The Executive Summary from the report states
Protection of Australia’s environment and iconic places
Australia’s natural environment and iconic places are in an overall state of decline and are under increasing threat. The current environmental trajectory is unsustainable.
The overwhelming message received by the Review is that Australians care deeply about our iconic places and unique environment. Protecting and conserving them for the benefit of current and future generations is important for the nation.
The evidence received by the Review is compelling. Australia’s natural environment and iconic places are in an overall state of decline and are under increasing threat. The pressures on the environment are significant—including land-use change, habitat loss and degradation, and feral animal and invasive plant species. The impact of climate change on the environment is building, and will exacerbate pressures, contributing to further decline. Given its current state, the environment is not sufficiently resilient to withstand these threats. The current environmental trajectory is unsustainable.
The EPBC Act is ineffective. It does not enable the Commonwealth to effectively protect environmental matters that are important for the nation. It is not fit to address current or future environmental challenges.
The way the EPBC Act operates means that good outcomes for the environment cannot be achieved under the current laws. Significant efforts are made to assess and list threatened species. However, once listed, not enough is done to deliver improved outcomes for them.
In the main, decisions that determine environmental outcomes are made on a project-by-project basis, and only when impacts exceed a certain size. This means that cumulative impacts on the environment are not systematically considered, and the overall result is net environmental decline, rather than protection and conservation.
The EPBC Act does not facilitate the restoration of the environment. Given the state of decline of Australia’s environment, restoration to improve the environment is required to enable future development to be sustainable.
Key threats to the environment are not effectively addressed under the EPBC Act. There is very limited use of comprehensive plans to adaptively manage the environment on a landscape or regional scale. Coordinated national action to address key threats—such as feral animals—are ad hoc, rather than a key national priority. Addressing the challenge of adapting to climate change is an implied, rather than a central consideration.
Fundamental reform of national environmental law is required, and National Environmental Standards should be the foundation The EPBC Act has no comprehensive mechanism to describe the environmental outcomes it is seeking to achieve, or to ensure decisions are made in a way that contributes to them. Ecologically sustainable development (ESD) should be the overall outcome the Act seeks to achieve. ESD means that development to meet today’s needs is undertaken in a way that ensures the environment, natural resources and heritage are maintained for the benefit of future generations.
Legally enforceable National Environmental Standards should be made to set the foundations for effective regulation, to ensure that decisions made under the EPBC Act clearly track towards ESD.
National Environmental Standards should be binding and enforceable regulations. The Commonwealth should make them, through a formal process set out in the EPBC Act. Standards should be developed in consultation with Indigenous, science, environmental and business stakeholders, and the community. Consultation with states and territories is essential. However, the process cannot be one of negotiated agreement with rules set at the lowest bar.
National Environmental Standards should prescribe how decisions made contribute to outcomes for the environment. They should also include the fundamentally important processes for sound and efficient decision-making. Standards should be concise, specific and focused on the requisite outcomes, with compliance focused on attaining the outcome. National Environmental Standards should not be highly prescriptive, where compliance is achieved by ‘ticking the boxes’ to fulfil a process.
As the centrepiece of regulation, National Environmental Standards should set clear rules for decision-making. Current arrangements, buried within hundreds of statutory documents, fail to provide clearly defined and specific rules, and they enable considerable discretion in decision-making. Instead, the law must require the Standards to be applied, unless the decision-maker can demonstrate that the public interest and the national interest is best served otherwise.
National Environmental Standards will clearly demarcate the objectives in managing the environment, and the outcomes sought. This is important to help the community know what they can expect from the EPBC Act. It is also important for business, who seek clear and consistent rules.
Interim Standards are recommended as a first step, to facilitate rapid reform and streamlining. These Interim Standards will need to define clear limits of impacts to protect nationally important environmental matters. Ultimately, Standards should be granular and measurable, and provide clarity as to where and how development can occur so as not to compromise environmental sustainability. A quantum shift will be required in the quality of accessible data and information, to increase the granularity of Standards.
Precise, quantitative Standards, underpinned by quality data and information, will provide for effective environment protection and biodiversity conservation and ensure that development is sustainable in the long-term. They will also support faster and lower-cost assessments and approvals, including the capacity to automate consideration of low-risk proposals.
The EPBC Act should focus on core Commonwealth responsibilities
The focus of the EPBC Act should be the Commonwealth’s core responsibilities. The Act, and the National Environmental Standards that would underpin its operation, should focus on the places, flora and fauna that the Commonwealth is responsible for protecting and conserving in the national interest—including World and National Heritage, Ramsar wetlands, and nationally important species and ecological communities. Under the Act, these nationally important matters are called ‘Matters of National Environmental Significance’ or MNES.
Proposals have been made to remove the Commonwealth’s role on regulating water impacts from coal and coal seam gas, and for nuclear activities. The Review considers the Commonwealth should maintain an ability to intervene where developments may result in the ‘irreversible depletion or contamination’ of cross-border water resources. Similarly, for community confidence, the Commonwealth should retain the capacity to ensure nuclear (radioactive) activities are managed effectively.
The Review does not support the many proposals received to broaden the environmental matters dealt with in the EPBC Act. To do so would result in muddled responsibilities, leading to poor accountability, duplication and inefficiency.
While climate change is a significant and increasing threat to Australia’s environment, successive Commonwealth Governments have elected to adopt specific mechanisms and laws to implement their commitments to reduce greenhouse gas emissions.
The EPBC Act should not duplicate the Commonwealth’s framework for regulating emissions. It should, however, require that development proposals explicitly consider the effectiveness of their actions to avoid or mitigate impacts on nationally protected matters under specified climate change scenarios.
This position is consistent with the foundational intergovernmental agreements. It was agreed that emissions would be dealt with by national-level strategies and programs, rather than the EPBC Act. The Review considers there is merit in mandating proposals required to be assessed and approved under the Act (due to their impacts on nationally protected matters), to transparently disclose the full emissions profile of the development.
Planning at the national and regional (landscape) scale is needed to take action where it matters most and to support adaptive management Regional (landscape) plans should be developed that support the management of threats at the right scale and to set clear rules to facilitate and manage competing land uses. These plans should prioritise investment in protection, conservation and restoration to where it is most needed, such as biodiversity hotspots, and where the environment will most benefit.
Ideally these plans would be developed in conjunction with states and territories. Where this cooperation is not possible, the Commonwealth should develop its own plans to manage threats on a landscape-scale, and cumulative impacts on MNES. The Commonwealth’s regional planning efforts should be focused on those regions of highest pressure on MNES.
Strategic national plans should be developed for ‘big-ticket’, nationally pervasive issues such as the management of feral animals or adaptation of the environment to climate change. These plans should guide the national response and enable action and investment by all parties to be effectively targeted to where it delivers the greatest benefit. National-level plans will support a consistent approach to addressing issues in regional plans or inform activities in areas where there is no regional plan.
More needs to be done to restore the environment
The operation of the EPBC Act needs to shift from permitting gradual decline, to halting decline and restoring the environment, so that development can continue in a sustainable way. Active mechanisms are required to restore areas of degraded or lost habitat to achieve the net gain for the environment that is needed.
The proposed regional plans are key mechanisms that can set the priorities for restoration and adaptation and identify where investment will have the best returns for the environment. The Review has identified opportunities for national leadership outside the EPBC Act that should be considered. Existing markets, including the carbon market can be leveraged to help deliver restoration. There are also opportunities for greater collaboration between governments and the private sector, to invest in both in the environment directly, and in innovation to bring down the costs of environmental restoration activities.
National Environmental Standards and national and regional (landscape) plans will support greater harmonisation with the states and territories The construct of Australia’s federation means that the management of Australia’s environment is a shared responsibility. The Commonwealth and states and territories need to work effectively together, and in partnership with the community, to manage Australia’s environment and iconic places well.
Jurisdictions have agreed their respective roles and responsibilities for protecting the environment, and where possible, they have agreed that they will accommodate each other’s laws and regulatory systems. This is a sound ambition, but more needs to be done to realise it.
The National Environmental Standards and improved planning frameworks aim to support greater cooperation and harmonisation between the Commonwealth, states and territories. Setting clear, legally enforceable rules means that decisions should be made consistently, regardless of who makes them, providing a pathway for the Commonwealth to recognise and accredit the regulatory processes of others. In pursuing greater harmonisation, the Commonwealth should retain the ability to step in to make decisions, where it is in the national interest to do so.
National Environmental Standards and national and regional plans will allow the Commonwealth to step up its focus to achieve nationally important environmental outcomes. They will also support a shift away from the current transactional focus of the EPBC Act, that can be duplicative, costly to business and result in little tangible benefit to the environment.
Indigenous culture and heritage
Indigenous knowledge and views are not fully valued in decision-making
The Review considers that the EPBC Act is not fulfilling its objectives as they relate to the role of Indigenous Australians in protecting and conserving biodiversity and heritage, and promoting the respectful use of their knowledge.
Over the last decade, there has been a significant evolution in the way Indigenous knowledge, innovations and practices are incorporated into environmental management, for example through investment in Indigenous Rangers. The EPBC Act lags well behind leading practice.
Western science is heavily prioritised in the way the EPBC Act operates. Indigenous knowledge and views are diluted in the formal provision of advice to decision-makers. This reflects an overall culture of tokenism and symbolism, rather than one of genuine inclusion of Indigenous Australians.
The operation of the EPBC Act Indigenous Advisory Committee (IAC) exemplifies the culture of tokenism. The Act does not require the IAC to provide decision-makers with advice. The IAC is reliant on the Minister inviting its views. This contrasts to other statutory committees under the Act, which have clearly defined and formal roles at key points in statutory processes.
The Department has issued guidance on best practice Indigenous engagement. This sets out expectations for applicants for EPBC Act approval, but it is not required or enforceable. It is not transparent how the Commonwealth Minister factors in Indigenous matters in decision-making for EPBC Act assessments.
The proposed National Environmental Standards should include a specific standard on best practice Indigenous engagement. The purpose of the Standard is to ensure that Indigenous Australians who speak for and have traditional knowledge of Country have had the proper opportunity to contribute to decisions made under the EPBC Act.
The role of the IAC should be substantially recast. The EPBC Act should establish an Indigenous Knowledge and Engagement Committee, responsible for providing the Commonwealth Minister with advice on a Standard for Indigenous engagement. This should include the development and application of the Standard, and ensuring its effectiveness through monitoring, evaluation and review.
Indigenous Australians seek, and are entitled to expect, stronger national-level protection of their cultural heritage
Places of natural and cultural value that are important to the world or Australia can be recognised and protected by listing them as National Heritage or World Heritage under the EPBC Act. At the national level, Indigenous cultural heritage is protected under numerous other Commonwealth laws, including the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (ATSIHP Act). The ATSIHP Act can be used by Aboriginal and Torres Strait Islander people to ask the Commonwealth Environment Minister to protect an area or object where it is under threat of injury or desecration and where state or territory law does not provide for effective protection.
Contributions to the Review have highlighted the importance of cultural heritage issues being dealt with early in a development assessment process. However, under the ATSIHP Act, the timing of a potential national intervention is late in the development assessment and approval process.
Indigenous Australians have emphasised to the Review the importance of the Commonwealth’s ongoing role in Indigenous cultural heritage protection. Because the states and territories also play a key role in the legal framework for Indigenous heritage protection, the arrangements of the jurisdictions need to work well together to avoid duplication or regulatory gaps.
The current laws that protect Indigenous cultural heritage in Australia need comprehensive review. This review should explicitly consider the role of the EPBC Act in providing national-level protections. It should also consider how comprehensive national-level protections are given effect, for example how they interact with the development assessment and approval and regional planning processes of the Act.
The EPBC Act does not meet the aspirations of Traditional Owners for managing their land
The EPBC Act provides the legal framework for the joint management of three Commonwealth National Parks—Kakadu, Uluṟu-Kata Tjuṯa and Booderee. Traditional Owners lease their land to the Director of National Parks (DNP), a statutory position established under the Act. For each of these parks, a joint management board is established to work in conjunction with the DNP.
The structure of the DNP means that position is ultimately responsible for decisions made in relation to the management of national parks, and for the effective management of risks such as those relating to occupational health and safety. Given this responsibility, the DNP has made decisions contrary to the recommendations of joint boards or has made a decision when the joint board has been unable to reach a consensus view. The contributions to the Review from Traditional Owners and the Land Councils who support them, indicate that the current settings for joint management fall short of their aspirations for genuine joint decision-making or indeed sole management.
The first step is to reach consensus on the long-term goals for jointly managed parks, and the nature of the relationship between Traditional Owners and the Commonwealth. The policy, institutional and transition arrangements required to successfully achieve these goals should then be co-designed with Traditional Owners.
Reforms should be co-designed with Indigenous Australians
This Review has highlighted significant shortcomings in the way the views, aspirations, culture, values and knowledge of Indigenous Australians are supported by the EPBC Act.
The Australian Government has committed to recognising improved outcomes for Indigenous Australians through enabling co-design and policy implementation with them. This commitment is reflected in COAG’s commitments in the Partnership Agreement on Closing the Gap 2019-2029. The proposed Indigenous Knowledge and Engagement committee should play a key leadership role in the co-design of reforms.
Legislative complexity
The EPBC Act is complex, its construction is archaic, and it does not meet best practice for modern regulation. Complex legislation makes it difficult, time-consuming and expensive for people to understand their legal rights and obligations. This leads to confusion and inconsistent decision-making, creating unnecessary regulatory burdens for business, and restricting access to justice.
The policy areas covered by the EPBC Act are inherently complex. The way the different areas of the Act work together to deliver environmental outcomes is not always clear and many areas operate in a largely siloed way. There is a heavy reliance on detailed prescriptive processes that are convoluted and inflexible, meaning engaging with the Act is time-consuming and costly. This is particularly the case for environmental impact assessment. Convoluted processes are made more complex by key terminology being poorly defined or not defined at all.
In the short-term, legislative amendments to the EPBC Act are required to address known inconsistencies, gaps, and conflicts in the Act. In the longer-term, comprehensive redrafting of the Act (or a new set of related Acts) is required. This should be done following the development of the key reforms proposed by this Review. During re-drafting, consideration should be given to dividing the Act, creating separate pieces of legislation for the key functional areas of the Act, or along thematic lines. This will ensure that legislation is developed in a way that supports the desired approach, rather than inadvertently hindering it.
Efficiency
A key criticism of the EPBC Act is that it duplicates state and territory regulatory frameworks for development assessment and approval. The Review has found that, with a few exceptions, this is largely true.
There is no systematic way to determine the additional environmental benefits resulting from the EPBC Act. There are examples where the Act has led to demonstrably different environmental outcomes than those arising from state and territory processes. While far from perfect, the EPBC Act requirement for ‘like-for-like’ offsets exceeds those in some jurisdictions and results in additional or different conditions placed on projects resulting in better outcomes than would have otherwise been the case.
Frustration rightly arises when Commonwealth regulation does not, or does not tangibly, correspond to better environmental outcomes, given the additional costs to business of dual processes.
Efforts made to harmonise and streamline with the states and territories have not gone far enough
The EPBC Act allows for the accreditation of state and territory laws and management systems for both assessments and approvals.
Under a bilateral assessment agreement, the Commonwealth retains responsibility for approvals, based on environmental impact assessments undertaken by the jurisdictions. For the 5-year period between July 2014 and June 2019, 37% of proposals under the EPBC Act were assessed (or are still being assessed) through either a bilateral assessment (25%) or accredited assessment (12%) arrangements with jurisdictions. The proportion of projects covered by an assessment bilateral agreement is limited, because not all state and territory processes can deliver an adequate assessment of matters that are protected under the EPBC Act.
Approval bilateral agreements have never been implemented. Under this type of agreement, the Commonwealth would devolve its approval decision-making powers to a state or territory decision-maker. Under the current settings, the mechanism to devolve approval decisions is inherently fragile. Particularly important amendments are needed to:
- enable the Commonwealth to complete an assessment and approval if a state or territory is unable to
- ensure agreements can endure minor amendments to state and territory settings, rather than requiring the bilateral agreement to be remade (and consequently be subject to disallowance by the Australian Parliament on each occasion).
These and other necessary amendments have failed to garner support in the Australian Parliament. In 2015 the Parliament did not support these amendments, in response to significant community concerns about the ability of states and territories to uphold the national interest when applying discretion in approval decisions.
Legally enforceable National Environmental Standards provide a clear pathway for greater devolution
The foundational intergovernmental agreements on the environment envisaged that jurisdictions would accommodate their respective responsibilities in each other’s laws and regulatory systems, where possible. This is a sound ambition, and one that governments should continue to pursue.
The National Environmental Standards proposed by the Review would provide a legally binding mechanism to provide confidence to support greater devolution. Accrediting an alternative regulator would be on an ‘opt-in’ basis, and they would need to demonstrate that their system can achieve the National Environmental Standard. This may require states and territories to adapt their regulations to meet National Environmental Standards and to satisfy accreditation requirements.
The proposed devolution model involves 5 key steps:
- National Environmental Standards—to set the benchmark for protecting the environment in the national interest and provide the ability to measure the outcomes of decisions.
- State or territory or other suitable authority to demonstrate that their systems meet National Environmental Standards—this element includes a formal check to give confidence that arrangements are sound.
- Formal accreditation by the Commonwealth Minister—this element is intended to provide accountability and legal certainty, and the Commonwealth Minister should seek the advice of the proposed Ecologically Sustainable Development Committee prior to an accreditation decision.
- A transparent assurance framework—this element provides confidence that parties are implementing the processes and policies as agreed. It should include the mechanisms for the Commonwealth to step in when it is in the national interest to do so.
- Regular review and adaptive management—this ensures decision-making contributes to the objectives established in the Standards. Pursuing greater devolution does not mean that the Commonwealth ‘gets out of the business’ of environmental protection and biodiversity conservation. Rather, the reform directions proposed would result in a shift with a greater focus on accrediting and providing assurance oversight of the activities of other regulators, and in ensuring national interest environmental outcomes are being achieved.
Commonwealth-led assessments and approvals should be further streamlined
The Commonwealth should retain its capability to assess and approve projects. Commonwealth assessments and approvals will be required where:
- accredited arrangements are not in place or cannot be used at the request of a jurisdiction
- when the Commonwealth exercises its ability to step in on national interest grounds
- when the activity occurs on Commonwealth land, or
- when the activity is undertaken by a Commonwealth agency outside a state's jurisdiction.
The Review has identified opportunities to streamline environmental impact assessments and approvals conducted by the Commonwealth. The most significant gains will be realised by fundamental changes to the way the EPBC Act works. Reform proposals including the development of National Environmental Standards and regional plans, and improvements in the data, information and regulatory systems discussed further in this report are central to improving the quality and efficiency of Commonwealth-led processes.
Streamlining the assessment pathways available under the EPBC Act will reduce the complexity of and efficiencies in the current process. The first step in all assessment pathways is known as ‘referral’, where the decision-maker determines whether a proposal requires more detailed assessment. For proposals where the need for detailed assessment and the relevant environmental matters are obvious, the referral creates an additional, pointless step in the process.
For other proposals, the lack of clarity on the requirements of the EPBC Act means that proponents refer proposals for legal certainty. More than half of all referrals result in a decision that detailed assessment and approval is not required, or not required so long as it is carried out in a particular manner. National Environmental Standards and regional plans will provide clarity on impacts that are acceptable, and those which will require assessment and approval, enabling the referral step to be avoided.
Other Commonwealth environmental management laws interact with the EPBC Act
The EPBC Act operates in a way that seeks to recognise other environmental regulatory and management frameworks, including the management of Commonwealth fisheries, Regional Forest Agreements (RFAs) and offshore petroleum activities. The interplay between the Act and these other frameworks is often more onerous than it needs to be.
The Australian Fisheries Management Authority (AFMA) is responsible for the day-to-day management and compliance of Commonwealth fisheries. Assessments under the EPBC Act are conducted on the environmental performance of all export fisheries and all Commonwealth-managed fisheries to ensure that fisheries are managed in an ecologically sustainable way. There are opportunities to streamline the multiple assessment and permitting processes needed to undertake commercial fishing operations in Commonwealth waters or jointly managed fisheries. Given the maturity of the fisheries management framework administered by AFMA, and the improvement in environmental outcomes that have resulted, the Review is confident that further streamlining can be achieved while maintaining assurance in the outcomes.
An RFA is a regional plan, agreed between a state and the Commonwealth for management of native forests. RFAs balance economic, social and environmental demands on forests and seek to deliver ecologically sustainable forest management, certainty of resource access for the forest industry and protection of native forests as part of Australia’s national reserve system. The EPBC Act recognises the Regional Forest Agreements Act 2002 (RFA Act), and EPBC Act assessment and approvals are not required for forestry activities conducted in accordance with an RFA (except where forestry operations are in a World Heritage property or a Ramsar wetland).
During the course of this Review, the Federal Court found that an operator had breached the terms of an RFA and should therefore be subject to the ordinary controlling provisions of the EPBC Act. Legal ambiguities in the relationship between EPBC Act and the RFA Act should be clarified, so that the Commonwealth’s interests in protecting the environment interact with the RFA framework in a streamlined way.
Increase the efficiency of the regulation of wildlife trade
The EPBC Act gives effect to Australia’s obligations as a member of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), including the international movement of wildlife specimens. The requirements of the Act exceed Australia’s obligations under CITES. Aspects of wildlife trade provisions in the Act result in administrative process and costs for individuals, business and government, while affording no additional protection to endangered species. The Act should be amended to align its requirements with CITES and to provide for a more efficient permitting process.
Trust in the EPBC Act
The community and industry distrust the EPBC Act, and there is merit in their concerns
The community and industry do not trust the EPBC Act and the regulatory system that underpins its implementation.
A dominant theme in the 30,000 contributions received by the Review is that many in the community do not trust the EPBC Act to deliver for the environment. Limited access to information about decisions and the lack of opportunity to substantively engage in decision-making under the Act further erodes trust.
The EPBC Act and its processes focus on the provision of environmental information, yet the Commonwealth Minister can and should consider social and economic factors when making an approval decision. The community can’t see how these factors are weighed in EPBC Act decisions. Under the current arrangements, this leads to concern that the environment loses out to other considerations as proponents have undue influence on decision-makers.
The EPBC Act is also not trusted by industry. They generally view it as cumbersome, pointing to duplication, slow decision-making, and legal challenges being used as a tool to delay projects and drive up costs for business (often called ‘lawfare’).
An underlying theme of industry distrust in the EPBC Act relates to perceived duplication with state and territory processes and the length of time it takes to receive an approval. On average, complex resource sector projects can take nearly 3 years, or 1,013 days to assess and approve, and this is too long. Recent provision of additional resources has improved on-time approval decisions from 19% to 87% of key decisions made on time.
Lengthy assessment and approval processes are not all the result of a slow Commonwealth regulator. On average, the process is under the management of the proponent for more than three quarters of the total assessment time, indicative of the time taken to navigate current requirements and collect the necessary information for assessment documentation. For business, time is money. Delays, regardless of when they occur, can result in significant additional costs, particularly on large projects.
Legal standing and review
The Review has received highly conflicting evidence and viewpoints about the appeal mechanisms under the EPBC Act. Where concerns arise about environmental outcomes associated with a decision, public focus turns to challenging high profile decisions. Legal review is used to discover information and object to a decision, rather than its proper purpose to test and improve decision-making consistent with the law. Industry is very concerned about the delay to projects that can arise from politically-motivated legal challenges.
The public discourse on legal challenges is focused on large projects, with considerable economic benefits that are in highly valued environmental areas. Pro-development groups argue that the extended standing provisions (standing beyond a person directly affected by a decision) should be removed from the Act.
The Review is not yet convinced that extended standing should be curtailed. Broad standing remains an important feature of environmental legislation, particularly given the presence of collective harm resulting from damage to environmental or heritage values. The evidence suggests that standing has not been interpreted broadly by the courts. The courts have the capacity to deal with baseless or vexatious litigation and litigation with no reasonable prospect of success can be dismissed in the first instance. It may though be beneficial for the EPBC Act to require an applicant seeking to rely on the extended standing provisions to demonstrate that they have an arguable case, or that the case raises matters of exceptional public importance before the matter can proceed.
In a mature regulatory framework, judicial and merits review operate in concert. Judicial review helps ensure legal processes are followed, complemented by merits review to ensure decisions are meeting the intent of the legislation, not simply following processes.
Full merits review is not advised. Opening decisions on appeal or review to the admission of new documentation or materials for consideration delays decisions without necessarily improving outcomes. It also promotes forum shopping.
Reforms to the EPBC Act should focus on improving transparency of decision-making, to reduce the need to resort to court processes to discover information. Legal challenges should be limited to matters of outcome, not process, to reduce litigation that does not have a material impact on the outcome.
Adjustments to legal review provisions should be made to provide for limited merits review ‘on the papers’. This form of review limits the considerations to those matters that were raised and maintained by the applicant during the due course of the regulatory decision or matters arising from a demonstrable material change in circumstances.
Transparent independent advice can improve trust in the EPBC Act
Low levels of trust are an underlying driver behind calls for independent institutions to be established to make decisions under the EPBC Act. This solution is not supported by the Review. It is entirely appropriate that elected representatives (and their delegates) make decisions that require competing values to be weighed and competing national objectives to be balanced.
Community confidence and trust in the process could be enhanced by the provision of transparent, independent advice on the adequacy of information provided to a decision-maker.
The statutory advisory committee structures in the EPBC Act should be recast. An Ecologically Sustainable Development (ESD) Committee should be established, comprising an independent chair and the chairs of these committees:
- Information and Knowledge (to advise on science, social impacts, economics and traditional knowledge)
- Indigenous Knowledge and Engagement (to advise on the co-design of reforms and the National Environmental Standard for Indigenous engagement)
- Threatened Species Science (to advise on the status of threatened species and ecological communities and actions needed to improve their condition in regional recovery plans)
- Australian Heritage Council (as established under the Australian Heritage Council Act 2003—to advise on heritage matters)
- A committee with water resources expertise (to advise on the impacts of projects subject to the water trigger).
The ESD Committee should provide transparent advice to the Minister to inform decisions on the making of National Environmental Standards, regional plans, and the accreditation of arrangements for devolving decision-making. The Commonwealth Minister could ask for their advice on other decisions, where they had relevant expertise.
Data, information and systems
Decision-makers, proponents and the community do not have access to the best available data, information and science. This results in sub-optimal decision-making, inefficiency and additional cost for business, and poor transparency to the community. The Department’s systems for information analysis and sharing are antiquated. Cases cannot be managed effectively across the full lifecycle of a project, and the user experience is clunky and cumbersome for both proponents and members of the community interested in a project.
The collection of data and information is fragmented and disparate. There is no single national source of truth that people can rely on. This adds cost for business and government, as they collect and recollect the information they need. It also results in lower community trust in the process, as they question the quality of information on which decisions are made, and the outcomes that result from them.
A national ‘supply chain’ of information is required so that the right information is delivered at the right time to those who need it. This supply chain should be an easily accessible ‘single source of truth’ on which the public, proponents and governments can rely. A custodian for the national environmental information supply chain is needed, and the Commonwealth should clearly assign responsibility for national level leadership and coordination. Adequate resources should be provided to develop the systems and capability that are needed to deliver the evidence base for Australia’s national system of environmental management. The recent financial commitment from the Australian Government and the Western Australian Government to the collaborative Digital Environmental Assessment Program is a good first step in this direction. The program will deliver a single online portal for assessments and biodiversity databases.
In the short-term, the granularity of National Environmental Standards is limited by the information available to define and apply them to decision-making. A quantum shift in the quality of information is required to transform standards from qualitative indicators of outcomes to quantified measures of outcomes. To apply granular standards to decision-making, governments need the capability to model the environment, including the probability of outcomes from proposals. To do this well, investment is required to improve knowledge of how ecosystems operate and to develop the capability to model them. This requires a complete overhaul of the systems to enable improved information to be captured and incorporated into decision-making.
Monitoring, evaluation and reporting
There is no effective framework to support a comprehensive, data-based evaluation of the EPBC Act, its effectiveness in achieving intended outcomes, and the efficiency of implementation activities. The Act includes some requirements for monitoring and reporting. These are not comprehensive, and follow-through is largely focused on bare minimum administrative reporting, rather than genuine monitoring and evaluation of outcomes to learn lessons, adapt and improve.
The development of a coherent framework to monitor and evaluate the effectiveness of the EPBC Act in achieving its outcomes and the efficiency of its implementation is needed. Key reforms proposed by this Review, particularly the establishment of National Environmental Standards and regional plans, provide a solid foundation for the development of a monitoring and evaluation framework for the Act as a whole. The framework must be backed in by commitment to its implementation.
The national State of the Environment (SoE) report is the established mechanism that seeks to ‘tell the national story’ on Australia’s system of environmental management. While providing an important point in time overview, the report is an amalgam of insights and information, and does not generate a consistent data series across reports. It lacks a clear purpose and intent. There is no feedback loop, and as a nation there is no requirement to stop, review, and where necessary change course.
A revamp of SoE reporting is required. The national SoE report should examine the state and trends of Australia’s environment, and the underlying drivers of these trends, including interventions that have been made. National environmental economic accounts will be a useful tool for tracking Australia’s progress to achieve ESD. The SoE report should provide an outlook and the government should be required to formally respond, identifying priority areas for action, and the levers that will be used to act.
Efforts to finalise the development of these accounts should be accelerated, so that in time they can be a core input to SoE reporting.
Restoration Given the state of decline of Australia’s environment, restoration and adaptation are required to enable future development to be sustainable. Available habitat needs to grow to be able to support both development and a healthy environment.
Environmental offsets do not offset the impacts of developments
Under the current arrangements, as a condition of approval, developers can be required to protect areas similar to that which has been destroyed or damaged. This is known as an environmental offset.
Environmental offsets are often poorly designed and implemented, delivering an overall net loss for the environment. The stated intent of the offsets policy is to encourage proponents to exhaust reasonable options to avoid or mitigate impacts. In practice, offsets have become the default negotiating position, and a standard condition of approval, rather than only used to address residual impacts.
Offsets do not offset the impact of development, and overall there is a net loss of habitat. Proponents are permitted to clear habitat in return for protecting other areas of the same habitat from future development. It is generally not clear if the area set aside for the offset is at risk from future development.
Offsets need to include a greater focus on restoration and should be enshrined in the law. The EPBC Act should require that offsets only be considered when options to avoid and then mitigate impacts have been demonstrably exhausted. Where applied, offsets should deliver genuine restoration, avoiding a net loss of habitat.
There is an opportunity to incentivise early investment in restoration. If offsets were to be supported with greater certainty under the EPBC Act, then this could be the catalyst for a market response. Proponents are generally not in the business of managing habitats as their core business. There are, however, expert land managers and specialist project managers who deliver these services. The right policy and legal settings would provide certainty for these players to invest in landscapes, confident that proponents will be in the market to purchase offsets based on these investments down the track.
There are opportunities for restoration beyond the EPBC Act
There are opportunities beyond the EPBC Act that should be explored to accelerate investment in restoration.
The carbon market, which already delivers restoration, could be better leveraged to deliver improved biodiversity outcomes. The Australian Government has recently agreed to carbon market reforms that will increase the competitiveness of carbon-farming when compared to other land uses. More could be done if credit for biodiversity outcomes could be ‘stacked’ on top of carbon credits, with one area of land delivering both carbon and biodiversity outcomes.
There is an opportunity to provide the policy settings to better leverage private interest in investing in the environment as well as drive down the cost of restoration. Globally, there is growing interest from the philanthropic and private sectors to invest in a way that improves environmental outcomes. A biodiversity market is one destination for this capital, another is co-investment to bring down the cost of environmental restoration, growing the habitat available to support healthy systems. The merits of the application of these types of models for investing in environmental improvement will be further explored prior to the finalisation of the Review.
Compliance, enforcement and assurance
Monitoring, compliance, enforcement and assurance under the EPBC Act is ineffective
There has been limited activity to enforce the EPBC Act over the 20-year period it has been in effect, and the transparency of what has been done is low.
While the Department has improved its regulatory compliance and enforcement functions in recent years, it still relies on a collaborative approach to compliance and enforcement. This is too weak.
Serious enforcement actions are rarely used, indicating a limited regard for the benefits of using the full force of the law where it is warranted. When issued, penalties are not commensurate with the harm of damaging a public good of national interest. Since 2010, a total of 22 infringements have been issued for breaches of conditions of approval, with total fines less than $230,000. By way of contrast, individual local governments frequently issue more than this amount in paid parking fines annually.
The compliance and enforcement powers in the EPBC Act are outdated. Powers are restrictive and can only be applied in a piecemeal way across different parts of the Act due to the way it is constructed. The complexity of the legislation, impenetrable terminology and the infrequency with which many interact with the law, make both voluntary compliance and the pursuit of enforcement action difficult.
A strong, independent cop on the beat for monitoring, compliance and enforcement is required
An independent compliance and enforcement regulator that is not subject to actual or implied direction from the Commonwealth Minister should be established. The regulator should be responsible for monitoring compliance, enforcement, monitoring and assurance. It should be properly resourced and have available to it a full toolkit of powers.
Penalties and other remedies for non-compliance and breaches of the EPBC Act and the National Environmental Standards need to be adequate to ensure that compliance is regarded as mandatory not optional. The costs of non-compliance should not be regarded as simply a cost of doing business.
The Commonwealth Minister must retain responsibility for setting the rules (including making decisions and setting conditions for development approvals), but the regulator should be responsible for enforcing them.
The compliance and enforcement regulator must have a clear and strong regulatory stance. It remains important to be proportional, and to work with people where inadvertent non-compliance has occurred. However, the regulator needs to establish a culture that does not shy from firm action where needed.
An independent compliance and enforcement regulator will build public trust in the ability of the law to deliver environmental outcomes and that breaches of the law will be fairly, proactively and transparently managed. Strong compliance and enforcement activities protect the integrity of most of the regulated community—who spend time and money to comply with the law—with those who break the rules facing appropriate consequences.
Devolved decision-making needs strong assurance
The Review proposes reforms that will support greater devolution in decision-making. Clear, legally enforceable National Environmental Standards combined with strong assurance are essential to community confidence in these arrangements. The independent compliance and enforcement regulator should play a key role in providing assurance of devolved arrangements.
This will require a focus on oversight of these devolved and strategic arrangements, including auditing the performance of devolved decision-makers. The devolved decision-maker should remain primarily responsible for project-level monitoring, compliance, enforcement and assurance, and transparently report actions taken. The Commonwealth should also retain the ability to intervene in project-level compliance and enforcement, where egregious breaches are not being effectively enforced by the state or territory regulator.
The reform pathway
The EPBC Act is ineffective, and reform is long overdue. Past attempts at reform have been largely unsuccessful. Commitment to a clear pathway for reform is required. The reform agenda proposed is not one to ‘set and forget’. Settings should be monitored and evaluated, and the path forward adjusted as lessons are learnt and new information and ways of doing things emerge.
Effective administration of a regulatory system is not cost free. The reforms proposed seek to improve the overall efficiency of the system. It is important to consider how to best fund the implementation of a reformed system, including the fair costs that should be recovered from proponents. In principle, government should pay for elements that are substantially public benefits (for example, the development of standards), while business should pay for those elements of the regulatory system required because they derive private benefits by impacting the environment (for example, approvals and monitoring, compliance and enforcement). There are elements of the regulatory system that have mixed benefits where costs should be shared (for example, data and information).
Immediate steps to start reform should be taken. In the first instance, amendments should be made to:
- fix duplication, inconsistencies, gaps and conflicts
- enable National Environmental Standards to be made
- improve the durability of the settings for devolved decision-making.
Interim National Environmental Standards should be made, to set clear rules for decision-making and to support greater devolution in decision-making.
Similarly, in the short-term, the conversation should focus on delivering complex reforms and the mechanisms to underpin continuous improvement so that the policy development and implementation plans can be finalised and resourcing commitments made. These reforms include:
- reforms to establish the framework for monitoring, reporting and evaluating the performance of the EPBC Act, with a key focus on the arrangements for National Environmental Standards
- starting the conversation with the states and territories about state and territory-led regional planning priorities and priorities for strategic national plans
- committing to sustained engagement with Indigenous Australians, to co-design reforms that are important to them—the culturally respectful use of their knowledge, effective national protections for their culture and heritage, and working with them to meet their aspirations to manage their land in partnership with the Commonwealth
- appointing a national data and information custodian, responsible for delivering an information supply chain and overhauling the systems needed to capture value from the supply chain
- establishing the mechanisms to better leverage investment, to deliver the scale of restoration required for future development in Australia to be sustainable.
Once the policy direction is settled, and key initiatives are underway, the final phase of reform should involve complete legislative overhaul to establish the remaining elements of reform and to focus on implementing the reformed system.
The proposed reforms seek to build community trust that the national environmental laws deliver effective protections and regulate businesses efficiently. It is impossible for the Review to satisfy the aspirations of every person with an interest in the environment or in business development. Rather, the Review has attempted to provide a way forward, to ensure effective environment protection and biodiversity conservation and efficient regulation of business. The EPBC Act in its current form achieves neither.
The proposed reforms are substantial, but the changes are necessary to set Australia on a path of ESD. This path will deliver long-term economic growth, environmental improvement and the effective protection of Australia’s iconic places and heritage for the benefit of current and future generations
