Australia: The response to the Hawke Review: federal environmental law to be reformed, not re-written

The environmental assessment and approvals process in Australia will be streamlined, and tentative steps taken towards the harmonisation of environmental assessment and approvals legislation across States and Territories, according to the Australian Government's response to the Hawke review of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) ("EPBC Act").

For project proponents, legislative changes likely to result from the response will reduce some of the uncertainty stemming from the application of the EPBC Act. However, despite the fact that the Government Response largely has bipartisan support, it is still some time before any changes are likely to be implemented, and many of the complexities of the EPBC Act will remain. For this reason, proponents and developers must continue to carefully manage EPBC Act issues when undertaking projects in Australia.

Four main changes to the EPBC Act

The Government Response, which has the broad support of the Coalition, does not commit to drafting an entirely new EPBC Act, as recommended by the Hawke Review. However, it proposes a raft of important amendments following four key themes:

  1. a shift from individual project approvals to strategic approaches, including new regional environment plans;
  2. streamlined assessment and approval processes;
  3. better identification of national environmental assets, including listing "ecosystems of national significance" as a matter of national environmental significance; and
  4. co-operative national standards and guidelines to harmonise approaches between jurisdictions and foster co-operation between stakeholders.

The Government Response recognises the contribution of the Council of Australian Government (COAG) in pushing for increased uptake of strategic approaches; key themes of the Government Response and the associated environmental reform package were foreshadowed by the COAG communiqué last year.

Strategic approaches

The Government has committed to increasing the use of strategic approaches available under the Act, including strategic assessments for consideration of environmental impacts arising from various activities in a particular region, and approval of actions undertaken in accordance with the strategically assessed policy, program or plan.

Effective use of strategic assessments could provide significant time savings and greater certainty for project proponents, particularly for projects involving large-scale native vegetation clearing and offsets. A close working relationship between governments will be necessary to ensure processes are not duplicated as far as possible.

Key changes affecting proponents of large projects

The major aspects of the Government Response which will be relevant for proponents of large projects are:

  • the new approval trigger;
  • amendments to environmental impact assessment processes for individual projects;
  • the scope for public participation and public interest litigation; and
  • changes to compliance and enforcement processes.

Each of these are discussed below.

New approval triggers – what's in and what's out?

Ecosystems of national significance

A key component of the Government Response is the introduction of new matter of environmental significance – "ecosystems of national significance" – to better integrate the conservation of ecosystems into development planning and environmental assessment. This is intended to promote landscape-scale approaches to environmental protection.

Clear parameters will be set around how ecosystems of national significance will be identified, spatially delineated and assessed using a strategic assessment, or other strategic method such as regional environmental improvement plans.

Greenhouse gas trigger

The Hawke Review recommended introducing an interim greenhouse trigger through regulation to require greenhouse emissions-intensive developments to be referred to the Minister. For example, a similar trigger has already existed for some time in Victoria where projects with potential emissions exceeding 200,000 tonnes of CO2-e per annum must be referred to the Minister to decide if an Environmental Effects Statement is required for the project.

The greenhouse gas trigger was one of 15 recommendations which was not accepted on the basis that the Government considers its proposed carbon price mechanism to be the most effective method to address carbon emissions.

Streamlining environmental impact assessment for individual projects

The Government has accepted that improvement is required in relation to the environmental impact assessment process for individual projects, including:

  • providing clearer information in pre-referral discussions;
  • clearer identification of parties taking the action that will, or is likely to have, a significant impact on a matter of national environmental significance;
  • development of a range of further guidelines and policy statements relating to the amended EPBC Act, including significance guidelines, industry-specific guidelines on significant impact, and guidelines on continuing use and prior authorisation; and
  • allowing the Minister to make a binding determination as to particular classes of actions that will have a significant impact, and to request information on alternatives for projects referred for approval.

Other practical changes include penalty provisions clarifying when actions will be considered to be inconsistent with a "particular manner decision", and the ability to apply for an amendment of the requirements of a particular manner decision.

Some of the uncertainty surrounding the process for project variation will be addressed by allowing variations to approval conditions before a project commences, and introducing greater clarity for when a project variation needs a new assessment.

Further, a new option to potentially fast-track the approval process will be the "approval on referral information" which will provide a final approval decision within 35 business days for projects meeting specific criteria.

Public participation and litigation

The Government Response acknowledges that the transparency and quality of decision-making process under the EPBC Act can be improved. The minimum public consultation period on proposed developments will be increased from 10 to 11 business days, effectively ensuring that there are at least two weekends in every comment period.

However, third parties' ability to challenge decisions made under the EPBC Act will continue to be limited. In particular, it will be made clear that the Minister can only look at a request to reconsider a controlled action decision if first satisfied that the information on which the request is based is new and substantial. The EPBC Act will not be amended to allow for merits review of a controlled action decision or an assessment approach decision.

The Government has not given public interest litigants (such as environmental groups) any additional certainty on their exposure to risks associated with challenging decisions under the EPBC Act. The Federal Court will still determine standing for merits review of decisions, undertakings as to damages as a condition of granting an interim injunction or as security for costs in public interest litigation, and costs orders.

Compliance and enforcement

The EPBC Act will be amended to give the Minister the discretion to undertake audits to assess compliance with legislation and environmental performance outcomes for any relevant decision taken under the EPBC Act. At present this power is more limited.

The Secretary of the Department of Environment, Water, Heritage and the Arts will be given new powers to issue Warning Notices for breaches as a low-level, formal compliance alternative where prosecution is unwarranted, and Environment Protection Orders to direct a person whose actions are in breach of the EPBC Act to immediately cease or change that action. Such powers are common in State environmental legislation, but have been a gap in the EPBC Act to date.

Going forward

Minimising duplication of State and Federal processes and greater use of regional planning and strategic assessments could have significant cost and timing benefits for business, however achieving this aim will require concerted co-operation between governments and may not happen quickly.

A completed reform agenda and detailed implementation arrangements are to be submitted for approval to COAG's first meeting in 2012.

In the meantime, proponents should be aware of the proposed amendments to the EPBC Act outlined above which the Coalition is hopeful will be "an example of co-operative legislative and policy making" and may significantly impact on the referral, assessment, approval, compliance and enforcement of major projects under the EPBC Act.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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