Queensland’s new environmental offsets regime is now up and running with property developers and resource proponents set to benefit. 

Environmental offsets

Environmental offsets are used in project approvals to compensate for impacts that cannot otherwise be avoided or mitigated. Offsets may take the form of direct or indirect actions that result in ‘no net loss’ or ‘net gain’ in a conservation outcome. For example, a direct offset may take the form of providing new habitat, while an indirect offset may involve funding research activities or a captive breeding program.

Environmental offsets are usually regarded as the final option in the environmental management hierarchy behind avoidance and mitigation.  However, despite being a ‘last resort’, the use of environmental offsets has become increasingly common in project approvals. The greater use of environmental offsets over the past decade has also been associated with a proliferation of ad hoc environmental offset policies. This was resulting in a complex and confusing system of overlapping or conflicting requirements and the imposition of unnecessary costs on government and businesses.

Environmental Offsets Act

The Environmental Offset Act 2014 and associated regulations and offset policy took effect on 1 July 2014 and have been introduced to simplify and streamline the use of environmental offsets and remove inconsistency and duplication. The new reforms also seek to deliver better environmental outcomes by providing greater flexibility and encouraging a more strategic and transparent approach to environmental offsets in Queensland.

The Environmental Offsets Act applies to all environmental offsets imposed in Queensland by State agencies and local governments. The only exception is the imposition of environmental offsets by the Coordinator-General under the State Development and Public Works Act 1971, which will not be subject to the Environmental Offsets Act.

The Environmental Offsets Act does not itself create any new power to impose environmental offsets on project approvals, and an environmental offset can only be imposed on a project where the power to do so exists under another Act. This is presently limited to the:

  • Sustainable Planning Act 2009
  • Marine Parks Act 2004
  • Environmental Protection Act 1994
  • Nature Conservation Act 1992.

However, the new Act will control when an offsets condition can be imposed under another Act. Under the Environmental Offsets Act, an administering agency may only impose a condition requiring an environmental offset under another Act if the offset condition is required to counterbalance a significant residual impact of a prescribed activity, on a prescribed environmental matter. 

A significant residual impact is an adverse impact, whether direct or indirect, of a prescribed activity on all or part of a prescribed environmental matter that will remain despite on-site mitigation measures and is, or is likely to be, significant.

Prescribed activities and prescribed environmental matters are declared by regulation.  Examples of prescribed activities include:

  • resource activities and prescribed environmentally relevant activities under the Environmental Protection Act
  • a range of development under the Sustainable Planning Act.

Examples of prescribed environmental matters are:

  • regulated vegetation
  • wetland and watercourses
  • protected wildlife habitat.

Restrictions are also imposed on duplicating conditions imposed by higher levels of government (e.g. the State cannot impose a condition that duplicates a Commonwealth condition and a local government cannot impose a condition that duplicates a State condition).

Where an offset condition is imposed, the authority holder will have the discretion (subject to obtaining approval from the administering authority) to choose whether to provide the offset as a proponent-driven offset or a financial settlement offset or a combination of a proponent-driven offset and a financial settlement offset.

A proponent-driven offset is an environmental offset that is to be undertaken directly or indirectly by the authority holder. Where a proponent-driven offset is used, the authority holder must prepare and comply with the agreed delivery arrangement, including agreed offset delivery plan (which must be approved by the administering agency).

A financial settlement offset is a payment by the authority holder to the Department of Environment and Heritage Protection or local government (depending upon who was the administering agency) of an amount required by the administering agency that granted the authority. A financial settlement offset must be calculated in accordance with the environmental offsets policy.

Queensland Environmental Offsets Policy

Under the Act, an environmental offsets policy may be made by the chief executive administering the Act or a local government. However, a document does not become an environmental offset policy until prescribed by regulation. 

As at 1 July 2014, the only offset policy in force under the Act is the new Queensland Environmental Offsets Policy (version 1.0) (QEOP). The QEOP replaces the following former offset policies:

  • Queensland Government Environmental Offset Policy
  • Marine Fish Habitat Offsets Policy
  • Policy for Vegetation Management Offsets
  • Queensland Biodiversity Offset Policy
  • Offsets for Net Gain of Koala Habitat in South East Queensland Policy.

The QEOP addresses a number of matters including:

  • the circumstances in which an environmental offset may or may not be required
  • the characteristics of an area that is suitable for undertaking an environmental offset
  • the requirements for the ongoing management and monitoring of, and reporting about, an environmental offset
  • the provisions for deciding the size and scale of an environmental offset, so the offset is proportionate to the significant residual impacts on a prescribed environmental matter
  • the requirements for calculating the amount required for a financial settlement offer.

Conclusion

The Environmental Offsets Act and QEOP introduce a new consolidated environmental offset regime replacing the former five separate environmental offset policies administered by different agencies in Queensland. The reforms are a significant step towards the delivery of a more simplified and streamlined system for environmental offsets in Queensland.