A new age of enforcement under the NSW Water Management Act
What you need to know
- Recent reform to the Water Management Act 2000 (NSW) (WM Act) has made it easier to prosecute individuals and corporations for contraventions of the Act.
- A range of civil penalties have been introduced with a lower burden of proof than the equivalent criminal offences.
- Courts can now consider potential or likely harm caused by offending when determining an appropriate penalty, not just the actual harm arising from the offence.
- For the first time, Courts can now consider potential harm to spiritual, social, customary or economic use or value of the land or water by Aboriginal people and the views of the impacted Aboriginal persons.
- There is a new broader range of orders, allowing enforcement of the Act to occur in new ways, including to directly impact the ability to rely on existing water access licenses or approvals.
- Directors and employees of corporations can now be personally liable for offences.
What you need to do
- It is too soon to know how the regulator will handle its new enforcement powers or how the courts will apply the new offence and penalty provisions.
- Proponents should ensure compliance with the Act, including by regularly conducting compliance checks and preparing for increased regulatory oversight.
2025 saw the commencement of a new age of water law enforcement in NSW.
Following reform to the Water Management Act 2000 (NSW) (WM Act), it is now easier for individuals and corporations to be prosecuted and penalised for contraventions of the WM Act.
In this article, we will consider four of the main changes to the WM Act and explain what these changes could mean for you.
What has changed?
1. Civil penalties have been introduced for the first time
Individuals and corporations could historically be prosecuted by the Natural Resources Access Regulator (NRAR) for a range of criminal offences under the WM Act.
For the first time in NSW environmental law, the reformed WM Act now also includes civil penalties.
Common criminal offences that can now also constitute contraventions of civil penalty provisions include:
- taking and using water without appropriate licenses and approvals;
- tampering with metering equipment;
- failing to keep metering records; and
- harming aquifer or waterfront land.
The civil penalties are expressed in terms of penalty units, and each unit is valued at $110.
Some penalties are also expressed in terms of the value of the water taken, calculated using a prescribed method in the WM Act and its regulations.
The maximum civil penalty for individuals who have contravened a civil penalty provision is the greater of approximately $5 million (45,450 penalty units) or 5 times the value of the water taken. An additional penalty of $242,000 (2,200 penalty units) can be imposed for each day that contravention continues.
The maximum penalty for corporations who have contravened a civil penalty provision is the greater of approximately $10 million (90,900 penalty units) or 5 times the value of the water taken, with an additional penalty of $495,000 (4,500 penalty units) for each day that a contravention continues.
The limitation period for bringing proceedings for contravention of a civil penalty provision is 3 years after the contravention occurred, or the day the contravention first came to the attention of an authorised officer, whichever occurs later.
The introduction of civil penalties is significant because the burden of proof for establishing contravention of civil penalties is on the balance of probabilities, which is lower than the burden for the equivalent criminal offence which involves proving matters beyond reasonable doubt.
In addition, in proceedings against a person for contravention of a civil penalty, NRAR will not have to prove the state of mind of the person including their intentions, knowledge or recklessness.
Overall, this means that it will be easier for NRAR to satisfy a court that a contravention of a civil penalty provision has occurred.
2. Courts can consider impact on use or value of land or water for Aboriginal people in determining an appropriate penalty
While the WM Act identifies the maximum penalty that can be imposed in relation to a contravention, ultimately, a court must determine the orders to be made and the appropriate penalty that should be imposed.
In prosecution of criminal offences, the WM Act previously identified a range of factors that a court must consider in imposing a penalty. The range of factors has now been expanded so that a court must also consider:
- the impact, likely impact or potential impact of the offence on the spiritual, social, customary or economic use or value of the land or water by Aboriginal people;
- the views of the Aboriginal persons impacted or likely to be impacted; and
- the harm, likely harm or potential harm to the environment.
This change is significant because it explicitly acknowledges the impact on and views of Aboriginal people in a manner that was not previously contemplated by the WM Act.
The concept of "harm" is now broader than ever before. It is no longer limited to the actual harm arising from the offence. Instead, individuals and corporations can be penalised for anticipated (and potentially theoretical) harm caused by their conduct.
The Court may also take into consideration other matters that it considers relevant.
In proceedings for civil penalties in other contexts (such as ASIC and ACCC enforcement matters), courts have commonly applied the "French factors" in determining the appropriate penalty. The "French factors", as set out by French J in Trade Practices Commission v CSR Limited [1990] FCA 521, include the size of the contravening company, whether the contravention arose out of the conduct of senior management or at some lower level, whether the contravener has a corporate culture conducive to compliance with the law (as evidenced by educational programs and disciplinary measures), and whether the contravener has shown a disposition to cooperate with authorities.
3. Courts have a broader range of orders for contraventions
Under the reformed WM Act, a court now has the power to order:
- an offender to pay any monetary benefits obtained by the offender as a result of the offence to the NSW Government;
- the cancellation of an access license or approval held by the offender;
- the offender to contribute an amount to a project to restore or enhance the environment in a public place; and
- the offender to carry out a specified project or activity for the benefit of the community affected by the offence.
The broader range of orders now available to courts allows enforcement of the WM Act to occur in new ways, and to directly impact an individual or corporation's ability to rely on existing water access licenses or approvals.
4. Directors and employees of corporations can be personally liable
Under the reformed WM Act, a director or person involved in the management of a corporation that has contravened a civil penalty provision is also taken to have contravened that provision.
As a consequence, NRAR can now commence proceedings against directors and managers who knowingly authorised or permitted a corporation to contravene the WM Act even if NRAR did not commence proceedings against the corporation.
NRAR can also commence proceedings against a person who is knowingly involved in or causes or permits a contravention of a civil penalty provision.
The reformed WM Act now also includes the concept of a "related person" of a corporation which is defined as a director or person involved in the management affairs of the corporation, a related entity, or a director or person involved in the management of the affairs of a body corporate.
If the Land and Environment Court finds that a corporation has contravened a provision of the WM Act or its regulations, on application, the court can make an order that a related person of the corporation is to pay an amount estimated to be the monetary benefit obtained by the related person as a result of the contravention to the NSW Government. In determining whether such an order should be made, the court is only required to be satisfied that the estimated monetary benefit was obtained as a result of the contravention on the balance of probabilities.
If the Land and Environment Court orders the cancellation of an access license, the court can also prohibit a related person of the offender from applying for the same or a similar type of license or approval as the cancelled license or approval.
These amendments mean that directors and managers of corporations are now at a higher risk of being pursued individually for contravention by corporations.
What can you do?
As these changes have only recently been introduced (with some provisions only commencing on 1 January 2026), it is unclear how the NRAR will handle its new enforcement powers or how the courts will apply the new offence and penalty provisions. At the very least we expect to see more regulatory oversight and more enforcement action on water.
Therefore, we recommend ensuring that you comply with the WM Act and implementing processes to ensure that such compliance checks occur on a regular and periodic basis.
Please contact the Ashurst Planning Access and Environment Team if you have any questions or concerns in relation to your compliance with the WM Act.
