Australia: A new framework for environmental offsets in Queensland

Clayton Utz Insights

Key Points:

The Environmental Offsets Act is meant to deliver a simpler, more flexible offsets regime for Queensland.

The Environmental Offsets Act 2014 was passed with amendments on 22 May 2014 following the Agriculture, Resources and Environment Committee report which was tabled on 14 May 2014.

The Offsets Act is expected to commence mid-2014. It will be supported by the Environmental Offsets Regulation 2014, the Queensland Environmental Offsets Policy and the Financial Settlement Offset Calculation Methodology which are all currently the subject of public consultation.

We've previously taken an overview of the new environmental offsets framework, while in Bill form, back in March. In this article we take a look at how the new framework will operate under the Offsets Act, as well as the Offsets Regulation and Policy.

A new framework for environmental offsets in Queensland

The Offsets Act introduces a new framework for environmental offsets in Queensland. Under the Act, the existing five issue-specific offset policies are replaced by a single State policy governing the assessment of environmental offsets.

The Offsets Act binds all persons including the State, but is expressed not to affect or limit the functions and powers of the Coordinator-General under the State Development and Public Works Organisation Act 1971. The State has advised that it intends to develop and publish guidelines that will provide greater transparency for industry and conservation groups about how the Coordinator-General will impose environmental offsets.

The power to impose a condition requiring an offset, which exists under several Acts, including the Sustainable Planning Act 2009 and Environmental Protection Act 1994, is not removed. However, the Offsets Act introduces additional criteria for when such a condition under those Acts can be imposed.

When can an offset condition be imposed?

Under the Offsets Act, an administering agency, being the entity that may grant or has granted an authority1 under another Act for a prescribed activity, may impose an offset condition on that authority only if:

  • a prescribed activity will, or is likely to have, a significant residual impact on a prescribed environmental matter; and
  • all reasonable on-site mitigation measures for the prescribed activity have been, or will be, undertaken.

A prescribed activity is an activity prescribed in Schedule 1 of the Offsets Regulation, which relevantly includes a resource activity or prescribed ERA under the Environmental Protection Act, development for which an environmental offset may be required under a local planning instrument, or specific modules of the State Development Assessment Provisions, and development assessed under Part E of the State Planning Policy 2013.

A significant residual impact is generally defined as an adverse impact, whether direct or indirect, of a prescribed activity on all or part of a prescribed environmental matter that:

  • remains, or is likely to remain (temporarily or permanently), despite on-site mitigation measures for the prescribed activity; and
  • is, or is likely to be, significant.

A prescribed environmental matter is any of the following:

  • a matter of national environmental significance, as defined by the Environment Protection and Biodiversity Conservation Act 1999 (Cth);
  • a matter of State environmental significance (identified in Schedule 2 to the Offsets Regulation); and
  • a matter of local environmental significance, as provided by a local planning scheme or planning scheme policy.

Restrictions on imposing offset conditions

The Offsets Act aims to reduce duplication on proponents by providing when an administering agency must not impose an offset condition on an authority. This includes if the significant residual impact on the prescribed environmental matter relates to an area:

  • for which there is an existing Commonwealth condition about the same, or substantially the same prescribed activity and the same or substantially the same prescribed environmental matter; or
  • for which the Commonwealth has decided not to impose a condition.

Similarly a local government administering agency must not impose an offset condition on an authority if it relates to an area for which there is an existing State condition about the same, or substantially the same, impact and area, or the State has decided not to impose a State condition.

Deemed conditions

The Offset Act also imposes additional conditions, that are deemed to apply to an authority granted under another Act, known as deemed conditions. This includes a requirement for the holder of an authority for a prescribed activity to provide the administering agency with a notice of election stating the type of offset they will deliver being either a proponent driven offset, a financial settlement offset or a combination.

Delivery of offsets

Under the Offsets Act and proposed Policy, a proponent can choose to deliver a proponent driven offset, a financial settlement offset or a combination of both.

The financial settlement offset is a new form of offset by which a payment is made by the authority holder to either the State or local government administering agency of an amount calculated using the standard formula and the Methodology.

The proposed Policy provides the following standard payment formula for a financial settlement offset:

Financial settlement = (total offset area x on ground cost per ha) + landholder incentive payment + administration cost

Variations to this standard formula are specified in the Methodology for SEQ koala habitats, protected areas and marine and aquatic matters.

The proposed Policy also provides that a self-administered offset code of compliance is under development which may apply to certain prescribed activities.

Next steps

The Offsets Act was assented to on 28 May and is expected to commence mid-2014.

The Offset Regulation, proposed Policy and the Methodology have been released for public consultation until 6 June 2014. Submissions can be made through the Department of Environment and Heritage Protection website.

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1Authority means an agreement (however described) under another Act or a licence, permit, or other authority (however described) under the other 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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