Markets

'Six Scandals: Why We Need Consumer Protection Laws Instead of Just Markets' (St. John's Legal Studies Research Paper No. 21-0001) by Jeff Sovern comments 

 Markets are powerful mechanisms for serving consumers. Some critics of regulation have suggested that markets also provide consumer protection: for example, Nobel Prize-winning economist Milton Friedman said “Consumers don’t have to be hemmed in by rules and regulations. They’re protected by the market itself.” This article tests the claim that the market provides consumer protection by examining several recent incidents in which companies mistreated consumers and then exploring how the companies’ sales to consumers fared. The issue also has normative implications because if markets consistently protected consumers, society would need fewer regulations and regulators, as Friedman suggested. 

The article finds a more nuanced situation than Friedman and other critics theorized. In three--possibly four--instances, businesses’ sales actually increased after their misconduct became public, despite the fact that, in at least two cases, consumers had told pollsters they would avoid patronizing the company. In two or perhaps three cases discussed in the article, companies suffered declines in sales after their misbehavior became public, and it seems likely that a scandal was at least partly the cause. In those latter cases, the scandal became known only because of laws and those who enforce them, suggesting that it is the very rules that Friedman decried that led to a market response. In other words, laws helped the market achieve a better outcome by enabling consumers to learn of information that they wished to take into account in making purchasing decisions. Though it is impossible to know what would have happened if the problematic conduct had not occurred, the evidence suggests that markets alone are often not enough to protect consumers, or at least that markets are not a reliable consumer protection mechanism. Indeed, in five of the six scandals discussed in the paper, the strong likelihood is that in the absence of rules, regulators, and consumer attorneys, injured consumers would not have been compensated and the troublesome conduct would not have elicited a response that deterred future misconduct. It thus appears that rules and those who enforce them are sometimes the only source of consumer protection. 

The Article also offers hypotheses for when consumers will and will not avoid a company that has misbehaved. Factors that may affect consumer response to misconduct include how the choice to patronize the company is presented to consumers; how difficult it is to switch to other providers (e.g., the cost of switching from one bank to another); whether the company has presented itself as catering to consumer values but failed to deliver; and how many consumers are affected.

Environment

The Exec Summary of the final report of the Independent Review of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) 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 animals and invasive plant species. The impact of climate change on the environment will exacerbate pressures and contribute to further decline. In 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 EPBC Act focuses on nationally important matters, termed ‘matters of national environmental significance’ (MNES). Good outcomes for the environment, including heritage, cannot be achieved under the current laws. 

Cumulative impacts on MNES are not holistically addressed, as the Commonwealth and the States and Territories do not manage their environmental and heritage responsibilities in concert. The overall result for the nation is net environmental decline, rather than protection and conservation. 

The lack of integration between jurisdictions is exacerbated by the construction of the EPBC Act and the way the Commonwealth implements it. Significant efforts are made to assess and list threatened species. However, once listed, not enough is done to deliver improved outcomes for them. 

Most decisions of the Commonwealth that determine environmental outcomes are made on a project-by-project basis only when impacts exceed a certain size, and only for those parts of the environment protected under the EPBC Act. This means that cumulative impacts on the environment are not systematically considered. Rather than an integrated system of environmental management that ensure cumulative impacts are well managed, pressure to manage impacts is placed on individual projects. 

When introduced, the EPBC Act was intended to be part of a broader package of Commonwealth initiatives that worked together to protect and conserve the environment and invest in restoration. Over time, these initiatives have become disconnected. Planning, funding and regulatory decisions are not well integrated or clearly directed towards achieving long-term environmental sustainability. Given the state of decline of Australia’s environment, restoration to improve the environment is required to make it easier to accommodate future development in a sustainable way 

New National Environmental Standards should be the centrepiece of fundamental reform of national environmental law 

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. 

Legally enforceable National Environmental Standards should be made as the centrepiece of effective planning, regulation and investment. This will ensure that all decisions clearly track towards improved environmental and heritage outcomes. 

National Environmental Standards should be a set of binding and enforceable Regulations. They should be one set of rules that apply nationwide. The Commonwealth should make the Standards, and a formal process for doing so should be set out in the EPBC Act. This should include consultation with Indigenous Australians; science, environmental and business stakeholders; and the broader community. 

Consultation with States and Territories is essential. However, the process cannot be one of negotiated agreement to accommodate existing rules or development aspirations. To do so would result in a patchwork of protections or rules set at the lowest bar. 

National Environmental Standards should set clear requirements for those that interact with the EPBC Act and clear bounds for decision-makers. Standards should prescribe how activities at all scales, including actions, decisions, plans and policies contribute to outcomes for the environment. 

National Environmental Standards should be concise, specific and focused on the requisite outcomes, with compliance focused on attaining the outcomes. Standards should not be highly prescriptive processes where compliance is achieved by ‘ticking the boxes’ to fulfil a process. This is necessary to focus attention on whether environmental outcomes are being achieved and shift from the current mindless adherence to a process. 

The full suite of National Environmental Standards recommended by the Review (Appendix B) should be adopted in full and immediately implemented. To accelerate this process, the Review has developed detailed recommended Standards for:

• matters of national environmental significance (MNES) 

• Indigenous engagement and participation in decision-making 

• compliance and enforcement data and information. 

Other necessary National Environmental Standards set out in Appendix B should be developed without delay. The full suite of Standards will provide clear rules and improved decision making. Together with a sound accreditation process, the full suite of Standards will provide confidence that any agreements with States, Territories or other parties under the EPBC Act will achieve good environmental outcomes, as well as streamlined development approval decisions. 

National Environmental Standards for matters of national environmental significance 

The current arrangements and decision-making requirements are not focused on outcomes for MNES and allow considerable discretion by the decision-maker. Requirements are buried within hundreds of pages of legislation, statutory documents, and unenforceable guidelines and policies. 

National Environmental Standards for MNES developed by the Review clearly prescribe the outcomes in managing the environment. This is important to help the community know what they can expect from the EPBC Act. It is important for business – who seek clear and consistent rules – and it is important for decision-makers and regulators because it gives clarity on the outcomes their decisions need to support. 

The law must require the National Environmental Standards for MNES to be applied, with only the Commonwealth Environment Minister able to make a decision that is inconsistent with the Standards. This should be a rare exception that must be demonstrably and transparently justified in the public interest. 

National Environmental Standards should be applied to multiple scales of decision-making 

Ideally, National Environmental Standards for MNES should be applied in a way that supports a shift to a more holistic way of managing the environment. The Standards enable the intended outcomes of the EPBC Act to be more effectively integrated into broader environmental management responsibilities and activities of others (such as States and Territories) – so long as they can demonstrate that they can act consistently with the Standards. A management plan, regional plan, environmental planning policy, development assessment and approval regulation or control, or program of investment should individually, or as part of a broader system of management, demonstrate that the outcomes in the Standards are being achieved. 

When applied at a system scale, a decision at the project scale must not prevent the National Environmental Standards for MNES from being met. ‘Hard lines’ and ‘no-go zones’ in the Standards are equally relevant to the project scale. A system that allows for developments that impact certain habitats is not consistent with a Standard that requires impacts on these habitats to be avoided. Similarly, if the Standards require that the values or attributes of a heritage place or property are to be protected to achieve the outcome, then a project-level decision cannot allow a development to destroy or compromise those values or attributes. 

The National Environmental Standards for MNES provide flexibility by outlining clear outcomes but not dictating how these should be achieved. For example, where the Standards allow ecologically feasible offsets to balance habitat loss from a development, this balance could be achieved in different ways. A decision-maker could impose the requirement on an individual project approval. Alternatively, it could achieve the outcome in a collective way at the system level, where the offset obligations of multiple projects are delivered by a centralised approach. The outcome is important, not the path to achieve it. 

Regardless of whether the rules are applied at a system or project scale, the National Environmental Standards for MNES support more streamlined decision-making for development proposals. If the outcomes are clear and legally required, then it does not matter who makes project assessment and approval decisions. 

The recommended National Environmental Standards for MNES developed by the Review are an immediate step that can be taken. They clarify the existing settings of the EPBC Act to define clear limits of acceptable impacts while allowing flexibility for development. They represent an improvement on the status quo where opaque rules and unfettered discretion in decision-making can result in poor environmental outcomes. Progress towards stabilising the current rate of decline of MNES can be made if the recommended Standards for MNES are accepted in full and immediately implemented. 

The National Environmental Standards must evolve 

The recommended National Environmental Standards for MNES cannot deliver the level of protection required to alter the current trajectory of environmental decline. They are constrained by the current requirements of the EPBC Act. The Act needs to change so that Standards can be set in a way that enables the environment and our iconic places to be protected, maintained and actively enhanced. This is necessary to ensure ecologically sustainable development (ESD). ESD, including the sustainable management of heritage, 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. 

The recommended National Environmental Standards for MNES are also constrained by the quality of data, information and systems available to describe and apply them. A quantum shift is required so that Standards can become granular and measurable. With better information, Standards can be applied with greater precision and efficiency. For example, accurate mapping of habitat for threatened species provides clear and accessible information. Currently, this information is provided as a general scientific description, which then requires expert interpretation. 

When the application of the National Environmental Standards is underpinned by quality data, information and systems, the Standards can support faster and lower-cost assessments and approvals, including the capacity to automate consideration of low-risk proposals. 

Precise, quantitative National Environmental Standards that provide for effective environmental protection and biodiversity conservation will ensure that development is sustainable in the long term. Settling only for the full suite of Standards recommended by the Review, rather than pursuing the fundamental reform of the EPBC Act that is needed and the investment in restoration that is required, means accepting the continued decline of our iconic places and the extinction of our most threatened plants, animals and ecosystems. 

National Environmental Standards are the centrepiece of a broader reform framework 

National Environmental Standards are the centrepiece of reforms needed to deliver effective environmental protection and biodiversity conservation, and more efficient decision-making. 

The recommended National Environmental Standards developed in detail by this Review should be implemented, and the remainder of the full suite of Standards should be developed and implemented immediately. The full suite of Standards is necessary to support an immediate improvement in decision-making by the Commonwealth, as well as confidence that any agreements with States, Territories or other parties will achieve good environmental outcomes and streamlined development approval decisions. 

In isolation, National Environmental Standards are insufficient. A broader framework of reform is required to provide confidence that good decisions are being made about Australia’s environment in a way that adheres to the law. Reform is also required to understand if Australia is on track to deliver the intended environmental outcomes, or what adjustments might be needed. 

Key elements of the broader reform framework recommended by the Review are:

• respectful inclusion of Indigenous Australians’ knowledge and views in decision-making 

• the provision of comprehensive expert advice to decision-makers 

• full transparency of decisions that are made 

• independent auditing of decisions, regardless of who makes them 

• appropriate legal review and access to justice 

• high-quality accessible data and information 

• strong, independent compliance and enforcement 

• comprehensive monitoring, evaluation and reporting on environment outcomes. 

The protections of the EPBC Act should focus on core Commonwealth environmental responsibilities The focus of the EPBC Act should be on the Commonwealth’s core responsibilities for protecting the environment and conserving biodiversity. The Act, and the National Environmental Standards that 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 Heritage and National Heritage, Ramsar wetlands, and nationally important species and ecological communities. 

Contributions to the Review have suggested that amendments to the EPBC Act be made to remove the Commonwealth’s role in regulating the impacts from coal and coal seam gas on water resources, and in regulating nuclear activities. The Review considers the Commonwealth should maintain an ability to intervene where any activity (not just large coal mining or coal seam gas projects) is likely to have a significant impact on cross-border water resources. Similarly, for community confidence, the Commonwealth should retain the capacity to ensure nuclear (radioactive) activities are managed effectively and in accordance with best practice. 

The Review does not support the many proposals received to broaden the environmental matters that the EPBC Act specifically deals with. To do so would result in a muddling of responsibilities, leading to poor accountability, duplication and inefficiency. 

Climate change is a significant and increasing threat to Australia’s environment. However, 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. 

The Review considers there is merit in mandating proposals required to be assessed and approved under the EPBC Act or by an accredited party (due to their impacts on nationally protected matters), to transparently disclose the full emissions profile of the development. The Act should also require that development proposals explicitly consider the effectiveness of their actions to avoid, mitigate or offset impacts on nationally protected matters under specified climate change scenarios. 

This position is consistent with the foundational intergovernmental agreements that underpin how the Commonwealth manages the environment. It was agreed that emissions would be dealt with by national-level strategies and programs, rather than by the EPBC Act. 

National Environmental Standards will support greater integration of Commonwealth, State and Territory environmental responsibilities 

The construct of Australia’s federation means that the management of Australia’s environment is a shared responsibility. The Commonwealth, States and Territories need to work together, and in partnership with the community, to effectively manage Australia’s environment and iconic places. 

Jurisdictions have agreed their respective roles and responsibilities for protecting the environment and, where possible, have agreed that they will accommodate each other’s laws and regulatory systems. This is a sound ambition, and more needs to be done to realise it. 

The National Environmental Standards are designed to provide a pathway for the Commonwealth to recognise and accredit the regulatory processes and environmental management activities of others. Setting clear, legally enforceable rules also means that decisions should be made consistently, regardless of who makes them. The Standards enable the management of Australia’s environment to be better integrated across jurisdictions. 

In the immediate term, implementing the National Environmental Standards through bilateral accreditation can achieve this. This may require a State or Territory to amend their environmental management arrangements to enable them to demonstrate that they can meet the Standards. Over time, the preferable arrangement would be for State and Territory laws be amended to adopt the Standards made under the EPBC Act, enabling jurisdictions to fully accommodate the requirements of the Commonwealth through their own laws. By accrediting States and Territories, the way business is regulated can be streamlined by removing duplicative processes that can be costly to business and result in little tangible benefit to the environment. 

The reforms recommended by this Review are not about the Commonwealth relinquishing its responsibilities. Rather, they are about the Commonwealth meeting its obligations in a more effective and efficient way, including by accrediting others to deliver against the National Environmental Standards. They enable the Commonwealth to lift its focus from process-driven project-level transactions to the achievement of national level environmental outcomes, and oversight of how the environmental management systems and project-level decisions of others contribute to outcomes. 

The reforms recommended by the Review will enable the Commonwealth to step up its own efforts to deliver nationally important outcomes for the environment, and to show national leadership on the environment. This includes:

• applying the National Environmental Standards to its own decision-making 

• stronger Commonwealth-led national and regional planning 

• the mechanisms to deliver long-term and substantial investment in restoration 

• improved data and information 

• the frameworks to enable effective monitoring and reporting of environmental outcomes. 

The EPBC Act should continue to be about sustainable management of the environment and the achievement of ecologically sustainable development. However it needs fundamental reform to ensure that future generations can enjoy Australia’s unique environment and iconic places and heritage. 

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. Environmental management is inadequate without incorporating the knowledge, land and sea management practices of Indigenous Australians. 

The EPBC Act lags well behind leading practice, and as a result, the operation of the Act forgoes the enormous benefits that can be derived when Indigenous knowledge is fully considered in decision-making. 

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 way the advice of the Indigenous Advisory Committee (IAC) is sought and taken into account by decision-makers typifies the culture of tokenism. The EPBC 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 Engage Early – Guidance for proponents on best practice Indigenous engagement for environmental assessments under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). This sets out expectations for applicants for EPBC Act approval, but it is not required or enforceable. There is a lack of transparency about how the Environment Minister factors Indigenous matters into decision-making for EPBC Act assessments. 

Through an Indigenous-led process, the Review has developed a recommended National Environmental Standard for Indigenous engagement and participation in decision-making. The purpose of this Standard is to ensure that Indigenous Australians who speak for and have traditional knowledge of Country are empowered to participate in decision-making, and their views and knowledge are respectfully and transparently considered in the operation of the EPBC Act. 

This National Environmental Standard should be implemented immediately, to take the first steps to improve how decision-makers listen to Indigenous Australians and respectfully harness the value of their knowledge of managing Country. It will ensure that, where appropriate, Indigenous land and sea management practices can be applied to the operational aspects of the EPBC Act to help improve outcomes for MNES and for the Australian environment. Refinements to this Standard should be pursued through an Indigenous-led co-design process. 

This National Environmental Standard seeks to complement existing Commonwealth, State and Territory legal frameworks that recognise cultural rights and interests of Aboriginal and Torres Strait Islander peoples – such as Native Title, statutory land rights and heritage protection. It sets out the minimum requirements for meaningful engagement and participation of Indigenous Australians in the legislative and policy processes related to the EPBC Act. 

The National Environmental Standard is based on key principles such as the right of Indigenous people to self-determination, the right for Indigenous people to derive benefit from the sharing and use of their knowledge, and the provision of support and resources to Indigenous Australians where engagement is required as part of a statutory process. As with the Standards for MNES, this Standard is constrained by the current settings of the EPBC Act. Amendments are needed to enable other principles, such as the principle of free, prior and informed consent, to be fully incorporated into the Standard. 

The role of the IAC should be substantially recast. The EPBC Act should establish an Indigenous Engagement and Participation Committee, responsible for providing the Environment Minister with policy advice on the National Environmental Standard for Indigenous engagement and participation in decision-making, and for monitoring and reporting on the effectiveness of its implementation. The IAC should advise the Commonwealth Minister on the application of this Standard to decision-making, including:

• the making and review of all National Environmental Standards listing decisions 

• Commonwealth-led national and regional planning 

• the incorporation and use of Indigenous knowledge in the information supply chain 

• other decisions, as requested. 

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 nominating them for World Heritage listing or listing them as National Heritage or Commonwealth Heritage under the EPBC Act. At the national level, Indigenous cultural heritage is also protected under 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 peoples 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, or after an approval has been issued. 

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 jurisdictional arrangements need to work together to avoid duplication or regulatory gaps. 

The destruction of the Indigenous heritage in the Juukan Gorge in Western Australia was approved under State laws, and Commonwealth intervention under the ATSIHP Act did not occur. The outcry from this event – from Traditional Owners and Indigenous leaders, from shareholders and from the Australian community – has garnered international attention. Other large companies have subsequently taken stock of their approvals in response to shareholder and community pressure. The current laws that protect Indigenous cultural heritage in Australia are well behind community expectations. They do not deliver the level of protections that Indigenous Australians and the community expect, and they do not work well with the way developments are assessed, approved and conducted. 

The national-level laws for Indigenous cultural heritage protection require immediate and comprehensive review. On 20 July 2020, the Environment Minister and Minister for Indigenous Australians announced a commitment to a national engagement and co-design process for modernising the protection of Indigenous cultural heritage in Australia, but little detail is available about how this will occur. 

A sound starting point for the review of cultural heritage protection laws is the Best Practice Standards in Indigenous Cultural Heritage Management and Legislation that has been developed by the Heritage Chairs and Officials of Australia and New Zealand, in partnership with Indigenous heritage leaders. The review of heritage laws 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 effectively interact with the development assessment and approval and regional planning processes of the EPBC 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 3 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 board of management is established to work in conjunction with the DNP. 

The legal settings in the EPBC Act have created an unbalanced power relationship between the DNP (as the lease holder) and Traditional Owners, resulting in long-standing tensions between the boards of management and the DNP. The legal construction of the position means that the DNP 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 boards or when a board has been unable to reach a consensus view. Contributions to the Review from Traditional Owners and the Land Councils who support them, indicate that the current settings for joint management are unsatisfactory, falling well short of their aspirations for genuine joint decision-making or sole management. 

A shared vision for success is needed. This should be done for each park to reflect local differences. Without a shared vision any change is likely to deliver unintended outcomes, diluted focus, or underinvestment in the transition needed. The first step must be to reach agreement on the long-term goals for each of the jointly managed parks, and the nature of the relationship the Traditional Owners want to have with the Commonwealth. The legal, policy, institutional and transitional 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 recognises that improved outcomes are achieved when Indigenous Australians have a genuine say in the design and delivery of the policy and programs that affect them. This is reflected in COAG’s commitments in the Partnership Agreement on Closing the Gap 2019-2029. It is important that reform to the EPBC Act be conducted in a way that is consistent with these commitments. The recommended Indigenous Engagement and Participation Committee should play a key leadership role in the reform process. 

Legislative complexity 

The EPBC Act is complex, its construction is dated, 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, which creates unnecessary regulatory burdens for business and restricts 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 siloed way. The Act also interacts with a wide range of other Commonwealth environment, heritage and Indigenous legislation. These interactions include inconsistency and conflicts, which drives complexity and uncertainty when applying the Act. 

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. 

The EPBC Act needs to be completely overhauled. This will involve both immediate and ongoing change, with sensible staging of legislative reform required. Legislative amendments should be immediately made to address known inconsistencies, gaps, and conflicts that can deliver improvements to the operation of the Act. 

The EPBC Act must also be amended to effectively deliver the legal framework of National Environmental Standards, accreditation of alternative decision-makers, and audit and oversight of these arrangements. 

The National Environmental Standards should immediately be established through a straightforward technical amendment to provide a legislative basis for them. This is an important first step. However, the effectiveness of the Standards and the efficiency of their application are limited without more comprehensive changes. Changes need to be made to those parts of the EPBC Act that interact with the Standards because they would need to be applied alongside the existing rules in the Act. More complex amendments are needed to significantly reduce complexity, delivery more effective protections and improve efficiency, particularly to support accreditation. Comprehensive amendments to these parts of the Act should be pursued as a matter of priority and delivered within the next 12 months. This will ensure that legislation is amended in a way that can deliver the full benefit of the package of reforms. 

Comprehensive redrafting of the remainder of the EPBC Act (or a new set of related Acts) is also required and should be completed within 2 years. This process should consider the benefits of alternate structures for the Act, such as creating separate pieces of legislation for its key functional areas. Redrafting should also consider how to improve the interactions within the Act and with other Commonwealth legislation. 

Trust in the EPBC Act 

The community and industry do not trust 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 plus 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 Environment 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 Act decisions. Under the current arrangements, this leads to public perception that the environment is losing out to other considerations due to proponents having 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 the length of time it takes to receive an approval and perceived duplication with State and Territory processes for little additional environmental benefit. On average, complex resource-sector projects can take nearly 3 years, or 1,009 days to assess and approve. This is too long. Recent provision of additional resources has improved performance of on-time assessment and approval decisions, from 19% of key decisions made on time at the end of December 2019 to 97% by the end of September 2020. 

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 70% of the total assessment time. This is 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. 

Transparent independent advice can improve trust in the EPBC Act 

Low levels of trust are an underlying driver behind calls for independent agencies to be established to make decisions under the EPBC Act. This solution is not supported by the Review. Rather, community confidence and trust in the process should 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 the:

• Indigenous Engagement and Participation Committee – to advise on the co-design of reforms, including the National Environmental Standard for Indigenous engagement and participation in decision-making and the application of this Standard to decision-making 

• Biodiversity Conservation Science Committee (a recasting of the Threatened Species Scientific Committee) – to advise on the status of migratory species, threatened species and threatened ecological communities, and actions needed to improve their condition in regional recovery plans 

• Australian Heritage Council – to advise on heritage matters (as established under the Australian Heritage Council Act 2003) 

• Water Resources Committee – to advise on matters related to Ramsar wetlands and the impacts of projects subject to the water trigger. 

The national environmental information supply chain custodian should be a member of the ESD Committee. Other members may also be necessary to ensure the committee has the skills and expertise to execute its functions. 

The ESD Committee should provide transparent policy advice to the Environment Minister to inform decisions on the making of National Environmental Standards and strategic national plans and regional plans. This should include advice on the:

• extent to which the environment and heritage outcomes under the EPBC Act are being achieved, by developing and overseeing the implementation of a comprehensive monitoring and evaluation framework 

• development of National Environmental Standards, and recommended refinements to the Standards when outcomes are not being achieved 

• the framework and priorities for strategic national plans and Commonwealth-led regional plans 

• overall adequacy of the environmental, social, cultural and economic information available for decision-making.

On request, the ESD Committee could provide policy advice to the Minister on other issues or specific decisions, where they have relevant expertise). 

Legal standing and review 

The Review has received conflicting views 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 projects. 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 that legal challenges are politically motivated ‘lawfare’ and result in unnecessary delay. 

Third-party court actions over the life of the EPBC Act have been diverse in nature and stable in number. The ability of the public to hold decision-makers to account is a fundamental foundation of Australia’s democracy. To characterise these types of actions as ‘lawfare’ misrepresents the importance of legal review in Australian society. 

The Review does not agree that the current standing provisions in section 487 of the EPBC Act should be removed or changed. Standing has not been interpreted broadly by the courts, because it is aimed at protecting the public interest rather than private concerns. 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 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. The EPBC Act should 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 public importance, before it can proceed (for example, by seeking the advice of senior counsel). 

The recommended reforms to deliver improved transparency and robust oversight of decision-making address the underlying causes of distrust in decisions. This should reduce the need for third parties to resort to court processes to discover information. Improving participation and transparency will mean that stakeholders will be less likely, and have less justification, to resort to legal challenge. 

Legal challenges should be limited to matters of outcome, not process, to reduce litigation that does not have a material impact on the outcome. In a mature regulatory framework, judicial and merits review operate in concert. Judicial review helps ensure legal processes are followed and is 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 can delay decisions without necessarily improving outcomes. It also promotes ‘forum shopping’. 

Adjustments to legal review provisions should be made to provide for limited merits review ‘on the papers’ for development assessment and approval decisions made under the EPBC Act. This type of review should be:

• available to proponents and those with standing limited to the material available at the time of the original decision 

• apply to the approval decision and the application of conditions related to consideration of decisions where the exercise of discretion was incorrect in the circumstances or the decision was unreasonable in the circumstances. 

Limited merits review should result in either the decision being affirmed or referred to the original decision-maker with recommendations on remaking or varying the decision. 

Overlaying an entirely new legal review process on the EPBC Act in its current prescriptive form is likely to be administratively complex and have unintended consequences, leading to uncertainty. The improvements to decision-making recommended in this Review are a necessary precursor to ensure that merits review, when introduced, is focused on environmental and heritage outcomes and not process. 

Interactions with State and Territory laws 

A key criticism of the EPBC Act is that it duplicates State and Territory regulatory processes for development assessment and approval. The Review has found this is largely true, with a few exceptions. 

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. The EPBC Act requires that environmental offsets only be applied for the protected matter the approval relates to – that is, they must be 'like for like'. This policy may not be perfect, but it exceeds requirements in some jurisdictions. This results in additional or different conditions placed on projects that have better outcomes than would have been the case under State or Territory law alone. 

Frustration rightly arises when Commonwealth regulation does not tangibly correspond to better environmental outcomes, given the additional costs to business of dual processes. The extent to which the Commonwealth’s responsibilities are effectively addressed by the processes of State and Territory Governments varies between jurisdictions and over time as rules change. Under the current arrangements, the same environmental outcomes cannot be consistently replicated even though the process is duplicative. 

Efforts made to reduce duplication in development assessment and approval have not gone far enough 

The EPBC Act currently allows for the accreditation of State and Territory laws and management systems for both development assessments and approvals. 

Under an assessment bilateral agreement, the Commonwealth retains responsibility for approval decisions based on environmental impact assessments undertaken by the jurisdictions. Between July 2014 and June 2020, on average 38% of proposals under the EPBC Act were assessed (or are still being assessed) through either a bilateral assessment (25%) or accredited assessment (13%) 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. This is largely due to a lower standard, or the absence of a process for certain impacts, in State and Territory arrangements. 

Approval bilateral agreements have never been implemented. Under this type of agreement, the Commonwealth would accredit States and Territories to undertake assessment and approvals for Commonwealth matters. Under the current settings, the mechanism is inherently fragile. Particularly important amendments to the EPBC Act are needed to:

• enable the Commonwealth to complete an assessment and approval if a State or Territory is unable to do so  

• ensure agreements can endure minor amendments to State and Territory settings, rather than requiring the bilateral agreement to be remade or amended settings to be re-accredited (and consequently be subject to disallowance by the Australian Parliament on each occasion). 

In 2015, these and other necessary amendments failed to garner support in the Australian Parliament. This was in response to significant community concerns about the ability of States and Territories to uphold the national interest when applying discretion in approval decisions. A similar Bill was tabled in the Parliament in August 2020. 

Legally enforceable National Environmental Standards provide a clear pathway to accredit States and Territories 

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 Review recommends that the EPBC Act should enable the Commonwealth to recognise and accredit the regulatory processes and environmental policies, plans and programs of other parties, including States and Territories. 

The full suite of National Environmental Standards should clarify the requirements of the EPBC Act and be a legally binding mechanism that provides confidence to support the accreditation of the arrangements of States and Territories in the immediate term. Accreditation should only occur when a State or Territory can demonstrate it is capable of meeting all the Standards and, therefore, the requirements of the Act. Once accredited, a State or Territory would approve or authorise a project under its own laws, and approval from the Commonwealth Environment Minister would no longer be required. 

An accredited party must be required to make decisions in a way that is consistent with the National Environmental Standards. Only the Commonwealth Environment Minister can make a decision that is inconsistent with the Standards. This must be demonstrably justified in the public interest, and a clear statement of reasons why such a decision was made must be provided. 

A party must refer an activity to the Commonwealth Environment Minister for decision – for example, where an accredited party believes it is in the public interest to undertake an activity or make a decision that is inconsistent with the National Environmental Standards. 

Importantly, under the accreditation model recommended by the Review, the EPBC Act would still apply in the event of failure of an accredited arrangement. For example, if a project is approved by a State or Territory in a way that is not in accordance with the accredited arrangement, the project would continue to be subject to the ordinary referral, assessment and approval processes of the Commonwealth. Similarly, a project conducted in a way that is not consistent with the accredited arrangement (such as failure to implement conditions of an approval) may result in a breach of the EPBC Act. 

Accrediting State or Territory arrangements would be on an ‘opt-in’ basis, and they should be required to demonstrate that their system operates in a way that is consistent with the National Environmental Standards. This may require States and Territories to amend their legislation to meet the Standards and to satisfy accreditation requirements. While it is important that the Commonwealth provides a sound mechanism for willing States and Territories to enter these arrangements, a focus solely on accreditation at the expense of other reforms it not recommended. 

The recommended accreditation model involves 6 key steps:

• Make National Environmental Standards – to define clear outcomes for matters of national environmental significance (MNES), and for important processes, to set the legal benchmark for protecting the environment and provide the ability to measure the outcomes of decisions. 

• Accreditation assessment – a State or Territory or other suitable party demonstrates they have the capacity to deliver the outcomes of the National Environmental Standards, and the public is provided the opportunity to comment on the proposal. 

• Accreditation by the Commonwealth to provide accountability and legal certainty, involving a formal check by the Environment Assurance Commissioner to give confidence that arrangements are consistent with the National Environmental Standards and can be effectively audited the opportunity for the Parliament to consider and disallow the arrangement that the Commonwealth Environment Minister proposes to accredit formal accreditation by the Commonwealth Environment Minister. 

• Transparent pathways to enable the Commonwealth Environment Minister to intervene in a proportionate and escalating way at times when accredited arrangements are not performing well, or failing, or where there is serious risk of environmental harm. The pathways for escalation should include the ability for the Commonwealth Environment Minister to step in to make a decision where they are satisfied that a significant breach of the accredited arrangement or the National Environmental Standards is likely to occur, or to prevent serious or irreversible environmental damage the Commonwealth Environment Minister to suspend or revoke the accreditation the accredited party to request the Commonwealth make a decision (for example, where they are unable to effectively manage conflicts) or to request Commonwealth consideration of a decision that is inconsistent with the National Environmental Standards. 

• Strong audit and independent oversight by the Environment Assurance Commissioner – to give confidence that decision-makers are adhering to the National Environmental Standards and the provisions of the bilateral accreditation. 

• Regular review – to ensure accredited arrangements are contributing to environmental outcomes, and to make necessary adjustments The Commonwealth Environment Minister should retain the unfettered right to make decisions, even where an accredited arrangement is in place and working well. To avoid unnecessary disruption, uncertainty or ‘forum shopping’, this right should be exercised only at key points early in the project proposal cycle. For example, when a project is registered or when an accredited party issues its environmental impact assessment requirements. This unfettered right is distinct from the Minister’s ability to step in at any time before a decision is made to address situations such as a breach of the accredited arrangement or the National Environmental Standards, or risk of serious environmental harm. 

Accrediting another party does not mean that the Commonwealth is no longer responsible for environmental protection and biodiversity conservation. Rather, the reform directions recommended would result in greater focus on setting standards and planning, and accrediting and providing oversight of the activities of others, to ensure that national environmental outcomes are being achieved. 

Oversight by the Environment Assurance Commissioner 

Past attempts to accredit the approval processes of States and Territories have failed due to community concerns that decision-making would be too discretionary and inconsistent with national obligations and the national interest. The inherent conflicts of interest at a State and Territory level justify the community’s scepticism of the ability for these arrangements to achieve the aims and objectives of the EPBC Act. The reforms recommended by this Review are designed to address the shortcomings of past processes. 

Legally enforceable National Environmental Standards would prescribe clear outcomes, and an accredited State or Territory would need to demonstrate that they are adhering to the Standards in their decision-making. But Standards alone are not enough. They need to be buttressed by strong and independent oversight of the performance of accredited arrangements. 

The Australian Parliament and the public need confidence that accredited parties – and the Commonwealth Environment Minister – are adhering to the law by making correct decisions and properly implementing their commitments. 

A new, independent, statutory position of Environment Assurance Commissioner (EAC) should be created to provide this oversight. The EAC should be free from political interference and responsible for publicly reporting on the performance of the Commonwealth and accredited parties. The EAC would report to the Australian Parliament, through the Minister, with reports tabled within a prescribed time frame. 

The EAC should be supported by a standing, well-resourced audit function within the Department of Agriculture, Water and the Environment that would conduct recurring scheduled audits and special audits or investigations of concerns. The EAC would ensure the rigour and integrity of the audit function. The EAC would provide advice and recommendations for action to the Commonwealth Environment Minister, where issues of concern with accredited arrangements are found. The EPBC Act should require the Minister publicly respond to the EAC’s advice and recommendations, within a reasonable time frame specified in the Act. 

Commonwealth decisions and interactions with other Commonwealth laws 

Commonwealth-led assessments and approvals should be streamlined 

Even where accredited arrangements are in place with States and Territories, the Commonwealth will have an ongoing role in directly assessing and approving some developments, including:

• where accredited arrangements with States and Territories are not in place or cannot be used 

• at the request of a jurisdiction – for example, where conflicts cannot be appropriately managed 

• when the Commonwealth Minister exercises their unfettered right to make decisions 

• when the activity occurs on Commonwealth land or in Commonwealth waters 

• when the activity is undertaken by a Commonwealth agency. 

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. The development of National Environmental Standards and regional plans, and improvements in the data, information and regulatory systems, are central to improving the quality and efficiency of development assessment and approval processes. 

When in place, these reforms will identify where and in what form development is acceptable (and therefore does not need approval or can receive automated approval). The reforms will also provide clarity on the matters that will need to be considered and the required information to do this. 

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 is not required so long as the project is carried out in a particular manner. National Environmental Standards and regional plans will provide clarity on impacts that are acceptable, and those that will require assessment and approval. In many cases, this will avoid the need for referral. 

Interactions with other Commonwealth environmental management laws 

The EPBC Act operates in a way that seeks to recognise other Commonwealth environmental regulatory and management frameworks. The interplay between the Act and these other frameworks is complex. It is often more onerous than it needs to be, which leads to inefficiencies. At times the arrangements are not supported by robust systems and processes, which can compromise effectiveness in achieving intended environmental outcomes. 

The accreditation model recommended by the Review can equally be applied to other Commonwealth agencies where they can meet the National Environmental Standards. Subjecting these types of arrangements to the oversight of the EAC will provide community confidence that the Standards are applied equally across Australia, regardless of the decision-maker. 

Key interactions include the management of Commonwealth fisheries, Regional Forest Agreements (RFAs), offshore petroleum activities and the regulatory activities of other Commonwealth agencies. 

Commonwealth fisheries 

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 currently conducted on the environmental performance of all export fisheries and all Commonwealth-managed fisheries, to ensure they are managed in an ecologically sustainable way. The recommended accreditation model is designed to streamline these processes, while maintaining oversight by the Commonwealth Environment Minister of AFMA’s environmental regulation of commercial fishing operations in Commonwealth waters and jointly managed fisheries. Offshore petroleum The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) is the Commonwealth regulator for offshore energy activities in Commonwealth waters. Since 2014 significant streamlining of the environmental regulation of offshore energy activities has been achieved through the accreditation of NOPSEMA via a strategic assessment. However, the current settings for strategic assessments have significant limitations. The regulatory setting for NOPSEMA are effectively frozen, stifling continuous improvement of environmental regulation and further streamlining. The accreditation model provides a way to overcome these limitations with the current arrangements. 

Regional Forest Agreements 

A Regional Forest Agreement (RFA) is a regional plan agreed between a State and the Commonwealth for management of native forests. When first made, RFAs resulted in the protection of significant areas of forest by excluding forestry activities. 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 operations are in a World Heritage property or a Ramsar wetland). 

There are fundamental shortcomings in the interactions between RFAs and the EPBC Act. The Review has low confidence that the environmental considerations under the RFA Act are equivalent to those imposed by the EPBC Act, but recognises that some RFAs afford environmental protections that exceed the requirements of the RFA Act. RFAs rely on the States to undertake monitoring, compliance and enforcement, with little Commonwealth oversight. 

In May 2020 the Federal Court found that a forestry 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 the EPBC Act and the RFA Act should be clarified. This should be achieved by requiring that RFAs demonstrate consistency with the National Environmental Standards to avoid the need for an EPBC Act assessment and approval. Adopting the accreditation model would support greater Commonwealth oversight of the RFAs, including the effectiveness of the State-based compliance and enforcement regimes. 

Amendments to both the RFA Act and the EPBC Act will be required to implement these changes in a legally binding way. But changes to these arrangements should be pursued by the Commonwealth now to provide for equivalent protections for MNES and strong Commonwealth oversight. This will provide confidence to the community and certainty for the forestry industry, with forestry activities able to continue under well-made, well-implemented, transparent RFAs. To do this, the Commonwealth should require a State to commit to the application of the National Environmental Standards to RFAs and consequential oversight by the EAC, as a condition of any accreditation process. 

Approvals granted by other Commonwealth agencies 

The EPBC Act provides for approvals issued through other Commonwealth agencies in relation to airspace, airports, foreign aid and other activities prescribed under the Regulations – for example, sea dumping. These are known as Section 160 advice. These arrangements require the Environment Minister to conduct an environmental impact assessment and provide advice to the responsible Commonwealth Minister or agency, enabling them to issue an approval under their own laws and processes without the need for an accompanying EPBC Act approval. 

There are shortcomings in these arrangements, particularly where the approving agency does not have sufficient expertise in environmental monitoring, or compliance and enforcement. The Section 160 advice provisions should be removed, and these arrangements should be subject to the accreditation model, consistent with National Environmental Standards and subject to the oversight of the EAC. Where accreditation is not possible, the ordinary EPBC Act assessment and approval processes should apply. 

Regulation of wildlife trade 

The EPBC Act includes requirements intended to meet Australia’s international commitments as a signatory to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) and the Convention on the Conservation of Migratory Species (Bonn Convention). Some aspects of the EPBC Act go beyond Australia’s international obligations, such as restricting the take of some species listed under the Bonn Convention. Others, such as those relating to the humane transport of wildlife, do not go far enough. The Review recommends that the EPBC Act should be amended to bring requirements into line with Australia’s international obligations. 

The EPBC Act should be amended to reduce unnecessary prescription and administrative process around wildlife trade permitting. This adds additional costs for individuals, businesses and government, but provides no additional protection for endangered species. Other amendments – such as those enabling proportionate compliance and enforcement responses and reducing instances where wildlife permitting could be subject to abuse by applicants – will improve the effectiveness of these provisions. 

Planning and restoration 

Despite its purpose, the EPBC Act does not facilitate the maintenance or restoration of the environment. The current settings cannot halt the trajectory of environmental decline, let alone reverse it. 

Future development needs to be able to be accommodated in a sustainable way. For the purpose of the EPBC Act to be achieved, cumulative impacts on the environment need to be addressed, threats to the environment properly managed, and the legacy of past degradation rectified by pursuing environmental restoration at scale. 

Many of the reforms to the EPBC Act recommended by the Review will deliver greater environmental protections in the future – including National Environmental Standards that enable MNES to be protected, maintained and enhanced. 

Significant investment is also required to reverse the current trend of environmental decline and to enable future development to be sustainable. This challenge is exacerbated by the impacts of climate change. 

To do this effectively and efficiently, adaptive planning is required. Broadscale investment in restoration and sustainable land management will improve the overall state of the environment and enable Australia to accommodate future development in a sustainable way. 

The scale of the restoration challenge is beyond the ability of governments alone to solve. However, government can provide clear direction and facilitate and coordinate the contributions of others. This requires good planning and the mechanisms to support collaborative investment. 

The EPBC Act lacks comprehensive plans 

With limited exception, the way the EPBC Act operates does not support effective planning at the right scale. The Act requires some plans to be made – such as plans for World Heritage properties, National Heritage places on Commonwealth land and for Commonwealth reserves – but the effectiveness of these plans and their implementation has been variable. 

The approach to planning for the recovery of threatened species and ecological communities is piecemeal. Once listed, each threatened species and ecological community MNES is separately described and managed through individual species or community conservation advices and may also have recovery plans. Even if these plans were implemented effectively, they would still result in piecemeal planning because they focus on the needs of a single species or ecological community. 

Plans to address key threats to the environment are not required. Currently, 21 threats are listed as key threatening processes and only 6 have an up-to-date threat abatement plan. Critically, the Act has no clear mechanism to enable a quick response to acute threats, such as:

• major bushfires – which can have a devastating impact on threatened species and lead to more common species becoming rarer 

• new biosecurity incursions – which are best managed quickly, before they become established and widespread. 

Opportunities for coordinated national actions and investments to address key environmental challenges – such as feral animals, habitat restoration and adapting to climate change – are ad hoc, rather than a key national priority. 

With limited exception, the administration of the EPBC Act is not based on comprehensive planning to manage the environment on a national or regional (landscape) scale. 

National and landscape scale plans are needed 

Planning at the national and regional (landscape) scale is needed to take action where it matters most and to support adaptive management. The EPBC Act should be amended to enable adaptive regional planning approaches. These amendments, together with a commitment to make and implement plans, are necessary to support a fundamental shift in focus – from project-by-project development transactions, to effectively planning at the right scale for a sustainable environment and for sustainable future development. 

This does not mean that the Commonwealth must plan for everything. Rather, the Commonwealth, through the National Environmental Standards can be clear about national-level outcomes and priorities for MNES, which can then be incorporated into planning activities of other jurisdictions or organisations to support more holistic environmental management. 

Strategic national plans should be developed for ‘big-ticket’, nationally pervasive issues such as the management of feral animals and 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 planning should also ensure that the capability and processes are in place to quickly and effectively deal with acute threats to the environment. The current Intergovernmental Agreement on Biosecurity provides a model for this type of preparedness planning to enable rapid and coordinated responses. National-level plans will support a consistent approach to addressing issues in regional plans or to inform activities in areas where there is no regional plan. 

Regional (landscape) plans should be developed that support the management of the environment at the right scale. Three regional planning tools are recommended:

• Commonwealth-led regional recovery plans that identify recovery priorities for multiple threatened species and ecological communities at the landscape scale. 

• Ecologically sustainable development plans that identify environmental, economic, Indigenous and social priorities, incorporate outcomes for MNES and support the regulation of development. 

• Strategic assessments that consider the staged proposed development by proponents in a coordinated manner. 

The EPBC Act should set out the explicit criteria the Commonwealth should use to make its own regional plans, or to assess and accredit plans developed by other parties. These criteria could include:

• consistency with the full suite of National Environmental Standards – including those for MNES, data and information, compliance and enforcement and Indigenous participation 

• consistency with the requirements of relevant strategic national plans and regional recovery plans to effectively address threats across tenures and borders 

• clearly identified priorities for restoration and identified funding to meet environmental outcomes and shared goals 

• clearly identified responsibilities and accountabilities for implementing the actions in the plan  

• consistency with requirements for monitoring and reporting on outcomes for MNES 

• a requirement for regular (for example 5-yearly) reviews to assess whether plans are achieving their intended environmental outcomes, and to identify adjustments needed. 

Ideally, these plans would be developed in a way that allows national outcomes to be fully integrated into the land use and environmental planning systems of the States and Territories. Ecologically sustainable development plans, or similar plans developed by a State or Territory that seek to balance competing activities, should be developed in a way that is consistent with the National Environmental Standards and strategic national plans and regional recovery plans (where in place). 

Where integration with State and Territory environmental planning regimes is not possible, the Commonwealth should develop its own regional recovery plans to enable it to better manage threats to and cumulative impacts on MNES at a landscape-scale. This will have flow-on benefits for more common species and biodiversity more broadly. Regional recovery plans should prioritise protection, conservation and investment in restoration where it is most needed and delivers the biggest environmental gains. The Commonwealth’s regional planning efforts should be initially focused on those regions with the highest pressures on MNES, in biodiversity hotspots, or in areas where the Commonwealth has identified national priorities for future development. 

Government investment should align with planning priorities 

Investment to improve the environment should align with the priorities identified in the national and regional plans. 

Commonwealth programs for investment in environmental restoration have been a constant feature of national environmental policy over the past 20 years. These include the National Heritage Trust, Caring for Country, the Environmental Stewardship Program, the National Landcare Program, the Green Army, the Threatened Species Recovery Fund and the Reef Trust. 

The current streams of Australian Government funding allocated towards environmental protection, conservation and restoration, despite being aligned with MNES, are not comprehensively coordinated to prioritise investment in a way that achieves the greatest possible biodiversity benefits. 

Funding is often spread thinly across the nation, and the link between the investment of program funds on a particular project and outcomes for MNES can be difficult to discern. More recent efforts to target and prioritise funds, albeit at a modest scale, are starting to deliver results. For example, the Threatened Species Strategy has shown that with targeted investment the decline of species can be halted, and some species’ numbers are now increasing. This underscores the value of targeted and sustained investment in key species and their habitat. 

The reforms recommended by this Review, with a focus on National Environmental Standards and national and regional planning, will provide a foundation for more effective prioritisation and coordination of direct government investment in restoration. 

The regulatory levers of government, including offsets, should align with the priorities of plans 

A regional plan (such as an ecologically sustainable development plan or strategic assessment) must be consistent with the National Environmental Standards for MNES to be accredited under the EPBC Act. These plans will need to clearly demarcate areas where development is desirable and is encouraged, those areas where development must be avoided, and those areas where unavoidable impacts on MNES can be acceptable so long as an ecologically feasible offset can be delivered. Where they are acceptable, environmental offsets should deliver against the restoration priorities of a regional plan. 

The current EPBC Act environmental offsets policy states that after all reasonable efforts are made to avoid impacts, remaining impacts should be mitigated to reduce the impacts on MNES, and any residual impact can be offset. However, this is not how it has been applied in practice. Some proponents see offsets as something to be negotiated from the outset, rather than making a commitment to fulsome exploration (and exhaustion) of options to avoid or mitigate impacts. Conditions of approval most often require proponents to protect areas of habitat similar to the area that has been destroyed or damaged by the project, but compliance and enforcement of these conditions is ineffective. 

Immediate changes are required to the environmental offsets policy to ensure that offsets do not contribute to environmental decline. Offsets should only be acceptable:

• when they are applied in accordance with the recommended National Environmental Standards for MNES 

• where an offset plan demonstrates that they can be ecologically feasible 

• where outcomes from offsets can be properly monitored and measured. 

In the longer term, offsets should be enshrined in law. The EPBC Act should require:

• offsets to be ecologically feasible and deliver genuine restoration in areas of highest priority 

• a decision-maker accept offsets that encourage restoration offsets to enable a net gain for the environment to be delivered before the impact occurs 

• a public register of offsets for all Commonwealth, State or Territory offsets sites, designated as a national interest environmental dataset. 

These settings would incentivise early investment in restoration. If offsets were to be supported with greater certainty under the EPBC Act, this could catalyse 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. 

Additional mechanisms to support private investment are needed 

The Commonwealth continues to spend significant public funds to improve the environment. However, the overall level and targeting of investment has been insufficient to deliver the broad restoration required to address past loss, build resilience and adjust the environmental trajectory from its current path of decline. 

The Review has identified opportunities for national leadership beyond the EPBC Act that should be considered. This includes opportunities for greater collaboration between governments and the private sector to invest in the environment directly and to invest in innovation that reduces the costs of environmental restoration activities. 

Mechanisms are needed that leverage public and private capital to deliver the significant scale of investment in restoration that is required. The Commonwealth also has a clear role in assisting private-sector investment by improving data and key metrics of environmental health, to provide the market with certainty to encourage investment in activities that contribute to sustainability. 

The Australian Government has allocated $2.5 million in the 2020–21 Budget for further policy work related to environmental markets. This should include formal investigation of the feasibility of mechanisms that leverage private capital to deliver greater investment, including: 

• funding innovation that reduces the cost of large-scale environmental restoration 

• co-investing with private capital to improve the sustainability of private land management 

• establishing a central trust or point of coordination for private and public investment in restoration (including offsets) 

• using opportunities to leverage existing markets (including the carbon market) to help deliver restoration.

Access to Commonwealth funds and mechanisms for restoration should be made contingent on States and Territories implementing the National Environmental Standards. This provides an incentive for greater integration of Commonwealth requirements into State and Territory systems to deliver more holistic environmental management. It is also important to avoid paying for restoration in some areas, while the environment is being degraded elsewhere. 

Compliance and enforcement 

Compliance and enforcement of 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 a lack of transparency about what has been done. The Department has improved its regulatory compliance and enforcement functions in recent years. However, it still relies on a collaborative approach to compliance and enforcement, which is too weak. 

Serious enforcement actions are rarely used, which indicates 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. For example, since 2010, a total of 22 infringements have been issued for breaches of conditions of approval, with total fines less than $230,000. 

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. 

Strong, independent compliance and enforcement is required 

Independent compliance and enforcement functions that are not subject to actual or implied political direction are needed. The functions should be properly resourced and include a full toolkit of powers and systems. 

Penalties and other remedies for non-compliance and breaches of the EPBC Act, or of an arrangement accredited under the Act, need to be adequate to ensure that compliance is regarded as mandatory and not optional. The cost of non-compliance should be an active deterrent, not simply a ‘cost of doing business’. 

A strong compliance and enforcement regulatory stance is needed. It is important to be proportional and to work with people where inadvertent non-compliance has occurred. However, a culture that does not shy from firm action where needed is also important. Strong compliance and enforcement activities protect the integrity of most of the regulated community, who spend time and money to comply with the law. Those who break the rules should face appropriate consequences. 

A National Environmental Standard for compliance and enforcement is recommended. This Standard should apply to the compliance and enforcement of requirements under the EPBC Act and those under accredited arrangements. The Standard requires compliance and enforcement functions to be delivered in a way that: 

• is independent of actual or implied political interference 

• deters illegal behaviour, through high penalties for non-compliance 

• is proportionate to the seriousness of the non-compliance is transparent and accountable, including public registers of action. 

Where the Commonwealth Environment Minister is responsible for an approval, the Commonwealth should deliver compliance and enforcement functions consistent with the National Environmental Standard. This includes where the Commonwealth Environment Minister has issued an approval under the EPBC Act, and for activities that should have been the subject of an application for approval (such as illegal land clearing). 

The Commonwealth should immediately assign independent powers for Commonwealth compliance and enforcement to the Secretary of the Department of Agriculture, Water and the Environment, with the current compliance functions consolidated into an Office of Compliance and Enforcement established within the Department. Consistent with the Standard, the exercise of these functions should not be subject to ministerial direction. 

The Office of Compliance and Enforcement should be provided with a full suite of modern regulatory powers and tools, and adequate resourcing. This will enable the Commonwealth to deliver compliance and enforcement consist with the National Environmental Standard and provide confidence that the law is being enforced. 

An accredited party (such as a State or Territory) should be primarily responsible for compliance and enforcement of approvals under an accredited arrangement, and activities that should have been the subject of an application for approval through that party. 

An accredited party would be subject to the National Environmental Standard for compliance and enforcement, and it would need to report adherence with this Standard to the EAC. Reporting on accredited arrangements should include reporting on all potential breaches and the compliance and enforcement response taken by the accredited party. 

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 for the community. The Department’s systems for information analysis and sharing are antiquated and the user experience is clunky and cumbersome for proponents and for members of the community interested in a project and its impacts on the environment. 

The collection of data and information is fragmented and disparate. There is no clear, authoritative source of environmental information 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 quantum shift will support the reforms recommended by this Review. Better data and information will improve the efficiency of: 

• setting clear outcomes, effectively plan to deliver them and efficiently regulate to achieve them 

• ensuring the mechanisms for public and private-sector investment in restoration are well targeted and delivers the best returns 

• understanding the baseline starting point, and to monitor and report on the impact of activities and to adjust them where needed. 

A national supply chain of information will deliver the right information at the right time to those who need it. This supply chain should be an easily accessible, authoritative source that the public, proponents and governments can rely on. A clear strategy to deliver an efficient supply chain is needed so that each investment made contributes to building and improving the system. Immediate investment in the information supply chain is needed to support reform. We can't wait until perfect data is available. 

The Commonwealth should assign a Custodian to provide national level leadership, coordination and responsibility for the national environmental information supply chain. Adequate resources should be provided to deliver the evidence base for Australia’s national system of environmental management, including a complete overhaul of departmental and public-facing systems. 

The essential information required to underpin the National Environmental Standards for MNES should be identified and designated as a set of National Environmental Information Assets (NEIAs). This approach is consistent with broader government reforms to identify, prioritise and manage high-value and critical datasets. The requirement to deliver and improve these NEIAs should be enshrined in the EPBC Act. 

A National Environmental Standard for data and information has been developed by the Review and should be immediately implemented to provide clarity on expectations for the use and provision of information and data and improve accountability. The recommended Standard includes requirements for:

• sharing environmental data – these requirements apply to proponents who seek approval, parties accredited under the Act, and researchers where data has been generated as part of a government-funded project 

• ensuring that decisions made under the EPBC Act or an accredited arrangement are informed by the best available evidence. 

An outcomes-based approach to implementing the National Environmental Standards requires long-term monitoring to measure outcomes against a clearly established baseline. 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 and for efficient regulation. The recent financial commitment from the Australian Government and the Western Australian Government to the collaborative Digital Environmental Assessment Program, which offers significant potential efficiencies for both proponents and governments, is a good first step in this direction. The program will deliver a single online portal for assessments and biodiversity databases. However, at this stage it is only a pilot of a potential national system. 

The short-term costs of a quantum shift in information and data will be high, but improvements will deliver efficiencies and cost-savings to decision-makers and proponents. The adoption of the recommended National Environmental Standard for data and information will increase the accessibility and usability of existing data, lowering the overall level of government investment required. 

Ultimately, better data and information will enable National Environmental Standards to be more precise and to support faster decision-making. It will enable governments to determine what activities will deliver the biggest environmental gains and where adjustments are needed to enable outcomes to be achieved. 

Monitoring, evaluation and reporting of outcomes 

There is no effective framework to support a comprehensive, data-driven 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, but these have not all been met. Efforts are not comprehensive, activities that are done lack coordination and often the focus is on ‘bare minimum’ administrative reporting. 

The current approach lacks a clear articulation of environmental outcomes and a mechanism for evaluating and reporting on the effectiveness of the EPBC Act. The lack of an overarching framework to support evidenced-based and adaptive management, and to optimise monitoring and reporting effort remains a key shortcoming that needs to be addressed. 

Evaluating the effectiveness of environmental policy is challenging, given that attributing observed outcomes to specific interventions can be difficult. But that does not mean environmental monitoring and evaluation should be dismissed as too hard. Effective monitoring, evaluation and reporting of the EPBC Act is essential to achieve improved environmental outcomes and maintain public trust in the environmental management systems. 

The development of a coherent framework to monitor and evaluate the effectiveness of the EPBC Act in achieving its environmental outcomes is needed. Key reforms recommended by this Review, particularly the establishment of National Environmental Standards provide a solid foundation for this framework. Each Standard for MNES should have a monitoring and evaluation plan, and these plans should be underpinned by a National Environmental Standard for environmental monitoring and evaluation. 

The Ecologically Sustainable Development (ESD) Committee should be assigned responsibility for developing this framework and establishing the baseline to measure performance in implementing the National Environmental Standards for MNES. The ESD Committee should prepare an annual statement for the Minister on progress implementing the framework, how the outcomes for MNES are tracking and whether the Standards need adjustment. 

The Commonwealth Government has a clear leadership and stewardship role in maintaining a healthy national environment, and international reporting obligations that require a national-level view. The national State of the Environment (SoE) report is established under the Act as the mechanism to ‘tell the national story’ on Australia’s system of environmental management. The report provides an important point-in-time overview, but it is an amalgam of insights and information and does not generate a consistent data series over time. There is no feedback loop and no requirement to stop, review, and where necessary change course. 

A broader monitoring and evaluation framework, developed in collaboration all jurisdictions, is needed to better understand the performance of the different parts of the national environmental management system. Improvements in monitoring, evaluation and reporting for the EPBC Act provide a springboard for greater collaboration and alignment in national reporting, underpinned by the national environmental information supply chain. 

The Commonwealth should lead a revamp of the national SoE report. The report should examine the state and trends of Australia’s environment and the underlying drivers of these trends, including interventions that have been made, and current and emerging pressures. It should provide an outlook for Australia’s environment, based on future scenarios. It also needs to examine the effectiveness of all interventions made to manage the environment. The Commonwealth should be required to formally respond to the national SoE report, in the form of a national plan for the environment that identifies priority areas for action and the levers that will be used to act. 

National environmental-economic accounts will be a useful tool for tracking Australia’s progress to achieve ESD. More efforts should be made to accelerate the development of these accounts and embed them across the implementation of the EPBC Act and as a core input to SoE reporting. The Act should include a requirement to table a set of national environmental-economic accounts in the Parliament alongside traditional budget reporting. 

The reform pathway 

The EPBC Act is ineffective and inefficient, and reform is long overdue. Past attempts at reform have been largely unsuccessful. The inaction of the last 2 decades is in large part the reason why the review recommends such fundamental reform to the Act and its operation, and the urgency with which reform should be pursued. 

Commitment to a clear pathway of staged reform is required. The reform agenda recommended 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. 

Immediate steps should be taken to start reform. 

The Act should be immediately amended to:

• create a provision to make the National Environmental Standards as Regulations 

• improve the durability of the settings for accreditation of other decision-makers 

• provide comprehensive powers for effective compliance and enforcement, and ensure that the use of these powers is not subject to ministerial direction 

• establish the position of Environment Assurance Commissioner with responsibility for strong oversight and audit of Commonwealth decision-making and accredited arrangements 

• establish the recommended committee structure. 

The recommended National Environmental Standards developed in detail by this Review should be adopted, and the remainder of the full suite of Standards should be developed and implemented immediately to set clear rules and to improve decision-making. The full suite of Standards is required to support the accreditation of the environmental management arrangements of States, Territories and other parties and to provide the community with confidence that these arrangements are sound. 

The process for delivering complex reforms and the mechanisms required to underpin continuous improvement should also commence immediately. This will enable policy development to occur, implementation plans to be finalised and resourcing commitments to be made. These reforms include:

• establishing the framework for monitoring, reporting and evaluating the performance of the EPBC Act 

• 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 Custodian responsible for delivering a national environmental information supply chain and for overhauling the systems needed to capture value from the supply chain 

• examining the feasibility of mechanisms to leverage private-sector investment and deliver the scale of restoration required for future development in Australia to be sustainable. 

Within 12 months, a second tranche of reform should be completed that includes comprehensive amendments to the EPBC Act. These amendments should:

• substantially re-write Part 3 through to Part 10 to: enable proactive measures to recover, repair and enhance matters of national environmental significance 

• support the efficient integration of the National Environmental Standards with decision-making of the Commonwealth or an accredited party 

• introduce limited merits review support strategic national and regional planning 

• provide the legislative basis for the national environmental information supply chain custodian and the National Environmental Information Assets. 

The National Environmental Standards for MNES should then be revised to reflect the level of protection and restoration necessary for the environment to be sustainable. A program of Commonwealth-funded national and regional plans should commence to support the implementation of the Standards. 

The final phase of reforms should complete the legislative overhaul, including reforms related to the management of Commonwealth reserves and the settings for the Director of National Parks and joint-management. This phase should be finalised by 2022. 

Effective administration of a regulatory system is not cost free. The recommended reforms 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, governments should pay for elements that are substantially public benefits (for example, the development of National Environmental Standards), while businesses 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). Costs should be shared for elements of the regulatory system that have mixed benefits (for example, data and information). 

The Commonwealth, in its leadership capacity, should instigate a refresh of the underpinning intergovernmental agreements on the environment, including:

• a shared future program of regional planning priorities and priorities for strategic national plans 

• leveraging Commonwealth reforms in data and information monitoring and reporting on environmental outcomes across Australia through the State of the Environment report 

• ensuring the recovery of fair costs from proponents to fund the respective regulatory systems of the States, Territories and the Commonwealth.

The recommended reforms seek to build community trust that the national environmental laws deliver effective protections and regulate businesses efficiently. The recommendations of the Review provide a path to effective environmental protection and biodiversity conservation, efficient regulation of business and confidence that the Act is working as intended to achieve nationally important environmental outcomes. 

The recommended reforms are substantial, but fundamental changes are necessary to reverse the current state of environmental decline and to build the resilience of the environment to withstand future threats. 

Adopting these reforms will mean that Australia can meet its future development needs in a sustainable way that delivers 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.