27 March 2007
Key Points:
The Government has sought to clarify the meaning of "impact" in the recent amendments to the Environment Protection and Biodiversity Act 1999. The new definition was intended to address the Nathan Dam decision which extended the meaning of impact to include indirect impacts The definition in fact creates more uncertainty given its numerous hurdle requirements for third party actions and requirement of "substantial cause".
What are the impacts of an action?
Recent amendments to the Federal Government's flagship legislation - the Environment Protection and Biodiversity Act 1999 (Cth) (EPBC Act) - sought to clarify what impacts must be taken into account in determining whether a proposal needs Ministerial approval and, if so, whether approval should be granted.
However, the amendments are not as clear as many had hoped, and developers in both the private and public sector should tread carefully when it comes to applying the "impact" test to their own projects.
The EPBC Act prohibits various actions which will, or are likely to, have a significant impact with respect to prescribed nationally significant environmental matters without Ministerial approval. In determining whether an action requires approval(ie. is it a "controlled action"), the Minister is to consider "all adverse impacts" the action has, will or is likely to have on such matters.
Direct impacts such as land clearing will be obvious to a developer and plans can be adapted to minimise these direct impacts. There is, however, uncertainty as to what extent indirect impacts such as soil erosion and the resultant silting of an estuary are to be considered, especially when these impacts may result primarily from the actions of a third party rather than the propnent.
The Nathan Dam case opened the door for indirect impacts caused by third persons to be considered which widened the scope of environmental inquiry under the Act. The recent amendments actually cloud the issue further and potentially create more uncertainty.
Judicial interpretation of Impact - The Nathan Dam case
The Full Federal Court in the Nathan Dam case (Minister for the Environment and Heritage v Queensland Conservation Council [2004] FCAFC 190) determined that the statutory phrase "all adverse impacts" includes indirect consequences, whether done by the proponent or not and which are reasonably within the contemplation of the proponent. The Court held that the fact that those consequences may not be within the proponent's control is not a ground for excluding consideration of the impact. In essence the Court expressly supported a very broad scope of inquiry.
The facts of the case centred upon the plans to construct a dam on the Dawson River. The Queensland Conservation Council argued that the increased use of fertiliser in farms which would rely upon water from the dam would adversely impact on World Heritage listed marine areas 500km downstream from the dam. The Court held that the fertiliser run-off into the marine environment was an impact of the proposal and should therefore be taken into account in the Minister's assessment.
Statutory definition of "impact"
The statutory definition of "impact" in section 527E of the EPBC Act came into effect on 19 February 2007. The section seeks to limit what events might be an indirect consequence of an action. It is a convoluted definition that specifies a number of requirements.
First, the action must be a substantial cause of an event or circumstance that is an indirect consequence of the action. Establishing that an indirect consequence is a "substantial cause" of an action may be problematic and may lead to several indirect impacts being excluded from consideration. For example, the direct impacts of the proposed development of a new residential estate nearby a Ramsar wetland may include land clearing and habitat disturbance. Indirect consequences of the housing construction might include the introduction of domestic animals to an area and adverse impacts upon threatened species. Is the housing development a "substantial cause" of the damage caused to a threatened bird species by domestic cats?
The second part of the definition gets even murkier. Section 527E(2) deals with third party actions. If as a consequence of the primary actor's action, a secondary person acts (and not at the direction or request of the primary person) and if there is an event which flows from the secondary action, that event may be an impact if the primary action facilitates to a major extent the secondary action and the secondary action is within the contemplation of the primary actor or is a reasonably foreseeable consequence of the primary action. A further limitation is that the event caused by the secondary action is to have been within the contemplation of the primary actor or a reasonably foreseeable consequence of the primary action.
What does it all mean?
In the Nathan Dam case the Federal Court held the Minister erred in not considering as an impact, the consequences flowing from the use of the fertiliser on farms which the proposed dam would facilitate. Those consequences included adverse impacts on World Heritage areas some 500 kilometres away. Applying the statutory definition, the use of fertiliser by farmers would be a reasonably foreseeable consequence of the secondary action of cotton farming. The farming itself would be a reasonably foreseeable consequence of the construction of the dam (the primary action) and it is arguable that the primary action facilitated to a major extent the secondary action. It is, however, questionable whether the construction of the dam can be judged to be a substantial cause of the potential adverse consequences on the World Heritage values.
The new definition does not remove the possibility of future disagreement over the extent to which impacts are to be considered by the Minister. If anything it introduces greater complexity into the assessment process and thus greater uncertainty for business and public infrastructure providers contemplating taking action that would be assessable under the Act. It is probable that the difficult task of interpreting and applying the new definition will lead to future disagreements over what is an indirect impact, delays in assessment and perhaps and litigation.
For further information, please contact Karen Trainor.
