Discussion Paper

Professor Graeme Samuel AC will conduct the review, supported by an Expert Panel comprising
Mr Bruce Martin, Dr Erica Smyth AC, Dr Wendy Craik AM and Professor Andrew Macintosh. The review will draw upon the knowledge and experience of a range of scientific and other technical bodies throughout the process including the Commonwealth Scientific and Industrial Research Organisation (CSIRO), Geoscience Australia, the six National Environmental Science Program hubs, the Threatened Species Scientific Committee and the Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development. The knowledge and experience of the Indigenous Advisory Committee and Australian Heritage Council will also be sought.

The review will examine a wide range of information and explore views through extensive consultation with state and territory governments, interest groups, scientists, Indigenous Australians, academics, and the general public. Over the next 12 months there will be many opportunities to be involved (see Figure 1).

About this discussion paper

This discussion paper is the first step in consultation for the review.

With broad terms of reference, a key early step in the review process will be to identify those areas where reform will deliver the greatest benefit for the environment, business and the community, while maintaining strong environmental standards.

In addition to outlining the EPBC Act, what it does and where it came from, this paper is intended to be thought-provoking. It identifies some of the long-term pressures on Australia’s environment and heritage, and known concerns with the operation of the legislation, especially with its regulatory processes.

Potential areas of focus for the review are explored, and some possible options for reform are floated. These are not settled views, rather a starting point to stimulate discussion. The aim is to explore a wide range of options and to develop sensible recommendations for reform that can be implemented.

Over the next 12 months the review will consider a wide range of information and explore ideas provided by communities, business, environmental groups, Indigenous Australians, academics and others.

Your input is welcome at any time during the review. Targeted engagement activities will be undertaken during the consultation period for this discussion paper. Further consultation will be undertaken as the review progresses.

Make a submission

All interested parties are invited to provide written submissions to the review, particularly in response to the ideas and questions set out in this discussion paper. You are encouraged to provide your submission as early as possible as this feedback will shape thinking and inform further consultation with stakeholders in 2020.

Submissions on this discussion paper closed on the 17th April 2020.

The role of the Commonwealth

The Commonwealth, state and territory governments, local government, non-government organisations, the private sector and the community all play a role in the protection and management of Australia’s environment and heritage.

State and territory governments have primary responsibility for most land use planning and environmental protection. They have specific environmental laws and programs designed to protect and manage the environment within their jurisdictions. Local government also plays a key role, particularly in local land use planning. The private sector and the community are important participants, particularly in managing land and property and investing in environmental management and restoration.

The Commonwealth’s environmental responsibilities, while not explicitly defined in the Constitution, have been interpreted over time and largely rely on indirect Constitutional powers. Prior to the EPBC Act, Commonwealth environmental laws focussed on activities where the Commonwealth had exclusive responsibility, including regulating the activities of Commonwealth agencies and managing Commonwealth land. Over time, the Commonwealth’s role has become more expansive, driven in large part through the evolving nature of our federated system of government and Australia’s international commitments.

The Commonwealth has an important role in bringing together and facilitating cooperation between the states and territories, particularly to reach agreement on nationally coordinated approaches to protection and management of the environment. This cooperation is particularly important where environmental issues cross state and territory borders.

Commonwealth, state, territory and local governments have formally set out their interests in the environment, their respective roles and responsibilities, and their commitment to the principles of ecologically sustainable development. A foundational agreement was the Intergovernmental Agreement on the Environment (1992) and the subsequent Heads of Agreement on Commonwealth/State Roles and Responsibilities for the Environment (1997). These agreements set out Commonwealth commitments to safeguard matters of national environmental significance (see Box 4) and ensure Australia’s international obligations are met.

The history of the EPBC Act

In 1998, the Commonwealth implemented its intergovernmental commitments with a comprehensive package of initiatives focused on environmental issues of national interest and importance, and Australia’s international commitments. The package included the creation of the EPBC Act¹ and other initiatives, such as the Natural Heritage Trust, Australia’s Oceans Policy and the National Environment Protection Council. Together, these initiatives sought to address issues including land degradation, the retention of native vegetation, air quality, sustainable oceans use, and greenhouse gas emissions.

The EPBC Act, as the Australian Government’s central piece of national environmental law, reflects the role of the Commonwealth to address matters of national environmental significance, provide a nationally coordinated approach to managing our environment and meet our international commitments.

The EPBC Act remains an important part of a broad suite of Commonwealth and state and territory laws and activities that seek to protect Australia’s heritage and the environment (see Figures 2a and 2b). Significant investment by the Australian Government in programs such as the National Landcare Program, Australian Heritage Grants Program, Reef Trust and the National Environmental Science Program also seek to preserve and protect biodiversity and heritage.

The role of Indigenous Australians in the natural and cultural environment is reflected in the EPBC Act and supported through other programs. For example, the Indigenous Protected Areas Program and Indigenous Rangers Program recognise and promote the role of Indigenous Australians in the conservation and ecologically sustainable use of Australia’s biodiversity. Traditional Owners jointly manage Commonwealth National Parks and funding is provided through the National Landcare Program to support Indigenous people and organisations to participate in the delivery of natural resource management activities.

The EPBC Act has been amended on a number of occasions. Wildlife trade was incorporated in 2001 and Regional Forestry Agreements in 2002. New matters of national environmental significance have been added over time; national heritage places in 2004, the Great Barrier Reef Marine Park in 2009, and the ‘water trigger’ in 2013².

Figure 2: Environmental management in Australia

What the EPBC Act does

The EPBC Act passed the Australian Parliament in 1999 and commenced on 16 July 2000.

It aims to protect and conserve Australia’s environment, biodiversity and heritage, and promote ecologically sustainable development through the conservation and sustainable use of natural resources.

The Act:

• gives effect to the Commonwealth’s commitment to ensure the principles of ecologically sustainable development are taken into account in policy and decision making process (see Box 2)
• recognises the vital role Indigenous Australians and their knowledge play in the conservation and sustainable use of Australia’s environment and heritage
• facilitates cooperative arrangements with the states and territories
• implements international commitments on biodiversity, heritage and other relevant matters
• provides a framework for managing Commonwealth parks and reserves, and
• promotes biodiversity protection and recovery.

The Act identifies nine nationally and internationally important matters, which are defined in the EPBC Act as matters of national environmental significance (see Box 4). These include plants, animals, ecological communities, heritage places, water resources and nuclear actions. They are also known as ‘triggers’, as they trigger the assessment processes under the Act. Individuals or companies must not carry out an action that could significantly impact one or more of these matters unless this action has been assessed and approved by the Commonwealth.

The EPBC Act includes both regulatory (decision making) and non-regulatory (cooperative and facilitative) approaches. A broad description of the elements of the EPBC Act is set out in Figure 3.

The performance of the EPBC Act

Since it commenced, the performance of the Act has been examined through a range of reviews and inquiries. Stakeholders have repeatedly raised a range of concerns with the Act, what it is achieving and how it is operating. This section identifies some of these key concerns as a starting point for discussion.

Effectiveness

In the main, during the life of the EPBC Act the health of the Australian environment and its biodiversity has continued to decline⁵.

The EPBC Act was developed as a key statutory component of a package of initiatives to deliver ecologically sustainable development in Australia. Given it is part of a broader environmental protection system, it is very difficult (and often impossible) to determine the exact impact of the EPBC Act on Australia’s environment over its two decades of operation. Notwithstanding this uncertainty, many consider that the operation of the Act has been insufficient to protect and conserve the environment. This is in light of ongoing impacts of past activities and a failure to adequately manage the impacts of new developments and emerging threats. In contrast to biodiversity outcomes, Australia’s network of protected areas has expanded, delivering positive environmental outcomes.

The Act supports only constrained consideration of the social, economic and environmental costs and benefits that relate to some key elements of ecologically sustainable development.

Efficiency

Many businesses regulated under the Act say that it is complex, cumbersome and at times unreasonably delays development. Previous reviews and inquiries have concluded that the EPBC Act is difficult to navigate, inflexible, and duplicates state and territory processes. Inefficient regulation imposes costs on the economy and the community, while having little impact on the environmental outcomes that are achieved through regulation.

Other stakeholders have noted however that Australia’s economy has consistently expanded over the past 20 years while key environmental indicators have continued to decline.

Certainty

Some sectors, such as agriculture, highlight that many small businesses lack awareness of their obligations under the EPBC Act. Past reviews have highlighted examples that indicate the current regulatory framework imposed by the EPBC Act is hard to work with, due to uncertainty about what is required and what to expect. There is low understanding about how decisions are made and high potential for unexpected delays in decisions, particularly when individuals, partnerships or small businesses have to interact with the Act’s regulatory regime.  A lack of clear environmental standards contributes to this uncertainty and costs. 

Inclusion

The EPBC Act includes specific objects to recognise the role of Indigenous Australians and to promote the use of their knowledge in the protection of the environment and biodiversity. However, stakeholders have suggested that the involvement of Indigenous Australians in the operation of the EPBC Act has been inconsistent and potentially inadequate. Shortcomings often raised include environmental impact assessment, protection of Indigenous heritage and understanding the cultural significance of Australia’s plants, animals and cultural landscapes.

Trust and transparency

The increasing volume of legal challenges to decisions under the EPBC Act indicates both concern about the outcomes of regulatory decisions, and a decline in trust in the decision-making process. Requests for further information about decisions under the EPBC Act are also increasing, suggesting that many stakeholders are seeking greater transparency.

Pressure on the environment will increase

The 2016 State of the Environment Report identifies changing land use, habitat fragmentation and degradation, climate change and invasive species as key pressures on Australia’s environment. Many Australian species and habitats are in decline and the rate of this decline does not appear to be slowing. There have been permanent changes for some species and habitats as a result of past activities and ongoing impacts from invasive and feral animals and plants. While some ecosystems — such as oceans — are considered to be in good condition, further declines in habitat and biodiversity are expected.

The State of the Climate Report projects increases in sea and air temperatures, more extreme weather events, sea level rises, ocean acidification, and shifts in rainfall. While the full extent of climate change impacts on the environment is difficult to determine, CSIRO and BOM indicate that these changes can have a very significant impact on ecosystems, and that widespread ecological change is likely unavoidable.

The economy will continue to grow

CSIRO’s megatrend analysis shows that the Australian economy has grown consistently over the last three decades and is projected to grow into the future. Despite recent headwinds, the global economy is also expected to grow in the coming decades, and continue its shift towards Asia.

These trends are expected to transition millions of people out of poverty, with 65 per cent of the world’s middle classes expected to reside in Asia by 2030. By 2030, the Asia-Pacific region is expected to consume more than half of the world’s food and 40 per cent of its energy.

These global economic trends are likely to create opportunities for the Australian economy, and increase the pressure on our environment. A growing global middle class will increase demand for Australian products and resources, and the mix of goods and services is likely to change with increased affluence. For Australia, this means the role of tourism in our economy will grow significantly, and changed commodity export and business opportunities may emerge. The trend of increased international trade with, and travel to, Australia is expected to create additional demand for wildlife products and increase the risk of the incursion of pests, diseases and weeds.

Australia's population will grow, with changing expectations

Treasury’s intergenerational analysis indicates that Australia’s population will continue to age, and could grow by 50 per cent by 2050. This level of growth is likely to increase pressure on the Australian environment, with greater demand for our natural resources.

Submissions to the Hawke and Craik reviews⁷ indicate that Australians’ interest in protecting the environment has remained high over the last decade. Governments and communities will need to find new ways to maintain the quality of life for current and future generations within the confines of finite natural resources. There is growing recognition of the value of involving Australian communities, particularly Indigenous Australians, more directly in managing the environment.

Businesses will adapt to remain competitive

Trust in both public and private institutions has fallen in recent times. Businesses are responding to international and domestic community and consumer preferences. They are playing an increasingly active role in sustainable environmental management to build and maintain community support and social licence. For example, businesses are increasingly looking for opportunities to contribute to the United Nations Sustainable Development Goals (SDGs). The SDGs are a common reference point for all sectors and a framework to focus our collective efforts on a sustainable future for all. 

The rapid expansion of the digital world and disruptive technologies is changing business models and altering the economy. It is also resulting in greater expectations among the Australian community toward digital delivery of services and the accessibility of information that is important to them.

A. The role of the EPBC Act

While existing agreements between the Commonwealth, states and territories define respective roles and responsibilities in relation to the environment, there is scope within these agreements for the Commonwealth to consider the most appropriate role for the EPBC Act. For example, matters of national environmental significance have changed over time. Some stakeholders have proposed that they could be further altered to remove nuclear actions and the water trigger, while others have suggested adding land clearing and climate change triggers.

There are concerns the EPBC Act has not done enough to protect the environment. Business and government at all levels are affected by environmental regulation of activities. This regulation is resulting in unnecessary uncertainty and delays with flow on impacts to industry, governments and the community. The review provides the opportunity to modernise national environmental law to improve outcomes for industry and the environment both now and in the future.

A reformed EPBC Act could take a ‘standards-setting’ or coordination approach, relying more on endorsed state and territory processes to address specific impacts on matters of national environmental significance. For example, impacts on plants and animals that live exclusively within the boundary of one state or territory could be dealt with under that jurisdiction’s regulatory process.

Alternatively, if the current role of national environmental law remains largely unchanged, there are many potential administrative improvements that could increase certainty and transparency in decision-making. These could include improved communication of expectations, making better use of existing information, greater use of cross-jurisdictional standards such as the Common Assessment Method for threatened species listing, automated publication of decision making material and streamlined public facing systems.

B. Better environment and heritage outcomes

The objects of the EPBC Act reflect an ambition to unite biodiversity and heritage conservation with sustainable development principles, and to promote the conservation and sustainable use of natural resources. While states and territories have primary responsibility for land use planning and management of environmental matters within their borders, the Commonwealth has responsibility for matters of national or international significance, as well as its own actions and its own land.

Since the beginning of the Act, there have been some clear improvements in some areas, including substantial expansion to the network of parks and protected areas. However, many parts of Australia’s environment and heritage continue to decline. Many Australians have strong views about the outcomes they want from protecting the environment and Australia’s heritage.

Environmental standards

The EPBC Act currently relies on regulatory process to deliver consistent environmental outcomes in many areas complemented by a range of strategies and plans, such as the Reef 2050 Water Quality Improvement Plan 2017-22. These regulatory processes provide further guidance on environmental standards and targets in some areas. The EPBC Act could be amended to move towards a national standard setting approach, based on the best available science and more closely linked to outcomes.

The EPBC Act already includes tools that enable a form of environmental standards-setting through accrediting other legislative processes or plans that meet national standards. Examples include the accreditation of National Offshore Petroleum Safety and Environmental Management Authority’s environment management processes through a strategic assessment, and bilateral agreements with states and territories to undertake environmental impact assessments. Examples of possible alternatives include:

• The Commonwealth could refine policies and strategies to deliver greater clarity on expected national standards related to the objects of the EPBC Act. These standards would continue to act as guidance, aiming to build consensus and national consistency.
• Existing outcomes-based standards such as those for air quality, waste and site contamination under the National Environment Protection Council⁸, and water quality in the Great Barrier Reef catchments, are examples of how the Commonwealth and states and territories could agree to environmental standards.
• The Commonwealth could alternatively prescribe broad national environmental standards that seek to deliver the objects of the EPBC Act, to guide state and territory regulators, with the Commonwealth taking a monitoring and assurance role.

Environmental protection and restoration

The current state of the Australian environment is a legacy of past development and other impacts, much of which occurred prior to the implementation of the EPBC Act. The EPBC Act is focussed on protecting the environment through supporting ecologically sustainable development for activities after 1999. In practice, environmental restoration and sustainable development are intertwined as it is simpler and easier to ensure development is sustainable if it occurs within a healthy and resilient environment. This focus area seeks to consider if the EPBC Act could deliver better environmental outcomes were it focussed on both environmental protection and greater restoration. 

The package of environmental initiatives implemented in the late 1990s, of which the EPBC Act was a component, included the $1.1 billion Natural Heritage Trust which incorporated a focus on restoration of historical environmental impacts. This enabled the EPBC Act to focus on promotion of biodiversity, rather than including a greater regulatory focus on environmental restoration. It may be possible however to achieve better, more robust environmental outcomes by increasing the regulatory focus of the EPBC Act to incorporate environmental restoration.

While the combination of Natural Heritage Trust and the EPBC Act have delivered benefits to the environment, more action to support the recovery of species and ecosystems through national environmental law, or its application, may help in achieving ecologically sustainable development in the future. This is particularly true in the face of growing demands on natural resources and a changing climate.

It is also possible that environmental restoration should predominantly remain the focus of strategies and programs that sit outside the EPBC Act, such as the National Landcare Program. The substantial expansion of carbon farming projects, many of which store carbon by the regeneration of forests, may deliver improved environmental outcomes if the projects expanded into areas with greater biodiversity values.

Mitigation and offsetting requirements could be better directed towards areas of the most beneficial protection and restoration. Better use of new technologies could make information about priority recovery activities more contemporary, regionally relevant and accessible, and support monitoring and reporting.

Heritage protection and management

Nationally significant heritage places provide important cultural benefits to the Australian community, in addition to the use and enjoyment they provide to their owners and users. The International Union for Conservation of Nature presently has four of Australia’s natural World Heritage properties listed as being of significant concern. Some have also suggested Indigenous heritage values are potentially underrepresented in Australia’s heritage places.

Currently, the allocation of resources for heritage protection is risk-based. This risk-based approach to heritage protection could be changed to increase its focus and resources on national and Indigenous managed and World Heritage properties. The Commonwealth could consider if other jurisdictions or sectors could better manage or monitor heritage sites that are currently managed by the Commonwealth. Some categories of future listings could be constrained to help ensure potentially under-represented values increase over time. Further, greater emphasis could be put on developing conservation management plans for listed heritage places and to encourage greater recognition of privately-owned heritage places through appropriate incentives.

C. More efficient and effective regulation and administration

Improving the efficiency and effectiveness of regulation through changes to the Act or its implementation can deliver benefit to both the economy and environment. This may reduce the regulatory costs to businesses and the broader community. It may also improve environmental outcomes, particularly if changes facilitate greater compliance with the law or improve the focus of regulation toward areas of the greatest environmental benefit.

Reducing regulatory complexity

Commentary on the EPBC Act suggests it is challenging to navigate. Specifically, it is repetitive, complex, unclear in some areas and overly prescriptive in others. Changes to reduce unnecessary complexity and provide greater clarity could reduce confusion around obligations, remove duplication between jurisdictions, lower costs and improve environmental outcomes.

This complexity is evident in environment assessments and approvals:

• The EPBC Act includes regulatory tools that intend to reduce the need for case-by-case approvals. Strategic assessments can approve policies, plans or programs that outline upfront clear rules that apply broadly. Despite these tools existing in the EPBC Act, most projects are still being assessed on a case-by-case basis, with little differentiation for risk to the environment.
• The matters protected under the EPBC Act are often also protected by states and territories. However, jurisdictions can have differing requirements, meaning approval conditions set by a state for a project may not be sufficient to meet EPBC requirements. In other cases, such as for nuclear developments, the EPBC Act requires a whole-of-environment assessment, considering impacts on nationally protected matters but also impacts normally regulated by states and territories, such as noise or local air quality impacts. There may be an opportunity to refine the matters of national environmental significance to remove duplication of requirements.
• The requirement for proponents to self-assess the significance of their development against the range of matters of national environmental significance can be challenging, particularly for smaller organisations and individual land holders. This can impose unnecessary costs as it’s often difficult to be certain if actions are significant early in the process, even for relatively low-risk actions that end up not requiring approval under the Act.

The Act could be amended to simplify language and approaches, with more emphasis on clear communication of obligations. There is also an opportunity to unify and streamline key processes under the Act, including public consultation, applications, publication, management plans and issuing permits. The Act could also be substantially simplified through greater use of subordinate legislation, rules and guidelines.

Simpler and clearer interactions with government

The EPBC Act places obligations on a wide range of organisations and individuals. These include businesses, importers and exporters, farmers, communities, environmental consultants, and researchers. Clearly outlining obligations for specific audiences, and leveraging new technologies and approaches, could deliver improvements in user experience and compliance.

Future economic growth is expected to increase the volume of regulatory approvals and wildlife trade. One option to better manage this increased volume of approvals is to ensure the Act and its implementation keeps pace with community needs and expectations for digital services. A single, streamlined interface that reflects efforts to better align Commonwealth and state and territory processes could significantly reduce frustration and duplicated effort, and provide a central point for input and access to the information used to underpin decisions.

The information collected to support environmental approval decisions under the EPBC Act and those by states and territories is not easily accessible or transparent. Improving access to this information could reduce costs to industry and other stakeholders, as the same information can be re-purposed. It could also increase the consistency of, and confidence in, decision making across different levels of government, as decisions would be underpinned by the same information.

An alternative regulatory model could tailor obligations to the expected level of environmental impact assessed by an initial automated process. This could provide a higher level of transparency, predictability and consistency. Further capacity for fully automated decision making to authorise low-risk projects that do not require referral under the Act could be developed.

Regional approaches

Many of Australia’s ecosystems are at risk from a broad range of threats, including invasive species, habitat loss and climate change. There are also future development pressures from urban growth and resource developments in particular geographic areas. It is possible that these threats and development pressures could be more effectively addressed through a landscape-scale approach, rather than on a project or species basis. While there are a range of definitions of landscape-scale approaches, they tend to include the consideration of large spatial areas through an integrated multidisciplinary approach to better manage the cumulative impacts on the environment, with consideration of economic and social factors. The potential benefit of landscape-scale solutions is that they may enable better protection of matters of national significance, longer-term streamlining of administrative decision making and compliance, and coordinated investment in protection and restoration.

A regional approach has been relatively successful in the Commonwealth marine environment with plans developed for four of Australia’s marine regions. These plans identify conservation priorities, strategies and actions to address those priorities and obligations under the EPBC Act.

A number of existing approaches under the EPBC Act such as strategic assessments, bioregional planning and the National Reserve System were designed to deliver landscape‑scale approaches. The intent of these approaches is to reduce the need for individual project approvals to protect important areas, while delivering on ecologically sustainable development. In practice, these approaches in their current form have not always fully delivered on this intent with strategic assessments of large areas of land and bioregional plans seen as complex, slow and subject to legislative constraints on their use.

One success has been the use of regional planning and strategic assessments in the Commonwealth marine environment. This success may be linked to the Commonwealth being the sole jurisdiction in these areas. The application of Regional Forestry Agreements outside the EPBC Act is another example of a regional approach. The Commonwealth could expand regional planning to areas where multiple jurisdictions have a role. This could include potentially accrediting state and territory approaches to regional planning, where relevant landscapes exist completely within one jurisdiction. The Commonwealth could retain responsibility for plans that are wholly within Commonwealth jurisdiction, or those that cross state boundaries.

Efforts could also be made to clarify when regional planning should be used within the broader regulatory framework to help focus efforts and resources to those areas where the most benefits can be gained. For example, where development pressures intersect with areas of high environmental value or to ensure the impact of the combination of individual threats are adequately addressed.

Integrated regional or landscape-scale plans could be a priority for development in partnership with states and territories to meet a range of national and state level requirements, including developing an integrated and representative reserve system, determining priorities for investment and the valuation of co-benefits.

Alternative regulatory approaches

The EPBC Act is an example of a traditional rules-based regulatory model. The Act prescribes rules and processes to be followed and provides penalties if they are not. This approach to legislation relies on the assumption that the processes will deliver the intended outcome. It is also one reason why the EPBC Act is more than 1000 pages long. It is important to question if the current process-based regulatory approach is delivering the desired environmental outcomes, and whether this is being done in a timely or efficient way.

Alternatives to traditional rules-based regulation can be more effective, in certain circumstances, at achieving policy outcomes at lower cost and with less regulatory burden. Legislation should be about achieving clear, specifically determined outcomes, rather than compliance with process. This requires improved performance measurement and reporting to monitor impacts and performance, help set expectations and improve trust in the system.

The EPBC Act could be modified to enable self-regulation or co-regulation where basic conditions are met, such as where the regulated community has a vested interest in being subject to regulation, and where there are well-developed and accepted codes of practice. Accreditation of environmental professionals could also improve consistency of information and trust in advice. The Commonwealth could also further accredit the states and territories, setting national standards and adopting a focus on enhanced coordination and assurance stance to ensure good outcomes are achieved.  Alternatively, the EPBC Act could implement general duties, similar to occupational health and safety duties, applicable to all actions that could impact the environment and heritage.

D. Indigenous Australians' knowledge and experience

Indigenous Australians are the custodians of the oldest continuous culture in the world. Over tens of thousands of years, they have built a deep connection with Country. This connection is central to their culture, spirituality, language and wellbeing. The active management of the environment and associated cultural practices by Indigenous Australians have significantly shaped the natural environment of Australia.

The role of Indigenous Australians in the natural and cultural environment was recognised in the objects of the EPBC Act at its inception. This was a significant step at the time. Three of the eight objects of the EPBC Act recognise the role of Indigenous Australians: Indigenous roles in the protection and management of the environment; conservation and ecologically sustainable use of biodiversity; and promoting the use of Indigenous Australians’ knowledge of biodiversity.

Since the EPBC Act was introduced, respect for and appreciation of Aboriginal and Torres Strait Islander people and their cultures has deepened. To strengthen the role of Indigenous Australians in the implementation of the Act, emphasis in the Act itself could be placed on early and genuine engagement with them. The process and nature of longer-term involvement in environmental and cultural management could be determined in collaboration with Indigenous communities as part of this early engagement, reflecting the unique needs of different communities.

One pathway could be to update the objects of the Act to provide more emphasis and clarity on the involvement and interests of Indigenous Australians. This could be achieved by changing the wording in the objects from “to promote the use of Indigenous peoples' knowledge…” to “to provide for the use of Indigenous peoples' knowledge…”, and including appropriate supporting mechanisms in the Act. This would provide a more direct and clear role for Indigenous Australians in managing Australia’s plants, animals and cultural landscapes.

E. Community inclusion, trust and transparency

Australia’s environment is a valuable asset. Greater inclusion of Australians in the processes that protect, manage and promote the environment and heritage may help foster the best environmental outcomes for all Australians. Greater inclusion also facilitates transparency in decision making and fosters community trust in regulators and regulatory outcomes.

Inclusion and transparency

Australians have a long history of active involvement in environmental matters. This role is critical in directing Government, industry and community activity towards important environmental values. The Australian Government fosters these activities through programs that support on ground action, including by investing directly in community environmental programs. Additional models to increase community inclusion could also be considered. For example, Government could work with industry on a code-of-practice to support deep and early engagement of the community in environmental approval applications. Alternatively, Government could seek greater community involvement in co-designing approaches, such as new strategic assessments. It may also be possible for Government to deliver greater inclusion of Australians in the regulatory decision-making process, such as through new formal advisory bodies that include a range of community interest groups.  Further, existing advisory bodies for decision makers could be required to have greater community membership.

Greater transparency of decision making could be achieved by requiring automatic publication of greater information about decisions including for example, decision-making materials, external advice and offset agreements. This would also reduce the risk of administrative delays arising from the diversion of resources to respond to individual requests for information.

Governance, certainty and accountability

Trusted regulatory frameworks have effective governance arrangements that ensure decisions are properly made. Inappropriate governance arrangements, including poor guidance on regulatory requirements, can limit efficient and effective administration of legislation and undermine certainty and trust in the regulatory framework. Effective governance arrangements generally:

• define who sets policy
• identify the responsible decision makers
• identify how advice is used to inform decisions, and
• enable decision makers to be held accountable.

The existing governance model of the EPBC Act involves the Commonwealth Minister for the Environment as the primary decision maker. This is a valid model to consider due to the complex nature of decisions that must consider competing environmental, social, and economic factors, while also remaining accountable to the community.  Accountability and certainty could be increased through changes that further clarify existing roles and responsibilities under the Act for decision-makers and those providing advice.

Recently a number of stakeholders have proposed structural changes in governance. Options for broad reform have included creating new advisory bodies to inform decisions on approvals. It has also been suggested that a separate, statutory authority could become the responsible decision maker under the Act, similar to models used at state and territory level or Commonwealth regulators in other sectors. A different model again could be the creation of a single statutory office holder to determine environmental approvals, similar to the Director of National Parks. While these potential changes would alter decision making and accountability, recent public concern with outcomes delivered by other Commonwealth and state and territory regulators suggest improvement is by no means certain. Successful change of this nature would also likely require additional legislative rules and administrative costs.

F. Innovative approaches

The EPBC Act was created 20 years ago and takes a traditional regulatory approach – imposing rules on individuals and business through legislation to achieve environmental protection. The Act was not designed to consider or promote alternatives, such as ecosystem services markets, alternative financing arrangements, co- or self-regulation, environmental accounting and information and education-based approaches, noting there are likely limitations on the potential for these alternatives. The review provides an opportunity to consider increasing the role of environmental accounting, incentives and ecosystem services markets to complement the right environment protection rules.

Ecosystem services are functions performed by ecosystems that lead to desirable environmental outcomes. They include for example air and water purification, flood mitigation, and the stabilisation of climate in accordance with the Paris Agreement. Examples of potential markets for ecosystem services include tradeable units for carbon sequestration, and biodiversity conservation⁹. The expansion of ecosystem services markets in the past 20 years has been helped by the rapid growth in experience, data, analytics and digital technology. Ecosystem services markets for carbon and biodiversity are in limited use by both the Commonwealth and state and territories.

The limited capacity of government resources to directly manage Australia’s environment may constrain the achievement of environmental outcomes. Greater use of ecosystem services markets could make it easier for business to meet their obligations by investing in environmental outcomes. There is also an opportunity to take advantage of the greater focus on corporate social responsibility to increase private sector interest in improving the environment.

As noted earlier, where the interests of the regulated community aligns with the regulatory outcome, there may also be advantage in leveraging mature industries’ ability to self-regulate, with the Commonwealth retaining oversight. These arrangements can be more adaptive in a rapidly changing world and have greater support than traditional regulation, especially if there is connected and coordinated investment in what matters most with transparency of obligations supported by quality assurance arrangements.

Finally, the provision of greater information and education can change the behaviour of consumers and business, such as through labelling and other information products.

Offsets and market-based approaches

Since 2012, the Department of the Environment and Energy’s adoption of a formal offsets policy in environmental impact assessment decisions has created an emerging national biodiversity market. Companies purchase offsets (most often land with similar habitat) and are required to protect them as part of their conditions for development approval under the EPBC Act where residual impacts cannot be avoided or mitigated. The Offsets Policy¹⁰ was developed with a focus on regulatory and scientific considerations rather than the potential for a market. In reality, the national biodiversity offsets market exists in parallel with expanding states and territory biodiversity offset markets.

A greater focus on developing efficient ecosystem services markets may lower costs and support greater investment in the environment. There may also be opportunity to improve the environmental outcomes that the current biodiversity offsets system delivers and the systems that maintain the integrity of offsets.

Providing national biodiversity markets with greater long term certainty, such as converting policy into law, could reduce risk for the private sector when making the required long-term investments in the biodiversity market. Lower risk could be expected to reduce costs. It may also be possible to expand the scope of the national biodiversity market from a focus on offsets toward greater ecosystem recovery.

Alternative financing approaches

The use of trusts and other financial mechanisms to deliver environmental outcomes has expanded in the past decade at both the state and territory and Commonwealth Government levels. Their use may have potential to deliver improved environmental and business outcomes.

There are opportunities for governments to increase leverage of private sector investment. For example, investments targeted to deliver sustainable agriculture, carbon emissions reductions and regional development could also deliver improved public good in the form of environmental protection and recovery.

The EPBC Act and its associated policies could be modernised, and data and information systems improved, to enable the scaling up of philanthropic and private sector investment in Australia. This could be achieved by developing national environmental accounts that are clearly understood and usable by both the government, philanthropic and private sectors.

The Commonwealth could also develop its own investment vehicle, such as an environmental trust, to fund direct conservation outcomes and provide a coordinated vehicle to manage EPBC Act offset funding. This could deliver lower costs by enabling strategic investment over longer timeframes. It could also deliver more inter-connected areas of protected habitat than the present offsets policy delivers, improving ecosystem benefits.