Miralwyn Cotton: Budvalt Pty Ltd company fined by NRAR for building a two-kilometre illegal channel to take water from the Macquarie River

An investigation by the Natural Resource Access Regulator (NRAR) revealed Budvalt Pty Ltd, the company that owns Miralwyn Cotton near Walgett, had built the 30-metre wide unlawful channel in July to August of 2015.

The NSW Land and Environment court found the company breached the Water Management Act and fined it $252,000 on Tuesday.

Justice Tim Moore noted a strong message of deterrence needed to be sent to substantial cotton-growers and water users who flout the rules for business.

"It is appropriate to assume from the dimensions that are available that many, many thousands of cubic metres of earth have been excavated for the purposes of constructing this water supply work," he said.

"The scale of the construction work undertaken to create the channel proper demonstrates that the activities undertaken without having lawful consent were not a matter of insignificance - quite to the contrary.

"This undermining of that regulatory scheme ... inevitably gives rise to the necessity to consider, as later discussed, matters of general deterrence as well as the need to denounce and punish the company for its unlawful breaching of the regulatory regime."

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Budvalt Pty Ltd was ordered to publish a public notice that outlines the judgement in The Land and the Moree Champion.

The offence carries a maximum penalty of $1.1 million, and NRAR chief regulatory officer Grant Barnes said strong action will be taken when required.

"In times of scarce supply every drop counts, and we will continue to take strong regulatory action when required to deliver effective, transparent and accountable enforcement of our water laws," he said.

Budvalt Pty Ltd pleaded guilty to the charge.