The entire basis for the $425m agreement to save the Snowy River established between NSW, Victoria and the Commonwealth nearly a decade ago, is a carefully-crafted legal fiction which imposes virtually no obligations on the NSW Government or the Snowy Hydro Company, a Snowy River campaign group has found.

As Crikey recently detailed, the Snowy River continues to face severe degradation, despite nearly a decade of highly-expensive efforts to increase environmental flows, and the drought isn’t the only reason.

The Snowy River Alliance, which has been seeking ways to force Snowy Hydro to better comply with the water targets originally agreed between the Governments of John Howard, Bob Carr and Steve Bracks, has received a legal opinion that no action is possible due to the lack of real obligations in the agreement.

This is clearly at odds with the tenor of governments’ statements about efforts to save the Snowy. The NSW Government repeatedly pointed to “legally-binding” agreements about environmental flows during its 2006 attempt to privatise Snowy Hydro, and the Commonwealth National Water Commission also refers to a “legally-binding agreement” between the three governments.

According to the Environmental Defenders’ Office, however, there is nothing binding about the agreements, and NSW can provide as much or as little environmental flows for the Snowy (or, as per an additional stipulation inserted by the Commonwealth, the Murray and the Murrumbidgee) as it likes.

The basis for the three-way deal that ostensibly “saved the Snowy” in 2000 is the Snowy Hydro Corporatisation Act 1997, which licenses Snowy Hydro to operate. The Act requires Snowy Hydro to comply with the conditions of its licence, issued in 2002, and to give effect to any agreement between NSW and Victoria about Snowy River flows.

The problem is, that looks binding but isn’t — and appears to have been drafted to ensure it isn’t binding.

Snowy Hydro’s licence lists a range of comprehensive, Snowy-related environmental objectives. According to the EDO, the objectives in themselves constitute no obligation. The only clear requirements are that, for the period 2002-05, Snowy Hydro had to increase flows from aqueducts on the Mowamba River and Cobben Creek up to a maximum of 38 GL, and thereafter provide environmental flows according to directions from NSW’s Water Administration Ministerial Corporation.

Moreover, there isn’t an appropriate “agreement” between NSW and Victoria beyond this. The December 2000 Agreement between the states on the outcomes of the Snowy Water Inquiry should be the basis for Snowy Hydro’s licence requirements. But that Agreement only provides a more detailed version of the licence requirements about 38 GL and Ministerial Corporation direction.

There is also a “Heads of Agreement” between the Commonwealth, NSW and Victoria that lays down precise environmental flow requirements in four stages between 2000 and 2010. It is these requirements that have formed the ostensible basis for the process of providing greater water down the Snowy. But the Heads of Agreement doesn’t fit the description of an “agreement” for the purposes of the Snowy Hydro Act and in any event it’s not between NSW and Victoria but involves the Commonwealth as well, so it is irrelevant.

There is also an “Implementation Deed” of the Snowy Water Inquiry Outcome, under the Heads of Agreement, which provides a more detailed set of requirements for escalating environmental flows over a ten-year period. It, like the Heads of Agreement, does not fit the wording of the Snowy Hydro Act.

In effect, since 2005, Snowy Hydro has only been obligated to provide whatever environmental flows it is ordered to by the NSW Government’s own Water Administration Ministerial Corporation – which have been minimal and have actually involved “repaying” water to the company from the Snowy it initially provided in the first three years of the Agreement.

The EDO also noticed something very odd in preparing its legal advice. In December 2000, when the NSW Government was passing the relevant legislation to “give effect” to its agreement with Victoria, the Heads of Agreement — which give the misleading impression of stringent, detailed environmental flow targets — was incorporated into Hansard by the then-Minister, John Della Bosca. But the actual Agreement with Victoria, which only requires the minimal licence obligations of 38 GL and Ministerial Corporation direction, was tabled but not submitted as part of the Parliamentary papers that day. It was actually tabled nearly two weeks later, on 19 December, right before Christmas holidays.

It appears the NSW Government was keen to minimise the chances of anyone closely examining the only binding document about Snowy Hydro’s actual obligations in increasing the flow down the Snowy. Snowy Hydro has readily complied with those obligations since then, which is why the river is closer to death than ever despite hundreds of millions of dollars.