The Northern Territory needs a corruption watchdog to investigate allegations of cronyism in the allocation of water, the NT Environment Centre says.
The Country Liberal government had moved away from establishing a strategic indigenous water reserve in favour of its friends, Environment Centre NT chief executive Stuart Blanch told an environmental law conference in Darwin on Friday.
"We don't have a corruption commission; we don't have an independent, transparent, non-political, non-bureaucratic reviewer of decisions around water," he said.
He pointed to the government's recent decisions to grant large licences to Tina MacFarlane, a CLP candidate for the federal election, and to magistrate and former CLP MLA Peter Maley.
"There are allegations ... of water cronyism," Mr Blanch said.
"Who do we refer them to? The act only allows you to refer them to the minister, who's part of the party. Not good enough - you need institutional rigour so there's greater confidence in water markets when they start trading."
The NT government rejected any claim of cronyism in the water allocation process.
Minister for Land Resource Management Willem Westra Van Holthe told AAP: "There is no compelling reason to establish a water commission."
Northern Land Council chief executive Joe Morrison told the conference that Aboriginal people were concerned that licences to draw water from aquifers for irrigation were being over-allocated and they were being shut out of economic development.
And NT Farmers Association representative Ian Baker said the process lacked transparency.
"We feel totally disenfranchised," he said.
"This vacuum of knowledge and information and participation by users in the water-planning process creates a lot of problems, from my point of view."
The minister held a water forum in Katherine two weeks ago, but the meeting was disrupted by a rally of about 100 traditional owners from across the Top End who accused the government of shutting them out, which the minister rejected.
"It's a discriminatory - some would say racist - policy where the big white farmers and some who have never farmed before get given massive free water licences and they're now selling them to make a massive profit, and yet Aboriginal people don't get a look-in," Mr Blanch said.
