Federal Government releases Final Report of the independent review of the EPBC Act

Last Thursday, 28 January 2021, the Commonwealth Government publicly released the Final Report of the Independent Review of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) authored by Professor Samuel AC. Consistent with the views he expressed in the Interim Report released in mid-2020, Professor Samuel has delivered a comprehensive agenda for reform comprised of 38 individual recommendations to be implemented over a two-year period. He was critical of the complex and cumbersome format of the current Act, which has resulted in the duplication of State and Territory development approval processes at a federal level, adding cost and delay to business with often little benefit to the environment. For complex projects in the resources sector, for instance, assessment and approval processes under the EPBC Act currently take an average of nearly 3 years, or 1,009 days to complete.

Detailed beneath are some of the big ticket items for reform arising from the Final Report, including:

1. The creation of legally enforceable National Environmental Standards by which outcomes under the EPBC Act are to be measured and achieved, and State and Territory processes accredited;
2. Amendments to the water trigger and new requirements for proponents to report on the emissions profile of proposed developments;
3. The establishment of a range of statutory offices to oversee areas such as Indigenous engagement, compliance and enforcement, and data monitoring and sharing;
4. The expansion of avenues for judicial review through the introduction of a limited form of merits review of approval and post-approval decisions; and
5. An overhaul to the existing offsets policy, along with proposals to enshrine offsetting arrangements and requirements in the EPBC Act.

National Environmental Standards

At the centre of the recommendations of the Final Report is a proposal to implement a series of National Environmental Standards (Standards) by regulation that will apply nationwide to all aspects of the assessment, approval and post-approval process under the Act, including matters of national environmental significance (MNES), Indigenous engagement and participation in decision-making, and compliance and enforcement. A new, independent statutory position of Environment Assurance Commissioner is recommended to report on the performance of the Commonwealth, States, Territories and other accredited parties in implementing the Standards.

Underlying the proposed Standards is Professor Samuel’s view that, at present, there is no comprehensive mechanism in the EPBC Act to describe the environmental outcomes it is seeking to achieve and to ensure that decisions are made in a way that contributes to them. It is hoped the Standards will ensure that all decisions clearly track towards improved environmental outcomes, whilst providing flexibility in how those outcomes are achieved. The Standards are designed to facilitate increased accreditation of State and Territory processes through bilateral agreements. Where a State or Territory can demonstrate it is capable of meeting all of the Standards, it will be accredited and capable of approving projects under its own laws without the need for separate, Commonwealth approval – a process referred to by the Commonwealth government as ‘single-touch’ approvals. Professor Samuel noted that from July 2014 to June 2020, just 38% of proposals under the EPBC Act were assessed through bilateral assessment or accredited assessment arrangements, with approval bilateral agreements never having been implemented.

The role of the Commonwealth

Among the more contentious reforms aired during the consultation process were proposals to remove the role of the Commonwealth in regulating the impact of large coal mining and coal seam gas projects on water resources, and in regulating nuclear activities. Whilst Professor Samuel recommended restricting operation of the water trigger to actions likely to have a significant impact on cross-border water resources (see Recommendation 1), he saw a continued role for the Commonwealth to manage impacts on water resources generally, as well as to regulate nuclear activities.

In response to calls for the introduction of a new climate change trigger, Professor Samuel recommended that the EPBC Act not duplicate existing Commonwealth frameworks and national-level strategies and programs for the regulation of emissions. Instead, he recommended that the Standards require development proposals to explicitly consider the likely effectiveness of avoidance or mitigation measures on nationally protected matters under specified climate change scenarios, and transparently disclose the full emissions of developments (see Recommendation 2).

As in the Interim Report, Professor Samuel emphasised that in focusing on its core responsibilities for protecting the environment and conserving biodiversity, and in devolving decision-making under accredited arrangements, the Commonwealth should not be seen as relinquishing its responsibilities, but instead lifting its focus from process-driven project-level transactions to the achievement of national level environmental outcomes. He recommended that the Commonwealth maintain an ongoing role in directly assessing and approving certain categories of development, including where accredited arrangements are not in place, at the request of a jurisdiction, or where an activity occurs on Commonwealth land or in Commonwealth waters.

Creation of new statutory offices

Central to the recommendations of the Final Report is the recasting of statutory advisory committee structures under the current EPBC Act, as well as the creation of a number of new statutory offices. Professor Samuel has called for the establishment of a new overarching advisory committee, the Ecologically Sustainable Development Committee (ESD Committee) to report on outcomes for MNES, provide policy advice to the Environment Minister to inform decision-making on the making of Standards and strategic national plans/regional plans, and to more broadly monitor the effectiveness of the Act in achieving its outcomes (see Recommendation 12). He rejected calls, however, for the creation of independent agencies to make decisions under the EPBC Act as a means of rebuilding trust in its operation and effectiveness.

Alongside the creation of the ESD Committee, Professor Samuel recommended:

1. An Indigenous Engagement and Participation Committee to replace the existing Indigenous Advisory Committee. That committee will be responsible for providing policy advice to the Environment Minister on the proposed Standard for indigenous engagement participation in decision-making, and to monitor and report on the effectiveness of its implementation (see Recommendation 5);
2. An independent Office of Compliance and Enforcement to sit within the Department of Agriculture, Water and the Environment, equipped with the full suite of modern regulatory powers and tools (see Recommendation 30). This was in keeping with Professor Samuel’s critique of the outdated and restrictive enforcement powers under the current EPBC Act and the limited record of enforcement action (since 2010, just 22 infringements have been issued for breaches of conditions of approval with total fines amounting to less than $230,000); and
3. A “Custodian” to provide national level leadership, coordination and responsibility for the proposed national environmental information supply chain (see Recommendation 32). Given what Professor Samuel identified to be an absence of any clear authoritative source of environmental information that can be relied upon by the public, proponents and governments, he has recommended a new scheme both for the storage and ready access of information, as well as the sharing of environmental data by private proponents and researchers for government-funded projects.

Legal standing and review

After considering proposals to amend or remove the current extended standing provisions for judicial review in section 487 of the EPBC Act, Professor Samuel concluded that broad standing remains an important feature of environmental legislation and ought to be retained. He recommended introduction of a threshold test, however, which would require applicants to demonstrate that they have an arguable case, or that the case raises matters of public importance, before it can proceed. More significantly, he called for the introduction of a limited form of merits review on the papers for development assessment and approval decisions under the Act, an idea floated in the Interim Report (see Recommendation 13). This form of review would be available to proponents with standing, would be limited to material available at the time of the original decision, apply to the approval decision and application of approval conditions, and relate to consideration of decisions where the exercise of a discretion was incorrect or a decision was unreasonable in the circumstances.

Offsetting policy

Finally, Professor Samuel criticised the current EPBC Act environmental offset policy which in practice has resulted in his view in some proponents viewing offsets as something to be negotiated rather than making a commitment to fulsome exploration and exhaustion of options to avoid or mitigate impacts. Under the current policy, proponents are required to make all reasonable efforts to avoid impacts, to mitigate any remaining impacts to reduce impacts on MNES, and then offset any residual impacts. As well as directing immediate changes to be made to the offsets policy, Professor Samuel called for long-term enshrining of offsets in the Act, opining that if they were to be supported with greater certainty under the Act, this might catalyse a market response (see Recommendation 27). He recommended that the Act should require offsets to be ecologically feasible and deliver genuine restoration in areas of highest priority, and that decision-makers accept offsets that encourage restoration offsets to enable a net gain for the environment to be delivered before the impact occurs.

What now?

At present, it is unclear when the Government is expected to respond to the recommendations of the Samuel review, which was delivered to the Government in October 2020. We note, however, that following release of the Interim Report environment Minister Sussan Ley was quick to rule out the creation of a new independent Office of Compliance and Enforcement, but endorsed the implementation of Standards and the modernisation of indigenous cultural heritage protection.

On 27 August 2020, that is, prior to completion of the Final Report, the Environment Protection and Biodiversity Conservation Amendment (Streamlining Environmental Approvals Bill) 2020 (Amendment Bill) was introduced to the House of Representatives. It passed the lower house on 3 September 2020 and is presently before the Senate. The Amendment Bill seeks to further devolve assessment and approval processes to States and Territories, amending the provisions relating to bilateral agreements as a step towards a single touch approval process. It seeks to allow the Minister to accredit a broader range of approval processes for the purposes of approval bilateral agreements which, as noted above, have not been implemented to date. It also seeks to enable States and Territories to make minor changes to environmental assessment processes without the need for amendment of a bilateral agreement or re-accreditation. Finally, it seeks to remove the current prohibition on approval bilateral agreements applying to actions that have, will have or are likely to have a significant impact on water resources.

If you have any queries in relation to the findings and recommendations of the Final Report, or how it might affect your business or industry, you can contact Samantha Daly, Partner in environment and planning at JWS.

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