of measuring the success of the strategies in the plan (s 35(1)(d)).

(2) Because water that is to constitute environmental health water is not identified, except as water volume in excess of the long-term extraction limit, there is no environmental water rule for environmental health water within the meaning of the Act. In addition, environmental water is not committed in any relevant respect. The combined operation of ss 5, 8, 9 and 20 of the Act requires the establishment of environmental water rules and particularly rules relating to environmental health water before the establishment of a bulk access regime. The plan involves an inversion of the statutory requirement.

(3) The supplementary environmental water rule that establishes an account for water committed for specific environmental purposes is defective because it does not specify times or circumstances for its release and the water can be used for other uses. (4) By failing to consider thresholds for within river purposes or effluent streams the plan is not consistent with, nor does it give effect to, the SWMOP as required by s 6(1) and s 9(2) respectively.

(5) By expressly subordinating supplementary environmental water to regulated river (high security) access licence extractions the Minister, when making the plan, was in breach of the duty in s 9(1)(b) and was otherwise manifestly unreasonable.

(6) An environmental health rule that requires passage of defined water to the Gwydir wetlands fails for uncertainty by failing to define the wetlands. Furthermore, the wetlands are not part of the plan.

Performance Indicators 19 Clause 8 at the commencement of Pt 2 - Vision, objectives, strategies and performance indicators - of the plan states that Pt 2 is made in accordance with s 35(1) of the Act. Within Pt 2, cl 12 specifies in (a) to (i) indicators that "are to be used to determine the performance of this Plan against its objectives". The applicant relies upon the distinction between the reference to "strategies" in s 35(1)(c) and (d) and to the performance of the plan against its "objectives" in cl 12. The objectives of the plan are listed in cl 10 whereas the strategies are enumerated in cl 11. The argument is that, for example, a performance indicator to measure the success of the strategy to "establish environmental water provisions" nominated in cl 11(a) and contained in Pt 3 is a requirement fundamentally different from a performance indicator to determine the performance of the plan against its objectives. 20 According to the applicant, a measure of success requires identification of a measure of quantity or quality, (The King v Galvin and Another; Ex Parte Metal Trades Employer's Association and Others (1949) 77 CLR 432 at 447) the specification of criteria, (Herald-Sun TV Proprietary Limited and Others v Australian Broadcasting Tribunal (1985) 156 CLR 1 at 4) the laying down of a method of finding it to achieve the same result if it is used correctly (Cann's Proprietary Limited v The Commonwealth and Another (1946) 71 CLR 210 at 228) or the means of achievement (Seaton v Mosman Municipal Council and Another (1996) 93 LGERA 1 at 10). Clause 12 contains no specific means to measure the success of the strategies. There is no statement of direction or magnitude and no method is laid down to apply the matters referred to in cl 12(a) to (i). The consequence, therefore, is that the performance indicators themselves are said to be not capable of measuring the success of the strategies. 21 There is a note to cl 12 which refers to Appendix 4 for details of the objectives to which the performance indicators relate and the method of assessing indicators. However, although cl 5(1) provides that terms defined in the Act have the same meaning in the plan unless re-defined and the effect of these terms may be explained in notes, cl 5(4) expressly provides that Appendices to the plan do not form part of the plan. Even so, according to Mr Robertson SC, who appears for the applicant, Appendix 4 in terms merely specifies the methods for assessing indicators not how the purported performance indicators are used to measure the success of the strategies. 22 The respondent sees the applicant's argument as merely semantic. If the purpose of a strategy is to reach an objective, as a reading of s 35(1)(c) suggests, then Mr Hutley SC, who appears for the respondent, says it must be a reasonable way to measure the success of a strategy to see how well the objectives are being achieved. Moreover, s 35(1) only requires that performance indicators be selected. They may then be used to measure performance. It is therefore intended that the performance indicators are merely the data which allow the Minister to measure how the plan is performing. 23 It can be ascertained from the indicators listed in cl 12(a) to (i) that they are each a category of matter that is capable of being used to point out or direct attention to the performance of the plan in the context of its application to the Gwydir Regulated River Water Source. This effect may be compared to a steam pressure gauge on an engine. The gauge is an indicator of what is occurring to facilitate an assessment of the performance of the engine. The applicant's argument, however, demands that the plan specify standards in order to comply with s 35(1). 24 I regard an indicator as one that points out or directs attention to something. Whatever the indicator identifies might then be used to measure the success of the operation of the strategies for achieving an objective. It is not the role of the indicator to provide a standard or ultimate conclusion but rather to provide information that can be used for the purpose of making an assessment of performance.

25 Each of the matters specified in cl 12(a) to (i) are factors that can be used to indicate whether changes have occurred which contribute to or detract from the achievement of the objectives of the plan as a consequence of implementation of the strategies adopted by the plan in cl 11. They are part of the means of making an assessment in order to measure the success of the plan in reaching the stated objectives. The result of that assessment will itself be a means to measure the success of the strategies. All that s 35(1)(d) requires is that the plan provide the source of the information to be used in the assessment and monitoring process. In my opinion, cl 12 achieves that purpose. In my view, there is a clear distinction between "performance targets", which were the subject of the Court of Appeal's decision in Seaton, and "performance indicators" referred to in s 35(1)(d) of the Act. 26 The applicant's argument in respect of the effect of cl 12 of the plan must, therefore, be rejected.

Environmental Health Water 27 The Dictionary to the Act defines "environmental water rules" as the environmental water rules referred to in s 8(2). As a result, that meaning is transposed into s 20(1)(a). The establishment of environmental water rules for each class of environmental water referred to in s 8(1) is the primary core water sharing provision stipulated for a management plan by s 20(1)(a). Pursuant to s 8(1), environmental health water that is committed for fundamental ecosystem health may not be taken or used for any other purpose. 28 By dint of s 5(3) and s 9(1)(a) and (b) the water management principle of protecting the water source and its dependant ecosystems is given priority over other water sharing management principles. 29 Therefore, according to Mr Robertson, a water sharing plan must include a rule "for the identification, establishment and maintenance of water that is committed for fundamental ecosystem health at all times, and may not be taken or used for other purposes, that rule reflecting the priority of protecting the water source (the river and its wetlands) and dependent ecosystems over extractive uses". 30 Clause 20(2)(a) of the plan claims that the plan establishes a bulk access regime having regard to the environmental water provisions established under Pt 3 of the plan. Clause 14(a), (b) and (c), within Pt 3, provides as follows:- 14 Environmental health water This Plan establishes the following environmental health water rules: (a) water volume in excess of the long-term extraction limit established in clause 30 of this Plan may not be taken from this water source and used for any purpose,

(b) water availability is to be managed as specified in clause 32 of this Plan to ensure water volume in excess of the long-term extraction limit is not being taken, … (c) the minimum flow passed through to the Gwydir wetlands is to be the lesser of: (i) the sum of flows in the Horton River at Rider, Myall Creek at Molroy, and Halls Creek at Bingara, plus any water spill or pre-release for flood mitigation purposes from Copeton Dam water storage, and (ii) 500 megalitres per day…, … 31 The applicant's complaint about cl 14(a) and (b) is that the water which is to constitute "environmental health water" is not identified except as volume in excess of the long-term extraction limit. Therefore, the applicant submits that the rule in cl 14(a) and (b) is not properly an environmental rule within the meaning of s 8(2) of the Act as a rule for the identification, establishment and maintenance of each class of environmental water recognised for the purposes of the Act by s 8(1). 32 Clause 30 of the plan establishes a long-term extraction limit for the Gwydir water source as the lesser of:- (a) the long-term average annual extraction from this water source that would occur with the water storages and water use development that existed in 1999/2000, the share components existing at the commencement of this Plan and application of the water management rules defined in this Plan, or

(b) the long-term average annual extraction from this water source that would occur under Cap baseline conditions. 33 The Dictionary in the plan defines "Cap baseline conditions" as those used for assessment of Cap in Sch F of the Murray-Darling Basin Agreement and relate to the level of water resource development at June 1994. 34 Clause 32(1) requires that the long-term average annual extraction may not be permitted to exceed the long-term extraction limit specified in cl 30. Notwithstanding cl 32(1), the balance of the provisions in cl 32 establish a regime for proportional reduction in maximum available water determinations in circumstances where it has been assessed that the current long-term average annual extraction from the water source exceeds the value specified as the long-term extraction limit in cl 30(1)(a) and (b). 35 The long-term average annual extraction is defined in the Dictionary of the plan as "the average of annual water extractions from the water source over the period for which an assessment is carried out". 36 Clause 33 of the plan sets the maximum volume that may be taken or assigned from a regulated river (general security) access licence as 125 per cent of the share component in any one water year or 300 per cent of the share component in any three consecutive water years. 37 The applicant's submission is that the net result of cl 32 and cl 33 is that in any water year the current long-term annual extraction limit may be exceeded thereby limiting the residue of water left over for environmental health water. Indeed, it says, in some years the residue may be no water at all. 38 It is contended by the applicant, as a matter of construction, that the environmental water rules effectively do not exist until the long-term extraction limit is established. Section 20(1)(e) of the Act expressly states that the establishment of the bulk access regime must have regard to, inter alia, the environmental water rules. For the reasons explained, the applicant's argument is that the effect is to the contrary, namely that the provisions of the water sharing plan are "effectively putting the cart before the horse". 39 In addition, the effect of the plan is that extractive water is committed but environmental water is not, thereby inverting the priority accorded to environmental water in the context of water sharing contrary to the principles in relation to water sharing in s 5(3) of the Act. 40 Mr Hutley responds that neither cl 14 nor cl 32 of the plan are concerned with actual water volumes in any particular year. By reference to cl 32(1) the expression "water volume" as used in cl 14(a) and (b) must mean long-term average annual extractions. The effect of cl 14(a), therefore, cannot be to create or preserve any particular volume of water at any given point in time. All that cl 14(a) requires is that the long-term average water volume extracted from the water source not exceed the long-term extraction limit specified in cl 30. Clause 14(b) dictates that water availability be managed to achieve that objective. Accordingly, as I understand the argument, the issue of local fluctuations from year to year is not addressed in terms of actual water physically present in the water source but rather the whole process is to be managed over time so that the long-term average requirements are satisfied. The long-term extraction limit says nothing about what happens in any one year and therefore, according to Mr Hutley, cl 14(a) does not purport to create what he describes as "such a meaningless body of water". 41 In other words, the Minister says that cl 14(a) ensures that the long-term average water use is kept at 1999/2000 levels or Cap levels under the Murray-Darling Basin Agreement so that the long-term performance of the current state of affairs is kept below the long-term state of affairs. The respondent refers to cl 14(a) as performing "a mediation between long-term averages". 42 The respondent's explanation of the operation of cl 14(a) and (b) by reference to cl 32 and 30 demonstrates that cl 14 is a rule that is effectively designed to operate at all times. 43 As the Minister acknowledges, however, that does not dispose of the applicant's claim that cl 14(a) fails to identify water which "may not be taken or used for other purposes" in the way that s 8(1) requires. Irrespective of which proposition about the effect of cl 14(a) is correct, it does not create any particular volume of actual water. Mr Hutley seeks to overcome this difficulty by contending that s 8(1)(a) does not require the identification of any such body of water but rather s 8(2) requires the plan to contain in it "rules for the identification, establishment and maintenance of such water". He claims that the rules in cl 14(a) and (b) are rules of identification and establishment while cl 32 is a rule of maintenance. Therefore, they may properly be seen as rules for identification, establishment and maintenance of environmental health water. 44 In order to understand this argument it may be necessary to appreciate how the assessment of long-term extraction limit and current long-term average annual extraction is to be carried out. Clause 31 provides as follows:- 31 Assessment of the long-term extraction limit and current long-term average annual extraction (1) Assessment of the long-term extraction limit and the current long-term average annual extraction shall be carried out after the end of each water year, using the hydrologic computer model that, at the time, is approved by the Department for assessing long-term water use from this water source.

(2) To assess the long-term extraction limit, the model referred to in subclause (1) shall be set to represent as closely as possible the conditions referred to in clauses 30 (1) (a) and 30 (1) (b).

(3) To assess current long-term average annual extraction from this water source the model referred to in clause 31 (1) shall be set to represent as closely as possible all water use development, supply system management and other factors affecting the quantity of long-term average annual extraction from this water source at the time of compliance assessment. 45 The model used to carry out these functions is known as the Gwydir IQQM. The evidence is that the model allows assessments to be made regarding the river flows and water extractions that would have occurred in the Gwydir river source if the level of water use, development, volume of licences and rules affecting water access had been in place and consistent over the period for which historical climatic data is available. In the case of long-term average annual extractions, the IQQM model assumes that conditions in the Gwydir river source have always been exactly as they are today and applies that to the available climatic data since the 1890's. 46 In the case of the long-term extraction limit established pursuant to cl 30(1)(a) of the plan, the model assumes development levels at 1999/2000. The Cap dictated by Sch F to the Murray-Darling Basin Agreement assumes development levels at 1994. 47 The Minister relies on the following statement in the SWMOP to refute the applicant's claim that the Cap fails to take account of environmental issues:- Evidence of significant environmental damage and continuing erosion of supply reliability to downstream users led the Murray-Darling Basin Ministerial Council (MDBMC) to place a cap on water extractions in the Basin at 1993/94 development levels (the MDBMC Cap). However, there is scientific evidence to suggest that water extractions at the Cap level may be responsible for unacceptable degree of environmental damage in parts of the Basin and a lower extraction limit may be required to rehabilitate these water sources and ensure the effectiveness of the environmental water rules. The extraction limit target for the NSW regulated rivers of the Murray-Darling Basin is therefore set at a level of extraction below the MDBMC Cap, which results from the impact of the prevailing environmental water rules. This lower extraction limit is necessary to ensure that river flows not specifically targeted or restored by environmental water rules cannot be further diminished by extractions. Because the extraction limit is below the Cap it ensures this external obligation is also met. 48 It is contended by the respondent that the setting of the lower of two averages by cl 30(1) as the long-term extraction limit recognises that the Cap was not necessarily environmentally adequate. Furthermore, as s 6(3) requires the SWMOP to be consistent with, inter alia, the Murray-Darling Basin Agreement, s 8 must have been enacted on the basis that the Cap "could be caught within s 8". For those reasons, it is submitted by Mr Hutley, on behalf of the Minister, that the word "water" where used in s 8, is sufficiently broad to catch the rather abstract concept erected by cl 14. 49 It is difficult to comprehend how the respondent's argument can jump from an acceptance that cl 14(a) and cl 14(b) do not create, commit or otherwise operate as a rule that sets aside a specific body, volume or other identifiable portion of the water within the water source to a point where it is claimed the same clauses operate as a rule that does in fact establish and identify the class of environmental water recognised by s 8 as environmental health water. 50 The following note appears after cl 14(b) of the plan:- Note. By limiting long term average annual extractions to an estimated 388,000 megalitres per year this Plan ensures that approximately 56% of the long-term average annual flow in this water source (estimated to be 875,400 megalitres per year) will be preserved and will contribute to the maintenance of basic ecosystem health. 51 Irrespective of the veracity of the statement in the note, it is expressly provided by cl 5(3) of the plan that notes in this plan do not form part of the plan, although the effect of terms used may be explained by the notes by dint of cl 5(1). 52 Moreover, the statement that limiting the long-term average annual extraction to 388,000 megalitres ensures that approximately 56 per cent of the long-term average annual flow will be preserved has the potential to be as difficult to understand, in practical terms in the context of one water year, as attempting to describe what physically happens in any one year by reference to the long-term extraction limit or, for that matter, the long-term average annual extraction. Nevertheless, the question might still be asked whether the provisions of cl 14 can amount to a rule within the meaning of s 8(2) even if minds differ as to their potential to be effective. 53 Spread over time, the concept of the plan appears to be to constrain extractions to a particular average level thereby maintaining an average balance of water and leaving it uncommitted to any other purpose except to remain in the system, thereby theoretically preserving it as environmental water in the long-term. Clause 32 then has the effect of maintaining the average volume by reducing other water determinations whenever the current long-term average annual extraction exceeds the volumes in cl 30(1)(a) or (b). 54 The environmental water is in that way identified as that average volume which is the difference between the long-term extraction limit and the long-term average flow. It is established as an average volume calculated using the results of the assessments made pursuant to cl 31 of the plan. Clause 32 ensures the average volume committed is maintained by adjusting other entitlements until the current long-term average annual extraction from the water source is made to equate to the long-term extraction limit. Even though the period over which the average is to be calculated is left at large by the plan, so too are other inputs to the hydrolic computer model. Nonetheless, the model is described in general terms as the one "that at the time, is approved by the Department for assessing long-term water use from this course". Dictating the inputs to such a model should not, and probably cannot, be achieved through an instrument such as a water sharing plan. The extent of variables to be taken into account in respect of climate alone is recognised by the combined effect of s 20(2)(c) and s 20(1)(e) or s 20(1)(a), (b), (c) and (d). Arguably, therefore, if a fixed period was designated by the plan, say 10 years, vital information obtained in respect of an earlier period could be excluded. The evidence is that the model can be set up to assess the river flows and volume of water extractions that would have occurred each year since the 1890's had the current rules and current level of development been in place at that time. As further information becomes available, in any respect, that contributes to a more accurate undertaking of how the Gwydir system operates it can be used to assess the long-term extraction limit. 55 That the period of an assessment will not be constant is highlighted by the definition in cl 31of "long-term average annual extraction" as the average of annual water extraction from the water source over the period for which an assessment is carried out. Alternatively, cap baseline conditions are separately determined as those used for assessment of Cap in Sch F of the Murray-Darling Basin Agreement.

56 The respondent emphasises the dynamic nature of a water source such as a river system and that, accordingly, rather than averages being an ineffective criteria for making a rule for committing any water for a particular purpose, conversely there can be no meaningful rule that takes account of the physical conditions prevailing in any one year period. There can of course be exceptions where, for example, it may be possible to calculate a minimum volume of inflow to maintain the health of a particular ecosystem such as has been done with the Gwydir wetlands in cl 14(c) of the plan. The task is obviously greater as the complexity of the system expands and hence a demand for formulae arises. 57 The Act does not require that the rules contemplated by s 8 operate to specify volumes or amounts of water in a particular year or over any other given period but instead it speaks in a timeless way by merely specifying that the rules be for identification, establishment and maintenance of each class of environmental water. That the actual volume of water remains wholly unknown and unknowable by reference to the outputs, as contemplated, does not, according to the Minister, detract from the operation of the clause as a rule for the management and control of a dynamic system such as a river. The water committed for fundamental ecosystem health in the abovementioned way is allowed to remain in the system. The amount of actual water itself will vary from time to time according to prevailing climatic conditions. Clause 14(a) and (b) are rules about averages that act as a device to ensure that the extractions over the long-term will not exceed the limit specified in cl 30. 58 In accordance with s 20(2)(b) of the Act available water determinations are required, by cl 34 of the plan, to be expressed as a percentage of the share component of each access licence in a licence category, according to the criteria in clauses 35, 36, 37, 38 and 39 respectively. Although the total share component for issued licences exceeds the long-term average annual extraction determined under cl 30 by approximately 300,000 megalitres, the available water determinations for regulated river (high security) access licences and (general security) access licences are to be based on the volume available in Copeton Dam water storage after making "provision for the environmental water provisions established by this Plan".

59 The climatic conditions are part of the dynamics of any water source that ultimately depends on natural resources for its replenishment. Over time, environmental health water will be maintained at the level of the average annual flow above the long-term extraction limit. When it drops below that level adjustments will be made to restore the deficiency, albeit not at once. There is no evidence to persuade me that such a formula will be or will not be adequate for the purpose. That is not an issue the Court can decide in these proceedings. The present issue is the construction of the provisions of the plan against the requirements of the Act.

60 Notwithstanding that the concept may be arguably nebulous, I am nonetheless not persuaded that the environmental health rules contained in cl 14 must be treated as invalid because they say nothing at all about what might happen to any water in any year as the applicant contends they should. Furthermore, it is not correct to say that cl 14 does not commit water for fundamental ecosystem health at all times when the mechanics of the provisions of the plan ensure that a constant average component of flow is retained in the water source and that adjustments must be made to other determinations to maintain that commitment when necessary. 61 I do not accept that the Minister in making the plan has put the cart before the horse by determining the rules for the establishment of the bulk access regime prior to the establishment of the environmental health water rules. For the purposes of cl 14(a), the long-term average annual extraction is that which would occur in the circumstances that existed in 1999/2000. The operating bulk access regime under the plan deals with the actual water. Moreover, the bulk access regime is established consequently to the environmental health water rules in cl 14 and, as stated in cl 20, having regard to the environmental water provisions established in Pt 3 of the plan. 62 Finally on this issue, there is no evidence to show whether the Minister, in exercising his functions under s 50, did or did not subjectively give priority in accordance with s 5(3) of the Act. On the construction of the plan adopted me, the plan does not show, on its face, that the duty framed in s 9(1)(b) was disregarded as the applicant contends. Supplementary Environmental Water 63 Under s 20(1)(a) of the Act the plan must deal with the establishment of an environmental water rule in respect of the class of environmental water recognised by s 8(1)(b) as supplementary environmental water. Clause 15(a) of the plan purports to do this by establishing an environmental contingency allowance ("ECA") to be set aside in the Copeton Dam water storage. Whenever an available water determination for regulated river (general security) access licences is made the ECA account is to be credited with the lesser of two volumes specified in cl 15(c). Clause 15(d) provides as follows:- (d) water in the ECA account may be released for any of the following purposes: (i) to support a colonially nesting native bird breeding event that has been initiated in the Gwydir wetlands following natural flood inundation,

(ii) to provide additional inundation in the Gingham and Lower Gwydir Wetlands during or following periods of extended dry climatic conditions,

(iii) to provide inundation of higher level benches in the river reaches between Copeton Dam and the Gwydir River at Gravesend,

(iv) to provide short-term inundation of the wetlands to promote germination of Hyacinth as part of a weed management strategy involving a wetting and drying cycle,

(v) to provide flows for environmental purposes in effluent streams,

(vi) to support native fish populations and habitat,

(vii) to support invertebrates and other aquatic species, (viii) to support threatened species, and

(ix) to maintain aquatic ecosystem health. 64 Pursuant to cl 15(g), an ECA Operations Advisory Committee is to be established for the purpose of advice regarding the annual ECA Release Program and the making of releases during the course of a water year. 65 The applicant's argument concentrates on an alleged failure to provide for "specified environmental purposes at specified times or in specified circumstances" contemplated by s 8(1)(b) and further that the ECA Operations Advisory Committee is empowered by cl 15 to undertake the task of drafting the rule for supplementary environmental water on an annual basis. In respect of the latter point, the applicant has unjustifiably, in my view, elevated the role of the committee to that of an administrator or decision-maker whereas a literal reading of cl 15 clearly limits the committee's role to that of an advisor.

66 Section 8(1)(b) foreshadows the alternatives for the committing of the supplementary environmental water either as at specified times or in specified circumstances. The majority of the purposes specified in cl 15(d), if not all, can be regarded as either specified circumstances or, in at least two cases, namely cl 15(d)(i) and (ii), purposes at specified times. 67 Under cl 35 and cl 36 of the plan priority is afforded to water determination for domestic and stock access licences and local water utility access licences so that it is open for the ECA account credits to be taken for those purposes. 68 I am not persuaded that cl 15 is not a rule for identification, establishment and maintenance of supplementary environmental water. To the contrary, it requires the water to be set aside in cl 15(a) and then establishes and maintains it through the ECA. Failure to consider thresholds for within river purposes or effluent streams 69 Section 16(1) of the Act requires that a management plan must be consistent with the SWMOP. The SWMOP is established as a consequence of s 6 and it is the duty of all persons involved in the administration of the Act (including, of course, the Minister) to exercise their functions in a manner that gives effect to the SWMOP. In accordance with cl 7(2) of the plan, Sch 2 identifies the SWMOP targets applicable to the plan and how the plan purports to contribute to these targets. The applicant seizes on a statement made as a comment in respect of Target 9a in Column 3 of Sch 2 to show that there has been no consideration of thresholds for within river purposes or effluent streams as the Minister allegedly was required to do under the SWMOP. Target 9a is as follows:- Flow thresholds for declaration of supplementary water access, which take into account environmental needs, clearly specified. 70 The comments attached to Target 9a are as follows:- s This Plan specifies that inflows up to 500 ML/day from 3 of this water source's major tributaries goes through to the wetlands. · There has been no consideration of thresholds for within river purposes or effluent streams. 71 This, according to the applicant, confirms the alleged defects in the way in which the plan deals with supplementary environmental water. 72 The taking of water under supplementary access licences is regulated by cl 48 of the plan. The applicant's concern is that cl 15(d)(v) of the plan provides water in the ECA account may be released to provide flows for environmental purposes in effluent streams yet no consideration has been given to the thresholds for this purpose. The applicant's argument is based upon the one statement made in regard to a single subject matter, namely supplementary water access pursuant to supplementary licences in Sch 2, and its application to the release of supplementary "environmental" water controlled by cl 15 of the plan. 73 There is no logical connection between the context of the comment in regard to Target 9a in respect of supplementary water access and the supplementary environmental water rules. Moreover, the applicant has not demonstrated a legal basis for the claim that the Minister was bound to consider thresholds for within river purposes or effluent streams, at least to the extent that invalidity would follow from a breach of that duty.

Alleged subordination of supplementary environmental water to regulated river (high security) access licence extractions

74 Because cl 15(c) of the plan allows for credit to the ECA account when an available water determination is made for regulated river (general security) licences and as that does not occur until the sum of available water determinations for regulated river (high security) access licences for the water year is equivalent to 100 per cent of share components (see cl 38), then, the applicant says, the purported supplementary environmental water rule in cl 15 is subordinated to regulated river (high security) access licences contrary to the requirements of s 5(3) and s 9(1)(a) and (b) of the Act. Furthermore, there is no guarantee for the release of water from the ECA account for any purpose nominated in cl 15(d)(vi) to (ix). Thereby, so the applicant submits, the plan is made in breach of s 9(1)(b) and is otherwise manifestly unreasonable. 75 The Minister acknowledges the effect of cl 15(c). However, as Mr Hutley points out, cl 15(c) is only dealing with additions to the ECA account. Furthermore, he says, cl 37(6)(a) provides that available water determinations made for regulated river (high security) access licences must take into account "the environmental water provisions established" by the plan. Clause 15 is in Pt 3 of the plan dealing with environmental water provisions. 76 Notwithstanding that the plan may not in terms make it clear it what is intended by cl 15(a) for water to be set aside in the ECA account initially, the first objective of the plan in clause 10(a) is stated to be to protect, maintain and enhance the environmental values of the Gwydir Regulated River Water Source; the primary strategy identified in cl 11(a) is to establish environmental water provisions (Pt 3); cl 15(a) directs that any environmental contingency allowance is to be set aside; cl 15(c) provides for credits to the ECA already set aside by cl 15(a); cl 20(2)(a) requires that the bulk access regime for the extraction of water under access licences is to have regard to the environmental water provisions established under Pt 3 and cl 37(6)(a) and cl 38(3)(a) provides that available water determinations for high security and general security access licences respectively must take into account the environmental water provisions established by the plan. Section 9(1)(b) operates to require the person exercising the functions of establishing the ECA account and making available water determinations pursuant to the plan to take all reasonable steps to do so in accordance with the water management principles in relation to water sharing, giving priority to those principles in the order in which they are set out in s 5(3). 77 Having regard to the whole of the provisions in, and the scheme established by, the plan, I am not satisfied that cl 15 necessarily leaves the identification of the ECA until an available water determination for regulated river (high security) access licences is made. It cannot, in my opinion, be said that the establishment of the ECA under cl 15(a) is subordinate to the regulated river (high security) licences when it is considered in conjunction with the other provisions of the plan, particularly those referred to immediately above, in the context of s 9(1) and s 5(3). The overall scheme of the plan, in my view, ensures that available water determinations pursuant to Pt 8 Div 2 are to be managed in a manner that has regard to the environmental water provisions established under Pt 3. Accordingly, management provisions such as cl 35(1) and (2), cl 26(1) and (2) and cl 38(1) and (2) that set aside sufficient volumes to provide 100 per cent of share components through the worst periods for domestic and stock access licences, local water utility access licences and regulated river (high security) access licences are to be implemented having regard to the priorities established first by the environmental water provisions in Pt 3.

The identification of the Gwydir wetlands 78 Notwithstanding the express provision in cl 14(c) for a minimum flow of 500 megalitres per day to pass through to the Gwydir wetlands, the applicant claims that the plan does not define the Gwydir wetlands or where the 500 megalitres has to reach. The prescription thus establishes a category of indeterminate reference rather than a rule. 79 The applicant's difficulty is a fundamental one, namely there is no evidence to show that the identity of the Gwydir wetlands is unknown or uncertain. There is evidence that the wetlands are listed in the publication A Directory of Important Wetlands in Australia, 3rd ed, Environment Australia, 2001 and they are specifically referred to in the applicant's own website. 80 I agree with the respondent's submission that the fact that the Gwydir wetlands may well be an object which changes in size and delineation depending on conditions makes no difference to whether "flow passed through" to it. It is not necessary for the wetlands itself to be part of the plan for the provision of cl 14(c) to be valid. 81 The argument in so far as it relates to the identity of the Gwydir wetlands is rejected. Conclusion 82 Section 50(2) of the Act provides that a Minister's plan must "in general terms" deal with any matters that a management plan is required to deal with. Although the plan made in this case may not, in some respects, be as specific or categorical in its provisions as the applicant would prefer nevertheless the scheme considered in the context of a dynamic body of water dependant for its replenishment upon unpredictable climatic conditions is generally consistent with and pays due regard to the water management principles in s 5 and provides for water sharing generally in accordance with s 9 and establishes rules by which class of environmental water can be identified, established and maintained. 83 To the extent that the terms of the provisions of the plan are uncertain and lack finality is a reflection of the nature of the management discretions to be exercised and administrative decisions to be made, from time to time. In such circumstances I recognise that administration of the function of water sharing may not be easily made subject to specific volumetric allocation and commitments in the plan itself. The primary purpose of the plan is to establish a scheme whereby the water source and its dependant ecosystems are protected. Water determinations made pursuant to Div 2 of Pt 8 of the plan are an integral part of the scheme to ensure that the objectives set by cl 14 in conjunction with cl 30 and cl 32 are met. The appropriate priority has been established through the scheme set by the plan for the reasons already explained. Admittedly, the use of a computer generated extraction limit that may vary according to the type of hydrolic computer model approved by the Department for assessing long-term water use from the water source from time to time introduces an inherent uncertainty. That is, in my view, an acceptable operational provision for a process designed to determine the long-term average annual extraction for the purpose of cl 30(1)(a). Furthermore, as a consequence of cl 30(1)(b) of the plan, the average to be used can never exceed that which would occur under Cap baseline conditions set independently pursuant to the Murray-Darling Basin Agreement. 84 In my opinion, therefore, the plan is not relevantly uncertain and, having regard to the circumstances under which it will apply, its terms are not manifestly unreasonable in a legal sense. 85 For all the above reasons the application by the Nature Conservation Council of New South Wales Inc is dismissed. 86 The question of costs is reserved. 87 The exhibits may be returned.

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