Water whistleblowers will be protected, and obstructionist public officials sanctioned, under powers enabling the new Murray–Darling Basin inspector-general, Mick Keelty, to tackle corruption and overextraction in the nation’s largest river system.

Keelty has confirmed powers similar to those of a standing royal commission are being written into the legislation that will formalise his job. At present, he has interim status and won’t have those powers until the legislation is passed.

It is not clear yet what sanctions for water officials may entail but The Saturday Paper has confirmed separately that such obstruction would be considered a criminal offence and the failure to co-operate and supply information would be likely to attract financial penalties or jail.

Now involved in drafting the legislation for his position and separate legislation for the government’s planned national integrity commission, Keelty wants both to have substantial teeth, including protections for whistleblowers.

“I’ll make sure they are complementary to each other,” he says.

The integrity commission legislation is to be ready by the end of the year.

The former Australian Federal Police commissioner has served for the past year as northern basin commissioner, without the legal authority to compel bureaucrats to provide information.

He has encountered frustrating levels of obstruction, especially from state bureaucracies, and says his newly expanded position must include the power to compel truthful answers.

The unco-operative attitude prompted him to insist on tougher powers in his new role as inspector-general for the entire basin.

“It derives from the lack of response that’s come from the questions I’ve asked from some of the departments,” Keelty told The Saturday Paper. “And there’s no sanction for them … Some people gave me false information, or incomplete information.”

“If it’s hard for people who want to comply to comply, then it’s just as easy for people who want to corrupt the system to be corrupt.”

Keelty declined to divulge details of alleged obstruction at this stage but hinted they will be included in a December report he is preparing for the federal Water Resources minister, David Littleproud.

Bret Walker, SC, who was the commissioner on South Australia’s Murray–Darling Basin Royal Commission in 2018, agrees the new inspector-general should have significant powers.

“Mick Keelty’s new position is one that definitely requires those powers,” Walker told The Saturday Paper.

“Any position which is required in effect to audit administration – and that’s the function Mick has – has to be able to compel information from public servants … The position would be set up to fail if it did not have those usual and necessary powers of compulsion.”

Keelty’s comments come six months after an initial interview with The Saturday Paper in which he revealed concern about the potential for corruption in the water market, including the lack of transparency in political donations.

To date, Keelty has been unable to find evidence of corruption involving the issuing of water licences, but he is not ruling out its existence. The system’s complexity has made it difficult to track connections.

He remains concerned that how – and when – donations to political parties and candidates are reported creates a climate ripe for corruption and fuels suspicion and anxiety.

Keelty’s previous public comments about the risk of corruption drew attention to his work and he has subsequently referred two sets of specific allegations to anti-corruption investigators.

Keelty is also seeking to overhaul and simplify the collection and presentation of data on entitlements to water – particularly how much licence-holders are allowed to take.

He wants to streamline all official information to be presented on one website and smartphone app so users can more easily understand and follow the rules, calling it a “single source of truth”.

At present, it is impossible to accurately calculate the total volume of water being allocated across the basin, meaning licence-holders may believe they are entitled to more water than is actually available. That situation is fuelling the brawling over who or what should have greatest priority.

“In the current environment, given the drought, there is less water available, which means licence-holders are getting less than they did on average in the past,” Keelty says. “Information regarding the number of licences issued, entitlements and the amount of available water for allocation is not aggregated in a single site.”

He said streamlining this would help to moderate licence-holders’ expectations.

Federal bureaucrats from the Commonwealth Environmental Water Office confirmed during a senate estimates hearing on Friday last week that the $78.9 million purchase of water entitlements from Eastern Australia Agriculture – a company previously linked to Energy Minister Angus Taylor – had not yielded any water at all, due to drought conditions.

The 2017 purchase allowed the government to fulfil its on-paper obligations to buy back the entitlement to specified volumes of water from licence-holders so water can be returned to the environment.

The Commonwealth environmental water holder (CEWH), Jody Swirepik, told the hearing it could take as long as seven years to receive any water under the EAA entitlement.

Minister Littleproud said this week he would not allow further licence buybacks because they had not worked.

“What we can do is not go near buybacks again,” he said on the ABC’s Q&A program on Monday.

“Those things destroy these communities … I’m as popular as the pox in places but I cannot look people in the eye … and say, ‘I’m going to leave you a legacy that’s worse than what’s there now.’”

As public debate escalates over government responses to the drought, Mick Keelty attributes significant problems in the Murray–Darling to the river management system itself.

He is scathing about its complexity and doesn’t want the basin inspector’s position just to add another bureaucratic layer.

Speaking to The Saturday Paper this week, he highlighted the confused and contradictory information basin water users face when trying to determine what they can and can’t do.

He says this fuels inadvertent and possibly deliberate overextraction.

“If it’s hard for people who want to comply to comply, then it’s just as easy for people who want to corrupt the system to be corrupt,” he says.

But because the information and the laws themselves are contradictory, he also wants to see better co-ordination across the basin states of Queensland, New South Wales, the ACT, Victoria and South Australia, in the same way speed limits and road rules were largely standardised.

Keelty says the legal confusion makes authorities reluctant to pursue prosecutions and adds to the difficulty in gathering information.

Illustrating that problem, the Bureau of Meteorology (BOM) confirmed this week that the Water Act actively prevents it from providing other agencies with satellite information on individuals’ water use.

Responding in writing to a question asked during an October 18 hearing of a senate inquiry into the Murray–Darling’s cross-border management, the bureau said restrictions on what it can “publish” meant it couldn’t pass information to those policing water use.

“‘Publish’ includes passing water information to any third party,” the BOM said, answering the question from Centre Alliance senator Rex Patrick.

“So the Bureau of Meteorology is not permitted to pass water information to the Murray–Darling Basin Authority, the CEWH or any of the jurisdictions.”

Patrick suggested on Thursday that this situation should be rectified.

“The MDBA needs to have all the relevant information available at its fingertips if the basin is to be properly managed,” he told The Saturday Paper.

“I understand the need for privacy, but this is public water and there is a need for a level of transparency.”

Keelty confirmed he is also looking at the legislative obstacles to better policing of water use, including in the Water Act.

He is also highly critical of both state and federal officials who have overseen the Murray–Darling system.

Keelty gave damning evidence two weeks ago at the senate inquiry into the management and execution of the Murray–Darling Basin Plan.

“It’s a nightmare,” he said of the river’s management, arguing federal water bureaucrats were more inclined to “prance around Canberra” than try to fix it.

In his upcoming northern basin report, Keelty will recommend overhauling the tangle of overlapping laws and government websites related to the Murray–Darling.

To make his point, he tabled documents in the senate inquiry listing 27 separate state and federal agencies and bodies dealing with aspects of basin management, 67 pieces of legislation and 13 audits or reviews.

An experiment his office conducted involving accessing the various relevant agency websites and asking a series of standard questions – including “What are my entitlements?” and “How much water can I take today?”– elicited thousands of differing responses.

Keelty says the Commonwealth government doesn’t make it easy for the states to manage the river and that bureaucratic practices delay action.

“One of the recommendations I am making is that the Commonwealth department adopt a more enabling culture,” Keelty told the inquiry.

“[That’s] because the rubber doesn’t hit the road in the Commonwealth. The rubber hits the road in the states. Rather than hold a purse of money and prance around Canberra saying, ‘You’ve got to jump through these hoops to get to it’, go out and facilitate how these things happen.”

The former police chief, who has now employed fellow former AFP officer Ramzi Jabbour as his deputy, said federal officials should reduce the time between ministers announcing a water infrastructure project and when it is funded and begins.

“There is a real bureaucracy operating and it’s sort of a self-fulfilling prophecy,” he said. “It’s building on itself rather than delivering the outcome.”

In his committee evidence, Keelty said it was not surprising farmers, irrigators and other water users struggled to comply with the law, suggesting the system encouraged people not to bother trying.

The difficulty in prosecuting offenders cultivated a sense of impunity.

“If you have policies that are so complex – and if you have a national asset such as the Murray–Darling Basin divided up on jurisdictional lines, and if you break those jurisdictional lines into departments, subdepartments, sublegislation and subpolicies – it is counterintuitive to having good compliance,” Keelty told the inquiry.

He said he wanted the Commonwealth to “develop an enabling culture and make things happen”.

“The processes that people are going through are so laborious,” he said. “In my view, some of them are unnecessary. You need good governance – I understand that – but you don’t have to have a bureaucratic process to deliver it. The private sector does it every other day.”

Keelty told The Saturday Paper his December report for Minister Littleproud will be in five parts.

He will examine the policy settings – including the complexity of that web of current policies – and the communication and co-ordination problems that have seen “releases from dams where water went to places it shouldn’t have gone”.

Farmers, graziers, irrigators and other producers in the southern basin have been enraged and bewildered at the timing of releases in recent years from upstream dams and from the Menindee Lakes in NSW.

The releases designed to send water to users downstream have instead seen dramatic overflow flooding in the narrowest parts of the river, including around Victoria’s Barmah Choke, effectively wasting water. In some cases, it is also alleged to have damaged the environment.

Keelty says blame should not rest solely with the Murray–Darling Basin Authority. He singles out the federal–state Basin Officials Committee for criticism, too.

Keelty says his report will examine historical decision-making that he argues doesn’t withstand contemporary scrutiny. This includes political links to the issuing of water licences, especially involving the NSW Nationals. While he stipulates that this was within the law at the time, he emphasises it may not meet the standard of public expectations today.

The report will devote a section to the rights of Indigenous communities in the basin, which Keelty says have “really been left behind” and deserve far greater consideration.

Its final section will examine the environment’s need for water.

“Access to the water must include the environment and it should not be left last on the list,” Keelty says.

He told the senate committee there were “lots of issues” that can’t be addressed overnight.

“This won’t be the last drought. The drought has brought everything here into sharp focus. But people are not thinking long term about this. We have to think about the legacy that we leave, as a generation, to the generations behind.”

Many water scientists and other basin experts echo Keelty’s concerns.

Australian National University hydrologists Professors Quentin Grafton and John Williams aired their concerns last week in a paper published in the International Journal of Water Resources Development.

The paper on basin “rent-seeking behaviour and regulatory capture” – the pursuit of preferential treatment or financial gain and decision-making that favours particular interests – highlights what the scientists say is the failure of water programs to meet stated environmental objectives and obtain value for money.

“Rent-seeking behaviour and regulatory capture have affected public decisions with respect to both one-on-one targeted purchases of water entitlements and irrigation infrastructure subsidies in the MDB,” their paper says.

Williams told The Saturday Paper that the 2014 abolition of the 10-year-old National Water Commission exacerbated problems.

“We took away the cop on the chop and we took away the mechanism to have that conversation with the states,” he said.

He also endorsed Keelty’s new role.

“I’m just hopeful he can keep enough independence and not be shut down when he lifts the rug,” Williams said.

Another expert, The Australia Institute’s water researcher Maryanne Slattery, remains concerned about politicisation.

“I think that both sides of politics … are really invested in making sure that the Murray–Darling Basin Plan continues in its current form and aren’t willing to actually have a look at what’s gone wrong with that plan,” she told Q&A on Monday.

On the drought-focused episode of the program, Minister Littleproud defended both the government’s management of the basin and its broader drought assistance. He insisted no farmer would be cut off when the Farm Household Allowance reached its four-year limit, saying Prime Minister Scott Morrison had promised as much in parliament last week.

“They will still get a supplementary payment,” Littleproud said in response to shadow Agriculture minister Joel Fitzgibbon. “We’re not taking the money out of their pocket … You heard it. It’s in Hansard. The prime minister made it clear that … no one will come off these payments. We will continue to make the supplementary payments up until June next year and … in May next year we’ll have to make another decision if it hasn’t rained.”

He clarified later that the four-year limit would be enforced but that farmers would then be eligible for the supplementary payment, which would be extended if necessary.

Littleproud said Keelty’s role in the Murray–Darling Basin was to bring “integrity” to water management.

Keelty told senators at the committee hearing: “I’m an honest broker in this. I am a newcomer. If I see things that need fixing, I call them out.”

Soon, he will also be brandishing a big stick.