The Australia Institute has released new analysis of the controversial $80 million water deal between the Department of Agriculture and Water under then-Minister Barnaby Joyce and a company domiciled in the Cayman Islands.

The analysis shows the close collaboration between the Department of Agriculture and Water Resources and the company selling the water, Eastern Australia Agriculture (EAA), as outlined in documents released to the Senate and under FOI to Guardian Australia.

“The deeper into this water deal you go, the murkier it gets,” said Maryanne Slattery, Senior Water Researcher at The Australia Institute.

“Not all of the licenses the Commonwealth bought existed before this sale. The company selling the water, EAA, did all the key calculations on water volumes for the newly created licenses itself, apparently with no independent verification.

“EAA offered to have their work verified ‘if considered appropriate’ or an on-site visit if ‘considered useful’, but the Department seems not to have taken up these offers.

“The Department was attempting to buy water to meet targets on paper, without actually removing any water from irrigation. It was told the purchase would have ‘virtually no impact’ in drier years and ‘marginal’ impact in high-flow years.

“It is very difficult for the Department to buy back water in the Condamine-Balonne region, and EAA knew the department under Mr Joyce had ‘a very strong objective to minimize the water being taken away from productive agriculture’.

“EAA were happy to oblige with a deal that ‘would not affect the viability’ of the property because the company can use its other ‘water entitlements to continue irrigation.’

“Deep in the detail, we see that this deal doesn’t actually count towards environmental water recovery because this water was never counted in baseline calculations of water use.

“Essentially something was created from nothing – or at least from outside baseline modelling – and sold to the taxpayer for millions.

“The Murray Darling Basin Authority has made it clear to the Senate that water that wasn’t in the baseline calculations can’t contribute to the water recovery target.

“Released correspondence shows that EAA and the Department know that much, if not all, of this deal does not count.”