Water (Place of Take) Regulations 2023

The central concept is the particular place of take approval that is tagged (tagged approval). This is an approval for water to be taken from a place in one water system zone when the water allocation itself sources from a different water system zone (the source water system zone). In practical terms, it allows a water user to divert water from a location different from where the water share or entitlement originated, reflecting trading across zones. The Regulations regulate when the Minister can prohibit the taking of water under such tagged approvals.

Source water system zone is defined separately for each type of entitlement: water shares, approved interstate rights taken to be water shares, approved interstate rights taken to be water allocations, bulk entitlements, and environmental entitlements. For a water share, it is the water system zone determined for that share under the Act, including any variation, or the zone into which the allocation has been assigned. For interstate rights, it can be an interstate trading zone. This definition is critical because it determines which allocations are ‘tagged’ and thus subject to the prohibition determination regime under regulation 6.

Prohibition determination and restriction determination are terms defined in section 64FA of the Act, and the Regulations use them without redefinition. A prohibition determination prohibits the taking of water under an allocation, while a restriction determination limits it. The Regulations only prescribe circumstances for prohibition determinations, not for restriction determinations.

The Basin Plan (Commonwealth Water Act 2007) appears in two key places. Regulation 6(1) incorporates section 12.18 of the Basin Plan as the set of reasons that justify a prohibition determination for tagged approvals in Basin water resources. Regulation 7 incorporates section 12.23 of the Basin Plan to characterise taking water under a tagged approval as ‘taking water with an order’. This classification determines whether section 12.23 of the Basin Plan applies to a Victorian prohibition determination. The Basin Plan is applied, adopted or incorporated as in force from time to time, as noted in the explanatory table in the endnotes.

The three water systems added by the 2024 amendment (Broken, Bullarook, Ovens) are defined by reference to the Order Declaring Water Systems in Northern Victoria 2007. They are not part of the Basin water resources for the purpose of regulation 6(1) but are subject to the separate pathway in regulation 6(2). This means prohibition determinations in those systems do not need to rely on Basin Plan reasons; the Minister may act based on deliverability constraints and either insufficiency of a restriction determination or public interest.

The revocation of the Water (Tagged Water Allocations) Regulations 2021 is also a significant concept. That earlier instrument presumably dealt with restrictions on tagged allocations, and the new Regulations replace it entirely. The Regulations do not contain transitional provisions for existing tagged approvals that were subject to the old regime. This creates a gap: holders of tagged approvals who relied on the old rules now face a different set of criteria for prohibition, though the practical effect depends on how quickly the Minister issues new determinations.

The Regulations directly affect several classes of water users and officials in Victoria. The most directly affected are holders of tagged approvals under water shares, bulk entitlements, environmental entitlements, and interstate rights. These holders have an approval to take water from a zone different from the source zone. Under regulation 6(1), their ability to take water under a tagged approval can be prohibited if the Minister reasonably believes that any of the Basin Plan section 12.18 reasons exist. This group includes irrigators, water traders, and environmental water managers who have moved allocations between zones.

Holders of works licences issued under section 67 of the Act are also directly affected. Regulation 8 provides a ground for suspending or cancelling a works licence if the licence holder uses the works to take water in contravention of a Part 4AA determination. This applies whether or not the water taken is under a tagged approval; any contravention of a restriction or prohibition determination can trigger licence action. Works licence holders include irrigators, urban water corporations, and commercial water users who operate pumps, dams, or diversion structures.

Irrigators and water users in the Broken, Bullarook, and Ovens water systems are affected by the separate prohibition pathway under regulation 6(2). In these systems, the Minister may prohibit taking water from a specified area if deliverable water is insufficient and a restriction determination is not sufficient or if prohibition is in the public interest. This gives the Minister a broader discretion than for Basin water resources, since the public interest criterion is subjective and not defined in the Regulations. Users in these systems face greater uncertainty about when prohibitions may be imposed.

The Minister (currently the Minister for Water) is the decision maker who exercises the prohibition power under section 64FZE of the Act. The Regulations guide but do not constrain that power tightly, especially under regulation 6(2) where the Minister need only have a reasonable belief about delivery constraints and then choose between two alternative limbs. The Authority (likely the relevant water corporation or the Department) is responsible for monitoring compliance and recommending or enforcing suspension or cancellation of works licences.

Interstate water traders who hold approved interstate rights that are taken to be water shares or water allocations under the Act are affected because the definition of source water system zone for interstate rights includes interstate trading zones. Their tagged approvals can be prohibited under the same Basin Plan reasons. This creates interstate consistency but also imposes Victorian ministerial authority over water that originates in another state.

Holders of bulk entitlements and environmental entitlements with tagged approvals are also within scope, though the practical effect depends on the terms of their entitlement. Bulk entitlements are often held by water corporations serving urban or irrigation customers, so the impact may flow through to those customers indirectly.

The Regulations do not impose obligations on ordinary domestic or stock and domestic users who do not hold tagged approvals or works licences, unless they also hold such licences. The affected groups are primarily commercial and institutional participants in the water market.

The Regulations impose one explicit duty: the Minister must reasonably believe the prescribed circumstances exist before making a prohibition determination. For Basin water resources under regulation 6(1), the Minister must reasonably believe it is necessary to provide for restrictions when any of the Basin Plan section 12.18 reasons exist. For the three named water systems under regulation 6(2), the Minister must reasonably believe that deliverable water is insufficient to meet demand, downstream commitments, and system management requirements, and that either a restriction determination is not sufficient or prohibition is in the public interest. The word ‘reasonably’ imports an objective standard that can be judicially reviewed, but the structure gives the Minister significant latitude, especially under the public interest limb which is not further defined.

The Minister does not have a duty to consult affected parties before making a determination. The Regulations are silent on notice, hearing, or publication requirements. Those matters may be addressed in the Act itself (sections 64FZE and following), but the Regulations do not add procedural protections. This creates a risk that prohibition determinations could be made without prior warning, imposing sudden costs on water users who have made planting or operational decisions based on expected water availability.

For works licence holders, regulation 8 creates a duty not to use works to take water in contravention of a Part 4AA determination. This is not a new duty; it is already implicit in the Act. The regulation merely specifies that contravention of a determination is a prescribed ground for suspension or cancellation. The licence holder retains the right to make submissions before any suspension or cancellation under the Act’s procedures (section 74AB), but the Regulations do not affect those rights.

Holders of tagged approvals have a right to take water subject to any prohibition determination in force. The Regulations do not create a right to compensation if a prohibition determination reduces the value of a tagged allocation or interferes with existing contracts. Nor do they create a right to have a determination reviewed or varied. The absence of compensation provisions means the full cost of a prohibition falls on the water user, which may deter investment in water trading across zones.

The Regulations do not confer any rights on third parties to seek a prohibition determination or to object to one. The decision is entirely within ministerial discretion once the prescribed circumstances are met.

The Regulations do not create penalties directly. They prescribe grounds for suspension or cancellation of a works licence under section 74AB of the Act, and the circumstances for prohibition determinations that carry consequences under the Act. The enforcement structure rests on the Act’s existing penalty framework.

For works licence holders, using the works to take water in contravention of a Part 4AA determination triggers the ground in regulation 8. The Act’s section 74AB then permits the relevant Authority to suspend or cancel the licence. The Act may also impose penalties for the underlying contravention, such as fines for taking water without authorisation. The Regulations do not specify the severity of the suspension or cancellation; that depends on the Authority’s assessment of the seriousness of the contravention.

Prohibition determinations themselves are not penal but have penal effects: taking water after a prohibition is in force is an offence under the Act (likely under Part 4AA or general provisions). The Regulations do not create a new offence; they simply enable the prohibition. Enforcement of a prohibition determination is through the Act’s monitoring and compliance powers, including inspection, directions, and court proceedings. The Regulations do not confer any additional powers on authorised officers.

The absence of prescribed penalties in the Regulations means that the real consequence for most water users is the loss of the ability to take water, which can be economically devastating during a growing season. For works licence holders, the potential loss of the licence itself is a severe penalty that could effectively end an irrigation enterprise. The Regulations do not provide for graded enforcement, such as warnings or minor sanctions for first breaches. The single ground in regulation 8 is binary: if the works were used in contravention, the licence may be suspended or cancelled. There is no requirement that the contravention be serious or repeated.

The Regulations also do not deal with enforcement of prohibition determinations against persons who do not hold works licences, such as those taking water under a tagged approval but not through licensed works (if that is possible under the Act). That gap may be intentional, as the Act likely requires works for most diversions.

The Regulations sit within a complex federal-state legislative architecture. The primary connecting law is the Water Act 1989 (Vic), particularly Part 4AA (sections 64FA to 64FZF) which empowers the Minister to make restriction and prohibition determinations. The Regulations prescribe circumstances under section 64FZF for prohibition determinations, thus filling out the Act’s framework. Section 74AB of the Act provides for suspension or cancellation of works licences; regulation 8 prescribes one ground for that power.

The Commonwealth Water Act 2007 and the Basin Plan made under it are incorporated by reference. Regulation 6(1) uses the reasons in section 12.18 of the Basin Plan as the trigger for prohibition determinations for tagged approvals in Basin water resources. Regulation 7 deems taking water under a tagged approval to be taking water with an order for the purpose of determining whether section 12.23 of the Basin Plan applies. Section 12.23 restricts the amount of water that can be taken under orders, and the deeming provision effectively subjects tagged approvals to the Basin Plan’s order limits. This is a significant interaction: it means Victorian prohibition determinations for tagged allocations are co-ordinated with the Basin Plan’s own restriction mechanisms.

The revocation of the Water (Tagged Water Allocations) Regulations 2021 means those older provisions no longer apply. The old regulations may have had different or additional criteria for restrictions on tagged allocations. The new Regulations do not contain transitional savings for actions taken under the old regulations. Any ongoing matters under the old regime would need to be dealt with under the new Regulations from 20 November 2023.

The Regulations interact with interstate water rights through definitions. ‘Approved interstate right’ and ‘interstate trading zone’ are defined in the Act and referenced in regulation 5. The Regulations do not modify the Act’s provisions on interstate trade; they merely subject interstate tagged approvals to the same prohibition regime as Victorian allocations when the water is taken from a Victorian approved place.

The Regulations do not interact with planning laws, environmental laws beyond the Basin Plan, or native title. They are a narrow instrument focused on ministerial power to prohibit taking of tagged water and to sanction works licences used in contravention.

The Water (Place of Take) Regulations 2023 were made on 24 October 2023 by the Governor in Council and published as S.R. No. 111/2023. They came into operation on 20 November 2023. The Regulations were amended once by the Water (Place of Take) Amendment Regulations 2024, S.R. No. 32/2024, made on 14 May 2024 and commencing on 22 May 2024.

The 2024 amendment made three changes. First, it inserted definitions of ‘Broken water system’, ‘Bullarook water system’, and ‘Ovens water system’ into regulation 5(1). Each is defined by reference to the Order Declaring Water Systems in Northern Victoria 2007 made under section 6A of the Act. Second, it inserted new regulation 6(2), creating a separate prohibition pathway for those three water systems. The amendment also updated the note to regulation 5(1) to reflect that the definition of ‘particular place of take approval that is tagged’ was already present from the original version. The amendment appears to have been made to address local supply constraints in those specific systems that were not adequately captured by the Basin Plan reasons in regulation 6(1).

The original 2023 Regulations revoked the Water (Tagged Water Allocations) Regulations 2021 (S.R. No. 140/2021). That earlier set of regulations presumably dealt with similar subject matter but has been superseded. The revocation was immediate upon commencement of the new Regulations in November 2023.

The Regulations have a fixed sunset date of 24 October 2033, ten years after the date of making, as required by section 5 of the Subordinate Legislation Act 1994. This means the Government must review the Regulations before that date if it wishes to re-make them with or without amendments. The sunset clause provides a built-in review mechanism, but it also means that after 2033 the Regulations lapse unless re-enacted, at which point the Minister would lose the prescribed circumstances for prohibition determinations and the ground for works licence suspension under this instrument.

The source text of the Regulations contains no references to litigation. No cases are mentioned in the regulation text, endnotes, or explanatory material. As a subordinate instrument made in 2023 and amended only once in 2024, the Regulations have had limited time to generate judicial consideration. It is possible that challenges have been brought in the Victorian Civil and Administrative Tribunal or the Supreme Court under administrative law grounds, but the Regulations themselves provide no record of such cases. The absence of litigation history in the source is itself notable: the provisions have not yet been tested on questions such as the meaning of “reasonably believes”, the application of the public interest limb, or the interaction with section 12.23 of the Basin Plan.

The key potential grounds for challenge include: whether the Minister’s belief is genuinely reasonable and supported by evidence; whether the public interest limb in regulation 6(2)(b)(ii) is too vague to be a valid delegation of legislative power; and whether the deeming provision in regulation 7 is consistent with the Basin Plan’s own framework. The Commonwealth might also have a role if a Victorian prohibition determination is alleged to conflict with Basin Plan requirements. The Regulations’ incorporation of the Basin Plan by reference may create issues if the Plan is amended; the Victorian instrument would then automatically incorporate the new version, which could be challenged as an impermissible delegation to a non-Victorian body.

Because the source provides no litigation history, no further commentary can be offered. A thorough practitioner would need to search Victorian and federal court databases for any decisions citing these Regulations.

Several features of the Regulations pose traps for unwary water users and advisers.

First, regulation 7 deems taking water under a tagged approval to be taking water with an order for the purpose of determining whether section 12.23 of the Basin Plan applies. This means the Basin Plan’s order limits apply to tagged approvals, potentially capping the volume that can be taken even if the tagged approval itself would allow more. A water user who obtains a tagged approval expecting to take water at the full allocation may find that the order limit under the Basin Plan caps their actual take. This deeming provision is not spelled out in the Act; it is a regulatory sleeper.

Second, regulation 6(2) for the Broken, Bullarook, and Ovens systems contains a public interest alternative that is completely undefined. The Minister may impose a prohibition if it is ‘in the public interest’, even if a restriction determination would be sufficient to meet system management requirements. This gives the Minister power to prohibit water taking for reasons that have nothing to do with physical water availability, such as political pressure or environmental advocacy. The lack of definition invites challenge but also creates uncertainty for irrigators who rely on those systems. A prohibition could be imposed on a Friday with effect from Monday, and the holder may have no recourse beyond judicial review of the reasonableness of the belief.

Third, the Regulations do not provide for any grace period, transitional provisions, or compensation when a prohibition determination is made. A tagged approval is a form of property right in the water allocation, but a prohibition effectively cancels the right to take water at the approved place without any payment. The legal character of the tagged approval as a licence rather than a property right means compensation is unlikely, but the economic effect is still a deprivation of value. Irrigators who have purchased tagged approvals at a premium expecting interzone trading flexibility may find that value erased by a ministerial determination.

Fourth, the revocation of the old Tagged Water Allocations Regulations 2021 without transitional provisions means any administrative arrangements, exemptions, or conditions under the old regime are extinguished. If a tagged approval was issued under the old regulations with specific conditions about when restrictions could apply, those conditions are now governed solely by the Act and the new Regulations. There is no grandfathering. Holders of such approvals should review their position immediately.

Fifth, the definition of ‘source water system zone’ for water shares includes zones that have been determined under the Act and then varied. If a water share’s zone has been varied historically, the source zone may not be the zone the holder thinks it is. This can affect whether an approval is ‘tagged’ and thus subject to the prohibition regime. A water user who believes they are taking water in their own zone might actually be operating under a tagged approval if the source zone changed through assignment.

Sixth, the Regulations apply to interstate trading zones for approved interstate rights. A holder of a South Australian right that is taken to be a Victorian allocation may find that the Minister can prohibit taking at the Victorian approved place based on Basin Plan reasons. The holder may have no representation in the Victorian decision making process.

Compliance with the Regulations is largely passive: do not take water in contravention of a prohibition determination, and do not use works to take water after a determination has been made. However, because prohibition determinations can be made with little notice, pro active steps are advisable for any holder of a tagged approval or a works licence.

First, maintain current records of your source water system zone and approved place of take. The definition of ‘source water system zone’ is complicated and depends on the type of entitlement and any assignments. Know whether your approval is tagged; if the source zone and approved place zone differ, you are subject to regulation 6(1) for Basin water resources or, if in the Broken, Bullarook or Ovens systems, regulation 6(2). Contact your water corporation or the Department of Energy, Environment and Climate Action if you are unsure.

Second, monitor the Victorian Government Gazette and departmental websites for any new prohibition determinations. The Regulations do not require personal notice to affected holders, so the burden is on the water user to stay informed. Subscribe to relevant water system updates. A prohibition determination can take effect from publication, so checking daily during the irrigation season is prudent.

Third, if you hold a works licence, ensure that you never use the works to take water while a prohibition determination is in force for the relevant water allocation and approved place. A single contravention can lead to suspension or cancellation of the licence. Even if the determination was not properly notified to you, the ground in regulation 8 may still be triggered. Ignorance is not a defence. If a prohibition is in place, physically lock out the works or install tamper proof valves to prevent accidental use.

Fourth, if you operate in the Broken, Bullarook or Ovens systems, be aware that the Minister may prohibit taking based on the public interest even if restriction would be adequate. Engage with the Minister and the relevant water corporation early if you anticipate delivery constraints. Lobby for restriction determinations rather than prohibition when possible. The public interest limb is vague but may be influenced by submissions showing the economic harm of a prohibition.

Fifth, if you hold a tagged approval that you purchased expecting to trade water between zones, factor into your business plan the risk that a prohibition determination may prevent you from taking water in the destination zone. Do not rely on the tagged approval as a guaranteed right. Consider hedging by maintaining some water in the source zone.

Sixth, if you are affected by a prohibition determination, seek legal advice promptly. You may have grounds for judicial review if the Minister’s belief was not reasonable or if the determination fails to comply with the Act’s requirements. The Regulations do not provide an internal review mechanism. You may also wish to make a submission to the Minister before a determination is made, though there is no statutory right to be heard. Early engagement is the only proactive compliance strategy available.