Essential ESG: Episode 17 – Reforms to the Environment Protection and Biodiversity Conservation Act

Louise Camenzuli, Head of Environment and Planning

Georgia Smith, Lawyer, Environment and Planning and Responsible Business and ESG

Georgia: Welcome to another instalment of Corrs’ Essential ESG podcast. I want to start by acknowledging that I’m recording on the lands of the Gadigal people of the Eora nation, and I pay my respects to their elders past, present and emerging. My name is Georgia and I am a lawyer in both our Environment and Planning and Responsible Business and ESG teams. Today I am speaking with Louise Camenzuli, the Head of Environment and Planning here at Corrs. Welcome Louise.

Louise: Thanks Georgia. Great to be back.

Georgia: As many listeners might be aware, the Government released its Nature Positive Plan (NPP) in 2022, signalling significant reforms to the national Environment Protection and Biodiversity Conservation Act (commonly referred to as the EPBC Act). Now we expect that the Government will release the exposure draft of the legislation early this year so on today’s episode we thought we would discuss some of the changes we expect to see made to the EPBC Act. However before we dive in it might be helpful Louise if you could provide a quick recap on the EPBC Act for our listeners.

Louise: Sure. So to recap, the EPBC Act is Australia’s primary Federal environmental legislation. It seeks to protect our ‘matters of national environmental significance’ or MNES, which include things like world heritage areas, certain threatened species and ecological communities, and important wetlands and marine areas. Under the EPBC Act, actions that are likely to have a significant impact on a MNES require assessment and approval from the Federal environment minister. The ‘Significant Impact Guidelines’ which sit under the EPBC Act provide guidance on whether a project is likely to have a significant impact on an MNES. To streamline assessment processes, states and territories have bilateral agreements in place with the Federal Government which allow them to assess the impacts of a proposed action under the EPBC Act and share that assessment with the Federal Government. The EPBC Act also allows for strategic assessments, which are landscape-scale assessments rather than project-by-project assessments. These assessments are undertaken with a strategic assessment partner and once approved, provide upfront approval for development covered by and undertaken in accordance with the strategic assessment approval.

Georgia: Thank you for that overview, Louise. Now before I ask you about the expected reforms, can you tell us maybe a bit about the milestone events that led us to the proposed reforms?

Louise: Okay. Well the EPBC Act itself requires an independent review to be undertaken of the legislation at least every ten years. Now given the EPBC Act is more than 20 years old, there have been two independent reviews. The most recent review is what largely kickstarted the current reform agenda. This review was conducted by Professor Graeme Samuel and completed in October 2020. The Final Samuels Report outlined broad criticisms of the EPBC Act. For example, some of the issues raised were that the Act does not clearly outline its intended outcomes; the Act is complex and cumbersome and results in duplication with State and Territory processes; and that it’s ineffective to protect environmental matters of importance to the nation, and not fit to address current or future environmental challenges. And it made all of these findings in the face of the following observation, and I want to quote here because I think it’s important to do so:

“Australia’s natural environment and iconic places are in an overall state of decline and are under increasing threat. The environment is not sufficiently resilient to withstand current, emerging or future threats, including climate change. The environmental trajectory is currently unsustainable.”

So in the hope of addressing these issues, the Samuel Review then made 38 recommendations for reform of the EPBC Act across a broad range of substantive and procedural matters.

Georgia: Shortly after the Samuels Report, the State of the Environment Report was released. Can you tell us a bit about the report and what it found, Louise?

Louise: So the release of the 2021 State of the Environment Report was the next key milestone in this reform journey. Like the independent reviews of the EPBC Act, a State of the Environment Report is required by the EPBC Act to be prepared periodically – essentially every five years. The findings of the latest State of the Environment Report were equally if not more bleak than the Samuel Review, and again quoting from page ten of that report:

“Overall, the state and trend of the environment of Australia are poor and deteriorating as a result of increasing pressures from climate change, habitat loss, invasive species, pollution and resource extraction. Changing environmental conditions mean that many species and ecosystems are increasingly threatened. Multiple pressures create cumulative impacts that amplify threats to our environment, and abrupt changes in ecological systems have been recorded in the past 5 years”.

Georgia: So that takes us then to the current key indication of intent, the nature positive plan. So at a high level, what does that propose, Louise?

Louise: Okay, the Nature Positive Plan sets out a really ambitious and time sensitive reform package. As the name suggests, the Plan details a shift from the current requirement for no net loss of biodiversity to a requirement for a ‘nature positive’ approach to development. Projects and plans approved under national environmental law will have to avoid unacceptable and unsustainable impacts on MNES and deliver net positive outcomes for MNES. Specific detail around the vehicle for implementation of the Nature Positive Plan and extent of reforms, is not yet clear. Options though include an amendment to the EPBC Act, the repeal or replacement of the EPBC Act, or possibly a mixture of amendments to the EPBC Act as well as new legislation on certain matters. As you noted in the introduction, Georgia, we currently expect an exposure draft of the new legislation to be released at the early this year.

Georgia: Ok now that we’ve set the scene, I want to drill down on a few of the key reform proposals. I think the best place to start is probably the National Environmental Standards (NES). So Louise can you tell us, what are they and what standards can we expect first?

Louise: Okay, the aim of the National Environmental Standards is to clearly state the aims of the EPBC Act and to provide more certainty to project proponents, local communities and other stakeholders by shifting from a process-driven and somewhat discretionary assessment approach to a more outcomes-based approach. It is proposed that the new NES will be enshrined in law and apply to all decision-making under national environmental law. The Government has stated that the Standards will be developed in consultation with stakeholders. However, it has also indicated that a standard for MNES will be developed first and is expected to be released with the exposure draft legislation. The standard for MNES will require a nature positive approach to development. In particular, projects and plans approved under national environmental law will have to avoid unacceptable and unsustainable impacts on MNES and deliver net positive outcomes for MNES. The Government has also indicated that it will prioritise new national environmental standards for First Nations engagement and participation in decision-making, community engagement and consultation, regional planning and environmental offsets. So Georgia as you can see, the reforms are not just focused on addressing environmental or ‘E’ issues, but also on addressing ‘S’ issues, like First Nations’ engagement and community consultation.

Georgia: Absolutely. So another proposed reform that caught my eye was around regional planning. Can you tell us what the Government is proposing there?

Louise: Sure. The Government is proposing to designate areas of varying environmental value for the purpose of either prohibiting, allowing or streamlining development approval within the area. The plans will be subject to approval by the minister and negotiated with relevant state or local governments, as well as regional natural resource management bodies. The first round of these plans is expected to be completed by 2028.

Georgia: There are also some significant changes proposed to the decision-making process, right?

Louise: Yes, there are. So the Government has proposed the establishment of a new independent Federal EPA or Environment Protection Authority. The EPA would generally replace the Minister as the new independent Federal environmental approval decision-maker. So it would be responsible for project assessment, decisions and post-approval compliance matters. The Minister will not be able to direct the EPA, but she would have a power to call in decisions that would otherwise be made by the EPA, with a requirement for full transparency about any decisions and reasons. Another reform is the improvement of accreditation arrangements for States and Territories to both assess and approve controlled actions by reference to the new National Environmental Standards, with oversight by the Federal EPA.

Georgia: Thanks Louise. I want to change now to a different topic, climate change – a hot button topic. What did the National Positive Plan have to say about climate change, if at all?

Louise: So the Nature Positive Plan does not propose a new climate change trigger. However the Government does propose that applicants for Federal environmental approvals be required to publish Scope 1 and 2 emissions data and disclose alignment with Australia’s international and national obligations. I should also mention Georgia that the Greens have separately introduced a Bill before parliament to establish a climate trigger as a new MNES and a Climate Change Authority to develop a national carbon budget. Under the Bill, a project that is estimated to emit between 25,000t to 100,000t CO2-e per year would have to be assessed by the Minister, including assessing whether the project is consistent with the national carbon budget. Any projects emitting above 100,000t CO2-e per year would be prohibited. Now there has been no indication to date that either major party supports the Climate Trigger Bill, therefore the likelihood of it passing currently seems very low.

Georgia: Alright. I recall that the Samuel’s Review recommended that limited rights to seek merits review of EPBC Act decisions be introduced. Did the Nature Positive Plan adopt this recommendation?

Louise: No, it didn’t. However, it does suggest a possible strengthening of third-party enforcement provisions. It is not clear what type of third-party enforcement provisions are envisaged, but it may be that the NPP is referring to rights similar to those provided for in the relatively recent Victorian Environment Protection Act 2017 (Vic) which allows third parties who constitute ‘eligible persons’ to bring civil proceedings to enforce non-compliances.

Georgia: Okay. So, we’ve talked about the proposals outlined in the Nature Positive Plan. Before we end, I just wanted to get your thoughts on the future for existing and new EPBC Act approvals.

Louise: Well a few recap and wrap up observations are, first, Commonwealth environmental reform is imminent and will be broadscale. As we’ve discussed, the exposure draft of this legislation is due to be released for public comment early this year and it will have wide ramifications. Secondly, while some streamlining of process is promised, this does not necessarily increase prospects of securing approval. Thirdly, climate change impacts will be relevant in the assessment of future applications in one way or another. Fourthly, it’s clear that engagement with First Nations people will be the subject of a new national standard, along with other new national environmental standards to create greater transparency and consistency in decision-making. And finally, third party challenges will continue to be available on administrative law ground with some potential for new or expanded pathways.

Georgia: I think that’s a great place to finish. Thanks Louise. So that concludes another instalment of Essential ESG. Thank you again Louise, for taking us through the proposed EPBC Act reforms. We will certainly have to get you back on for another instalment so we can pick your brain about the exposure draft once it is released.

Louise: Thanks Georgia, a pleasure.