07 Apr 2010

Major changes proposed to federal environmental laws by Hawke review

by Nick Thomas, Thomas Kwok

The Hawke review of the EPBC Act suggests changes that, if adopted, would be a significant overhaul of key elements of the EPBC Act.

The long-awaited Final Report of the independent Hawke review of Australia's flagship environmental law - the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) - was tabled in Parliament on 21 December 2009.

If the Final Report's recommendations are adopted, the scope of the EPBC Act could be broadened significantly, and we could have Australia's first climate change-related approval trigger.

In this article, we provide a brief overview of the review's findings and recommendations.

Themes in the Final Report

The Final Report makes 71 recommendations on reform for various aspects of the EPBC Act. This article looks at a few of these recommend changes to:

  • the EPBC Act's operating framework;
  • the scope of EPBC Act environmental assessment; and
  • enforcement measures.

Clarifying the EPBC Act's operating framework

The Final Report makes various recommendations which aim to clarify the EPBC Act's purpose. These include the confirmation of ecologically sustainable development as the overarching principle for decision-making under the EPBC Act, and making the protection of the environment the "primary object" of the EPBC Act.

The Final Report also proposes renaming the EPBC Act as the "Australian Environment Act", in order to "embrace the all encompassing nature of the environment and the Act’s role as national legislation".

Although the Final Report states that such conceptual redrafting would "increase efficiency and improve administration" it is likely that those in practice will wait until any such amendments come into operation before judging whether this objective has been achieved.

New approval triggers

Of key importance in the Final Report are recommended changes to the scope of the EPBC Act environmental assessment, which would broaden the reach and significance of the EPBC Act.

Unlike most State laws, the EPBC Act requires approval only for specific types of actions. Essentially, these are actions which are likely to have a "significant impact" with respect to a "matter of national environmental significance", or Commonwealth land, or the environment generally if carried out by a Commonwealth agency.

Ecosystems - a new approach to environment protection

A key recommendation is that the EPBC Act include "ecosystems of national significance" as a new "matter of national environmental significance" in addition to identified species or ecological communities. This would provide an additional approval trigger for a requirement to obtain EPBC Act approval.

The inclusion of ecosystems as a "matter of national environmental significance" is intended to promote "landscape" approaches to environmental protection (rather than focusing on particular species, for example). This proposal would provide a wide-ranging and potentially complex approval trigger, and lead to more extensive assessments within the EPBC Act framework.

Greenhouse gas trigger

The Final Report also discusses the introduction of an "interim trigger" under the EPBC Act for greenhouse gas emissions, which would be "complementary" to a market-based carbon pollution reduction scheme (CPRS). The proposal involves using this trigger as an interim step until the proposed CPRS begins operation. The Final report discusses the use of a threshold of 500,000 tonnes of carbon dioxide equivalent (CO2e) from a proposed project as the threshold for this "interim trigger".

Interestingly, at the press conference releasing the Final Report, the Minister for the Environment stated that because of Government support for a CPRS, and the market-based approach of the CPRS, "there will be no need for a greenhouse trigger to be introduced, even as an interim measure".

Although the fate of the CPRS in the short term appears in doubt, the introduction of a greenhouse trigger of the kind proposed would involve an important policy step which the Government has already flagged may not be aligned with its desire to set a market-based carbon price. Accordingly, it is difficult to see the adoption of the proposed greenhouse trigger at this stage.

However, developers and other project stakeholders, particularly in emissions-intensive industries, should still keep an eye on developments under the EPBC Act as a potential source of emissions regulation. In addition to its recommendations on an interim greenhouse trigger, the Final Report also recommends the introduction of requirements to consider emissions mitigation options at a strategic land-use planning level. This would be consistent with the emerging trend, in Government and in the courts, of including climate change-related issues at a strategic planning level in the local and State regulatory schemes.

Enforcement measures and auditing

The Final Report comes at a time when there appears to be increased focus within the Commonwealth Government on investigations and enforcement under the EPBC Act, and it makes some important recommendations about enforcement.

At a structural and administrative level, the Final Report recommends that the range of compliance and enforcement powers be rationalised for greater clarity, and also that the suite of administrative, civil and criminal remedies is extended. While this would give the regulator a greater range of options for enforcement, it may also mean that developers subject to enforcement could benefit from a "more flexible and strategic approach" which this recommendation aims to achieve.

For example, the Final Report recommends that the EPBC Act provide for "Environment Protection Orders" and "Warning Notices" to assist in regulatory functions. The former could be used, for example, to prevent or compel certain actions to achieve environmental outcomes. The latter would be used to address "lower order compliance matters" such as technical breaches of conditions of approval. Developers may be familiar with similar powers which are often part of their State's planning system, for example, Ministerial powers to compel certain actions, or local council orders, under the Environmental Planning and Assessment Act 1979 (NSW).

Other recommendations include giving the Environment Minister the power to undertake compliance and performance audits not currently covered by the EPBC Act.

What this means for you

While at this stage, it is not clear which (if any) of the Final Report's recommendations would be implemented, the recommendations provide a guide as to the areas of possible amendment to the EPBC Act in the future. The recommendations would represent a significant overhaul of key elements of the EPBC Act.

For developers, the recommended changes to the scope of environmental assessment could extend the reach of the EPBC Act and increase the regulatory burden. Further, any changes to the enforcement and auditing provisions under the EPBC Act will require developers to be aware of the possible range of options which the regulator has in relation to activities relevant to the EPBC Act, and their possible consequences. Whether greater reach and more enforcement powers are accompanied by greater scrutiny and a tougher line on compliance is a question which will only be answered when an amended EPBC Act becomes operational.

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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 communication. Persons listed may not be admitted in all States and Territories.