Landholder Negotiation Scheme

Legislating the Landholder Negotiation Scheme (LNS) ensures the NSW Government follows a fair, transparent and consistent process when negotiating with landholders affected by proposed changes to environmental water releases arrangements.

The LNS provides a clear framework for good-faith negotiations that ensures the interests of landholders are appropriately considered when enduring changes to environmental water release arrangements are made.

It also provides for mediation and facilitation services to be made available and for WaterNSW to provide flow notifications.

Once a Declaration Order is published in the NSW Government Gazette and on the department’s website, affected landholders will receive a written invitation to negotiate. All reasonable steps will be taken to identify and contact landholders.

• Landholders will have 28 days to respond to the invitation. This may be extended in some circumstances.
• The 12-month negotiation period begins once the invitation is accepted. This negotiation timeframe may be extended in some circumstances.
• If many landholdings are affected, negotiations may be staged. If this occurs not all landholders will be invited to negotiate at the same time but they will be kept informed.

Every reasonable effort will be made contact a landholder specified within a Declaration Order. Where, after all reasonable efforts have been made, a landholder is unable to be located and given a notice under the LNS, it may be determined the negotiation is unable to occur and the LNS process may be ended.

This does not preclude the possibility that, in future, the landholder may be located and invited to participate in negotiations.

If a landholder formally declines an invitation to negotiate, or does not respond within the required timeframe, the Ministerial Corporation may end the negotiation.

Under Schedule 9, section 6 of the Water Management (General) Regulation 2025, negotiations end when:

• an agreement is reached; or
• the 12-month negotiation period expires; or
• the Ministerial Corporation determines the negotiation is unlikely to succeed or is unproductive.

Each landholder will work with a dedicated Personal Manager to assess how their land is used and how it may be affected by proposed environmental water releases.

• Landholders can provide information to valuers to inform their valuation assessment.
• Valuations will include consideration of potential impacts to land and/or assets, including changes in market value and to compensate landholders.
• Compensation may include financial payments or where eligible mitigation works in lieu of or in addition to financial compensation.
• Landholders can appoint their own legal and valuation advisors to negotiate a settlement.
• Landholders are also encouraged to obtain their own legal and tax advice.

The 12-month negotiation timeframe may be extended by agreement between the Ministerial Corporation and the landholder.

No. Negotiations and agreements are specific to each individual landholding.

The LNS is an additional voluntary process and timeframe that NSW Government will adopt to negotiate agreements with landholders, as part of environmental water programs, seeking to deliver enduring changes to delivery of environmental water.

By creating the LNS, the NSW Government is ensuring the interests of affected landholders are appropriately considered in program delivery. The LNS will provide landholders with sufficient time to understand the nature of the proposed agreements and what it means for their individual circumstances to make informed decisions.

The Land Acquisition (Just Terms Compensation) Act (Just Terms Act) is existing legislation providing an established process for government acquisition for public interest projects. It establishes a minimum period for the government and landholders to try to reach agreement and outlines the factors to be considered to determine compensation on just terms. The Just Terms Act existing processes remain unchanged by the making of the LNS.

Compensation for flow easements will be determined in accordance with the Just Terms Act which considers:

• market value of the land on the date of its acquisition
• any special value of the land to the person on the date of acquisition
• any loss attributable to severance
• any loss attributable to disturbance
• the disadvantage resulting from relocation
• any increase or decrease in the value of any other land, adjoining or is severed from the acquired land.

Consistent with the Just Terms Act, this compensation will be payable in the form of a one-off payment.

An independent valuer will assess the impacts of proposed environmental water releases and the acquisition of an interest in land as outlined in the Negotiation Guidelines.

Landholders are encouraged to appoint their own valuer and legal representative to contribute to negotiations.

Reasonable legal and valuation costs may be reimbursed.

Landholders will be informed about their rights to compensation and reimbursement of legal and valuation fees as part of the written invitation to negotiate and throughout the negotiation process.

Compulsory acquisition of a flow easement is a last resort measure and would only be considered if:

• an agreement cannot be reached under the LNS; and
• the flow easement is essential for delivering future environmental flows.

The Minister for Water must approve any proposals for compulsory acquisition of an interest in land and this will be done on a case-by-case basis. Factors considered include:

• the proportion and location of the affected land;
• the impact of inundation on the current land use and ongoing property viability.

Not all unsuccessful negotiations will result in compulsory acquisition of an interest in land.

No. The Ministerial Corporation must determine compensation for the acquisition of an interest in land (i.e., flow easement) consistent with section 55 of the Just Terms Act. According to the Act, determining the amount of compensation must be informed by:

• the market value of the land on the date of its acquisition
• any special value of the land to the person on the date of acquisition
• any loss attributable to severance
• any loss attributable to disturbance
• the disadvantage resulting from relocation
• any increase or decrease in the value of any other land, adjoining or is severed from the acquired land.

Yes. Consistent with section 59 of the Just Terms Act, where negotiations result in an agreement, compensation will be available for:

• legal costs reasonably incurred
• valuation fees of a registered valuer reasonably incurred
• if the negotiation relates to the need to reconfigure or adjust the actual land uses, the financial costs reasonably incurred by the landholder directly in respect of the negotiation of those matters
• in recognition of the need for mental health support a Property Acquisition Support Line will be available to landholders delivered by a team of qualified psychologists and social workers.

Affected landholders will be advised of what costs are eligible for reimbursement as part of the formal invitation to negotiate.

The Ministerial Corporation must explain whether fees reasonably incurred for negotiations under the LNS Regulation will be reimbursed if agreement is not reached. This will be provided in writing as part of the invitation to negotiate. Individual programs will be required to inform landholders up front about reimbursement of costs reasonably incurred during negotiations. The Reconnecting River Country Program intends to reimburse legal and valuation costs reasonably incurred during negotiations even if an agreement is not reached.

Yes. Under the LNS, WaterNSW is required to provide adequate notice to landholders ahead of a declared environmental water release through an opt-in flow notification scheme.

For the Reconnecting River Country Program in the Murrumbidgee, negotiations are likely to commence in 2025 with some impacted landholders up to December 2026.

No, the LNS does not apply to current negotiations with landholders involved in SDLAM Acceleration projects.

The LNS will only apply to land specified in a gazetted Declaration Order. Under the LNS, the NSW Minister for Water can make a Declaration Order for a proposed enduring environmental water release arrangement. This order will outline the details of the environmental water release arrangement, such as anticipated timing, duration, frequency and extent and identifies the land likely to be affected. ​The Declaration Order will be published in the NSW Government Gazette and on the NSW Department of Climate Change, Energy, the Environment and Water website.

No, the LNS does not apply to current negotiations with landholders involved in these projects.

The LNS only applies to land specified in a gazetted Declaration Order. Under the LNS, the NSW Minister for Water can make a Declaration Order for a proposed enduring environmental water release arrangement. This order will outline the details of the environmental water release arrangement, such as anticipated timing, duration, frequency and extent and identifies the land likely to be affected. ​The Declaration Order will be published in the NSW Government Gazette and on the NSW Department of Climate Change, Energy, the Environment and Water website.

It is NSW Government policy that river operators should have statutory protection from civil claims when they make releases of water for environmental purposes in good faith.

In 2018, the NSW Parliament passed amendments to the Water Management Act 2000 (WM Act), including an amendment to section 398 to clarify that the exclusion of river operator liability also apply to releases of water for environmental purposes, when these releases are made in good faith. This amendment ensured that statutory civil liability protections were consistent.

These liability protections have been in place since the WM Act commenced. Notably, section 398 already provided liability exclusions for actions done in good faith, such as releasing water from water management works, before the 2018 amendments were made. When the WM Act was developed (pre-2000), there was no held environmental water, so the legislation did not provide a framework for managing it.

The 2018 amendments to section 398 clarify that the civil liability protection under section 398 also applies to releases of water for environmental purposes. This is intended to include proposed changes to environmental water releases under programs such as the Reconnecting River Country Program and the Gwydir Reconnecting Watercourse Country Program.

To be clear, these new flow arrangements for these programs won’t begin until after the Minister for Water declares an end to negotiations under the Landholder Negotiation Scheme (LNS), which will not occur before December 2026.

The NSW Government remains committed to seeking agreements with all affected landholders and ensuring appropriate compensation before these changed environmental flow arrangements commence. This process is a key part of demonstrating good faith.

No. The statutory protection provided under section 398 of the WM Act only applies where the NSW Government or prescribed authority have acted in good faith.

An exclusion of Crown liability for acts or omissions done in good faith and in the exercise of functions under the WM Act has been part of the legislative framework under the WM Act since its inception, and the notion of ‘good faith’ is commonly used in NSW legislation.

The amendment to section 398 of the WM Act means that river operators must make these environmental releases in good faith to receive statutory protection for these releases. Whether a relevant action or omission was done in good faith for the purposes of section 398 will be dependent on the specific circumstances that exist at the time the claim is made. In general terms, matters which might demonstrate good faith may include, for example:

• adhering to all relevant legislation, policies and procedures, such as river operation procedures to ensure a risk-based approach to delivering environmental water releases
• use of the latest data and modelling.

A Declaration Order, made under Schedule 9, section 3 of the Water Management General Regulation 2025, turns on the LNS for a proposed environmental water release arrangement in a particular area.  The proposed environmental water release arrangement will not commence until the Minister for Water declares that all negotiations under the LNS are complete.

Declaration Orders must be published before negotiations under the LNS can commence. The process from Declaration Order to commencement of any proposed environmental releases is described in the figure below.

photo_camera Open description

Minister's Declaration Order. close Close description

For the Murrumbidgee project of the Reconnecting River Country Program, landholder negotiations are expected to begin later in 2025, following the publication of a Declaration Order. The project may be delivered in phases. If this occurs, the Declaration Order will be updated to include different parts of the river where LNS negotiations will be conducted.