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6.3 - Commonwealth-led assessment processes are inefficient

6.3.1 - Assessments and systems that support environment impact assessment are inefficient

Even with greater accreditation, the Environment Minister is likely to have an ongoing role in directly assessing and approving some developments. It is important that conflicts of interest are managed and situations of unconstrained self-regulation are avoided.

The Environment Minister would need to retain capability to conduct assessments and approvals where the Commonwealth provides sole jurisdiction, where accredited arrangements are not in place, or when the Commonwealth exercises its ability to step in. Such capability is essential to ensure that EPBC Act requirements can continue to be upheld when other decision-makers are, for whatever reason, unable to accommodate Act requirements in their processes. To weaken this capability would risk unnecessary delays for projects.

The business and information systems that the Department uses for conducting assessments are antiquated and inefficient. File management systems used by assessment officers are cumbersome and information is double handled throughout the process (Chapter 10). Steps are missed or duplicated, interactions with proponents are not easily recorded, and project tracking is difficult and often out of date.

Inefficiencies have arisen in the way information is received from proponents. To determine if a valid referral has been received the Department conducts manual checks, rather than an automated system to prevent invalid referrals from being submitted. The environmental impact assessment documentation provided by proponents is voluminous and can extend to more than 10,000 pages. These are provided in a form that is not word-searchable and with data that cannot be interrogated.

There are inefficiencies in the Department’s procedures for conducting assessments. Documentation from past decisions is not maintained and is not used to provide guidance to proponents about what they can expect or to support consistent assessment and decision-making. Relevant projects from past decisions are difficult to identify and, if found, it is difficult to extract information in a way that aids decision-making. Where there is deviation from past decisions, this is often not well explained.

6.3.2 - Assessments and systems are not fully funded

Timely assessments require resourcing of the assessment capability and systems (Chapter 4). The benefits for industry from extra resourcing of assessments is evident in recent improvements to timely assessments due to additional ‘congestion busting’ funding in 2019 (Minister for the Environment 2019).

Existing Commonwealth cost recovery arrangements are not sustainable because they do not cover many indirect costs that are currently born by the Commonwealth Government. Examples of some key costs that are not cost recovered include resourcing of data collection, management and IT systems, and receiving legal advice.

6.3.3 - Multiple environmental assessment pathways create unnecessary complexity

When a proposal is referred under the EPBC Act, the Environment Minister determines if an action will, or is likely to, have a significant impact. For those proposals that will clearly need to be assessed in detail, it creates an additional and time-consuming step in the process.

For some proponents, the lack of clarity on the requirements of the EPBC Act (for example, key terms like ‘significant impact’) means that they refer proposed actions for legal certainty. More than half of all referrals result in a decision that detailed assessment and approval is not required, or not required as long as the action is carried out in a particular manner.

The EPBC Act contains 5 environmental assessment pathways:

  1. Assessment on Referral Information
  2. Preliminary Documentation, with or without further information
  3. Public Environment Report
  4. Environmental Impact Statement
  5. Public Inquiry.

Each environmental assessment pathway has its own specific set of requirements, time frames and processes set out in the EPBC Act. This increases the complexity of the regulatory framework and affects the Department’s ability to clearly communicate regulatory requirements (Chapter 3). Multiple pathways do not result in any additional environmental benefit or significantly change the assessment time frames for the regulated community.

In practice, the Assessment on Referral Information, Public Environment Report and Environmental Impact Statement assessment pathways have had limited use in recent years (Table 1). The Public Inquiry pathway has never been used.

 Table 1 - Percentage of total assessment method decisions, from 2014–15 to 2019–20

Assessment approach

Per cent of total assessment method decisions

Preliminary Documentation, with further information

56%

Accredited Process

13%

Bilateral Process

25%

Public Environment Report

2%

Environmental Impact Statement

2%

Assessment on Referral Information

1%

Preliminary Documentation, without further information

1%

Public Inquiry

0%

Source: Department of Agriculture, Water and the Environment, unpublished.

6.3.4 - Reform recommendations – streamlining environmental impact assessments conducted by the Environment Minister

The Environment Minister will continue to have a role undertaking environmental impact assessments and approvals for individual projects.

To reduce the complexity of the regulatory process, the pathways for assessing proposals should be rationalised. Separate pathways should be provided for high-impact and lower-impact developments, so that the assessment is proportionate to the level of impact on MNES.

Better guidance and clarity upfront on the types of impacts that are acceptable, and those that will require assessment and approval, will also reduce the number of unnecessary referrals. The National Environmental Standards (Chapter 1) will help provide the foundation for determining acceptable impacts.

As a result of the reforms recommended by this Review, the overall caseload of the Department is anticipated to reduce over time. The most significant gains will be realised by fundamental legislative changes to the way the EPBC Act works. National Environmental Standards and regional plans will set clear rules, meaning that proponents will be incentivised to develop projects with acceptable impacts. This will streamline, or indeed avoid the need for any interaction with, the regulatory process. Lower-risk projects that still require assessment could receive approval with standard conditions (Chapter 3), which would provide proponents with greater certainty.

Similarly, the recommended accreditation model incentivises the States and Territories to enter into accredited arrangements with the Commonwealth because the overall time frame for project assessment and approval would be expedited (Chapter 5).

Effective administration of a regulatory system (whether by the Commonwealth or an accredited party) is not cost free. Fair costs should be recovered from proponents. In principle, governments should pay for elements that are substantially public benefits (for example, the development of standards) and business should pay for those elements of the regulatory system required because they derive private benefits by impacting the environment (for example, assessments and approvals; assessment of complex post-approval management plans). There are elements of the regulatory system that have mixed benefits where costs should be shared (for example, data and information).

The EPBC Act should ensure a ‘user pays’ approach to cost recovery. This could include simplifying the current cost recovery fee structure, levies for ongoing after-market activities or introducing indexation. In the short term, until regulatory amendments to cost recovery have been implemented, the congestion busting funding should be continued for as long as required to achieve required performance levels and maintain the efficiencies achieved through its introduction.

Recommendation

Recommendation 18

In the second tranche of reform, Commonwealth assessment pathways should be rationalised to enable a risk-based approach to assessments that is proportionate to the level of impact on matters protected by the EPBC Act.

Recommendation

Recommendation 19

In the second tranche of reform, the implementation of Commonwealth assessments should be supported by providing clear guidance, modern systems and appropriate cost recovery.