New method to calculate value of illegal water take

New method to calculate the value of illegally taken water

A new method for valuing illegally taken water has been developed based on sound economic principles.

The method is used by the Natural Resources Access Regulator (NRAR) to issue charges for illegal water take under section 60G of the Water Management Act 2000.

Charges can be up to 5 times the value of the water taken illegally. The method for calculating the value of water is set out in clause 20 of the Water Management (General) Regulation 2018.

A charge under section 60G of the Act offers a graduated and proportionate enforcement response between issuing a penalty notice and prosecution, which carries significant maximum penalties and a criminal conviction (maximum of $1.1 million and 2-year imprisonment for individuals, and $5.5 million for corporations).

The old method produced inconsistent results across water sources. It was based on trade prices, but it did not adequately account for circumstances where trade is limited.  The method therefore did not adequately reflect the value of illegally taken water, which limited NRAR’s ability to impose charges under section 60G that deterred illegal water take.

The department proposed a new method to calculate the value of illegally taken water for imposing charges under section 60G to better reflect the value received through illegal water take.