5.1 - There is duplication with State and Territory regulation
5.1.1 - There have been efforts to streamline and harmonise with States and Territories
The EPBC Act includes tools to achieve streamlining processes between the Commonwealth and States and Territories. These tools include:
- a common assessment method for listing threatened species, which means that lists are aligned and consistent protections are provided across jurisdictions
- accreditation through bilateral assessment and approval agreements.
Common assessment methods for threatened species listing
The Commonwealth and State and Territory Governments have been working since 2015 to harmonise and streamline the listing of threatened species and ecological communities through a common assessment method. This work is formally underpinned by an intergovernmental memorandum of understanding (Australian Government 2015).
Any jurisdiction can undertake a national assessment using the common assessment method. The outcome of this assessment may be adopted by other jurisdictions where that species occurs (under their laws), as well as the Commonwealth (under the EPBC Act). This work is supported by the States and Territories (NSW Government 2020). It also supports regulatory harmonisation by aligning lists and providing consistent protections across jurisdictions, which reduces confusion. Rather than a species being assessed numerous times, it can be considered once and listed in the same threatened category across all relevant jurisdictions, which leads to corresponding improvements in efficiency.
To date over 100 species listing decisions have been made under the EPBC Act based on State and Territory-led assessments and a further 47 are in progress. The Commonwealth should pursue opportunities for greater streamlining by moving to a single list of nationally protected matters. The Commonwealth should maintain this list on behalf of all jurisdictions.
Assessment bilateral agreements
The EPBC Act allows for the accreditation of State or Territory laws and management systems where they provide appropriate protections for nationally protected matters. Under a bilateral assessment agreement, the Commonwealth retains responsibility for approvals based on environmental impact assessments undertaken by the jurisdictions on nationally protected matters.
These agreements do not provide full accreditation of State and Territory arrangements because the Commonwealth remains the decision-maker for the approval decision. Assessment bilateral agreements allow the Commonwealth to rely on the assessment processes under State and Territory laws in making its decision.
Assessment bilateral agreements are in place in all 8 jurisdictions. However, recent changes to State and Territory laws mean that some of these agreements are being re-made to make them fully operational. Where agreements are not fully operational, individual assessments are often undertaken jointly (known as accredited assessments). This has the same effect as if a bilateral assessment agreement was in place and ensures continued streamlining and reduced impact on projects. However, it also highlights the inherent fragility of the agreements when changes are made to State and Territory laws.
Between July 2014 and June 2020, and average of 38% of proposals under the EPBC Act were assessed (or were being assessed) through either a bilateral assessment (25%) or accredited assessment (13%) arrangement with States and Territories. Figure 5 shows the breakdown over this period.
Figure 5 - Percentage of projects assessed under bilateral agreements and accredited processes, 1 July 2014 to 30 June 2020
Source: Department of Agriculture, Water and the Environment, unpublished
Significant shortcomings exist in the current arrangements. The requirements of the EPBC Act mean that even where they are in place, bilateral assessment agreements do not cover all development types. For example, activities are unable to be accredited under the current inflexible bilateral provisions where States and Territories do not actively assess certain development types – such as code-based developments – or where assessments are conducted by local councils under local planning laws.
For a single project, bilateral agreements may cover some aspects of the project, but not all. For example, not all clearing of habitat of nationally threatened species can be accredited due to the way State and Territory land clearing laws are constructed. The NSW land clearing codes are not an ‘assessment and approval’ process that is equivalent to Part 5 of the EPBC Act, and hence cannot be accredited under a bilateral agreement.
Bilateral agreements contain provisions committing parties to information-sharing and cooperation in surveillance. However, under the current arrangements this does not occur in a meaningful way. For example, a commitment to regular provision of compliance data is contained in only one agreement. As noted by the Australian National Audit Office (ANAO) in its recent performance audit of referrals, assessments and approvals under the EPBC Act:
in the absence of agreed and structured information sharing arrangements, information received from co-regulators will be reactive, issue-based and dependent on personal relationships. Consequently, compliance information may be incomplete and limited in value for strategic planning. (ANAO 2020)
Figure 6 provides the breakdown by jurisdictions and shows that approaches to streamline arrangements have had varied success between jurisdictions.
Figure 6 - Percentage of projects assessed under bilateral agreements and accredited processes, by State or Territory, 1 July 2014 to 30 June 2019
Source: Department of Agriculture, Water and the Environment, unpublished
Both proponents and regulators are supportive of bilateral assessment agreements and acknowledge the benefits they provide. Benefits cited in submissions to the Review by proponents include:
- better communication between the parties, which translates to greater clarity for proponents
- cost savings for industry and government
- reduced administrative overheads, through production of a single set of assessment documentation
- greater alignment of approval conditions, including offsetting arrangements
- broader landscape scale benefits for the environment, because individual matters of national environmental significance (MNES) are considered in the landscape context required by State and Territory arrangements.
Similarly, as co-regulators with the Commonwealth, the States and Territories indicated in their submissions to the Review that they support effective bilateral assessment agreements. The benefits they see from harmonised assessments include:
- increased cooperation, understanding and collaboration between assessment teams and proponents
- reduced regulatory duplication in the assessment of proposals, including aligning conditions of approval where appropriate
- reduced time frames for project assessments.
For example, the NSW Government advised in their submission to the Review that since the commencement of the NSW bilateral agreement in February 2015:
6 projects (with a combined Capital Investment Value of $6.4 billion and the creation of up to 5,150 jobs) have been assessed through the streamlined process, leading to an overall reduction in time frames for project assessments.
Some stakeholders raised strong concerns that environmental outcomes are not clearly defined, and States and Territories may not be able uphold the national interest (Chapter 7).
Approval bilateral agreements
Despite attempts by successive Australian Governments, approval bilateral agreements have never been implemented. Under such agreements, the Commonwealth would not apply the EPBC Act. Instead, it would rely on the State or Territory decision to achieve an acceptable environmental outcome.
The EPBC Act requires an action that may have or is likely to have a significant impact on a MNES to be referred to the Commonwealth Environment Minister to decide if it is a controlled action. If determined to be a controlled action, the Act requires the impacts of that action be assessed and the action approved before it can be legally taken.
Where an approval bilateral agreement is in place, an EPBC Act referral or approval is no longer needed because it is replaced by the accredited State or Territory approval for specified types of actions. The need for EPBC Act approval is avoided where are action is authorised in accordance with the accredited arrangements set out in the bilateral agreement. If not, the action requires approval under the EPBC Act.
Under the current settings, bilateral agreements are inherently fragile and amendments to the EPBC Act are required to make accreditation stable and to work efficiently in practice. A suite of amendments was pursued by the Australian Government in 2014 to support the implementation of its One-Stop Shop for environmental approvals policy and to provide a more enduring framework for accreditation.
Based on the advice of this Review, the Australian Government committed to develop Commonwealth-led National Environmental Standards to underpin new ‘single-touch’ agreements with State and Territory Governments. To support this, the Commonwealth introduced a Bill in 2020 to make amendments to the EPBC Act that would:
- enable the Commonwealth to complete assessments and approvals if an accredited State or Territory is unable to
- ensure agreements can endure minor amendments to State and Territory settings, rather than requiring the bilateral agreement to be remade (and consequently be subject to disallowance by the Australian Parliament on each occasion).
In their submissions to the Review, jurisdictions expressed a range of views on this, including both an ongoing desire to pursue the accreditation of approval powers (WA Government 2020, SA Government 2020) as well as to continue to improve existing arrangements (ACT Government 2020, NSW Government 2020, NT Government 2020).
5.1.2 - Duplication with States and Territories remains
Submissions to the Review identified that despite efforts to streamline and harmonise, a key criticism of the EPBC Act is that it duplicates State and Territory regulatory processes for development assessment and approval. The Review has found this is largely true, with a few exceptions.
The ‘water trigger’ and ‘nuclear trigger’ matters of national environmental significance (MNES) (Chapter 1) are often cited as areas where streamlining with the States and Territories is incomplete. Uranium and other projects assessed under the ‘nuclear trigger’ require a whole-of-environment assessment. These expanded assessments cover impacts that the States and Territories already regulate (such as air, noise and water quality), as well as duplicating State and Territory regulation of mining projects.
The Australian Radiation Protection and Nuclear Safety Agency (ARPANSA) highlighted in its submission (ARPANSA 2020), that if decision-makers adopt relevant national codes developed under the Australian Radiation Protection and Nuclear Safety Act 1998, then EPBC Act assessments can lead to ‘substantially the same assessment activities being undertaken across multiple jurisdictions creating duplicative regulatory processes’. The evidence presented to the Review suggests these areas have significant potential to be streamlined while ensuring that the national interest continues to be upheld.
The duplication that is evident does not mean, as suggested by some, that the EPBC Act is unnecessary and the Commonwealth should step out of the way. The Commonwealth has a clear role in Australia’s system of environmental management (Chapter 1).
However, the regulatory systems of the States and Territories have changed over time and, with increasing jurisdictional cooperation, the regulatory gap filled by the EPBC Act has reduced. For example, to meet the requirements for accreditation for bilateral assessment agreements, most States and Territories have made changes to their environmental or planning laws to improve environmental impact assessment processes. Furthermore, joined-up assessments through bilateral assessment agreements or accredited assessments mean that many EPBC Act project approvals mirror those given by the relevant State or Territory. The current EPBC Act Condition-setting Policy (DAWE 2020c) aims to streamline approval conditions between jurisdictions in circumstances where State or Territory conditions are adequate to protect MNES.
There is no systematic way to determine the additional environmental benefits resulting from the EPBC Act. There are examples where the operation of the Act has led to demonstrably different environmental outcomes than those arising from State and Territory processes. In some cases, States have used powers for state-significant developments that effectively circumvent their environmental impact assessment requirements, while at the same time the Commonwealth has maintained the importance of due process and undertaken assessment and approval. Submissions to the Review point to examples such as the rejection of the State-sponsored Traveston Dam in Queensland in 2009 and fast-tracked processes for designated state significant developments in New South Wales as evidence of this.
For the application of offsets conditions, the EPBC Act requires they be applied only for the protected matter the approval relates to — that is, they must be ‘like-for-like’. This exceeds requirements in some jurisdictions (Chapter 1 and Chapter 8). This results in additional or different conditions placed on projects that have better outcomes than would have otherwise been the case under State or Territory law alone.
Submissions to the Review have highlighted that Commonwealth involvement should set the tone and provide leadership, as the Commonwealth is more at arms length from the benefits that would arise from the proposed action. There is anecdotal evidence of this, but there are also cases where the regulatory requirements of States and Territories are more stringent than those of the EPBC Act (for example, Indigenous engagement requirements of Victoria and the Northern Territory).
Frustration rightly arises when regulation under the EPBC Act does not tangibly correspond to better environmental outcomes, given the additional costs to business of dual processes. Various estimates of the costs to industry and business of dual assessment and approval systems have been provided to the Review:
- The Minerals Council of Australia estimated delays can increase costs for a major greenfield mining project (worth $3 billion to $4 billion) in Australia by up to $46 million per month.
- The Property Council of Australia estimated that delays in assessments can add up to $36,800 to the cost of new homes in some greenfield sites.
- The 2017 Independent Review of the Water Trigger Legislation estimated costs to industry of around $46.8 million per year.
Estimates of costs will invariably depend on the underpinning data, assumptions and the cost structures of projects. Caution should be exercised, since the additional costs to business arising from the EPBC Act cannot always be clearly delineated from the impositions of other processes (such as costs associated with complying with state-based regulations). Nevertheless, the essential argument put forward by industry is undisputed – a reduction in time taken will reduce the cost of regulation.
As others have also done (PC 2020), the Review finds there is duplication in regulatory processes that should be addressed. There is a clear case for reducing duplication but, to achieve this, States and Territories must demonstrate they can effectively accommodate the national interest. The accreditation process should not be one of negotiated agreement.