(f) to require a State Contracting Government to notify the Authority of any intervalley transfer described in clause 2 made within that State.
2. Application
Subject to the laws of each State, this Schedule applies to transfers, between States and between valleys within the Murray‑Darling Basin, of such water entitlements and allocations as are, from time to time, determined by the Ministerial Council and specified in Appendix 1, relating to water within:
(a) the upper River Murray and the River Murray in South Australia; and
(b) regulated reaches of the Goulburn, Broken, Campaspe, Loddon and Murrumbidgee river systems; and
(c) such other sources from time to time specified in Appendix 1,
for the purposes of exchange rate trade or tagged trade (or both), as the Ministerial Council may determine from time to time.
3. Definitions and interpretation
(1) In this Schedule and any protocols made under it, save where inconsistent with the context:
(a) “allocation” means the volume of water allocated for use under an entitlement in any water year (as defined in clause 2 of Schedule E) pursuant to the law of a State;
“cap on diversions” has the same meaning as in Schedule E;
“convert”, in relation to an entitlement, means to convert an entitlement of one type, with lower reliability into an entitlement of another type, with higher reliability, or vice versa;
“conversion factor” means a factor determined for the purpose of clause 12;
“designated river valley” has the meaning set out in Schedule E;
“entitlement” means:
(i) an entitlement to a particular share of water within the upper River Murray, the River Murray in South Australia or regulated reaches of the Goulburn, Broken, Campaspe, Loddon and Murrumbidgee river systems or a source referred to in paragraph 2(c) pursuant to the law of a State; or
(ii) any other entitlement to divert water or to receive water diverted by another from those sources,
but does not include a State entitlement;
“environmental entitlement” means an entitlement to use water for environmental purposes;
“exchange rate” means a rate determined for the purposes of clause 12;
“former Schedule” means Schedule E of the former Agreement;
“interstate transfer” means a transfer of an entitlement or allocation made between States in accordance with this Schedule;
“intervalley transfer” means a transfer of an entitlement or allocation made out of a valley:
(i) into another valley; or
(ii) into the River Murray, or vice versa;
“licensing authority” means the authority within a State with power to make a final decision whether a transfer may be made into or out of that State;
“relevant water authority” in relation to an entitlement or allocation within an irrigation district, means the body responsible for administering that entitlement or allocation in that district;
“State of destination” means the State into which a transfer of an entitlement or allocation is, or is to be, made;
“State of origin” means the State out of which a transfer of an entitlement or allocation is, or is to be made;
“transfer”, in relation to an allocation, includes:
(i) the transfer of an allocation already made in a State of origin to a State of destination, in accordance with this Schedule; and
(ii) the transfer of an allocation within a State, according to the laws of that State;
“transfer”, in relation to an entitlement, includes:
(i) the transfer of an entitlement, by either exchange rate trade or tagged trade, between States, in accordance with this Schedule; and
(ii) the transfer of an entitlement within a State, according to the laws of that State;
“Transfer Register” means the register referred to in clause 16;
“valley” means a river valley defined in a protocol made under paragraph 6(1)(b);
“valley account” has the meaning set out in sub‑clause 11(3);
“year” means the 12 months beginning on 1 July;
(b) a reference to a clause, sub‑clause, paragraph or Appendix is a reference to a clause, sub‑clause, paragraph or Appendix of this Schedule;
(c) a reference to the cap on diversions for a designated river valley is to the long‑term diversion cap for that designated river valley, fixed in accordance with Schedule E;
(d) a reference to “exchange rate trade” is to an arrangement under which an entitlement in a State of origin is cancelled, extinguished or suspended and an equivalent entitlement is created in a State of destination, either permanently or for a fixed term;
(e) a reference to “tagged trade” is to an arrangement under which every allocation made under an entitlement in a State of origin is made available for use in a State of destination, either permanently or for a fixed term.
(2) For the purposes of this Schedule, the Ministerial Council may determine the geographic extent and limits of the Barmah Choke.
PART II—GENERAL PRINCIPLES
4. Power to alter entitlements and allocations to which Schedule applies
On the recommendation of the Authority, the Ministerial Council may, from time to time, alter the entitlements and allocations to which this Schedule applies, by amending Appendix 1.
5. Suspension of Schedule
(1) Subject to sub‑clause 19(10), a State Contracting Government may, from time to time, after consulting the Ministerial Council, suspend or limit the operation of this Schedule in that State, if the State Contracting Government considers that:
(a) the use or management of water comprised in entitlements or allocations transferred under this Schedule have increased or accelerated environmental degradation; or
(b) any other State has made inadequate progress towards pricing water to recover full costs, in accordance with principles adopted by the Council of Australian Governments; or
(c) the policies or practices applying within any other State do not achieve the objectives of the National Water Initiative relating to reducing barriers to trading entitlements and allocations and ensuring competitive neutrality in the market for such entitlements and allocations.
(2) The Ministerial Council may, from time to time, having regard to the National Water Initiative, by resolution, suspend or limit the operation of this Schedule in relation to a State or States.
6. Power to make protocols
(1) The Authority may, in consultation with the Committee, from time to time make protocols:
(a) to implement the provisions for adjusting the cap on diversions set out in Appendix 3;
(b) about calculating salinity debits and credits for the purposes of clause 10;
(c) defining valleys for the purposes of this Schedule and about maintaining, crediting, debiting and giving directions for releases to be debited to, valley accounts, pursuant to clause 11;
(d) determining one or more conversion factors and exchange rates; about applying and using any conversion factor or exchange rate so determined; and defining trading zones, for the purposes of clause 12;
(e) about any matter referred to in clause 13 (Restrictions on Transfers);
(f) about any matter referred to in clause 15 (Procedures and Principles for Transfers);
(g) about any matter referred to in clause 17 (Monitoring and Reporting);
(h) to implement either or both of exchange rate trade and tagged trade; and
(i) implementing any resolution of the Ministerial Council about transferring environmental entitlements.
(2) The Authority must notify each Contracting Government:
(a) whenever it is considering making, amending, reviewing or revoking a protocol; and
(b) of the subject matter of any proposed protocol, amendment, review or revocation.
(3) A Contracting Government may nominate a person with relevant expertise and experience to give advice to the Authority in preparing, amending, reviewing or revoking a protocol.
(4) The Authority must consider any advice given by a person nominated under sub‑clause 6(3), before it makes, amends or revokes a protocol.
(5) A protocol made under this clause:
(a) must, subject to clause 2, indicate whether it applies to exchange rate trade, tagged trade or both; and
(b) must not be inconsistent with any provision of the Agreement (including its Schedules) and is void to the extent of any inconsistency.
(6) The Authority may:
(a) amend, review or revoke any protocol made under sub‑clause 6(1); and
(b) review any such protocol at the request of a Contracting Government.
(7) The Authority may not delegate any power conferred on it by sub‑clauses 6(1) and (6).
PART III—MATTERS RELATING TO ADMINISTRATION OF THE AGREEMENT
7. Adjustment of delivery of State entitlements
The Authority must, from time to time, adjust the delivery of State entitlements under Part XII of the Agreement to take into account, and to give effect to, transfers of entitlements and allocations between States, in accordance with Appendix 2.
8. Adjustment of cap on diversions
(1) Subject to paragraph 16(7)(a), the Authority must, from time to time, adjust the cap on diversions for each designated river valley to reflect interstate and intervalley transfers of entitlements or allocations under this Schedule, in order to ensure that diversions within the Murray‑Darling Basin do not exceed the total diversions under baseline conditions referred to in Schedule E.
(2) For the purpose of making any calculation under clause 12 of Schedule E, the relevant annual diversion target for that year must either be increased or reduced, as the case requires, by the volume determined in accordance with Appendix 3.
10. Accounting for salinity impacts
(1) An entitlement or allocation can only be transferred under this Schedule if the proposed transfer is consistent with Schedule B.
(2) Consistently with the law of the relevant State, a licensing authority within that State must attach such conditions to any transfer into or out of that State which the licensing authority considers necessary or desirable to ensure that the State meets its obligations under Schedule B.
(3) The Authority must attribute salinity credits and debits arising from the dilution effects of interstate transfers of entitlements or allocations to the State of origin and State of destination, in equal shares and in accordance with any protocol made under paragraph 6(1)(b).
(4) The Authority must attribute salinity credits and debits arising from changes to salt accession attributable to any transfer of entitlements or allocations, or changes to the use of water arising from such transfers, to the State in which the change occurs and in accordance with any protocol made under paragraph 6(1)(b).
PART IV—OPERATIONAL PRINCIPLES AND ADMINISTRATION
11. Delivery of water and valley accounts
(1) The Authority must ensure that water made available in each valley reflects the transfers of entitlements and allocations made under this Schedule, in accordance with any protocol made under paragraph 6(1)(c).
(2) The valley accounts maintained under sub‑clause 11(2) of the former Schedule immediately prior to commencement of this Schedule are continued in existence.
(3) For the purpose of this clause, the Authority must maintain a valley account referred to in sub‑clause (2):
(a) for each tributary in respect of which there are entitlements or allocations which may be traded under this Schedule; and
(b) in accordance with any protocol made under paragraph 6(1)(c).
(4) The Authority may:
(a) in accordance with any protocol made under paragraph 6(1)(c), direct that water standing to the credit of a valley account for any valley be used for any purpose to which the Authority may have regard under sub‑clause 98(3) or 98(4) of the Agreement; and
(b) amend or cancel any such direction at any time.
(5) A State Contracting Government must implement any direction given under paragraph 11(4)(a) in accordance with any protocol made under paragraph 6(1)(c).
(6) With the consent of the State Contracting Government to whom a direction is given under sub‑clause 11(4), a direction may result in a valley account being overdrawn.
12. Conversion factors and exchange rates
(1) Subject to sub‑clause 12(2), the Authority may, by a protocol made under paragraph 6(1)(d), determine or alter one or more:
(a) conversion factors to be applied when converting an entitlement of one type into an entitlement of another type, in the same valley; and
(b) exchange rates to be applied under this Schedule:
(i) to any transfer of an entitlement by exchange rate trade; and
(ii) to any transfer of an entitlement by tagged trade or to any transfer of an allocation,
and must publish any such conversion factors and exchange rates in such manner as it thinks fit.
(2) An exchange rate referred to in subparagraph 12(1)(b)(ii) must only be made to take into account any changes in distribution losses resulting from the transfer.
(3) A conversion factor and an exchange rate determined or altered by the Authority operates prospectively and cannot be used to alter:
(a) a previous entry made in any valley account; or
(b) any previous adjustment made to State entitlements or the cap on diversions,
under this Schedule.
(4) A protocol referred to in sub‑clause 12(1):
(a) must specify how any conversion factor or exchange rate is to be applied; and
(b) may establish one or more zones within which an exchange rate will not be applied to specified types of entitlement; and
(d) may provide for taking account of:
(i) any losses which may occur during transmission of an entitlement; and
(v) any other matter which the Authority considers appropriate.
(5) Each State Contracting Government must ensure that any licensing authority within the State applies any relevant conversion factor or exchange rate determined under this clause, in accordance with any protocol made under paragraph 6(1)(d).
13. Restrictions on transfers
(1) Subject to sub‑clause 13(4), a protocol made under paragraph 6(1)(e) may prohibit, restrict or regulate the transfer of a specified type of entitlement.
(2) Without limiting sub‑clause 13(1), a protocol:
(a) must, subject to other provisions of this clause, facilitate the transfer of entitlements or allocations between hydrologically connected systems, in accordance with this Schedule; and
(b) must be consistent with any principles relating to markets in, and trading of, water entitlements and allocations, from time to time adopted by the Ministerial Council; and
(c) must not hinder the ability of the Authority to regulate and manage the flow of water within the upper River Murray and the River Murray in South Australia, in accordance with the Agreement; and
(d) must not purport to affect or interfere with State responsibilities for managing water resources, except as provided for in the Agreement.
(3) Until the Ministerial Council resolves otherwise an entitlement must not be transferred into or out of the Lower Darling Valley.
(4) A State Contracting Government may, consistently with the law of that State, from time to time prohibit, restrict or regulate the transfer of any type of entitlement or allocation in a way which is consistent with any principles relating to markets in, and trading of, water entitlements, from time to time adopted by the Ministerial Council.
(5) Each State Contracting Government must, consistently with the law of that State, take such action within the State as may be necessary to ensure that any prohibition, restriction or regulation made or imposed by the Authority or the State Contracting Government is complied with and observed by each authority and other person in that State.
15. Procedures and principles for transfers
(1) The Authority may, by a protocol made under paragraph 6(1)(f), specify processes and principles to be followed by the Authority and, consistently with State law, each State Contracting Government and licensing authority, to record and to facilitate the transfer of entitlements and allocations, subject to the other provisions of this Schedule.
(2) Each State Contracting Government must, consistently with the law of that State, take such action within the State as may be necessary to ensure that processes and principles referred to in this Schedule and in any protocol made under paragraph 6(1)(f) are applied and observed by each authority and other person in that State.
(3) Without limiting sub‑clause 15(1), a protocol made under paragraph 6(1)(f) may:
(a) apply to:
(i) interstate transfers;
(ii) intervalley transfers;
(iii) transfers made across the Barmah Choke; and
(b) specify procedures, which are consistent with State law, for:
(i) ensuring, where appropriate, that an entitlement in a State of origin is cancelled or extinguished before, or at the same time as, an equivalent entitlement is created in the State of destination;
(ii) processing applications to transfer entitlements and allocations;
(iii) confirming the ability of the Authority to deliver water pursuant to any proposed transfer;
(iv) notifying the Authority when a transfer has occurred; and
(c) subject to clause 16, require the keeping of registers and accounts of transfers.
16. Transfer Register
(1) In this clause:
“base valley” means a valley referred to in sub‑clause 3(2) of Schedule E.
(2) The transfer register kept under clause 16 of the former Schedule immediately prior to commencement of this Schedule is continued in existence.
(3) The Authority must maintain the register referred to in sub‑clause (2) so that it sets out the following information with respect to conversion of entitlements and each intervalley transfer of an entitlement (and, if the Authority so resolves, each allocation) occurring within the area referred to in clause 2:
(a) The following information about the place of origin:
(i) The volume in megalitres and type of any entitlement converted into an entitlement of another type.
(ii) The volume in megalitres of any entitlement created by such conversion, after applying the relevant conversion factor, and the type of the new entitlement.