In brief

  • An Independent Review has recommended reforms to the Commonwealth environmental impact assessment laws which could have far-reaching implications for the process and timing of environmental assessment and approval of projects throughout Australia. The recommendations include expanding the list of ‘matters of national environmental significance’ to include ‘ecosystems of national significance’, greater reliance on public inquiries and enhanced strategic assessment and regional planning processes, and the possibility of merits appeal from some of the Commonwealth Minister’s decisions
  • The Review also makes recommendations regarding the use of a temporary ‘greenhouse trigger’ pending the commencement of the Carbon Pollution Reduction Scheme, and other climate change-related issues
  • The Review could have significant implications for environmental consultants and their clients, as it recommends the preparation of an enforceable Code of Conduct for consultants who supply information for the purpose of the environmental assessment regime under Commonwealth law

Introduction

Shortly before Christmas 2009, the Commonwealth Minister for the Environment, Heritage and the Arts tabled the Report of the Independent Review of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) in the Federal Parliament. The 372 page Report makes 71 recommendations to enhance or improve the EPBC Act.

The Report recommendations, if implemented, would have significant—and in some cases profound—implications for the environment impact assessment of projects in Australia. They should be considered and understood by all developers and their advisers.

The centrepiece of the Report is a proposed new Australian Environment Act which would be a simplification and rewrite of the EPBC Act, and an integration of other Commonwealth environmental and Indigenous heritage legislation.

Before considering some of the key recommendations of the Report, a brief summary of the environmental impact assessment (EIA) and approval requirements of the EPBC Act are set out below.

Brief overview of existing EIA requirements

The key feature of the EPBC Act is the requirement for EIA and Ministerial approval of projects that have or are likely to have a significant impact on specified ‘matters of national environmental significance’. These matters are World Heritage areas, Ramsar wetlands, places on the National Heritage List, protection of the environment from nuclear actions, listed threatened species and communities, listed migratory species, and the marine environment. The processes described below also apply to actions on or which have the potential to significantly impact on the environment on Commonwealth land.

The EIA process is usually triggered by a referral of the project by the proponent, which typically includes a fairly generic description of the project and the outcomes of desktop or limited field surveys. Based on that referral, the Minister must decide whether the project will or is likely to have a significant impact on the ‘matters of national environmental significance’. If the Minister makes this decision, the project is a ‘controlled action’.

After the Minister has decided that a project is a controlled action, the Minister must make two further decisions:

  • how the project is to be assessed. The EPBC Act enables controlled actions to be assessed on the referral documentation, preliminary documentation, public environment report (PER), environmental impact statement (EIS), public inquiry, or an accredited state/territory process (accredited processes can be set out in agreements between the Commonwealth and the state or territory, or accredited ad hoc). There is also the little-used option of carrying out strategic assessments. In practice, most projects under the EPBC Act are assessed under an accredited state/territory process or preliminary documentation, and
  • whether to approve the project. This decision is made after the exhibition process is complete and the Minister has received a report from the Secretary of the Department of Environment, Water, Heritage and the Arts (DEWHA).

There are no rights of appeal against the Minister’s decision, although the legality of any of the Minister’s decisions can be challenged by judicial review in the Federal Court.

The Review recommends that these well-understood processes be changed in a number of significant ways.

Protection of landscapes and ecosystems

One criticism of the EPBC Act is that with the exception of Ramsar wetlands and World Heritage areas, the focus of EIA is on the protection of individual species rather than their habitats and ecosystems. Accordingly, the Report recommends the inclusion of ‘ecosystems of national significance’ as a new matter of national environmental significance. The ‘ecological character’ of the listed ecosystem would be the matter protected by the EPBC Act.

The Report also proposes criteria for identifying and listing ecosystems of national significance.

There is much to be said for taking a holistic, landscape approach to the protection of natural ecosystems. However, this recommendation frankly will not work unless the character of the listed ecosystem is also clearly articulated and defined at the time of listing. This is a significant shortcoming for many Ramsar wetlands which lack a description of their ecological character.

Changes to EIA processes

The Report recommends a number of important changes to EIA processes, including:

  • publication of criteria for EIA processes, and the subsequent accreditation of EIA state and territory processes where they meet this criteria. The Report also recommends that the Commonwealth audit the effectiveness of accredited state and territory EIA processes
  • streamlining and simplifying the EIA methods by combining assessment by preliminary documentation and assessment on referral information, and removal of assessment by PER
  • greater use of public inquiries and joint Commonwealth-State/Territory assessment panels for major projects. This is an important recommendation, as there has not been a public inquiry under the EPBC Act since it commenced, although public inquiries are part of the regulatory landscape for major projects in several Australian states
  • development of an industry Code of Conduct for consultants who supply information for the purposes of the EIA and approval regime under the EPBC Act. The Code could be enforced by either prescribing the Code under the Trade Practices Act 1974 (Cth) which would allow for enforcement of breaches of the Code by the Australian Competition and Consumer Commission, or by DEWHA under a suite of new Code of Conduct audit and enforcement powers, which are also proposed in the Report, and
  • changing the EPBC Act to give greater weight to environmental considerations over economic or social considerations, and also to give the Minister the power to require all of the environmental impacts of the proposed action to be assessed and evaluated, not just impacts on matters of national environmental significance.

Strategic and regional planning

The Report recommends enhancing and using strategic assessments and regional planning to greater effect than is presently the case. This has some merit, though there is limited experience with both concepts—only three strategic assessments are presently being carried out under the EPBC Act in terrestrial environments (though Freehills is involved in two of them), and only five bioregional plans in progress (all of which relate to marine areas).

Some of the recommendations for strategic assessment include guidelines that describe the requisite form and standard of information required in a strategic assessment, an amendment to the Act which requires the Minister to only approve an action or class of actions under a strategic assessment if it ‘improves or maintains’ the natural or cultural values of the affected environment, and increasing the length of time during which the public can comment on a draft strategic assessment report.

It is also recommended that the Minister have the power to ‘call-in’ a plan, policy or program that is likely to have a significant impact on a matter of national environmental significance.

Despite the historically slow uptake of strategic environmental assessments, there has been a renewed interest and use of these assessments as a tool to plan spatially and environmentally diverse plans or programs, such as Melbourne’s urban growth boundary expansion and the LNG hub and heritage assessment in the West Kimberley. Drawing from these experiences will be essential to ensuring any enhancement of the strategic assessment framework is workable and taken up more frequently.

Climate change

The Report recommends that an interim greenhouse trigger, with a threshold of at least 500,000 tonnes of CO2 equivalent emissions, be introduced as soon as possible by way of regulations. The trigger would sunset upon commencement of the Carbon Pollution Reduction Scheme (CPRS).

Interestingly, when he released the Report the Minister issued a media release which states that if the CPRS is passed when it is reintroduced to Parliament on 2 February 2010, there ‘will be no need for a greenhouse trigger to be introduced, even an as interim measure’.

The difficulty with the greenhouse trigger recommendation is that it does not clarify what the Minister is obligated to have regard to or protect if a project meets or exceeds the greenhouse trigger—is the Minister obligated to have regard to the project’s impacts on the Australian climate? If so, the impact of a single project on climate change would be negligible. Or is the Minister only obligated to have regard to, or be satisfied that, appropriate climate change mitigation measures are implemented? This aspect of the Report is somewhat incomplete, and needs more work.

The Report also recommends:

  • an obligation on the Minister to consider cost-effective climate change mitigation opportunities as part of strategic assessments and bioregional planning processes, and
  • implementing additional protection for non-forest native vegetation by imposing additional eligibility requirements for reforestation projects under the CPRS—for example, by not issuing credits for activities that are occurring on land that has been cleared of remnant native vegetation within a specified time-frame.

Appeals and access to the courts

As discussed previously, the EIA and approval processes obligate the Minister to make three key decisions:

  • whether a project is a ‘controlled action’
  •  which EIA method is to be used to assess the impacts of the controlled action, and
  • whether or not the ‘controlled action’ should be approved.

While all of these decisions can be (and frequently are) subject to judicial review proceedings in the Federal Court, they are not subject to merit review by the Administrative Appeals Tribunal.

The Report makes a number of important recommendations on these matters, specifically that:

  • while the ultimate decision on whether or not to approve a project should not be subject to merits review, the Government consider allowing merits review of the ‘controlled action’ decision and/or the assessment approach decision. This recommendation, if enacted, would have very significant implications for the time, cost and uncertainty of the EIA process—especially if that process is also to include greater use of public inquiries
  • the legal standing for the purpose of merits review applications be expanded to include persons who made formal public comment during the relevant decision-making process
  • a section be reinstated that provides that the Federal Court cannot require an applicant to give an undertaking as to damages as a condition of the court granting an interim injunction. Section 478 used to prevent the Federal Court from requiring an undertaking as to damages, but it was repealed by the former Federal Government
  • the courts be prohibited from ordering security for costs in ’public interest proceedings’. Despite the Report’s recommendation on this issue, the Federal Court’s decisions in EPBC Act litigation indicate that it is already extremely difficult to obtain security for costs against ‘public interest litigants’, so it is questionable whether this recommendation achieves anything meaningful, and
  • the Federal Court be empowered to decide, as a preliminary matter, whether a case is a ‘public interest proceeding’ and, if so, to determine the appropriate form of ‘public interest costs order’.

These amendments are aimed at reducing the barriers against ‘public interest litigants’ challenging the validity of administrative decisions in the courts. While this is a laudable objective, the problem with the recommendations is that they do not impose any discipline on the public interest litigant to weigh up the merits of its case before commencing legal proceedings in the courts. This can result—and in our experience has resulted—in cases with limited prospects of success, which in turn result in significant delays to the project, costs to the Federal Government and proponent, and the use of the court’s time and resources. In fact most judicial review cases under the EPBC Act have been unsuccessful.

Having been involved in a number of EPBC Act legal proceedings, we respectfully suggest that the courts should retain a discretion regarding the award of costs and making security for costs orders, perhaps with guidelines contained in the Act relating to the public interest nature of the litigation, whether is a serious matter is to be tried, and whether there is a prima facie prospect of success. This is a much fairer outcome than dictating such matters to the courts.

Other issues

Many other important issues are canvassed by the Report which are too numerous to list here. Some other key issues include:

  • simplifying and streamlining the heritage listing and assessment processes
  • wide-ranging reforms to the protected area listing and management planning
  • retaining the existing mechanisms regarding Regional Forest Agreements, but subjecting those Agreements to independent auditing, reporting and sanctions for serious non-compliance
  • strengthening the Federal Government’s compliance and enforcement, monitoring and audit powers in a number of respects, and
  • introducing fees for referring an action or applying for a permit, and cost recovery mechanisms for the EIA of proposed actions.

Where to from here?

The Federal Government’s response would suggest that any revisions to the EPBC Act are unlikely to occur for some time. Nevertheless, the Report is likely to constitute the benchmark against which new legislation may be introduced shortly before—or perhaps after—the next Federal election.

The magnitude and scope of the recommended changes should be carefully monitored by businesses and consultants that frequently have to deal with the EPBC Act.