The head of Australia's peak water broking body says while members are broadly supportive of the Quinlivan report on the Murray-Darling Basin, they have concerns about a mandatory code of conduct for market intermediaries.
The recommendation was one of five made by an advisory group, led by senior commonwealth public servant Daryl Quinlivan, which looked at the Australian Competition and Consumer Commission's investigation into the basin's water market.
The interim report looked at how to improve faith and transparency in the basin water market.
The Australian Water Brokers Association president Ben Williams said the group remained supportive of an improvement to the regulatory framework for all water market intermediaries.
"Our members have signed up to a voluntary code of conduct, which has been successful in improving standards," Mr Williams said.
"However, as we have stated in the past, not all water market intermediaries are members of the AWBA, hence it is not an effective measure for the entire industry.
Whilst its submissions to the ACCC report called for stronger regulatory measures, members were encouraged that the advice from Mr Quinlivan to the commonwealth government recognised that improved regulatory controls need to be proportionate and support confidence in the water market.
"We would highlight that it is important that the suggested Mandatory Code of Conduct is applicable to any party who is negotiating, facilitating or lodging trades on behalf of another party," he said.
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Mr Williams said the AWBA was also interested in understanding who would be responsible for enforcing the code and potential penalties for breaches.
"We also believe that the creation and implementation of statutory trust accounts, with an indemnity fund, and mandated professional indemnity insurance would have a significant benefit to confidence in water market intermediaries and have encouraged Mr Quinlivan to consider this as part of the code."
He said it was hoped regulatory controls, implemented for the Murray-Darling Basin, would also be applicable throughout Australia.
The AWBA would potentially be supportive of legislative measures to address concerns about market manipulation and insider trading, however it reserved its unqualified support until it had seen the detail.
The AWBA was fully supportive of measures that would result in improved water market information, available to all water market participants.
"We note that there has been improvements implemented by the states, however we would encourage all states to ensure that their provision of information to the market is as accurate, complete and timely as possible. "
While the AWBA was supportive of a basin-wide education program, it noted significant funds had been dedicated to Waterflow, to develop such a program.
"We would encourage Mr Quinlivan to consider this work as a foundation to build upon."
Bendigo-based broker H20X business development manager Craig Feuerherdt said for of the five reform measures made sense.
"H2OX have argued for more robust regulation of water market intermediaries since our inception," he said.
But he said the proposed water markets education program would be very difficult to implement and benefits would be hard to assess.
"State departments and water authorities have tried and failed in such endeavours," Mr Feuerherdt said.
"I can see a consultant building a web site outlining all the rules - not unlike the Waterflow 'water university' - that will be visited by few people.
"Educating an individual about trade restrictions, water sharing, determination frameworks etc who trades allocation once a year won't change their behaviour."
Kyabram, Victoria, broker Waterpool general manager Donna Mulcahy said her group was a member-owned, not-for-profit organisation, which was bound by strict objectives, reporting and audit requirements.
"The constitution was specifically designed and implemented to provide equality, transparency and safeguards on how we trade in the market," Ms Mulcahy said.
"We have no issue with the recommendations as we have been operating under these principles since Waterpool began in 2012.
"We welcome the water market reforms and hope that they will bring improvements in accessibility, transparency, education and trust across the market."
Andrew Miller
I'm a general reporter with Stock & Land, with a special interest in irrigation issues. I completed my cadetship, with the Age, in 1980. Over my career, I've worked for ABC radio news (Mt Isa, Qld) and at provincial and suburban newspapers.
I'm a general reporter with Stock & Land, with a special interest in irrigation issues. I completed my cadetship, with the Age, in 1980. Over my career, I've worked for ABC radio news (Mt Isa, Qld) and at provincial and suburban newspapers.
