LARGE WATER RESOURCE DEVELOPMENTS -

AN INTEGRATED ASSESSMENT PROCESS

Report prepared by

Centre for Water Policy Research, University of New England

and

Australian Centre for Tropical Freshwater Research, James Cook University

for

The Sational Land and Water Resources Audit

June 1999

FOREWORD

Australians all know that in this driest of inhabited continents, water is a precious resource. Our weather is subject to El NinoiLa Nina events with the result that rainfall is highly variable across much of the continent. However, for agricultural industries, hydroelectric generation and a host of other industries a secure supply of water is crucial to success. One approach to this issue has been the implementation of 'drought-proofing' strategies including the construction of large water storages in many catchments across the continent. Consequently, there are now over 300 large dams in catchments across Australia with new proposals for additional large storages regularly being put to governments for assessment and approval.

Modem Australian governments must satisfy themselves that the economic, environmental and social impacts of these proposals are acceptable and able to be documented in a consistent manner to allow for comparison. Furthermore, the advent of the Council of Australian Government's Water Reform Framework and the linking of progress under that framework to payments to States and Temtories under Competition Policy Reforms in 1996 highlighted the need for a consistent set of criteria against which proposals for large water resource developments could be assessed. That is where this document becomes important.

The development of an assessment process for large water resource development proposals which was applicable Australia-wide was commissioned in 1997 by the then lMinister for Primary Industries and Energy, the Hon John Anderson MP. This document is the result of nearly two years consultation and discussion and most likely represents best practice in its field. It provides two levels of assessment - a rapid screening process to allow the preliminary assessment of proposals followed by a much more detailed and rigorous procedure for those that survive the rapid screening process.

The processes described in this document are a significant contribution to the field of resource assessment methodology and will bring long sought after consistency to the assessment of large water resource development proposals.

Warren Truss MP Minister for Agriculture, Fisheries and Forestry Canberra

November 1999

OVERVIEW OF REPORT

This report is the outcome of a research consultancy undertaken by the Centre for Water Policy Research and the Australian Centre for Tropical Freshwater Research between June 1998 and April 1999 for the National Land and Water Resources Audit. The initial brief for the work specified the development and recommendation of a set of assessment criteria and a decision support method to screen and evaluate water resource development proposals. The ensuing criteria would need to encompass:

environmental impact assessment; social impact assessment; economic evaluation; and engineering requirements of water resource development.

In response, the consultants have developed a Rapid Assessment Process to assist proponents in the preparation of preliminary development proposals and provide a level of transparency and accountability in the assessment of project proposals. Within this process, Preliminary Project Statement Guidelines have been developed to support the efforts of all stakeholders in the specification and assessment of preliminary water resource development proposals. The consultants have also prepared a comprehensive set of Water Resource Development Guidelines for guidance and assessment of Detailed Project Statements as part of a Detailed Assessment Process.

The Integrated Assessment Process and its guidelines were designed to be of general applicability to governments at all levels and to all proponents. They were not developed to support any specific water infrastructure development program or evaluation in relation to any particular source of funding. Full compliance with the process and associated guidelines cannot, therefore, imply any assurance to the proponent that the Commonwealth will fund, or give consideration to funding a specific project. In addition, the attention of proponents is drawn to their obligations in relation to relevant Commonweealth environment and heritage legislation, including the Environment Protection (Impact of Proposals) Act 1974 and associated State legislation. However, the Integrated Assessment Process does represent, in the view of the consultants, international best practice in terms of a process to support the specification and assessment of all water development proposals.

The report details a process and assessment criteria that are also of more general applicability than to water infrastructure development; they would apply to many resource development activities and issues that characterise the Audit's overall agenda.

The report is in two parts. The first component is the Rapid Assessment Process to guide preliminary water infrastructure development proposals and their rapid consideration by government. As part of this process, the proponent needs to consult guidelines to develop a Preliminary Project Statement to address the following key points:

Likely level or degree of stakeholder support and impacts on those individuals/groups (including state/comrnunity and industry stakeholders); Prospect for economic viability; Prospect for ecological viability; and Prospect for engineering viability

The Preliminary Project Statement should be a concise, descriptive outline of the proposal with sections addressing the preceding points and should not ordinarily exceed three or four pages.

The second part is the Detailed Assessment Process, and it presents a more comprehensive set of economic, ecological, social and engineering criteria that collectively address the impact and benefits of specific water resource development activity. The Water Resource Development Guidelines were developed to complement the Preliminary Project Statement and to provide for a Detailed Project Statement in relation to the kinds of issues and considerations that need to be taken into account to support water resource development proposals. A guide to the Integrated Assessment Process and the intended roles of the Preliminary Project Statement Guidelines and Water Resource Development Guidelines is presented in Figure 1.

Figure 1: Overview of the Integrated Assessment Process - preparation of a Preliminary Project Statement (Part I) and links to the development of a Detailed Project Statements (Part 11)

PART I - Rapid Assessmetzt Process

Proponent develops proposal concept

\

Proponent prepares Preliminary Project Statement (PPS) outlining the following;

Likely level or degree of stakeholder support (including state /community and industry stakeholders) Prospect for economic viability Prospect for ecological viability Prospect for engineering viability

Guidelines (PPSG) assist with concept formulation

PPS submitted to appropriate State agency or Minister.

I Response from State agency I . . . . .. . . . . . . . . . . .. . . ... . . . . .. . . . . . . . . .... . . . . . . . ...... .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . .. . . . . . . . .. .. . . . . . . ...... .. . . ... .. . . . . . . . . .... . . . . . . . ... . . , . . . . . .. . . . . . . . . . . .. . . . . . . . . .. .- . . . . . . . . . . .. . . . . . . . . . . * . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . PART 2 - Detailed Assessment Process

Referral to Commonwealth seeking partial funding or approval

/ ' T Negotiation with State

Statement (DPS) for consideration by State and Commonwealth.

Guidelines (WRDG) assist with detail of proposal.

Conclusions and Recommendations

The lack of a transparent and accountable process to assess proposals for water resource development in Australia needs to be addressed. The ambiguity that exists gives rise to both false expectations and misleading argument. It is also a time-consuming constraint upon both resource manager and prospective developer as responsible decision making is constantly confounded by socio-political imperatives. In a recent publication, Water and the Australian Economy, Jon Thomas (1 999) states "there is a need for a nationally- agreed assessment process for major new water resource development proposals". This report provides the basis for the development of such a process.

Recommendation I : The Commonwealth Government adopt the concept of an Integrated Assessment Process (Integrated Assessment Process) for water resource development proposals.

Given that a rapid response is required from the Commonwealth. A process which identifies stakeholders and defines a transparent assessment methodology needs to be adopted.

Recommendation 2: The Rapid Assessment Process be implemented as the mechanism for initial CommonwealtWState/proponent interactions. It is suggested that Agriculture, Fisheries, Forestry-Australia (AFFA) is the most appropriate organisation to coordinate this task. Other key stakeholders, such as Environment and Heritage, Treasury, and Transport and Regional Services would require input fop a whole-of- government response.

The Rapid Assessment Process will be adequate for many existing proposals; however, detailed assessment of a subset is likely to be necessary, at either or both State and Commonwealth levels.

The Detailed Assessment Process is a considerably more comprehensive and contentious process, and it will need to be refined and reviewed prior to its use as an assessment tool and guidelines. This W h e r development will require the cooperation of the States.

Recommendation 3: The Detailed Assessment Process be reviewed for adoption by the Commonwealth and a commitment to the Process be soughtfvom the State through the SCARM; SCEP and SCC structures. The Detailed Assessment Process and its inherent guidelines should be tested, with stakeholder support, on a priority case study that is nominated by a State($). AFFA should act as the lead agency in the coordination of this task.

The technical guidelines developed as part of the Detailed Assessment Process will provide a platform for transparent and accountable decision making, and are consistent with other national water management guidelines, such as the ANZECC Water Quality Guidelines, and the A R MCANZ/ANZE CC National Principles for Provision of Water for Ecosystems. Following the case study, and with stakeholder support, they should become industry standardhest practice.

Recommendation 4: The guidelines developed, as part of the Detailed Assessment Process should be formally adopted Australia-wide through Ministerial Councils.

INTEGRATED ASSESSMENT PROCESS FOR PROPOSED WATER RESOURCE

DEVELOPMENTS

PART I

RAPID ASSESSMENT PROCESS

to support the preliminary assessment and specification of water resource development proposals

1.0 INTRODUCTION

The Rapid Assessment Process has been prepared to assist both proponents and government with the preparation and consideration of water infrastructure development proposals. Given the diversity of government agencies and Ministries that could ultimately be involved in the consideration of proposals of this nature, the Rapid Assessment Process and accompanying guidelines are an attempt to support an effective interface between the proponent and government from the outset.

The Rapid Assessment Process has not been prepared with any particular source of development funding in mind. It relates to 'ad hoc' proposals rather than to those invited in relation to specific funding calls or schemes. The primary aim is to support an efficient and effective process of proposal description from the proponent side and a more streamlined response process from the government administrative side.

As most water infrastructure developments will involve some merging of jurisdiction across ministries, government departments and agencies, another role for the Rapid Assessment Process is to facilitate communication between those crganisations in relation to specific proposals. In the first instance, proponents are invited to consider an initial representation to State level decision-makers. Depending on the outcome of those discussions, a subsequent representation might be made to the Federal level, in which case a project description supported by the Rapid Assessment Process together with details relating to the State response would be addressed to the Federal Minister for Agriculture, Fisheries and Forestry.

2.0 STRUCTURE OF THE RAPID ASSESSMENT PROCESS

The Rapid Assessment Process was designed to assist with the preliminary outlining of a water infrastructure development proposal. As discussions progress, the likely level of detail required to negotiate government support and investment would increase, and the more Detailed Assessment Process in Part I1 of this Integrated Assessment Process needs to be utilised. This would have the effect of streamlining the proponent's efforts in specifying a proposal, minimising duplication of effort across all stakeholders and improving the response time of government at all levels. Of particular importance, the Rapid Assessment Process will facilitate a clear-cut rendering of proposal implications at an early stage, and support a transparent documentation of the ensuing decision making process.

3.0 PREPARATION OF A PRELIMINARY PROJECT STATEMENT

The Preliminary Project Statement is intended as the basis of the Rapid Assessment Process. It should provide a brief outline of the proponent's submission for a proposed

water resource development, but be sufficiently structured to support initial contact with government administration.

Structure of Preliminary Project Statement

The Preliminary Project Statement needs to address the following key points:

Likely level or degree of stakeholder support and possible impacts on those individuals/groups (covering state/community and industry stakeholders) Prospect for economic viability Prospect for ecological viability Prospect for engineering viability

The proponent is required to present a concise, descriptive outline of the proposal with sections addressing the preceding points. The Statement would ordinarily not exceed three or four pages.

3.1.1 Likely level or degree of stakeholder support and impacts (covering state/community and industry stakeholders).

The main points that should be addressed under this heading would include:

A listing of those groups, individuals and private/public organisations that might be regarded as stakeholders or parties with an interest in and/or authority relevant to the development both during and after the project construction phase, including reference to the management phase. The proponent needs to sort identified stakeholders into those who would be directly and those who would be indirectly affected by the development. The proponent should then attempt to sort directly and indirectly affected stakeholders into those who would be advantaged and those who would be disadvantaged by the proposed development. As part of their evaluation of stakeholder support, the proponent should succinctly outline the nature of likely social impacts arising from the development.

The detailed Guidelines presented in Part I1 are available to support the later, more analytically orientated stages of project assessment. At this stage the Preliminary Project Statement would incorporate largely qualitative or 'best informed guess' information.

3.1.2. Prospect for economic viability

The proponent presents views on the likely economic prospects for the proposed development. This discussion should reflect on likely:

Project construction costs Returns (income) during project construction stage Project running costs after construction or during, operational stage

Project returns over operational stage of project Project life Community economic benefits (eg. employment generated) during the project construction stage Community economic benefits from project (eg. employment generated, additional agricultural/industrial activity generated) during operational stage Losses incurred by any displacement of existing economic activity (eg. lost agricultural production from areas to be inundated or other industrial activity that might be curtailed). Management costs in operating the system.

3.1.3. Prospect for ecological viability

The proponent identifies the most likely ecological impacts from the proposed development during both construction and operation stages. In particular, this discussion should address:

Ecological sustainability and environmental management Downstream impacts (including the uses of the water - freshwater, estuarine and marine environments) Surface water impacts Groundwater impacts Flooding and environmental flow regimes Soil impacts of proposed accompanying land development Air quality impacts Biodiversity (fauna and flora) and water quality impacts

The proponent should consider the geographical spread of these impacts; indicating their incidence from the local, to catchment and or regionalhioregional levels. Again, the proponent need only provide a qualitative indication of likely ecological impacts and management issues at this stage. More precise details would ordinarily be required as the assessment of the proposal progresses.

3.1.4 Prospect for engineering viability

The proponent, as part of this initial representation, is encouraged to reflect on the technical or engineering feasibility of the development. This could involve some brief discussion in relation to:

Can the development be undertaken with existing technologies/resources? Are there alternative construction/engineering options? How cost-effective is the proposed engineering approach likely to be? What is the prospect for the project to realise its design objectives (ie. Will it work)?

4.0 CASE STUDY - Hell's Gate Dam

The following are reflections on the prospective benefits to be derived from the application of the proposed Rapid Assessment Process to a case study development proposal:

Funding Submission to the Federation Fund Council for Construction of the Hell's Gate Dam Irrigation Project on the Burdekin River, North Queensland Prepared by the Hell's Gate Development Council

4.1 ContextofthisReview

The purpose of this case study is to assess the prospective merits of the proposed Rapid Assessment Process through reflection on its potential to strengthen or enhance an

I

1

actual water infrastructure development application of current interest. Though a number of actual developments were considered by the researchers, the Hell's Gate proposal was chosen as a specific case for detailed consideration. The conclusions would apply generally to other proposals. The aim of the current review is not to .

address the relative strengths and weaknesses of the proposal under consideration. Rather, it is to support the consultant's attempts to 'reality check' or validate the Rapid Assessment process that is at the core of their brief. Through undertaking this review, the consultants are able to make some claims in relation to the prospective contributions of their process as a support mechanism for proponents and as a systematic mechanism to support the development of an appropriate initial response from government.

The ensuing discussion will highlight how the Rapid Assessment Process could strengthen the indicated case study proposal. As a general comment, though, it is noted that there are currently no general guidelines to support the development of water infrastructure developments in this country, just as there is no single government authority or Department (at either State or Federal levels) to which all applications of this nature should be directed. Given that, this Rapid Assessment Process was I I

developed to support any proponent's initial representations to any relevant government i I organisation. The intent was to create guidelines of universal applicability and 1 relevance. I 1

4.2 Application of the Rapid Assessment Process to the Hell's Gate Proposal: Ecological Criteria Related Observations

4.2.1 Ecological sustainability and environmental management

This is not addressed in the proposal; other than i) acknowledging the seasonal nature of the dry tropics (Section 5.2, p.4) and ii) reiterating that water supplies in south-eastem Australia are over-committed and significant environmental damage has already occurred (Section 13.2, p. 16).

4.2.2. Downstream impacts (including the uses of the water)

This is not addressed in the proposal.

4.2.3 Surface water impacts

This is not addressed in the proposal.

4.2.4 Groundwater impacts

This is not addressed in the proposal.

4.2.5 Flooding and environmental flows

This is not addressed in the proposal.

4.2.6 Soil impacts

This is not addressed in the proposal.

4.2.7 Air quality impacts

This is not addressed in the proposal.

4.2.8 Biodiversity (fauna and flora) and water quality impacts

This is not addressed in the proposal.

4.2.9 Conclusions in relation to Ecological Criteria

From the preceding observations, the Hell's Gate proposal, as it currently stands, must be regarded as deficient in its coverage of what is considered to be relevant ecological detail. The proponent's application would be considerably strengthened through consideration of the proposed ecological criteria.

4.3 Application of the Rapid Assessment Process to the Hell's Gate Proposal: Observations Relating to Economic and Financial Criteria

Information on likely project construction and operational stage running costs are provided, as are details relating to likely project returns. The proponent would, however, be invited to present additional detail through the application of the proposed Rapid Assessment Process:

likely returns during the construction period; likely project life;

an indication of the likely community economic benefits, (eg. employment generated during project construction stage, flood mitigation benefits, improved public health due to better water quality; and likely losses incurred by any displacement of existing economic activity (eg. lost agricultural production from areas to be inundated or other industrial activity that may be curtailed).

These additional details would facilitate a more considered appreciation of the proposal by government. The guidelines would ensure a consistently and appropriately detailed appraisal of community economic impacts for all proposals of this nature. For the application under review, the suggested additional economic detail would considerably strengthen that proponent's representation.

4.3.1 Financial Implications

The Hell's Gate proposal would be strengthened through consideration of additional detail in relation to financial implications. Specifically, the proponent requests the establishment of an Underwriting Buffer Fund of $150 million, to be contributed by the Federation Fund and Queensland Government. To support this request, the proposed Rapid Assessment Process guidelines would recommend further details in relation to:

the likely project costs and benefits (including externalities) affecting the Queensland Government and Federation Fund. likely community service obligations relevant to the project location (ie. those benefits which are unable to be attributed and charged to specific beneficiaries). likely subsidy requirements that would justify the establishment of the Underwriting Buffer Fund.

Again, these additional details would support a more considered initial appreciation/evaluation of the project proposal by government.

4.4 Application of the Rapid Assessment Process to the Hell's Gate Proposal: Observations Relating to Engineering Criteria

The proposal as it stands would support only a superficial appreciation of the proponent's intentions and project implications in relation to the engineering dimension. The proponent has provided only some background statistical information in relation to the proposed dam and a rough map showing the proposed location and an approximate indication of a possible irrigation area.

The proposed Rapid Assessment guidelines would have supported the presentation of additional information to more completely specify the proponent's intentions and enable a more considered response from government. Specific observations pertaining to each of the proposed engineering criteria are presented below.

4.4.1 Technical Feasibility

The objectives of the project are not detailed and there is no clear indication of how the assumed objective of irrigation west of the Burdekin River (but within the Burdekin catchment) might be achieved. There is no detail about the proposed dam other than statements of its height, length, storage capacity and yield.

4.4.2 Engineering Feasibiiity

There are no data suitable to support an assessment in relation to the engineering feasibility of the proposed development.

4.4.3 Construction Alternatives

There are no data available to support an assessment in relation to the engineering feasibility of the proposed development.

4.4.4 Discussion

The background to the proposed Hell's Gate development may be linked to an earlier proposal by Dr Bradfield in 1938 as part of the Bradfield Plan for a Western diversion of the waters of the Burdekin catchment and adjacent rivers for large-scale irrigation. Following that long tradition, the resources available to draw on and support the extra detail implied by the proposed Rapid Assessment Process guidelines might be amenable to straightforward compliance on the part of the current proponent. That extra detail would certainly support a more informed response from government at this preliminary proposal stage.

4.5 Application of the Rapid Assessment Process to the Hell's Gate Proposal: Observations Relating to Stakeholder/Community Support

Discussion relating to likely stakeholder or community support is intended as an indicator of general social/comrnunity impact. The proponent is encouraged to systematically consider how the proposed development might be perceived by diverse stakeholder groups. A more detailed evaluation, in this regard, would constitute a likely next step following this first rapid assessment stage of project assessment. More detailed social impact assessment is a key feature, for example, of formal EIA processes. For the purposes of a preliminary or Rapid Assessment, though, only subjective/expert opinion is needed to support this criterion.

For the Hell's Gate proposal, additional information would be needed in relation to the diversity of stakeholders who are likely to be influenced by or influence the development. This community of stakeholders could be broken down into those stakeholder groups/individuals who:

would benefit directly or indirectly by the development both during and after the project construction phase; or

who would be negatively affected, directly or indirectly, by the development both during and after the project construction phases.

Again, any extra detail along the preceding lines would strengthen the proposal as it now stands and support a more considered response from government including the most appropriate referral to other government organisations of appropriate jurisdiction. All these outcomes are consistent with a more timely processing of developments of this nature and may be consistent with a more complete realisation of potential community benefits; always an important consideration where public fimding needs to be justified.

Overall Conclusions

The Hells Gate proposal may have merit, but this is difficult to hlly determine at the preliminary assessment level with the information provided. Information collated on those aspects listed previously would allow for a more complete assessment.

INTEGRATED ASSESSMENT PROCESS FOR PROPOSED WATER RESOURCE

DEVELOPMENTS

PART I1

DETAILED ASSESSMENT PROCESS I -'I F

to support the asses; t, specification, implementation and . ?- monitoring of detailed water resource infrastructure - I - -

developments

' _ I I " . . '

1 4 , .

INTRODUCTION

The following Detailed Assessment Process was develop{ I conjunction with the Rapid Assessment Process for the National Land and Water Resources Audit by the Centre for Water Policy Research at the University of New England in conjunction with the Australian Centre for Tropical Freshwater Research. The aims in relation to the both Parts I and I1 of the Integrated Assessment Process are similar. In each case, the overall aim is the facilitation of an integrated perspective to support water infrastructure development in Australia. In each case, the intention is to provide guidance to development proponents, policy administrators and the general interested community to ensure sustained attention to the interrelated ecological, economic and socio-cultural aspects that are a feature of all water-related developments.

The Rapid Assessment Process was developed to assist proponents and policy decision- makers in their preliminary consideration of water development proposals. The Detailed Assessment Process is intended to assist proponents through adding structure to proposals and through supporting a public decision making process that embodies the greatest possible degree of transparency and consistency. A Consultation Program was undertaken as par lf this study and the results su A :sented in Appendix 5 .

The Water Resource: Development Guidelines, tldt form the basis of the Detailed Assessment Process, are intended to constitute a comprehensive survey of the latest research and thinking in relation to ecologically-economically sustainable resource development. As such, they are intended as a resource to assist development proponents and public decision-makers in the preparation and consideration of proposals that address best practice sustainable resource development. The guidelines incorporate a comprehensive survey of economic, ecological, community and engineering criteria that are general to water resource development. Also included are details pertaining to a strategically orientated process for project scoping that is consistent with the latest thinking in the environmental management and policy planning areas. Stakeholders are invited to select that information of greatest relevance to their specific needs; though attention to all the guidelines would ensure the greatest possible ecol

' al-economic responsibility for pros~ective~development activity.

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GUIDELINE OBJECTIVES

The objective of the guidelines is to support the documentation and adoption of a water resource development and assessment process, which features:

a systematically integrated consideration of interlinked ecological, economic, engineering and community implications; clear feedback to proponents to guide their development of detailed proposals consistent with Xational and State water policy objectives, resource and environmental policy imperatives and the integrated consideration of ecol economic, engineering and community implications; and

transparent advice to politicians and development proponents.

One key aim is to support the consistently holistic or integrated consideration/documentation of proposed development issues and implications on the part of proponents. A second aim of the Rapid Assessment Process is to facilitate feedback to proponents that is transparent to all involved decision makers and which will mc rategic osals thrc

- to the implementation

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STRATEGIC ENVIRONMENTAL ASSESSMENT (SEA) FOL - - LILED PROJECT SCOPING

;ic Environmental Assessment (SEA) is a recent development in the environmental planning area (Gill 1997 and Therival 1996). Fundamentally, SEA is a systematic (or structured) procedure for ensuring the comprehensive consideration of ,-

environmental factors in development assessment procedures. The 'strategic' aspect of i 1 ''

the title implies the application of a carefully determined process to identify (or scope), - I

articulate and develop shared understandings of environmental impacts.

SEA is all about the application of a kind of 'best practice' procedure which can be applied the same way by development proponents and environmental planning and policy professionals, rather than relying on a more idiosyncratic or ad hoc internally developed process for interpreting prospective environmental impacts. It facilitates the identification of a wider group of stakeholders than otherwise might be consulted and the incorporation of their concerns and advice before plans progress to a less flexible stage. SEA presents a much more consultative perspective for the development , proposal process than more traditional 'adversarial' approaches (which may, for -

example, rely on a public inquiry to solicit public feedback). -; r .. ' 7 . -

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- i SEA presents a considerable opportunity for cost savings to proponents and the public 1,' ' -

h sector in their respective consideration of development proposals. Proponents can -;access a highly concentrated array of expert and other advice in relation to their ;proposal that has the prospect to streamline the documentation of projects and avoid F 'hidden surprises' later in the planning process.

There is a need, though, for proponents to engage the services of a professional, appropriately accredited community consultation consultant to undertake a formal SEA. It is not a 'do it yourself process as, at the very least, stakeholders need the assurance of objective, third party facilitation to secure the most transparent and frankly motivated discussions.

A comprehensive stake1 :r representation would normally include community representatives, representation from environmental interest groups, relevant scientific representation, representation from agencies/organisations with influence over the development and its monitoring and, if relevant, representation from Abo~iginal/traditional ownership interests. Guidelines for the conduct of an appropriate SEA are included in Appendix 3. The SEA consultant would usually take responsibility for documenting the attendant discussions, and their report would ideally be appended to the proponent's submission to government. The stakeholder resources and interest

;,. - $3 'mobilised' through the SEA process may subsequently be applied through subsequent stages of proposal detailing.

PREPARATION OF DETAILED PROJECT STATEMENT

To structure the more detailed specification of water resource development proposals, proponents are encouraged to prepare a Detailed Project Statement relating to each of the criteria listed in Table 1. The ensuing Statement should incorporate 20 separate sections, one for each criterion. Guidelines describing the detail required in relation to each criterion are provided in Appendix 1. Where numerical responses are indicated, appropriate worksheets are also provided. Much of the information recommended for inclusion in Table 1 could be derived from the results of the Strategic Environmental Assessment process described in the preceding section. As will be noted from Criteria 10, the proponent is invited to prepare a preliminary Environmental Management Statement to detail both the prospective environmental impacts involved and how they might be mitigated or managed. A comprehensive array of environmental criteria to guide the development of the recommended Environmental Management Statement is found in Appendix 4.

Table 1: Structure of a Detailed Project Statement

L

Criteria Economic Criteria (1 ) Construction s ;e annual benefits. (K: Worksheet 3) + (M: Worksheet 5) + . 1:

Worksheet 7) (2) Operational stage annual benefits. (L: Worksheet 4) + (N: Worksheet 6) + (P: Worksheet 7) (3) Annual interest to represent opportunity cost of capital invested (J: Worksheet 2) (4) To what degree would the project proceed without government funding? (5) Identification of community service obligation implications of project Financial Criteria (6) Post construction stage or operational level financial viability. (N: Worksheet 5) - (H: (Worksheet 2) (7) Operational level financial viability after interest ((N: Worksheet 5) - (H: Worksheet 2) - (5: Worksheet 2) Ecological Criteria (8) Local, State and Federal environmental/resource management agencies with empowerment of relevant jurisdiction to the proposed development (proponents are required to list all relevant agencies). (9) Existing natural resource management activity/plans that will relate to the proposed development (eg. TCM, ICM, WAMP activities). Proponents also need to identify and indicate likely compliance with relevant State/Temtory and Commonwealth environment and heritage legislative requirements. (1 0) Adequacy of proponent's Draft Environmental Management Statement in accordance with detailed specifications provided in Appendix 4

Community and Social Criteria (1 1) Identification of specific individuals and/or groups likely to be effected by the project and then describe the nature of the likely impacts on them. (12) Identification of relevant regional development planning agendas that will be influenced by or influence the proposed development (1 3) New employment prospects associated with proposal (14) Estimated displacement of existing employment by proposed development (1 5 ) Why are the works necessary? (16) Why does the project need to proceed now? (1 7) What happens if the project does not proceed (or the current situation continues)? Engineering Criteria (1 8) Technical feasibility: will the project achieve the technical objectives claimed for it? (19) Engineering feasibility: can the relevant engineering works be built with existing technology/available resourcedat the nominated site? (20) Are there alternative construction/engineering options?

5.0 GUIDELINES TO SUPPORT PROPOSAL ANALYSIS

The detail incorporated in both the SEA and the Detailed Project Statement would present the best possible foundation to support public consideration of water resource development proposals. The Detailed Assessment Process is aimed at supporting a consistent, streamlined and systematic consideration of every water development proposal. That Process will best ensure that the most appropriate public and private sector stakeholders are located to support the subsequent development of a proposal.

Subsequent to the Rapid Assessment Process, the Detailed Assessment Process will support the specification of a proposal to a level that would ensure the greatest possible transparency and most informed foundation for objective decision making. The Guidelines recommend the undertaking of a Strategic Environmental Assessment to effectively and systematically scope out the holistic dimensions of any water resource development proposal. The Detailed Project Statement recommends a level of detail that will support a project assessment process that is as streamlined and well informed as practicable. Collectively, the whole process would assert a perspective that addresses those complex, integrated dimensions of all environmental developments that are highlighted in most contemporary environmental management and policy agendas.

So far, though, the Detailed Assessment Process has recommended only the compilation of a detailed data resource to support public assessment. It is more than likely that some kind of formal analysis will ultimately be required. The convention is to use cost- benefit analysis. However, given the strong economics focus of that perspective, some compromise in relation to the holistic scope that can be accommodated would invariably apply. The ideal would be to constitute an analytical process with the capacities of cost-benefit analysis and soft systems methodologies to best address the detail that might potentially be available for review.

, ' . - An ideal analytical process to support the holistic consideration of water resource I -

developments would include: I '

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the capacity to estimate standard public investment criteria including a benefit-cost ratio, net present value and internal rate of return;

* the capacity to track the intertemporal performance o- 'iverse array of ecolol ' :a1 indicators (as outlined in Appendix 4); the capacity to explicitly represent feedback between all relevant criteria over time (particularly between economic, ecological and socio-cultural criteria);

* the capacity to represent non-linear processes (eg. in relation to feedl relationships); the capacity to represent non quantitative socio-cultural criteria; analytical transparency to all decision makers; and the capacity to highlight rather than disguise/assume away knowledge gaps and informational uncertainties.

The methodological perspective with the greatest potential to address all these needs is system dynamics modelling. The track record of the associated techniques in relation to environmental impact assessment and policy planning is particularly well documented (eg. Van den Bergh 1996, Milon et a1 1995, Meppem and Gill 1999, Folke 1994, and van den Bergh et a1 1994) and supported by the Commonwealth through various current project initiatives (eg. the CSIROYs 'Insight' program supported by the Land and Water Resources Research and Development Corporation and the New England Ecological Economics Group's own work supported by the Australian Research Council in relation to regional development planning for the Upper Hunter Region of NSW among others). System dynamics modelling is as amenable to tracking economic impacts as it is to incorporating environmental flow relationships. Its overriding strength is in facilitating the consideration of explicit links between these different dimensions.

For the purposes of the current Guidelines, the recommendation is for the development of an appropriately detailed system dynamics 'systems model' to facilitate formal project analysis should that be required. This task, is, of course, specialised and would be undertaken by appropriately qualified and experienced personnel either within government or on behalf of the development proponent. The ensuing analysis might become the core of any required Environmental Impact Assessment process initiated to complete the consideration of specific proposals.

References

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Gill, R. A. 1997, Strategic Environmental Assessment and the IDeaMaP Toolbox, in Proceedings ofthe Royal Australian Institute of Planning Conference, Armidale.

Meppem, A. and Gill, R. A. 1999, Planning for sustainability as a learning concept, Ecological Economics, 26(2), 12 1 - 13 8.

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The ' ', R a ' 4. R. Pa ' ' lrio 1996 -* .e Practice of Str. :gi t-: assessment, Earascan, London. % - . . .% - A L P - ., . - , O w n -

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