The Commission’s study, which kicked off early this year, sought to benchmark Australian development assessment and approval processes at all levels against those in comparable jurisdictions (Canada, the United Kingdom, the United States and New Zealand).

The Commission found that none of the jurisdictions it considered stood out as performing better overall than Australia.

Nevertheless, it identified several areas where there is a clear need for improvement, a conclusion which major project proponents in Australia will surely endorse. As expected, the study confirmed major project proponents’ experiences of a range of inefficient and burdensome approvals process requirements, including unnecessary complexity and duplication, lack of transparency in decision making, and regulatory outcomes falling short of objectives.

A number of detailed reforms are proposed in the research report. Our take on some of the Commission’s key recommendations is set out below.

  1. Greater use of bilateral assessment and approval agreements

Many submissions to the study, including KWM’s submissions (available here and here) called for the making of bilateral approval agreements between the States and the Commonwealth. Most of the existing bilateral agreements permit the Commonwealth to rely on an accredited State-level environmental assessment process, but the ultimate decision to grant Commonwealth environmental approval must still be made by the Commonwealth Minister. Under a bilateral approval agreement, State and Territories would have the ability to approve projects that otherwise would have required determination by the Commonwealth as a matter of national environmental significance.

This position is one of several which proponents believe has led to inefficient duplication of approvals processes, e.g. where a project must obtain separate State and Commonwealth approvals by undergoing similar but not identical assessments processes at both levels.

The issue is further exacerbated by what many submitters described as inadequate interaction between State and Commonwealth agencies on the assessment processes for such projects.

The Commission has recommended a “one project, one assessment, one decision” framework and called for further negotiations on bilateral approval agreements between the Commonwealth Government and the States and Territories.

Greater use of bilateral assessment agreements, where the Commonwealth accredits the assessment of the State and Territories (but does not confer approval) was also recommended.

The approach of the Commission is consistent with the recent steps taken between the Commonwealth Government and States to enter into a “one stop shop” for environmental approvals, which is essentially an agreement for greater use of bilateral assessment agreements and negotiation of bilateral approval agreements within the next 12 months.

KWM is monitoring developments in this area – particularly the renewal/updating of existing assessment bilaterals, and any progress towards new approvals bilaterals, and will keep you updated. Given the lack of bipartisan support at federal level for the latter, whether such agreements can be reached in the short-term remains to be seen.

  1. Establishment of Major Projects Coordination Offices (MPCOs)

The Commission’s recommendations regarding bilateral agreements seek to streamline approvals processes between State and Federal regulatory agencies.

In response to the related (but different) issue of inadequate interaction/duplication amongst State agencies, the Commission also recommended that where they do not already exist, State and Territory Governments should establish a Major Projects Coordination Office (MPCO) (or similar) to coordinate the procedural aspects of assessment and approval processes.

Examples of the remit of an MPCO include:

  • advising proponents on regulatory requirements for particular approvals processes, and preparing project agreements between the State and proponents in order to document agreed working arrangements and timeframes amongst regulatory agencies, and
  • publicly reporting on the progress of the agencies.

We have previously questioned whether MPCOs achieve the desired level of coordination or simply add an extra layer of regulatory burden. KWM (consistent with our submissions) continues to take a cautious view of the practical utility of MPCOs in general which, without a concerted effort from State governments, may have the potential to increase administrative/process burdens without necessarily improving efficiency in approvals processes.

  1. Review of decisions

After consideration, and in light of a wide variety of divergent views from some submitters, the Commission found that judicial review of the legality of decisions made by a Minister is appropriate for major project primary approval decisions.

For decisions not made by a Minister, including those that are deemed because a Minister has not made a decision, the Commission found that limited merits review is appropriate. The Commission’s “limited merits review model” provides for a review of the merits of a project, but limits the review to the material that was available to the original decision maker. In the Commission’s view, the only additional material that should be allowed is material that could not have been reasonably available to the original decision maker, where if it had been available, there would be a significant prospect of a different decision.

  1. Standing

Again, with a background of differing views from submitters, the Commission recommended that standing to initiate judicial or merits reviews of approval decisions should be limited to proponents, those whose interests have been or could potentially be affected by the project and those who have taken a substantial interest in the process.

However, the Commission also recommended that in “exceptional circumstances”, a review body should be able to grant leave to other persons if a denial of natural justice would occur. The effect of the Commission’s recommendations on standing, if implemented, would mean that a third party seeking to initiate an action would first be called on to make a case for why it should be heard. Provided sufficient interest is demonstrated, the review application would most likely proceed.

  1. Focus shift from detailed EIA to monitoring and enforcement

Finally, the Commission’s findings supported KWM’s view that the a greater direction of regulator efforts into compliance monitoring and enforcement (and slightly less focus on highly process-driven and detailed upfront environmental assessment) would have the potential to increase the effectiveness environmental approval conditions and improve efficiencies in the assessment process.

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As noted above, the Commission warned of weakest links in any system and noted that partial reform efforts are unlikely to achieve meaningful outcomes. The length and detailed scope of the Commission’s proposed reforms, against the background of Australia’s current political landscape, mean that realistically this is unlikely to be achieved. However, we expect the some Commission’s reforms will be the subject of legislative amendments during 2014 – particularly those relating to the Commonwealth government’s proposed “one stop shop” for approvals, which is linked to the bilateral agreements issue in 1. above.