Transcript

SARAH FERGUSON, PRESENTER: Welcome to Four Corners.

More than a hundred years of greed, mismanagement and the plundering of one of Australia's most valuable resources was supposed to end 5 years ago with the introduction of the federal government's Murray Darling Basin Plan.

Billions of dollars of taxpayers' money was committed in a hard won deal - to save the inland river system from the ravages of heavy agricultural use - particularly the thirsty work of irrigating the vast cotton plantations of northern NSW and southern Queensland.

Tonight, we raise serious allegations about the way the plan is working, with accusations of illegal water use, pumping water from fragile rivers and tampering with metres.

You'll also hear recordings of cosy backroom discussions between bureaucrats and the powerful irrigators the plan was supposed to manage.

This investigation by Linton Besser reveals that far from saving the river, the implementation of the plan has helped create a financial windfall for a select few.

LINTON BESSER, REPORTER: At Phil O'Connor's place family and friends are getting ready for a big weekend of fishing.

Phil puts on a good show.

PHILLIP O'CONNOR, MAYOR OF BREWARRINA: Just grab one of them big ones mate and lug her in.

LINTON BESSER: Here in Brewarrina he's the local mayor and for a long time he also ran the fishing club.

PHILLIP O'CONNOR: I usually wear glasses to do this.

LINTON BESSER: The club's running its annual competition …

PHILLIP O'CONNOR: Go hard, get 'im in, get 'im in.

LINTON BESSER: Brewarrina's famous carp muster.

PHILLIP O'CONNOR: Did ya catch 'im? Good boy. Bring it up to pop and we can get the $500 and I can put it on the bar.

LINTON BESSER: And how many carp do you pull out of the river?

PHILLIP O'CONNOR: Well last year there was over 2000.

LINTON BESSER: Where do those 2000 carp go?

PHILLIP O'CONNOR: Well we bury them supposedly but the pigs go alright with them.

LINTON BESSER: Over at the RSL, the weigh-in is already underway.

LUKE HERTSLET: She's all about fun, and trying to get the bloody mongrel carp out of the river of course.

LINTON BESSER: In these small river towns fishing clubs are at the heart of the community.

DAVID HAGARTY, BREWARRINA FISHING CLUB: This year, with a monster 6.752 kg carp is number 327, Matthew Taylor.

LINTON BESSER: Beneath the surface, however, there's a tension between fishermen and irrigators who pump water from the river.

TOM TAYLOR: We were actually fishing there and your lines were flowing back up the river and we could hear the diesels running and it was the cotton and the river was flowing the wrong way.

LINTON BESSER: That's how powerful the pumps are?

TOM TAYLOR: That's how big they are.

LINTON BESSER: This year the Brewarrina Fishing Club has had a rocky time.

It shows a bit of tension in the community, doesn't it?

DAVID HAGARTY: No, no tension in the community. It's just we're not going to talk about it. We don't need to talk about it.

LINTON BESSER: Its members have split over whether to accept a big donation from a local cotton grower.

PHILLIP O'CONNOR: I didn't want Clyde Cotton money.

But anyway, that was my opinion, I thought I'd contact a couple of club members, they agreed with me, I made the decision, which I was president of the club not to accept the money.

Then the club formed the opinion that I'd made the wrong opinion, so they had a meeting and decided to take the money.

And I resigned because I wouldn't accept the money because it was sweetening money and I didn't think it anything more than that.

LINTON BESSER: Phil O'Connor had to resign you know?

LUKE HERTSLET: He did pull out that's sad because he's a good bloody man for the job.

LINTON BESSER: Phil O'Connor's taking us up-river on his well-equipped vessel, decked out with its own barbecue and even a port-a-loo.

A 5-star luxury cruiser.

He heads up here now and then to keep an eye on the local irrigators.

PHILLIP O'CONNOR: People come to me in my position as mayor of this town and they suspect things that are going wrong along the river and I'll try and take it to the authorities the best I can then.

We're not about stopping irrigation, we're not about that.

I'm an irrigator myself, so, it's not about that.

It's about people doing the right thing for the river and that's what it's all about.

LINTON BESSER: Along the way a local fisherman calls out to Phil to stay on the job.

FISHERMAN: Stop all that illegal pumping … dirty bastards!

LINTON BESSER: Fifteen minutes up-stream and we arrive at the first pumps.

They're not small pumps, are they?

PHILLIP O'CONNOR: Yeah, they're pretty sort of average size for cotton irrigation I suppose.

LINTON BESSER: These pipes pull billions of litres out of the Barwon River.

PHILLIP O'CONNOR: If they've got the right to use them and they're licenced to use them, and they're adhering to that, no one hasn't got any problems, have they?

LINTON BESSER: This is one of Clyde Cotton's properties called Rumleigh on the Barwon River.

It's a crucial waterway in the Murray-Darling Basin where there's been bitter tensions over access to water.

SUE HIGGINSON, CEO ENVIRONMENTAL DEFENDERS OFFICE: It's a really hostile environment.

Water is the single most important natural resource.

There are operators with really deep pockets, with a lot to lose, a lot at stake, and they're willing and able to stand up and fight.

LINTON BESSER: Much of this fight has been about cotton.

We all wear cotton practically every day. And it can be a very lucrative crop.

In a good year, producers make tens of millions of dollars growing this stuff, but there's only one catch - you've got to have enough water to begin with.

In the far reaches of north-western New South Wales the land is dry and unforgiving and water is scarce.

So, for decades, behind huge walls of clay and dirt cotton-growers have been building private dams that are simply staggering.

BILL JOHNSON, FORMER MURRAY-DARLING BASIN AUTHORITY, DIRECTOR, NORTHERN BASIN ENGAGEMENT: Some of these storages are enormous.

They're mind boggling.

They'll take your breath away.

You're driving along, you drive for kilometres and there's just walls of storage.

There are farms across this part of Northern New South Wales, that have dams that can hold a sizable proportion of Sydney Harbour.

LINTON BESSER: These storages are owned by a company called Webster Limited.

On this one farm, they have five of them, holding a combined 30-billion-litres of water drawn from the Barwon-Darling.

There used to be a host of smaller irrigators up and down this river system.

But since the Murray-Darling Basin Plan was signed, there's been huge consolidation.

Now, just two big players own 70 per cent of the water in this river.

One of them - Webster Ltd - now owns more water than anyone else in this country outside the federal government.

It's a portfolio worth about $300 million.

Webster is chaired by corporate raider Chris Corrigan, famous for busting waterfront unions 20 years ago.

The company - which trades on the securities exchange - plans to grow cotton in a good year and to make even more money in drought by selling its water at a profit to farmers willing to pay.

MARTIN CRABB, CHIEF INVESTMENT OFFICER, SHAW AND PARTNERS: If they didn't plant any cotton, and they had a very high water price, they would make a lot more money selling water than planting cotton.

Which is part of their model.

Their model is if there's a better price in the open market than actually going through the hassle of growing cotton.

So, although it's one of Australia's biggest cotton growers, it could actually make more money by not growing cotton.

MAL PETERS, FORMER MURRAY-DARLING BASIN AUTHORITY ADVISORY COMMITTEE CHAIRMAN: So, when you talk about an irrigation company that has come in, is not there to produce agricultural production but to make profit from selling the water, I don't think that's a good outcome for those communities and it certainly not a good outcome for the Australian economy.

So, I don't support it.

I don't think they are good things to happen.

LINTON BESSER: In the Barwon-Darling, a new set of water pumping rules introduced by the NSW Government have been a boon for the company.

The rules which came in after extensive lobbying by irrigators allowed them more access to water than prior to 2012 when the Murray-Darling Basin Plan was signed.

University of NSW scientist Richard Kingsford says even buybacks - water bought by the government to save the environment - can now be pumped.

PROFESSOR RICHARD KINGSFORD, DIRECTOR, CENTRE FOR ECOSYSTEM SCIENCE, UNSW: What we're seeing is quite clearly that environmental water bought by taxpayers is going through pumps into storages to grow cotton, and to me that is the biggest problem that we've currently got in the way the Barwon-Darling is managed, and it really goes against the whole tenet of the plan.

SUE HIGGINSON: The water was purchased with Australian taxpayer money to go to the environment.

That is a public interest matter, that is a public interest consideration.

LINTON BESSER: How do people feel about that?

BILL JOHNSON: People are, I think they're beyond angry.

I think they're dismayed.

People are very distressed.

There's a small number of large extractors who have benefited and nearly everybody else has paid the price, and that includes all the towns downstream, communities and the river itself.

If you abandon the river, you're basically abandoning the people.

LINTON BESSER: Former Murray-Darling Basin Authority official Bill Johnson, is showing us where Webster pumps its water.

BILL JOHNSON: This is one of the pump sites for one of the big cotton farms in the area.

LINTON BESSER: Oh my god look at that.

BILL JOHNSON: These big pumps were always used to take the medium and the high flows.

The low flows, you were only allowed to use a pump about this big, 150 mls.

The volume that they could take is much less.

The rules were changed in the Barwon-Darling, so that those low flows could be extracted using these pumps.

LINTON BESSER: Now, even when the river runs low, Webster can use these pumps to take millions of litres of water.

BILL JOHNSON: In the Barwon-Darling, that water is pumped out and stored and used to grow irrigated crops.

It is a subversion of the intent of the basin plan, of the water act and the basin plan.

It undermines, that undercuts the whole intent of the basin plan.

MAL PETERS: The rules were that in a huge flow that was the only time these big pumps could be used.

Well, the rule changes meant that in a low-flow, when there wasn't much water running down the river, they could kick those big pumps up.

Keeping in mind that you've got rural communities downstream.

Farmers who need stock and domestic water.

They won't be able to access it.

LINTON BESSER: Mal Peters was the former head of the Farmers' Association in NSW.

And until last year chaired a Murray-Darling Basin Authority committee overseeing the Barwon-Darling River.

He wrote a scathing review of the new river rules.

How did you describe those changes?

MAL PETERS: Oh, bloody disgusting.

I didn't use that language but, it was most unsatisfactory, because it rendered the whole plan, in my mind, completely null and void because the amount of water that could be taken out was huge.

LINTON BESSER: The rules also allowed water rights to be traded up and down the river triggering a buying spree.

Former cotton farmer Ian Cole lobbied for the new rules and also benefited from them.

IAN COLE, FORMER IRRIGATOR AND IRRIGATOR LOBBYIST: Behind us now we've got the first dam that was built on Darling Farms.

LINTON BESSER: After the new rules increased the value of some water licences, Ian Cole put his licence on the market.

In May 2015, you on-sold just the water component.

There are other sales of the land, but you on sold the water at $4.5 million.

Now that's a significant profit, isn't it?

IAN COLE: It's a good profit, yeah.

Yeah, if you put it like that.

I don't even remember that.

LINTON BESSER: The licence sale was part of a $30 million-dollar deal with Webster Ltd to offload Ian Cole's family property, Darling Farms at Bourke.

For a decade, no-one had wanted to buy it until after the new water rules came in.

They were rules Ian Cole lobbied for.

The public exhibition for the water plan closed December 2011.

You had a number of meetings and contacts with the government and the ministers involved after that, didn't you?

IAN COLE: Maybe, I can't remember.

I possibly did.

I often go and talk to ministers about things, yeah.

LINTON BESSER: Ian Cole knows the big irrigators are being blamed by farmers and towns downstream for a disappearing river.

They're really upset down there.

They say that they are seeing drastically less water in the river, that it's affecting their daily life.

IAN COLE: People downstream have always got legitimate concerns as far as I'm concerned.

I think for anyone that lives on a river, they know the argument about the people upstream are always the greedy buggers taking all the water, and the people downstream are the people - that you might seek to ignore - who are wasting water.

I don't say that.

STUART LE LIEVRE, GRAZIER 'YATHONGA': The major irrigators have taken it.

There's no Darling extraction limits anymore.

There's no limit on pump sizes.

LINTON BESSER: Can I get you two another one? Any chance of two beers Cath?

Downstream at Louth, there's no sign of them wasting water.

LEAH LE LIEVRE, GRAZIER 'DELTA': I just get a little bit worried about what's going to happen to the rest of us who are trying to just have a shower, brush our teeth and let our sheep and cattle have a drink of water when you're standing on the riverbank and all you can see is a puddle of water, but you know that people upstream have huge amounts of water.

LINTON BESSER: Cousins Stuart and Leah Le Lievre say they have seen the water steadily diminish.

STUART LE LIEVRE: There is nothing right about it, none at all.

They neglected 1400 kilometres of river and the communities living on it.

LINTON BESSER: Cath, what about for you? Are you worried about the future of the Louth pub?

CATH MARETT, PUBLICAN, SHINDY'S INN: I'm worried about the future of small business all the way along the Darling.

It's detrimental for everybody.

It's detrimental for graziers, it's detrimental for farmers.

KATE MCBRIDE: So right here's the point where last year I came with the bikes we rode down into the river bank with the Go-Pros on the top of our head and there was just absolutely nothing.

LINTON BESSER: Kate McBride's family at Tolarno Station have run sheep for generations.

KATE MCBRIDE: We rode along the bottom of the river and it was absolutely bone dry.

There was hardly any puddles you didn't have to worry about getting bogged there was just nothing but dirt.

LINTON BESSER: In late 2015 in the midst of a drought the river disappeared for eight months.

Kate's father and prominent grazier Rob McBride says huge amounts of water were pumped out upstream.

ROB MCBRIDE, GRAZIER, 'TOLARNO' STATION: We put up with droughts for hundreds of years in this western division.

That's just life living here, but that's not what happened.

We're fighting man-made disaster, not a natural disaster and that was the difference.

LINTON BESSER: Rob McBride says water is money and it's moving upriver.

ROB MCBRIDE: It's changed.

You can take water licences from further down the catchment and you drag it up to the top, everything is changing so rapidly.

People are profiteering.

People want to get water in their hands because if you get water in your hands that's big money.

It's the biggest water grab in Australia's history and they're just moving, the goalposts are moving further up the catchment.

MAL PETERS: I mean, that's social engineering.

Transferring wealth from one part of the community to another part, and that's not acceptable at any level.

PHILLIP GLYDE, CHIEF EXECUTIVE, MURRAY-DARLING BASIN AUTHORITY: We certainly heard that concern that people downstream feel as though that there's been too much water taken out both historically but also recently, and that that is in some ways unfair.

LINTON BESSER: Head of the Murray-Darling Basin Authority Phillip Glyde says the entire Basin Plan rests on proper accounting of how much water people are taking.

PHILLIP GLYDE: It's not just the metering, it's the measurement, the recording, the compliance activities, the enforcement activities are all vital, absolutely vital to having faith in the basin plan.

As water becomes more valuable, people will want to know that it is being used fairly.

LINTON BESSER: Jamie Morgan has grave concerns that in fact water is not being used fairly.

Until last year, Jamie Morgan was the state's top investigator charged with enforcing the NSW water laws.

JAMIE MORGAN, FORMER MANAGER, DEPARTMENT OF PRIMARY INDUSTRIES STRATEGIC INVESTIGATIONS UNIT: It was clear to me and my team that in that area, it was an area that needed significant compliance attention.

It was clear that not just one property was involved, that there was basically an entire river system that was seriously lacking accountability, and compliance with the water legislation of New South Wales.

LINTON BESSER: Four years ago, Jamie Morgan set up the Strategic Investigations Unit inside the NSW Department of Primary Industries.

It was the Department's response to two scathing reports which found it had failed to properly investigate and prosecute illegal water works as far back as 2003.

JAMIE MORGAN: The team was put together basically to address the serious non-compliance and designed to bring a uniform approach with highly trained officers across the state.

LINTON BESSER: For more than a year Jamie's team investigated hundreds of cases all over NSW.

Where they found really alarming problems, though, was in the Barwon-Darling.

JAMIE MORGAN: We checked our case management system, and found a couple of cases that were clearly in need of an inspection.

So, both myself and my senior investigator decided to go out there and spend a week out there conducting investigations in the northwest of the state.

LINTON BESSER: Jamie Morgan's team took a close look at this cotton farm called Burren Downs at Mungindi near the Queensland border.

They found the meter attached to this pump wasn't working even as it drew millions of litres of water through this channel and into a vast private dam.

His report to the department said the meter, ' … has been tampered with'.

And that, 'in total it appears that 1.191GL has been taken … in contravention of the WMA [Water Management Act].'

LINTON BESSER: That's more than one billion litres of water.

JAMIE MORGAN: At the property, we inspected the river pump. It was clear that water had been taken, because the storage dam was filling up, and there was no change in the metre reading.

The metre was the same reading that we had previously obtained at the property.

So, it was clear that water had been taken, but not metered correctly.

LINTON BESSER: The irrigator in the spotlight was cotton-farmer Anthony Barlow.

Anthony Barlow had been pumping during a ban set up to ensure water got down the river to give Broken Hill its drinking supply.

In his formal interview with investigators, he claimed the then NSW minister for water, Kevin Humphries, had given a room full of irrigators permission to pump.

JAMIE MORGAN: The information that I had at the time was that he had been to a community-type meeting, somewhere up in the north, and he had made certain assortations [sic] that he was aware the ban was being lifted.

That wasn't the information that I had, and as far as I was concerned, the ban was still in place.

It was still a gazetted or advertised ban, and that's what we were enforcing.

NEALE MAUDE, CAMERAMAN: Yeah, the blokes on his phone looking at us.

LINTON BESSER: Oh g'day Anthony, it's Linton Besser with ABC Four Corners …

We tried to speak with Anthony Barlow about this.

Anthony Barlow didn't want to talk to Four Corners.

When I put to him that Kevin Humphries had put to a meeting that he attended that he could pump during 2015, that it was a flow-by-flow embargo he said, 'well it sounds like you already have the information.'

He said I can't confirm or deny, but he didn't want to do an interview.

Another target of state investigators was this massive irrigation farm.

It's called Miralwyn about 50 kilometres east of Brewarrina.

It's owned by the same powerful irrigator who owns Clyde Cotton, Peter Harris, whose family's properties and water licences are worth at least $150 million.

INVESTIGATOR: Okay it's 1.28 pm on the twentieth of the eighth, 2015.

We're at the property Miralwyn.

LINTON BESSER: Investigators toured the property checking its meters.

INVESTIGATOR: You can obviously hear the lift pump working and obviously down near the, in the dam, you can see the water pumping in.

LINTON BESSER: And inspecting water levels in its channels and storages.

INVESTIGATOR: It's come up higher, so it's quite full.

And obviously it's, we haven't copped any rain lately so it's obviously through the pumping system on the property.

LINTON BESSER: The investigators produced a report on what they found.

When they looked inside the water meters, they saw cables were unplugged suggesting, '… possible meter tampering …'

And, '… possible pumping outside of required river heights …'

INVESTIGATOR: I require you to answer the following questions.

Warn that if you neglect or fail to answer without lawful excuse you're guilty of an offence against the Water Management Act 2000.

LINTON BESSER: Investigators recorded a formal interview with Miralwyn's manager.

INVESTIGATOR: In your diary what, what's, can you describe the diary to me? What it actually is?

LINTON BESSER: Under NSW law when a meter isn't working, irrigators must keep a detailed logbook, which the farm manager insisted he'd done.

MIRALWYN MANAGER: Just write down when I had the pump going and I know it pumps 100 megs a day on a high river.

LINTON BESSER: He promised to retrieve the logbook after the interview.

INVESTIGATOR: So, after the interview we can walk over and grab it and have a look at it?

MIRALWYN MANAGER: Yep.

INVESTIGATOR: Okay, and it will be all filled out to the way you're saying?

MIRALWYN MANAGER: Yep.

LINTON BESSER: But seven minutes later, the tape recorder was turned back on.

INVESIGATOR: So, can you just tell me what's happened?

MIRALWYN MANAGER: We've left the room and I don't have a record of any, the logbook of the pump.

LINTON BESSER: It turned out Harris's manager had been lying - there was no logbook.

INVESTIGATOR: Are you aware of any other logbooks around here?

MIRALWYN MANAGER: I'm not aware of any, no.

INVESTIGATOR: For any of the works?

MIRALWYN MANAGER: No.

SUE HIGGINSON: The system relies on compliance with having metres that are fully functioning and adhere to a particular standard, or the maintenance of log books.

So, if they're not working, or they're not being complied with, those requirements, then that's an illegal act, and a very significant one at that.

JACK HARRIS: My name is Jack Harris, I'm a third-generation farmer from this area.

LINTON BESSER: Jack Harris is Peter Harris's 24-year-old son who runs Miralwyn.

Online, he makes light of his family's access to water calling it, ' … just fillin' the bath.'

And a friend urges him to, ' … pump that river dry', hashtag 'fukthefrogs.'

INVESTIGATOR: Jack could you just for identification purposes just state your full name and date of birth?

JACK HARRIS: Yeah, Jack William Harris.

LINTON BESSER: When investigators returned to interview Jack Harris he conceded they hadn't been following the rules.

JACK HARRIS: I understand we probably should be running a diary, which, and we probably will start, you know, from today.

LINTON BESSER: Jack Harris also runs the Clyde Cotton property Rumleigh upstream of Phil O'Connor's place at Brewarrina.

Last year, on one of his trips up here, Phil O'Connor saw these pipes pulling huge volumes of water out of the river when pumping wasn't allowed.

PHILLIP O'CONNOR: And we come 'round and had a look and there was one of these pumps running, yeah.

And we just recorded the time and the date when it was.

LINTON BESSER: Phil O'Connor's son shot this mobile phone video.

PHIL O'CONNOR'S SON: It's Saturday the 13th of February at 1.45. Pump running at Rumleigh Station Brewarrina.

LINTON BESSER: The problem was, the official river heights published that day showed there wasn't enough water to be legally pumping.

Phil O'Connor passed the video on to a NSW Government investigator.

PHILLIP O'CONNOR: That's what they've got the thresholds in place for, you know.

So, let the low flow get down the system, and if people aren't adhering to the rules, why have any rules, you know? It's just an absolute joke.

LINTON BESSER: Another Harris property that came to the attention of authorities at Hay was owned by Ron Harris with his brother Peter Harris.

Ron Harris pleaded guilty four years ago to meter-tampering, using a sophisticated technique to jam the meter.

SUE HIGGINSON: The evidence or the facts agreed to the land and environment court prosecution was that he had made a device in his shed, he'd oxy-welded a device that fit perfectly into his water metres, and actually stopped the impeller, which then of course stops the count.

LINTON BESSER: NSW investigators inspecting Miralwyn also found this water channel dug on Harris property through Crown land.

This is a public road coming through this country, and it used to travel straight across here, and up to that major intersection there.

But in about 2015, this giant irrigation channel was built and what's had to happen is they have rerouted the road to get around this giant culvert.

It was work done by the Harris family, and the allegation is it was all done without any approval.

LINTON BESSER: As we were filming one of Peter Harris' employees arrived.

So, what's the issue?

HARRIS EMPLOYEE: You can't be here?

LINTON BESSER: Why not?

HARRIS EMPLOYEE: Because this is our property.

LINTON BESSER: No this is a Crown Road.

HARRIS EMPLOYEE: No, it's not.

LINTON BESSER: Yes, it is.

HARRIS EMPLOYEE: Where you entered that sign there is private property.

LINTON BESSER: I didn't enter that sign there.

We've driven up this public road.

When was that channel built?

Not too happy to have a camera here.

SUE HIGGINSON: Two thousand, five hundred and thirty-one megalitres was actually extracted.

LINTON BESSER: CEO of the Environmental Defender's Office, Sue Higginson, has been investigating Peter Harris' farms since last year under instruction from the Australian Conservation Foundation.

SUE HIGGINSON: That's five times…

LINTON BESSER: Last year, she used freedom of information laws to obtain data which appears to show huge volumes of water have been taken beyond what Peter Harris' properties are allowed.

SUE HIGGINSON: From the information that we obtained, it would certainly appear on the face of that information that there has been a significant over extraction of water from the system.

The volume of water over extracted was five times that amount that is, that was legally permissible.

LINTON BESSER: The figures indicate those farms pumped at least a billion litres of water more than was allowed.

It was the same year Broken Hill almost ran out of water because not enough water was getting down the Darling River.

SUE HIGGINSON: Look, it raises quite catastrophic pictures in your mind.

So, really, it's the social inequity that springs up immediately, and passing the burden of drought to your downstream neighbours.

LINTON BESSER: How serious are these breaches, Sue?

SUE HIGGINSON: Look, they're really serious.

They're offences under the water laws.

They're punishable by fines, imprisonment.

LINTON BESSER: What Sue Higginson didn't know was that Jamie Morgan's team was already on the case.

JAMIE MORGAN: We were there to conduct a full investigation, in relation to all our specs of water management on the property.

So, we would look at their dams.

We'd look at where the water was going.

And we'd inspect all their works.

In the northwest, the metres I looked at, I didn't see one that actually worked.

We had cables unplugged, batteries removed, impellers missing.

Basically, they were in a state of disrepair.

LINTON BESSER: Jamie Morgan was so concerned at what they were uncovering along the Barwon-Darling that he sought approval for a major investigation.

JAMIE MORGAN: So, it was my desire to run a proactive operation out in that area and inspect every single river pump at times by boat down the river, identifying where all the extraction points are, confirming that they're complying with their licence, and if they weren't, taking action to bring them into compliance.

LINTON BESSER: How did the operation go?

JAMIE MORGAN: It was never approved.

LINTON BESSER: Why not?

JAMIE MORGAN: I have no idea.

LINTON BESSER: At about the same time that the investigations unit made its request to proceed, Jamie Morgan says the hierarchy went cold on compliance, moving it out of the department and his staff numbers began to fall.

JAMIE MORGAN: I think that it was clear that there was no appetite for compliance anymore.

It was odd timing in my view.

It was only when we went to the northwest of the state, where we found significant problems, that our team was very quickly disbanded after that.

Our briefings weren't being answered.

And to this day, no one has actually addressed those issues in that area.

LINTON BESSER: There has still been no action taken against Peter Harris's operations.

NEALE MAUDE: They're on the phone.

LINTON BESSER: They remain under investigation.

He wasn't keen to talk to us.

So, my phone just beeped.

And Peter Harris has just texted me.

And he's written, just remember, do not enter, exclamation mark, exclamation mark.

Irrigators have a direct line to the people who are making the decisions.

The bureaucrat in charge of water in NSW is Gavin Hanlon.

Last year he set up a secretive group with irrigator lobbyists to discuss the Murray-Darling Basin Plan.

GAVIN HANLON, DEPUTY DIRECTOR GENERAL WATER, DEPARTMENT OF PRIMARY INDUSTRIES, NEW SOUTH WALES: Have we gained someone? It worries me when you hear that, hear the beep, because you're never sure who's dialing in.

LINTON BESSER: In this recording of one teleconference obtained by Four Corners … Gavin Hanlon offers to share with the group sensitive government data.

GAVIN HANLON: What we might do as well, is set up some sort of, something like drop box, or something like that, where we can stick documents in that we're sharing, as a, as a just safe way to get information around between us.

LINTON BESSER: Gavin Hanlon indicates he is aware he could be criticized for favouring this group above others.

GAVIN HANLON: I think I can manage that sort of a conversation by being seen to and occasionally meeting with everyone and anyone, but in terms of having structure and detail and discussions in confidence I only do it here.

LINTON BESSER: Gavin Hanlon offers to assist the lobbyists in their fight to get the best deal under the Murray-Darling Basin Plan … by providing them with internal documents stripped of the department's logos.

GAVIN HANLON: There's a whole lot of ammunition we've got at the moment.

There's a good discussion to be had with a group like this confidentially about at what point do you roll, and start firing those things off?

We can put together a few paragraphs for you to assist.

IRRIGATOR LOBBYIST: That would be great.

GAVIN HANLON: Obviously we would have to de-badge it.

IRRIGATOR LOBBYIST: Yeah, that would be fabulous.

GAVIN HANLON: We will get some paragraphs or even that paper that we wrote about the holes in the modelling circulated to this group, de-labelled.

LINTON BESSER: Would it be appropriate to quote "de-badge" that information?

SUE HIGGINSON: De-badging documents is something that is entirely inappropriate, unprofessional, and there are freedom of information laws.

We are really struggling to get access to documents lawfully at the moment, and documents that we think we're really entitled to, members of the community ought to be having access to.

So, providing anybody a sort of material advantage in a position of, in a high-level position, I would suggest, is very inappropriate.

LINTON BESSER: Gavin Hanlon's group has even discussed what they call 'Plan B' …

IRRIGATOR LOBBYIST: Plan B would also be interesting, if there is one.

GAVIN HANLON: Plan B is scary

GROUP PARTICIPANT: Plan C is scary; Plan B is fun!

LINTON BESSER: 'Plan B' is the state of NSW walking away from the Murray-Darling Basin Plan altogether.

GAVIN HANLON: Just on what we've called Plan B or a Plan or some sort of plan, we have had detailed legal advice on what walking away means, I might get our lawyers to write up a, so I don't breach legal privilege, I might get them to write up a … one pager that I can share with you guys about what that looks like.

The other part, the in-between plan …there is a provision for the MDBA to step in if they don't think we're doing things right.

Before we walk away we would dare them to step in over the top of what we're doing if we're acting in good faith, delivering on what we should, and they start carrying on, we would say well we dare you to bloody step in over the top of us.

LINTON BESSER: What would your response but if I told you that Gavin Hanlon was actively discussing with representatives of the irrigation industry a plan to walk away from the Murray-Darling Basin Plan?

SUE HIGGINSON: It just seems highly inappropriate and unprofessional.

When NSW was a participant, a willing participant, we referred our powers, we were a part of a commonwealth and national water initiative, we were part of the Murray-Darling.

To then disrupt that seems terribly unprofessional.

LINTON BESSER: In a statement, Gavin Hanlon said all discussions with irrigators are, '… carefully managed under our protocols so that market sensitive information is not released.'

He said he has talked with irrigators about abandoning the Murray-Darling Basin Plan because, ' … it is prudent for the NSW Government to consider all possible scenarios for the implementation of the Basin Plan.'

PHILLIP GLYDE: That's a matter for those states, is you'd understand that there's a lot of tension and a lot of stress in making the sort of reform that is underway here.

LINTON BESSER: Is it appropriate?

PHILLIP GLYDE: It's appropriate for the states to argue their own case.

I don't know what the state governments do but you'd expect them to behave in the best interest of their constituents, to get the best out of the value of the Murray-Darling Basin.

PHILLIP O'CONNOR: The Murray-Darling Basin Authority, I think the name should be changed because they don't seem to have much authority over anything really.

LINTON BESSER: The dying river redgums of the Macquarie Marshes were a wake-up call prompting one of the biggest economic reforms in the country's history - The Murray-Darling Basin plan.

Now after five years and billions of taxpayer dollars there are real questions about whether Australia's fragile inland ecosystem has been saved.

RICHARD KINGSFORD: Look, we all hoped because of the state of the Murray-Darling basin that the basin plan would essentially take this patient, which was essentially in the intensive care unit, out of the intensive care unit and be able to make it walk again but essentially the basin plan is not working the way it was meant to work.

The whole idea of water for the environment was that water would come down these river systems and make its way right down to the end.

You know, it would be there for Aboriginal kids to play in at Wilcannia.

It would be there for the environment down at Menindee lakes.

And we don't know where that water's going? and we don't know what's happening to that water?

It just seems bizarre, and particularly when there are so many major players that are potentially exploiting the system.

LINTON BESSER: The Murray-Darling Basin Plan may not yet have saved the river, but it's made a fortune for the lucky few.

MAL PETERS: There is no question, in my mind, that the majority of Australians supported the expenditure of a huge amount of money, 13 billion dollars, billion dollars, to fix the river.

If the outcome of it is, that we have a very few number of irrigators that have got a huge windfall out of this, I think everybody will be disgusted.

PHILLIP O'CONNOR: Well, it's just whether the people care, Linton, whether they care about the river.

There is a lot of people take it for granted, mate, like flushing the toilet.

There will be people that care, and I just hope that people with the most money aren't the people that are getting all the say and that care about it.

SARAH FERGUSON: Lawyers for cotton famers Peter and Jack Harris wrote to Four Corners on Friday denying any wrongdoing in relation to their use of water.

You can find further responses and details on our website.

Next week the international trade in hi tech on line surveillance tools - that enable governments to spy on their citizens.

See you then.