Proposed reforms to streamline environmental approvals
for large projects are polarising industry and environmental
groups. However, the case for reducing duplication and delay is
overwhelming and there are ways to safeguard environmental
The Commonwealth Government has released a
new draft Framework of Standards for accrediting State and
Territory environmental assessments and approvals. The Framework
aims to "strengthen intergovernmental cooperation and minimise
unnecessary costs to business", while maintaining "high
In Australia, major projects must pass environmental assessments
at both the Commonwealth and State and Territory levels before
going ahead. The advantage of this dual system is that protection
of Australia's environment and biodiversity is not placed
solely in the hands of any individual State or Territory
However, the drawback is often significant levels of duplication
and delay. To minimise these issues, the Environment Protection
and Biodiversity Conservation Act 1999 allows the Commonwealth
to strike "bilateral agreements" with State and Territory
governments to accredit their assessment and approval processes.
This eliminates the need for separate Commonwealth assessments or
Until now, the Commonwealth has restricted bilateral agreements
to assessments only. When the Commonwealth accredits a State or
Territory environmental assessment process the effect is that a
proposed project is assessed solely by the State or Territory.
However, the Commonwealth and State or Territory Governments still
make separate approval decisions.
The new draft Framework contemplates shifting to a position
where the Commonwealth will negotiate agreements relating to both
assessment and approval of projects.
While Assessment Bilaterals are now generally accepted by the
community, there is significant controversy around the introduction
of Approval Bilaterals.
The economic case for Approval Bilaterals is strong. By removing
the need for separate Commonwealth approval of projects they
promise to streamline the environmental assessment process
The Productivity Commission estimates that reducing a major
project's approval time by one year could increase its net
present value by 10 to 20 per cent. Thus, even minor efficiency
improvements can lead to significant economic gains.
Industry groups have enthusiastically welcomed Approval
Bilaterals. Australia's resources sector investment pipeline is
close to $500 billion, of which almost half relates to projects
requiring government approvals. The value of improving the
implementation of Assessment Bilaterals alone is estimated to be
$400 million over 10 years.
While the economic case for Approval Bilaterals is clear,
environmental groups are concerned that these agreements place too
much power in the hands of State and Territory Governments, whose
direct economic interest in a project might be greater than the
Commonwealth's. Their view is the Commonwealth should retain a
closer supervisory role over matters of national environmental
However, if the Commonwealth decides that a State or Territory
is failing to comply with a bilateral agreement, it can suspend or
revoke the agreement. It has done this before, such as when the
Commonwealth objected to the Queensland Government's assessment
of the $6.4 billion Alpha coal project. The Commonwealth froze the
assessment process and threatened to suspend its Assessment
Bilateral with Queensland, which could have resulted in the
Commonwealth restarting Alpha coal's assessment process.
While disputes between Commonwealth and State or Territory
Governments can have dire consequences for industry, it is a
safeguard against any potential for abuse of bilateral
In developing the Framework, the Commonwealth appears to have
taken care to minimise the risks inherent in Approval Bilaterals.
The environmental standards that will be required before a State or
Territory approval process is accredited are comprehensively
described, as are the standards for regular reviews and audits.
Overall, the Framework strikes the right balance –
streamlining the approvals process without jeopardising
environmental outcomes. The reduced duplication should see a faster
approvals process for major projects, something that is sorely
needed, particularly in the resources sector.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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This legal update is an overview of existing eligible project activities and new project types proposed to be developed.
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