Chief executive's review

MDBA Chief Executive, Rhondda Dickson

MDBA Chief Executive, Rhondda Dickson

Coming into the role of Chief Executive in June 2011, I saw the end of what had been a very busy and challenging water year for the Murray–Darling Basin Authority (MDBA).

In 2010-11, widespread flooding in the Murray–Darling Basin well and truly broke the millennium drought (c. 1997 to c. 2009) that had gripped much of the eastern states of Australia for the previous decade. While floodwaters replenished dams and rivers and revitalised wetlands and floodplains, they also caused significant damage to property and assets, and adversely affected the progress of new and ongoing MDBA construction work. Among the delayed or suspended MDBA construction projects were navigable pass upgrades and/or fishways at locks 2, 4, 11 and 15 along the River Murray and the Chowilla Environmental Works and Measures Program project, which is unlikely to resume before January 2012, a 15-month delay.

The floods mobilised salt from the floodplains, with about 2,500,000 tonnes of salt estimated to have passed Morgan in South Australia in 2010-11, compared with about 210,000 tonnes the previous year. River Murray salt interception schemes diverted approximately 324,000 tonnes of salt from the River Murray and helped limit the flood-induced salt mobilisation.

River Murray at the mouth of Barmah Lake, november 2010

River Murray at the mouth of Barmah Lake, November 2010

We made significant progress in the development of the draft Basin Plan. On 8 October 2010, the Guide to the proposed Basin Plan was published and made available for public scrutiny and discussion. Authority members participated in engagement activities to support the Guide's release, with former Chair Michael Taylor attending many of the 33 community information sessions organised across the Basin by MDBA staff. Authority members also met with representatives of Basin state governments about their formal feedback on the Guide.

The Guide generated considerable public feedback. As a result, MDBA reviewed and widened our engagement and consultation activities, and addressed shortcomings in the Guide identified by Basin stakeholders, through further analysis and by commissioning new work. The release of the draft Basin Plan has been delayed until late 2011 to enable a more thorough consideration of matters raised by jurisdictions and the community.

It was also a year of comings and goings. In May 2011, Rob Freeman retired as Chief Executive of MDBA. During his time as Chief Executive, Rob helped the Murray–Darling Basin Commission and its staff transition into the Murray–Darling Basin Authority, and helped to create a strong organisation well placed to deal with the current and future challenges facing the Murray- Darling Basin.

Michael Taylor, the Chair of the Murray–Darling Basin Authority, resigned in December 2010 and Dr Diana Day, an Authority member, resigned in February 2011. Both Michael and Diana played important roles as formative members of the Authority. We welcomed the Hon Craig Knowles as the new Chair of the Authority. Bringing a wealth of experience from his time as a minister in the New South Wales Government from 1995 to 2005, Craig hit the ground running, undertaking a series of tours across the Basin, meeting with many stakeholders and starting an ongoing dialogue with Basin communities on water management and reform.

The Murray–Darling Basin Ministerial Council met twice during 2010-11. Its achievements included approving additions to the register of water recovered for the environment under The Living Murray program and approving the Schedule for Water Sharing and the Schedule to Account for South Australia's Storage Right. The Ministerial Council endorsed MDBA's work on Indigenous cultural values associated with rivers and wetlands, and proposed a framework to incorporate them into state water plans. The Ministerial Council also recommended deferring the date of enforcement for sustainable diversion limits under the Basin Plan to 2019; MDBA took up this recommendation.

The Ministerial Council also supported MDBA by approving our corporate plan for 2011-12 to 2014-15 and approving a final report on our funding strategy beyond 2010-11.

For more information about the Authority, Ministerial Council and related committees, please refer to Appendix A (p. 256).

Delivering water

The MDBA's River Murray Division is responsible for equitably managing, operating and sustaining River Murray assets to deliver states' shares of water and environmental outcomes in the river system.

The floods dramatically reversed our role from ensuring that water was available for essential water requirements to managing minor and moderate floods through Hume Reservoir and Yarrawonga Weir on a number of occasions, and forecasting the timing and size of flood peaks and recessions at sites downstream of these structures.

The MDBA's River Operations targeted a range of environmental outcomes, including delivery of environmental water, management of blackwater and weir-pool drawdowns. The flooding caused the first overbank watering of Barmah-Millewa Forest since 2005, and our release of 410 GL of environmental water — to prolong the duration of flooding in the forest by extending the recession of high flows rather than exaggerating the peak flows — resulted in one of the largest bird- breeding events there in 50 years.

Despite its many benefits, the flooding caused widespread and significant damage to property and also delayed new and ongoing work scheduled to be carried out by the Environmental Works and Measures Program. More information about this program and the issues it faced because of the floods is in Chapter 3, ‘Delivering water efficiently and equitably' (p. 123).

Water being released from Lake Mulwala through Yarrawonga Weir, March 2011

Water being released from Lake Mulwala through Yarrawonga Weir, March 2011

Until the floods arrived, Basin storage had been well below average for a number of years. Throughout 2010-11, total Basin government storage increased from 32% to 81% of capacity. Total MDBA active storage on 30 June 2011 was 7,056 GL, more than 3,771 GL higher than the previous year and over 1,500 GL above the long-term average for this time of year.

At Hume Reservoir, releases to meet downstream diversion requirements were low because of high inflows from downstream tributaries and rainfall across the irrigation areas. Low demand coupled with high inflows resulted in the reservoir spilling in October, November and December 2010 and again in February 2011.

The total annual flow across the South Australian border, including additional dilution flow and unregulated flow, was about 15,100 GL, the highest since 1975-76. The Lower Lakes returned to their full supply level of 0.75 m Australian height datum (for an explanation of AHD, please see the glossary included with this report) during October 2010. The first releases of water through the barrages from the Lower Lakes since 2006 began in September 2010. More than 11,000 GL of water is estimated to have been released to the Southern Ocean during 2010-11, resulting in the opening of the Murray Mouth and enabling salt export to the sea and improving fish passage. A further benefit was that dredging to keep the mouth open was no longer necessary and the dredging contract was terminated.

Capping water diversions

The MDBA manages the implementation of the Cap on water diversions for each river valley in the Murray–Darling Basin. The Cap was established in 1995 by the Murray–Darling Basin Ministerial Council to limit the growth in diversions from the Basin's rivers. This was seen as an essential first step in establishing management systems to achieve healthy rivers and sustainable consumptive uses.

Under the Basin Plan, the Cap will be replaced by sustainable diversion limits (SDLs) for surface water and groundwater.

The MDBA is responsible for a Cap compliance audit by the Independent Audit Group, and for preparing and publishing an annual water audit monitoring report using information provided by the Basin states. The Cap audit for 2009-10 was conducted in September 2010, before the floods, with the Independent Audit Group's report finding that diversions were within acceptable bounds in all Basin valleys where a Cap applies; this included the combined Barwon-Darling - Lower Darling valley that had a Cap breach continuation in 2009-10.

The Independent Audit Group's report on the annual Cap audit for 2009-10 was published and distributed in January 2011. The Water audit monitoring report 2009-10, which updates the Independent Audit Group's figures, was published and distributed in May 2011.

The report also found that diversions from rivers in the Basin in 2009-10 were the fourth lowest since 1983-84 because of the ongoing millennium drought and the possible onset of climate change.

Although part of the Cap, floodplain harvesting and some other diversions (e.g. farm dams) are not currently accounted for because we lack reliable methods to monitor them. However, MDBA has developed a way to estimate floodplain harvesting and other diversions using remote sensing derived from satellite imagery analysis, geographical information system techniques and some on-ground weather data measurements. Although this method needs further development for use in routine Cap compliance monitoring, its use means we will be able to provide reasonable and cost-effective estimates of floodplain harvesting and other currently unmonitored diversions.

Trading water

Interstate water trade in the southern-connected Murray–Darling Basin in 2010-11 differed markedly from water trading that took place during the millennium drought, when large volumes of water were traded.

Compared to the drought years, volumes of water traded in 2010-11 were significantly lower than those traded in previous years — 200 GL compared to 490 GL in 2009-10 and 593 GL in 2008-09. Wetter conditions throughout the second half of 2010-11 allowed most water entitlements to reach 100% allocation, which meant that net trades from New South Wales (100 GL), Victoria (45 GL) and South Australia (55 GL) were much lower.

During the year, and following advice from the Australian Competition and Consumer Commission, draft Basin Plan water trading rules were published in the Guide to the proposed Basin Plan: technical background (Part I, Vol. 2). The MDBA then consulted with Basin states on further refining these rules.

Once the draft Basin Plan becomes law, its water trading rules will create consistent water trading rules for all Basin water resources. These rules will enable tradeable water access rights to reach their most valued use, and will create efficient and effective water trading regimes by removing barriers to trade, specifying the terms and processes for trading water, and providing market information.

Draft Basin Plan

On 8 October 2010, MDBA published the Guide to the proposed Basin Plan. Volume 1 in this suite of publications outlined the basis of the draft Basin Plan; the technical detail was set out in parts I, II and III of Volume 2 of the Guide.

One of the key elements of the draft Basin Plan is the setting of new limits — sustainable diversion limits, or SDLs — on the amount of water used in the Basin. While feedback provided after the release of the Guide indicated a high level of acceptance of the need to ensure sustainable water use in the Basin, stakeholder views differed markedly on the amount of additional surface water needed for the environment and where this water should come from. In response, MDBA has been incorporating this feedback into the development of sustainable diversion limits and policy proposals for the implementation of the Basin Plan.

The MDBA's initial work in 2009 and early 2010 to determine a new balance for the Basin was based on the approach of identifying water needs as a subset of key environmental assets and key ecological functions sites in the Basin (known as hydrologic indicator sites). The water needs at these sites are considered a reasonable approximation of the environmental water requirements of the broader Basin environment.

Determining the environmental water requirements through this method is an iterative process involving assessment of the environmental water demands of different environmental objectives and targets at each site and the interaction between sites. In mid-2010, as the Guide was being finalised, modelling to estimate water needs based on the hydrologic indicator sites approach (based on assets and functions) was still underway. The method was described in the Guide, but a simpler estimation of environmental requirements based on an end-of system-flow analysis (also described in the Guide) was used to derive the proposed SDL numbers in the Guide — the range of 3,000 to 4,000 GL additional water requirements proposed in the Guide.

Since the Guide, MDBA has continued the work commenced before the Guide's publication to model water requirements based on the hydrologic indicator sites approach, and this method will be the one used to inform the proposed SDLs in the draft Basin Plan.

Sustainable diversion limits will be enforced through state water resource plans. In line with the Murray–Darling Basin Ministerial Council request, MDBA will propose aligning the SDL enforcement dates to 2019 across all Basin states. This is a significant change from the staggered enforcement set out originally in the Guide, and will ensure that all Basin communities have sufficient time to adjust to the new limits.

The public concern generated by the Guide led to the establishment of the House of Representatives Standing Committee on Regional Australia inquiry into the impact of the Murray–Darling Basin Plan in regional Australia (the Windsor inquiry). The inquiry report, Of drought and flooding rains, was released in June 2011; in it the committee criticised MDBA's consultation and engagement with Basin communities and stakeholders during the Guide's production and made a number of recommendations.

In the months following the Guide's release, MDBA sought feedback on the planning and policy framework described in the Guide. We provided extensive opportunities for feedback. Over 20,000 people attended our community information sessions and many others contributed by telephone, email and post.

The public concern generated by the Guide led to the establishment of the House of Representatives Standing Committee on Regional Australia inquiry into the impact of the Murray–Darling Basin Plan on regional Australia (the Windsor inquiry).

The public feedback, both informal and formal, has helped MDBA improve our engagement and communication with Basin stakeholders, and has opened up opportunities for them to participate in the draft plan's development.

To help people understand the science underpinning the Guide, MDBA launched an online searchable catalogue — the Basin Plan Knowledge and Information Directory. Available on our website, <www.mdba.gov.au>, BPKID makes it easier for people to access information used in assembling the draft Basin Plan. Currently the directory has over 1,500 entries, but it is continually being updated as new information becomes available, including information discovered through regular dialogue with Murray–Darling Basin stakeholders.

Basin communities also expressed concerns about the potential social and economic impacts of the draft Basin Plan. Recognising these concerns, MDBA commissioned seven further studies to inform understanding of the social and economic impacts of the Basin Plan. These studies included a major review, led by Environment and Behaviour Consultants and released in July 2011, of the Guide's impact on Basin communities. The MDBA also commissioned further and improved economic modelling of the impacts of the draft Basin Plan, a study to assess the cost and benefits of the plan, and a study of the impacts of drought on communities in the lower Murray region. A major new project assessing in detail the multiple benefits of the draft Basin Plan is currently underway.

Community information session held in narrandera, new south Wales on 9 november 2010

Community information session held in narrandera, New South Wales on 9 november 2010

Over 700 people attended this meeting, which provided stakeholders with information about the draft Basin Plan as well as allowing them to ask questions and receive answers on specific issues. Tea and coffee were supplied by the Narrandera Lions Club.

The MDBA has analysed and considered the findings of a large number of social and economic studies undertaken by other agencies and experts. The outcomes of MDBA's economic modelling have been considered together with the outcomes of hydrologic modelling to inform the finalisation of the draft Basin Plan, including the proposed SDLs.

In response to concerns about the adequacy of the draft Basin Plan in recognising cultural flows, MDBA also established the National Cultural Flows Planning and Research Committee. The initial role of the five-member committee is to develop a detailed cultural flows research proposal, which it will then oversee.

The living Murray

The MDBA's Natural Resource Management Division administers The Living Murray (TLM) program, which aims to restore the River Murray System to a healthy working state.

The initiative specifically aims to improve environmental outcomes at six icon sites chosen for their high ecological and cultural value to Aboriginal people and other communities. The six icon sites are Barmah-Millewa Forest; Gunbower-Koondrook-Perricoota Forest; Hattah Lakes; Chowilla Floodplain and Lindsay-Wallpolla Islands; the Lower Lakes, Coorong and Murray Mouth; and the River Murray Channel.

The millennium drought exacerbated the ongoing decline of the River Murray's ecological balance, and for a number of years we concentrated on recovering water for TLM. The drought- breaking floods of 2010-11 changed this focus to delivering water and continuing construction of water management structures along the length of the river. Inflows over summer 2010-11 were the highest on record, which increased the volume of water allocations in The Living Murray water portfolio, making a wide range of watering options available and increasing opportunities for significant environmental benefits.

Throughout 2010-11, TLM continued to monitor the condition of fish, birds and vegetation at the icon sites, enabling us to provide consistent reports on the health of the sites and continue working on long-term ecological objectives for these sites.

Significant progress continues to be made in meeting TLM's water recovery goals, with 18 water recovery measures completed or implemented and a total of 479 GL long- term Cap equivalent on the environmental water register.

Our monitoring projects at icon sites and in the River Murray System found that widespread flooding in late 2010 and early 2011 has been good news for the environment, enabling species to recover from the effects of the drought.

In 2010-11, we began a series of intervention monitoring projects to help us understand links between TLM management intervention — such as environmental watering — and ecological responses. Information from these projects will enable us to refine and improve future watering and management action, maximising TLM environmental benefits. Intervention monitoring projects include monitoring the freshwater turtle population in Barmah-Millewa Forest to provide a scientific framework for their culturally led management, and a series of projects at the Chowilla icon site to provide information about risks associated with the operation of the Chowilla Environmental Regulator and to assess progress towards achieving ecological objectives for the site. Throughout 2010-11, TLM continued to monitor the condition of fish, birds and vegetation at the icon sites, enabling us to provide consistent reports on the health of the sites and continue working on long-term ecological objectives for these sites.

Intermediate egrets (Egretta intermedia) at their nest at Picnic Point, Barmah-Millewa Forest, 17 December 2010

Intermediate egrets (Egretta intermedia) at their nest at Picnic Point, Barmah-Millewa Forest, 17 December 2010

The intermediate egret (also known as the median egret or the yellow-billed egret) is similar to the great egret, but is smaller and has a more rounded head; its neck is about the same length as its body.

Blackwater in the River Murray

The high spring and summer inflows of 2010-11 combined with carefully planned environmental water delivered during the gaps between flood peaks to maintain river levels have been critically important for many species recovering from the recent drought in the Murray–Darling Basin. However, these unprecedented inflows were large enough to cause a simultaneous blackwater event in the River Murray and in the Goulburn-Broken, Edward-Wakool, Murrumbidgee and Loddon rivers.

Blackwater events are natural phenomena that occur when floodwaters flush organic matter (e.g. leaves) from floodplains into the river system — the tannins and other compounds released during the breakdown of this organic material discolour the river water. While such events have positive environmental impacts because they put nutrients back into river systems that promote the growth of many aquatic organisms, river water can become very low in dissolved oxygen, which may harm aquatic plants and animals.

To counter this risk during the 2010-11 blackwater event, MDBA and New South Wales, Victorian and South Australian agencies implemented actions that targeted specific flow rates (at times using environmental water) in the River Murray and its tributaries, which helped dilute blackwater as it returned to the river from the floodplains. Privately owned Murray Irrigation Limited infrastructure was used to divert highly oxygenated water around the Barmah-Millewa Forest into the Edward-Wakool system where it provided localised refuge areas with higher dissolved oxygen levels.

The MDBA also coordinated the monitoring and reporting of this blackwater event, with preliminary findings indicating that overall benefits of the flooding to the river ecosystem will outweigh adverse effects such as fish kills.

Checking river health

The MDBA monitors the long-term ecological health of the Murray–Darling Basin's 23 river valleys through the Sustainable Rivers Audit. The program uses indicators from five environmental themes — fish, macroinvertebrates, hydrology, vegetation and physical form.

An independent panel of eminent ecologists prepares its assessment every three years — its first report, the Sustainable Rivers Audit-SRA report 1: A report on the ecological health of rivers in the Murray–Darling Basin 2004-2007, was published in 2008. During 2010-11, significant work was undertaken for the analysis and preparation of the next report. Complexity of the analysis has now required postponing delivery of this report until late 2011.

During 2010-11, MDBA also continued its long-term data collection for fish and macroinvertebrates. Conditions of the recent wet/floods phase were captured and are likely to continue in 2011-12 sampling. This will be reported in the next three-yearly report, due in 2014.

Acid sulfate soil material is likely to still be present in many of these wetlands and the underlying causes of acid sulfate soil formation in the first place have not changed, which means that the ongoing acid sulfate soil risk will continue to exist.

During the year we completed the acid sulfate soils risk assessment project, which has substantially increased our knowledge of where acid sulfate soils occur throughout the Basin and the hazards and risks associated with these soil materials. Over 19,000 Basin wetlands were assessed, including 14 listed under the Convention on Wetlands of International Importance (the Ramsar Convention). The project summary report, Acid sulfate soils in the Murray–Darling Basin, was released by the Murray- Darling Basin Ministerial Council in May 2011. Among other things, it found that wetlands affected by acid sulfate soils are more widespread than initially understood and that their development is linked to changes in hydrology, particularly where high water levels are maintained in ephemeral systems for unnaturally long times, which reduces the frequency of drying and flushing phases.

While many of the affected wetlands were re-flooded during the extensive floods of 2010-11, the impacts on water quality through re-flooding of acid sulfate soils were diluted by the size of the floods. Acid sulfate soil material is likely to still be present in many of these wetlands and the underlying causes of acid sulfate soil formation in the first place have not changed, which means that the ongoing acid sulfate soil risk will continue to exist.

Identifying risks to water resources

Throughout 2010-11, we made a substantial effort to improve our understanding of risks to the condition and availability of the Murray–Darling Basin's water resources and the biodiversity and communities that depend on them.

While human activities (such as interception activities) affect the availability and condition of water, other major risks include the effects of climate change, changes to land use and limitations in the state of the knowledge that forms the basis of estimates about Basin water resources. Our risk analysis activities throughout 2010-11 included 24 research projects assessing current and potential risks to Basin water resources; these projects received funding from the Basin states.

We also carried out 12 projects focusing on climate change (e.g. climate patterns and causal processes, and atmospheric and land surface dynamics) and, with the assistance of an expert panel, identified another 12 projects targeted at other priority risks to natural resources in the Murray–Darling Basin (e.g. climate change and variability, adaptive management capacity and impacts on water quality in the Basin arising from climate change).

Understanding drought and climate change

Our understanding of Australia's climate variability and the effects of possible climate change is critical to determining how we should use Basin water resources in the future. The ending of the millennium drought and the onset of widespread flooding throughout the Basin has temporarily distracted community attention from the predictions of increased drought from climate change. However, MDBA has continued to focus on the effects of climate change and how to deal with them because of the significance of the future risk to Basin water resources.

We are preparing an adaptive management framework for the draft Basin Plan that will allow us to identify and manage the impact of climate change on Basin communities and the environment. The purchase of entitlements for environmental watering under the Australian Government's ‘bridging-the-gap' commitment means that the environment will have access to water under lower inflow conditions without affecting consumptive water user entitlements. Changes in water availability because of climate change will be shared by consumptive users and the environment through standard water allocation processes, consistent with the National Water Initiative agreement.

Fishway on the southern bank of torrumbarry Weir, River Murray, March 2011

Fishway on the southern bank of torrumbarry Weir, River Murray, March 2011

Helping native fish

During 2010-11, MDBA continued its work on the Sea-to-Hume fishway program, which is re- establishing opportunities for fish migrations to over 2,000 km of the River Murray by installing fishways. This program allows fish passage for the majority of species in a migrating fish community rather than for only one or two species of economic or social significance.

During the year we continued work on how to manage alien fish species in the Basin, to determine how their proliferation might affect native fish species, particularly if the effects of climate change are fed into the equation.

We began developing the Native Fish Strategy Action Plan for 2011-21 in late 2010, which identifies high-priority activities for the next 10 years.

We also funded a collaborative project to interview and collect information from members of the Basin's Indigenous communities, recreational fishers and commercial fishers across the Basin — people who hold a wealth of knowledge about the local, historical and cultural changes to native fish communities in the Basin. We hope to tap into their collective knowledge to better understand how fish relate to the riverine environment and how changes to these environments have affected the status of native fisheries.

Other MDBA activity during the year included Native Fish Awareness Week, held in November 2010. We used a Basin-wide approach, with every jurisdiction hosting activities ranging from tree- planting to fishing competitions, and from school-based education days to book launches.

Historic Hampden Bridge over the Murrumbidgee River, Wagga Wagga, new south Wales, 25 March 2011

Historic Hampden Bridge over the Murrumbidgee River, Wagga Wagga, new south Wales, 25 March 2011

Continuously improving performance

During 2010-11, we continued to look for opportunities to improve and streamline our internal operating arrangements and performance. This resulted in ongoing revision of internal policies and procedures to improve how we do business across corporate areas such as finance, human resources, governance and records management.

We also focused on strengthening our workplace, which saw us implement our first Strategic Workforce Plan and our Workforce Diversity Program, as well as negotiate a new enterprise agreement.

The MDBA's strength in corporate governance was recognised during 2010-11 when we received two awards — the ‘Highly commended — small to medium agency' award in the 2010 Comcover awards for excellence in enterprise risk management, and a silver Australasian Reporting Award for our 2009-10 annual report.

As well as these awards, an independent occupational health and safety audit showed our very high compliance with occupational health and safety requirements.

Looking forward to 2011-12

The coming year will again be a busy one for MDBA. The draft Basin Plan will be released late in 2011 and will be followed by a 20-week consultation period. During this time, we will try to reach as many Basin stakeholders as possible so that we can to explain what is proposed in the draft plan and hear community ideas and views. We will then incorporate this feedback on the draft Basin Plan into a revised plan that will be presented to the Murray–Darling Basin Ministerial Council for consideration, and then to the Commonwealth Minister for Water (the Minister for Sustainability, Environment, Water, Population and Communities) for adoption before it is eventually tabled in the Australian Parliament.

With wet catchments and full dams, we will once again be monitoring inflows into the catchments and preparing to respond to possible flooding.

Since becoming Chief Executive, I have become aware of the very broad scope of MDBA's business and have been impressed by many of its achievements over the past year. I am certain that in the coming year MDBA will build on its successes of the past year by once again meeting the challenges of managing the Murray–Darling Basin's water resources in the national interest.

Rhondda Dickson
Chief Executive
Murray–Darling Basin Authority

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