Summary: Introduction

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1 Summary: Melbourne Water has a range of responsibilities in the Port Phillip and Westernport region, including responsibilities for the protection and restoration of waterways and, in collaboration with others, to improve the quality of stormwater and catchment runoff to protect bays and waterways in accordance with Government legislation and objectives. These responsibilities are achieved using a variety of tools, mainly involving works, but also including community information programs and regulation. Regulation is an important part of Melbourne Water achieving its goals, especially in areas where private development can seriously impact on the health and amenity of waterways and floodplains and on community safety. Introduction The Melbourne Water Waterways Group appreciates the opportunity to make a submission into the current Inquiry into Environmental Regulation in Victoria. Melbourne Water has noted the Terms of Reference for the Inquiry including that the Commission is directed to report on the benefits from environmental regulation in the modern Victorian economy, and the comment in the Issues Paper that having an understanding of the benefits of environmental regulations assists in making decisions about the trade-offs between environmental outcomes and the costs to business and the community of achieving those outcomes. Melbourne Water is a statutory corporation fully owned by the Victorian Government, and is a water resources manager, providing water, sewerage and recycled water services to retail water businesses and waterways and drainage services to the greater Melbourne community. Melbourne Water has had responsibility for delivery of waterways, drainage and floodplain management in the Melbourne region since the 1920s. Melbourne Water manages around $2.7 billion in drainage assets and more than 8,000 kilometres of waterways. Melbourne Water undertakes programs to improve and protect the health of rivers and creeks (which includes improving the water quality of waterways) and enhance their environmental, economic and social values. It also provides drainage infrastructure to service urban growth and provides a safe level of flood protection for communities within the Port Phillip and Westernport region to meet State Government requirements. This submission focuses on Melbourne Water s Waterways programs and the use and relevance of environmental regulations in achieving the goals of these programs.

2 2 Background information on the range of projects and priorities that the Melbourne Water Waterways Group focuses on, and the reasons why, are also provided. The Victorian Government in its Our Water Our Future action plan designated Melbourne Water as caretaker of river health with responsibility for waterways, drainage and floodplain management. These key roles are managed through Melbourne Water s Waterways Group, which works closely with other key groups in Melbourne Water responsible for water supply, sewerage, research and community engagement. Melbourne Water s Waterways responsibilities, set out in Melbourne Water s revised Statement of Obligations and Waterways Operating Charter, the State Government s Our Water Our Future and the Central Region Sustainable Water Strategy. The Waterways Group undertakes programs to improve and protect the health of rivers and creeks (which includes improving the water quality of waterways) and enhance their environmental, economic and social values. It also provides drainage infrastructure to service urban growth and provides a safe level of flood protection for communities within the Port Phillip and Westernport region to meet State Government requirements as well as its obligations under the Waterways Operating Charter. Melbourne Water s obligations in relation to waterways and drainage derive from a wide array of legislation given the diversity of responsibilities that range from managing river health to regional drainage systems, and minimising flood risks. Melbourne Water s Statement of Obligations states that in relation to Waterways: The Authority must develop and implement an Operating Charter which sets out the responsibilities, goals and programs of work to deliver the following long term aims: (a) a safe and effective system for dealing with storm run off, a reduced risk of flooding in priority areas and the prevention of inappropriate development in flood prone areas; (b) the protection, restoration and care of the physical and environmental health of creeks, rivers and wetlands and the sustainable allocation of water for irrigation; and (c) in collaboration with others, including government agencies, councils, industry and the community, to improve the quality of stormwater and catchment runoff and protect waterways and bays in accordance with Government objectives and targets. To achieve the objectives of the legislation and policy documents that Melbourne Water works under, the Waterways Group receives funding from a Waterways and Drainage Charge, which is paid by all property owners in Melbourne Water s service area. The majority of Melbourne Water s current waterway improvements, regional drainage and flood protection works are funded through this Charge. This funding enables Melbourne Water to undertake works on our rivers and creeks, floodplains, wetlands and main drains. The Waterways Charge is not for supplying

3 drainage services to individual properties. This is usually a local council or landowner responsibility. Spreading the cost of these services across all properties in the catchment is the fairest possible approach, given that everyone benefits either directly or indirectly from healthy waterways and a safe reliable drainage system. One of our key roles in the protection of waterways is to mitigate some of the impacts of private development. Where new development imposes additional environmental and infrastructure costs, Melbourne Water uses regulation to recover some of these costs from the developers, rather than the broader community having to pick up the costs through increased charges eg an increase in the Waterways Charge. The need for an element of regulation in relation to mitigating some of the impacts of residential development on waterways is because of the external costs involved. The negative impacts of the development, eg increased runoff to waterways of stormwater full of nutrients and other pollutants, are experienced both within and external to the development, including in the public waterway. Regulation has a role in minimising the public costs of the private development. The public good of ensuring the health of the waterway will not be achieved without regulation. In relation to flood protection, current regulations require developers to pay the full cost of the flood protection works, so that development is designed and built to meet the one-in-100 year flood event. As described above, developers are also required to contribute towards rectifying some of the water quality problems caused by their development. It is acknowledged that sometimes the costs required to achieve the above outcomes can appear high, due to the substantial nature of the works required to ensure general public safety and that the development does not impact on third parties, the nearby waterways and, ultimately, the Bays. It is also fair to acknowledge that the drainability of land is only one of many criteria for whether land is within the urban growth boundary, and therefore sometimes difficult (ie expensive) to drain land may be included with in the urban growth boundary. Regulatory and Policy Background Melbourne Water, as caretaker of river health and a Protection Agency under the Environment Protection Act 1970, is required to undertake actions to help achieve water quality policy objectives for rivers, creeks and bays and to implement agreed attainment strategies identified in the State Government s State Environment Protection Policy (SEPP) (Waters of Victoria) and Schedules F6 (Waters of Port Phillip Bay), F7 (Waters of the Yarra Catchment) and F8 (Waters of Western Port and Catchment). The protection policies and schedules include objectives for water quality pollutants such as nutrients, several heavy metals, suspended solids and bacteria which aim to protect beneficial uses of waterways. Schedule F6 (Waters of Port Phillip Bay) provides a nitrogen reduction target of 1,000 tonnes per year from mid 1990 levels by 2006 for Port Phillip Bay. This target has been incorporated into an Environmental Management Plan (EMP) developed in

4 by the former Department of Natural Resources and Environment (now the Department of Sustainability and Environment) in consultation with Melbourne Water and EPA Victoria. A key target of the EMP was assigned to Melbourne Water to reduce nitrogen loads from the Western Treatment Plant by 500 tonnes per year by A major upgrade to the Western Treatment Plant was completed in 2004 to achieve this target and has been designed to treat increased loads from future population growth. The EMP also set a joint target to reduce catchment nitrogen loads to Port Phillip Bay by 500 tonnes per year by Melbourne Water s contribution to meeting this target involved undertaking targeted stormwater actions within urban areas. In 2000, Melbourne Water committed to a $60 million wetlands program aimed at achieving a 100 tonne reduction in nitrogen loads by The wetlands program has achieved a cumulative reduction in nitrogen loads of 56.1 tonnes up to the year 2007/08. In addition, Melbourne Water was assigned the responsibility for monitoring nitrogen loads to Port Phillip Bay to allow a comparison to be made against the baseline determined by EPA Victoria. The load monitoring program undertaken by Melbourne Water has been expanded and improved in line with recommendations from the Port Phillip Bay Environmental Study. The current network includes nine sites in the Port Phillip catchment including the Yarra-Maribyrnong and Patterson-Mordialloc catchments. There are also five sites in the Western Port catchment. The monitoring program also measures total suspended solids, total phosphorus and more recently pathogens, pesticides and heavy metals. Samples are taken in both dry weather and for each storm event. Computer Modelling undertaken for Melbourne Water s Water Quality Strategy suggests that increased loads from urban development, and to a lesser extent rural intensification, continue to pose a significant challenge in achieving the 500 tonne reduction target for nitrogen loads from the Port Phillip catchment. An important focus of the Water Quality Strategy is recognising that all human activities within the Port Phillip and Westernport region have varying degrees of impact on water quality, and that no single agency can undertake water quality management works on its own. Therefore, Melbourne Water s progress towards meeting State Environment Protection Policies and water quality targets can only be achieved by working in collaboration with State agencies, local government, industry, land managers and the general community to improve the quality of stormwater and catchment run-off. In addition to the catchment scale load based targets associated with Schedule F6 of the SEPP (Waters of Victoria), Melbourne Water is also required to meet obligations and water quality objectives outlined in Schedule F7 (Waters of the Yarra Catchment) and F8 (Waters of Western Port and Catchment). Water quality targets based on SEPP objectives for individual rivers and creeks have been identified in the Regional River Health Strategy. The SEPP (Waters of Victoria) noted that improved stormwater management will contribute to the protection of the ecological, economic, recreational and aesthetic values of Victoria s waters. For example, by minimising the impact of urban stormwater run-off on Port Phillip Bay, the levels of nutrients, sediments and bacteria in the Bay will be reduced and the Bay s health will improve. Further, through these improvements, the Bay will be cleaner and safer for aquaculture, fishing and 4

5 swimming, which will encourage the 30 million people who visit Port Phillip Bay every year to return. In relation to the key issue of stormwater, the Melbourne 2030 report noted that: The quantity and quality of stormwater entering our waterways and bays is an important issue for Melbourne Impervious surfaces in built-up urban areas result in less water being absorbed into the ground and can exaggerate peak flows into a stormwater system. These surfaces affect the quality and quantity of stormwater, often generating significant pollutant loads that are readily washed off and conveyed into the stormwater system. Further, urban development and activity occurring within the catchment, such as the construction of roads and buildings, affects the quality of stormwater, as sediments and pollutants from urban areas are transported to our creeks, rivers, bays and oceans. Measures to manage urban stormwater quality will be critical in maintaining the ecological health of Port Phillip Bay and Western Port, as well as improving the health of our waterways. The Guidelines for Urban Stormwater suggest that urban stormwater management should achieve a 45 per cent reduction in nitrogen load, 45 per cent reduction in phosphorus load and an 80 per cent reduction in suspended solids load. The Government will work with Melbourne Water, local government and other key stakeholders to develop programs to ensure the achievement of best practice performance objectives for stormwater (see Water-sensitive urban design ). EPA Victoria runs the Victorian Stormwater Action Program which provides grants to local governments throughout Victoria for the development and implementation of stormwater management plans. Melbourne Water and local government fund the development and implementation of these plans for the metropolitan area. All stormwater management plans developed will be consistent with the BPEM guidelines. Subsequently, the revised Clause 56 of the Victorian Planning Provisions the new residential subdivision provisions came into effect from 9 October Clause 56 is the Residential Subdivisions component of the Victoria Planning Provisions (VPP) and the basis for all local council planning schemes in Victoria. The Clause applies the Neighbourhood Principles set out in Melbourne planning for sustainable growth to deliver more sustainable built environments. As the EPA has noted: Integrated water management provides a new and more sustainable basis for managing water in residential subdivisions by conserving potable (drinking quality) water, providing opportunities for reusing and recycling water for non-drinking purposes and managing the quality as well as quantity of urban run-off. In particular, the new mandatory 'integrated water management' provisions for urban runoff will, amongst other things, contribute to improved stormwater water 5

6 6 quality and assist in achieving the objectives of the State Environment Protection Policy (Waters of Victoria). 1 The Waterways Water Quality Strategy identifies that significant opportunities exist for local government to reduce pollutant loads at their source by incorporating water quality works into their road and drainage renewal work programs along with placing planning conditions on all new developments. While retrofitting water sensitive urban design into existing urban catchments is increasing, it is still in its infancy and being applied to a very limited number of potential projects. Developing local targets, such as municipality based load reduction targets, will be an important action for the future to enable assessment against broader scale targets such as the 500 tonne reduction target for Port Phillip Bay. Melbourne Water responsibilities are focussed in areas such as supporting capacity building programs that assist local government to deliver best practice stormwater management and assisting EPA Victoria, Department of Sustainability and Environment and Department of Planning and Victorian Communities in the development of regulatory frameworks. These regulatory frameworks will aim to institutionalise water sensitive urban design and incorporate sustainable urban water management into planning provisions and building permits. Drainage and flood protection Melbourne Water s obligations under part 10 of the Water Act 1989 as the Floodplain Management Authority for the Port Phillip and Westernport region includes the requirement to provide, operate and maintain drainage systems (that service areas generally greater than 60 hectares), determine how high floodwaters will rise and how far they will extend and to develop and implement plans to minimise flood damage. Melbourne Water has historically focussed on mitigating flood risks by undertaking engineering works to improve flood protection in areas that have been identified as being at high risk with the aim of protecting 500 properties every ten years. It is recognised that the recent rates of expenditure on mitigation works are making little impact on about 40,000 identified properties that contain buildings or dwellings that would be at risk of flooding above floor level in a one-in-100 year storm. In addition, a 2005 performance audit of stormwater drainage systems operated and maintained by Melbourne Water and six local governments identified that there is scope for more effective and collaborative consultation arrangements between Melbourne Water, local governments and key stakeholders. This will enable flood risk reduction targets to be set that are cost effective and that consider stakeholder expectations. In light of the above, Melbourne Water has developed a Flood Management and Drainage Strategy in consultation with stakeholders to clarify requirements and determine acceptable standards for managing flood risks. The Strategy acknowledges that floods are a natural event and that it is not physically, or practically, possible or necessary to protect all properties in the region from a one-in-100 year flood. Consequently, the approach to managing flood risk will see Melbourne Water and local governments undertake works to reduce flood risks that are determined to be intolerable, increase community understanding and awareness in relation to other flooding risks and their preparedness for flood events. 1

7 7 Land development Melbourne Water s responsibilities as a statutory referral authority for planning permit applications under the Planning and Environment Act 1987 and floodplain management authority under the Water Act 1989, require it to provide flood risk information and undertake development planning. This ensures that new urban development meets appropriate standards of flood protection and will assist in ensuring that the costs of infrastructure required to service growth are equitably allocated among land developers. Melbourne Water is also required to ensure that developments comply with State Government Best Practice Guidelines for the environmental management of urban stormwater to protect and enhance the condition and values of existing rivers and creeks where feasible. These requirements have been further clarified in the Waterways Operating Charter as long term aims and ten year goals. Melbourne Water is very conscious of the need to keep costs as low as possible; this includes any costs that developers are required to pay. The Essential Services Commission provides appropriate oversight on any changes in the fees and costs that Melbourne Water charges. When preparing developer services schemes for developments, Melbourne Water observes 16 industry endorsed principles. These principles were prepared by a specially appointed Review Group representing the development industry, local government and Melbourne Water. The principles were adopted in November 2003 following circulation to industry association members for comment and endorsement. The principles, together with Melbourne Water's legislative powers and principles adopted by the Council of Australian Governments (COAG) for Water Policy, are designed to provide an integrated solution to drainage and stormwater quality works including: 1. Adoption of an integrated catchment approach to stormwater management; 2. Consumption based pricing, full cost recovery and removal of cross subsidies that are not consistent with efficient and effective services; 3. Environmental requirements based on the best available scientific information; 4. Protection of waterway health and water quality forms the basis for determining drainage arrangements, and are the main determinants for calculating development charges for a scheme. The principles for creation and review of development services schemes are designed to meet the tests of equity, transparency and nexus, while facilitating development in a way that leads to positive social, economic and environmental outcomes. In summary, the Melbourne Water Waterways Group believes that regulation has a relevant role to play as part of the overall mix of policy responses that are required for Melbourne Water to fulfil its responsibilities. The use of regulation is particularly relevant in dealing with externalities and in ensuring that private development does not cause unacceptable public costs. Submission ends.

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