1.4 - Recommended reforms

Many of the suggestions about the Commonwealth taking on a broader role reflect a lack of trust that States and Territories will manage these elements well. The Review does not agree with suggestions that the environmental matters the EPBC Act deals with should be broadened. The remit of the Act should not be expanded to cover environmental matters that are State and Territory responsibilities. To do so would result in muddled responsibilities, further duplication and inefficiency. Unclear responsibilities mean that the community is less able to hold governments to account.

The matters protected by the EPBC Act should focus on the places, flora and fauna that the Commonwealth is responsible for protecting and conserving in the national interest. This includes World and National Heritage, internationally important wetlands, migratory species and threatened species and ecological communities, as well as the environment of Commonwealth areas and actions by the Commonwealth.

Three particular changes to MNES dominated submissions to the Review – those relating to water, nuclear activities and climate change. Each of these are explored in this section.

Water

The ‘water trigger’ (section 24D) requires proposed coal seam gas and large coal mining developments likely to significantly impact on a water resource to be assessed and approved by the Commonwealth. The Australian Parliament amended the EPBC Act in 2013 to include the ‘water trigger’, as a response to community concern of the perceived inadequacy of state-based water regulation of these types of activities. The 2013 Act amendments prohibit the Commonwealth from accrediting a State or Territory to make approval decisions under the ‘water trigger’.

The Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Developments (IESC) was established in part to provide technical advice to the Commonwealth and State and Territory decision-makers. The IESC has improved decision-making and led to increased transparency and community confidence that cumulative impacts of proposals are assessed.

Stakeholders have presented highly polarised views to the Review about the operation of the ‘water trigger’ (Box 5). Mining industry stakeholders argue that it duplicates state-based water regulatory frameworks and should be removed. Others suggest its limited scope ignores other types of actions that impact on water resources.

The operation of the ‘water trigger’ suffers from insufficient definition of the water resources covered and the scale of the impact on the resources it is seeking to regulate. Further, it targets the activity of part of a specific sector, which results in regulatory inconsistency. Only large coal mining and coal seam gas projects are regulated under the ‘water trigger’, despite other activities conceivably posing the same or greater risk of irreversible damage. Finally, the current construct of the ‘water trigger’ is inconsistent with the Commonwealth’s agreed role in environmental and water resources management.

The States and Territories have constitutional responsibility for managing their water resources. This responsibility is reflected in the National Water Initiative, which is the intergovernmental agreement that sets out the respective roles of jurisdictions in water management and the water reform agenda they have collectively agreed to pursue.

The Review considers that it is not the role of the EPBC Act to regulate impacts of development on water users such as towns or agricultural users. This is the responsibility of the States and Territories and they should be clearly accountable for the decisions they make. In its leadership role, the Commonwealth should continue to transparently report on the progress made by jurisdictions in advancing commitments to manage water under the National Water Initiative.

However, the Commonwealth does have responsibility for protecting listed threatened or migratory species, wetlands of international importance (Ramsar wetlands), World Heritage sites and for leadership on cross-border issues. Direct or indirect changes to water resources that have a potential to impact protected matters have always triggered the EPBC Act and should continue to do so.

The Commonwealth should have the capacity to step in to protect water resources to adjudicate cross-border matters (for example, on a water resource that spans jurisdictions, such as the Great Artesian Basin). One State or Territory should not be able to unilaterally approve projects that risk (individually or cumulatively) irreversible damage or contamination to a water resource that the environment of another State or Territory relies on. The capacity to step in should be clearly linked to processes for assessments and approvals.

The Review recommends that the MNES relating to water be amended so that the Commonwealth’s focus in regulating water resources in the EPBC Act is limited to those water resources that span jurisdictions (cross-border water resources). This new trigger should apply to all actions that are likely to have a significant impact on cross-border water resources. The current restriction that prevents the accreditation of others to undertake approvals of proposals assessed under the ‘water trigger’ should be removed, subject to the accredited party demonstrating compliance with the National Environmental Standards for MNES.

The name and remit of the IESC should be adjusted to reflect an amended water resources MNES. The Commonwealth Environment Minister (or accredited party) should continue to seek the advice of this Committee when considering a proposal against the National Environmental Standards.

Nuclear actions

Nuclear activities are regulated under the EPBC Act in 2 ways. The first is section 140A, which prohibits the Environment Minister from approving specific nuclear installations. This section reflects a policy choice of elected Parliaments to ban specific nuclear activities in Australia. Any change in scope is similarly a policy choice of elected Parliaments. Should Australia’s policy shift in relation to these types of nuclear activities, changes to section 140A would be required.

The second way nuclear activities are regulated is similar to the construct of other MNES, whereby ‘nuclear actions’ that are likely to have a significant impact on the environment (defined broadly in section 528 as including people and communities) are assessed and approved by the Commonwealth.

The nuclear trigger reflects Australia’s commitment to maintain high levels of community and environmental protection from the harmful effects of radiation, and supports Australia’s commitments under international agreements to ensure nuclear safety and security in Australia and around the world.

The EPBC Act and Regulations together define activities and thresholds for ‘nuclear actions’. In practice, this trigger primarily captures:

• mining projects, including uranium mining, and rare earth and mineral sand mining, transport and milling activities that result in radioactive by-products that exceed certain thresholds
• Commonwealth agencies undertaking nuclear transport, research or waste treatment.

It is both appropriate and desirable that the Commonwealth maintains its oversight over the long-term risks of radiation arising from nuclear actions to the community and the environment. The Review recommends that regulation of nuclear actions should remain within the EPBC Act. Regulation should be made more consistent and efficient by aligning the requirements of the EPBC Act to the national and international best-practice approaches of the Commonwealth’s Australian Radiation Protection and Nuclear Safety Agency (Chapter 5). This should focus on protecting the community from the harmful effects of radiation and radioactive material, regardless of the activity being undertaken.

Climate and emissions

Contributions to the Review have suggested that the EPBC Act should be expanded to include a climate trigger, which would seek to solve 2 apparent problems.

The first view presented is that Australia’s current emissions reduction policy settings are insufficient to meet our international commitments and more needs to be done. Advocates for a climate trigger suggest it would contribute to reducing Australia’s emissions profile by regulating significant land clearing and those projects with large emission profiles.

Successive Australian Governments have elected to adopt specific policy mechanisms to implement their commitments to reduce emissions. The Review agrees that these specific mechanisms, not the EPBC Act, are the appropriate way to place limits on greenhouse gas emissions.

The Review recommends that proposals required to be assessed and approved under the Act or accredited arrangements (due to their impacts on nationally protected matters) should transparently disclose the full emissions of the development.

The second view is that the EPBC Act does not effectively support adaptive management that uses the best available climate modelling and scenario forecasting to ensure the actions taken to protect matters will be effective under a changing climate.

The Review recommends that the EPBC Act require that development proposals assessed under the Act or accredited arrangements explicitly consider the likely effectiveness of their avoidance or mitigation measures on nationally protected matters under a range of specified climate change scenarios.

1.4.2 - The EPBC Act should define and deliver sustainable environmental outcomes

The objects of the EPBC Act are sufficiently broad to enable the Commonwealth to fulfil its role. The range of views on the objects of the Act received by the Review span from full support to a complete revamp. The broadness of the objects has been applauded for flexibility but criticised for carrying little clout and being ‘uninspiring and perfunctory’.

The Review considers that amending the objects of the EPBC Act will not provide more clout or deliver better outcomes unless other issues that diminish the effectiveness of the Act to protect the environment are addressed.

A fundamental shortcoming in the EPBC Act is that it does not clearly outline the outcomes it aims to achieve and does not provide sufficient constraints on discretion to ensure that development is sustainable. To do this, ecologically sustainable development (ESD) needs to be hardwired into the Act as the basis of decisions made. This means that:

• the Act must require the Environment Minister to apply and deliver ESD, rather than just consider it
• decisions must be based on a clear and transparent assessment of environmental, social, economic and cultural information (Chapter 4)
• strong protections are needed for those matters most at risk of being lost, including clear rules about unacceptable impacts.

Effective environmental protection and economically important development are not mutually exclusive. Sustainable development is possible and should be encouraged. ESD cannot be achieved on a transaction-by-transaction basis. It is a collective outcome, the sum of all policies, plans, actions and decisions that affect the environment, across all jurisdictions. To support this, the system needs flexibility to balance out impacts across landscapes and across timescales (section 1.4.4). This can be best achieved by adopting a regional planning approach and ensuring that public and private investment in restoration is targeted towards achieving the overall outcome (Chapter 8).

Legally enforceable National Environmental Standards should be the foundation for effective regulation

1.4.3 - National Environmental Standards are the centrepiece of recommended reforms

The EPBC Act and the decisions made under it are not delivering for the environment. Strong, measurable and legally enforceable National Environmental Standards are needed to clearly define environmental outcomes and underpin and uplift the operation of the Act.

As the centrepiece of recommended reforms, National Environmental Standards should set clear requirements for those operating or accredited under the EPBC Act, and clear outcomes and limits for decision-makers. National Environmental Standards should prescribe how activities at all scales, including actions, decisions, plans and policies, contribute to the outcomes under the Act. Standards should be concise, specific and focused on the requisite outcomes. Compliance should focus on whether environmental outcomes are being achieved (or if there are failings), rather than whether a process has been correctly adhered to.

National Environmental Standards should not be dominated by highly prescriptive processes so that compliance is only achieved by ‘ticking the boxes’ to fulfil a process. However, Standards should cover the fundamental processes needed to support effective implementation of the EPBC Act and the delivery of outcomes.

Standards are increasingly used internationally to support sustainability objectives and have been used successfully within Australia for air pollutants under the National Environment Protection (Ambient Air Quality) Measure. The Commonwealth has made past attempts to define some standards for the EPBC Act (DoE 2014). These attempts focused on clarifying important processes that were already set out in the Act, and they provide a useful foundation to build on in developing the full suite of National Environmental Standards. A key shortcoming of these is the absence of any clear articulation of the intended outcomes for, and acceptable impacts on, MNES.

Contributions to the Review indicate strong support for National Environmental Standards. Despite this strong support, there will inevitably be objection to the detail contained within them. As rules and outcomes become clearer, so too will the limits on discretion in decision-making. Industry stakeholders and jurisdictions consistently call for clarity but have raised concerns about limiting discretion on approving the environmental impacts of developments. At the other end of the spectrum, environmental groups advocate for uncompromising rules that prevent any impact to protected matters. Neither of these views are compatible with ESD or the objects of the EPBC Act. National Environmental Standards must be set in a way that delivers better outcomes for the environment, while allowing a sensible and sustainable approach to meeting Australia’s future development needs.

National Environmental Standards should be legally enforceable and relevant to all parties operating or accredited under the EPBC Act, including the Commonwealth Environment Minister and accredited third parties.

Application of the National Environmental Standards by the Commonwealth Environment Minister

National Environmental Standards should be made and implemented by the Commonwealth Environment Minister.

The activities and decisions made by the Environment Minister under the EPBC Act should be consistent with the National Environmental Standards. The Standards are relevant to activities and decisions at all scales, including policies, plans and programs. This includes decisions on the approval of individual projects or actions, where they trigger the EPBC Act.

This enables consistency and flexibility across the administration of the EPBC Act and recognises that the overall outcome is best accomplished by the collective achievements of all activities.

The EPBC Act should provide discretion for the Environment Minister to make a decision that is inconsistent with the National Environmental Standard. However, the use of this power should be a rare exception, justified in the public interest. In these cases, the Minister should publish a statement of reasons.

In considering the accreditation of the regulatory processes or arrangements of third parties under the EPBC Act, the Environment Minister must be satisfied that the processes or arrangements proposed for accreditation can meet the National Environmental Standards and that the parties assure accountability for the outcomes.

Application by third parties following accreditation

Ideally, National Environmental Standards should be applied in a way that supports a shift to a more cooperative and holistic way of managing the environment. The Standards enable the outcomes sought through the EPBC Act to be more effectively integrated into broader environmental management responsibilities and activities of others (such as a State or Territory), so long as they can demonstrate that they can deliver the Standards.

The activities and decisions of an accredited party should be consistent with the National Environmental Standards. The Standards are relevant to activities and decisions at all scales including policies, plans and programs. This includes decisions on the approval or authorisation of individual projects or actions. An accredited party must not allow an activity, such as an individual project, that prevents a Standard from being met.

In limited circumstances, such as where an accredited party believes it is in the public interest to undertake an activity or make a decision that would prevent them from meeting a National Environmental Standard, the party must refer that activity to the Commonwealth Environment Minister for decision.

Processes to make and review National Environmental Standards

The Commonwealth is responsible for ensuring the National Environmental Standards are effective, have public confidence and deliver national environmental outcomes.

The Commonwealth Environment Minister should immediately develop and implement the full suite of National Environmental Standards recommended by the Review (section 1.4.4). A consultative process like that conducted by this Review should be adopted and include consultation with States and Territories. However, the process cannot be one of negotiated agreement to accommodate existing rules or solely on the basis of development aspirations. This would result in a patchwork of protections or rules set at the lowest bar.

National Environmental Standards should be enacted through legislation, with a clear head of power to make and apply Standards, including the ability to apply them to accredit of other parties.

The EPBC Act should include legislative requirements for regular monitoring, reporting and review of the National Environmental Standards to ensure they remain contemporary and continue to effectively deliver environmental outcomes. Standards should be subject to both regular reviews and reviews in response to changing, unforeseen or emergency situations, such as the 2019–20 Black Summer bushfires. The Standards should be adjusted if the settings are not resulting in the right environmental trajectory, to ensure a path that will deliver ESD.

1.4.4 - National Environmental Standards should describe environmental outcomes and the fundamental processes of good decision-making

A comprehensive set of National Environmental Standards is needed

The Review recommends that a full suite of National Environmental Standards should be made to describe the outcomes that contribute to effective environmental protection and management as well as the processes needed to support the effective implementation of the EPBC Act (Appendix B). All the Standards are necessary to improve decision-making.

The full suite of Standards should include:

• matters of national environmental significance
• Commonwealth actions and actions involving Commonwealth land
• transparent processes and robust decisions, including
  • judicial review
  • community consultation
  • adequate assessment of impacts on MNES – including climate change impacts
  • disclosure of emissions profile
  • quality regional planning
• Indigenous engagement and participation in decision-making
• compliance and enforcement
• data and information
• environmental monitoring and evaluation of outcomes
• environmental restoration, including offsets
• wildlife permits and trade.

Contributions to the Review have suggested many additional topics for National Environmental Standards but not everything needs to be codified within a Standard. Standards should be used where the collective achievement of multiple activities or scales are necessary to effectively deliver an outcome. Other mechanisms, such as planning frameworks, policies and guidelines, should continue to be used to support the efficient operation of the EPBC Act.

To demonstrate that National Environmental Standards can be developed, and that they immediately provide greater clarity and consistency, the Review has developed in detail recommended Standards for 4 high-priority issues:

• matters of national environmental significance (in this section)
• Indigenous engagement and participation in decision-making (Chapter 2)
• compliance and enforcement (Chapter 9)
• data and information (Chapter 10).

The recommended National Environmental Standards developed in detail by the Review are set out in Appendix B. They have been developed and refined following consultation with science, Indigenous, environmental and business stakeholders and with input from technical experts. They should be adopted in full and immediately implemented.

The recommended National Environmental Standard for Indigenous engagement and participation in decision-making should be adopted in full and immediately implemented. Over time, refinements should be made through an Indigenous-led process (Chapter 2 and Appendix B).

The National Environmental Standards set out in detail in Appendix B should be adopted in full. The remainder of the suite of Standards should be developed without delay to enable the full suite of 9 Standards to be implemented immediately.

Clear National Environmental Standards will improve the effectiveness and efficiency of Australia’s national environmental law. Strong, clear and nationally consistent Standards will improve outcomes for Australia’s biodiversity and heritage, and ensure development is ecologically sustainable over the long term. Improved certainty for all stakeholders will lead to a more efficient, accessible and transparent regulatory system, and enable faster and lower-cost development assessments and approvals (Chapter 4).

National Environmental Standards for matters of national environmental significance

The current arrangements and decision-making requirements are not focused on outcomes for matters of national environmental significance (MNES). Decision-making requirements are buried within hundreds of pages of legislation and statutory documents, and unenforceable guidelines and policies.

The recommended National Environmental Standards for MNES developed by the Review clearly prescribe the national intent for the protection and conservation of MNES (Appendix B). Clear outcomes and requirements are important to help the community know what they can expect from the EPBC Act. It is important for businesses, which seek clear and consistent rules. It is also important for decision-makers and regulators, because it gives clarity on the rules they are expected to adhere to and enforce.

The recommended National Environmental Standards for MNES also support harmonisation and integration with States and Territories through a clear articulation of the requirements for accreditation under the EPBC Act.

Decisions at all scales and by all parties should work together to protect, conserve and improve outcomes for MNES. Progress towards environmental outcomes will result from the collective achievements of the combination of activities. This provides flexibility to decision-makers in how and where they balance impacts, while establishing critical protections for MNES. The outcome is important, not the path chosen to get to it. For example:

• Where the Standard requires the habitat of a threatened species to be maintained and improved, this can be achieved by the combination of a range of activities including for example, through regulation or programs of restoration.
• Where a Standard allows ecologically feasible and viable offsets to balance habitat loss from development, this can be achieved by imposing the requirement on individual project approvals or the offset obligations of multiple projects being delivered through a centralised approach.

However, individual decisions must not prevent a Standard for MNES from being met. Hard lines and no-go zones in the Standards protect critical assets and prevent unacceptable impacts. For example:

• Where a Standard requires impacts on certain threatened species habitats to be avoided, for example critical breeding habitat, a system cannot deliver this if it allows for developments that adversely impact these habitats.
• Where a Standard requires the values or attributes of a heritage place or property to be protected to achieve an outcome, then a project-level decision cannot allow a development to destroy one or more of those values or attributes.

Regardless of whether the rules are applied at a system or project scale, the National Environmental Standards for MNES support more streamlined decision-making at the project level. If the outcomes are clear and legally required, it does not matter who makes project assessment and approval decisions.

The recommended National Environmental Standards for MNES developed by the Review are a first and immediate step that should be taken. They clarify the existing settings of the EPBC Act to define clear limits of acceptable impacts for MNES, while accepting flexibility for development. They represent an improvement on the status quo, where opaque rules and unfettered discretion in decision-making often results in the trading away of environmental outcomes.

The National Environmental Standards recommended by this Review must evolve. The current settings of the EPBC Act constrain the recommended National Environmental Standards for MNES, such that they cannot deliver the level of protection required to alter the current trajectory of environmental decline. The Act needs to change so that Standards can evolve in a way that requires ESD, and for the values and attributes of our iconic places to be protected, maintained and actively enhanced.

The recommended National Environmental Standards for MNES are further constrained by the quality of data, information and systems available to describe and apply them. A quantum shift is required so that, in the future, Standards can become granular and measurable. With better information, Standards can be applied with greater precision and efficiency (Chapter 10). For example, definitive mapping of habitat critical to the survival of a species will provide greater clarity than a more general scientific description of that habitat.

When the application of National Environmental Standards is underpinned by quality data, information and systems, they can support faster and lower-cost assessments and approvals, including the capacity to automate consideration of low-risk proposals.

In the future, National Environmental Standards for threatened species could be expressed in quantitative measures to support recovery over a specific time frame – with targets that specify the intended outcomes. Measures such as population size and trends, and the area and quality of habitat available across a landscape type (that is, population numbers, hectares, threat management and years), should be developed. In time, and with better information and the capability to model ecosystem outcomes, these Standards could shift to measures of probable outcomes for species (such as the likelihood of survival or recovery).

Precise, quantitative National Environmental Standards for MNES that require ESD to be delivered will provide for effective environmental protection and biodiversity conservation and ensure that development is sustainable in the long-term. To settle for the recommended Standards, rather than pursue the fundamental reform of the Act that is needed, and the scale of investment in restoration that is required, is to accept the continued decline of our iconic places and the extinction of our most threatened plants, animals and ecosystems.

1.4.5 - National Environmental Standards will support greater integration with State and Territory environmental management

The National Environmental Standards are designed to deliver greater integration of the environmental management responsibilities of the Commonwealth, States and Territories. They provide a pathway for the Commonwealth to recognise and accredit the regulatory processes and environmental management activities of others, enabling the environment to be managed as a system at the right scale (Chapter 7).

National Environmental Standards provide the foundation on which the Commonwealth can confidently accredit others to make project-level decisions, removing duplicative processes that can be costly to business and result in little tangible benefit to the environment. Over time, the preferable arrangement would be for State and Territory laws to be amended to mirror the Standards made under the EPBC Act, enabling jurisdictions to fully and transparently accommodate the requirements of the Commonwealth in their own laws.

National leadership and intergovernmental cooperation are needed to safeguard the future of Australia’s environment and iconic places. The Intergovernmental Agreement on the Environment (IGAE, CoAG 1992) is over 20 years old and did not contemplate the pace of development, complexity of environmental matters or the scale of the cooperation required to achieve harmonisation in environmental regulation. Governments should revisit the IGAE to ensure it provides a contemporary foundation for shared management of Australia’s environment.

1.4.6 - To be successful, National Environmental Standards must be part of a broader framework

The National Environmental Standards recommended by the Review are the centrepiece of the reforms needed to deliver effective environmental protection and biodiversity conservation and more efficient decision-making. But Standards will not work in isolation.

Reform is needed to ensure that Australia listens to Indigenous Australians and respectfully harnesses the enormous value of their knowledge of managing Country (Chapter 2).

A broader framework of reform is required to provide confidence that, as a nation, we are on track to deliver the intended environmental outcomes and ensure that good decisions are being made about Australia’s environment in a way that adheres to the law.

Key elements of the broader reform framework recommended by the Review are:

• respectful inclusion of Indigenous Australians’ knowledge and views (Chapter 2)
• the provision of comprehensive expert advice to decision-makers (Chapter 4)
• full transparency of decisions that are made (Chapter 4)
• appropriate legal review and access to justice (Chapter 4)
• independent oversight of Commonwealth decision-making and accredited arrangements (Chapter 7)
• strategic planning and restoration of the environment (Chapter 8)
• investment in restoration of the environment (Chapter 8)
• strong, independent compliance and enforcement of project-level activities (Chapter 9)
• high-quality accessible data and information (Chapter 10)
• comprehensive monitoring, evaluation and reporting on environmental outcomes (Chapter 11)

These broader reform elements, together with National Environmental Standards, combine to support and deliver a more effective and efficient regime to protect Australia’s unique environment and iconic places (Figure 1).

Figure 1 - Reform framework 

The reforms recommended by this Review are not about the Commonwealth relinquishing itself of its responsibilities. Rather, they are about the Commonwealth meeting its obligations in a more effective and efficient way by enabling others to be accredited to deliver against the National Environmental Standards. They enable the Commonwealth to lift its focus from process-driven project-level transactions, to the achievement of national-level environmental outcomes and providing oversight to ensure the environmental management systems and decisions of others contribute to these outcomes.

The recommended reforms enable the Commonwealth to improve its own efforts to deliver nationally important outcomes and to show national leadership on the environment. This includes applying the National Environmental Standards to its own decision-making, stronger Commonwealth-led national and regional planning, the establishment of mechanisms that support greater investment in restoration, improved data and information and the frameworks to enable effective monitoring and reporting of environmental outcomes.

Strong, independent and transparent oversight of all parties implementing National Environmental Standards will be necessary to build and maintain confidence that the EPBC Act is working as intended and delivering environmental outcomes.

The EPBC Act is and should continue to be about sustainable management of the environment and ensuring that future development is ecologically sustainable. However, it needs fundamental reform to ensure that future generations can enjoy Australia’s unique environment, iconic places and heritage.