Australia Strengthens Water Market Laws Amid El Niño Concerns

The Australian Competition and Consumer Commission (ACCC) recently enacted stricter laws regarding market manipulation and insider trading within the Murray-Darling Basin water markets. Australia has long been a leader in formal water markets, allowing farmers to trade water entitlements as a financial asset. These markets are becoming increasingly important as the country braces for a potentially strong El Niño event, which is predicted to bring hotter and drier conditions.

The new regulations, which took effect July 1, expand the ACCC’s powers to investigate and penalize those who attempt to artificially influence water prices. While a 2021 ACCC review found no evidence of market manipulation by investors, the laws address concerns raised during the 2017-2019 Tinderbox drought when high water prices and increased non-farmer ownership sparked criticism.

Though some stakeholders, including First Nations people, have faced historical exclusion from these markets, officials believe continual improvement of water governance is crucial for ensuring fair and efficient water distribution, especially as climate change intensifies.