Rivers in crisis: Redesigning river systems for profits

March 2, 2019
While communities, small farmers and Indigenous people are impacted, not everyone is losing out on the government’s plans for the Murray Darling basin.

As prolonged drought bites deeply in New South Wales and Queensland, and regional towns run out of water, state and federal governments are continuing their push to deliberately dry out the Menindee Lakes.

The Menindee Lakes, located in far west NSW near the town of Menindee, are a chain of big shallow lakes along the Darling River that form an important water storage system.

Although politicians claim there is too much evaporation from the lakes and associated wetlands, ecologists state that they are a key part of maintaining water flows and preventing mass fish kills in the river systems. They have also pointed out that the lakes are crucial migratory waterbird habitats and key fish breeding areas.

The drying up of the lakes has already had a huge impact on towns such as Broken Hill, local table grape growers, graziers and the Barkandji people, who have had the water at the heart of their native title claim strip out of it.

However, not everyone is losing out on the government’s plans for the Murray Darling basin.

Webster Limited

Webster Limited, one of the two biggest irrigators in Australia and the owner of Tandou Station in Menindee, is the is the only stakeholder in the Murray Darling basin that has received compensation as well as the purchase price through the federal government’s water buyback scheme.

Linton Besser outlined the background to Webster's rise on ABC’s Four Corners in July 2017: “There used to be a host of smaller irrigators up and down [the Murray-Darling river] system.

“But since the Murray-Darling Basin Plan was signed, there's been huge consolidation. Now, just two big players own 70% of the water in this river.

“One of them — Webster Ltd — now owns more water than anyone else in this country outside the federal government. It's a portfolio worth about $300 million.

“Webster is chaired by corporate raider Chris Corrigan, famous for busting waterfront unions 20 years ago.

“The company — which trades on the securities exchange — plans to grow cotton in a good year and to make even more money in drought by selling its water at a profit to farmers willing to pay.”

The other major player in the Murray Darling is Peter Harris, who owns Clyde Cotton and whose family's properties and water licences are worth at least $150 million.

In its report, Trickle Out Effect: Drying up money and water in the Lower Darling, released in September, The Australia Institute (TAI) notes that while other stakeholders have been denied the right to transparent consultation and equitable compensation, Webster “has not had these problems”.

“Major agribusiness Webster purchased Tandou Station, an irrigation property near Menindee, in June 2015.

“By June 2017 it had secured sale to the Commonwealth of its water licences for $38 million, plus $40 million in compensation for loss of future business, as well as a gift of 21 gigalitres of water from the Commonwealth for Tandou Station to grow a cotton crop in 2017–18 — the financial year after the purchase. Webster booked a $36 million [profit] on the transaction.” 

All of this led TAI to conclude: “The Webster deal raises some major questions about accountability, transparency and the implementation of the Basin Plan.”

Water buybacks

Explaining how the water buyback rort works for Webster, Helen Vivian wrote in the Sydney Morning Herald last March: “Hundreds of millions of taxpayer dollars have been spent on water ‘buybacks’, where the government has paid twice the going rate for water which effectively does not exist, except during heavy rainfall and peak water conditions.

“The first of these was the purchase of $34 million of supplementary water rights, described locally as ‘empty buckets of water’, sold to the federal government during the Millennium drought in 2008 by Tandou Station...

“A further water sale to the federal government was made last year by the same station, $78 million for their entire 21,900-megalitre water right and for business readjustment…

“That deal — personally negotiated by [then water minister] Barnaby Joyce — was at more than twice the market price for water.

“That’s $112 million of taxpayer funds to one station, Tandou.”

Webster is a major donor to Joyce’s National Party.

It gets worse, as Vivian explains: “The outcome from this $112 million investment of taxpayer funds is that Webster will decommission the irrigated horticultural enterprise at Tandou and return the property to dry-land farming.

“They will take all the promised jobs and economic activity with them to their northern NSW holdings, where they get to intercept the water before it enters the Darling River.

“This is the real kicker - the $112 million water ‘buyback’ will do nothing to benefit the river or water users downstream.”

Webster was not the only one to benefit from its connections to the National Party.

Harris, who gave $10,000 to the National Party prior to the 2011 state election via personal and company donations, was a beneficiary of rules changes contained in the Barwon-Darling water-sharing plan that was signed off by the Coalition state government in 2012.

Under the new rules, irrigators were allowed to increase pump sizes, had their daily extraction limits removed and were given allowance for more storage.

A Freedom of Information application by the Environmental Defender’s Office revealed that Harris directly benefited from these rule changes.

Legalising water theft

Webster and Harris have clearly taken advantage of floodplain harvesting where water is pumped, free and unmeasured, into dams before it can reach the river. Currently, only water pumped from rivers is measured and licensed.

Last year, the NSW government began the process of legalising floodplain harvesting by handing out free licences to irrigators on the basis of how much they have been able to extract and store until now. This means that those who previously managed to extract the most water receive the biggest share of the free licences.

Irrigators are able to sell these licences to others and be compensated for any reduction in entitlements. 

As the volumes of water taken from floodplains have not been measured, there is no transparency over the process and the government has no ability to know if irrigators exceed the amount stipulated in their licences in the future.

Speaking to Besser, Macquarie Marshes grazier Peter McClellan asked the question many others are raising: "Why would they give them property rights for … something you can't measure or they haven't measured?"

"That's just making some people richer and richer and the rest of the communities, they're getting poorer. I think it's just a disgrace,” McClellan said.


In its Trickle Out Effect report, TAI notes: “The story of the Webster deal and the Lower Darling is about more than a big company getting a lot of money. This is a story about power. 

“The $13 billon Murray–Darling Basin Plan has resulted in the interests of the powerful being enhanced at the expense of the vulnerable.”

“Similar stories of powerful interests reaping huge windfalls from the Basin Plan at the expense of the wider community can be found throughout the Murray–Darling Basin.

“The flow of money and water has made some more powerful and weakened others, such as floodplain graziers, downstream users and communities and made them vulnerable in ways they were not before the Basin Plan.”

The report notes that the key factor at play “is the concentration of power and water in the hands of few people, and their ability to influence decisions that affect their own financial interests, to the detriment of everyone else and the environment.

“The problem is not that there are big agribusinesses flourishing under the Basin Plan, but the inability or unwillingness of governments and their bureaucrats to ensure that those with power are not prioritized at the expense of the wider community interest.

“The problem is that Webster’s management can talk directly to senior department staff at any time, while the native title owners are offered token consultation.

“The problem is that Webster is given compensation but every other property owner is not.

“The experience of the Lower Darling shows that the Basin’s decision makers have one way of dealing with a powerful agribusiness and a different way of dealing with native title owners, graziers, communities, small irrigators and the environment.”

[Elena Garcia is a grazier based in federal water minister David Littleproud’s Queensland electorate of Maranoa. This is the latest in the ongoing "Rivers in crisis" series. To read the others articles click here.]

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