Australia: Federal environmental law reform: biodiversity and environmental offsets

Environment and Climate Change Update (Australia)
Last Updated: 4 October 2011
Article by Mark Beaufoy and Alice Skipper

On 24 August 2011, the Australian Government released its response to a review of the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). The response is part of a broad package of reforms to the EPBC Act and related policies and guidelines. Consultation drafts released that are presently open for public comment include the Australian Government Biodiversity Policy (biodiversity policy) and the Environmental Offsets Policy (offsets policy). These policies will be relevant to any projects that trigger the EPBC Act and require approval and provisions of an environmental offset. The draft environmental offsets policy can be accessed here.

The further development of the offsets policy is welcome given the uncertainty created by the current practice of the Department in determining offsets relying on the previous draft policy (in draft since 2007).

Biodiversity policy

The biodiversity policy delineates ten principles to guide the design and delivery of policies, programs and laws related to biodiversity by the Australian Government. The intention is to ensure all policies and programs significantly impacting biodiversity take account of these principles.

The principles include taking a preventative approach to declining biodiversity, improved valuation, the need for adaptive approaches, well-targeted investment, shared responsibility, credible information and knowledge and strategic national regulation that complements state and territory legislation.

These principles are relevant to the way in which the Government will assess proposed projects and developments that impact on biodiversity, and the way in which new laws, policies and management practices will be developed in future. The policy principles are very broad and general and the policy itself does not make clear how the complex issues related to each principle will be addressed in practice.

Offsets policy

The offsets policy relates specifically to environmental offsets. Environmental offsets are measures to compensate for environmental impacts that cannot be adequately reduced by primary avoidance or mitigation measures ('residual impacts'). Projects that are likely to significantly impact the environment may be required to provide offsets, eg as a condition of an approval or as a requirement of an enforcement measure to address a breach of the EPBC Act.

Broadly, the offsets policy outlines:

  • what constitutes a 'suitable offset'
  • the requirements for decision-making relating to offsets (ie how government decision-making on offsets is to be conducted and informed).

The present draft offsets policy appears to follow and build upon the previous draft policy released in 2007, although it does not directly reference the 2007 draft policy or its associated discussion paper. Concepts such as the use of direct and indirect offsets that existed previously are translated into an assessment guide as part of the new draft policy.

When will the offsets policy apply?

The draft offset policy will be used by the Government when it assesses actions that are likely to have a significant impact on a matter of national environmental significance ('controlled actions') under Part 9 of the EPBC Act. The policy will apply where offsetting is proposed, appropriate and feasible. Such a situation arises in relation to controlled actions where the likely magnitude of residual impact after avoidance and mitigation measures have been sought remains significant.

For controlled actions with significant residual impact, offsets may be required as a condition of a project approval. The proponent is then responsible for ensuring that offsets are delivered. The draft policy clarifies that if proponents are required to provide offsets under state or territory legislation, these offsets can count toward an EPBC-required offset to the extent that it compensates for the relevant residual impact. It should be expected that when an offset is required at state level in relation to the same native vegetation or habitat regulated by the Commonwealth, that provision of the offset at state level would be simply accredited by the Commonwealth (avoiding duplication or additional requirements at Commonwealth level).

Assessment of offsets

The offsets policy includes an 'assessment guide' that will assist project proponents to consider offset requirements as part of project planning where the project may have or is likely to have a significant impact on a matter of national environmental significance (such as listed threatened species and communities).

The assessment guide aims to improve transparency and consistency of offset requirements by explaining how offsets will be assessed. The guide provides that 'impact points' will be assigned to an action; the proponent will need to ensure that, at minimum, an equal number of 'offset points' are available to match the impact.

Impact points will be calculated depending on the conservation status of the protected matter, the duration of the impact, and the type and condition of the habitat that will be impacted. The policy will inform the eligibility of offset points, but the guide provides that more points will be available in certain circumstances such as where the offset is close to the impact site, where there is contribution to a wildlife corridor and where the length of time between the offset and the impact is minimised.

The assessment guide appears to provide a more detailed and transparent approach to the calculation of offset requirements than the Department's application of seemingly arbitrary 'offset ratios' and consideration of the general 'environmental offset package'. However, given the lack of detail in the current draft policy it is not clear whether improvements will be seen in practice with the new policy. To improve certainty for proponents, the categories used in the assessment guide require clarification. At present, the various options to which 'offset points' have not been given specific values. The Department has specifically requested comments regarding the quantification of 'low', 'medium', 'high' and 'very high' impact categories.

Significantly, 75% of the total number of offset points required to compensate a given impact will need to be derived from 'direct' offsets. Direct offsets relate to the protected matter that is impacted, and include habitat protection, vegetation rehabilitation and revegetation of degraded land. The remaining 25% may include 'indirect offsets', which include measures to improve knowledge, understanding and management that will ultimately lead to improved conservation outcomes for the impacted protected matter. The assessment guide can be found here.

The other important issue for proponents and developers who are required to provide offsets is the link between the offsets required and what is available in the market. Limited market information is available through organisations like Trust for Nature and BushBroker in Victoria. However, those organisations cannot always supply the required offsets and accessing the more informal offset market through individual landowners can be more difficult.

Making a submission

The Government is seeking feedback on the methodology used in the draft guide. Specifically, the Department is seeking feedback on the following:

  • the appropriateness of the factors that influence 'impact points'
  • suggestions for quantifying the impact categories of low, medium, high and very high
  • the proposal that 75% of offset points must be earned from 'direct offsets'
  • the appropriateness of the actions that can earn offset points
  • suggestions for appropriate weightings of offset points for particular actions.

Submissions close on Friday 21 October 2011. If you are interested in making a submission on the draft policy in this regard, DLA Piper can help.

The Department will also be conducting a series of workshops with key stakeholder groups to discuss the policy.

© DLA Piper

This publication is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not used as, a substitute for taking legal advice in any specific situation. DLA Piper Australia will accept no responsibility for any actions taken or not taken on the basis of this publication.

DLA Piper Australia is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities. For further information, please refer to

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