Where close management of water resources is required, the Governor, on the Minister’s recommendation, can prescribe those water resources under the Natural Resources Management Act 2004 (Act) (refer to section 125 of the Act).

Prior to making a recommendation to the Governor, the Minister must be satisfied that the proposed regulation is necessary or desirable for the proper management of the water resource. A recommendation is only made by the Minister to the Governor after first issuing a notice of intent to prescribe the resource (refer to section 125(5) of the Act) and consulting the community. A minimum consultation period of three months is set down for this important step.

In addition to the prescription of a water resource, a temporary cap on water use is often used as a necessary complementary measure. This is established by the Minister issuing a notice of prohibition/restriction (refer to section 132 of the Act) conjunctively with the notice of intent to prescribe and is generally kept in place until the water allocation plan has been fully developed and brought into operation.

During this period people may only continue to use water by authorisation issued in accordance with the arrangements set out in the relevant notice. Commonly, this allows people to continue to use water to the same extent they were using it before the notice came into effect, or for a new activity for which a legal or firm commitment was in place.

Once a water resource is prescribed, the relevant regional natural resources management board develops, in consultation with the community, a water allocation plan for the prescribed water resource (refer to section 76 of the Act).

Existing users at the time that the intent to prescribe a water resource is declared hold a special status and have the first right to an allocation of water from the prescribed resource. An existing user for this purpose is defined in section 164N(10) of the Act.

To achieve existing user status, an application for a water licence must be made within six months after the publication in the Gazette of the regulation prescribing the water resource/s. The Department attempts to advise all potential existing users about the prescription through newspapers, public meetings and direct mailing. Existing users are issued with a water licence endorsed with a water allocation prior to new users being considered. Water licences are a property right held separately from land and may be traded pursuant to the rules in the water allocation plan.

Once an understanding of the capacity of a water resource to meet demands has been determined, provisions exist under the Act for the Minister to reduce water allocations if necessary, either proportionally or via a scheme established by regulation (refer to section 164N(3) of the Act).

New water users must also apply for a licence and may be allocated water, within the sustainable limits of the resource and subject to the provisions of the relevant water allocation plan.

The requirement to obtain a water licence to take water from a prescribed resource applies to all water uses unless they are exempt. Exemptions typically include the use of water for stock (not including intensive stock keeping such as feed lots, piggeries, chicken farms etc), water for domestic use, fire fighting and road making. However, water taken for stock and domestic water use in the Western Mount Lofty Ranges (if the water is taken from a dam five megalitres in capacity or greater), the Far North, the Northern Adelaide Plains and the River Murray prescribed water resource areas currently requires a water licence. Future prescriptions may include the need to obtain a licence for stock and domestic use, where this is necessary and appropriate for the proper management and equitable sharing of the resource.