Nick G.VANGUARD - Expressing the viewpoint of the Communist Party of Australia (Marxist-Leninist)
For National Independence and Socialism • www.cpaml.org
Nick G.
Last night’s ABC Four Corners program revealed that billions of dollars in tax payers' money, poured into rescuing the rivers and streams of the Murray-Darling Basin to save it from environmental collapse, had instead benefitted a handful of wealthy cotton growers.
Aided by corrupt officials in the NSW Department of Water, cotton growers are stealing water from the Barwon River and Darling Rivers to create massive shallow dams from which to irrigate vast tracts of land on which cotton is grown.
Imperialist finance capital buys up our water
As valuable as the program was in exposing these rorts, it really only scratched the surface of problems related to Australian freshwater supplies. And those problems do not exist in isolation. They are part of a global theft of public commons by giant multinational financial corporations which have forced their way into a deliberately constructed private water market that allows them to speculate with their surplus capital.
The seizure of freshwater supplies contained in rivers and the Great Artesian Basin by finance capital investors, miners and gas extraction companies mirrors the wave of privatisations and corporatisations of city and state water utilities that occurred in the mid-1990s. The major beneficiaries of the latter included French companies Suez Lyonnaise des Eaux and Vivendi, Thames Water and Lend Lease.
Water trading followed a June 1995 decision to establish the Murray-Darling Cap to put a limit on the amount of water that could be taken out of the Murray-Darling river catchments. Ostensibly a response to concerns about environmental flows, the Cap came with a new system that allowed irrigators to trade their entitlements to waters taken from the Murray-Darling, and also to trade annual allocations taken under those entitlements.
Investment funds with active interests in water emerged after 2007, when investors no longer had to own land in the Murray Darling Basin to be eligible to buy and sell its water rights.
Water was no longer a common good, that is, a resource deemed to be under the ownership of all Australian citizens and available for their use and enjoyment, but a private commodity, “blue gold” as it was quickly dubbed by corporate investors. And it was no longer a simple commodity, but a financial instrument which could be held, in the case of entitlements, as a security against mortgages.
Whilst making this fundamental change to ownership and control of freshwater supply, the federal government chose not to maintain any register of foreign capital purchasing Australian water rights. Very belatedly, a register will be introduced in December of this year.
Despite the lack of clarity around who owns our water, several major players have been identified.
By 2010 the major players in our water market, then valued at $30 billion included:
• $20 million worth of entitlements bought by the US-owned Summit Global Management through an Australian subsidiary;
• An estimated $130 million worth of water bought by Olam International of Singapore in a deal involving the purchase of almond groves in northern Victoria;
• More than $30 million worth of rights in western NSW held by Tandou which has substantial British and US ownership.
(It is worth noting that Summit’s assets were sold in 2015 to noted enemies of the Australian working class in the Aware Water investment group, owned by former ports bosses Chris Corrigan and Peter Scanlon. Corrigan, who tried to smash the Maritime Union of Australia is also tied to the Webster Group, one of two corporations currently owning 70% of the Barwon River’s water.)
It was estimated that by 2010, 8.1% of Australian freshwater was owned by foreign capital. By 2013, that figure had risen by 60% to 13.7%. No doubt the figure will be higher again when the registry data is released next year.
There are currently two investment funds serving to channel local and foreign capital into the water market. One is BlueSky Alternative Investments which incorporates private equity, hedge fund and venture capital divisions and whose major shareholders are JP Morgan Nominees Australia Ltd and HSBC Custody Nominees (Australia) Ltd.
The other is a private fund, Kilter Investments. Financial analyst Alan Kohler reported how in 2015 he “spoke yesterday with Cullen Gunn who runs a wholesale water investment fund (for “sophisticated” high net worth investors and big super funds only) called Kilter. He says water is a "great asset class". "It’s like commercial property except there’s no problem with impairment or messy tenants. The yield is sold, about 5-8 per cent and if someone doesn’t pay you just take the asset back, instead of having to apply to have a tenant evicted."
"Also, it’s clear to me that climate change means there is going to be less water in future, so the economic value of it will increase."
The Australian Constitution – an obstacle to a national approach to water management
As we have stated elsewhere, the Australian Constitution was a weak three-way compromise between the British, the colonial elites in the separate colonies, and the proponents of a central government. It does not provide for control of Australian freshwater by the Australian government. Rather, that control is vested in the States.
As a consequence of our ineffective and outdated Constitution, our two major freshwater systems rely on the cooperation and goodwill of the state and federal governments. Hence there are the Murray-Darling Basin Authority and the Great Artesian Basin Coordinating Committee. The former holds powers referred to it by State Ministers; the latter advises Ministers on behalf of various stakeholder groups.
This is an unacceptable arrangement. There should be single national authorities with exclusive powers over both Basins.
In the case of the Great Artesian Basin, there are divergent views on its sustainability. Some view it as a renewable supply, refreshed by rains falling in north-eastern Queensland. But another view sees it as a plutonic source of water derived from steam generated by vulcanism deep in the earth over millions of years and hence essentially not renewable.
As per the Constitution, three separate states and the Northern Territory are in charge of their own Great Artesian Basin waters. SA allows Olympic Dam to extract up to 42 million litres per day.
The Queensland government has given Adani open slather on Great Artesian Basin waters. It has no limit on what it can extract but merely needs to monitor and report the amount of water it extracts with a permit that runs until 2077.
Gas producer Santos plans to drill 850 coal seam gas wells through the Great Artesian Basin.
The Achilles heel of the current cooperative arrangements between the states and the federal government over the two Basins is that individual players can walk away at any stage as indeed was mooted by NSW Department of Primary Industry and Water Deputy Director Gavin Hanlon.
In a confidential phone discussion with irrigator lobbyists, a tape of which was played on the Four Corners program, Hanlon raises the Plan B “walk away” option, much to the delight of the lobbyist. When one realises that the value of the NSW water market is equal to the entire value of Australia’s wool exports, the potential for corrupt relations between senior public servants and traders of water entitlements and allocations becomes immediately apparent.
What can be done?
In the short term and within the current Constitution’s limited provisions, the federal Government must regulate the water market to ensure equity and access, control increases in the price of water, restrict the entry of foreign capital to the market, and secure water for environmental flows all the way to and through the mouth of the Murray.
In the longer term, water must be protected as a public trust, as a common good, within a new anti-imperialist and republican Constitution. Private ownership of our freshwater supplies must be abolished and the assets of foreign investors confiscated without compensation. The two Basins must be administered by a national public authority created to ensure fair water allocation and a healthy freshwater ecosystem.
Only an independent and socialist Australia can implement these changes.