The Northern Territory Supreme Court has been told Territory Families Minister Kate Worden showed "intelligible justification" when she re-granted a record-breaking licence in 2021, following accusations from traditional owners her decision to do so was "seriously irrational".
The NT government and Fortune Agribusiness are defending the company's 40,000-megalitre water licence against a bid from traditional owners and environment groups to have the licence thrown out.
Justice Peter Barr heard Ms Worden's decision to approve the licence was "rational" and considered both 1,600 pages of technical advice and correspondence from Fortune, which outlined its "unhappiness" with a proposed licence condition.
The decision to approve the licence was delegated to Ms Worden by the Environment Minister due to a conflict of interest.
Fortune plans to use the staged groundwater licence to irrigate hay, avocados, melons and more on an arid cattle station.
It says the project will create 1,450 mostly seasonal jobs for the region, but this number has been disputed.
Counsel for Fortune, Scott McLeod KC, said Ms Worden's reasons for her decision "set out" how she arrived at her conclusion on several matters, including her most contentious decision to set the licence's first stage at three years instead of the five years recommended by an expert review panel.
The licence was originally awarded with a two-year first stage.
The expert panel was tasked with reviewing the licence for the minister after traditional owners and environment groups requested greater scrutiny over the water allocation, which they feared could damage the groundwater-dependent ecosystems and sacred sites.
The expert panel said a five-year first stage would allow for a better understanding of the aquifer and region's groundwater-dependent ecosystems.
The court had previously heard "basic information" about the water resource was not yet known.
Economic reasons covered by act
In documents tendered to the court and seen by the ABC, Fortune chair Peter Wood wrote to Department for Environment and Natural Resources executive officer Stephanie Jungfer three days before Ms Worden re-awarded the licence to express his concerns over the proposal to lengthen the first term of the licence.
In his letter, he says the additional years would mean the single project would become two, and that it would make the project "less attractive to investors and financiers".
Mr Wood also said the additional years would push back jobs for the region and would change the mix of crops they planned to grow, "contrary to the NTG's desire and our commitment to aim for maximum value from every ML of water utilised".
"It is our judgement that extending the stage one development period from two years to three years or, with reservations, four years could possibly be accommodated, albeit with consequences, as outlined above," Mr Wood wrote.
Referring to this letter, Mr McLeod told Justice Barr it was "entirely reasonable" for Ms Worden "to regard the economic reason that my client gave to the department on this issue," when she went against the expert review panel's advice.
"The review panel makes advice. The minister is not bound by their recommendations," he said.
Mr McLeod said the Water Act allowed for decisions to be made on various unspecified factors, which he submitted included economic rationale.
Ministers often make quick decisions
Several grounds fought by traditional owners for the Kaytetye country where the licence will be built allege they were deprived of procedural fairness during the review process.
They say that, unlike the proponent, they were not briefed with all the information used by the minister to make her decision and that the department's own information about the water resource was inadequate.
Mr McLeod argued Fortune was entitled to more procedural fairness as the licence applicant.
He also hit back at accusations from litigants that Ms Worden did not have enough time to properly consider the expert review panel's technical advice, calling it "speculation".
He said he found no case law to back this concern and that it was common for ministers to make decisions in short periods of time.
Guideline questioned
In submissions for the Arid Lands Environment Centre, John Lawrence SC told the court that Ms Worden did not follow the water allocation plan and therefore the water act when she awarded the licence.
He told the court the licence was not assessed against the relevant water allocation plan and instead it was granted according to a separate guideline that allowed for more environmental damage than the government's planning document.
He argued the government was allowed to rely on "new scientific information" but the court heard the guideline did not fit this criteria.
In response the minister's counsel, Chad Jacobi SC, told the court the water allocation plan was "not regulatory."
The Matter returns to court September 26.
