4.3 - Recommended reforms

4.3.2 - Strengthen independent advice to provide confidence that decision-makers are using best available information

The community is skeptical that EPBC Act decisions are made free of inappropriate political interference. Lack of trust is an underlying driver behind calls for independent authorities or commissions to make decisions (WGCS 2020).

This solution is not supported by the Review. It is entirely appropriate that elected representatives (and their delegates) make decisions that require competing values to be weighed and competing national objectives to be balanced. It is important that the law is clear and that core regulatory functions are carried out effectively, rather than decision-making being ‘independent’.

That said, community confidence and trust in the process could be enhanced by the provision of transparent, independent advice on the adequacy of information provided to a decision-maker. The statutory advisory committee structures in the EPBC Act should be recast. An Ecologically Sustainable Development (ESD) Committee should be established, comprising an Independent Chair and the Chairs of subject-specific committees:

• Indigenous Engagement and Participation Committee – to advise on the co-design of the National Environmental Standard for Indigenous engagement and participation in decision-making and its implementation.
• Biodiversity Conservation Science Committee – to advise on the status of migratory species, and threatened species and ecological communities and actions needed to improve their condition in regional recovery plans.
• Australian Heritage Council – as established under the Australian Heritage Council Act 2003 to provide advice on heritage matters.
• Water Resources Committee – to advise on matters related to Ramsar wetland and the impacts of projects subject to the water trigger (Chapter 6).

The national environmental information supply chain custodian (Chapter 10) should be a member of the ESD Committee. Other members may also be needed to ensure the ESD Committee has the skills and expertise to execute its functions.

The membership of the ESD and subject-specific committees, and specific obligations regarding the National Environmental Standards and transparency, are outlined in Box 20.

The Environment Minister has a specific role to implement governance arrangements including the establishment, terms of reference and membership of the statutory advisory committees.

The ESD Committee should provide transparent advice to the Environment Minister to inform decisions. This should include policy advice on the:

• design and implementation of the monitoring and evaluation framework of the EPBC Act
• making of National Environmental Standards
• the framework and priorities for strategic national plans and Commonwealth-led regional plans
• overall adequacy of the environmental, social, cultural and economic information provided to the available for decision-making.

The Environment Minister could request, and the ESD Committee provide, transparent policy advice on other issues or specific decisions where they have relevant expertise such as:

• whether the processes that underpin the recommendation have been conducted in accordance with relevant National Environmental Standards (for example, for community or Indigenous engagement)
• the benefits and impacts of decisions, such as listings of threatened species and ecological communities, and the adequacy of measures to protect listed matters
• consistency of a proposed decision, such as Commonwealth-led regional plans or an individual approval, with the National Environmental Standards.

Transparency of the statutory advisory committee arrangements should occur at multiple scales:

• The ESD Committee should be required to report annually on environmental and heritage outcomes in line with the monitoring and evaluation framework for the EPBC Act (Chapter 11) – making specific reference to the National Environmental Standards – as well as the functioning of the committee framework.
• The ESD Committee should report annually on the functioning of all committees, including advice provided and areas of focus.

The EPBC Act should require the Environment Minister to explain how the advice of the ESD Committee was considered.

4.3.3 - Retain standing with a refined, limited merits review mechanism

Improving participation and transparency will mean that stakeholders will be less likely, and have less justification, to resort to legal challenge. The limited merits review model recommended requires information to be available as part of the decision-making process. Therefore, more complete information is available to make the decision rather than being withheld for legal ‘forum shopping’.

The legal review framework should not be the primary determinant for the performance of the EPBC Act. The ability of the public to hold decision-makers to account is a fundamental foundation of Australia’s democracy and improves the performance of law over time. To characterise legal review as ‘lawfare’ is artificial and misrepresents the importance of legal review in Australian society. Limited merits review and judicial review operating together enables improvements to decision-making to be identified over time, if available at the right points in the process (ARC 2007).

Effective, efficient and transparent decisions based on clear outcomes should reduce the demand for legal review. Implementing the package of recommended reforms, including National Environmental Standards, transparent decisions based on quality data and information, monitoring of environmental outcomes, improved compliance and enforcement and a comprehensive independent oversight, will reduce the need for legal challenges. This is because the underlying reasons for these challenges will have been addressed. For example, challenges on the basis of a lack of visibility of the information used in a decision will not be justifiable if information is transparently available.

Standing

Broad standing remains an important feature of environmental legislation, particularly given the presence of collective harm resulting from damage to environmental or heritage values. Individual loss is not always identifiable or quantifiable. The inability to rely on individual loss, means that the cost of rectifying or restoring environmental damage falls to the tax-payer.

The courts already have the capacity to deal with baseless or vexatious litigation. Litigation with no reasonable prospect of success can be dismissed in the first instance. Both the Federal Court and the High Court have the capacity to maintain lists of vexatious litigants, who are prohibited from taking legal action without permission. This can also impact a litigant’s ability to retain counsel.

The likely result in removing extended standing is that individuals with a demonstrable interest in a project would be co-opted to join litigation driven by others, or that courts would continue to grant standing to applicants in line with previous case law. It also means that hearings would be lengthened to consider arguments as to a person’s standing before the substantive issues are considered.

Removing the current standing provisions in the EPBC Act would mean that general standing provisions would apply. This would mean some uncertainty as the courts revisit the application of standing in the environment context (Wilcox 2015). The scope of general standing provisions under Commonwealth law is wider than under the Act. It is possible that removing the current extended standing arrangements could lead to an increase in challenges.

The Review does not agree that the current standing provisions in the EPBC Act (section 487) should be removed or changed. The Review has found no reason to broaden standing under the EPBC Act, even though open standing (as opposed to extended standing as set out in section 487) would be unlikely to result in a deluge of cases. As highlighted in the submission from the Law Council of Australia, the case law supports a finding that standing is not interpreted broadly by the courts because it is aimed at protecting the public interest rather than private concerns (LCA 2020).

Court time should be optimised by limiting vexatious litigation and litigation with no reasonable prospect of success. Reforms should focus on:

• improving transparency of decision-making, to reduce the need to resort to court processes to discover information
• limiting legal challenges to matters of outcome, not process, to reduce litigation that would not have a material impact on the outcome.

In this light, it may be beneficial for the EPBC Act to require an applicant who seeks to rely on the extended standing provisions to demonstrate that they have an arguable case, or that the case raises matters of exceptional public importance before it can proceed.

Form of legal review

Legal review processes aim to ensure that decisions are:

• made correctly in accordance with the law (judicial review)
• ‘preferable’ – that is, within the range of decisions possible under the law, the best decision is made to meet the intent of the relevant legislation based on the relevant facts (merits review) (AGD 1999, ARC 2007).

In a mature regulatory framework, judicial and merits review mechanisms are complementary. They operate in concert to test and refine decision-making over time to ensure that regulation achieves its objectives and is responsive to changing circumstances.

Full merits review is not advised. The evidence in support of full merits review is limited and indicates that it could lead to adverse consequences. Opening decisions to the admission of new documentation or materials for consideration – on appeal or review – delays decisions without necessarily improving outcomes. It can also result in the applicant receiving a substituted decision that is preferable or more complete in some way, leading to withholding of important information and ‘forum shopping’. Box 21 outlines elements of a limited merits review (LMR) model for development assessment and approval decisions under the EPBC Act.

Limited merits review ‘on the papers’ (that is based on the information available to the original decision-maker) has benefits in terms of:

• ensuring decisions are ‘reasonable’ given the material at the time of the decision
• contributing to ensuring decisions are of high quality – that is, transparent and consistent decisions, contested to a degree that is not detrimental to the effectiveness of regulation, and less open to gaming.

However, LMR must be carefully designed to minimise perverse outcomes. The primary consideration is a focus on good, transparent decision-making by the regulator. Merits (and judicial) review should be a last resort to ensure correct decisions are being made. Limits on the ability to exercise merits review should be clear and in the interests of outcomes of the legislation. A successful LMR approach should:

• support long-term environmental and heritage outcomes
• ensure interested parties can meaningfully participate in decision-making processes
• result in merits review applications being the exception rather than the rule
• not enable ‘forum shopping’ nor encourage people to hold back information at the original decision point
• be efficient and cost-effective
• maintain regulatory certainty.

Introducing new legal review processes into the current prescriptive EPBC Act arrangements is likely to lead to greater administrative complexity and uncertainty. The improvements to decision-making recommended in this Review (Chapter 3) are a necessary precursor to ensuring LMR is efficient and focused on environmental and heritage outcomes and not process.