Legislation and guides

Water NSW Act 2014 (the Act) defines the functions and objectives of WaterNSW.

The principal objectives of WaterNSW under the Act are:

(a) to capture, store and release water in an efficient, effective, safe and financially responsible manner, and
(b) to supply water in compliance with appropriate standards of quality, and
(c) to ensure that declared catchment areas and water management works in such areas are managed and protected so as to promote water quality, the protection of public health and public safety, and the protection of the environment, and
(d) to provide for the planning, design, modelling and construction of water storages and other water management works, and
(e) to maintain and operate the works of WaterNSW efficiently and economically and in accordance with sound commercial principles.

The other objectives of WaterNSW are as follows:

(a) to be a successful business and, to that end:

(i) to operate at least as efficiently as any comparable business, and

(ii) to maximise the net worth of the State’s investment in Water NSW,

(b) to exhibit a sense of social responsibility by having regard to the interests of the community in which it operates,

(c) to exhibit a sense of responsibility towards regional development and decentralisation in the way in which it operates,

(d) where its activities affect the environment, to conduct its operations in compliance with the principles of ecologically sustainable development contained in section 6 (2) of the Protection of the Environment Administration Act 1991.

The functions of WaterNSW under the Act are to:

• capture and store water and to release water:

(i) to persons entitled to take the water, including release to regional towns, and

(ii) for any other lawful purpose, including the release of environmental water

• supply water to the Sydney Water Corporation
• supply water to water supply authorities and to local councils or county councils prescribed by the regulations
• supply water to licensed network operators or licensed retail suppliers within the meaning of the Water Industry Competition Act 2006
• supply water to other persons and bodies, but under terms and conditions that prevent the person or body concerned from supplying the water for consumption by others within the State unless the person or body is authorised to do so by or under an Act
• construct, maintain and operate water management works (including providing or constructing systems or services for supplying water)
• protect and enhance the quality and quantity of water in declared catchment areas
• manage and protect declared catchment areas and water management works vested in or under the control of Water NSW that are used within or for the purposes of such areas
• undertake flood mitigation and management
• undertake research on catchments generally, and in particular on the health of declared catchment areas
• to undertake an educative role within the community.

A key responsibility of WaterNSW is identifying and managing impacts on water quality in the declared catchment areas. In order to protect water quality, the Water NSW Regulation 2020 restricts access to lands immediately adjacent to the storages used for drinking water supplies. It also provides for regulatory powers to manage pollution activities that impact water quality.

In Special Areas, (those lands adjacent to water storages in the Greater Sydney drinking water catchment) access may be prohibited or certain activities restricted to protect water quality and ecological health.

The Water NSW Regulation 2020 (which operates under the Water NSW Act 2014) provides WaterNSW with the power to legally enforce access restrictions.

WaterNSW has enforcement powers under the Protection of the Environment Operations Act 1997 to penalise polluting activities in the catchment that may impact on water quality.

WaterNSW keeps a public register of all notices issued under the Protection of the Environment Operations Act 1997.

The objects of the Water Management Act 2000 are to provide for the sustainable and integrated management of the water sources of the state for the benefit of both present and future generations and, in particular:

• Ecologically sustainable development
• Protect, enhance and restore water recourses
• Recognise and foster social and economic benefits
• Recognise the role of the community
• Provide efficient and equitable sharing of water
• Management of water sources with other aspects of the environment including native vegetation and native fauna
• Encourage the sharing of responsibility and efficient use of water
• Encourage best practice management and use of water.

In NSW, the regulator and policy maker for water resource management is the NSW Department of Industry – Water (DoI Water). The department develops natural resource management policy frameworks, strategies and plans related to water management. DoI Water is accountable for water sharing plans (WSPs), which define the rules for sharing the water resources of each regulated river valley between consumptive users and the environment. WSPs are made under the Water Management Act 2000. WaterNSW operates in accordance with these WSPs and delivers water to customers and the environment. Customers’ water accounts are credited with their shares of available water and, as they use their water, their usage is debited from their accounts.

The majority of water access licences are issued under the Water Management Act 2000 but some are still issued under the Water Act 1912.

For more information, see the NSW DPIE - Water website.

The Operating Licence for WaterNSW also confers on WaterNSW certain functions of the Minister administering the Water Management Act 2000 and the Water Act 1912.

Dams Safety NSW is the state regulator for dams safety. It is responsible for developing and implementing regulation for effective dam safety management to protect life, property and the environment from dam failures.

WaterNSW is obligated to meet the requirements under the NSW Dams Safety Act 2015.

The requirements that WaterNSW need to comply with during the life of each dam include:

1. Proper operation and maintenance of their dams using trained personnel;
2. Regular dam surveillance using trained personnel;
3. Appropriate dam safety emergency plans to be in place for those dams whose failure could cause loss of non-itinerant life;
4. Ongoing assessment of the dam’s behaviour on the basis of surveillance information;
5. Periodic review of their dam's compliance with current Dams Safety NSW requirements;
6. Review of all dam information and assessments by experienced personnel; and
7. Actions, in response to dam assessments, to ensure that their dams are maintained in a safe condition.

The safe and responsible management of WaterNSW’s prescribed dams is also vital to ensure:

• compliance requirements relevant to the activities undertaken by WaterNSW including the current relevant Commonwealth and State legislation, Operating Licence(s) obligations;
• commitments to Government and associated regulatory bodies with respect to safety and asset management delivery and performance, specifically with respect to cost, risk and operational delivery, are achieved within agreed timeframes;
• management of public infrastructure to assure safe and reliable water delivery for future generations.

WaterNSW ensures dam safety and manages the risks of dam failure throughout the life of each dam by implementing an effective dam safety management system.

This is undertaken by professional and technical staff responsible for all aspects of dam safety including surveillance, investigations, risk analysis, planning and prioritisation, project initiation and oversight, and regulatory compliance and reporting.

WaterNSW operates under an operating licence granted by the Independent Pricing and Regulatory Tribunal (IPART). The operating licence enables WaterNSW to exercise its functions under the Water NSW Act 2014. The Operating Licence also contains a number of reporting obligations on WaterNSW.

Each year, IPART audits and reports on the organisation’s performance against the licence provisions. Penalties may be imposed for non-compliance. You can view previous operational audits on the IPART website.

• WaterNSW Operating licence 2024 - 2028 (PDF, 622.45 KB)
• WaterNSW Reporting Manual – operating licences 2024-2028 (PDF, 311.09 KB)

WaterNSW operates in accordance with Water Sharing Plans (WSP) and delivers water to customers and the environment. Based on the WSP rules, the available water resources are shared throughout the year, allowing water for the environment and for consumptive use. Customers’ water accounts are credited with their shares of available water and, as they use their water, their usage is debited from their accounts. More information about Water Sharing Plans can be obtained from NSW DPIE - Water.

The water licences and approvals granted to WaterNSW regulate its access to water resources in its area of operations.

Water Access Licences authorise WaterNSW to take and use water.

Water Supply work and water use approvals set out how the water management works are to be operated, including the amount of water that WaterNSW must make available for environmental flows.

WaterNSW provides raw water to a range of customers across NSW.

For some of the customers arrangements by which water is provided is documented in water supply agreements.

The Water NSW Act 2014 requires that the supply agreement with Sydney Water must address:

• water quality standards
• continuity of water supply
• costs the customer must pay for the water supply
• how to resolve disputes and handle complaints.

Under our agreement with Sydney Water, WaterNSW provides raw water to Sydney Water's water filtration plants, and meets nominated water quality standards or criteria.

These criteria apply to the quality of water passing through the inlet to the various water treatment facilities and are based on historical raw water quality data and the water treatment facility's ability to treat the water.

How we manage raw water quality is also influenced by:

• the Australian Drinking Water Guidelines

The Water NSW Act 2014 requires that there be an independent audit of the health of the declared Sydney catchment area at least every three years.

The audit report is provided to the Minister responsible for WaterNSW.

The first audit for the declared Sydney catchment area was published in 1999. The most recent audit addresses the period 1 July 2019 to 30 June 2022 and is available at:

• 2022 Drinking water catchment audit - main report  (PDF, 22391.1 KB)
• 2022 Drinking water catchment audit - appendices  (PDF, 3003.04 KB)

Catchment health indicators

Catchment audits are required to assess the health of the declared catchment areas using a list of indicators developed under Section 41 of the Water NSW Act 2014.

The current catchment health indicators are:

Land use and human settlements

• Land use
• Sites of pollution and potential contamination
• Soil erosion
• Population settlements and patterns
• Community attitudes, aspirations and engagement

Biodiversity and habitats

• Macroinvertebrates
• Fish
• Riparian vegetation
• Native vegetation
• Fire
• Wetlands
• Physical form

Water availability

• Surface water flow
• Environmental flows
• Groundwater availability

Water quality

• Ecosystem and raw water quality
• Nutrient load
• Cyanobacterial blooms

Audit findings

WaterNSW is required to evaluate the findings of the catchment audit to the extent to which they relate to its activities and risks to water quality. WaterNSW is also required to incorporate the findings of the audit into its risk framework, and its programs and activities relating to catchment management.

WaterNSW is required to report to the Minister on its progress to achieve improvements in catchment health, to prevent degradation of existing catchment health and to maintain existing catchment health, having regard to the findings. Such a report must be provided within two years after the catchment audit report is received by the Minister. The report in response to the 2022 Catchment Audit is due in June 2025.

The NSW Water Strategy sets the overarching vision for 12 regional and two metropolitan water strategies, tailored to the individual needs of each region in NSW. Together, the strategies will improve the resilience of NSW’s water services and resources.

WaterNSW rural bulk water prices from 1 October 2021

The Independent Pricing and Regulatory Tribunal (IPART) have released the final report (in September 2021) on prices for rural bulk water and non-urban metering services. IPART has finalised its review of maximum prices for rural bulk water services, including non-urban metering services, in NSW.

• IPART Review of prices for rural bulk water services from 1 October 2021
• IPART Final Report - Review of Water NSW’s rural bulk water prices - September 2021

For more information, please visit IPART.

WaterNSW, the Department of Climate Change, Energy, the Environment and Water (NSW DCCEEW), and the Natural Resources Access Regulator (NRAR) have developed a Roles and Responsibilities Agreement that came into effect on 30 June 2021. This agreement replaces the former Deed of Transfer.

The agreement is required for WaterNSW to meet its Operating Licence, and sets out how the three agencies collaborate and work together to deliver key water management functions. The agreement details each agency’s role and provides a framework for resolving any interagency issues, along with the identification of improvement opportunities.

Memoranda of Understanding (MoU) are a requirement of the Water NSW Act 2014. The memoranda:

• establish cooperative relationships with regulatory agencies
• develop consultative processes to consider operational, strategic, and public health and environmental issues
• allow for exchange data and information.

The MoU with NSW Health (PDF, 237.9 KB) recognises the role of that agency in relation to water quality standards and public health.

The MoU with the Environment Protection Authority (PDF, 305.64 KB) recognises the role of that agency in protecting the environment of NSW.

WaterNSW also has a range of non-statutory MoUs with other stakeholders.

The purpose of this statement (PDF, 972.25 KB) is to help WaterNSW ensure its strategic direction aligns with the Government's expectations. We seek to clarify the Government's key priorities relevant to the work of WaterNSW, while it continues to operate its business in a commercial manner.

The public register provides details of each environment protection notice and penalty notice issued by Water NSW as the Regulatory Authority, and the Sydney Catchment Authority before its abolition on 31 December 2014.

WaterNSW  Protection of the Environment Operations (POEO) Public Register ( PDF, 204.43 KB)