The Snowy Water Licence (the Licence) defines Snowy Hydro Limited's rights and obligations in relation to water in the Snowy Mountains Scheme. Under the Snowy Hydro Corporatisation Act 1997, the Licence is subject to mandatory reviews, initially after five years and then at intervals of 10 years.

The review's terms of reference are established under the Licence. In summary, the review is focussed on Snowy Hydro Limited's obligations under the Licence, which fall into three broad categories:

• increased flow requirements (environmental releases)

• water release requirements (predominately water releases to the Murray and Murrumbidgee rivers)

• administrative obligations (for example, compliance, annual operating plans, fees and charges).

It is also considering Snowy Hydro Limited's performance in meeting the conditions of the Licence.

The Department of Industry—Lands & Water administers the Licence on behalf of Water Administration Ministerial Corporation (Ministerial Corporation) and is managing the 10-year review. Department of Industry initiated the review on 28 June 2017, with invitations to stakeholders to lodge submissions.

Department of Industry’s approach to the review involved:

• acknowledging and responding to all issues raised in the submissions • considering all Snowy Hydro Limited issues in good faith

• only proposing recommendations on issues that fall within the review's terms of reference

• identifying a process to resolve complex issues rather than delay completing the formal review

• seeking independent advice on performance where NSW government agencies are party to implementation.

The draft report is structured to provide important context and meet the review's terms of reference.

Chapters 1 to 5 set the scene by describing the review's scope, the department’s approach to undertaking the review, how the Snowy Mountains Scheme is managed, the relevant policy settings and the outcomes of previous reviews.

Chapter 6 discusses the issues raised in the submissions and includes 20 proposals in response aimed at increasing transparency in how the Snowy Mountains Scheme is operated and managed, strengthening compliance and accountability and simplifying licence provisions. It also proposes further investigating numerous amendments to the Licence to improve the delivery of environmental flows, maximise water efficiencies and clarify ambiguous licence provisions. Chapter 6 is structured in accordance with the three categories outlined in the terms of reference.

Chapter 7 provides an initial discussion around Snowy Hydro Limited's performance in meeting the conditions of the Licence, summarising its self-assessment and discussing implementation issues identified on the management of Snowy Mountains environmental water. It includes one proposal in response, being to procure an expert panel to independently review Snowy Hydro Limited's performance to date as part of this review, with reference to the submissions.

Chapter 8 acknowledges the large number of issues raised in the submissions that did not fall within the review's terms of reference. These issues were generally concerned with the implementation of the Snowy Water Initiative and broader water resource management arrangements in the Snowy Mountains region. It includes one proposal in response, being to establish the Snowy Water Advisory Government Officials Committee to jointly oversee and coordinate water management in the Snowy Mountains and ensure partner governments continue to meet agreed outcomes from the Snowy Water Inquiry.

Chapter 9 commits to developing and including a detailed implementation plan in the final report and contains preliminary information on the work streams and governance arrangements.