Report snapshot: Water management and regulation in NSW

Overview

This audit assessed the effectiveness of the Department of Climate Change, Energy, the Environment and Water (DCCEEW), the Natural Resources Access Regulator (NRAR) and WaterNSW in implementing compliance and enforcement measures for the sustainable and integrated management of non-urban water use in NSW. 

Key findings

There have been significant reforms to address deficiencies in water regulation

Reforms include the establishment of NRAR and the progressive implementation of non-urban water metering and licensing for floodplain harvesting.

The complexity of the reform agenda has posed challenges for effective regulation

The complexity of the reform agenda has reduced clarity about obligations for some water users. This has undermined efforts to promote voluntary compliance and confidence in the regulation of the sector.

DCCEEW has not assessed the outcomes of water regulation reforms 

DCCEEW conducted regulatory impact assessments of some reforms before they were implemented. However, it has not assessed the cumulative impact and the economic, social and environmental outcomes of the reforms.

Significant deficiencies in IT systems limit the oversight of outcomes and risks

Regulation of water management is dependent on IT systems maintained by WaterNSW, including some that were in use before it was established.

These systems were intended to manage water accounts, and were not for regulatory and enforcement purposes. The water agencies have identified significant data quality and access issues with these systems and have taken some steps to address them. 

While the agencies have developed a collaborative plan to address these IT issues, implementation of this plan is subject to governance approval and the availability of funding.

NRAR has developed a policy architecture with supporting technologies

NRAR has comprehensive regulatory policies and procedures, and it has developed capability and advanced operational technology to support its regulatory functions.

NRAR needs to improve how it measures and reports on its regulatory outcomes

The quality and governance of NRAR’s activity data is poor and the regulator lacks adequate performance measurement and reporting. This impacts its ability to demonstrate its effectiveness as a regulator and hinders its use of data as a valuable organisational asset.

Recommendations

The audit makes 4 recommendations. These are intended to ensure a better understanding of the cumulative impact of regulatory changes, resolve deficiencies with core IT systems necessary for effective regulation, and ensure that the regulator has an outcomes-focused approach to demonstrating its performance.

Further information

Please contact Renee O'Kane, Chief of Staff, on 9275 7347 or by email.