Australia’s $1.5 billion water market could be set for major reform after a report by the Australian Competition and Consumer Commission found “significant faults” with trading regulation.
Key points:
The long-anticipated interim report by the competition watchdog released today suggests tighter regulation is needed for market participants, including water brokers and exchange platforms, which it found had been allowed to operate mostly without regulation, allowing “conflicts of interest to arise and opportunities for transactions to be reported improperly”.
The report found “there are significant deficiencies associated with the settings and governance of water trading, which undermines the efficiency of water markets and their dependent industries”.
The report also said “rules to guard against the emergence of conduct aimed at manipulating market prices” were “scant” and that there was “no body to monitor trading activities of market participants”.
There was a disconnect between the rules of the trading system and the physical characteristics of the river, the report said.
The ACCC is considering recommending that the government improves transparency about how water is traded and disallowing zero dollar trades.
“Trade processes are outdated and fragmented across many service providers,” the report said.
https://www.abc.net.au/news/2020-07-30/accc-murray-darling-basin-water-trading-report-released/12506270