25 Jul 2011
WA Court of Appeal dismisses LNG precinct challenge
by Mark Etherington, Rebecca Shanahan
Two related decisions of the Court of Appeal in Western Australia clarify the boundaries between "strategic proposals" and "significant proposals" under the Environmental Protection Act 1986 (WA).
The Court of Appeal rejected the argument that the proposal for the controversial James Price Point LNG Hub was a "significant proposal", which had the effect of preventing any other approval being granted until the environmental assessment was complete.
Chief Justice Martin's comments in Roe No. 1 are particularly useful to proponents, not only for the discussion of strategic proposals generally, but also in relation to preliminary and minor works during the environmental assessment process.
Although rarely used, the benefits of a strategic proposal include that:
the details of the proposal do not need to be finalised at the referral stage;
on approval of a "strategic proposal", derived proposals (being the actual "significant proposal" that flows from the "strategic proposal") may avoid the need for further assessment; and
unlike in the case of "significant proposals", there is no prohibition on the determination of related approvals during the period of environmental assessment.
Proposal for James Price Point LNG Hub
The Browse Basin located off the Kimberly coast in Western Australia has long been known for its significant gas reserves. With a number of different companies seeking to develop these reserves in the near future, the State Government in Western Australia has sought to set aside an area for a multi-user LNG hub at James Price Point north of Broome.
To date, the State Government has prepared a scoping document and an additional master plan, showing the possible ways in which the land may be developed. The Environmental Protection Authority (EPA) is currently assessing the proposal.
The proposal for the LNG Hub was referred to the EPA in 2008 for assessment as a "strategic proposal". Following referral, the Department of Conservation (DEC) granted clearing permits to:
- Woodside to clear 25 ha of native vegetation for geotechnical and hydrological investigations of the site; and
- the Commissioner of Main Roads, to clear a trace line for investigation of an access road to the hub area.
Mr Joseph Roe, a native title claimant for the area, unsuccessfully objected to the grant of these permits at first instance and challenged them before the Western Australian Court of Appeal in:
- Roe v The Director-General, Department of Environment and Conservation for the State of Western Australia  WASCA 57 (Roe No. 1); and
- Roe v The Director-General, Department of Environment and Conservation for the State of Western Australia [No 2]  WASCA 58 (Roe No. 2) .
What is a strategic proposal?
In Roe No. 1, Chief Justice Martin distinguished between a "significant" and "strategic" proposal on the basis that:
- a "significant proposal" is one which is specific enough to allow all potential environmental impacts to be assessed; and
- a "strategic proposal" may identify potential future "significant proposals", but is not itself sufficiently detailed to allow a full environmental assessment to be carried out.
In finding that the James Price Point LNG Hub proposal was a "strategic proposal", the Court of Appeal held that the proposal identified future "significant proposals" rather than provided for the implementation of a "significant proposal" (being proposals that are likely to have a significant impact on the environment).
This definition may assist proponents in determining whether their proposal should be referred to the EPA as a "significant proposal" or "strategic proposal". The test, as identified by Chief Justice Martin, is whether the proposal has the requisite specificity to enable the likely effect of the proposal, if implemented, to be assessed. If it does, then the proposal is a "significant proposal". If, on the other hand, the proposal merely identifies a proposal in the future that could be characterised in this way, the proposal will be a "strategic proposal".
Interestingly, the Court also considered that one proposal could contain elements that fit the definition of "strategic proposal", while other more defined aspects of the project could amount to "significant proposals". In this case the project would be considered as two separate proposals, a "significant proposal" and a "strategic proposal".
When will an approval be "related to" a proposal?
In the context of considering whether the proposal was "significant" or "strategic", Chief Justice Martin also turned to examine section 41 of the EP Act, which prevents approvals from being granted which have the effect of "causing or allowing the proposal to be implemented" until the environmental assessment for "significant proposals" is complete.
In the context of environmental assessment for "significant proposals", the Court drew a distinction between approvals to carry out work which forms part of the planning and assessment process for the project (such as surveys and feasibility studies) and those approvals which actually allow the project to be commenced. For instance, Chief Justice Martin uses an example of clearing of native vegetation for the purposes of environmental assessment. In these circumstances, the act of granting an approval for clearing would not "allow" the project to commence, but rather facilitate the environmental assessment process.
It you have a large project requiring a number of approvals, it is well worth seeking legal advice on the proper characterisation of your project or part of your project as a "strategic proposal" and whether the strategic proposal process will save time and expense in the future.
This characterisation process may also assist in identifying environmental issues at an early stage, when the final design of the project can still be adjusted with minimal cost and delay, to avoid any problems could hold up the final Ministerial approval.