In brief - New environmental offsets framework requires action from Queensland's local governments

The environmental offsets framework provided for in the Environmental Offsets Act 2014 (Act) and the Environmental Offsets Regulation 2014 (Regulation) requires action to be taken by a local government before it is able to impose offset conditions and manage environmental offsets. This article outlines the key aspects of the environmental offsets framework for local government, particularly in respect of impacts on koalas and koala habitat.

Legislation aims to counterbalance environmental impacts of development

On 28 May 2014, the Queensland Parliament passed the Act and the Regulation, the operative provisions of which commenced on 1 July 2014. The current reprints of the Act and the Regulation are each dated 19 December 2014.

The main purpose of the Act is stated to be "to counterbalance the significant residual impacts of particular activities on prescribed environmental matters through the use of environmental offsets (Act, section 3(1))."

The Act provides that the main purpose is achieved by (Act, section 3(2)):

  1. establishing a framework for environmental offsets;
  2. recognising the level of protection given to prescribed environmental matters under other legislation;
  3. providing for national, State and local matters of environmental significance to be prescribed environmental matters for the purpose of this Act; and
  4. coordinating the implementation of the framework in conjunction with other legislation.

Themes of this article

This article focuses on the ability of a local government to impose an offset condition on a development approval or infrastructure agreement under the Sustainable Planning Act 2009 (SPA), along with any pre-conditions to, and limitations on, that ability. In particular the article addresses the following questions:

  • What is an offset condition?
  • What is an environmental offset?
  • When can an offset condition be imposed by a local government?
  • How are environmental offsets provided?
  • What action is required from a local government?

What is an offset condition?

In general terms, an offset condition is a condition which:

  • may be imposed on an agreement, licence, permit or other authority; and
  • requires, or otherwise relates to, an environmental offset (Act, section 7(1) and schedule 2).

When considered in the context of a local government's power under the SPA, an offset condition includes a condition imposed by a local government on a development approval, or as part of an infrastructure agreement (Act, schedule 2), so long as the condition relates to an environmental offset.

The interpretation of "environmental offset" must therefore be considered to determine whether a condition is an offset condition.

What is an environmental offset?

In general terms, an environmental offset is an activity which is undertaken to counterbalance an adverse impact of a prescribed activity on a prescribed environmental matter that:

  • remains, or will or is likely to remain, despite on-site mitigation measures; and
  • is, or will or is likely to be, significant (Act, sections 7(2) and 8(1)).

For an offset condition to be valid, the following conditions must therefore be satisfied:

  • Prescribed activity – The activity for which the environmental offset the subject of the offset condition is required must be a prescribed activity.
  • Counterbalance for a prescribed environmental matter – The environmental offset must require activities to be undertaken to counterbalance an adverse impact on a prescribed environmental matter.
  • Remaining adverse impact – The adverse impact must remain, or be likely to remain, despite on-site mitigation measures.
  • Remaining adverse impact is significant – The remaining adverse impact must be, or be likely to be, significant.

Environmental offset condition: prescribed activity

A prescribed activity relevantly includes development the subject of a development approval for which an environmental offset may be required under a local planning instrument (Act, section 9; Regulation, section 4 and schedule 1 (item 7)). A number of other activities are also prescribed activities, however, these are not considered as part of this article.

Environmental offset condition: counterbalance for a prescribed environmental matter

Under the Act, a "prescribed environmental matter" is (Act, section 10(1)):

...any of the following matters prescribed under a regulation to be a prescribed environmental matter––

  1. a matter of national environmental significance;
  2. a matter of State environmental significance;
  3. a matter of local environmental significance.

The Regulation relevantly states the matters of national environmental significance along with the matters of State environmental significance (Regulation, section 5 and schedule 2). (Whilst these matters are not thoroughly addressed here, local governments should be aware of the content of these matters as they are of relevance to a local government for reasons discussed below.)

In addition to the prescribed matters of national and State environmental significance, the Regulation relevantly provides that a matter of local environmental significance is a prescribed environmental matter if (Regulation, section 5(4)):

  • an environmental offset is required under a local planning instrument for the matter; and
  • the matter is not the same, or substantially the same, as any of the following:
    • a matter of national environmental significance under section 5(1) of the Regulation;
    • a matter of State environmental significance under schedule 2 or section 5(3) of the Regulation.

It is unclear at this stage what degree of similarity is required for matters to be considered "substantially the same".

Environmental offset condition: remaining adverse impact

In order for a local government to impose an offset condition, the adverse impact for which the offset condition is imposed must remain, or be likely to remain, despite on-site mitigation matters.

If on-site mitigation will prevent the adverse impact from being likely to remain, an offset condition cannot be imposed in respect of that adverse impact.

If on-site mitigation will not prevent all adverse impacts from being likely to remain, an offset condition may be imposed in respect of the remaining adverse impact.

Environmental offset condition: remaining adverse impact is significant

In order for a local government to impose an offset condition, there must be a remaining adverse impact for which the offset condition is imposed which is, will or is likely to be, significant.

The Act does not provide any guidance as to what is considered significant in respect of matters of local environmental significance (Act, section 8; Regulation, schedule 2 (sections 7 and 12)). Although the Queensland government has produced the following guidelines, these specifically do not apply to the assessment of matters of local environmental significance:

If a local government decides to identify matters of local environmental significance in a local planning instrument, the local government may develop its own set of significant residual impact guidelines for the matters of local environmental significance, which should be made publicly available (Environmental Offsets Policy, section 1.1.2). By developing and making available local significant residual impact guidelines, the local government would provide more certainty for developers and greater efficiency in the assessment of development applications for local governments.

For a condition imposed for a non-juvenile koala habitat tree under the Koala SPRP, the DSDIP Significant Residual Impact Guideline refers to the decisional criteria contained in the Koala SPRP to determine whether an action is likely to have a significant residual impact (DSDIP 2014, section 3.5.1).

When can an offset condition be imposed by a local government?

A local government is subject to a number of restrictions on imposing an offset condition under the Act and Regulation which are outlined below.

Restrictions on imposing an offset condition: local significance

A local government may impose an offset condition only for one of the following two matters (Act, section 15(4)):

  • a matter of local environmental significance identified in a local planning instrument, which by definition excludes matters which are the same, or substantially the same, as a matter of national environmental significance or State environmental significance (Act, schedule 2; Regulation, section 5(4)(b));
  • a non-juvenile koala habitat tree located in an area shown as bushland habitat, high value rehabilitation habitat or medium value rehabilitation habitat on the "Map of Assessable Development Area Koala Habitat Values" under the South East Queensland Koala Conservation State Planning Regulation Provisions (Koala SPRP) (Regulation, section 37 and schedule 2, (section 6(3))).

Restrictions on imposing an offset condition: timing

Generally, a local government may only impose an offset condition on a development approval or as part of an infrastructure agreement where the application was lodged on or after 1 July 2014 (Act, section 95(1)), subject to the following exceptions:

  • Permissible change – Where an application is made after 1 July 2014 to amend a development approval (or infrastructure agreement) granted prior to 1 July 2014 and the amendment may or is likely to result in a significant residual impact on a prescribed environmental matter, the local government may impose an offset condition on the amended approval or agreement (Act, section 95(4)). This most relevantly includes an application for permissible change to a development approval where the approval was granted prior to the commencement of the Act on 1 July 2014.
  • Undecided applications – Where a development application was lodged but not dealt with before the commencement of the Act and the local government is considering whether to impose an offset condition on the development approval, the local government may, at the request of or with the agreement of the applicant, consider all or part of the environmental offsets policy under the Act instead of all or part of any other previously relevant policy (Act, section 95A).

It is unclear how this applies in the context of an infrastructure agreement which includes an offset condition which was not executed prior to 1 July 2014. However, it is likely that the infrastructure agreement must be considered against the Act, Regulation and Environmental Offsets Policy, rather than against the law in force at the time that the infrastructure agreement was initially being negotiated.

  • Decided applications – Where a development approval or infrastructure agreement which was lodged before the commencement of the Act has been granted subject to an offset condition imposed under another Act, the applicant may apply for an amendment of the approval or agreement to (Act, section 95B(1) and (2)):
  • allow the selection and delivery of an environmental offset in accordance with the environmental offsets policy;
  • allow a financial settlement offset determined in accordance with the environmental offsets policy; or
  • remove a requirement to provide an environmental offset for an environmental value that is not a prescribed environmental matter or an impact on a prescribed environmental matter that is not a significant residual impact.

Where a local government receives an application of this type, the local government may (Act, section 95B(6) and (8)):

  • decide to make the amendment only if satisfied that the environmental values for which the environmental offset was required have not yet been impacted by the activity that is authorised by the approval or agreement; and
  • if the local government decides to make the amendment, make any other amendments the local government considers relate to the amendment and are necessary or desirable.

Restrictions on imposing an offset condition: Commonwealth

A local government cannot impose an offset condition if either of the following has been assessed under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) or the Great Barrier Reef Marine Park Act 1975 regardless of whether or not the assessment has resulted in the imposition of an offset condition (Act, section 15(1), (2) and (5)):

  • the same, or substantially the same, impact;
  • the same, or substantially the same, prescribed environmental matter.

Interestingly, if an impact has been assessed by the Commonwealth government, a strict interpretation of the legislation would prohibit a local government from imposing an offset condition on the same, or substantially the same, impact even where the impact is being assessed on a different matter by each government. It is unclear whether this was the intention of this restriction.

Restrictions on imposing an offset condition: removal of conditions

An applicant may apply for the removal of an offset condition imposed by a local government where the Commonwealth government or State government has imposed an offset condition which relates to the same, or substantially the same, impact and the same, or substantially the same, prescribed environmental matter (Act, section 25A(1) and (2)). However, the offset condition imposed by the local government will prevail over the condition imposed by the State government in the circumstances prescribed in the Regulation, most notably where a local government imposes an offset condition in respect of koala habitat or a non-juvenile koala habitat tree under the Koala SPRP (Act, section 25A(3); Regulation, section 36).

Imposing an offset condition for koalas

Of particular relevance to local governments (especially in South East Queensland) are conditions in respect of koalas, which have the following characteristics:

  • All levels of government – All levels of government may impose an offset condition in respect of either koalas or koala habitat.
  • Matter of national environmental significance – Koala (combined populations of Queensland, New South Wales and the Australian Capital Territory) is a listed vulnerable species under the EPBC Act and as such is a matter of national environmental significance under the Act (Regulation, section 5(1)(d)).
  • Matter of State environmental significance – Koala habitat is a matter of State environmental significance in any of the following circumstances (Regulation, schedule 2, (section 6)):
    • Non-juvenile koala habitat tree – A tree will be a matter of State environmental significance as a non-juvenile koala habitat tree if the tree is:
      • a koala habitat tree, being Angophora, Corymbia, Eucalyptus, Lophostemon or Melaleuca (this list is quite broad, including trees which are not typically considered koala food trees, as many of these trees are potentially utilised by koalas for shade rather than food);
      • non-juvenile, being more than 4m high or having a trunk with a circumference of more than 31.5cm at 1.3m above the ground; and
      • in an area shown as bushland habitat, high value rehabilitation habitat or medium value rehabilitation habitat on the Map of Assessable Development Area Koala Habitat Values under the Koala SPRP
    • Habitat for vulnerable koala – Habitat will be a matter of State environmental significance if it is habitat for the koala (South East Queensland bioregion);
    • Habitat for special least concern koala – Habitat will be a matter of State environmental significance if it is habitat for the koala.
  • Local government powers – A local government may impose an offset condition in respect of koalas (Act, section 15(4); Regulation, section 37):
    • where the condition relates to a non-juvenile koala habitat tree that is a matter of State environmental significance; or
    • where a local planning instrument identifies an environmental matter in respect of the koala that is not, and is not substantially the same as, a matter of national environmental significance or State environmental significance. However, it is difficult to imagine circumstances in which this could arise.
  • Interplay between Commonwealth and local government conditions – It is unclear whether an offset condition imposed by the Commonwealth government in respect of a significant impact on the listed vulnerable koala overrides an offset condition imposed by a local government in respect of a significant impact on a number of non-juvenile koala habitat trees, on the basis that the conditions relate to substantially the same matter. This will be particularly controversial where the Commonwealth government purports to override a condition imposed by a local government by deciding not to impose a Commonwealth offset condition.

How is an environmental offset provided?

Once a local government imposes an offset condition on a development approval or as part of an infrastructure agreement under the SPA, a proponent may elect to deliver the environmental offset for the activity, or a stage of the activity, by one of the following methods (Act, sections 18(1)-(2)21 and 23):

  • Proponent-driven offset – This delivery method involves providing an environmental offset through an action that a proponent undertakes directly or indirectly.
  • Financial settlement offset – This delivery method involves making a payment by the proponent to the local government in relation to delivering an environmental offset, of an amount required by the local government.
  • Combination of a proponent-driven offset and financial settlement offset – This delivery method involves providing some combination of the two previous delivery methods.

Requirements for proponents when determining the delivery method

When electing the delivery method, the proponent must provide the notice of election in the approved form, which may be found on the Queensland government website (Act, section 18(2)).

Where the proposed delivery method involves a proponent-driven offset, the notice of election must be accompanied by an offset delivery plan about how the proponent will undertake the offset, which must satisfy each of the following (Act, section 18(3)-(5); Regulation, section 8):

  • Describe how an offset will be undertaken – Describe how an environmental offset will be undertaken and the conservation outcome will be achieved. A conservation outcome is achieved if the offset is selected, designed and managed to maintain the viability of the matter to which the offset relates (Act, section 11). This requirement is achieved by:
    • effectively accounting for and managing the risks of the environmental offset failing to achieve the conservation outcome,
    • ensuring the environmental offset provides benefits in relation to the relevant matter of local environmental significance or the non-juvenile koala habitat tree, in addition to any other benefit provided under a requirement of, or of an authority under, an Act,
    • having transparent governance arrangements that can be readily measured, monitored, audited and enforced, and
    • ensuring the environmental offset is of a size and scale proportionate to the significant residual impact on the matter of local environmental significance or the non-juvenile koala habitat tree.
  • Agreement of landowner – State that the proponent, and any other entity that owns land on which the environmental offset will be undertaken agree to the offset being undertaken and be signed by each of these entities.
  • Description of impacted matter – Describe the matter of local environmental significance or the non-juvenile koala habitat tree to which the offset condition relates.
  • Description of the land – State the following in respect of the land on which the environmental offset will be undertaken:
    • whether the offset condition will be delivered, wholly or partly, on this land (this requirement is uncertain in its operation and may be a drafting error in the Regulation);
    • particulars of, or a description sufficient to identify, this land;
    • details of any person with an interest in this land;
    • the existing land use of this land and any impact that land use may have on the delivery of the offset;
    • the measures the proponent will take to secure this land as a legally secured offset area, including why the measures are considered reasonable and practicable, the period during which the proponent will take the measures and why the period is considered reasonable for securing the land.

Local government requirements on receiving a notice and offset delivery plan

Once the local government receives a notice in the correct form and any required offset delivery plan, the local government must satisfy each of the following:

  • Consideration – Consider the notice and any offset delivery plan, including by considering (Act, section 19(1); Regulation, section 9):
    • each relevant environmental offsets policy, which is currently the Queensland Environmental Offsets Policy (version 1.1) (Environmental Offsets Policy), which is discussed below, but can also include any local government policy approved by the Minister and prescribed under the Regulation;
    • whether the offset delivery plan satisfies the requirements for an offset delivery plan (stated above);
    • whether an activity proposed in the offset delivery plan is restricted or prohibited or requires permission under any law, such as where the proposal would involve the proponent undertaking assessable development; and
    • the impact undertaking the environmental offset under the offset delivery plan will, or is likely to, have on other prescribed environmental matters on the land on which the environmental offset will be undertaken.
  • Decision – Decide whether it is appropriate to deliver the environmental offset in the way stated in the notice and any offset delivery plan, or whether the offset should be delivered in a different way (Act, section 19(2)).

There is no statutory authority for making an information request. However, it is reasonable for a local government to make a non-statutory and informal request for information where there is insufficient information in the notice for the local government to make a decision.

  • Notification – Give the proponent a notice which states (Act, section 19(3), (6) and (8); Regulation, part 7):
    • the way in which the environmental offset is required to be delivered;
    • the proponent is required to enter into an agreed delivery arrangement within a stated reasonable period of time;
    • that the proponent may apply for a review of the decision; and
    • how and when the proponent may apply for a review of the decision.

Delivery of environmental offsets must comply with the policy

The Environmental Offsets Policy relevantly provides the following for the delivery of environmental offsets:

  • Offset principles – These seven offset principles with which all environmental offsets must comply (Environmental Offsets Policy, section 1.3):
  1. offsets will not replace or undermine existing environmental standards or regulatory requirements, or be used to allow development in areas otherwise prohibited through legislation or policy;
  2. environmental impacts must first be avoided, then minimised, before considering the use of offsets for any remaining impact;
  3. offsets must achieve a conservation outcome that achieves an equivalent environmental outcome;
  4. offsets must provide environmental values as similar as possible to those being lost;
  5. offset provision must minimise the time-lag between the impact and delivery of the offset;
  6. offsets must provide additional protection to environmental values at risk, or additional management actions to improve environmental values; and
  7. where legal security is required, offsets must be legally secured for the duration of the impact on the prescribed environmental matter.
  • Offset size and scale – The size and scale of an environmental offset is stated to be that which is necessary to achieve a conservation outcome. Specific requirements are provided in respect of each type of delivery method, which generally relate to:
    • Land-based offsets – The land required to be provided is based on a habitat quality assessment, but cannot exceed four times the size of the land impacted by the prescribed activity.
    • Direct Benefit Management Plan – The suitability of this type of offset is considered on a case-by-case basis by reference to the benefits of the proposal.
    • Financial settlement offsets – The amount payable is determined in accordance with the methodology provided in the Environmental Offsets Policy.
  • Staged offset delivery – A proponent may deliver offsets in stages in line with stages of the prescribed activity, subject to:
    • the proposal to stage the offset delivery must be identified before the development approval is issued or infrastructure agreement is executed so that the conditions of the authority can reflect the arrangement;
    • the assessment of the development application or infrastructure agreement will need to consider, for the whole project, avoidance and mitigation of impacts on prescribed environmental matters and the maximum likely extent and duration of the impact on prescribed environmental matters;
    • detailed assessment of the impact of each stage of the proposal, including the offset requirement for that stage, will need to be conducted prior to providing a notice of election for that stage;
    • information in relation to completed stages is to be sought by the local government with the notice of election so that offset debits and credits may be assessed for subsequent stages; and
    • offset credits may be used in subsequent stages where the impact is on the same prescribed environmental matter, along with offset debits for earlier stages in unavoidable circumstances for unforeseen impacts.
  • Strategic offset investment corridors – Strategic offset investment corridors are pre-identified areas of land which may be suitable for land-management activities which provide a benefit to matters likely to be impacted by development. These areas are subject to:
    • offsets are not required to be provided in these areas, but proponents are encouraged to do so wherever possible to provide strategic landscape-scale benefits;
    • these corridors are intended to connect conservation hubs (e.g., national parks) in areas subject to low development pressure which are not zoned for activities such as urban development; and
    • at this stage only the Galilee Basin is identified as a strategic offset investment corridor on the Queensland government website.

Agreed delivery arrangement requirements

The local government and proponent must enter into an agreed delivery arrangement which has the following qualities (Act, section 19B):

  • the agreement is about the proponent's delivery of an environmental offset, with reference to any offset delivery plan (Act, section 19(4));
  • the agreement is entered into either before or after the development approval is granted or infrastructure agreement is executed (Act, section 19(5));
  • if the agreement is entered into before the development approval is granted or infrastructure agreement is executed, the following requirements are satisfied (Act, section 19A):
    • the proponent may start to deliver a proponent-driven offset before the development approval is granted or infrastructure agreement is executed, but must not pay any amount under a financial settlement offset until after the authority is granted;
    • the delivery method may be varied by the local government where the proponent changes the proposal after the agreement is entered into but not more than 10 business days after the development approval is granted or infrastructure agreement is executed (Act, section 19A(3) and (4));
  • either or both of the agreement and the offset delivery plan may be amended by entering into another agreed delivery arrangement before the proponent starts the relevant prescribed activity or stage of a prescribed activity (Act, sections 19(7) and 20).

Proponent-driven offset characteristics

Where under an agreed delivery arrangement a proponent is required to deliver an environmental offset in whole or in part by a proponent-driven offset, the following matters apply:

  • Form of offset – The proponent-driven offset may be one of the following:
    • Land-based offsets – This form of proponent-driven offset involves providing suitable land as an environmental offset. The suitability of the land for an offset condition imposed by a local government is determined by undertaking a habitat quality analysis under one of the following:
      • for a non-juvenile koala habitat tree under the Koala SPRP, the Guide to Determining Terrestrial Habitat Quality or an alternative approach approved by DEHP;
      • for a matter of local environmental significance, the local government's habitat quality assessment, provided any area of land for the offset does not exceed the impacted site area by more than a factor of 4.

For a land-based offset, the site must be capable of delivering a conservation outcome for the impacted prescribed environmental matter. Most relevantly this means that for vegetation and for wetlands, the offset site must be of the same broad vegetation group or within the same wetland habitat type as the impacted vegetation and wetlands, respectively (Environmental Offsets Policy, section 2.3.1.6).

Direct Benefit Management Plan – This form of proponent-driven offset involves identifying priority actions in a pre-approved Direct Benefit Management Plan (DBMP) to address threats to, and provide substantial benefits for, prescribed environmental matters. Examples of conservation outcomes which may be achieved by a DBMP include the following where the activities are additional to existing management practices or requirements, and are priority actions for the prescribed environmental matter:

  • enhancing, restoring and establishing key habitat across multiple tenures or properties;
  • threat mitigation activities such as (but not restricted to) weed or feral animal control on a landscape scale or across multiple properties;
  • propagating and planting of threatened plant species or establishment and intensive management of new populations of threatened fauna in appropriate habitat;
  • protecting and restoring significant freshwater, marine or estuarine ecosystems;
  • landscape-scale fire management activities such as patch burning or protective burns;
  • fencing or other management techniques to manage access impacts on the prescribed environmental matter including legal security where relevant to all or part of the area.

Combination of land-based offset and DBMP – This form of offset involves providing a combination of land-based offset and DBMP.

  • Legally secured offset area – Generally, a proponent-driven offset is required to be, or to be undertaken on, a legally secured offset area. The consequences of land being a legally secured offset area include:
    • Any use of the area which is inconsistent with how the environmental offset was or is required to be undertaken, is a significant residual impact on the prescribed environmental matter for which the area was set aside (Act, section 8(4)),
    • It is a deemed condition of certain authorities that a prescribed activity cannot be undertaken in the legally secured offset area if carrying out the prescribed activity will delay, hamper or stop the delivery of the conservation outcome as stated in the agreement for the offset area (note that this is discussed further below) (Act, section 25)
  • Compliance with agreements – The proponent is required, as a deemed condition of the development approval or infrastructure agreement, to comply with the agreed delivery arrangement, including the agreed offset delivery plan (Act, section 22).
  • Advanced offsets – A landowner may apply to a local government for an area of land to be registered as an advanced offset to be used for the purposes of an environmental offset in the future (Act, section 93(2)(b)). Advanced offsets are subject to the following (Regulation, sections 13 and 14):
    • Approved form – The applicant must provide the application in the approved form, which may be found on the Queensland government website;
    • Local significance or SPRP – A local government may only consider an application which relates to an environmental impact for which an offset condition may be imposed under a State planning regulatory provision or a local planning instrument of the local government. However, where an environmental offset may be required by the State, the application must be made to the Chief Executive;
    • Consideration – The local government must have regard to the Environmental Offsets Policy and any other relevant environmental offsets policy.  
    • Decision – The local government may:
  • approve the identification of all or part of the area as an advanced offset; or
  • refuse the identification of the area as an advanced offset.
  • Registration or notification – As soon as practicable after making the decision, the local government must:
  • if the application was approved or partly approved, register the area as an advanced offset in the local government's register of environmental offsets, or
  • if the application was refused, give the applicant a notice stating the decision, reasons for the decision and all rights of internal review. It is unclear whether such a notice must be given where the local government partly approves the application.
  • Deregistration – An owner of land may apply, at any time in the approved form, for an area of land registered as an advanced offset to no longer be identified as an advanced offset and to be removed from the register. As soon as practicable after the application is made, the local government must remove the record for the advanced offset from the register. There is no provision for the local government to refuse a request of this type.  

Financial settlement offset characteristics

Where, under an agreed delivery arrangement, a proponent is required to deliver an environmental offset in whole or in part by a financial settlement offset, the following matters apply:

  • Maximum amount – The maximum amount payable for a financial settlement offset where the administering agency is a local government is the amount determined by the local government in accordance with the Environmental Offsets Policy (Act, sections 12(1) and 23(2); Regulation, section 6).
  • Payment requirements – The proponent must pay to the local government, the amount required by, and in the way stated in, the agreed delivery arrangement (Act, section 24):
    • before the proponent starts any part of the prescribed activity to which the offset condition relates; or
    • if the development approval or infrastructure agreement allows the prescribed activity to be carried out in stages, the proponent may pay the amount required by the agreed delivery arrangement for a stage.
  • • Local government management – The amount payable as a financial settlement offset is held on trust by the local government and may only be transferred for one or more of the following (Act, section 89):
    • paying expenses incurred, directly or indirectly, by the local government in the delivery of the environmental offset to achieve a conservation outcome;
    • paying fees or expenses related to administering the trust fund.

There is also an ability for the State government to prescribe other amounts under the Regulation to be paid out of the trust fund. However, this has not yet been done in the Regulation dated 19 December 2014.

Deemed conditions of development approvals or infrastructure agreements

Where an offset condition is imposed on a development approval or an infrastructure agreement, the following conditions are deemed to be conditions of the authority despite section 347(b) and (c) of the SPA (Act, section 16):

  • Agreed delivery arrangement condition (Act, section 19B) – The local government and proponent holding a development approval or an infrastructure agreement which includes an offset condition must have entered into an agreed delivery arrangement before starting:
    • any works that impact on the matter of local environmental significance or the non-juvenile koala habitat tree to which the offset condition relates; or
    • if the development approval or an infrastructure agreement allows the prescribed activity to be carried out in stages, any works for the stage that impact on the matter of local environmental significance or the non-juvenile koala habitat tree to which the offset condition relates.
  • Proponent-driven offset condition (Act, section 22)– Where under an agreed delivery arrangement a proponent holding a development approval or an infrastructure agreement is to deliver an environmental offset in whole or in part by a proponent-driven offset, the proponent must comply with the agreed delivery arrangement, including the agreed offset delivery plan. This condition has the effect of locking a proponent to its proposal for offset delivery.
  • Financial settlement offset condition (Act, section 24)– Where under an agreed delivery arrangement a proponent holding a development approval or an infrastructure agreement is to deliver an environmental offset in whole or in part by a financial settlement offset, the proponent must pay to the local government the amount required by, and in the way stated in, the agreed delivery arrangement:
    • before the proponent starts any part of the prescribed activity to which the offset condition relates; or
    • if the development approval or infrastructure agreement allows the prescribed activity to be carried out in stages, the proponent may pay the amount required by the agreed delivery arrangement for a stage.
  • Legally secured offset area condition (Act, section 25) – Where a development approval or an infrastructure agreement authorises a prescribed activity to be undertaken in a legally secured offset area, the proponent holding the approval or agreement must not carry out any prescribed activity in the legally secured offset area if:
    • a delivery or management plan or agreement applies to all or part of the offset area; and
    • carrying out the prescribed activity will delay, hamper or stop the delivery of the conservation outcome for a prescribed environmental matter as stated in the delivery or management plan or agreement.

This appears to apply even where no offset condition is imposed. However, the Explanatory Notes to the Environmental Offsets Bill 2014 indicate that this section is intended to be read down such that this section only applies where an offset condition is imposed (Act, sections 16 and 25; Explanatory Notes, clause 24).

It is also relevant to note that legally secured offset areas are matters of State environmental significance and, on this basis, a local government may not impose an offset condition in respect of a legally secured offset area (Act, section 15(4); Regulation, section 5(2), 4(b)(ii) and schedule 2, (section 12)). A local government may impose an offset condition in respect of a matter of local environmental significance within the legally secured offset area, but not in respect of the area itself.

Delivery of environmental offsets for koalas

Delivery of environmental offsets in respect of koalas may be provided by way of proponent-driven offsets or, where appropriate, financial settlement offsets.

  • For proponent-driven koala offsets, the following apply: SEQ requirements – For koala habitat within South East Queensland and under the Koala SPRP, the only acceptable approach to meeting a proponent-driven offset is to meet all of the following requirements (Environmental Offsets Policy, section 2.3.1.6):
    • DBMP – A DBMP cannot be used to manage a proponent-driven koala offset and therefore proponent-driven koala offsets in South East Queensland can only be delivered through a land-based offset.
    • Habitat rehabilitation, establishment and protection – The rehabilitation, establishment and protection of koala habitat is the only appropriate action to offset koala habitat within South East Queensland and under the Koala SPRP.
    • 3-to-1 replacement – Establish three new koala habitat trees for every one non-juvenile tree removed.
    • Same local government area – Offset plantings must occur within the same local government area as the impact site, except relevantly where the impact occurs within the Koala Coast (as identified in the Koala SPRP maps) and the impact area crosses local government boundaries. In these circumstances the assessment manager, local authority, Minister or State agency may determine an appropriate area within the Koala Cost for the offset plantings to occur.
    • Habitat value – In an area of high value or medium value suitable for rehabilitation habitat, or where these are not available, within low value suitable for rehabilitation habitat or where appropriate, within bushland habitat to enhance the quality of bushland within the local government area.
    • Tree density – Koala habitat trees to be established must be reflective of the species endemic to the site and planted at densities that will produce a mature density reflective of the regional ecosystems present on the site.
  • Requirements outside SEQ – For koala habitat outside South East Queensland, a proponent may choose to either (Environmental Offsets Policy, section 2.3.1.6):
    • establish three new koala habitat trees for every one non-juvenile tree removed, or
    • provide a land-based offset in accordance with the Guide to Determining Terrestrial Habitat Quality and the Land-Based Offsets Multiplier Calculator tool.

It is unclear whether these offsets must be provided in the same local government area as the impacted site.

  • General offset site requirements – For fauna habitat under the Nature Conservation Act 1992, including koala habitat, the offset site must contain, or be capable of containing, a self-sustaining population of that same species.

What action is required from a local government?

In order to impose an offset condition, other than a condition in respect of a non-juvenile koala habitat tree under the Koala SPRP, a local government must make a local planning instrument that identifies:

  • matters of local environmental significance for which an environmental offset is required (Act, section 10(1)(c); Regulation, section 5(4)(a)); and
  • development for which an environmental offset may be required (Act, section 9; Regulation, section 4 and schedule 1 (item 7(a))).

A local government must also comply with the following when administering environmental offsets:

  • a trust fund must be established for the holding of money received as a financial settlement offset by the local government, which may only be transferred in certain circumstances (Act, section 89(1) and (2));
  • a register of information must be kept about each authority with an offset condition that has been issued by the local government, which must be made available for inspection in the way in which the local government reasonably considers appropriate, including being made electronically available (Act, section 90).

Local planning instrument

Should a local government decide to make or amend a local planning instrument to provide for the requirements of the Act and Regulation, the local government should consider the following:

  • SPA requirements – The requirements of the SPA, including the applicable guideline, apply to the process for making or amending the local planning instrument (SPA, chapter 3, part 5; MALPI Guideline).
  • Adoption of additional documents – To assist in interpreting the local planning instrument and explaining the local environmental significance of relevant matters, the local government should also consider adopting the following documents with the local planning instrument:
    • a significant residual impact guideline, to explain the significance of the local environmental matters and set guidelines for the types of impacts on these matters which will be considered significant residual impacts;
    • an environmental offsets policy, to set guidelines around the delivery of environmental offsets for the identified matters of local environmental significance;
    • a habitat quality assessment tool, to provide a local tool for assessing the suitability of a proposed offset site.

Key matters for local governments

A local government may only impose conditions in respect of:

  • a non-juvenile koala habitat tree under the Koala SPRP; or
  • a matter of local environmental significance set out in a local planning instrument.

For the purposes of this article, the offset condition must be imposed as a condition of a development approval or as part of an infrastructure agreement.

An offset condition imposed by the Commonwealth government (or a decision not to impose a condition) will prevent a local government from imposing a condition on the same, or substantially the same, matter. There is still some uncertainty as to how this will operate in practice.

Generally, an offset condition imposed by the State government will prevent a local government from imposing a condition on the same, or substantially the same, matter. However, this is not the case for conditions in respect of a non-juvenile koala habitat tree imposed under the Koala SPRP.

All levels of government continue to have a stake in imposing some form of offset condition in respect of koalas or koala habitat.

Offsets may be delivered by a proponent-driven offset (land-based offset or DBMP) or a financial settlement offset.

A landowner may apply for an area of land to be designated as an advanced offset to be used as an environmental offset for a future impact.