This paper describes the ecological sustainable development of water resources, discusses Council of Australian Government water reforms, and the NSW Government approach to implementing these reforms.

The Protection of the Environment Administration Act 1991 defines ecologically sustainable development (ESD) as requiring the effective integration of economic and environmental considerations in decision making processes. To achieve ESD the following principles need to be implemented: application of the precautionary principle; maintenance of inter-generational equity; conservation of biological diversity and ecological integrity; and the improved valuation and pricing of environmental resources (pages 1-5). The effect of these principles on water reform is discussed.

In 1994 the Council of Australian Governments endorsed a strategic framework for the efficient and sustainable reform of the Australian water industry. The agreed reforms included changes to pricing of water, provision of environmental flows, rights to water and institutional reforms (pages 6-7).

In response to the COAG reforms, the NSW Government introduced reforms to the rural water industry in 1995 and 1997. These reforms largely follow the framework as outlined by the 1994 COAG Communique (pages 9-15).

On 1 May 1997 the Premier Hon Bob Carr MP publicly released details of the Government's Waterways Package. This largely covered reforms to water and sewage supply in the Sydney metropolitan area. The Waterways Package is reproduced in Appendix One.

In September 1997 Sydney Water also released its vision for waste water management in the Sydney metropolitan area. The vision, called Water Plan 21, covered four key areas of waste water management. These are: protecting the rivers; protecting the beaches and oceans; recycling water and biosolids; and reducing wet weather sewage overflows (pages 17-19).