Why is compliance and enforcement important?

Water is a precious and sometimes limited resource. It needs to be managed fairly for all water users including farmers, households, communities and the environment.

Effective and strong compliance facilitates fair access to water. It supports community confidence in the water entitlement framework and water market as people know that everyone is held to the same rules.  It also deters people from illegally taking and using water. Water theft undermines the health of our environment, which threatens communities and our economy.

Strong culture of compliance in Victoria

Victoria is committed to maintaining its strong compliance record to maintain the integrity of the water market and to protect the environment.

In August 2019, Victoria passed the Water and Catchments Legislative Amendment Act 2019 (Amendment Act) that strengthens penalties and enforcement measures and makes it easier to prosecute offences. The Amendment Act has:

  • increased the maximum fine for intentional water theft and related offences if they cause substantial harm, to $990,000 for companies and $198,000 for individuals,
  • allowed for the suspension or cancellation of licences for taking water and works, and
  • enabled water corporations to issue penalty infringement notices for less serious offences.

With tougher penalties and new enforcement measures, the Amendment Act makes it clear offences such as misuse of water or water theft will be addressed seriously.

The Amendment Act came into effect on 9 October 2019.

Role of water corporations in maintaining compliance

Water corporations are responsible for the compliance and enforcement of the rules and legislative requirements for the take and use of water and construction of works on a waterway.

Water corporations are expected to have compliance strategies that demonstrate how they will meet their obligations to effectively manage and prioritise compliance risks and enforce the Water Act 1989.

Principles for good compliance strategies

The Department of Environment, Land, Water and Planning has guidelines for water corporations to establish effective compliance strategies. The Non-urban Water Compliance and Enforcement Guidelines for Water Compliance set out five principles for maintaining strong compliance in Victoria.

Having a risk-based compliance strategy means that resources within a water corporation are used more efficiently by focussing more on areas and entities where risks of compliance breaches are the greatest.

This does not mean that areas assessed as low risks are not monitored – it means that a water corporation’s approach to monitoring this risk and taking enforcement actions against breaches may differ from areas assessed as high risks.

A responsive compliance system means that water corporations adopt a more proactive approach to compliance by focussing more resources on encouraging and assisting compliance. This can be achieved by providing water users with the information and tools needed to comply with the Water Act 1989.

A responsive compliance system also means that water corporations can take tough enforcement actions against breaches of the law such as issuing warning letters, penalty infringement notices, cancel or suspend licence or prosecution, depending on the severity of the breach.

Transparency and accountability are essential elements of successful compliance and generally considered the two main pillars of good corporate governance. They reinforce public confidence in the legitimacy and fairness of water sharing.

Transparency means that a water corporation’s compliance and enforcement activities can be clearly seen by the public.

Transparency and accountability are essential elements of successful compliance and generally considered the two main pillars of good corporate governance. They reinforce public confidence in the legitimacy and fairness of water sharing.

Accountability means that there is a clear assignment within water corporations of who is responsible for making decisions on compliance and enforcement.

Consistency in compliance and enforcement practices across Victoria means that everyone is held to the same rules across different water corporation areas. This will help maintain fair access to water.

Download the Non-urban Water Compliance and Enforcement Guidelines for Water Compliance (PDF, 2.0 MB).

Safeguarding against water theft

Water corporations have several tools that help monitor compliance.

Non-urban water metering plays a vital role in enabling compliance with the Water Act 1989 as it allows water users and water corporations to accurately measure how much water is taken and water corporations to account for the distribution and use of water.  

Over the past 20 years, Victoria invested heavily in metering by installing thousands of new meters and implementing Victoria’s non-urban water metering policy.

Victoria now has the largest fleet of modern meters in Australia. As at 30 June 2019, there are approximately 57,000 meters state-wide, approximately 30,000 of these meters have telemetry that can provide data on water use in real-time or at least daily to water corporations and to water users. This enables water users to better monitor their own usage and stay within the limits of their water shares or licences. Telemetry on meters also enable water corporations to prevent and detect water theft quickly.

Meters are owned and maintained by the water corporations. Water corporation officers read meters regularly to check that no one is using more water than their water share or licence allows.

Many irrigation systems today also have automated control systems. These systems provide water corporations with accurate information about water deliveries and losses. It also prevents people from ordering more water than they are allowed.

Victoria's water resources are managed under an entitlement framework. Water shares and licences are entitlements issued to individuals by water corporations.

Bulk entitlements are issued to water corporations. These entitlements set obligations on water corporations to ensure that water is distributed fairly and equitably.

Transparency and accountability are essential elements of a successful compliance culture. They build public confidence in both the legitimacy and fairness of water sharing.

Victoria publishes a broad range of information about its water resources. A comprehensive list of publicly available sources of information is available.

Victorian Water Register and Water Accounts

Victoria’s Water Register is a key source of information for water users. The water register allows water users to track their take of water against their entitlements, allowing for better self-regulation and compliance. The water register also helps water users verify that trades comply with market rules. These rules are reviewed regularly to make trading easier.

Another key source of information is the Victorian Water Accounts. These water accounts are annual summaries of the availability of water, specifically rainfall, streamflow and storage levels, and tracks the use of this water to its end use. Other market information are also available from the Victorian Water Register.

Community understanding is critical to a community culture of compliance. This requires a continuing program of awareness-raising campaigns and interactive education opportunities.

Many water corporations have communications strategies to help water users understand their rights and obligations, highlight what water users can do to maintain compliance and promote the tools (e.g. apps to check water use, storage levels and allocations) available to help them achieve this.

Other education tools could include regular committee meetings with customers to discuss key issues and solutions and publishing newsletters and media releases on compliance and enforcement activities that reassures people that the compliance system is doing its job. Publishing enforcement decisions also shows others the consequences of committing an offence which may sometimes be a more effective deterrent than financial penalties.

Water corporations can take enforcement actions with warning letters, notices of contraventions, restricting water supply or delivery, penalty infringement notices, suspension or cancellation of a licence, and prosecutions.

The type of enforcement action taken will depend on the severity of the offence and risk profile of the water user (e.g. repeat offender versus first-time offender, cooperative versus uncooperative). The compliance pyramid illustrates how enforcement actions can be escalated.

Graphic showing the escalation of enforcement actions. At the bottom of a pyramid sits advisory letters and education, monitoring and auditing programs that encourage and assist compliance. Higher up the pyramid are restrictions, notices and warning letters aimed at directing compliance. At the top of the pyramid sits revocation or suspension of licences and shares, prosecution, fines and imprisonment, and penalty infringement notices that sit under the highest level of enforcement tool.

Consistent application of these tools foster public confidence that breaches in the law are taken seriously and deters other water users from doing the same.

Enforcement actions undertaken by water corporations are reported to the Department every year.

Strengthening compliance and enforcement in Victoria

In the Government’s water plan Water for Victoria, Victoria committed to modernising its compliance regime. Victoria strives to maintain high standards in water compliance by updating its policies, systems and legislation to be more effective in the face of changes in climate, reduced water availability and increased demand for water.

Key actions the Government has taken are:

  1. Passed the Water and Catchment Legislation Amendment Act 2019
  2. Committed to the Murray Darling Basin Compliance Compact and implemented Victoria’s actions
  3. Introduced regulations for the use of water infringement offences
  4. Commissioned an independent review of the Department of Environment Land Water and Planning and water corporations with non-urban customers compliance and enforcement frameworks by Des Pearson, Victoria’s former Auditor-General.

Independent review of compliance and enforcement

In May 2020 the Minister for Water appointed Mr Des Pearson, Victoria’s former Auditor-General to review the compliance and enforcement frameworks of DELWP and water corporations with non-urban customers, to ensure they are aligned to the Government’s zero tolerance approach to unauthorised take.

The review considered policies, procedures and frameworks established to govern and manage compliance and enforcement including monitoring and reporting for early identification of risks.

The review found that rates of unauthorised take are not excessive and the key elements of a robust compliance and enforcement framework are in place. The review has highlighted benefits of and opportunities to better align approaches and practices across water corporations as compliance and enforcement strategies are fully operationalised. It also found DELWP could enhance its oversight of water corporation compliance functions by increasing monitoring and reporting.

DELWP will work with Victorian water corporations to ensure the recommendations are fully implemented effectively and uniformly across the state by mid-2021.

See the Pearson report. (PDF, 473.2 KB)

Page last updated: 19/10/20