Resource Governance and Integrated Catchment Management · Resource Governance and Integrated...

Resource Governance andIntegrated Catchment Management:

Issues Paper No 2

Murray-Darling Basin Commission Project MP2004:

Agriculture and Natural Resource Managementin the Murray-Darling Basin: A Policy History and Analysis

Resource Governance andIntegrated Catchment Management:

Issues Paper No 2

Murray-Darling Basin Commission Project MP2004:

Agriculture and Natural Resource Managementin the Murray-Darling Basin: A Policy History and Analysis

Ian Reeve Graham Marshall Warren MusgraveInstitute for RuralFutures

Institute for RuralFutures

Economic Consultant

Institute for Rural FuturesUniversity of New EnglandArmidale, NSW 2351

Tel: 02 6773 2220Fax: 02 6773 3245Email: [email protected]: http://www.ruralfutures.une.edu.au

April 2002

i

Contents

Preface ........................................................................................................................................... iiiAcknowledgments ....................................................................................................................... iii

Summary......................................................................................................................................... v

1 The Role of the State in Natural Resource Management ................................................ 11.1 Definitions........................................................................................................................ 11.2 The role of the state........................................................................................................ 31.3 Multi-government resource governance ........................................................................ 3

2 Historical Trends in the Role of the State ......................................................................... 52.1 Historical context............................................................................................................. 52.2 Trends in public participation.......................................................................................... 62.3 Trends in policy instruments........................................................................................... 72.4 Distribution of responsibility between governments...................................................... 9

3 From ICM to Resource Governance................................................................................. 133.1 ICM ................................................................................................................................ 133.2 ICM as governance....................................................................................................... 153.3 The LWMP Experience................................................................................................. 193.4 The Connection Challenge........................................................................................... 20

4 The Possibility of Resource Governance........................................................................ 234.1 A governance framework.............................................................................................. 234.2 Practical considerations................................................................................................ 24

5 Conclusions and Prospects .............................................................................................. 295.1 Introduction.................................................................................................................... 295.2 The conclusions ............................................................................................................ 295.3 The prospects ............................................................................................................... 31

6 Bibliography ........................................................................................................................ 33

7 End Notes............................................................................................................................. 37

iii

Preface

Government policy for agriculture and natural resource management (NRM) has a profoundinfluence on the ways in which natural resources are utilised. There is broadacknowledgment that agriculture will have to be practised differently from now on, in order toreverse the trend towards environmental degradation in many parts of the Basin. There is aneed for new policy directions, especially considering the urgent need to address drylandsalinity, biodiversity and related issues.

This report is part of a project instigated by the Human Dimension Program of the Murray-Darling Basin Commission and was undertaken by the Institute of Rural Futures based at theUniversity of New England in NSW.

The project initially produced an Overview Report which is a description of the broad trendsin 20th century government policy which impacted on land use practice in the Basin. AWorkshop was then held to debate and agree upon the four most significant areas where ashift in policy could, in the long term, encourage and facilitate sustainable farming practices.Each of these four areas is the subject of an issues discussion paper. These papers aredesigned to be a broad canvassing of ideas which will contribute to the debate about thedirection NRM will take in the future. Authors were asked for suggestions to move theagenda forward, and the ideas contained in the papers are not necessarily endorsed by theCommission.

Overview Report: Agriculture and Natural Resource Management in theMurray-Darling Basin – A Policy History and Analysis

Issues Paper 1: Legal Issues Relating to Water Use

Issues Paper 2: Resource Governance and Integrated Catchment Management

Issues Paper 3: Regional Development Issues

Issues Paper 4: Human Dimensions of Structural ChangePlease note that these are a linked set of documents and are fully referenced at the end of eachcomponent report.

Acknowledgments

Each of the papers has been reviewed by one or more external reviewers, as well as by themembers of the project Steering Committee. The papers have gained significantly from thehelpful comments and suggestions provided by these reviewers and their assistance isgratefully acknowledged.

v

Summary

For much of the 19th and 20th century, agricultural development in the Murray-Darling Basinproceeded, as elsewhere in Australia, with little attention to the wide range of public goodsthat were provided by the environment. With the transition from agricultural frontier tomature regional economy, governments have had to concern themselves increasingly with theimpacts of agriculture on the provision of public goods such as clean water and naturalbiodiversity. In the last two decades of the 20th century, there has been a growing complexityin both the environmental problems faced by the Basin, and the arrangements governmentshave put in place to deal with them.

This paper commences with a brief account of the role of the state in resource management,and the changes that have occurred in this role, including the distribution of responsibilitiesbetween the States and the Commonwealth.. After identifying some of the promisingdevelopments in cooperative federalism in the sphere of resource management policy, thepaper turns to the question of resource management arrangements at the regional and locallevel. The dominant policy framework at this level, integrated catchment management(ICM), is briefly reviewed. It is suggested that the ideal of integrated catchment managementis a critical and essential policy goal for the Basin. The practice of ICM would be improvedwith further policy development in two areas. First, there is a growing body of evidence thatforms of self-governance based on trust and cooperation among small groups of resourceusers are a robust and sustainable institution that can complement state-based ICM efforts.Second, the values that underpin such self-governance have the potential to conflict with thevalues that underpin State ICM efforts and cooperative federalism more generally. It isargued that the regional resource management organisations will need to play a skilledmediating role if the sorts of value conflicts that underlie current landholder cynicism aboutlandcare and ICM are to be avoided.

The paper sketches an overall resource governance framework which builds on the strengthsof cooperative federalism that have become evident with the COAG water reform process, thestrengths of State ICM and research capacity, and the potential for robust, sustainable self-governance by resource users at the local level. The paper concludes by canvassing some ofthe key issues relating to the feasibility of the resource governance framework. Regionalcapacity building is a central issue, both in terms of the ability of catchment managementorganisations to carry out their critical mediating role, and in terms of the civic participatoryskills needed by resource users involved in local scale self-governance.

Institute for Rural Futures 1

1 The Role of the State in Natural Resource Management

This discussion paper focuses on the issues and future policy directions relatingto how governments exert influence on the activities of their citizens that areimpacting on the rural environment and natural resources, in order to achievepublic interest goals. The geographical focus is the Murray-Darling Basin,although much of the discussion in this paper is applicable to other areas ofAustralia.

Over the last decade or so, Australian policy discussion in this area hasdeveloped a number of terms and concepts which are often used with theassumption that they will mean the same thing to all who encounter them. Thischapter commences by clarifying the meaning of a number of these terms asused in this discussion paper.

1.1 Definitions

In policy discussion, the term ‘institution’can refer to either an organisation or tosocial practices that are regularly andcontinuously repeated, are sanctioned andmaintained by social norms, and bringorder and stability to societies1. Forexample, the Commonwealth Bank is afinancial institution, i.e. a financialorganisation or firm. The social practiceof having firms specialising in borrowingand lending money is an institution incapitalist societies. In this paper, the term‘institution’ refers to social practices.

The usage of the terms ‘state’ and‘government’ can also be confusing. Amodern nation-state comprises apopulation occupying a defined territory,with a system of government that isrecognised as legitimate by other nation-states. ‘The state’ is an abstract conceptreferring to the set of institutionscomprising the legislature, executive,central and local administration, judiciary,police and armed forces. ‘Thegovernment’ refers to the individuals andorganisations that carry out the functionsof the state. A government may followtime-honoured ways of carrying out itsfunctions, in which case the methods ofgovernment are also institutions.

In an Australian context, further confusionarises because our federal system ofgovernment has some functions of

government carried out by the States (suchas Queensland or New South Wales),which have defined territories, their ownsystems of government, legislatures,executives and administrations.

In this paper, ‘state’ refers to the abstractconcept of a set of institutions as describedabove, ‘State’ refers to a State within theC o m m o n w e a l t h o f A u s t r a l i a ,‘government’ is a generic term forindividuals and organisations carrying outthe functions of the state, and‘Government’ refers to a specific set ofindividuals and groups, such as ‘theKeating Government’ or ‘the QueenslandGovernment in 1990’.2

The concept of ‘resource governance’ hasemerged from an area of study thatdeveloped during the 1990s, and that isperhaps best represented by the work ofElinor Ostrom (Ostrom, 1990). As usedby Ostrom and others, the concept refersto the process by which collectivedecisions are made about access to naturalresources when there is more than just asingle government agency involved —when, for example, multiple agencies,interest groups and individuals take part indecisions.3 An examination of the use ofthe term ‘resource governance’ on theWorld Wide Web, both in Australia andoverseas, suggests that the term is oftenused to describe situations where

Institute for Rural Futures2

decentralisation of resource managementfunctions formerly held by state agencieshas taken place. This may also, but notalways, involve the sharing of planningand decision making powers of stateagencies with resource owners or users.

The statutorily defined sharing of powersbetween state agencies and resource usersor organisations representing theirinterests is more frequently denoted by theterm ‘co-management’. This term iswidely used in the Australian context ofmarine resources and indigenous resourceusers.

The term ‘partnerships’ or ‘communitypartnerships’ can also denote sharing ofpower as in ‘co-management’, but anexamination of the usage of ‘partnerships’in Australian documents about naturalresource management on the World WideWeb reveals it is often used rhetorically inState and Commonwealth agencydocuments, with the actual arrangementsfor sharing power, responsibility andaccountability are rarely delineated in anydetail. The use of the term appears torelate more to acknowledging commitmentto particular social or political values, thanto describing a specific form of resourcegovernance.

In this paper, ‘resource governance’ willrefer to situations where multiplegovernment agencies, interest groups, andindividuals are involved, without implyingany particular distribution of powersamong the state and resource users. ‘Co-management’ will be used to describeforms of resource governance involvingstatutorily defined sharing of power,responsibility, accountability, monitoring,enforcement and other functions essentialto the management of natural resources.

‘Partnership’ will be used to describeformal a r rangements be tween .Commonwealth and State governments, orbetween State governments and catchmentmanagement organisation, whereresponsibilities, accountability and thesharing of costs are well defined.

The terms ‘resource management’ and‘natural resource management’ pre-date‘resource governance’ by many decades,having their roots in the USA Progressivemovement in the first part of the 20thcentury. This movement was a reaction tothe wasteful excesses of the frontier era,and held that a strong governmentbureaucracy supported by scientificexpertise was necessary to manage the useof public lands4. In Australia, theProgressivist ideal of a neutral and expertbureaucracy objectively resolvingenvironmental issues has lived on in suchinstitutions as environmental impactassessment and organisations such as theResources Assessment Commission5. Theideal also underpinned early views aboutintegrated catchment management in the1980s. Since that time, and with thegrowth of public participation in collectivedecision making on rural environmentaland resource issues, the Progressivistpurity of the original concept of ‘resourcemanagement’ has become diluted. Forexample, the term ‘land resourcemanagement’ as used in Australian policydiscussion refers to the actions of bothState agencies managing Crown land inthe public interest and to farmersmanaging private land for commercialgoals. Staff of State agencies and farmersare both referred to as ‘land managers’.

As this dual usage can blur the clarity ofpolicy discussion, the term ‘resourcemanagement’ without qualification willrefer to actions by government agencies.Where individual landholders aremanaging resources for public benefit,such as establishing wetlands or wildlifehabitat, the term resource managementwill be used with appropriate qualification.Actions carried out by individuallandholders for private benefit will bedescribed as ‘land use’ or ‘agriculturalpractices’.

Lastly, the term ‘catchment managementorganisation’ will be used to refer to State-created organisations such as CatchmentManagement Boards in New South Walesand Catchment Management Authoritiesin Victoria. The term ‘regional resource


management organisation’ will be used torefer to any organisation with naturalresource management responsibilities,regardless of whether it is created by aState government or not. MurrayIrrigation Ltd is an example of the latter.

1.2 The role of the state

Broadly speaking, the state is a set ofinstitutions that provide for themaintenance of order, the settlement ofdisputes, the coordination of the activitiesof citizens and their protection fromexternal threats. The impacts on theenvironment of economic development,technological innovation and populationincrease since the Industrial Revolutionhave introduced new threats to social orderand the role of the state has expanded todeal with these threats. In modernindustrial nations, the generic roles of thestate in relation to natural resources andthe environment include:

ß improving knowledge about theenvironment and resources (monitoring,research, education),

ß planning and development of strategiesand policies,

ß controlling the access of individuals andfirms to natural resources andenvironmental assimilative capacity,

ß resolving conflicts, andß enforcement.

The roles of the state relating to the use ofland and water resources form the mainsubject matter of this paper.

1.3 Multi-government resourcegovernance

1.3.1 Coordinate and cooperativefederalism

At the broadest level, the relationshipsamong governments in a federation can bedivided into two types. The first is whereeach function of the state is neatlyallocated to just one level of government,an arrangement that is termed coordinate

federalism. Where functions are sharedacross levels of government, this is termedcooperative federalism In reality, somefunctions of the state will be amenable toneat allocation and others will not, so thata federation will always be a mixture ofcoordinate and cooperative federalism.6

At the time of the framing of theAustralian Constitution, the concept ofresource governance scarcely existed,although some functions of the colonialgovernments were essentially resourcegovernance as it is understood today.Functions such as the granting andadministration of leasehold land, and thealienation of freehold land, were amenableto neat allocation among the States under aConstitution that granted to the Statesthose powers not defined asCommonwealth powers (the so-called‘residual powers’).

Whatever hopes there may have been for acoordinate Australian federation, theposition of State borders in the Murray-Darling Basin and the conflict betweenirrigation and navigation made cooperativefederalism in resource governanceinevitable early in the life of theCommonwealth (see section 6.1.3 of thecompanion report to this paper, Reeve,Musgrave, Frost and Stayner, 2001). Theresult was the River Murray Commissionwhich, later in the 20th century wassucceeded by the Murray-Darling BasinCommission.

However, even without the inconvenientlocation of State borders, the inter-linkednature of environmental and resourcemanagement issues, and the tendency ofthese issues to span all sorts ofjurisdictional boundaries, means thatresource governance in the Basin isinevitably an exercise in cooperativefederalism.

1.3.2 Cooperative federalism in othercountries

The Murray-Darling Basin is not unique inthis respect. A number of other nationstates have federal systems of government.


These include the USA, Canada, and anumber of European countries. In theUSA, environmental quality, for example,has generally been managed throughcooperative agreements between the USEnvironment Protection Agency (USEPA)at the Federal level, and the agencies ofthe individual States of the USA.7 TheUSEPA sets the criteria defining anacceptable environmental program.8 Theimplementation of the program is theresponsibility of individual States9. TheUSEPA assists States to establishprograms and retains the authority to takeenforcement action in cases where Stateprograms are failing to meet the criteriafor acceptable performance.

In the Netherlands, environmental qualityis protected by dividing responsibility fordifferent types of industry betweendifferent levels of government. Thenational government is responsible for theenvironmental regulation of the nuclearpower and chemical waste processingindustries, the provincial governments forindividual large plants, such as oilrefineries, and municipal governments forthe remainder of firms having impacts onthe environment. The three levels ofgovernment work cooperatively toimprove the e f fec t iveness ofenvironmental compliance programs.10

1.3.3 Advantages of centralisationand decentralisation

Experience in federal systems ofgovernment suggests that good argumentscan be found in favour of both centralisingand decentralising resource managementresponsibilities. In policy debates aboutresource management policy, there tend tobe consistent patterns of support amongdifferent interest groups for centralisationor decentralisation.

Among the arguments for decentralisationof resource management responsibilitiesare:

ß better knowledge of local conditions,

ß better matching of programs to theseconditions,

ß greater policy diversity andexperimentation,

ß avoidance of unnecessary duplication ofbureaucratic effort,

ß simplicity for clients of programs, andß communities have more involvement in

the decisions that affect them.

These arguments are commonly advancedby governments in the lower levels offederations, for example by State or localgovernments.

On the other hand, arguments in favour ofcentralising resource managementresponsibilities include:

ß essential for dealing with problems thatspan the jurisdictional boundaries oflower level governments,

ß central governments may have resourcesand expertise not available to lowerlevel governments, and can be morestrategic in their allocation of policyeffort,

ß lower level governments may lowerenvironmental standards in competitionfor private sector investment, and

ß the need for national standards in keyareas affecting human health, such ashazardous wastes.

Conservation interest groups often favourcentralisation of responsibilities as ameans of overcoming the perceived undueinfluence of pro-development interests inlower levels of government.

Industry interest groups, on the other hand,tend to favour a balance betweencentralisation and decentralisation, withstandards established nationally to removebarriers to, or distortions in, trade, andapproval procedures operating locallywhere pro-development interests holdsway.11


2 Historical Trends in the Role of the State

The previous chapter, after clarifying a number of the terms used in this paper,outlined some of the functions undertaken by the state to maintain orderamongst citizens who use the environment and resources for their privatebenefit, and citizens experiencing the side effects of this use. In nations withmulti-government federations, the balance between centralised anddecentralised functions can be set in various ways — the balance at any onetime being a reflection of the nature of resource management problems, thepracticalities of administration and the influence of interest groups. Thischapter shifts the focus to the Murray-Darling Basin and outlines some of thetrends in the roles that the Commonwealth, State and local governments play inthe management of the resources of the Basin.

2.1 Historical context

The changes that have occurred during the20th century in the resource managementroles of the Basin governments have nottaken place in isolation from the changesin agriculture, regional economies and thebroader evolution of public policy over theperiod.

In the late 19th and early 20th century, anddespite some serious droughts, thegenerally favourable economic conditionsfor agriculture led to the provincial citiesand towns of the Basin enjoying a periodof prosperity and civic amenity that couldbe thought of as the ‘golden age’ of ruralAustralia. Federation in 1901 had turned agroup of colonies into a nation, and the‘golden age’ was proof positive of theyoung nation’s rosy future if the pastpolicies of closer settlement and stateprovision of infrastructure continued to bepursued. The third plank of nation-building — tariff protection — fell intoplace after federation, a consequence of analliance between the protectionist Liberalsand the Labor Party.12

For some sixty years, the Basin, alongwith the rest of Australia, rode on thesheep’s back, while the increasingly lessfavourable conditions on world marketswere offset by the productivity gains andexpansion of agriculture through newtechnology and state-provided irrigationinfrastructure. The symptoms of themassive landscape re-adjustment that hadbeen unleashed by agriculture (soil erosion

and salinity) went largely unnoticed bypoliticians, with the exception of a periodabout World War II when most Statesenacted soil conservation legislation.

About the late 1960s and early 1970s, anumber of events combined to producewhat appears to be a critical policywatershed for natural resourcemanagement in the Basin.

On the macro-economic front, confidencein Keynesian prescriptions evaporated inthe face of persistent stagflation and thearguments of monetarism. The tariffbarriers and statutory marketingarrangements that had provided prosperityduring the nation-building phase wereseen as impediments to future prosperityas Australian commodities faced greatercompetition in a globalising worldeconomy.

With greater attention on micro-economicreforms in the 1980s, the earlier critiquesby economists of the squandering ofpublic funds in irrigation developmentbegan to receive political attention. As thechallenge to dominant world views posedby the rise of modern environmentalism inthe late 1960s was absorbed into policydiscourse, soil erosion and other forms ofland degradation became environmentalproblems rather than agricultural extensionproblems. At the same time, agriculturewas becoming less important in both thenational economy and in the economies of


the towns and cities of the Basin, whilenew interest groups such asconservationists and Aboriginal land rightsgroups were laying claim to land andrivers that had been the exclusive domainof agriculture.

Lastly, as it became evident that the landdegradation problems were national inscope, and with public dissatisfaction withthe rate of progress of State governments,the Commonwealth government becameincreasingly involved in natural resourcemanagement. With increasing pressure inthe 1990s for local government to take onresource management responsibilities, theera of full-blown resource governance —resource management by multiplegovernments and interest groups — hadarrived.

The period from the 1980s to the presenthas been a period of great change inagriculture and natural resourcemanagement policy in the Basin. Theoverview report (Reeve, et al., 2001) thatis a companion to this report, provides anaccount of these changes. Before turningto some of the trends in the role ofgovernments during this period, it is worthdrawing attention to several aspects ofthese changes that are relevant to laterdiscussion in the paper.

2.2 Trends in public participation

The rise of modern environmentalism inthe late 1960s brought with it a demandfor direct involvement of the public inurban planning decisions, rather thanthrough elected representatives. About thesame time, the urban and regionalplanning literature began to draw adistinction between planning as a technicalactivity by a central professional elite andplanning as a facilitated negotiationbetween competing interests13. Publicconsultation with those affected bydevelopment proposals seeking planningconsent was an important part of thenegotiation process. Since that time,public participation has come to be animportant part of the practice of urban and

regional planning, although several studiessuggest that the advances in participatoryinstitutions made in the late 1970s havesince been partly dismantled.14

Perhaps more importantly for the purposesof this paper, the same trend occurred inthe rural planning activities carried out byState government agencies. Although aform of regional land resource planningwith a participatory flavour had beendeveloped in Victoria in the late 1950s andearly 1960s (group conservation areas)and in New South Wales in the mid-1960s(group schemes), it was not until the mid-1980s that public participation began to beextensively discussed in a land resourceplanning context, particularly in thecontext of integrated catchmentmanagement.

However, in comparison to urban andregional planning, in which publicconsultation was explicitly about resolvingconflicting interests, integrated catchmentmanagement adopted an approach topublic consultation which tended to playdown these conflicts. Integratedcatchment management was about 'landmanagers' and 'stakeholders', who 'all livedin a catchment', 'owned the problems' andachieved its aims by, in the words ofCunningham (1986:5):

people talking to one another, understandingone another's problems and co-operativelysetting about solving them with a commonobjective in mind.

During the 1990s, with landcare inascendance, this conciliatory approachwas further enhanced with the entry ofnotions of ‘empowerment’ into policydiscussion about integrated catchmentmanagement and landcare.

The nature of public involvement andempowerment through the NationalLandcare Program has remained largelyunstructured and diffuse. On the otherhand, the increasing institutionalisation ofthe ideas of integrated catchmentmanagement in succeeding pieces oflegislation among the Basin States,together with the more explicit


acknowledgement of conflicting interestsin the COAG water reforms15, has resultedin a trend toward more structured publicconsultation. One form of this, and whichentails the public taking on someresponsibilities in return for having a voicein decision-making, is co-management(sometimes referred to as government-community partnerships).

2.3 Trends in policy instruments

The last thirty years of water and landresource management in the Basin haveseen an enormous increase in the diversityof policy instruments used by the Basingovernments. The changes can beconsidered under the headings of thegeneric roles of the state described insection 1.2.

2.3.1 Creating knowledge

The amount of research being conductedthat is relevant to natural resourcemanagement has increased significantly inthe last decade. New policy approachesthat have been introduced include:

ß industry levies matched by theCommonwealth to fund researchthrough the R&D Corporations,

ß programs to encourage research andmonitoring by farmers and members ofthe community,

ß greater integration of research with Stateand catchment resource managementstrategies,

ß more outsourcing of research functionsby resource management agencies, and

ß greater emphasis in researchmanagement on communicating andencouraging the adoption of findings.

2.3.2 Plans and strategies

One of the most marked changes in thelast decade or so has been the greatincrease in government resources devotedto the formulation of plans and strategies.

Much of this has been under the rubric ofintegrated catchment management, whichis dealt with in detail in the next chapter.As discussed in section 2.2 above, muchof this planning effort has beenaccompanied by the development ofpolicy instruments for involving thepublic, particularly local and regionalcommittees of various forms. There hasalso been an increasing emphasis on tryingto obtain voluntary change in landuse andagricultural practices through the planningprocess, either by the application ofmanagerial principles like time boundobjective setting, or by appeals to altruismand a ‘land ethic’. Another policyapproach that is increasingly beingconsidered is the tying of the provision ofgovernment funding to the developmentand implementation of regional plans.

2.3.3 Access to resources

The basic means by which the state givesindividuals access to land and waterresources is through the granting ofvarious forms of title and licences, i.e. theinstitutions of property. The institutionsthat give access to land resources, inparticular, have undergone relatively littlechange. This is the case in most Westernliberal democracies, although the politicalsensitivity of state experimentation in theinstitutions of land and other resourceownership is probably heightened inemigrant societies such as Australia.16

There have, nevertheless been somechanges. These include the introductionof conservation covenants and changes tothe administration of leasehold land.17

More importantly, the Mabo and Wikdecisions have introduced the possibilitythat persons may have some form orproprietary interest in land other thanthrough the conventional Western notionsof ownership.

In the case of water resources, there havebeen significant changes in governmentpolicy over the last thirty years. Thesehave been described in detail in two of thecompanion papers to this issues paper, the


overview report by Reeve et al. (2001) andthe paper on legal issues in water resourcemanagement by Tan (2002). A number ofaspects of these changes are also discussedin chapter 3.

The key change in the nature of the policyinstruments used by the Basingovernments is the shift away from anadministrative approach to waterallocation towards harnessing marketforces through the privatisation and/orcorporatisation of irrigation trusts and theregional branches of State agencies whichoperated irrigation systems, and throughthe creation of markets in waterentitlements.

In parallel with the trends in land resourcemanagement, there has also been a shifttowards policy instruments that formalisethe involvement of the public and interestgroups in water resource planning.

2.3.4 Resolving conflict

An important role of the plans andstrategies discussed in section 2.3.2 aboveis to reduce conflict between citizens byattempting to minimise the spillovereffects between different and/or competinguses of land and water resources, as wellas encouraging changes in use in thecommon good. However, conflicts stilloccur and the state needs to provide themeans of resolving them.

In the past thirty years there has been agrowing diversity of approaches toresolving resource conflicts, somesuccessful and some less so. Among theapproaches that have been used are:

ß appeal to Commonwealth powers underthe Constitution (e.g. the Fraser Islandsand mining and Franklin Riverconflicts),

ß establishment of statutory authorities,such as the Australian HeritageCommission in the 1970s and theResources Assessment Commission inthe late 1980s, to resolve conflicts byscientific investigation,

ß establishment of boards, authorities,committees or inquiries to take evidencefrom experts, hear representations frominterest groups and the public, andprovide advice to Ministers or otherpolicy makers, and

ß employment of alternative disputeresolution techniques.

2.3.5 Regulatory enforcement

Enforcement has always posed difficultiesin rural Australia. As with absolutistviews of property rights, these difficultieshave their origins in the history ofsettlement. Condoned lawlessness,particularly when that lawlessness isdirected toward distant and unpopularauthority, is often a feature of frontiersocieties. The new conditions of thefrontier society tend to outrun the capacityof the state to provide new institutionsappropriate to these conditions. As aresult, breaking the law of the state is seenas justifiable.18 Australia was noexception, commencing with squatting,followed by license evasion on thegoldfields, peacocking in the closersettlement era, right through to‘accidental’ entanglement of water meterswith fishing line in the present day.

The social dynamics of small communitiesalso plays a part. It is difficult forgovernment employees in regional areas tobe enforcement agents when they have on-going social relationships with manymembers of the communi ty .19

Consequently, there has generally beenlitt le enthusiasm for increasingenforcement in relation to land and wateruse. As a consequence, regulatoryenforcement has not seen thediversification and experimentation thathas occurred among other policyinstruments in the last thirty years. Theseparation of regulatory and operational orextension roles into separate agencies20 hasgone some way towards dealing with atleast one of the difficulties outlined above.However, the difficulties that haveaccompanied the enforcement of theprovisions of the Native Vegetation


Management Act in New South Walessuggest that regulatory enforcement willremain a contentious instrument for theforeseeable future.21

2.4 Distribution of responsibilitybetween governments

2.4.1 The Constitution

The Constitution gave the Commonwealthgovernment no responsibilities in areasthat would be seen today as naturalresource management. However, theemergence of modern environmentalism inthe late 1960s put pressure on theCommonwealth government from twodirections. Firstly, as a consequence ofthe Stockholm Conference of 1972,international agreements on environmentalmatters began to impose responsibilitieson indiv idual na t ions , whichresponsibilities in Australia’s case fellunder the external affairs provision(§51(xxix)) of the Constitution. Secondly,as a consequence of growing publicawareness in Australia, a number of iconicenvironmental issues such as the GreatBarrier Reef, Fraser Island sand miningand the flooding of Lake Pedder foundtheir way onto the national politicalagenda. In the case of Fraser Island, theCommonwealth government used itsoverseas trade powers under theConstitution (§51(I)) to halt sand mining.In the 1990s, additional powers relating toworld heritage areas became available tothe Commonwealth.

2.4.2 The 1970s and 1980s

For much of the 1970s and 1980s, theCommonwealth took a role of ad hocresponses to emerging internationalobligations and nationally contentiousdevelopments.22 Naturally, there were anumber of challenges from the States tothe widening powers of theCommonwealth with respect to Statedevelopment projects. However, thecourts generally found in favour of theCommonwealth, the list of exclusive

Commonwealth powers in §51 of theConstitution providing ample scope forstatutory interpretation by the courts tosupport the Commonwealth’s actions toprotect the environment. This resulted inthe Commonwealth having wider powersin relation to the environment than earlierreadings of the Constitution would havesuggested.

2.4.3 Land resource management

The situation was somewhat different,however, for land resource management.In this policy domain, the Commonwealthhad no usable Constitutional provisionsavailable to it. The Collaborative Study(Department of Environment Housing andCommunity Development, 1978), causedconsiderable concern about the levels ofland degradation it reported. However, theconservation movement at that time wasmore focused on iconic wilderness andpreservation issues, so that there was nointerest group pressure to elevate landdegradation onto the national politicalagenda.

Commonwealth involvement in landresource management began modestlywith some Commonwealth funding to theStates in the late 1970s, followed by theestablishment of the National SoilConservation Program in 1983. ThisProgram encouraged the use ofagricultural land within its capability, landuse decisions based on whole catchmentplanning concepts and the cooperation ofall sectors of the community in solvingland degradation problems. While theProgram altered the pattern of incentivesfacing the States, their responsibilities forland resource management remainedunaffected.

The situation was different yet again forwater resource management. In this case,the one water resource that had thepotential to be a national issue — theMurray-Darling Basin — already hadinstitutional arrangements in place forsharing responsibilities among theCommonwealth, New South Wales,


Victoria and South Australia. Theemergence of water quality as a concern inthe 1980s was responded to via thecooperative institutions already in place inthe form of the River Murray WatersAgreement and the River MurrayCommission.23 After several years ofmeetings and negotiations amongpoliticians and bureaucrats of the Basingovernments, the Murray-Darling BasinAgreement was established, firstly as anamendment to the River Murray WatersAgreement in 1987, and as a replacementfor the latter Agreement in 1992. Thisinvolved the passing of complementarylegislation in the Basin States, and theformation of a Ministerial Council, aCommission and a Community AdvisoryCommittee.24

2.4.4 The emergence of cooperativefederalism

In environmental matters more generallyduring the 1980s, cooperative federalismreplaced the previously adversarialCommonwealth-State relationships of the1970s, building on the networks that hadbeen forming since the 1970s amongprofessionals in the new environmentdepartments. This led, in 1992, to theInter-Governmental Agreement on theEnvironment, which attempted to clarifythe roles of the Commonwealth and theStates in environmental matters, providemechanisms for resolving difficulties inaccommodating the interests of theCommonwealth and the States and provideprinciples for the development andimplementation of environmental policyby the Commonwealth and the States.

In the same year, following a longtradition of Commonwealth-Statecoordination through ministerial councils,the Agriculture and Resource ManagementCouncil of Australia and New Zealand(ARMCANZ) was formed by theamalgamation of the AustralianAgricultural Council, the Australian SoilConservation Council and the AustralianWater Resources Council. The role ofARMCANZ was to formulate national

resource management strategies andpolicies which, in some cases, can beimplemented through complementarylegislation in the States. ARMCANZ wassupported by the Standing Committee onAgriculture and Resource Management(SCARM), comprising department headsfrom the Commonwealth and States. TheSustainable Land and Water ManagementCommittee of SCARM, established in1996, had a key advisory and coordinatingrole in matters pertaining to naturalresource management.

Under the recently establishedIntergovernmental Agreement on aNational Action Plan for Salinity andWater Quality, a Natural ResourceManagement Ministerial Council is tooversee the implementation of theNational Action Plan. This Council is alsoto have responsibility for resourcemanagement matters formerly dealt withby ARMCANZ and the Australia and NewZealand Environment and ConservationCouncil.

2.4.5 Local government involvement

As the institutions of cooperativefederal ism in natural resourcemanagement were put in place during thelate 1980s and 1990s, and the Statesturned to catchment-based planning, it wasinevitable that local government would bedrawn into the net of coordination.Because local governments are creationsof the individual States through their localgovernment Acts, their assumption ofresponsibilities in natural resourcemanagement has tended to be broughtabout by State legislative initiatives.Examples of this are the inclusion of localgovernment in state of the environmentreport ing procedures , and therepresentation of local government onstatutory catchment management bodies.

Local government has also becomeinvolved in natural resource managementin a less formal way through accessingCommonwealth funding (such as theNatural Heritage Trust), and through


programs that have been established bylocal government associations at regional,State and national level.25

2.4.6 COAG water reforms

While the COAG water reforms weremore a reflection of the influence of theideology of economic rationalism onpolicy, than of purposeful experimentationwith cooperative federalism, they appearto have been somewhat exceptional inmagnitude of the changes being attempted,the strength of the incentive structure andthe strength and transparency of the linkbetween performance and incentives.Consequently, the reforms have extendedthe scope of what might be considered asthe institutions of cooperative federalism.

Under the COAG water reformframework, all jurisdictions have agreed toa codified water reform process, theimplementation of which is beingmonitored by the National CompetitionCouncil. Further, payment to the States,by the Commonwealth, of the agreed‘dividends’ f lowing f rom theimplementation of the NationalCompetition Policy is dependent onendorsement, by the Council, of progressin water reform.26

To date, while the process is not complete,the COAG framework, coupled with theNational Competition Policy process ofreview and reward, appears to have been asuccessful exercise in cooperativefederalism, with all jurisdictions havingmade significant progress with itsimplementation. The States and theCommonwealth have jointly developed anon-coercive process, incorporating a setof principles, targets and incentives, whichprovide guidance to the States while they

determine their own best course of action,within a highly consultative framework.

As Quiggin (2001) notes, the COAG waterreform framework has reinforced policypreferences for price-based and market-based policy instruments. However, theseinstruments are to operate within thebroader and now almost ubiquitousplanning framework of integratedcatchment management (ICM).

2.4.7 Concluding comments

In summary, the elaboration of institutionsfor cooperative federalism in naturalresource management during the late1980s and 1990s has not resulted in adistribution of powers and responsibilitiesmarkedly different from that envisaged atthe time of the framing of the Constitution.Rather, it has been an importantinstitutional adaptation to the pressures ongovernments in the latter part of the 20thcentury.

The federal system of government put inplace in 1901 has proven to be remarkablyadaptable, the most recent and promisingadaptation being the COAG waterreforms. However, the complexity andinter-relatedness of resource managementissues remains a challenge to resourcegovernance in a federation.

In such an environment, integration ofresource management effort is essential.The 1980s and 1990s have seen a growingemphasis in this area, with the emergenceof integrated catchment management as adominant influence on resourcemanagement policy. The next chapterturns to a consideration of the relationshipbetween resource governance andintegrated catchment management.


3 From ICM to Resource Governance

The previous chapter discussed the changes that have taken place in the lastthirty years or so in the role of governments in natural resource management inthe Murray-Darling Basin, and in Australia more generally. The overallpicture is one of natural resource management issues that seem to beincreasingly complex, of increasing diversity in the policy approaches andinstruments being used, and of rising expectations among the public of theirinvolvement in the decisions that affect their lives. In such a situation, thefrequent calls for improved integration of policy effort are understandable.Integrated catchment management (ICM) has been at the forefront of suchefforts for a decade or more and is likely to remain a central aspect to resourcegovernance in the Basin.

3.1 ICM

3.1.1 Trends in ICM

ICM in Australia grew out of thesuccesses of the Victorian and New SouthWales soil conservation agencies in the1950s and 1960s in the rehabilitation oferoded catchments to protect waterquality and the life of water storages.Planning, coordinating and groupextension capabilities were developed bythese agencies in catchment-wide projectssuch as the Eppalock project in CentralVictoria and the Goorianawa project inNew South Wales.

The Collaborative Study (Department ofEnvironment Housing and CommunityDevelopment, 1978) brought a growingawareness that the land degradationproblems in rural Australia included morethan the soil erosion problems that hadbeen the focus of the successful catchmentprojects of the 1950s and 1960s. Duringthe early to mid-1980s, the termsintegrated catchment management andtotal catchment management began toappear more frequently in policydiscussions by soil conservationprofessionals. ICM was seen asaddressing the problem of fragmentedapproaches to land resource management.It was also believed that greatercollaboration among stakeholders inplanning solutions to problems of land

degradation would lead to wider adoptionof sustainable practices.27

In respect of the latter, it was believed thatinvolving local communities in planningstrategies for investing in natural-resources conservation would lead them toaccept a greater share of the costs ofimplementing those investments.

While there was broad agreement aboutthese ICM ideals, the Basin States wentabout achieving the ideals in differentways. For example, South Australia andQueensland did not pass legislation aimedspecifically at creating catchmentmanagement organisations, preferring torely on powers under existing legislationand coordinating structures and networksamong existing agencies with resourcemanagement responsibilities.

New South Wales was the first Basin Stateto pass catchment management legislation(the Catchment Management Act in 1989).The arrangements put in place by this Actsuffered as local resource managementcommittees continued to proliferate inresponse to pressures for improvedmanagement of water resources andremnant native vegetation. New SouthWales is currently attempting to restoresome cohesion to ICM through the


establishment of a smaller number ofCatchment Management Boards.Victoria introduced Catchment and LandProtection Regional Boards in 1994 withthe Catchment and Land Protection Act.In 1997, the functions of these boards andothers with resource managementresponsibilities were consolidated inCatchment Management Authorities.Victoria could be said to have proceededfurther than other Basin States in itsattempts to establish funding stability andautonomy for its Catchment ManagementAuthorities.

Despite the different approaches to ICM inthe Basin States, there have been a numberof common developments over the lastdecade. Among those identified byBellamy et al. (2002) are:

ß a broadening of the ambit of problemsconsidered to be under the ICMumbrella,

ß increasing emphasis on localparticipation,

ß increasing emphasis on governmentstaking facilitatory roles, and

ß a recognition that more needs to belearnt about the social and politicalaspects of natural resource managementif the current large body of biophysicalknowledge is to be used effectively.

To these can be added the trends noted byMarshall (2001):

ß an increasing tendency for governmentfunding for local land resourcemanagement to require local fundingcontributions (including in-kindcontributions),

ß increasing formalisation of thesefunding arrangements in partnershipagreements, and

ß growing concerns about accountability.

3.1.2 Some tensions within ICM

With the advantage of hindsight, it ispossible to identify some tensions thathave accumulated within the concept of

ICM as it has evolved. While this isnormal within the body of beliefs andvalues underlying a policy approach thathas widespread support, reflective policyanalysis and clarification of these tensionscan assist in identifying future directionsfor policy.

The first of the tensions has been noted byMarshall (2001) who argued that there isnow some distance between the originalvision of ICM as a vehicle for promotingvoluntary adoption of conservationmeasures, and the increasing demands forcatchment management organisations tobe held accountable for their cost-sharingcommitments. As has occurred withlandcare, the goodwill built aroundgovernment support for voluntaryadoption of sustainable practices can bediminished by bureaucratisation andonerous accountability procedures. Thestandards of operation of bureacracieswith their salaried staff and definedresponsibilities cannot be applied tonetworks of volunteers.

Secondly, integrative policy efforts haveinevitable centralising tendencies. If onewishes to integrate A with B, then onemust be in a position to comprehend bothA and B and have the power to includethem in the ‘integrated’ policy. Extendingthis to C and D and so on, it can be seenthat integrated catchment managementimplies management centralised for thecatchment in question, generally within acatchment management organisation. Thisaspect has a discomforting tension withthe participative and empowermentaspirations of ICM. Even if the concernsof the catchment community are to be‘integrated’ in a catchment strategy, acent ra l ca tchment managementorganisation has to do the integrating.Farmers have traditionally had a dislikefor bureaucracy and there is a real dangerthat catchment management organisationscould be seen as yet another layer ofbureaucracy making their lives moredifficult for them.

Thirdly, there are also some tensions in theconcept of ‘empowerment’ that has been


used widely in ICM policy discussion.The assumption underlying the notion ofempowerment is that rural communitieslack the ‘power’ to act cooperatively andvoluntarily to deal with the environmentalproblems they face. This notion of‘disempowerment’ does not fit well withBradsen’s (1988) claim, made after hisreview of the State soil conservation Acts,that farmers had been quite successful ininfluencing legislatures to abstain fromregulatory pressure for improved landmanagement for some forty years.28 Incomparison, other industries such asmining and manufacturing have borne asubstantial increase in regulations toprotect the environment. Althoughfarmers tend to have relatively morepolitical power than many other groupsthat make up a similarly small proportionof the national population, theynonetheless experience a great deal ofpowerlessness in other ways. Theseinclude their inability to insulatethemselves from the unpredictable swingsin prices and seasonal conditions. Therhetoric of empowerment will often have ahollow ring about it for those on the rollercoaster of variable prices and seasons.

The tensions described above probably lieat the root of some of the concerns thathave been expressed in recent reviews ofICM in Australia.29 More importantly,these tensions are likely to contribute togrowing cynicism and disenchantmentamong landholders, whose cooperationand goodwill is essential to naturalresource management in the Basin.

In reflecting upon how some of theseemerging tensions in ICM might beaddressed, it is useful to draw a distinctionbetween ICM-the-ideal, and ICM-the-practice (i.e. the practice of ICM that hasdeveloped over the last 20 years). There isabsolutely no doubt that the ideal is centralto effective resource governance in theMurray-Darling Basin and elsewhere.However, the good sense of the ICM-the-ideal does not remove the need to strivefor improvement of ICM-the-practice.

The previous discussion suggests that thenature of ICM-the-practice as directgovernment intervention may lessen theprospects for widespread landholderparticipation in catchment management.This leads to the question as to whetherthere may be less direct means ofachieving the ideal of ICM. As ananalogy, supply and demand in aneconomy can be matched directly bycentral planning, or indirectly by the‘invisible hand’ in the functioning ofmarkets. Of course, neither the centrallyplanned economy nor free marketeconomy works exactly as we would wishand economic policy generally aims for abalance between the achievement ofeconomic goals by direct intervention inthe economy, and by the indirect means ofallowing markets to function freely.

From the sources reviewed in thepreceding sections of this paper, it appearsthat relatively little policy analysis hasbeen directed to the question of whetherthere exist indirect means of achievingICM-the-ideal — an integrative ‘invisiblehand’ for catchment management. If suchindirect means exist, the question thatfollows is what should be the balancebetween the direct means that havetraditionally been the foundation of ICM-the-practice and any suitable indirectmeans. The remainder of this paperaddresses these two questions.

3.2 ICM as governance

3.2.1 Trust and cooperation

In recent years, commencing with thepioneering work of Ostrom (1990), a bodyof theory, with considerable empiricalsupport, has emerged that suggests theremay be an ‘invisible hand’ that can guideresource governance, particularly at thelocal and regional level.30 The centralproblem in local groups managing theiruse of resources for the good of all is oneof trust. (‘If I invest in reducing myfarm’s accessions to the water table, willothers around me also do this, because ifthey don’t my investment will have been


pointless’). In general, the more membersof the group trust one another, the morecooperative management of the resource ispossible.

There is convincing evidence from thework of Ostrom and others that trust andcooperative resource management in smallgroups are mutually reinforcing.31 Peoplebuild trust by working together and greatertrust enables them to tackle increasinglymore difficult management problems,which builds further trust, and so on. Thismutual reinforcement can be thought of asa ‘virtuous circle’.

This virtuous circle provides anexplanation as to why resources sharedamong a group of individuals can be usedwithout the occurrence of the ‘tragedy ofthe commons’ famously predicted byGarrett Hardin (1968).32 Strictly, Hardin’sformulation of the problem of herdsmendegrading a common grazing area was atragedy of open access, i.e. a resourceshared between users among whom thereare no institutions limiting the level of useby individuals.

The concept of open access is vitallyrelevant to the Murray-Darling Basinbecause the ongoing problems of landdegradation in the Basin tend to be theworkings of tragedies of open access. Forexample, rising watertables occur becausethe individual who increases accessions tothe watertable with a particularagricultural practice captures all thebenefits from this practice, while the costsof rising watertables are spread across allwhose land overlies the watertable. Thecollapse of regional biodiversity and thepollution of rivers by sediment, nutrientsand pesticides are also tragedies of openaccess.33

A state faced by tragedies of open accesshas a number of options. It can assert itsauthority to regulate open accessresources, thereby converting them to stateproperty. This can be followed by thegranting of forms of private property toindividuals wishing to use the resource (aswhen squatters were granted grazing

licences, when the riparian doctrine wasreplaced by water licences, or whenfreehold title is granted to an area ofCrown land). As can seen from thepreceding examples, this has been by farthe most common way of preventing orreversing tragedies of open access duringthe European settlement of Australia. Theconstantly increasing problems of landdegradation in the Basin would suggestthat this approach has been less thanadequate.

An alternative is for the state to encouragethe emergence of a degree self-governanceat the local scale through the operation ofthe virtuous circle discussed above.34 Thepossibilities for local scale self-governance in resource management arecanvassed in further detail below afterdealing with the question of how suchself-governance fits within the broadercontext of governance by the state.

3.2.2 From commons to governance

As the number of cooperating individualsusing a particular resource increases, thereis a point at which difficulties inmaintaining trust begin to emerge. This isdue to the decreasing opportunities forsocial interaction among all members ofthe group. However, this may beovercome if the group develops some formof hierarchical or vertical organisation.For example, sub-groups might providerepresentatives to an overarching councilor committee, where the norms andexpectation of trust and cooperation couldcontinue to work in a virtuous circle.

There is now considerable empiricalevidence that larger groups can sometimesorganise themselves hierarchically in orderto design, implement, monitor and enforceformal institutional arrangements (e.g.,Ostrom, 1990). If the simpler small scaleproblems are being solved cooperatively,the task of developing the verticalorganisation needed to resolve moredifficult problems becomes easier. In thisway, it can be possible for verticalorganization to build of its own accord.


The organisational entities at the higherlevels in the hierarchy fulfill two roles —dealing with problems whose scopeexceeds the capacity of a single entity atthe lower levels, and providing support tofacilitate the workings of the virtuouscircles at the lower levels. The formerrole requires that the higher level entitiespass resource condition goals deducedfrom the larger scale problems to thelower level entities. For example, areg iona l resource managementorganisation dealing with a groundwaterdepletion problem might determinedifferent reductions in extraction forvarious zones of the aquifer and thesereductions would be passed to the smallerself-governing groups corresponding tothese zones.

3.2.3 Trust in governance

The previous discussion has highlightedthe importance of trust among resourceusers in building a resource governanceframework founded on small self-governing groups of resource users Onceresource governance involves a verticalmulti-level hierarchy, the matter of trustbetween the individuals and the legitimacyof institutions at different levels becomesan important concern. This can be termedtrust in governance.

The nature of trust in governance

Trust in governance is more complex thantrust within a small group of resourceusers. The latter is built upon relativelyfrequent social interaction and theknowledge that this interaction willcontinue into the future. This is the trustthat develops in communities of frequentlyinteracting individuals. In a multi-levelresource governance hierarchy, however,individuals at one level have to trust thatindividuals in the next level up arebehaving according to the rules for thatlevel. Only if they have this trust, willthey regard the recommendations from thelevel above as legitimate and feel someresponsibility to implement them. To

continue the example above, the localgroups in the different aquifer zones willonly feel some responsibility forimplementing the reduction targetsrecommended by the regional group ifthey believe that their interests have beenfully and fairly represented at the regionallevel. This feeling of responsibility isalso enhanced by power sharing, when theupper level passes to the lower level thenecessary powers to undertake all thegovernance tasks that can be effectivelycarried out at that level — the principle ofsubsidiarity.

As we move further up the resourcegovernment hierarchy, the possibilities forfrequent and ongoing social interactionamong individuals become less. Once thecoordination between levels is built uponcomplex bureaucratic and politicalinstitutions, trust in these institutionsbecomes more important than trust inindividuals through social interaction.35

Trust, legitimacy and values

A person’s trust in bureaucratic andpolitical institutions, i.e. trust ingovernment,36 is strongly related to theirbeliefs about the appropriateness of theways in which these institutionsoriginated. Work in other areas ofresource and environmental managementsuggests that there are three broad ways inwhich collective decisions are made aboutenvironmental problems.37 The terms thathave been used to encapsulate theseapproaches are administrative rationalism,pluralism and communitariansim.38

The administrative rationalist approachassumes that good natural resourcedecision-making is done by the applicationof science. Modelling and planning areexpected to uncover the best way ofa l l o c a t i n g n a t u r a l r e s o u r c e s .Administrative rationalism also assumesthat facts and values can be separated, andthat only the former, and never the latter,should enter into decision-making. Thescientific values of objectivity, precisionand repeatability are important in


administrative rationalism. Alsoimportant are the administrative values ofclear specification of objectives,evaluation of performance andaccountability. Integrated catchmentmanagement without its participativedimension is an example of administrativerationalism in action.

The pluralist approach assumes that gooddecision-making is inevitably political, nottechnical. It accepts that there areinescapable conflicts between the interestsof those involved in the issue, that valuesmatter more than facts and that the finaloutcome may result in some interestsbeing the losers. What is important topluralism is that all interests have equalopportunity to be represented and to havetheir say in the policy process. Fairnessand representation in arriving at theoutcome are more important than whetherit is optimal in some technical sense. Agood decision, then, is one arrived atthrough fair and open political negotiation.The process leading to Regional ForestAgreements is an example of pluralistdecision-making in resource management.

The communitarian approach assumesthat only the community itself is capableof discovering its own interests. Thisapproach places importance on conceptsof participation, consultation andempowerment. That there appear to beconflicts of interest is taken as evidence ofthe disappearance of community under theweight of modern individualism. If thesense of community of the past wasrestored, it is argued, these conflicts woulddisappear. Experts and bureaucracy aredistrusted as being removed from, and 'outof touch' with local reality. Pluralistpolitics is also rejected as being tarnishedwith the selfish pursuit of individualinterests. Processes that might beregarded as fair from the pluralistperspective, can be seen as marginalisingthe community and submerging itsinterests in 'power politics'. Somebranches of the landcare ‘movement’ andrural lobby groups argue from acommunitarian standpoint.

Having described these three approaches,it can be seen that many of the difficultiesthat have emerged in the last decade in thepractice of resource management havetheir origins in the tensions betweenadministrative rationalist, pluralist andcommunitarian values. The complaintsfrom landcare groups, for example, aboutthe excessive bureaucratisation of landcareare a consequence of the differenceb e t w e e n c o m m u n i t a r i a n a n dadministrative rationalist views as to howthe performance of landcare projectsshould be judged. The complaints fromagency staff involved in ICM aboutinterest groups ‘playing politics’ are aconsequence of the difference between theadministrative rationalist and the pluralistview of how collective decisions aboutcatchment land uses should be made.39

The existence of these tensions betweenthe values inherent in administrativerationalist, pluralist and communitarianapproaches to finding the public interestdoes not necessarily imply that naturalresource management has to rest with justone approach. Realistically, all threeapproaches have their place — theidentification of these tensions highlightsthe need to be aware of the values thatunderlie natural resource managementpolicy making.

Trust and electoral politics

In addition to the difficulties these valueconflicts pose for building levels of trustin governance, there are other factorsinvolved. Most Western democracieshave experienced a decline in theperceived legitimacy of electedgovernments in recent times. One reasonfor this that is particularly relevant to ruralAustralia has been put forward by Manin(1994). Manin has argued that, since the1970s, there has been a gradualtransformation in the nature ofrepresentative government from what heterms ‘party democracy’, which arose inthe mid-19th century, to ‘the tribunal ofthe public’, a term Manin coined to


describe the politics on the late 20thcentury.

The term ‘party democracy’ describesrepresentative government where there arestrong associations between social classand culture on the one hand, and politicalparties, political ideology and policyplatforms on the other. In the mid-20thcentury, many primary producersbelonged to a recognisable social class andvoted for a party that solely representedfarming interests. Similarly, shearerscould vote for a party that representedworkers’ interests. However, the comfortof being able to vote for a political partywith a clearly differentiated policyplatform reflecting interests of readilydefinable groups has been replaced by theuncertainty of late 20th century politics.This is characterised by policyconvergence among the major parties, afocus on the personalities of leaders andthe susceptibility of politics to opinionpolls and media-savvy interest groups.

As a consequence, many rural people feeldisenfranchised and distrustful ofgovernment . Commitment bygovernments of all persuasions to micro-economic reforms that have benefitedmetropolitan Australia more than ruralAustralia has also been a factor in ruraldisillusionment with politics andgovernment.

Concluding remarks

This section has argued that there may beconsiderable potential for small scale localself-governance in resource management.This view is consistent with much of therhetoric that has emanated from thelandcare movement about grass rootsinvolvement and control, although thetreatment in the previous section providesreasoning and empirical evidence that, todate, has been absent from the rhetoric.There are, however, significant difficultiesin connecting local self-governance withlarger scale resource governance carriedout by Commonwealth and Stategovernments. Despite these difficulties,

there is some cause for optimism in theprogress that has been made in theMurray-Darling Basin in the processesinvolved in the preparation of land andwater management plans (LWMPs) in theirrigation areas of New South Wales.

3.3 The LWMP Experience

During the 1990s the NSW Governmentsought to withdraw from its involvementin the provision of irrigation infrastructurerehabilitation and renewal, and to reduceits exposure to future financial risk in thatarea. It did this by transferring ownershipof infrastructure of each irrigation area toan irrigation company owned by theirrigators of the area.40.

In order to promote the long-termsustainability of the new irrigationenterprises the Government, inter alia,included in the water licence of the largerof the new companies, the requirementthat the irrigation community, with theassistance of the Government and theirrigation corporation, had to develop aLand and Water Management Plan to theGovernment’s satisfaction. In approvingthe Plan, the Government would commititself to contribute funds, over 15 years, toan agreed program of works (Taylor et al2001).

The Plans are to meet clearly articulatedobjectives. The Government required theprograms of works to satisfy economicand environmental criteria, consistent withthose objectives. The corporations, whichhave contracted with the Government toimplement the Plans, have committedthemselves to the full 30 years of thenegotiated programs of works.41 Six Planshave been negotiated and are in theprocess of implementation.42 While it isearly days for most of the Plans, those ofthe Murray have been in place for sevenyears and were rigorously and successfullyreviewed in 1999.

A distinguishing feature of these Plans isthat the state funded the planning effort,


which was undertaken by a community-working group. The working groupcommissioned the necessary research anddocument preparation, albeit withconsiderable input of governmentexpertise. The principle throughout,however, was that the Plan belonged to thecommunity and that this could only be trueif the working groups had the necessaryresources and control. In this, the Landand Water Management Plan process isdifferent to many, though not all,Australian resource management programsbased on community-government‘partnerships’.

There are two matters of note relating tothe Plans. Firstly, the development of thePlans was reliant on the coercive powersof the state. Secondly, the ongoingfunding of the plans has experienced somedifficulties due to differences in the policygoals of New South Wales and theCommonwealth.

While not perfect as examples of nestedhierarchical resource managementinstitutions, the Plans are, however, goodexamples of what can be achieved in theform of collaboration between a State anda sub-regional community. In particular,they provide examples of how thecomplementary strengths of governmentsand communities can be incorporated in aneffective resource governance frameworkthat connects Commonwealth and Stateresource management with local scaleself-governance. They also provide anexample of the effective choice by thecommunity of a trusted ‘third party’, theirrigation corporation itself to implementthe agreement between the irrigationcommunity and the state government, andto monitor and enforce observance ofagreed action by members of thecommunity.

3.4 The Connection Challenge

The discussion to this point has sketchedsome of the contours of natural resourcegovernance, both from the perspective of

how it ideally might be conducted, and asit is presently conducted in the Murray-Darling Basin within the context ofcooperative federalism and the practice ofICM.

Within this context, natural resourcegovernance is inevitably hierarchical andnested — the Basin comprises parts ofmore than one State, the States have morethan one catchment managementorganisation and each catchment containsmore than one local group with in aninterest in a small part of the catchment.

The functioning of the vertical dimensionsand the horizontal dimensions of thehierarchy are equally important. Thecontractual arrangements between theCommonwealth and the States embodiedin the COAG water reforms (and theNational Competition Policy in which theyare embedded) provide a promising modelfor how the upper levels of naturalresource governance should be organisedwithin the context of cooperativefederalism.

In section 3.2.1, a strong case has beenmade that groups of resource users havethe potential to create their owninstitutions for self-governance of resourceuse at the local level.

In addition, as argued in section 3.2.2,there is the potential for local level self-governance to grow upwards towardsregional levels of governance. However,the spontaneous emergence of self-governance and its upward growth toregional levels is far from assured.Section 3.2.3 argues that this upwardgrowth requires trust in governance andthat the formation of such trust faces someformidable obstacles. These obstacles arenot insurmountable, as the description ofthe New South Wales Land and WaterManagement Plans in section 3.3 suggests.

Nevertheless, the connection of local levelself-governance with the institutions ofcooperat ive federal ism at theCommonwealth and State levels willremain a critical area for effective natural


resource management. The prospects for afuture resource governance frameworkvery much turn upon the evolution ofeffective institutions at the regional level

that provide a mediative connectionbetween the local self-governance andState government.


4 The Possibility of Resource Governance

The previous chapter, after identifying a number of shortcomings in ICM ascurrently practised, concluded that the missing link in resource governance inthe Murray-Darling Basin, and elsewhere in Australia, is effective mediatinginstitutions at the regional level. The prospects for effective resourcegovernance turn upon our ability to craft regional mediating institutions thatwill connect the promising institutions that are emerging within cooperativefederalism with those at the local level. This chapter commences with anoutline of a full and connected resource governance framework, and identifiessome of the important considerations if such a framework is to survive thesocial, economic and political realities of rural Australia.

4.1 A governance framework

The following description of ahypothetical resource governanceframework builds upon the idea of aNational Natural Resource InvestmentStrategy proposed by Kingma andMusgrave (2001). It embodies the lessonsof experience to date in cooperativefederalist resource management and thelessons of the yet very incompleteexperience in connecting State levelgovernance to regional and local levels ofgovernance or self-governance. It alsoembodies insights from reflection upon thehistory of resource management touchedupon in preceding sections of this paper,and dealt with in greater detail in thecompanion overview report by Reeve etal. (2001).

The example is a generic template forwhat might be a workable and enduringarrangement for the sustainablemanagement of natural resource systemsin Australia. Variations on this templatewould have to be developed for specificareas of resource management, such asdryland or irrigation salinity, regionalbiodiversity, or nutrient and sedimentsupply to rivers. The National Action Planon Salinity and Water Quality containssome elements similar to this example.

The essential features of the resourcegovernance framework are:

ß A national Ministerial Council fornatural resource management whichwould set national targets for naturalresource outcomes (comparable with theMurray Darling Basin Salinity andDrainage Strategy). The States andTerritories would sign off on thesetargets.

ß Agreement to fund the investmentnecessary to achieve these targetsthrough partnership arrangementsbetween the Commonwealth, the States,local governments and relevantcommunities (including the privatesector).

ß Agreement between the Commonwealthand the States, that Commonwealthpayments to the States should beperiodic and conditional on attainmentof targets (as with the NationalCompetition Policy).

ß A national natural resources auditcommission (analogous to the NationalCompetition Council) should review thestatus of the nation’s natural resourcesand advise the Commonwealth on Stateprogress in relation to targets, and theMinisterial Council on the need torevise targets and adjust the investmentprogram, in the light of growth inknowledge. The commission wouldalso advise the Ministerial Council onthe need for legislative reform in areassuch as environmental, planning andlocal government law that may be


impacting on the effectiveness ofresource management.

ß The States should be free to establishtheir own contractual partnershiparrangements with regional resourcemanagement organisations. Thesearrangements would revolve aroundnegotiated cost sharing agreements(reflecting the principles agreed by theMinisterial Council) and periodicpayments conditional upon theachievement of regional targets(deduced from those at the nationallevel). These regional organisationswould need to have the capacity todevelop the mediating institutionsrequired to form an effective bridgebetween the contractual arrangementswith the State and local self-governanceby resource users. The regionalresource management organisationscould be catchment managementorganisations created by Stategovernments or other appropriateorganisations.

ß The natural resources audit commissionwould also audit the partnershiparrangements between the States and theregional resource managementorganisations to establish that theycomply with the agreed partnershipprinciples. Periodic payments to theStates would also be contingent uponthis compliance.

ß Where resource management areasspanned inter-jurisdictional boundaries,an additional layer may be required inthe hierarchy. These inter-jurisdictionalresource management organisationswould be the joint creations of the Statesinvolved (such as the present BorderRivers Commission), or of the Statesand Commonwealth (such as theMurray-Darling Basin Commission). Akey role for the inter-jurisdictionalresource management organisationswould be to deduce and negotiate theresource management targets for theinter-jurisdictional regions.

ß The regional resource managementorganisations would be responsible forthe extension of communitydevelopment and structural adjustmentprograms to support the development at

the local level of institutions for self-governance such as common property,markets, accreditation, cooperatives,trusts, landcare and other farmer groups.There might be more than one layer ofnested self-governance below theregional resource managementorganisations.

4.2 Practical considerations

The previous section provides a briefoutline of a resource governanceframework that attempts to provide acont inuum of incent ives fromCommonwealth to local level. It alsoattempts to achieve a smooth transitionbetween the incentives grounded in thepluralism and administrative rationalismof cooperative federalism, and theincentives at the local level grounded inthe values of communitarianism, trust andcooperation.

However, the prospects for this resourcegovernance framework depend upon anumber of practical considerations. Thefollowing discussion starts at theCommonwealth level and moves to theregional and local level.

4.2.1 Commonwealth level

At the Commonwealth level, it can benoted that Ministerial Councils have anadvisory role and their recommendationsmust be approved by Cabinet. This meansthat the resource governance frameworkwill only protect natural resources to theextent that the Commonwealthgovernment is committed to doing so.

A particular challenge at theCommonwealth level is the nature of therelationship of the Natural Heritage Trust(NHT) and a resource governanceframework. It makes little sense for theCommonwealth to be funding landcareand related programs if this is bypassingthe system of targets and incentivepayments in the resource governanceframework. While attempts of various


kinds have been made during the 1990s toshape the projects under landcare fundingto regional catchment management goals,a number of reviews have concluded thatthese attempts have been largelyineffective43.

A resource governance framework neednot, however, require the absorption intothe system of targets and financialincentives of Commonwealth programssuch as the relevant NHT programs.There is an important role forCommonwealth programs directedspecifically to landholders or landholdergroups — a role that does not require closeintegration with the resource governanceframework. As discussed in section 4.2.3,below, the building of local humancapacity for self-governance is animportant precursor to the emergence ofenduring institutions at the local level andtheir upward growth toward regionalresource management organisations. Suchcapacity building programs are likely to bea universal need for the foreseeable future,and are far more independent of catchmentplans than programs that involve landusechange.

4.2.2 State level

The resource governance frameworkoutlined in section 4.1 contains somesignificant challenges for Stategovernments. This is because thecatchment management organisations havetraditionally been creations of Stategovernments. State political agendas haveinfluenced the form these organisationshave taken, and the amount ofindependence and power accorded them.In some cases (such as the formerCatchment Management Committees inNew South Wales) the organisations wererelatively weak coordinating institutionsdominated by landholder interests. Inother cases (such as Victoria’s CatchmentManagement Author i t i e s ) , t heorganisations have been given moreautonomy.

In most cases, the State catchmentmanagement organisations were notdesigned as a level in a nested hierarchy ofresource management institutions.Consequently, there are differences acrossthe Basin State in the ways in which thecatchment management organisationsrelate to their State governments and totheir local communities. For example, inSouth Australia and Queensland, the manystatutory and non-statutory bodies thathave ICM roles have relatively confusedaccountability and responsibili tyrelationships with their State governmentsthrough various advisory councils set upunder legislation not specificallyconcerned with ICM (Bellamy, et al.,2002). New South Wales and Victoria, onthe other hand, have more clearly definedrelationships originating in legislation withintegrative objectives.

There are also differences in howcatchment management organisationsinteract with their local communities, withsome States bringing community inputinto catchment management throughrepresentatives of interest groups (NewSouth Wales and Queensland), and othersobtaining input on the basis of expertise(Victoria).

To a large extent, the significance for theStates of a transition to the resourcegovernance framework depends on howregiona l resource managementorganisations develop. Reference hasalready been made to the criticalmediating role of these organisations willneed to play, located as they are in the gapbetween the politics and bureaucracy ofcooperative federalism on the one hand,and communitarian and agrarianfundamentalist44 values of rural Australiaon the other.

If the existing catchment managementorganisations are to become the regionalresource management organisationsproposed in the framework, they will needto take on the challenging role of beingaccountable to the State via contractualarrangements and having theirperformance monitored by a national


commission, while at the same time tryingto avoid the imposition of thesebureaucratic institutions of State-regionalcooperation on the local groups for whichthey are responsible.45 The organisationswould have to translate its contractualobligations to the State into consensualcollective action and new social norms atthe local level. To achieve this, theorganisations would have to build capacityfor self-governance at the local level. Thismight be in total or in part funded directlyby the Commonwealth, building on thestrengths of the Natural Heritage Trust.

This role for catchment managementorganisations is challenging one but notimpossible, particularly if the catchmentmanagement organisations have adequatefunding and autonomy. It does not implyany contraction of the role of the Stateresource management agencies. Thereason for this is that the State resourcemanagement agencies are generally wellendowed with regionally and locallyrelevant scientific expertise. There willcontinue to be strong demand for thisexpertise, although there will be a need tocontinue the emerging trend of puttingscientific expertise in an advisory, butclearly subsidiary role, to those involvedin collective resource managementdecisions. This role for the State agencies,external to the resource governanceframework, complements that of theCommonwealth. The former providesknowledge building services, while thelatter provides capacity building services.In both cases, there is not the need forclose integration with catchment plans thatis the case for programs bringing aboutlanduse change.

Past experience of the high levels of trustthat rural communities have developed forlandcare facilitators and State agriculturalextension staff suggests that the effectivemeans of capacity and knowledge building— community development to use an oldfashioned term — are already known, butcurrently out of favour due to fundingshortages and/or deliberate policydecisions.

4.2.3 Regional and local level

The magnitude and difficulty of the task oft ranslat ing regional contractualarrangements into culturally appropriatetargets for local self-governance hasalready been referred to. This has beenconstantly underestimated in the effortsthat have been made within an ICMframework to bring about voluntarylanduse change. However, reviews ofLand and Water Management Plans inNew South Wales, and other resourcemanagement planning efforts over the last15 years, do provide a reasonablyconsistent account of where the difficultieslie.46

Wilkinson and Barr’s (1993) study ofsalinity planning processes in Victoria inthe late 1980s and early 1990s put forwardtwo factors influencing the progress ofplanning efforts. The first was whetherthe solution required universal adoption(one in - all in) to be successful, or couldbe voluntarily adopted, such thateffectiveness of the solution improved asmore landholders adopted it. Experiencein Victoria suggested that a one in - all insolution could result in a ‘grand plan’(such as district drainage schemes), wheremost agreed on the need for the planbecause of the obvious impendingproblems, but lacked the capacity to bringthe plan to fruition.

However, the experience of the MurrayLand and Water Management Plans,which had the potential to be ‘grandplans’, suggests two circuit breakers forthe impasse of the ‘grand plan’. The firstis the external provision of generousfinancial incentives.

The second is the presence of a leader whocan build trust and motivation to a levelwhere individuals are prepared to ‘take achance’ and trust that others will alsoinvest in the necessary practice changes.If the solution has the potential to bringabout significant increases in farmprofitability, this will assist the task ofleadership.


There are several additional factors thatexplain why emergence of self-governancemight be more likely to occur in irrigationareas, and in southern irrigation areas inparticular. Firstly, the ownership of waterby the State provides a powerful lever incontractual arrangements in addition tothat of financial incentives.

Secondly, because of the course of historyand their experience with trusts andcooperatives, the southern irrigationdistricts have considerable social capital inthe form of people’s willingness to setaside the old frontier values ofindividualism and disrespect for authority,in favour of the civic values of trust, andcooperation, both among themselves andwith authority.

It can be seen from this, that someenvironmental problems and some areaswill be more susceptible to the emergenceof self-governance than others. Theendpoints of the spectrum are probablysouthern irrigation districts facing risingwater tables (high susceptibility) andnorthern parts of Australia where propertydevelopment and tree clearing is resultingin biodiversity loss (low susceptibility).

The second factor identified by Wilkinsonand Barr was whether or not there was anobvious impending problem. This factoris becoming less influential with time asthe evidence of major environmentalproblems affecting the productivity ofagriculture grows. However, it stillapplies in some areas, such as naturalbiodiversity, where farmer interest groupsacknowledge the problem but, secure inthe knowledge it is unlikely to have amajor impact on agricultural productivity,can argue they have no duty to doanything about it.

4.2.4 The framework as a whole

While it has been argued that inevitablevalues tensions exist in the resourcegovernance framework as described, thisis not to say that the values andapproaches of administrative rationalismand pluralism at the State andCommonwealth levels have to bequarantined from communitarianism at thelocal level. Even if regional resourcemanagement organisations effectivelyfulfil the mediating role proposed, therewill always be circumstances where thereis a need to combine all three approaches.This is particularly so for natural resourcemanagement problems with inherentcomplexity and uncertainty, such asdryland salinity. In these circumstancesthere is a need for consecutive cycles of:

ß scientific investigation and planning(administrative rationalism),

ß raising community awareness of newunderstandings about the nature of theproblem and appreciating their concerns(communitarianism), and

ß articulating the nature of the interests ofvarious stakeholder groups in the lightof the new knowledge, awareness andconcerns (pluralism).

If regional resource managementorganisations can become effectivemediating organisations in the way outlinedabove, they will be well placed to supportthis adaptive resource management as itprogresses through cycles of investigation,consultation and collective decisions.


5 Conclusions and Prospects

5.1 Introduction

As modern industrial societies grow intheir complexity and demands for bothresource access and environmental quality,governments face mounting difficulties inreconciling these demands. Thesedifficulties are particularly great when itcomes to the role of the state in managingthe competing demands on what might betermed the utilised environment, i.e. thatpart of the landscape that is predominantlyin some form of private ownership, butnonetheless is responsible for producing awide range of public goods. RuralAustralia faces a major challenge inmaintaining the production of publicgoods such as environmental quality andurban water supply in a landscape, thesettlement of which was built onindividualism and absolutist notions ofproperty rights. Added to this are thedifficulties that Australia faces with itsfederal system of government, somethingthat it shares with a number of othercountries Finally, Australia’s mostproductive agricultural region, theMurray-Darling Basin, is spread acrossfour States and the Australian CapitalTerritory.

As in other countries, Australia is evolvingways of adapting its federal system ofgovernment to the environmental andresource problems that found their wayonto political agendas in the last threedecades of the 20th century. After aperiod of adversarial relationships betweenthe Commonwealth and the States, therehas been a settling into what might betermed modern cooperative federalism,built around a Council of AustralianGovernments, Ministerial Councils and awillingness for governments to enter intoagreements and contractual arrangementsthat clarify their roles.

At the same time, there has beenevolutionary change in, and a growth inthe diversity of, the kinds of policy

approaches favoured by governments inresource management. Notable amongthese has been increasing research andpublic awareness raising efforts,increasing public consultation andinvolvement, and increasing reliance onregional catchment planning activities as ameans of attempting to resolve theconflicting demands on the environmentand resources in rural areas. In the lattercase, the concept of integrated catchmentmanagement has become pervasive. Incontrast to the policy approaches that havebecome more popular, those relating toproperty rights and regulatory enforcementhave experienced little change.

Given this background, resourcemanagement in the Murray-Darling Basinand elsewhere in Australia, inevitablyinvolves multiple governments andinterest groups — a state of affairs that isincreasingly being referred to as resourcegovernance. The question this paperdiscusses is whether there might be a wayof bringing some overall structure to themultiplicity of governments and policyapproaches — a resource governanceframework. Because of the pervasivenessof the concept of integrated catchmentmanagement and its obvious claim tobeing the structuring principle of resourcegovernance, it was first necessary toexamine the validity of this claim.

5.2 The conclusions

5.1 ICM

It has been argued that a distinction can bedrawn between ICM as an ideal and ICMas practice. There is no doubt that ICM-the-ideal is a sound policy goal that isessential to effective resource governancein the Basin.

However, ICM as practiced largelyattempts to achieve the ideal via the‘visible hand’ of bureaucracy. The two


‘invisible hands’ that are also capable ofachieving integration — the market andlocal cooperative self-governance — haveas yet received relatively little attention.

In addition, ICM-the-ideal is not withoutsome contradictions, particularly withrespect to its participative andempowerment aspirations and the growingemphasis on contractual arrangements andaccountability. The gap betweenadmin i s t r a t ive r a t iona l i s t andcommunitarian values remains an obstacleto the achievement of these aspirations.The ‘invisible hands’ of the market andself-governance embody a set of valuesthat conform more closely to thecommunitarian values of rural Australia,than do the administrative rationalistvalues of the ‘visible hand’ ofbureaucracy.

The key to effective natural resourcemanagement is the design of institutionsthat allow these ‘invisible hands’ to relieveICM of some of the burdens of regulatoryand bureaucratic control.

5.2.1 The keystone

The paper has argued that the COAGwater reforms and the National ActionPlan on Salinity and Water Quality areinnovations in cooperative federalism thathave much to offer as a model for theupper parts of a resource governanceframework. Further, it has argued thatthere are good grounds for believing that,given the right conditions, many ruralenvironmental problems at the regionallevels could be solved by a nestedhierarchy of self-governing organisationsor groups. This seems most likely toemerge where there are generous financialincentives, leverage through importantinputs to agriculture (such as irrigationwater), local leadership, and social capitalbuilt on a history of cooperativeendeavours.

A comprehensive resource governanceframework can be envisaged. The upperlevels are embedded within the

cooperative federalist institutions ofCommonweal th leadersh ip andcommitment, and negotiated targets,financial incentives and contracts with theStates. The lower level of the framework— its foundations — is a system ofhierarchical nested self-governance builton trust and cooperation.

The keystones, or linchpins, in the wholeframework — and this cannot beemphasised enough — are the regionalresource management organisations.These have the extremely difficult task oftranslating their contractual obligationswith State agencies into culturallyappropriate and locally credible targets toguide the activities of local self-governinggroups, and to trigger the flow of financialincentives to these groups.

The challenging nature of this tasksuggests that some experimentation with agreater diversity of regional resourcemanagement organisations would bejustified in the future.

5.3.2 The wider context

Obviously, the building of a resourcegovernance framework cannot occur in aninstitutional vacuum. The frameworkdescribed above probably poses thegreatest challenges for existing State ICMactivities. However, it can readilyaccommodate much of the Commonwealthand State program effort in an unchangedor slightly changed form. This is becauseof the need for substantial and ongoingcapacity building at the local level tosupport self-governing groups andorganisations at this level. This capacitybuilding, which includes both knowledgebuilding and community development cangenerally occur independent of theenvironmental priorities being establishedby regional resource managementorganisations.


5.3 The prospects

Section 4.2 discussed a wide range ofdifficulties that a resource governanceframework would face. The prospects forthe framework depend on our ability toovercome these difficulties. In manycases, and for a single difficulty, themeans of doing this is already known andbeing carried out somewhere in the Basinor elsewhere in Australia. The list belowfollows the order of section 4.2.

ß Organisations with an interest inimproving the quality of resourcegovernance need to keep pressure on theCommonwealth government of the dayto maintain its commitment to resourcegovernance and its willingness toentertain the recommendations of theMinisterial Council.

ß Movement towards a resourcegovernance framework will need to beaccompanied by a re-orientation ofrelevant NHT programs towards localcapacity building.

ß The emergence of highly capable,culturally appropriate and locallycredible regional resource managementorganisations is the keystone in thewhole resource governance framework.This will require flexibility in thinkingon the part of the State agencies to let goof old ideas about ICM, devolve powerto regional levels, and encourage adiversity of regional organisations. Amajor effort to support the building ofmediating capacity in theseorganisations will be needed.

ß The regional resource managementorganisations will require a stablefunding environment insulated from thevariabilities of State andCommonwealth political commitment.This stability could be structured aroundregional catchment strategies, annualinvestment plans and contractual

arrangements between theCommonwealth and individual Statesand regional natural resourcemanagement organisations. Catchmentlevies or rates may also play a role inachieving a stable funding environment.

ß The effectiveness of the resourcegovernance framework will be enhancedby the past and ongoing efforts of theState agencies to achieve clearseparations between operational,regulatory and advisory roles.

ß The prospects for the resourcegovernance framework depend criticallyupon a transformation in dominant ruralculture from the frontier values ofindividualism and disrespect forauthority to the civic values of trust andcooperation needed for self-governance.As self-governance emerges, it will bepossible for State governments to windback previous regulatory instrumentsregarded in rural areas as excessivelyauthoritarian

ß This transformation will be assisted bylocally credible communitydevelopment and capacity buildingprograms. These should aim to supportrural communities in their search for,and experimentation with, self-governance institutions such as commonproperty, markets, accreditation,cooperatives, trusts, and various localgroups.

ß The community development andcapacity building programs will need tobe shared between the Commonwealth,the States, inter-jurisdictional resourcemanagement organisations and theregional resource managementorganisations, so that broadly applicableprograms are funded by the higherlevels in the resource governanceframework, and those relatingspecifically to landuse change arefunded by the regional resourcemanagement organisations.


6 Bibliography

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7 End Notes

1 In the literature dealing with resource management and institutions, there tend to be two views ofinstitutions. One is that institutions are constituted by the knowledge of individuals about socialpractices and norms (e.g. Scott, 1995). For example, the institution of the ‘stag night’ only persistsbecause individuals know that a certain type of behaviour is expected. The other view of institutions isas rules by which individuals in a society order their behaviour (e.g. Bromley, 1990). The two viewsare not irreconcilable. Rather they simply place emphasis on different parts of the phenomenon ofordered social behaviour — one on the knowledge of individuals that results in behaviour consistentwith norms or rules, and one on the norms and rules themselves.

2 An example of this usage is: ‘the functions of the Australian state are carried out by a number ofgovernments, including the Commonwealth government (the most recent being the HowardGovernment) and the State governments’.

3 Sproule-Jones (1999) points out that resource governance is simply one example of what is known insome areas of public administration theory as horizontal management, and in others as networkmanagement.

4 The Progressivist concept of ‘resource management’ is actually a specific example of a broader set ofconcepts, also originating in the Progressive Era, that relate to government bureaucracies generally, andnot just those concerned with the environment and natural resources. The term ‘administrativerationalism’ is used by Dryzek (1997) in this respect. The ideal of policy making by neutral andobjective scientific elite that decides policy after a rational and comprehensive assessment, has beentermed the rational-comprehensive model (see, for example, Fenna, 1998).

5 This Commonwealth organisation was established in 1989 in the wake of the Wesley Vale pulp millproposal in an attempt take controversies over major developments out of the political arena and into aprocess of scientific assessment. The Resources Assessment Commission was disbanded by theKeating Government in the early 1990s.

6 A third and less common form of federalism is competitive federalism. In this case, State policiesaim to give that State an advantage over other States in some area, such as attracting capital investment.It can be seen as a means by which States have incentives to adopt best management practice, such asefficient approvals procedures for developments. It can also be seen as favouring institutional diversityand experimentation amongst the States, so that worthwhile institutional innovations can be adopted byother States. On the down side, however, competitive federalism can also favour ‘race to the bottom’situations in which States engage in bidding wars to attract capital investment by loweringenvironmental standards.

7 The description of the balance between centralised and decentralised responsibilities for USA andNetherlands is drawn from Wasserman (1996).

8 Broadly, the criteria relate to the State legal authority which will underpin the program, and theresources and personnel devoted to the program

9 Implementation included monitoring environmental quality and compliance, developing compliancestrategies, targeting and performing inspections, enforcing against violators, and verifying the qualityof monitoring and compliance data.

10 Identified shortcomings at the provincial and municipal level are addressed by the funding oftechnical assistance and training programs by the national government. To reduce the licensing burdenat the municipal level, general regulations administered at the national level have been introduced forthose firms where environmental impacts are minor and easily controlled, leaving firms with moresignificant impacts to be licensed and inspected by the municipalities.


11 The positions of the different interest groups on the balance of environmental responsibilitiesbetween central and lower level governments is conveniently summarised in the Senate Environment,Communications, Information Technology and the Arts Committee’s report from the CommonwealthEnvironment Powers Inquiry at:http://www.aph.gov.au/senate/committee/ecita_ctte/enviropowers/contents.htm

12 This is described in more detail in the companion overview report (Reeve, Frost, Musgrave andStayner, 2001).

13 Dale and Bellamy (1998, Chapter 3) provide a more detailed account of the emergence of thisdistinction.

14 Conacher and Conacher (2000:284-286) and Bonyhady (2001), for example, document the windingback of public consultation provisions in the NSW Environmental Planning and Assessment Act of1979 and the Victorian Planning and Environment Act of 1987. The trend in the actual numbers ofpeople involved in participative activities is less clear. The ‘Who Cares about the Environment’surveys undertaken by the New South Wales Environment Protection Authority in 1994, 1997 and2000 showed that the proportion of people in New South Wales reporting that they had, in the lasttwelve months, ‘Wr[itten] a letter or signed a petition or attended a meeting or made a report orcomplaint with the aim of improving the environment’ remained constant at 36 per cent for all threesurveys (NSW EPA, 2000).

15 The statement in June 2001 on Integrated Catchment Management in the Murray-Darling Basin2001-2010 from the Murray-Darling Basin Commission is an example, with mention of ‘harddecisions’, and ‘competition and conflict between the agricultural, urban and environmental sectors forthe scarce water resources of the Basin’.

16 The historical reasons for the limited experimentation with the institutions of property in Australia lieoutside the scope of this paper. Powell (1988) describes the Jeffersonian agrarian fundamentalism thatunderpinned the Closer Settlement Acts, while various aspects of rural absolutist perceptions ofproperty rights are discussed by Fowler (1984), Bonyhady (1992), Holmes and Day (1995) and Reeve(2002).

17 Statutory covenants for nature conservation purposes were introduced in New South Wales in 1974,in Queensland in 1992, in Victoria in 1972 and South Australia in 1985 (Binning and Young, 1997).Legislative reforms to leasehold tenure have taken place in South Australia in 1989 and Queensland in1994 (Holmes, 1999).

18 See, for example, Seal (1996).

19 Work on rural law enforcement (see, for example, Jobes, 1997) has identified two factors that areapplicable to local State agency staff with enforcement responsibilities. Firstly, in many cases there isno separation between extension and enforcement roles. The agency staff member who launches aprosecution of a landholder is hardly likely to create the atmosphere of trust and respect needed if thatperson is to be an effective extension agent, particularly if, for the reasons outlined above, the unlawfulactivities of the person being prosecuted are rationalised and condoned by the community.

Secondly, field level staff inevitably become drawn into the social fabric of the rural communities inwhich they live. Prosecuting a landholder whose children are friends of the staff member's children, orwho is a fellow member of a sporting club or church congregation places the staff member in a verydifficult position socially.

To these two factors might be added a third. Effective extension requires a degree of empathy on thepart of the extension agent with the values of clientele. As the extension agent becomes aware of thesevalues, he or she may come to accept the same rationalisations by which the clientele condonetransgressions of the norms of good land management. The endpoint in this process is, of course,agency capture and it has been argued that this has occurred in the mining, water resources andagricultural sectors in Australia (Clark, 1988).


20 This was one of the tenets of the ‘new environmentalism’ of the Greiner Government in the early1990s in New South Wales, and the principle has continued to be used since that time, such as in theCOAG water reforms.

21 The problem of rural enforcement is not immune to technological change. For example, theintroduction of automatic speed cameras in some countries has meant that the dislike for authority istransferred from the local police to a distant computer printing out infringement notices.

22 Among these were the flooding of Lake Pedder and the proposed Gordon below Franklin dam whichplayed a pivotal role in the evolution of Federal-State relations in environmental policy.

23 For more detail, see section 6.3.2 of the companion overview report (Reeve, et al., 2001).

24 For more detail, see Crabb (1997:289).

25 A full account of local government involvement in natural resource management is given by Hullicket al. (2001).

26 The COAG water reform framework, adopted in February 1994, calls for pricing reform based on theprinciples of full cost recovery, and the removal of cross-subsidies. Remaining subsidies are to bemade transparent. Second, jurisdictions are to adopt comprehensive systems of water allocation orentitlements, including allocations for the environment as a legitimate user. Water property rights areto be separated from land titles, so entitlements can be transferred between land title-holders. Third,there is to be structural separation of water service provision from water resource management,standard setting and regulatory enforcement. Fourth, two part tariffs are to be adopted for urban watersystems when such an approach is cost-effective. Fifth, arrangements are to be introduced for tradingin water systems or entitlements. Sixth, rural water charges are to recover all costs with transparentsubsidies. Seventh, future investment in new irrigation projects or extension to existing works are to beundertaken only after they are demonstrated to be economically viable and ecologically sustainable.

27 See, for example, the Proceedings of the National Workshop on Integrated Catchment Managementheld in 1988 and published by the Australian Water Resources Council in 1988.

28 This power derives from Australian politics’ susceptibility to agrarian fundamentalist and absolutistproperty rights rhetoric. This susceptibility is in turn a consequence of the nation’s and the electorate’s‘country mindedness’, i.e. the importance of pioneering and farming to our cultural heritage andnational identity. Put simply, politics tends to be forgiving of national icons, whether they bemisbehaving sports heroes, or farmers degrading the nations’ land resources.

29 See, for example, Bellamy et al. (2002), and Dore (1999).

30 This section and part of the subsequent one draws extensively on the work of Marshall (2001).

31 For a comprehensive review of this literature, see Marshall (2001). This view is not restricted tonatural resource management. The growing literature on the concept of social capital draws attentionto the role of trust in the ability of communities to adapt to changing economic circumstances. Some ofthis literature is discussed in Stayner and Reeve (2002).

32 Hardin argued that the structure of incentives among a group of herdsmen on a commons wouldinevitably lead to the degradation of the commons. This was because the benefit of increasing stocknumbers was captured by the individual introducing the additional stock, while the costs of so doingwere spread among all the herdsmen. In the literature that emerged in subsequent years on the tragedyof the commons, a distinction came to be drawn between open access resources and common propertyresources. The former has no system of social organisation limiting access to the resource, while thelatter does have such a system. Hardin’s analysis was correct for the ‘tragedy of open access’, but notfor common property resources. Unfortunately, Hardin’s analysis has been used improperly inresource management policy analysis to argue for the conversion of common property to privateproperty.


33 For a detailed discussion of tragedies of open access, see Reeve (1998).

34 Neighbourhood watch committees and main street committees are examples of small scale self-governance that supplies elements of the public goods of security and main street amenity moreefficiently and effectively that could be done by the state.

35 For example, our trust when we deposit money in a bank is more directed to the probity of the bankand its financial management procedures, than to whether the particular bank teller we deal with istrustworthy. In a large bank in a city, we may never meet the same teller again. Trust in institutionsinvolves many additional factors compared to trust among individuals. For example, the media canstrongly influence the amount of trust people are prepared to place in the institutions of their society.Giddens (1991) argues that the conditions of modernity require an amazing amount of trust byindividuals in the institutions that ensure the safety and predictability of their lives. For example, weall trust that the car will start in the morning, that the other drivers will stay on their side of the road,that the lift we ride to the office will arrive safely at the top floor, that the food we buy is notcontaminated in some way and so on.

36 At the risk of labouring the point, trust in governance refers to trust across the vertical dimension ofthe resource governance hierarchy, at any level. Trust in government refers to trust across the verticaldimension at the upper levels, where institutions are more important than social interaction.

37 The following outline draws on Williams and Matheny’s (1995) analysis of intractable policydisputes in waste management and Dryzek’s (1997) typology of policy discourses in environmentalpolitics and policy-making.

38 Communitarianism should not be confused with communism. The former is an ideology that callsfor greater emphasis upon the values of community within democratic processes (see, for example,Etzioni, 1998). The latter is an ideology that prefers that the means of production in an economyshould be in the control of communes or collectives of workers, rather than in the control of thoseinvesting the capital, or their managers.

39 It is worth noting here, for the purposes of the discussion in the next chapter, that as in the previousexamples, landholders can appeal to both communitarian and pluralist values. This is an example ofwhat Meinzen-Dick and Bruns (2000) have referred to in an irrigation context as ‘forum shopping’, i.e.water users facing changes in supply regimes may air their claims in a range of fora in an attempt tofind the one that is most favourable to their interests. Different fora have different values as to whatconstitutes good argument.

40 The Coleambally Irrigation Area elected to become a cooperative.

41 Taylor et al summarise the Land and Water Management Plans as follows:

Land and Water Management Plans were designed to effect the long-term sustainability of irrigationby improving irrigation management practices, addressing the harmful impacts created by the pastmanagement policies pertaining to irrigation and monitoring the impacts of the scheme. They alsocontain measures for environmental improvement and benchmarks for environmental performance.The plans were essentially a form of agreement between the government and the companies, and wereacknowledged by landholder representatives. The companies had to use their constitution provisionsand water supply agreements to ensure that landholders (who were responsible for on-farmmeasures) honoured the objectives in the plans

(Taylor et al 2001, p.12).

42 The irrigation areas involved are:

ß the Murray schemes (four in all being implemented by Murray Irrigation Limited);ß Lower Murray (implemented by Western Murray Irrigation);ß Coleambally (including the Coleambally Outfall Drain);ß Murrumbidgee; and


ß Jemalong.

43 See, for example, House of Representatives Standing Committee on Environment and Heritage(2000) and the NHT Mid-Term Review by Fargher (1999).

44 Agrarian fundamentalism has its origins in the views of Thomas Jefferson who believed a good andmoral society was one composed mainly of yeoman farmers. The Jeffersonian vision underpinnedmuch of Australia’s closer settlements policies in the 19th century. Agrarian fundamentalism lives onin the views that farming is a morally superior occupation to other occupations, especially those incities, that it is an inherited calling that can only be learnt by growing up on a farm, that agriculture isthe economic foundation of the nation, and that the nation owes debt to agriculture for feeding andclothing it.

45 The concerns expressed by Landcare groups in the late 1990s about the burden of paperwork were anexample of bureaucratic institutions moving into a domain of collective-action where communitarianvalues predominate. This has discouraged landholders from becoming involved in landcare projects.In a national survey of rural landholders in 2000 (Reeve, 2001), 59.7 per cent of respondents agreed orstrongly agreed with the statement ‘With the amount of paperwork it takes to get government grantsthese days, it is hardly worth farmers’ time to get involved in landcare projects.’

46 Reviews of this experience include Wilkinson and Barr (1993), Fargher (1999), House ofRepresentatives Standing Committee on Environment and Heritage (2000), Snowy MountainsEngineering Corporation (2001).

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