Australia: Environmental assessments for major projects

Last Updated: 14 August 2016
Article by Kathryn Pacey

Investing upfront in an outcomes-driven environmental assessment process will lead to better project approvals, and increased protection from successful legal challenges.

Major projects require a thorough environmental assessment in order to:

  • satisfy the regulator that proper account has been taken of the project's environmental impacts and benefits;
  • inform the community of the predicted impacts and how those will be measured and dealt with; and
  • secure all required approvals and consequently, funding for the project's delivery.

While it varies slightly between jurisdictions, an environmental impact statement (EIS) process generally involves:

  • an application to the relevant regulator to carry out an EIS;
  • terms of reference or guidelines;
  • submission, and subsequent publication notification, of the EIS;
  • a supplementary report or response to public submissions; and
  • evaluation and approval of the EIS.

Each state and territory has an "assessment bilateral" with the Commonwealth, whereby certain EIS processes meet the assessment requirements of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act). Separate approval is also required from the Commonwealth Minister under the EPBC Act.

An EIS process is both an expensive and time-intensive exercise, taking anywhere from 12 months to a number of years to complete. Before embarking on the process, it is important to identify the right approvals strategy, and know upfront the outcomes that are required from the EIS process. This will involve identifying:

  • assessment options;
  • community issues;
  • timeframes;
  • resources requirements; and
  • all required approvals for the project.

Do you need an EIS?

The first step is deciding whether a project should go through an EIS process. Sometimes, this is at the election of the proponent, and is not a mandatory requirement of the approvals process.

An application for an EIS is generally required that allows the decision-maker to determine if an EIS process is required or is suitable. This statement should describe the proposed project and provide an overview of the likely environmental effects. It must also contain enough information to allow the regulator to determine whether an EIS process is appropriate. The detail between applications varies, but things to consider include:

  • ensuring sufficient flexibility in the description of the project to accommodate likely changes;
  • comprehensively identifying key stakeholders, including landowners likely to be affected; and
  • identifying the proponent for the project, and ensuring that the proponent is a real legal entity.

Terms of reference or guidelines

The terms of reference set out the matters that must be addressed by the EIS and is a critical document. Often, the terms of reference are not given proper attention, which can have significant consequences for the scope of studies required, as well as timeframes and costs of assessment. While many regulators have developed standard terms of reference, these should always be critically reviewed to ensure that:

  • Compliance with the terms of reference is reasonable.
  • The requirements are proportionate and relevant to the likely environmental impacts and risks of the project.
  • It is actually possible to comply with the terms of reference — in many statutes, non-compliance with the terms of reference can cause issues for acceptance of the EIS and compliance with statutory processes.

Terms of reference generally will proceed through a public consultation process, and submissions from government agencies and the public will need to be responded to.

Submission of the EIS and public notification

Preparation of an EIS is a time-intensive exercise. Depending on the terms of reference, it may require a number of seasonal studies to be undertaken.

Most legislation contains timeframes for submission of the EIS, which must be monitored closely. Once submitted to the regulator, the EIS will be checked for compliance with the terms of reference prior to public notification.

If there are any areas of uncertainty or impacts identified following an impact assessment study, the application material should identify these and propose solutions. Any identified potential impacts may be able to be managed through a regime of further studies, monitoring and corrective actions and review.

The EIS will then proceed through a public notification process, and the project proponent generally provided with public submissions for response.

The critical outcome of the EIS process is the imposition of project conditions, which can determine whether the project is feasible or likely to proceed. For this reason, the EIS needs to be set up with those end conditions in mind.

Substandard EIS documentation can lead to:

  • the need to repeat public notification processes;
  • increased public submissions or increased complexity of submissions that need to be responded to;
  • a lack of confidence by the regulator, requiring the provision of additional information or a peer review of documents;
  • more complex conditions imposed on the project.

Response to submissions

The regulator will need to be able to demonstrate that each of the submissions received have been considered. The most efficient way to manage this aspect of the process is to create a "Response to submissions" document that outlines in detail how each of the issues raised in the submissions have been responded to.

Getting and communicating the project approval

An approval in an important communication to the broader community of the scope of the development permitted. Depending on the particular regime, an approval can do one or more of the following:

  • authorise the particular works or development to proceed;
  • define the works or development;
  • constrain or refuse parts of the development; or
  • authorise impacts caused by the development (including providing statutory defences to impacts).

Legal challenges

The best protection an EIS applicant has against a challenge to a decision-maker's process is to ensure the documents respond to the fullest extent possible to the decision-making criterion. This criterion will not always match the application requirements; however, it is crucial to show that the decision-maker had all the information required for the decision-making process. Poor applications also increase the risk of a successful legal challenge either to the merits of the application (where allowed) or to the validity of the decision-making process for the application. Decisions made under the EPBC Act can be subject to challenges by judicial review under the Administrative Decisions (Judicial Review) Act 1977 (Cth). Many state decisions are subject to its local equivalent.

If the application is well-drafted and the EIS process has been followed, these risks are significantly reduced. As part of preparing and thoroughly executing the approvals strategy, the risk of legal challenge should always be borne in mind, with documents critically reviewed to minimise that risk. Community consultation and strong stakeholder management will also assist here. Ultimately, while it can be tempting to save costs upfront on an EIS process, the end result should be kept in mind. Short cuts can lead to a protracted process, creating additional work to get the process to completion. Key performance indicators given to EIS consultants through procurement should take into account the longer-term view.

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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