Water theft in Australia’s Murray-Darling Basin: Offender motivations and criminal justice outcomes

Abstract

Fresh water is the lifeblood of all human and non-human life. In recent years, it has become a commodity of substantial value, not only in regions of drought but also for high yielding commercial enterprises that require substantial volumes of fresh water for maximum profit. As such, this precious natural resource has become the target of criminal enterprises that seek to exploit fresh water resources for economic gain. This article examines the deleterious social, economic, and environmental impacts of water theft with a focus on offending and offender motivation. It draws on original fieldwork and primary court data to understand the rationalities of perpetrators and to assess the processes and sanctions of the regulatory and criminal justice systems responding to these transgressions. In doing so, the article describes what is known about the offenders and penalties for water theft in south-eastern Australia's Murray-Darling Basin, the nation's largest and most regulated and connected fresh water river system.

Introduction

The Murray-Darling Basin Authority (“MDBA”) was established under the Water Act 2007 (Cth), following 10 years of the devastating “Millennium Drought” (which ultimately lasted from 1997 to 2009), in recognition of the lack of cohesive management between the Basin States (Queensland, New South Wales, South Australia, the Australian Capital Territory, and Victoria), the severity of water insecurity, and the spectre of climate change in Australia. In 2012, the MDBA commissioned the Murray-Darling Basin Plan (“MDBP”) to manage the Murray-Darling Basin (“MDB” or “the Basin”) as a connected system and improve the deteriorating ecological health of the MDB, while continuing to support and promote farming and agricultural industries. The MDBP remains the largest environmental restoration plan in Australian history and its implementation is estimated to cost AUD13 billion in taxpayer funds over the period 2012‒2024 (Department for Environment and Water, 2019; Leblanc et al., 2012).

In the past decade, however, little has changed with respect to improvements in environmental health and recovery in the MDB. A recent review of the MDBP found that out of 27 indicators (which include environmental, economic, indigenous, social, and compliance targets) that provide insight into the state of the MDBP since its implementation, only 7 (26%) of the targets were achieved with no overall improvement in the health of the MDB (Colloff et al., 2024). Even though it has been over 10 years since the MDBP was signed, Basin water continues to be over-extracted and over-allocated for irrigation. Correspondingly, the volumes for environmental flows have substantially declined, and the ecological condition of rivers and wetlands is poor and deteriorating (Pittock et al., 2023) and is worse than they were when the MDBP was promulgated to bring the river system back to health in 2012. In January 2019, for example, millions of native fish suffocated and died within stratified algae-infested pools of water due to drought and the upstream over-extraction of water from the Darling River (Australian Academy of Sciences, 2019). Less than 5 years later, in February 2023, local water users and communities experienced another mass fish kill along the same river system, but this time, it was due to hypoxic waters from increased flooding and possible mismanagement of blackwater entering the system (CSIRO, 2023). Acute events such as these fish kills and the media they attract, however, simply serve to underscore the ongoing and chronic loss of access and amenity, harms to ecosystem health, and loss of flora and fauna within the Basin year after year.

Criminological literature to date has focussed on water-related crime, including water theft (Baird et al., 2021; Brisman et al., 2018; Eman, 2023), and this article seeks to expand upon, and open new debates, in water governance and compliance. It does so through a critical examination of water theft in the MDB. While there are numerous threats and harms to the health of the river systems in the MDB, including climate change and ineffective water governance (at least in terms of the stated aims of the MDBP), one of the most significant yet under-researched sources of harm is water theft (Pittock et al., 2023). This article provides an overview of what we know about water theft in the MDB, including how it is defined in law, its history, and the social construction of water theft as an environmental harm. We consider the nature of water rights as these link to water entitlements and examine pertinent legislation and penalties for water theft across the Basin States. We explore recent high-profile cases of water theft involving small farmers, corporate irrigators, and mining companies in the MDB in order to begin to develop a typology of offending and to better understand the dynamics of the prosecution, conviction, and sanctioning of water theft offenders.

Water theft

Water theft refers to the theft or illegal acquisition of surface and/or groundwater from public and private properties. Other harms to fresh water that could be included in the description of water theft include the historical dispossession of fresh water from First Nations’ Australians under settler systems of water administration; the regulatory capture of water bureaucrats, officials, and policy for corporate benefit; the intentional or unintentional pollution or despoilation of water systems; and the violation of the rights of rivers in First Law (see Grafton & Williams, 2020; Hartwig et al., 2022; RiverOfLife et al., 2020). However, for present purposes, discussion here focuses solely on the definition of water theft as set out in Australian legislation. In this legal definition, water theft involves activities such as pumping, impoundment, diversion of natural water courses, metre tampering, and illegal tapping, without a license or in contravention of license conditions. Water theft causes changes to water flows, and besides breaking of the law, it potentially reduces access to neighbouring farms and ecosystems (Barclay & Bartel, 2015; Segato et al., 2017).

Conceptualising unauthorised acquisition of water as theft requires that it be first understood to belong to someone or something or for rights to be held in it. It requires that water be considered as something that can be owned. Water theft is not a new phenomenon, and neither is the concept of water rights or ownership. Water theft as a concept dates back almost 3,000 years and is closely linked to the creation of private rights of access and associated regulatory and legal systems developed as part of water management practices in Mesopotamian and Greco-Roman antiquity (Baird & Walters, 2020). For example, in the Republican period (509 BCE to 27 BCE), the Roman state monopolised civic aqueducts by granting servitudes (rights of access) to the elite classes as a mark of honour or in exchange for a fee and prioritised fresh water for the cities over more remote and rural locations (Mays, 2010). The prohibition of the withdrawal of public water for field irrigation was established under Roman water law in 116 BCE, and fines were issued to individuals who fraudulently diverted water. This Republican statute reflected tensions between urban and rural water supply and branded any water user outside of the city without the proper rights of access as a perpetrator of water theft (Bannon, 2017).

Water theft is a common occurrence today, particularly in regions experiencing water stress and insecurity and in those where administrative arrangements for water distribution are inadequate. Global heating is exacerbating the conditions, such as drought and desertification, that provide grounding for increased levels of conflict over water, including water theft (Baird et al., 2021). Aside from legal definitions of water theft, however, there are different understandings of and responses to the illegal taking of water around the world and even in different jurisdictions in Australia. For instance, taking of water from a river is generally not a crime in its own right. The status of the activity is defined by whether the activity is subject to legal restrictions or licensing provisions. This means that it is not theft unless it has been expressly prohibited and/or involves a breach of license conditions.

How the taking of water is perceived and conceived is not only subject to legal definition. It is also a social process. The perceived seriousness of the harm, for example, will vary according to stakeholder, the location of the phenomenon, and nature of who or what is victimised by the taking of water and the context of the theft. This is reflected in studies of water theft that indicate that those further removed from the river headwaters and those impacted more profoundly by water taking upstream are also those most likely to conceptualise water theft as a “crime” since they are most adversely affected (Clifford & White, 2021). Harm such as the unauthorised taking of water is also perceived differently depending on immediate circumstances (e.g., drought conditions). For example, White (2019) argues that for small family farmers experiencing drought conditions and agricultural hardship in Australia, the taking of water illegally may be considered a “folk crime”, something that everyone does “legitimately”, given the extenuating circumstances (White, 2019).

Should those who steal water as a last resort to save a heretofore productive family farm be understood (and treated) differently from corporate irrigators stealing to expand an already extensive monoculture of cotton to increase profit for shareholders? What is the evidence that the courts take context and circumstances into consideration and not just the facts of the theft itself? Given potential differences in both acts and responses, the harms associated with illegal water take might be construed three ways: (1) breaking of rules, where the response might simply be a “warning”; (2) illegal behaviour, for example, breaching of license conditions, for which the response might be an administrative fine or civil order to desist from particular actions; or (3) criminal offence, involving breach of criminal law and therefore warranting penalties such as fines and even imprisonment (White, 2019).

How harm is defined, measured, and presented, and by whom and why, has a great bearing on water regulation and law enforcement generally. How the state (as manifest in different domestic jurisdictions) deals with water theft as transgression is the focus of this paper. This, in turn, rests upon specific legislative parameters that, in the case of Australia, are tied to water rights as determined by a water market.

Method

In this article, we identified recent convictions for water theft in each Basin State and from online university sources (Lexis Advance) in which publicly available data was easily accessible. All publicly reported water theft offences were followed up through obtaining court submissions and all judicial rulings (via purchased court transcripts and recordings of hearings). On several occasions, we discovered that media reporting of water theft cases was incorrect (place, penalty, and offence category); hence, the use of official court data proved essential for the accuracy of this research.

The selection of the cases reported in this article is representative of the different kinds of water theft throughout the MDB and is based on a close reading of the relevant legislation as it applies in each Basin State. A number of observations are made about how “criminality” involving water theft is construed depending on location in the MDB, perceptions of victimisation, and the status of the actors involved. This research is funded by an Australian Research Council Discovery Project (DP230100630).

Rights in the water market

Water markets first emerged in Australia throughout the 20th century which saw greater economic investment in water infrastructure and irrigation practices. Water infrastructure, such as dams, channels, barriers, and weirs, was constructed along inland waterways to secure a greater supply of water for irrigation. In the 1980s, the emergence of water markets allowed water entitlements to be traded through a network of irrigation districts. Privatised networks of water trading between individual water users followed toward the end of the millennium. Scholars describe this period as the expansionary phase of water policy management and governance in the MDB (Grafton & Wheeler, 2018; Leblanc et al., 2012; Quiggin, 2011; Wheeler et al., 2014). During this expansionary phase, an awareness of over-allocation emerged in that demand and competition for water were increasing and diversions for irrigation were exceeding the limits and capacity of the MDB to sustain both agricultural production and the ecological health of its rivers.

Water markets are clearly fundamental components in achieving the MDBP objectives. Fresh water is traded and disseminated as an economic resource through several levels of MDB water governance. For example, resource management, trade arrangements, and system operations may be managed at three levels: at a catchment or resource level, through water resource plans; at a state level, through state water management law and policies; or at a regional or Basin level, under the Water Act 2007 MDBP, the Murray–Darling Basin Agreement, schedules and protocols, and/or the Border Rivers arrangements (Australian Competition and Consumer Commission [ACCC], 2021, p. 396).

Whatever water remains after these planned distributions is used for stock and domestic purposes and recovered for environmental flows. Irrigators and corporations that operate within the broadacre, horticultural, and vinicultural sectors and dairy industries invest in the water markets to maximise irrigation efficiency and yield greater financial returns out of their agricultural water usage (Connell, 2011; Grafton & Wheeler, 2018; Wheeler et al., 2014).

Today, there are two kinds of water rights or licenses traded across the Basin States. First, water entitlements are issued to irrigators as a nominal percentage or share in the water resource plan of a designated water catchment. The greater the share from a water entitlement, the greater the access to water (Grafton et al., 2016; Grafton & Wheeler, 2018; Wheeler et al., 2014). Water entitlements are permanent and are mainly sold and traded between corporate irrigators to facilitate large changes and movements in the location of agricultural industries between water catchments and to secure a longer tenure over access to water (Grafton et al., 2016; Turral et al., 2005; Wheeler et al., 2014).

Second, water allocations are physical volumes of water made available to irrigators as a percentage of their water entitlements. The volume of water allocation varies between locations and depends on the available water storages, seasonal variability of inland flows, water prices, trading rules, and the number of entitlement holders (ACCC, 2021). Water allocations are temporary and can be sold or exchanged in the form of a lease for a short period of time, without changing water entitlement ownership. Temporary trades provide irrigators with greater short-term flexibility over their water usage decisions, and they are mainly used to fulfil minor irrigation requirements and rectify underestimated or overestimated businesses losses. The percentage of water allocated governs the proportion of water entitlements that can be accessed which means that an irrigator cannot access or receive all their entitlement if their allocation is small (Grafton & Wheeler, 2018; Turral et al., 2005; Wheeler et al., 2014).

The Basin water markets allow irrigators to trade and transfer water rights across catchments to supplement their water supply in the short and long term, earn an income from water trading, and expand crop production (ACCC, 2021). In the MDB, it has been widely reported according to the ACCC (2021) that the tentative and fragmented market structure between the Basin States, combined with a lack of regulatory oversight for trading conduct, creates opportunities for market manipulation and illegal activities. In particular, sophisticated and professional water intermediaries such as brokers, real estate companies, and exchange platforms currently operate in a mostly unregulated environment and maintain the knowledge and resources (at least in principle) to exploit market flaws by, for example, concealing and manipulating water prices and insider trading. In 2022, the ACCC

identified that while there was no evidence of actual misconduct, there is a strong perception that market manipulation has occurred. The opportunity for this conduct to occur does, however, exist and there is not the data and systems in place that allow any such evidence to be available to the regulators. (Quinlivan, 2023, p. 34)

In September 2022, the Department of Climate Change, Energy, the Environment and Water proposed a series of legislative recommendations for water market reform. These recommendations included the Commonwealth government enacting legislation to prohibit market manipulation and insider trading and improve transparency and reporting standards over pricing information for tradeable water rights, as well as implementing a mandatory code of conduct for water market intermediaries with significant penalties up to AUD130,000 for non-compliance (Quinlivan, 2023).

Penalties and offenders

In Australia, the offence of water theft, whether by unlawful diversion or by the contravention of license conditions, is punishable by criminal penalties. However, each Basin State is responsible for managing prosecutions for water theft and other acts of non-compliance within its own jurisdiction and the approaches to penalties, and the legislative frameworks that reinforce those penalties vary significantly across the MDB (Greiner et al., 2016; Loch et al., 2024, p. 383). These differences are highlighted between each Basin State and Territory below.

Further details of how water laws are administered and penalised across different jurisdictions are provided below, as alongside highlights of recent cases where offenders have been prosecuted for water theft.

New South Wales

In New South Wales (NSW), fresh water is governed and managed in accordance with the Water Management Act 2000. The Natural Resource Access Regulator (NRAR), as the state's statutory water regulator, is responsible for the compliance and enforcement of water licenses and the prevention of illegal take across NSW. NRAR (2024) uses a variety of compliance and enforcement tools, such as on-site inspections and remote sensing technologies (satellite imagery and drones), in its detection and prosecution of offending. Penalties are stipulated under Section 60A of the Water Management Act 2000 and differentiate individual and corporate offenders. Under this legislation, the maximum penalty for taking water without an access license is AUD1,100,000 or 2 years in prison for an individual and AUD5,005,000 for a corporation (see Loch et al., 2024). A person who constructs or uses a water supply work and who does not hold a water supply approval for that work is also guilty of an offence under Section 91B of the Water Management Act 2000. Furthermore, under section 60G of the Water Management Act 2000, the relevant minister for water can impose unique penalties for water theft by charging or debiting an offender five times the market value of the water taken from their water account (Loch et al., 2024).

Despite significant penalties, there has been a long and problematic history of water theft in NSW, which notably gained public attention with the release in July 2017 of the Australian Broadcast Corporation's (ABC) Four Corners (2017) documentary, Pumped. The ABC documentary placed the issue of water theft in the MDB squarely on the national agenda. It documented a range of improper practices and systematic non-compliance with NSW water laws pertaining to the MDB. The programme specifically alleged that irrigators had pumped fresh water during unauthorised periods or in large quantities in excess of their licenses and that fresh water bought with taxpayer funds and allocated for environmental purposes was being illegally diverted. The ABC's investigative journalists provided evidence that the installation of illegal infrastructure, meter tampering, and failure to record daily volumes of pumped water were common practice in NSW. The ABC also exposed senior water management officials sharing access to confidential information about the state's involvement in the Basin Plan with irrigation lobbyists (ABC Four Corners, 2017; Baird et al., 2021; NSW Ombudsman). Many of the allegations made by ABC Four Corners involved irrigators in the cotton industry situated along and upstream of the Barwon-Darling River in the Northern MDB, in NSW. An independent investigation into NSW water management expressed concern over the prosecutorial action following the airing of the Four Corners programme and ongoing “unworkable” interagency environment proposed in reforms to enhance compliance (Matthews, 2017).

Two cases involving cotton irrigators and highlighted in Pumped are summarised here. Anthony Barlow, a manager of the industrial cotton farm Burren Downs which lies adjacent to the Barwon-Darling River, was fined with one offence of taking water contrary to a Ministerial Direction that imposed temporary water restrictions in the Upper Darling River and two offences relating to the taking of water when metering equipment was not operating properly in 2015 (Water NSW v Barlow [2019] NSWLEC 30). The NSW Land and Environment Court found that “Barlow knew that there was an embargo on pumping from that water source [Barwon-Darling River]” and was aware of the water shortages for which an embargo was imposed prior to taking water (Water NSW v Barlow [2019] NSWLEC 30: para. 68). The Judge also found that Barlow had the capacity to check whether metering equipment was operating properly, which amounted to complete control over the causes giving rise to the offending. However, the prosecution provided insufficient evidence to establish the impact of harm caused by the offences on downstream water users and the environment and had “not proven, beyond a reasonable doubt, that Mr Barlow committed the offences intentionally, negligently or recklessly” nor for financial gain (Water NSW v Barlow [2019] NSWLEC 30: para. 73). The court cited several other likely explanations, including loose metering connections and inadequate servicing by a third party, that may have hindered the functionality of Barlow's metering equipment. It noted that Mr Barlow had no prior convictions for environmental offences and demonstrated remorse throughout the court proceedings by offering to deduct the taken water from his current water allocation. He was fined AUD190,000 for all three offences (see also ABC, 2017; EDO, 2019; Independent Commission Against Corruption [ICAC], 2020).

In 2020, cotton corporation Budvalt Pty Ltd owned by Peter and Jane Harris, and owner of Miralwyn Cotton located along the Barwon River in the Northern Basin, was fined for the construction and use in 2015 of an illegal 2 km irrigation channel without the necessary water supply work approval (Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v Budvalt Pty Ltd; Harris [2020] NSWLEC 113). Prior to the exposé of this case by ABC Four Corners in 2017, the ICAC (2020) reported that allegations of water theft by Budvalt were handballed or passed between various departments, including the NSW Department of Primary Industries, Strategic Investigations Unit and Water NSW, which resulted in poor compliance and enforcement outcomes. ICAC (2020) has since revealed that the channel was not authorised for construction. In 2020, 5 years after the alleged offence had been committed, the NSW Land and Environment Court found Budvalt guilty of contravening section 91B of the Water Management Act 2000. However, the court found that “There is no suggestion… that the Company [Budvalt] has breached any license held by it or that it has been involved in water theft of any type” (Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v Budvalt Pty Ltd; Harris [2020] NSWLEC 113: para. 118). According to the Environmental Defenders Office (2020: para. 6), Budvalt's conduct did not amount to water theft because the company did not contravene the conditions of its access license to take water, which is separate from the approval required to build and use an irrigation channel. The court considered a range of aggravating and mitigating factors, including that the offence was not committed for financial gain, that it did not inflict any substantial environmental harm and that Harris’ absence of prior convictions, early plea of guilty and cooperation with the prosecutor, warranted a fine of AUD252,000, compared to the maximum penalty of AUD1,100,000 under the Act 2000 (EDO, 2020). The Judge noted that Budvalt expressed little remorse or contrition for its actions.

It is a condition of the water use approval that water is prohibited from being taken when the flow of the Darling Barka River is equal to or less than 4,894 megalitres per day at the Bourke gauge in NSW. In June 2016, for a period of 5 days, Budvalt extracted 1,897 megalitres or approximately 1.9 billion litres of fresh water, which amounted to a value of AUD44,000, when the Darling River was flowing below the specified condition on their water use approval. During this time of alleged offending, Peter and Jane Harris were travelling overseas while the manager of Beemary Farm operated the pumps and extracted fresh water from the Darling Barka River. Regardless, the NSW Land and Environment Court found Peter and Jane Harris responsible for the water theft. Judge Robson noted that “I am uncomfortable with Peter Harris’ evidence (and in this sense, Jane Harris’ evidence) that, despite being an experienced farmer and cotton grower with decades of experience, he claims not to have known the specific conditions of the Approval and in a general sense, seeks to place responsibility both upon his subordinates, and/or abandon responsibility having been overseas at the time of the offending” (WaterNSW vs Peter James Harris and Jane Maree Harris [2023] NSWLEC 33: para. 53). Prior to sentencing, the Harris’ attempted to dismiss the charges by applying to the NSW Court of Criminal Appeal to appeal against the finding of liability for the water theft and, on a separate occasion, to the High Court of Australia for special leave, but both attempts were unsuccessful. In 2023, they were fined AUD508,000 for water theft by taking water in contravention of a water use approval at their property Beemary Farm.

In a more recent case, in 2023 Dean Salvestro, operator and owner of Warrawidgee Station near Griffith in NSW, was fined AUD156,000 with four counts of taking groundwater in breach of bore extraction limits and one count of taking water not in accordance with a licensed water allocation under the Water Management Act 2000 (Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v Salvestro [2023] NSWLEC 34). The NSW Land and Environment Court took into consideration a range of aggravating and mitigating factors, such as the purpose of the offence, expression of remorse, and lack of any prior convictions. While the court found there was no motivation for financial gain from the over-extraction of water, Salvestro claimed that “he was saddened by the suggestion that he had caused environmental harm as a result of my food production” (Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v Salvestro [2023] NSWLEC 34: para. 15).

The NRAR has also secured three significant enforceable undertakings with coal mining companies for water theft in NSW. First, in July 2023, Boggabri coal mine was fined AUD54,000 for illegally taking and impounding water without a license between early 2019 and April 2022. The mining company was required to install accurate metres and report regularly after settling into an enforceable undertaking with NRAR (2023a). Second, in July 2023, Illawarra Coal Holdings Pty. Ltd. agreed to contribute AUD2.9 million to community projects for wetland restoration, after its mining operations resulted in the incidental take of surface water without a license between 2018 and 2023. The monetary contribution is the largest secured under an enforceable undertaking by NRAR since the agency established in 2017 (NRAR, 2023b). In August 2023, Tahmoor coal mine was required to pay AUD200,000 in compensation for taking water without a license, after it was noticed that underground longwall mining had fractured and caused water to be diverted from Redbank and Myrtle Creeks (NRAR, 2023c).

Lastly, Jindalee Road Wines, a Mildura wine company, and its former manager were fined AUD499,000 for water theft in NSW for damaging and interfering with a pipeline owned and managed by the Western Murray Irrigation (WMI) corporation in 2016 and again in 2020 and four counts of taking water from the WMI pipeline without authorisation between July 2018 and June 2020 (Natural Resource Access Regulator v Jindalee Road Wines PTY LTD BC202403479). The WMI and National Resource Access Regulator discovered that the former manager excavated the pipeline and installed unauthorised valves and pipes to bypass metering equipment and siphon 365 megalitres of unmetered water for which the vineyard received the benefit of irrigation and was estimated to be worth up to AUD300,000. These illegal tappings were operated by the former manager in such a way that the unmetered take of water was embedded within and proportionate to the metered take of water anticipated on the properties of the wine company, but not too excessive to raise detection by regulatory authorities. Judge Duggan noted further that:

The Water Take Offences were carried out over a long period of time, and involved systems of concealment, operation and planning. The system was capable of being turned on and off as intended and was operated in a way so as to avoid detection. The offending was repeated. The level of sophistication is such that… these offences should also be characterised as forming part of a planned or organised criminal activity. (para. 20)

The former manager of the wine company expressed remorse in that they had illegally taken water to help their employer avoid paying high costs for metered water use and was ordered to pay AUD172,500. The wine company, while unaware of its employee's misconduct, was considered responsible for it and held liable for their water theft offending and ordered to pay AUD326,500 (Natural Resource Access Regulator v Jindalee Road Wines PTY LTD BC202403479).

Queensland

In Queensland, fresh water is managed in accordance with the Water Act 2000. The Department of Regional Development, Manufacturing and Water (2022) functions as the state's water regulator and is responsible for the compliance and enforcement of legal and illegal water take across the Paroo, Warrego, Nebine, Condamine-Ballone, Moonie, and Border Rivers catchments within the Queensland portion of the MDB. Under Section 808 of the Water Act 2000, the maximum penalty for taking, supplying or interfering with water without authorisation is AUD257,742, with no distinction made between an individual and a corporate offender. However, the penalty level and sanctions for water theft in Queensland are lacking or small relative to the other Basin States (Loch et al., 2024).

One of the more significant examples in Queensland did not involve water theft per se, but fraud involving a federal water savings scheme. In 2018, Norman Farms, operated by Chief Executive Officer Mr John Norman, a former Cotton Farmer of the Year, and Mr Steve Evans, Chief Financial Officer of the cotton conglomerate located at Goondiwindi near the Macintyre River, were arrested over an alleged AUD20 million fraud involving taxpayer funds earmarked for federal water savings to increase environmental flows in the MDB (Brewster, 2018; Scott, 2024). The Australian Federal Police raided Norman's properties in 2017 alleging that between 2010 and 2017 both cotton executives falsified and submitted fraudulent documents claiming to construct on-site dams and levees that were legal and for diverting floodwaters. This fraud was allegedly committed through the Healthy Headwaters Project, a state and federal water efficiency project intended to deliver water to the environment by upgrading irrigation infrastructure and promoting better water management practices (Bunch, 2018; Scott, 2024). However, Hamilton-Smith (2018, para. 14) highlights local farmers’ concerns that “the Healthy Headwaters scheme had failed because there was never any checking of invoices by department officials.” Mr Norman was charged with six counts of aggravated fraud and six counts of fraudulently producing or using a false record and appeared in the Brisbane Magistrate's Court in August 2018. Mr Evans was also charged with four counts of each of the same charges for allegedly helping to lodge the claims after he started working for Norman Farms in 2013. Both cotton executives were released on bail provided they surrender their passports (Brewster, 2018; Bunch, 2018). Mr Norman was ordered to pay the Queensland Government's Public Trustee AUD16 million after the police received a tip that he had sold the Norman Farms cotton enterprise to Canadian conglomerate Manulife Financial Corporation for AUD100 million (Carson, 2019).

Victoria

In Victoria, fresh water is managed by the Department of Energy, Environment and Climate Action (DEECA) in accordance with the Water Act 1989. The Department's compliance and enforcement responsibilities are further delegated between six water corporations located across Northern Victoria (Monaghan et al., 2022). The Coliban, Goulburn Valley, Goulburn-Murray, Grampians Wimmera Mallee, Lower Murray, and North-East Water corporations are responsible for delivering water to communities within the Victorian area of the MDB. The water corporations are also tasked with ensuring compliance and enforcement with license conditions within their customer database and reporting any acts of non-compliance back to DEECA. Under Section 33E of the Water Act 1989, up until 2020, an individual could receive AUD9671.40, or 6-month imprisonment for a first offence, and AUD19,342.80, or 12-month imprisonment, for a subsequent offence. This changed when the maximum penalty for intentional water theft was increased to AUD198,000 for individuals and AUD990,000 for corporations as a part of the Victorian Government's Zero Tolerance Approach to Water Theft in 2020 (DECCA, 2023; Premier of Victoria, 2020). The “zero-tolerance approach to water theft [was created] to ensure a level playing field for all water users” (Premier of Victoria, 2020: para. 1). In doing so, this approach reduced state-wide rates of water theft in Victoria from 3.6% to less than 1% in June 2021 (Premier of Victoria, 2020). Now, according to 2023 values, the maximum penalty for the unauthorised taking of water from a waterway, aquifer, spring, or soak or dam in a declared water system is AUD230,772 or 10 years in prison for an individual and AUD1,153,860 for a corporation (Loch et al., 2024). While water corporations use a variety of compliance and enforcements tools, such as warning letters and penalty infringement notices, to regulate water usage in their local catchment, prosecutions for water theft in Victoria are determined by the local Magistrates Court. Despite the increase in financial penalties, however, the courts in Victoria tend to award low-level penalties for water theft which only send mixed signals to water users and drives greater inconsistency in penalty regimes between the Basin States (Loch et al., 2024).

In June 2020, Brownport Almonds Pty Ltd, an industrial farm located near Mildura in Northwest Victoria, was fined for illegally pumping more than 4,000 megalitres of water from the Murray River (Testa, 2021). The almond grower was first fined for pumping water 116 times while its accounts were in deficit between March and May 2019, at the peak of drought (Bureau of Meteorology, 2022) which saw water prices soar to AUD543 per megalitre – their highest levels in more than 20 years since the millennium drought. While Brownport attempted to keep its water balance positive by buying additional allocations throughout the year, high water prices and market competition and volatility saw its balance remain negative (Testa, 2021). By October 2019, Lower Murray Water had strengthened its compliance and enforcement mechanisms under amendments to The Water Act 1989 and incorporated a Zero Tolerance Approach to Water Theft, which resulted in vastly greater penalties for taking water when your account was in debt (Hollingworth & Testa, 2021). The almond grower pleaded guilty for pumping water another 31 times while its account was still in debt during October 2019. Brownport was ordered by the court to pay AUD27,500 to local charities and community organisations and AUD20,000 to Lower Murray Water for their legal costs (Hollingworth & Testa, 2021).

South Australia

In South Australia, fresh water is managed by the Department of Environment and Water in accordance with the Landscape South Australia Act 2019. While the department is responsible for the compliance and enforcement of water license conditions throughout the state, in the River Murray Prescribed Watercourse of the South Australian MDB, similar to Victoria, penalties are prosecuted by water supply corporations. If excessive water take or overuse is detected, an individual has an opportunity to balance their water account before prosecution commences or risk incurring a penalty (Loch et al., 2024). Under Section 104(1) of the Landscape South Australia Act in 2019, the maximum penalty for the unauthorised, unallocated, or unentitled taking of water from a prescribed watercourse, lake, or well is AUD25/kL of water taken or AUD50,000 for an individual and AUD100,000 for a corporation, whichever is greater. An individual can also incur a penalty for unlawful take based on a set rate (AUD25 per kilolitre) for the amount of water taken. These rates for illegal take vary throughout the year but aim to deter potential offenders by ensuring penalty rates are set at a value that is considerably greater than the cost of purchasing water on the market (Department of Environment and Energy, 2024).

In December 2022, Trevor Dean Mueller, former property owner and manager of an Adelaide Hills vineyard located in Birdwood, was charged with 22 counts of water theft from and one count of property damage to the Mannum-Adelaide pipeline, following a decade of alleged offending (DCCRM-21-833 Director of Public Prosecutions for the State of South Australia v Trevor Dean Mueller). In February 2019, a game (hunting) camera detected Mueller illegally opening and tampering with the dissipator valve on the pipeline to release water into a nearby creek, for which the vineyard received the benefit of irrigation. Covert cameras set up by local authorities in the metre box of the pipeline then captured Mueller illegally taking water another 18 times between December 2019 and February 2020, which was estimated to be worth more than AUD75,000. While Mueller's legal team argued that Mueller had received no direct financial gain or interest from the water theft, they told the South Australian District Court that “this offending can be explained by a misguided affection for the property [for which Mueller and his family owned and lived on] and a desire to maintain its irrigation during a period of drought” (DCCRM-21-833 Director of Public Prosecutions for the State of South Australia v Trevor Dean Mueller: 2). In total, the dissipater valve on the Mannum pipeline was opened 195 times between 2012 and 2020 by persons not authorised to do so. Of those charges, Mueller pleaded guilty to 22 counts of water theft in which the court imposed a sentence of 2 years imprisonment. However, the court suspended his sentence and placed Mueller on a good behaviour bond for 2 years after taking into consideration his old age, lack of criminal history, and significant contribution to the community. The remaining charges for water theft prior to February 2019 were dropped due to insufficient evidence.

Australian Capital Territory

In the Australian Capital Territory (ACT), fresh water is managed by the Environment, Planning and Sustainable Development Directorate in accordance with the Water Resources Act 2007. The Environment Protection Authority is also responsible for the compliance and enforcement of water licenses within the ACT. Under Section 77A, the maximum penalty for illegal water take or non-compliance is AUD8,000 or 6-month imprisonment, or both, for an individual, and AUD40,500 or 6-months in prison for a corporate body. There are, however, no recent or significant convictions for non-urban water theft found in the ACT.

Commonwealth

At the federal level, fresh water is managed by the MDBA in accordance with the Water Act 2007 (Cth), while issue of water theft is managed and prosecuted by the Inspector-General of Water Compliance. In June 2021, the Commonwealth government passed the Water Legislation Amendment (Inspector-General of Water Compliance and other measures) Bill 2021, an amendment to the Water Act 2007 which granted powers to the Inspector-General to ensure the Basin States and Commonwealth Government comply with intergovernmental agreements, transferred responsibility for compliance and enforcement under the Water Act 2007 from the MDBA to the new Inspector-General (Troy Grant), and created new penalties for the theft of environmental water. Under Section 73A of the Water Act 2007, the maximum penalty for illegally taking environmental water belonging to the Commonwealth is AUD313,000 for an individual and AUD3,130,000 for a corporation (Loch et al., 2024).

However, since February 2023, the Inspector-General has been forced to drop 62 cases relating to water theft due to poor legislative support from the Basin States and inconsistency in the approaches to water theft between the Federal and Basin State governments (Loch et al., 2024). While speaking at a senate enquiry in February 2023, the Inspector-General (Troy Grant cited in Ferrier, 2023: para. 1–2) noted that the federal legislation preventing water theft was “rubbish… [and] has more get-out-of-jail clauses and opportunities than a monopoly board”. Under the Water Act 2007, the Basin States are required to implement water resource plans that set rules and guidelines on how water can be taken from the river system for agriculture within their own catchment, to ensure the sustainable diversion limit is not exceeded over time. Accredited water resource plans provide the Inspector-General the necessary federal powers to investigate and prevent water theft across the MDB. To date (at this time of writing), the Inspector-General is limited in their power to pursue pecuniary actions for water theft, often relying on Basin State powers and legislation to convict alleged offenders (Loch et al., 2024). Without accredited water resource plans, the regulation for the take of water from rivers for agriculture falls under state rules that were used to manage water catchments prior to the 2012 implementation of the MDBP.

Sanctioning or facilitating water theft?

In the MDB, each Basin State refers to water theft as the acquisition, pumping, diversion, and supply of and interference with fresh water supplies either from surface water bodies, such as lakes, rivers, and creeks or groundwater aquifers. This may be without a license or in contravention of license conditions (Barclay & Bartel, 2015). There are few legislative differences that delineate how and where water is stolen between each Basin State, but what is defined as theft varies significantly. For example, in NSW and the ACT, the theft of water is referred to as the “illegal” take or taking of water without, or otherwise than authorised by, a water license (Water Management Act 2000 NSW s60A; Water Resources Act 2007 ACT s77A). While in Queensland, South Australia, and Victoria, the theft of water is referred to as the “unauthorised” take or taking of water without a license unless authorised to do so under another legislation (Water Act 2000 QLD s808) or from a prescribed water source (Landscape South Australia Act 2019 s104(1)) or share of a local catchment (Water Act 1989 VIC s33E), in Victoria, however, the “wrongful” taking of water is used to describe the theft of water that belongs to a water corporation or authority before it reaches its intended user or destination (Water Act 1989 VIC s289). Water theft may also be referred to as the “unlawful” taking of water throughout the MDB.

Aside from legal technicalities and jurisdictional differences in interpretation between the Basin States, the conviction track record of large company perpetrators of water theft raises several issues for further consideration. One obvious question, given the scale of the enhanced revenue generated by additional waters taken, is whether the state sanction is merely a form of fee-for-service rather than a deterrent or punitive sanction. In many cases, the fines for water theft are constituent of the cost of doing business that serves as nothing more than a mere “slap on the wrist” for environmental offences, enabling and perpetuating opportunities for further harm. For example, penalties are generally considered to be cheaper than the market price of water if it were legally purchased by users in the MDB (see Seidl & Wheeler, 2024). The expected payoff from water theft further undermines compliance and enforcement by creating an incentive to engage in illegal behaviour. When perceived rewards of stealing water outweigh the risks, such as low chances of detection and weak penalties, individuals are more likely to steal, reducing the deterrent effectiveness of punitive sanctions (Loch et al., 2020). It is also notable that many of those prosecuted for water offences have both social and legal resources to minimise perceptions of intentional wrongdoing and negotiate reduced penalties within the criminal justice system in ways not available to those less powerful.

Furthermore, it needs to be borne in mind that criminal prosecution usually only occurs after administrative (e.g., on-the-spot fines) and civil mechanisms (e.g., orders to desist) have failed to deter or stop harmful actions and/or because of the seriousness of the transgression. Much depends, as well, as the resources of the regulator to detect and investigate the breaches and, even when escalated, the capacity of criminal justice institutions to prosecute and convict on the basis of the evidence and the expertise available to environmental protection officials, water enforcement officers, police, and the courts.

The increasing scarcity of water in the MDB for environmental purposes is a problem in search robust solutions (Colloff et al., 2024). One part of the solution is to prevent, stop, and deter water theft from the river systems. As this paper has demonstrated, however, there is still a long way to go before the sanctioning of water offenders achieves suitable criminal justice objectives (such as deterrence), much less the ecological goals of the overarching water management system, including vital environmental flows which are required for the long-term viability of the system.

Conclusion

This article has outlined the legislation that underpins the criminalisation of water theft in the MDB River systems and, through highlighting specific cases, provided some insight into the prosecution and sanctioning process. To date, there have been relatively few convictions for water theft, and the penalties have varied considerably depending on the location and the defendant. Given the precarious state of the Basin in regard to ecological health and river flows, it is clear that much more needs to be done to enable the full execution of the MDB plan. Enforcement of criminal provisions pertaining to water theft forms part of the needed response. Harms to fresh water system health, sustainability, and supply, including water theft, should be defined as a crime in procedural and moral terms as wrongdoings both within the legal justice system and according to social norms (Eman, 2023).

Water theft is an international issue of concern that threatens the environmental security and sustainability of fresh water around the world. The harms of water theft are exacerbated by climate change as this leads to greater water scarcity in some regions and potential political, social, and economic conflict over access (Brisman et al., 2018). Yet, in Australia's MDB, perpetrators of water theft are seldom apprehended and there are gaps in understanding their modus operandi as a result. Water theft is an issue affecting multiple countries around the globe, and a majority of states within Australia, and yet little research has been conducted to date to understand its causes, motivations, and associated behaviours, or the effect of criminal penalties on those who steal the water. Preventing and responding to this crime, therefore, requires much more in the way of research and investigation, as well as greater resources devoted to combating water theft where and when it occurs.