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Jackson, S. and Palmer, L. 2012. Modernising water: articulating custom in water governance in Australia and Timor-Leste. 'International Journal of Indigenous Policy', 3(3): 1-24. This paper has four aims: 1.To describe the customary water governance systems of two neighbouring countries (Australia and Timor Leste), each at a different stage of reforming their water sectors 2.Examine the difficulties faced in asserting indigenous and local rights to control waterscapes 3.Reveal lessons 4.Illustrate 2 themes relating to empowerment: •Recognition and prioritisation of community managed systems •Inclusion of ethical concerns and people/nature inter-relationships The modernisation of water governance, which can entail resource commoditisation and privatisation, requires the reformation of water allocation institutions. In many parts of the world, such transformations have empowered statutory systems to dominate or marginalise parallel, extant customary systems of water governance. The water policy and management frameworks of Australia and East Timor (Timor-Leste) are at different stages of a modernisation trajectory; yet, both have extant systems of customary governance and so lend themselves to a comparative analysis. This paper describes the institutions and negotiating arenas through which indigenous peoples of these two countries seek to define, increase or influence their access to water, and the legitimacy of their water related values, ethics, and practices. Institutional transformations are compared alongside local efforts to create space for the co-existence of custom while improving the economic standing of Indigenous and local populations and the environmental quality of their territories.