Australia: Environmental Assessment Of Major Projects In Victoria

• New Ministerial Guidelines for the assessment of environmental effects and amendments to the Environment Effects Act 1978 (Vic) (EE Act) commenced operation on 30 June 2006.

• The amendments to the EE Act make it clear that a proponent of works, which could have a significant effect on the environment, may seek the advice of the Minister for Planning on whether an environment effects statement (EES) should be prepared. This is in addition to the existing provisions for a Minister or public authority to seek such advice from the Minister for Planning.

• The new Ministerial Guidelines go further than the amendments to the EE Act by stating that a proponent or the relevant decision-maker should refer a project to the Minister for a decision on whether an EES is required, particularly where the environmental effects of the project could be significant in a regional or state context. Detailed referral criteria are set out in the Ministerial Guidelines.

• Proponents and decision-makers should carefully consider the referral criteria and the guidance in relation to the significance of environmental effects of a particular project and whether the project should be referred to the Minister for Planning. For proponents, this assessment should be part of the statutory approvals and environmental assessment due diligence at an early stage of the project, similar to the assessment of whether a referral is required under the Commonwealth Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act).

The recent changes to the EE Act and Ministerial Guidelines followed an extended review of the EE Act which began in November 2000. A taskforce lead by the Department of Infrastructure produced an options paper entitled ‘Environmental Assessment Review, Issues and Options 2002’ which was released for public comment in mid-2002.

In July 2002, the Minister for Planning appointed an Advisory Committee to consider and hear submissions on the Issues and Options Paper and to investigate and recommend potential reforms under the EE Act. The Advisory Committee conducted a public hearing in August 2002 and produced a report on 2 December 2002 which contained 60 recommendations for reform of the EE Act and the environmental assessment process in Victoria.

In its 2002 report, the Advisory Committee noted that it was conscious of the need for an environmental assessment process in Victoria that is capable of achieving a bilateral agreement with the Commonwealth under the EPBC Act. This concern is also reflected in the recent Communiqué by the Council of Australian Governments (COAG) made on 14 July 2006.

The EPBC Act states that the Commonwealth and a state or territory may enter into a bilateral agreement to minimise the duplication in the environmental assessment and approvals process through the Commonwealth accreditation of the processes of the state or territory. The EPBC Act provides for both bilateral assessment agreements and bilateral approval agreements, but limits the ability of the Environment Minister to enter into a bilateral agreement unless he is satisfied that the agreement meets the objectives of the EPBC Act and meets the requirements prescribed by the Regulations. Part 3 of the Environment Protection and Biodiversity Conservation Regulations 2000 sets out a number of general requirements relating to the accreditation of state or territory assessment processes.

COAG has identified the environmental assessment and approvals process as one of the areas for cross-jurisdictional regulatory reform as part of the federal government’s commitment to reducing the regulatory burden across all three levels of government. The federal government’s interim response to the report of the Taskforce on Reducing Regulatory Burdens on Business agreed with the recommendation that the government seek to expedite the signing of environmental assessment bilateral agreements with all remaining states and territories, and all bilateral agreements should be extended to include the approval process. To date, assessment bilateral agreements are only in place with Queensland, Western Australia, Tasmania and the Northern Territory.

The COAG Communiqué states that ‘finalising the outstanding assessment bilateral agreements will provide certainty for business by ensuring that proposed developments are assessed under the relevant jurisdiction’s legislation, without duplication by the Commonwealth, and will in turn provide a stepping stone to the conclusion of approval bilateral agreements.’

The environmental assessment process in Victoria is not prescribed in any detail by the EE Act. However, the Guidelines for environmental impact assessment issued in 1995 (1995 EES Guidelines) provide guidance for the preparation and assessment of an EES.

The 2000 Issues and Options Paper stated that under the current process:‘The number of EES’s required each year has declined since the late 1980’s, probably as a result of a range of factors. There has also been a substantial and continuing reduction in the number of proposals referred for determination of the need for an EES. Between 4 and 9 new EES’s have been required each year since 1991.’

The Advisory Committee Report stated that most of the EES’s in the past decade have been for major roads, mines and coastal developments, major gas pipelines and other industrial developments. There have also been a number of multi-jurisdictional environmental assessments for projects such as the Basslink interconnector across Bass Strait.

The EE Act enables the Minister for Planning to require an EES for any works – whether public or private – requiring approval under Victorian law. An authority responsible for making a statutory decision on an approval, or a Minister responsible for public works, may formerly seek the Planning Minister’s advice as to whether an EES is required. A decision-making authority must seek the Planning Minister’s advice if so directed by the Minister responsible for the relevant legislation. The 1995 EES Guidelines suggested that any person may also seek the Minister’s advice. Although any person could informally notify the Minister of a proposal, a decision to actually trigger the Minister’s decision as to whether an EES is required was dependant on a formal request for the Minister’s advice having been made by a decision-maker.

An EES can only be required for works deemed by the Minister to ‘have or to be capable of having a significant effect on the environment’. However, no definition of either ‘environment’ or ‘significant effect’ is provided under the EE Act. The 1995 EES Guidelines only provided broad guidance on works that may require an EES.

The 2006 Ministerial Guidelines provide significantly more detail and guidance for proponents in deciding whether a proposal should be referred to the Minister and for the Minister in deciding whether or not an EES should be prepared.

The main change to the EE Act introduced by the Environment Effects (Amendment) Act 2005 (Amendment Act) is to section 8. This concerns the ability of a person or body making a decision under an Act (for example, VicRoads under the Road Management Act 2004, the Environment Protection Authority under the Environment Protection Act 1970, or councils under the Planning and Environment Act 1987), which could have a significant effect on the environment, to seek the advice of the Minister as to whether an EES is required. The decisionmaker may seek the Minister’s advice, but must do so if requested by the Minister responsible for administering the Act or law under which the decision is to be made.

The changes to section 8 introduced by the Amendment Act make it clear that a proponent of works, which could have a significant effect on the environment, may also seek the Minister’s advice on whether an EES is required. The amendments to section 8 also allow for the Minister to request, by notice in writing, the relevant decision-maker to refer the matter to the Minister for advice on whether an EES is required.

If the matter comes to the Minister for advice, the Minister may direct the relevant decision-maker that no decision is to be made under the relevant Act or law until the Minister has given advice in respect of the works.

The Minister may require further information from the decision-maker or the proponent of the works. The Minister must then decide if an EES is required or is not required, or is not required provided that conditions specified by the Minister are met. If conditions imposed by the Minister are not met, then the Minister may issue a notice to the relevant decision-maker advising that an EES should be prepared.

The 2006 Ministerial Guidelines set out in more detail when the Minister will be likely to exercise his discretion under the EE Act to require an EES and when a proponent or decision-maker should refer a matter to the Minister for advice on whether an EES is required.

For example, the Ministerial Guidelines state that the Minister might typically require a proponent to prepare an EES when:

• There is a likelihood of regionally or state significant adverse effects on the environment.

• There is a need for integrated assessment of potential environmental effects (including economic and social effects) of a project and relevant alternatives.

• Normal statutory processes would not provide a sufficiently comprehensive, integrated or transparent assessment.

The Ministerial Guidelines go further than the EE Act and state that:

The Guidelines provide more detail on the meaning of ‘significant effect on the environment’ in a way that is similar to the Significant Impact Guidelines - Matters of National Environmental Significance’ (May 2006) made under the EPBC Act. The Guidelines also provide significant detail in relation to the criteria by which a proponent or decision-maker should determine whether a referral to the Minister should be made. These are set out below.

Source: Department of Sustainability and Environment: Ministerial Guidelines for Assessment of Environmental Effects under the Environment Effects Act 1978 (7th edition, 2006).

When receiving a referral from a proponent or a decision-maker and deciding whether an EES is required, the Ministerial Guidelines set out a number of matters the Minister considers in determining whether the project is capable of having a significant effect on the environment, including:

• The potential for significant adverse effects on individual environmental assets, taking into account the magnitude, geographic extent and duration of the change in the values of each asset.
• The likelihood of effective avoidance and mitigation measures.
• The likelihood of adverse effects and associated uncertainty of available predictions.
• The likelihood that available environmental standards provide a sufficient basis for managing key issues.
• The likelihood that the project is not consistent with applicable policy.
• The range and complexity of potential adverse effects.
• The availability of project alternatives that may warrant investigation to assess opportunities to avoid or minimise adverse environmental effects.
• Other available assessment processes that may be suitable to address potential environmental effects.
• The likely level of public interest in a proposed project.

The Guidelines also provide significantly more detail in relation to the scoping and preparing of an EES, the process for public review of an EES, circumstances in which a Supplementary Statement may be required and the co-ordination of other statutory processes (for example, under the Environment Protection Act 1970, Mineral Resources Development Act 1990, Pipelines Act 1967, Coastal Management Act 1995 and the EPBC Act).

Interestingly, in relation to the scoping and preparation of an EES, the Ministerial Guidelines specifically refer to the consideration of cumulative environmental effects and indirect environmental effects, a recognition of the recent decisions of the Federal Court in Minister for the Environment and Heritage v Queensland Conservation Council (2004) 139 FCR 24 and The Victorian Civil and Administrative Tribunal in Australian Conservation Foundation v Minister for Planning (2004) 18 VPR 157.

The legal status of the Ministerial Guidelines is not entirely clear. The Ministerial Guidelines are made pursuant to Section 10 of the EE Act in relation any matters the Minister considers expedient to enable the carrying out of the EE Act. The Ministerial Guidelines have consequences for the Minister’s natural justice obligations when making a decision under the EE Act, for example, on whether an EES is required. A decision of the Minister which failed to take the Guidelines into account could also potentially be subject to judicial review on the grounds of failure to take into account relevant considerations.

To date, despite the long history of the operation of the EE Act, no judicial review challenges have been brought challenging the Minister’s decision to require, or not to require, the preparation of an EES. This is no doubt a reflection of the wide discretion given to the Minister under the EE Act, the limited content of the 1995 EES Guidelines, and the difficulty of successfully establishing these grounds of judicial review.

The amendments to the EE Act continue to use the word ‘may’ in relation to the decision of a proponent or a relevant decision-maker to refer a project to the Minister for advice and in relation to the decision of the Minister to require an EES. In the context of the EE Act, the exercise of the Minister’s powers is discretionary.

However, the use of the world ‘should’ in the Ministerial Guidelines, together with the detailed criteria relating to when a proponent should refer a project to the Minister, gives the provision relating to when a proponent may refer a project to the Minister more of an obligatory character. To avoid a possible legal challenge for failure to refer a project, proponents and decision-makers should carefully consider the referral criteria and the guidance in relation to the significance of environmental effects of a particular project and whether the project should be referred to the Minister for Planning. For proponents, this assessment should be part of the statutory approvals and environmental assessment due diligence at an early stage of the project, similar to the assessment of whether a referral is required under the EPBC Act.

From a practical perspective, if a proponent does not refer a project which satisfies the criteria in the Guidelines, either the relevant approval authority will refer it or the Minister may direct that it be referred.

In general, litigation concerning the operation of the EE Act has been quite limited. In 2005, the Supreme Court of Victoria dismissed an application for an interlocutory injunction by the environmental group, Blue Wedges Inc, to stop trial dredging works being conducted by the Port of Melbourne Corporation in Port Phillip Bay. These works involved testing and monitoring to obtain data relevant to the channel deepening project, for which an EES had been prepared, a panel hearing conducted and in relation to which the Minister had required a Supplementary Statement. The environmental group argued that the trial dredging works were part of the channel deepening project and were subject to the prohibition in Section 6(2) of the EE Act.

Section 6(2) of the EE Act provides that in any case where an EES has been submitted to the Minister, no works referred to in the EES should commence until the Minister has assessed the environmental effects. While the Court accepted that there may have been a serious or reasonably arguable issue to be tried, the Court found that the balance of convenience did not support the granting of an injunction, particularly where the applicant was not prepared to give an undertaking as to damages.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.