Integrated Water Resource Management in Australia: Case studies - Murray-Darling Basin initiative

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Department of the Environment and Heritage, 2004

The Murray-Darling Basin Initiative - integrated cross-border river basin management and community engagement


The Murray-Darling Basin (Figure 1) river catchments cover an area of 1.06 million km2 , or 14 per cent of Australia's land area. It is located in the states of Queensland, New South Wales, Victoria, South Australia and the Australian Capital Territory. Annual economic output from the Basin is around AUD$23 billion (USD$16.79 billion). AUD$10 billion (USD$7.3 billion) of this is from agriculture, equivalent to almost one third of the value of Australia's total annual agricultural output.

While use of the Basin's resources has brought huge benefit to Australia, this has had some detrimental ecological, cultural, social and economic consequences. In recognition that (under Australia's federated system of government) no one government alone was able to effectively manage the Basin's emerging natural resource management problems, the federal and relevant state governments negotiated the Murray-Darling Basin Agreement in October 1985 (which replaced the earlier 1915 River Murray Waters Agreement). Its aim is "to promote and co-ordinate effective planning and management for the equitable, efficient and sustainable use of the water, land and other environmental resources of the Murray-Darling Basin".

The management structure established to underpin the governance of the Agreement comprises:

  • the Murray-Darling Basin Ministerial Council, the decision-making forum;
  • the Murray-Darling Basin Commission, the executive and advisory arm of the Council;
  • the Community Advisory Committee, which provides the Council with advice and provides a two-way communication channel between the Council and the community; and
  • the Murray-Darling Basin Act 1993, which was ratified by the five Basin governments through identical legislation enacted by each Parliament.

Natural Resource Management Issues

Widespread degradation of the Basin's natural resources was apparent in the 1980s, with over 50% of the original vegetation cleared. About 80% of land lies in arid and semi-arid regions and most of it had become degraded (widespread soil erosion, river siltation, accelerated recharge of groundwater aquifers and subsequent discharge of saline groundwaters to rivers, dryland salinity, loss of flora and fauna habitat, and invasion of pest plants and animals). Problems in the Basin included:

  • increasing competition for scare water resources;
  • resistance to further land clearing controls by State Governments;
  • increasing conflict over who should pay for remediation of degraded common resources;
  • how to best mobilise and target the use of available resources for on-ground action; and
  • how to address poorly specified institutional arrangements for common property resource management.

These problems highlighted the need for Basin-wide policies and programs under a complex institutional environment which had grown up historically under each State's jurisdiction regarding land and water management and a complex array of laws and policies which were not coordinated across State borders. Increasing knowledge of the threats to river and catchment health gained through audits of water use and salinity in the Basin also highlighted the need to set targets for resource condition and implement environment mitigation practices and programs. The institutional arrangements for programs of management lay with the five State governments in the Basin and there was no overall coordination of remediation program development across the Basin. Joint action was required by Governments in partnership with the Basin's rural and urban communities.

Establishing the Murray-Darling Basin Commission

The initial action taken in November 1985 was to create the Murray-Darling Ministerial Council, which comprised Ministers holding land, water and environmental portfolios in the Commonwealth and each partner State and Territory Government. One of the first actions of the Council was the production of the Murray-Darling Basin Environmental Resources Study (1987), which highlighted the extent of environmental degradation.

To support the Council, the Murray-Darling Basin Commission (MDBC) was established in January 1988, under the Murray-Darling Basin Agreement. The Commission is the intergovernmental body responsible for managing the water of the River Murray and lower Darling River, advising on policies and programs for the management of the Murray-Darling Basin's environmental resources and overseeing the implementation of policies and programs aimed to help achieve their sustainable use. The mission of the MDBC is:

"Through the Government-community partnership, to foster joint action to achieve the sustainable use of water, land and other environmental resources of the Basin for the national benefit of present and future generations, and to maintain responsible, efficient and cost-effective delivery services of water of agreed quality from the River Murray."

Charter of the Commission

The Commissions charter requires it to:

  • efficiently manage and equitably distribute River Murray water resources
  • protect and improve the water quality of the River Murray and its tributaries and advise the Murray-Darling Ministerial Council on water, land and environmental management in the Basin.

Financial commitments

The investment of some AUD$8 million each year into this program of activities aims to underpin the key policy and on-ground investments within the Basin Sustainability Plan framework. This investment underpins some AUD$830 million annual investment in natural resources management by governments and the Basin community.

The Community Advisory Committee

The Committee has made a vital contribution to community awareness of the Initiative. It has also increased the role of the community in the development and implementation of natural resource management strategies to resolve the issues facing the Basin, and helped to provide regional and Basin-wide perspectives on the issues.

A large part of the Committee's focus over recent years has been the issue of the integrated catchment management and its implementation at the Basin scale.

The Committee played and important role in the development of the Integrated Catchment Management (ICM) Policy Statement 2001. By acknowledging that natural resource management is fundamentally a people-based activity, and by committing to a statement of values and principles that will guide the behaviour of the partners, the ICM Policy has the capacity to change awareness and behaviour across the Basin. This illustrates the growing appreciation of the need for genuine community engagement in policy development.

Outcomes Achieved

The Murray-Darling Basin Initiative has achieved significant outcomes:

  • reduced river salinity through the construction of jointly-funded salt interception schemes with some of the salinity benefits used to offset the impacts of land, water and management plans;
  • stabilisation of water extractions from the Basin's rivers through the Murray-Darling Basin Cap on water diversions;
  • allocation of water for high environmental value ecosystems and deliberate operation of the river to achieve environmental flows;
  • increased knowledge and awareness of declining resource condition and of management practices needed to address the causes;
  • increased understanding by Basin communities of the geography of the Basin and their place within it; and
  • establishment of a Human Dimension Program, one aim of which is to integrate social, institutional and biophysical sciences to improve the likelihood of adoption of best management practices for managing the Basin's natural resources and improve policy development for natural resources management.

The Murray-Darling Basin Cap

The Murray-Darling Basin Cap was introduced in 1997 to limit the amount of water that could be diverted for consumptive uses and to encourage the more efficient use of existing diversions.

It was recognised that further growth in water diversions would hasten the decline in river health, as well as to adversely affect water quality and to reduce the reliability of the water supply for existing water users.

Annual water diversion targets are set for each valley throughout the Murray-Darling Basin. The actual rate of diversion for a valley per annum is then compared to the annual water diversion target for that year, taking into account climate variables. If the diversion exceeds an agreed trigger, an Independent Audit Group is required to conduct a special audit of the valley. If the Audit determines that a valley has breached the Cap, the state must report to the Murray- Darling Basin Ministerial Council on the actions it intends to take in that valley to bring the diversions back in line with the Cap.

The Cap has not prevented redevelopment in the Basin. Together with reforms to property rights that have allowed trading of water separately from land, irrigators have purchased water for new developments.

The benefits that have been achieved by the Cap so far include:

  • stabilising access rights to existing users;
  • a greater emphasis on achieving water use efficiencies as a means to obtain water for further development;
  • a subsequent reduction in the percolation of groundwater with fewer consequent problems from waterlogging and soil salinisation;
  • a better framework for trading in water entitlements both within states and between individuals in different states;
  • less deterioration in water quality;
  • less deterioration in the health of natural ecosystems; and
  • activation of water trading.

Permanent Water Trading in the Murray-Darling Basin

Water trading seeks to improve productivity and promote the economic and environmental sustainability of the irrigation industry. Permanent water trading was introduced in Murray-Darling Basin in 1995. Since 1998, an interstate water trading trial has been conducted between New South Wales, Victoria and South Australia.

The benefits of water trading in the Murray- Darling Basin have been:

  • improved water use efficiency, especially in irrigation;
  • greater economic sustainability by encouraging water to move to its highest value use; and
  • enhanced resource and environmental sustainability.

Lessons Learned

Several lessons have been learnt since the Murray-Darling Basin Agreement began in 1985:

  • The Initiative has been successful in winning and maintaining community interest, involvement and support because of the participatory approach used with its Community Advisory Committee.
  • The strategies for action, programs and frameworks implemented under the Initiative have benefited from both intergovernmental (top-down) and bottom-up approaches to Integrated Water Resource Management.
  • Government policies in the States and Territory have been realigned according to the Initiative's strategies, while on-ground support and actions have been implemented over a very large area through the Murray-Darling 2001 funding program. This program, operated through the Federal Government's Natural Heritage Trust and in which State governments match Federal funds $ for $, financially supports local action programs developed within the framework of regional/catchment plans, using cost-sharing arrangements between community organisations, private sector organisations and governments. In this process, the challenge has been to specify who pays for what: how an equitable cost-sharing arrangement can be determined, implemented and maintained.
  • The Initiative has enabled the establishment of cross-border arrangements between the States to share water resources through the water trading scheme and increase water use efficiency. While further improvements are required, water trading has increased the economic value of water, with 75% of the water traded going into new irrigation developments using state-of-the-art water-use technology.
  • Resource condition outcomes are more likely to be achieved where formal targets are set and accountability for achieving them clearly established and agreed by governments.
  • Having legislative approval of the Agreement in each jurisdiction strengthens its effectiveness.
  • The sustainability of the Murray-Darling Basin Commission and its programs is still dependent on government funding, and will continue to be so. It is apparent that without central (Federal) government intervention in the first place, and ongoing Federal government support, this activity would not be sustained. Australia has benefited from a succession of Federal Governments who have supported the Commission since 1985.


The cross-border approach has been replicated elsewhere in Australia with the establishment of the Lake Eyre Basin Agreement (please refer to the LEB case study ).

The skills and approaches being developed in the Murray-Darling have been used to assist the Mekong River Commission, Vietnam, through exchange of experience and high-level staff interaction.

Principles and practices transferable

The most important aspects of the approach should be seen as principles and practices that can be replicated elsewhere. These include the use of:

  • an integrated approach;
  • Commonwealth-State-community partnerships;
  • a real sharing of power between participating jurisdictions;
  • an approach based on agreed values and operational principles;
  • using resource condition targets to help prioritise investment and effort;
  • a range of mitigation strategies, including market-based solutions;
  • a cap on water diversions;
  • a Human Dimension Program; and
  • the use of negotiation and legislative tools.

These principles and practices are transferable to other river basin organisations throughout the world.

Map of the Murray-Darling Basin, Australia

Figure 1: The Murray-Darling Basin, Australia